Andrew Thompson, CGFO
Chief Financial Officer

Rhea Rivera, CGFM

Asst. Director, Financial Services

Recommended Action:  The City Commission adopt the final millage rates for FY 2025 and adopt the FY 2025 budget.  To ensure compliance with TRIM requirements, it is recommended that the City Commission do the following in the indicated order to ensure proper adoption of the millage rates and budget:  

1. Conduct a public hearing in regard to the FY 25 final millage rates;  

2. After deliberation, adopt the FY 25 final millage resolution.  Prior to adopting the millage levy resolution, staff must formally announce the name of the taxing authority (City of Oakland Park), the rolled-back rate, and percentage increase over the rolled-back rate, and the millage rate to be levied.  The following millage rates are recommended to be adopted:

• Operating Millage: 5.7243 mills (7.42% over the rolled-back millage rate of 5.3289 mills)
• Debt Millage Series 2020: 0.3589 mills
• Debt Millage Series 2022: 0.1945 mills

3. Conduct a public hearing in regard to the FY 25 tentative budget of $166,220,199;  

4. After deliberation, adopt the FY 25 tentative budget, City fiscal policies, capital improvement program (CIP), citywide compensation, and fee booklet.

The State “Truth in Millage” (TRIM) legislation requires that a preliminary millage rate be established for inclusion on the TRIM Notice distributed by the County Appraiser in August each year. The TRIM Notice advises property owners as to the maximum millage rate being considered by the City, as well as the time and place for public hearings, in regard to the adoption of a tentative millage rate and annual operating budget.

The City Manager’s Recommended Budget was distributed to the Commission on July 10th and presented during the July 17th meeting. The millage rate and operating budget were discussed during this meeting and the Commission adopted a preliminary operating millage rate of 5.7243 mills, a combined debt service millage rate of 0.5534 mills, and the recommended assessment rates for inclusion on the TRIM Notices distributed by the Broward County Property Appraiser in August.  The Commission also set tentative millage and budget hearings date for September 4th.

On September 4th, the public hearings were conducted and after deliberation, the Commission adopted a tentative operating and voted debt service millage rates (5-0 approval) and a tentative budget (5-0 approval).  It was announced that the public hearings for the adoption of the final millage rate and annual operating budget would be held at 6:30 p.m. on September 18, 2024, at the City Hall Chambers.   

As part of the TRIM legislation, it is necessary to advertise these hearings two to five days before the final hearings. Two advertisements are required. One is notification that the hearings will be held at the above-indicated time and place. Since the tentative operating millage rate of 5.7234 mills adopted by the Commission exceeds the rolled-back millage rate of 5.3289 mills, TRIM legislation requires that the public hearings be advertised as a tax increase. The second advertisement is a schedule providing a summary of the tentative budget. As required, both advertisements have been scheduled for Sunday, September 15th in the Sun-Sentinel. TRIM legislation does not permit advertising solely on the Internet.

Another facet of the budget cycle is the adoption of assessment rates for the fire, residential solid waste, and stormwater services. If the TRIM notice is used for written notification of the time and place of the assessment rate hearings, the hearings cannot be scheduled until 20 days after the County Appraiser has mailed the last of the TRIM Notice, but no later than September 15th. The assessment hearings were held on September 12th and the Commission adopted all assessment rates that were preliminarily approved in July.  The Stormwater Assessment ($125 per equivalent residential unit) is an increase of $11 over last year; the Fire Assessment ($382 per unit) reflects a $106 increase or 38% increase from last year; and Residential Solid Waste Assessment ($340 per dwelling unit) reflects an increase of $30 from the FY24 rate of $310.  The adjustments to the Solid Waste and Fire Assessment rates are both predicated on the results of rate studies that were previously presented to the Commission (June 2022 for the solid waste rate study and May 2024 for the fire assessment rate study); copies of these presentations were attached as part of their respective agenda items.  All recommended assessment rates remain well below the average assessment rates charged by other mid-sized cities (40 to 80,000 in population).  The average assessment rates for these peer cities is $430 for fire, $370 for residential solid waste, and $191 for stormwater.  

The City's Fiscal Policies are adopted annually at the time of the City's adoption of the annual budget.  The City's Fiscal Policies remain unchanged from 2003 which incorporated the changes to Section 218.39, Florida Statutes regarding the selection of external auditors to perform annual financial audits.  A copy of these policies is attached as Exhibit "B".

