Since publishing the first edition of Straight Talk on August 5th, some community publications and groups continue making statements that are simply not true. Misinformation is never valuable to residents, the Commission or the future of this City. In this second edition of Straight Talk, we address misinformation and provide residents the facts.

Make no mistake, Coral Gables, like virtually every city in the United States, is coping with financial difficulties. This year is probably the most challenging for cities in a generation. The dramatic downturn in the economy is not the only factor that has significantly affected the City’s budget. Two years ago, the Florida Legislature mandated that cities reduce their property tax millage rate per $1,000 of taxable value. Coral Gables reduced its rate from 6.15 in fiscal 2006-2007, to 5.25 in fiscal 2007-2008. This change took effect just before the real estate market collapsed. In addition, the homestead exemption doubled from $25,000 to $50,000 for the current fiscal year 2008-2009, which further reduced revenues. Those three events, coupled with the present state of the economy among other factors, are what led to the current financial situation.

With so many factors affecting next fiscal year’s budget (October 1, 2009 – September 30, 2010), a multi-pronged approach is being utilized to steer the City through these extremely challenging times. The proposed budget mirrors the belt-tightening that citizens are making in their daily lives and they should expect the same from their government. The solution must be balanced to preserve the high standards, quality of life and beauty that make Coral Gables a special place and helps support our property values.

The City Commission and staff have not lost sight of their role as stewards of the public interest. In doing so, we will ensure that all options remain on the table as we pilot city government through these uncertain times.

Fiction: Cut spending by $10,000,000.

FACT: The above statement implies the City has not made any cuts. The City of Coral Gables’ proposed budget for fiscal year 2009-2010 already slashes expenditures by approximately $9 million and includes the elimination of 64 positions. Since the initial budget proposal on July 1st, additional cuts have been proposed for a total decrease in spending in excess of $10 million.

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Fiction: The proposed budget is now over $150,000,000. Almost double the annual budget… when the present Commission and Mayor took office.

FACT: The proposed budget for the upcoming fiscal year is $150,506,535. To calculate any increases in the budget over the years, it is appropriate to remove the total amount of Capital Expenditures as the figure varies widely from year to year. An analysis of Operating Expenses without Capital Expenses for fiscal year 2009-2010 yields a total Operating Cost of $136,831,535. The total Operating Cost for fiscal year 2000-2001 was $82,258,365. The budget has increased $54,573,170, or 66% over nine years. However, the real scenario emerges when you factor in the Consumer Price Index, which rose 27% over the same period of time. The Consumer Price Index adjusts for inflation and must be considered when comparing costs over long periods of time. Once the CPI is taken into account, the budget for the upcoming fiscal year represents a 39% increase from 2001 or 4% per year. Including Capital Expenses would yield a larger increase but does not portray an accurate picture of the budget.

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Fiction: We have non-performing departments throughout the City. Look at the Planning Department. It is useless and costs us MANY MILLIONS. Public Works is a monumental waste of money.

FACT: The Planning Department’s total proposed budget for the upcoming fiscal year is $715,172. The Department is responsible for providing guidance on the future development of the City. Department responsibilities include maintaining and implementing the City’s Comprehensive Land Use Plan and updating of the Zoning Code and all regulatory documents. The Department also reviews and provides recommendations to the Planning and Zoning Board, and the City Commission for all changes in zoning classification, Zoning Code text amendments, development reviews, conditional land uses, lot separations, vacations/abandonment’s of public rights-of-way, subdivision/replats and Comprehensive Land Use Plan and Future Land Use Map amendments. Many of these functions are required by state law.
The Public Works Department is responsible for managing construction projects, preserving historic landmarks, and maintaining all City facilities including fountains, parking lots and street lights. The Department is also responsible for street resurfacing and sidewalk repairs and improvements, traffic calming measures and upgrades to the sanitary sewer system. The fruits of their labor are evident all around the City. The Public Works Department has a long list of recently completed projects which, for example, includes construction and landscaping of the median along Ponce de Leon Boulevard from Alcazar to Almeria Avenues, renovation of Venetian Pool, restoration of the historic DeSoto Fountain, creation of a large roundabout on Coral Way and Segovia Street to correct traffic flow, improvements to the Coral Gables Country Club, extensive renovations to Coral Bay and Salvadore Parks, repairs to damaged sidewalks, resurfacing of roads, and the construction of 16 traffic circles throughout the City just this year. The Department is now in the process of restoring County Club Prado, an original entrance into Coral Gables and one of the most photographed landmarks in the City. The department is also working on major improvements to Riviera Park and is close to completing work at the new Coral Gables Art Cinema. Construction will soon start on a new roundabout on Segovia Street and Biltmore Way.

