HomeMy Public PortalAbout16-9185 Transmit the City's Financial Recovery Plan the Office of the Governor Sponsored by: Mayor& City Commission of Opa-locka, Florida
RESOLUTION NO. 16-9185
A RESOLUTION OF THE MAYOR AND CITY
COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA,
AUTHORIZING THE CITY MANAGER TO TRANSMIT
THE CITY'S FINANCIAL RECOVERY PLAN (EXHIBIT
"A")TO THE OFFICE OF THE GOVERNOR OF THE STATE
OF FLORIDA; PROVIDING FOR INCORPORATION OF
RECITALS; PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, The City Manager notified the Governor of the State of Florida
on its financial condition on October 22, 2016; and
WHEREAS, the City has been in communication with the Governor's office
regarding the City's financial condition and the development of a Financial
Recovery Plan since October of 2016; and
WHEREAS, the Mayor and City Commission has approved the City's
Financial Recovery Plan (EXHIBIT "A").
NOW THEREFORE, BE IT RESOLVED THAT THE CITY
COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA:
Section 1. The recitals to the preamble herein are incorporated by reference;
Section 2. The Mayor and City Commission of the City of Opa-locka,
Florida, hereby authorizes the City Manager to immediately transmit the City's
Financial Recovery Plan, (EXHIBIT "A"), to the Governor of the State of Florida.
Section 3. This Resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED this 10th day of May, 2016.
Resolution No. 16-9185
/ Ir
Lyra L. Taylor
Mayor
Attest to: Approved as to form and legal sufficiency:
Joa3na Flores Vincent T. Brown, Esq.
City Clerk The Brown Law Group, LLC
City Attorney
Moved by: COMMISSIONER SANTIAGO
Seconded by: VICE MAYOR HOLMES
Commissioner Vote: 5-0
Commissioner Kelley: YES
Commissioner Pinder: YES
Commissioner Santiago: YES
Vice Mayor Holmes: YES
Mayor Taylor: YES
OPp LockO
F.• Op
CITY OF OPA-LOCKA lr
FINANCIAL RECOVERY PLAN �OApORAl° �y
" R.ENEW OPA-LOCKA"
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PRESENTED BY:
DAVID CHIVERTON
CITY MANAGER
MAY 2016
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Page 2 of 25
MAYOR
Myra L. Taylor
VICE MAYOR
Timothy Holmes
CITY COMMISSION
Joseph L. Kelly
Luis B. Santiago
Terence Pinder
CITY ATTORNEY
The Brown Law Group
Vincent T. Brown
CITY CLERK
Joanna Flores
PREPARED BY
David Chiverton, City Manager
Yvette J. Harrell, Assistant City Manager
Charmaine Parchment, Finance Director
Keith A. Carswell, Budget Administrator
Newall Daughtery, Budgetary Consultant
Page 3 of 25
Table of Contents
Mission Statement- 5
Introduction 6
City of Opa-locka:A Community Profile 7
Chart 1.Racial Composition 7
Chart 2. Median Household Income 8
Chart 3.Percentage of Persons with a Bachelor's Degree or Higher 8
Chart 4.Percentage of Persons Living Below Poverty 9
Chart 5. Persons Per Square Mile 9
Chart 6. Home Ownership Rate 10
Chart 7.Percentage of Housing Units in Multiple Structures 10
Chart 8. 2015 Preliminary Average Residential Values(Taxable) 11
Chart 9.Property Taxes as a Percentage of Total General Funds for FY 2015-2016 12
Chart 10. 2015-2016 Millage Rates 13
Table 1. 2015 Preliminary Average Residential Values(Taxable) 13
FY 2015-16 General Fund Deficit: Proposed Efforts to Eliminate the Deficit 14
Table 2. Revenue Generation(General Fund)Tasks 14
Proposed Repayment of Obligations: Miami-Dade County 17
Water&Sewer Enterprise Fund 17
Chart 11. Water&Sewer Enterprise Fund Revenues&Expenses 18
Table 3. Water&Sewer Enterprise Fund Tasks 18
Storm Water Utility Management Fund 19
Chart 12. Storm Water Utility Management Fund Revenues&Expenses 20
Table 4. Storm Water Utility Management Fund Tasks 20
Solid Waste Management Fund 20
Chart 13. Solid Waste Management Fund Revenues&Expenses 21
Table 5 Solid Waste Management Fund Tasks 21
Operating Efficiency 22
Table 6. Operating Efficiency Tasks 22
Conclusion: Difficult Decisions are Necessary 23
PLAN OF ACTION FOR IMMEDIATE IMPLEMENTATION 24
Page 4 of 25
Mission Statement:
The Mission of the City of Opa-locka is
to enhance the quality of life,
environment, and safety of our
customers and employees in an
atmosphere of courtesy, integrity, and
quality service.