The City Charter and State Statute require the City to adopt a five-year capital improvement plan. The attached Capital Improvement Program plan (Exhibit “C”) identifies the capital investment needs of the City for the next five years, including identification of known funding sources to be utilized to pay for these projects. An overview of the plan was previously presented to the Commission in June and again in July.

In accordance with Civil Service Rules, the City Commission is requested to adopt the citywide Compensation Plan in conjunction with the annual budget. The current citywide Compensation Plan, previously approved by Commission, includes all classifications from all employee groups and is consistent with all collective bargaining agreements currently in effect.  These classifications have all been approved by the Civil Service Board as required by the Civil Service Rules.  The amended citywide Compensation Plan is attached as Exhibit “D”.  The proposed changes are described in the attached memorandum from the City's Human Resources Department.

The City also maintains a comprehensive Fee Booklet that is adopted by the City Commission as part of the budget adoption process.  The attached Fee Booklet in Exhibit "E" incorporates the proposed fees for FY 25.  Exhibit E-1 provides a comparison of the current (FY 24) rates versus the proposed FY 25 rates and the change between the years are also reflected in the table.  As discussed in the budget message, these proposed fee changes include minor changes to parks and recreation fees, facility rentals, code enforcement administrative fees, and plan review fees.

During the July 17th Commission meeting, staff presented a summary of the Recommended Budget's key elements, including the proposed FY 25 business plan capital purchases, grant activity, and the financial impact of the proposed recommended operating and voted debt service millage rates and assessment rates on residents. 

The below sections detail the operating and voted debt service millage rates and budget considered for FY 2025:

Millage Rates (Operating & Debt Service)

As required by the TRIM process, the first requirement of the initial public budget hearing is to adopt a tentative millage rate. The Recommended Budget included a preliminary operating millage rate of 5.7243 mills; and two (2) separate voted debt service millage of 0.3589 mills and 0.1945 mills for Series 2020 and Series 2022 of the G.O. Bonds, respectively, or a combined debt service millage of 0.5534 mills, which were adopted by the Commission.

The recommended operating millage is 5.7243 mills, which is unchanged from the preliminary and tentative rate approved by Commission. This will be the tenth reduction to the operating millage in an eleven-year period.

The 2024 property tax base, which forms the basis of FY 25's ad valorem revenue, has increased by 14.78% in the past year to $5.8 billion.  As part of the budget process, the City is required to calculate the "rolled-back rate", which is the millage rate that is needed to produce the same level of property tax revenue as the prior year's operating tax levy. With the property tax base increase and the proposed operating millage rate, there would be $2.18 million more in revenue than would be provided by the rolled-back operating millage rate of 5.3289 mills at a 95% rate of collection.

Although the City is reducing the operating millage rate, the total property tax collections will be higher and the City will be required to advertise a 7.42% tax increase over the rolled-back millage rate of 5.3289 mills under the State's Truth-in-Millage (TRIM) Statute.  The rolled-back millage rate only applies to the operating millage rate - it does not apply to debt service millage rates.

In 2018, over two-thirds of Oakland Park's voters approved the issuance of $40 million in General Obligation (G.O.) bonds to rebuild and enhance the City’s Fire-Rescue and community facilities.  In May 2020, the City was assigned an investment grade AA credit rating by Standard and Poor’s and in June 2020, the first tranche of bonds (Series 2020) was sold, securing $26 million of the approved $40 million. In late 2021, it became clear that large increases in the interest rates could be expected - to avoid higher interest costs, the City moved quickly to sell the remaining bonds and secure lower interest rates. In February 2022, the remaining $14 million of the approved $40 million G.O. bonds were subsequently sold (Series 2022).  These proceeds will be utilized to fund Oakland Park’s Building Our Second Century program facility efforts.  These G.O. bond proceeds are financed over a 20-year period.  The City is required to pay the bonds' debt service costs by levying the voter-approved debt service millage. 

The G.O. bond debt service to be paid next fiscal year is approximately $3.05 million, which will require a debt service millage rate of 0.3589 mills for Series 2020 and a debt service millage rate of 0.1945 mills for Series 2022.  The combined debt service rate for Series 2020 and Series 2022 is 0.5534 mills.  The Commission is asked to adopt a specific rate for each specific series.  