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Fiction: Pensions of all employees must be looked at.

FACT: This statement implies the City has not taken steps to address pension costs. Major changes to the employee pension plan were already proposed on July 1st and are being considered. These significant changes, however, are subject to collective bargaining agreements and state law. The City does not have the ability to simply make unilateral changes.

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Fiction: Coral Gables laps the field with a proposed… tax hike nearly double that of the City of Miami…

FACT: The City’s preliminary rate for the upcoming fiscal year is 6.243 mills per $1,000 of taxable value. This does not mean the City Commission will adopt that rate in September at the Budget Hearings, but it does establish the maximum rate which can only be reduced. The proposed millage rate for the City of Miami is 9.06 mills. While Coral Gables’ preliminary rate increase is higher this year than that of the City of Miami, it is worth noting that our millage rate would still be 50% less than Miami’s. Out of the 35 cities in Miami-Dade County, Coral Gables has the 11th lowest preliminary tax rate for the upcoming fiscal year.

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Almost every municipality in the country is struggling with the same issues affecting Coral Gables. The proposed budget goes right to the root of the problem and provides solutions. It is the City’s goal to hold any millage rate increase to a minimum. The decisions are difficult but they must be made to ensure that Coral Gables emerges from this national economic crisis with a foundation for a better future.

The City is committed to making the community proud of how our continued dedication to the heritage and tradition of Coral Gables adds value to our citizens; to being an organization that residents can trust and believe in and one that you can admire for the good we do and the future direction towards which we steer.

