Miami City Council members approved the 2008-'09 fiscal year budget this week, ending weeks of scaling down more than $9 million in budget requests to fit within budget constraints.
Interim City Manager Tim Wilson presented a “bare bones budget” to council members Monday, saying that the $7.5 million budget represents a “balanced approach” to a fiscal year challenged by rising fuel costs and the increased cost of doing business across the board.
Weather disasters of 2007 put a burden on the city and pushed projected expenses beyond last year's revenue by an estimated 12 percent, exceeding the limits of the law and forcing a “tightening of the belt,” Wilson said.
Municipalities are governed by law to hold expenses to within 90 percent of the prior year's budget, Wilson said.
Revenue in 2007-'08 was $5,890,200 and budget requests for 2009 topped $9.3 million.
“The good news is that revenues are up, the hotel tax is up which the Miami Convention and Visitors Bureau brings in, fuel tax is up, homes are being built and downtown is being restored,” Wilson said “I hear it every week that Miami is busting at the seems and it is exciting for our community.”
Wilson said reducing the number of city employees through attrition, implementing a new phase of recycling, continued use of a four-day work schedule and continuing an effort to find cost-saving and revenue-generating measures are the keys to keeping the new fiscal budget on target.
“In Miami, 83 percent of the budget is for personnel,” Wilson said. “The only way to ever reduce that percentage and retain good people is to do more with less.”
In a written report to the council, Wilson noted that the cost of personnel services has increased 25 percentage points in the last 20 years.
“Personnel services represented 58 percent of the total general fund budget back in fiscal year 1986-1987,” Wilson wrote.
Currently, the city has four open employee positions that will not be funded in 2009. The four positions which will remain vacant were formally held by a detective, a solid waste driver, a street department employee and a civic center maintenance worker.
“I want to assure the citizens that the city is finically sound,” Wilson said. “But, we are taking precautionary measures.”
City administrators are hopeful that revenues will continue to climb for the city and there will be no reduction in the services the City of Miami now provides to its citizens.
The city's primary source of revenue is a 3 percent sales tax that generated $5,042,039 last fiscal year, a 4.1 percent increase over the previous fiscal year.
Twelve of the city's 15 general government departments will operate on budgets larger than what was approved in the former fiscal year and a 3-percent cost of living raise has been approved for all full time employees.
However, no department was granted full funding of its budget request.
Helping to balance the budget for 2009 was a $1,170,000 transfer from the utilities department.
“The toughest part of the budget was not being able to give everything requested to the department heads and supervisors. They all had great justification on why they needed their capital improvements,” Wilson said. “It's tough when the requests add up to $1.6 million and you have $250,000 to work with, I was forced to make some tough decisions. Another tough decision was not being able to give more to our employees, with gas at $4 per gallon it makes it hard on their personal budgets. To be honest, the money just wasn't there to give anymore.”
Wilson said, however, that his priority was to balance a budget that maintained the existing level of city services for residents.
Additionally, the city maintained its commitment to eight community organizations - an investment of more than $172,000.
Funded were the following:
€ Miami Area Chamber of Commerce - $16,875
€ Miami Downtown Redevelopment Authority - $50,000
€ Pelivan Transit - $48,000
€ Senior citizens Center - $23,400
€ Miami Main Street Inc. - $15,000
€ Miami Boys and Girls Club - $6,000
€ Ottawa County Graduated Sanctions Program - $2,500
€ Animal Welfare Society - $6,000
“I can't speak for the mayor and council, but the community groups are so important to Miami,” Wilson said. “They can do so much for so little. It is amazing. For the last several years there was discussion on how some of the organizations may need to rethink how they can become more self sufficient.”
Wilson said the city may one day face not being able to financially help all the organizations as the cost of doing business continues to rise.
“My advice to the organizations would be to start brainstorming on ways to raise more money to be self-sustaining,” Wilson said.