Budget

In July, staff presented the City Commission with a Recommended Budget of $166.22 million. The document represents a financial plan based on the policy direction established by the Commission and the best information the staff has available at this time. As changes occur and new information becomes available that impacts these plans, revisions to the budget will be needed, either as part of the adoption of the final budget or later through the budget amendment process after the fiscal year begins. The Budget is attached as "Exhibit A."  The attached FY 25 Budget Message also provides a detailed narrative and explanation of the proposed budget. Please note that the Tentative Budget document includes a net increase of $279.00 in the Debt Service Fund to reflect a revision in revenue anticipated from the debt service millage.  The total citywide budget has therefore increased by $279.00 from $166,219,920, as recommended in July, to $166,220,199, as tentatively adopted on September 4th.  Additional details regarding the proposed FY 25 budget are included in the FY 25 Recommended Budget Book.  This document is available upon request through the City Clerk's Office. 

Since the preparation of the Recommended Budget in July, the City received the renewal notice from the Florida Municipal Insurance Trust (FMIT), which provides liability, property and workers' compensation insurance to Oakland Park.  Insurance costs for 2025 are about $250 thousand more than anticipated, a 15% increase of the prior plan year. The majority of the increase is attributable to the addition of Fire Station 9 and North Andrews Gardens Community Center to the City's property insurance portfolio.  The additional insurance costs will be addressed as part of the planned budget amendment in November.

The proposed budget maintains the millage and assessment rates recommended in July.  A copy of the budget summary is attached as "Exhibit A" to this agenda item.  Additional detail regarding the proposed FY 2025 budget is included in the FY 25 Recommended Budget Book.  This document is available on file at the Oakland Park City Library and at City Hall with the City Clerk's Office; copies are also available electronically by request.  All account-level information has also been uploaded onto the City's OpenGov transparency portal. 

The tentative operating millage rate is 5.7243 mills and the combined debt millage rate is 0.5534 mills (0.3589 mills for Series 2020 and 0.1945 mills for Series 2022).  The operating millage will generate about $2.18 million over the rolled-back rate for a total property tax revenue of $31.5 million while the debt millage will generate about $3.05 million for the debt service of the G.O Bonds due in FY 25.  This presumes approximately a 95% collection rate.

As provided in Section 193.155(1), F.S., beginning in 1995, or the year after the property receives homestead exemption, an annual increase in assessment shall not exceed the lower of the following:

For 2026, the CPI change reported by the Florida Department of Revenue is 3.4%.  As such, the maximum growth in taxable value a homestead residence can experience is 3%. About 60% of all Oakland Park residential properties are homesteaded.  With the maximum taxable value increase of 3% and the proposed operating millage rate of 5.7243, the median, homesteaded single-family home from last year would experience a $19.16 increase in City property tax for operations, or equivalent to $1.60 a month. With the combined debt service millage of 0.5534 mills, the estimated cost for the median, homesteaded single-family home is $101.54, which is a $10.44 decrease from the prior year.  The net increase in property tax (operating and debt service) is $8.72 for this median home.  With the proposed increases to the fire assessment ($106), residential solid waste ($30), and stormwater assessment ($11), the total increase for all taxes and special assessment fees is $155.72 for FY 2025, the equivalent of $12.98 a month. 

The proposed budget for adoption incorporates only information that is available now.  Budget amendments during fiscal year 2025 can be expected as new situations arise and reassessment of our budget is required. 

Taxing authorities must hold two public hearings to adopt the millage rate and budget.  The procedures required for each public hearing are governed by  s.200.065, F.S. 

To ensure compliance with TRIM requirements, it is recommended that the City Commission do the following in the indicated order to ensure proper adoption of the proposed millage and budget:  

1. Conduct a public hearing in regard to the FY 25 final millage rates;  

2. After deliberation, adopt the FY 25 final millage resolution.  Prior to adopting the millage levy resolution, staff must formally announce the name of the taxing authority (City of Oakland Park), the rolled-back rate, and percentage increase over the rolled-back rate, and the millage rate to be levied.  The following millage rates are recommended to be adopted:

• Operating Millage: 5.7243 mills (7.42% over the rolled-back millage rate of 5.3289 mills)
• Debt Millage Series 2020: 0.3589 mills
• Debt Millage Series 2022: 0.1945 mills

3. Conduct a public hearing in regard to the FY 25 tentative budget of $166,220,199;

4. After deliberation, adopt the FY 25 tentative budget, City fiscal policies, CIP, citywide compensation plan, and fee booklet.