August 5, 2009

Separating Fact from Fiction

FROM YOUR CITY GOVERNMENT

Tough times. Difficult choices. Significant needs. A challenge no doubt. But it is a
challenge the City of Coral Gables can meet if financial common sense and
responsibility prevail. Make no mistake, Coral Gables, like virtually every city in the
United States, is coping with financial problems caused by the dramatic downturn in
the economy, among other factors. This year is probably the most challenging for
cities in a generation. The unpredictable and ever-changing economy has taken a toll
on residents and, in turn, Coral Gables has suffered with revenues plummeting.
Several steps were taken to cut costs this year. The City laid off employees,
implemented a hiring freeze, and instituted a freeze on discretionary spending and
capital purchases, but more was needed. Until recently, Coral Gables had
approximately $9 million in reserves to handle emergency situations such as
hurricanes and other unexpected events that can burden the City financially. In order
to make it through this fiscal year, the City has had to utilize nearly all its reserves to
balance the current budget, all but eliminating the general operating fund safety net.
The proposed budget mirrors the belt-tightening that citizens are making in their
daily lives and they should expect the same from their government. There are many
factors affecting next fiscal year’s budget (October 1, 2009 – September 30, 2010)
and as such, a multi–pronged approach is being utilized to steer the City through
these extremely challenging times. The solution must be balanced to preserve the
high standards, quality of life and beauty that make Coral Gables a special place and
helps support our property values. The City Commission and staff have not lost sight
of their role as stewards of the public interest. In doing so, we will ensure that all
options remain on the table as we pilot city government through these uncertain
times.
Recently some community publications and groups have made statements that are
simply not true. Misinformation is never valuable to residents, the Commission or the
future of this City. Here atStraight Talk, we feel it is important to address
misinformation and provide residents with the facts.
Fiction: The City is proposing a 27% property tax hike.
FACT: The current millage rate is 5.250 per $1,000 of taxable value and the
preliminary rate is 6.243, a 1 mill increase. This does not mean the City Commission
will adopt that millage rate in September at the Budget Hearings, but it does
establish the maximum rate which can only be reduced. Because of an overall decline
in property values, the millage rate necessary to generate the same amount of
property tax revenue as the current fiscal year is 5.537. The difference between
5.537 and the preliminary rate of 6.243 is .70 mills, a 13% increase. It is the City’s
goal to hold any millage rate increase to a minimum. Most cities in the County
including Miami and Miami Beach have increased their preliminary millage rate for
next year. Out of the total amount of property taxes you pay to the Miami-Dade
County Tax Collector’s Office, 38% is directed to the Miami-Dade County Public
School System, 32% is directed to Miami-Dade County, 27% goes to the City of Coral
Gables and the balance is sent to the state.
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Fiction: 40 low-salaried or part-time employees are being cut.
FACT: A total of 64 positions are being cut. It should be noted that 20% of the full-
time positions proposed for elimination come from management, professional and
technical employees, yet this group makes up only 15% of the total workforce.
Among the high-ranking positions being eliminated are an Assistant Chief of Police
and an Assistant Public Works Director, both second in command in their respective
departments.
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Fiction: City expenses are out of control.
FACT: The City’s proposed budget slashes expenditures by approximately $9 million.
The budget calls for a 5% cut in salaries for all employees and a significant reduction
in benefits, an unprecedented move in the City’s history. We are unaware of another
community in South Florida cutting salaries more. It is worth noting that employees
in management positions have not received a cost of living adjustment since 2007.
Despite the significant reductions in expenses and necessary fee increases, the City
may have to lay off more employees, including police officers. Currently, 55 cents out
of every dollar spent from the City’s general operating fund goes toward public safety
(Police and Fire Departments). The proposed budget calls for a total of 828
employees, that’s fewer employees than the City had a decade ago.
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Fiction: It is much more financially sensible to tier salary reductions: Cut salaries by
5% for employees making more than $35,000; 10% for those making more than
$80,000 but less than $130,000; and 15% for employees making more than
$130,000.
FACT: A tiered salary approach would create inequities in the City’s pay plan. This
suggestion reduces the differential between higher-ranking and longer-term
employees and those they supervise. Increasing the percentage of reduction for
higher paid employees wrecks havoc with a sensible pay plan designed to reward
experience, expertise and responsibility. For example, under the aforementioned
tiered concept, a supervisor making $80,000 would now be paid $72,000 and a
subordinate with a salary of $78,000 would make $74,100; that’s more than the
supervisor they work under. Likewise, under this problematic approach, employees
with seniority could be paid less than those with fewer years of service to the City.
This is one of the reasons no other city in Florida, that we are aware of, is pursuing
tiered salary reductions. Approximately 85% of City employees are represented by
unions with collective bargaining agreements in which case the City does not have
the ability to simply make unilateral changes in salaries.
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Fiction: The City is cutting part-time employees. This measure is not economical
because these employees do not receive benefits.
FACT: The City is reducing the number of employees in a prudent manner. For
example, as part of the proposed budget, the City is cutting six full-time sanitation
workers with benefits and adding one part-time sanitation worker without benefits.
Remaining employees will work harder and smarter to get the job done.
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Fiction: The proposed fire fee will cost homeowners $96 a week.
FACT: The fire assessment fee is proposed as a flat $50 annual fee per residence. The
fee would be dedicated to fire protection services. The City is working on developing a
hardship exemption for seniors with limited incomes.
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Almost every municipality in the country is struggling with the same issues affecting
Coral Gables. This City must strike a balance of continuing to provide vital services to
the community while keeping costs down. Unlike businesses that cut costs by
providing self-service features, Coral Gables should not become a self-service city.
Among the vital services the City provides are Police and Fire protection. All City
departments have slashed their budgets and many dedicated employees will be laid
off. The proposed budget goes right to the root of the problem and provides
solutions. The decisions are difficult but they must be made to ensure that Coral
Gables emerges from this national economic crisis with a foundation for a better
future.
In a nutshell, the City is faced with the predicament of significantly diminishing
revenues, rising expenses and a fiduciary responsibility that this City must not back
down from: meeting the needs of citizens, all the citizens of Coral Gables — no
matter where you live, no matter what your income is, and no matter the particular
circumstances of your lives.
The City is committed to making the community proud of how our continued
dedication to the heritage and tradition of Coral Gables adds value to our citizens; to
being an organization that residents can trust and believe in and one that you can
admire for the good we do and the future direction towards which we steer.
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