Page 5 of 25
Introduction
In December 2015, the Mayor of Opa-locka presented a financial stabilization plan that
identified, from the prior fiscal year:
• an estimated $4,585,089 in obligations owed to Miami-Dade County (Miami-
Dade),
• an estimated $2,893,155 in obligations owed to various vendors, and
• financial requirements to remove Water and Waste Water Moratorium on building
permits imposed by Miami-Dade County DERM.
It should be noted that a portion of the obligations owed identified as being owed to
various vendors were found to be duplicate obligation; nevertheless, the estimated
obligations, substantially accrued during the previous fiscal year, required the use of
revenues from the 2015-16 fiscal year. As of May 6, 2016, the City of Opa-locka (Opa-
locka) has paid approximately $2 Million to satisfy prior year obligations and has
completed all tasks in a timely manner for removal of the Water and Waste Water
Moratorium. After some adjustments for the above-mentioned discrepancies, the
payments have resulted in the remaining balances as follows:
• $3,516,801 in obligations owed to the Miami-Dade (see Exhibit "A"), and
• $92,314.68 in obligations owed to various vendors (see Exhibit"B").
Based on a General Governmental Cash Flow Projection dated March 15, 2016, Opa-
locka will have a deficit in the general fund of $46,043 by the end of June 2016 (see
Exhibit "C"). The analysis covered the period from March 2016 thru September 2016,
reflected the payment of prior year obligations and projected a deficit of $1.4 million in
the general fund!
On March 28, 2016, AFSCME Local 20168 and the Dade County Police Benevolent
Association were advised that pursuant to Florida State Statutes 218.503, Opa-locka
was declaring a financial emergency; see Exhibit "D" and Exhibit "E." The declarations
are a preamble to facilitate any necessary workforce reduction AND terminate or amend
any agreements.
Prior to and concurrent with the declaration, there were a number of tasks identified to
increase revenues and enhance operating efficiency. Those tasks, coupled with input
from Opa-locka residents and City Commissioners at various public
hearings/workshops, form the framework for a comprehensive five (5) year financial
recovery plan ( the Plan) that will eliminate any and all operating deficits and further
reduce obligations owed to Miami-Dade and various vendors by:
• annexing adjacent un-incorporated areas of Miami-Dade to increase property tax
base;
Page 6 of 25
• increasing property taxes from 8.9 mills to 9.4 mills;
• increasing non-ad valorem (fees for service) revenues;
• aggressively pursuing the collection outstanding code enforcement
citations/liens;
• improving operating efficiencies;
• aggressively pursuing the collection of delinquent water and sewer accounts; and
• moving infrastructure projects forward.
In crafting this financial recovery plan, the Plan was developed taking into account Opa-
locka's socio-economic factors that are constrained within a relatively small geographic
area of 4.3 square miles.
City of Opa-locka: A Community Profile
With a 2014 population estimate of 16,460 by the US Census Bureau, Opa-locka faces
socio-economic challenges that are uniquely different from other Florida municipalities.
