The Mystery of Millage Rates

October 17, 2009 Leave a comment

City officials are repeatedly saying to us that the millage rate is “lower than two years ago”.  (And why didn’t they mention that the millage rate is much higher than last year–more misinformation and misdirecting the commentary!).  In fact, the millage rate is a simple residual after calculating the budget needs and other sources of revenue such as permit, fire and other fees.  What counts for the city are property assessments and new construction and the budget requirements, and then comes the millage rate to calculate the revenues to fill the gap with the other income source.

The city fathers do us no favor by having a lower or higher millage rate.  They do us a favor by better managing the city’s budget–that is the variable that counts.  Why in the world does the city want to keep spending merrily on capital projects during a crisis–this gives the impression that the commissioners and city manager think that the recession will be over quite soon.  Why can’t the city reduce the number of the senior managers now they have reduced the number of low level staff?

Now that the unemployment rates is 11 percent in Miami-Dade (this means really means 20 percent measuring discouraged workers and part-time employment at lower wages) and will certainly not be back to normal for several years, and is much higher than the national average of 9.8 percent.

Also, there is talk in financial circles of mortgage problems increasing among new groups of homeowners, not in the subprime category, but in conventional loan categories.  The does not portend a good future for the city’s property taxes.

Another kind of silly statement is that the Coral Gables taxes are only (say) 27 percent of your total tax bill.  Right, it is only a 27 percent, but two years ago it was a lower percentage of the tax bills.  Now Coral Gables is the fastest growing share of our property tax bills.

Therefore, mayor and commissioners, plan for the worst and hope for the best.  Let us see what happens in the coming months.

Filed under Coral Gables, Finance, Management

Where are the City’s Reserves and Capital Improvements? (Part II)

October 2, 2009 1 Comment

In response to comments on a previous post, I have endeavored to find information about salaries, wages and benefits in Coral Gables and comparative full service cities. Detailed information on salaries and benefits are not easily obtained. The most recent information indicates a few interesting comparative facts.

The Coral Gable’s 2009-2010 initial proposed budget indicated average costs of $118,300 per employee. The average pension costs are $23.5 million in addition to wages ($58.9), pension costs, FICA, workers comp., and sick leave adding up to $97.8 million out of total budget of around $155 million, or more than 60% of the total budget (that were subsequently changed in millage rate negotiations).

Based on 2007 comparative information (source: http://www.City-Data.com) there indicates that police and firefighters wages in Coral Gables are consistently above those in Key Biscayne, Miami Beach, the City of Miami, West Palm Beach and Fort Lauderdale. The average firefighter earns $95,661 in Coral Gables; compared to $77,685 in Key Biscayne; $91,503 in Miami Beach; $85,569 in the City of Miami; West Palm Beach $76,718; and $40,978, Fort Lauderdale. Similarly for police officers, the salary in Coral Gables is $77,547, compared to $75,404 in Miami, $73,741 in Key Biscayne; the much larger $96,165 in Miami Beach; 79,155 in West Palm Beach; and Fort Lauderdale, $79,696. It is assumed that these rates do not include pension benefits.

Average wages in government are as follows: Coral Gables, $67,595; Key Biscayne, $71,215; Miami, $64,576; Miami Beach, $63,709; West Palm Beach, $60,553 and Fort Lauderdale, $55,062. These data do not take account benefits that greatly add to average wage costs.

One may conclude that Coral Gables wages are generally above the average compared to other full service cities, although there are some specific differences. One wonders why Coral Gables would have to pay in the highest range of salaries given the relatively good working conditions and residential environment in City Beautiful. The higher wages and benefits, therefore, are due to additional factors such as the leverage of local unions, their involvement in local elections and the relative apathy of local voters and taxpayers as well as the abundance of tax revenues in recent years.  Also, other cities were making the same mistake as Coral Gables of pushing up wages and benefits in good budget times.

Filed under Coral Gables, Finance

Simple Budget Reductions: CGGAZETTE.COM did the Manager’s Job

September 26, 2009 Leave a comment

Coral Gable’s Commission likely nemesis, George Volsky did a “back of the envelope” budget reduction.

Question? Couldn’t the city manager had an estimate ready at the last Budget Hearing, or did he want more time to pressure the Commission into accepting a higher millage rate–in other words, a simple, old fashioned, delaying tactic.

TOTAL: $3,944,000

The…savings do not represent major personnel firings. It suggests retiring several highly paid (and less-than-efficient) directors who continue in their jobs even though under DROP they could voluntarily leave at any time. By continuing to work they accumulate additional retirement payments from the city already enmeshed in a serious pension crisis.

Filed under Coral Gables, Finance, Government

Fire Fee Approved; Two No Votes; Fees Are General Revenues, Not for the Fire Department

September 22, 2009 Leave a comment

Messrs. Kerdyk and Cabrera voted against the $50 fee that will raise about $1.5 million for the city budget. Based on questions raised by Mr. Kerdyk and Cabrera, and the city manager’s response, it is quite clear that the fees are additional taxes and funds that will be included in the budget without regard to their final use.

Earlier comments of the Mayor that property taxes will be reduced by the amount of the fire fees has not happened. In practice that will depend on this evening’s vote on the millage rate.

Clearly, the intention is that the fire fee will be raised annually (with a majority vote) to supplement property taxes increases (approved with a super majority of 4 votes) and other revenues.

Filed under Coral Gables, Finance, Taxes and Fees

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