Consideration of Opa-locka's socio-economic challenges by policy makers has
historically affected its long-term financial stability as there has been reluctance to
appropriately charge non-ad valorem "fees for service." Based on the latest census
data, relative to Miami-Dade County (Miami-Dade), City of Miami (Miami), City of
Hialeah (Hialeah), Town of Miami Lakes (Miami Lakes), City of Miami Gardens (Miami
Gardens), Opa-locka's racial composition, median household income, percentage of
persons with a Bachelor's degree or higher, percentage of persons living below the
poverty level, and persons per square mile is as follows:
Chart 1. Racial Composition
•African-American • Hispanic White/Other
94.7%
65.8%0 66.2% 70.0% 81.1%
76.3%
32.1%
18.9% 19.2%
2.1% 14.9%
10.8%
15.6% 22.0%
� 7% 2.6 .3%
Opa-locka _ 1.7%
Miami-Dade Miami
g
Hialeah
Miami Lakes
Miami
Gardens
Page 7 of 25
Chart 2. Median Household Income
■Opa-locka ■ Miami-Dade Miami ■ Hialeah to r Miami Lakes t4 Miami Gardens
$63,754
$43,100
$42,040
$30,375 29,96
$20,33
Chart 3. Percentage of Persons with a Bachelor's Degree or
Higher
■Opa-locka ■ Miami-Dade Miami ■ Hialeah I Miami Lakes Miami Gardens
30.5%
26.3%
23.1%
9.1% 13.2% 13.9%
Page 8 of 25
Chart 4. Percentage of Persons Living Below Poverty
■Opa-locka ■ Miami-Dade Miami ■ Hialeah ir Miami Lakes ?4 Miami Gardens
39.7%
29.9%
24.5%
21.2%
11.2%
sr
✓ hh
7
Chart 5. Persons Per Square Mile
■Opa-Iocka • Miami-Dade .4 Miami ■Hialeah • Miami Lakes a Miami Gardens
11,136
r, 10,474
x..
3,536 5,211 5,878
316
Page 9 of 25
In general, ad valorem, or property taxes, is the largest revenue source for county or
municipal government. The high concentration of persons living below the poverty
level, within a relatively small geographical area, does not afford many the opportunity
of achieving the dream of homeownership and therefore the creation of a stable "local"
housing market. The absence of having a stable "local" housing market for a municipal
government has the ripple effect of suppressing property values and thus minimizes
property tax revenue.
According to the most recent census data, the homeownership rate and percentage of
housing units in multiple structures are as follows:
Chart 6. Home Ownership Rate
■Opa-locka •Miami-Dade Miami •Hialeah I Miami Lakes I Miami Gardens
5
3 '
Chart 7. Percentage of Housing Units in Multiple Structures
■Opa-locka ■ Miami-Dade • Miami • Hialeah ■ Miami Lakes Miami Gardens
6 00
5
,o
u
0
With a high percentage of its population living below the poverty level and a low
homeownership rate, Opa-locka's property tax base is primarily comprised of
"affordable" non-homestead residential properties (rental properties). The remaining
property tax base is comprised of industrial and multi-family/commercial properties. A
significant amount of property in Opa-locka is also tax-exempt properties belonging to
churches and governmental entities.
As a financial indicator for Opa-locka's general fund, the Miami-Dade County Property
Appraiser 2015 Preliminary Average Residential Values (taxable) for Opa-locka
Miami-Dade, Miami, Hialeah, Miami Lakes, and Miami Gardens are as follows:
Chart 8. 2015 Preliminary Average Residential Values
(Taxable)
•Opa-locka •Miami-Dade Miami •Hialeah •Miami Lakes Miami Gardens
$1 0 559
$13: 898$1 844
•
$ •
1
r
Budgeted at $5,948,725 for FY 2015-16, although the actual amount collected for FY
2015-16 was $6,168,810 ( a difference of $220,85) property taxes are the largest
revenue source for Opa-locka and represent a significant percentage of the projected
general fund revenues. By comparison, property taxes, as a percentage of FY 2015-16
general fund revenues (excluding inter-agency transfers) for Opa-locka, Miami-Dade,
Miami, Hialeah, Miami Lakes, and Miami Gardens are as follows:
Page 11 of 25
Chart 9. Property Taxes as a Percentage of Total General
Funds for FY 2015-2016
■Opa-locka •Miami-Dade Miami a Hialeah Miami Lakes Miami Gardens
46%
4 %
t G 0
i U.
Opa-locka's considerable dependence on property taxes is further evidenced by its FY
2015-16 operating millage rate of 8.90 mills or $8.9000 per thousand ($1,000) of
assessed property. By comparison, the average millage rate for the thirty-four (34)
municipalities within Miami-Dade is 5.36 or $5.3600 per thousand ($1,000) of assessed
property. Moreover, the FY 2015-16 operating millage rate for Opa-locka, Miami-Dade,
Miami, Hialeah, Miami Lakes, and Miami Gardens is as follows:
Page 12 of 25
Chart 10. 2015-2016 Millage Rates
Opa-locka ■ Miami-Dade Miami le Hialeah Miami Lakes Miami Gardens
8 •
7.•
-i,
The relatively high millage rate is directly attributable to Opa-locka's relatively low
average residential taxable value of$20,384. As noted, the 2015 Preliminary Average
Residential Values (taxable are as follows:
Table 1 . 2015 Preliminary Average Residential Values
(Taxable)
Opa-locka Miami-Dade Miami Hialeah Miami Miami
Lakes Gardens
$20,384 $138,898 $145,844 $50,364 $170,569 $40,930
Page 13 of 25
FY 2015-16 General Fund Deficit: Proposed Efforts to
Eliminate the Deficit.
As noted, a General Governmental Cash Flow Projection dated March 15, 2016,
projects a deficit of$1.4 million in the general fund for Fiscal Year 2015-16. To increase
general fund revenues, Opa-locka's administration has, or will be, undertaking the
following:
Table 2. Revenue Generation (General Fund) Tasks
Begin Completion
Task
Date Date
Develop and implement a marketing plan to 12/2015 Ongoing
attract manufacturers and distributors.
With assistance from State and Federal lobbyist, 12/2015 Ongoing
aggressively pursue special appropriations for
current and future fiscal years.
Accelerate the sale of surplus City-owned 1/2016 Ongoing
property that has a tax assessed value of
$434,045.
Utilize the City Attorney's office to secure 3/2016 Ongoing
payments for delinquent code enforcement
citations through settlements and litigation, as
necessary.
Identify NEW grant funding opportunities to 3/2016 Ongoing
include, but not be limited to,
construction/infrastructure projects, safety
concerns and quality of life issue.
Conduct an internal study to determine if all civil 4/2016 7/2016
penalties, utility rates, and permit fees meet
minimum statutory requirements and re-evaluate
said penalties for comparison to other
municipalities. Adjust rates as necessary.
Utilize the City Attorney's office to review and 4/2016 7/2016
update Opa-locka's code with respect to civil
penalties, municipal taxes, permitting fees and
annexation.
Establish a Revenue Task Force with code 4/2016 9/2016
enforcement, finance and public works for:
payment of outstanding code enforcement liens;
payment of delinquent water&sewer accounts;
verification of property exemptions and/or
proper application of property taxes; and
Page 14 of 25
conduct a field audit to physically verify meter
locations as reported in the SunGard system.
Establish a Compliance Task Force with code 4/2016 9/2016
enforcement, community development and
building & license to conduct a systematic site
visit of the entire City with respect to illegal
structures and other code violations.
Authorize the City Manager to pursue 5/2016 Ongoing
annexation of all viable locations
Based on the City's financial emergency, direct 4/2016 5/2016
the City Manager to review all agreements and
contracts and as appropriate, re-negotiate
and/or terminate said agreements and contracts.
Propose an increase in property taxes from 8.9 7/2016 9/2016
mills to 9.4 mills to generate additional general
fund revenue of approximately $352,000 for FY
2016-17.
Analyze current property values and request 4/2016 Ongoing
reassessment thereof from Miami-Dade
County's Property Appraiser
While occurring in the current fiscal year, the full fiscal impact of the administrative
efforts will not be realized until fiscal year 2016-17.
To address the projected general fund deficit, Opa-locka's administration intends to
implement the following:
CONTRACTUAL TERMINATIONS
The City is obligated under various contracts that are being re-evaluated for necessity,
and negotiated where appropriate to reduce the City's expenses. For example, the
savings amount for one of the contracts being revised as estimated through the end of
this fiscal year is approximately $40,000.00. If carried through FY 2016-2017, the
savings realized would be more than $120,000.00.
REALIZATION OF ATTRITION
The City has experienced several personnel changes within the past several months
and in light of the current financial situation, the administration has decided not to
replace those positions. As a result of the attrition, the amount that will be realized in
budgetary savings through the end of this current fiscal year is $169,000. The positions
that were impacted by this attrition will be re-evaluated during fiscal year 2016-2017.
IMPLEMENTATION OF 32 - HOUR WORK WEEK
A proposal will be presented to the Commission for the implementation of a 32-hour
work week through the end of the Fiscal Year 2015-2016. The savings realized from
the implementation of the 32-hour work week for 40 hour employees will exceed
$250,000 through the end of this fiscal year. The City's fiscal needs will be re-evaluated
Page 15 of 25
to determine whether the 32-hour work week will be extended through additional
periods.
WORKFORCE REDUCTION
As a result of the budgetary challenges the City faces, there is an inevitable need for a
reduction in the City's workforce. To date, the City employs approximately 170
individuals, when the optimum workforce for a City of similar size and revenue, is
between 130 and 140 individual. As such, at the very least, there needs to be a
reduction of 30 individuals in order to begin to realize the benefits of an efficient
workforce. By the end of the 2015-2016 FY, there must be a reduction in the workforce
that will adjust the workforce numbers. The reductions will be implemented in two
phases for ease of transition for both the City and its residents. This process will also
ensure continuity and quality of service provision. The first reduction will be effective as
of May 20, 2016 and will consist of approximately 15 — 20 personnel. The second
reduction will occur within 30 to 45 days thereafter and will consist of the reduction of
15 — 20 personnel as well. After the second reduction, the Manager's office will re-
evaluate the fiscal situation at that time to determine if additional reductions are
necessary and how they will be implemented.
The above-mentioned measures are necessary in order for the City to regain its
financial footing. Without the implementation of these measures, in an urgent
timeframe, the City's situation will continue to rapidly decline and may inevitably lead to
the need for higher-level governmental intrusion on the City's decision-making authority.
Page 16 of 25
There are a number of obligations owed to vendors; however the most substantial
obligations are owed to Miami-Dade County for the services it provides to the City. In
order to realize a balanced budget and facilitate the City's stabilization, it is imperative
that we properly calculate the debt owed and prepare a feasible repayment of those
obligations.
Proposed Repayment of Obligations: Miami-Dade
County
As of May 6, 2016, the prior fiscal year obligations owed to Miami-Dade are largely
related to Opa-locka's restricted Enterprise Funds as noted:
• $2,374,165 related to the Water& Sewer Enterprise Fund,
• $ 456,432 related to the Stormwater Utility Management Fund, and
• $ 485,531 related to the Solid Waste Enterprise Fund.
In general, Enterprise Funds are used to account for operations that are financed and
operated in a manner similar to private business enterprises where "charges for
services" cover the operation.
Water & Sewer Enterprise Fund
The Water & Sewer enterprise fund is used to account for the delivery of water and
sewer services. Opa-locka owns approximately 50 miles of water mains and provides
water to all areas of the City and a number of residential and commercial accounts
outside of the City. Opa-locka purchases water and disposes sewer via an inter-local
agreement with Miami-Dade County. The four (4) components of the Water & Sewer
fund are meter reading, water services, sewer services, and customer service. Opa-
locka charges commercial and residential customers various rates based on
usage/thousand (1,000) gallons. Policy makers have been reluctant to increase fees for
services because of the socio-economic challenges facing Opa-locka residents.
While Opa-locka's comprehensive annual financial report (CAFR) has not been
completed for fiscal year 2015, the CAFRs for the previous five (5) years detail
revenues and operating expenses for the Water& Sewer Enterprise Fund as follows:
Page 17 of 25
Chart 11. Water & Sewer Enterprise Fund Revenues & Expenses
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
FY 2009 10
FY 2010-11
FY 2011-12
FY 2012-13
FY 2013-14
1—FY 2009-10 FY 2010-11 T FY 2011-12 I FY 2012-13 I FY 2013-14
■Charges for Service! $7,217,522 t $7,256,189 i $9,849,295 $8,504,623 ( $7,738,252
III Expenses $6,244,689 t $5,446,235 M $5,954,798 I $6,442,588 I $9,404,858
To compound the financial strain on Opa-locka's Water and Sewer system of fluctuating
charges for service revenues and increasing operating expenses, a significant number
of electronic meters are not functional and require manual recording. In addition, the
system has developed a significant infiltration problem. Through the purchase and
installation of new electronic meters, the number of defective electronic meters will be
reduced thus improving operating efficiency. The infiltration is being addressed through
a number of infrastructure projects financed primarily by a State Revolving Loan.
Fluctuating charges for service revenues suggest illegal water usage; outstanding water
accounts receivables currently exceed $1,000,000.
Table 3. Water & Sewer Enterprise Fund Tasks
To improve the operating efficiency of the Water& Sewer Enterprise Fund, the following
tasks were identified:
Begin Completion
Task
Date Date
Utilize the City Attorney's office to secure 12/2015 Ongoing
payments for delinquent water and sewer
Page 18 of 25
accounts.
Conduct an internal study to compare all water
&sewer rates and penalties with neighboring 4/2016 7/2016
municipalities. Adjust as necessary
As appropriate, seek legal assistance and
legislative support from Miami-Dade to review 4/2016 9/2016
and update Opadocka's code with respect to
water and sewer.
Seek City Commission approval for sewage 4/2016 9/2016
agreement with Miami-Dade.
Establish a Revenue Task Force with code
enforcement, community development, finance,
and public works for payment of delinquent 4/2016 9/2016
water&sewer accounts and conduct a field
audit field audit to physically verify meter
locations as reported in the SunGard system.
During a recent meeting with Miami-Dade County officials, a five (5) year, monthly
installment repayment plan of all enterprise fund obligations was proposed, and will
require the approval of the Miami-Dade County Commission and Opa-locka City
Commission.
To supplement the operating revenue for the water & sewer fund, a special assessment
to active commercial water accounts will be proposed for City Commission
consideration. The monthly installment payment to Miami-Dade County for the $2.4
million water & sewer obligation is approximated to be $41,000 over the five (5) year
period. The monthly surcharge is estimated to be $15,080 and based on the following
parameters:
• $13.00 per month monthly surcharge assessed to active commercial water
accounts; and
• There are currently 1,160 active commercial water accounts.
Storm Water Utility Management Fund
The Storm Water Utility Management Fund assesses a rate of six dollars ($6.00) per
month per sewer account for Stormwater operations and capital costs. Activities in this
fund include maintenance of the storm drains, canals and street and curb sweeping.
Commercial and residential accounts outside Opa-locka are therefore not assessed the
monthly charge. While Opa-locka's comprehensive annual financial report (CAFR) has
not been completed for fiscal year 2015, the CAFRs for the previous five (5) years detail
revenues and operating expenses for the Stormwater utility management fund as
follows:
Page 19 of 25
Chart 12. Storm Water Utility Management Fund Revenues &
Expenses
$800,000
$700,000 _..
$600,000 - --
$500,000 _ - _. _ _._
$400,000 , _
- I al --1 _$300,000 __ ..Ii :_
$100,000 _
$ -
FY 2009-10 ` -
FY 2010-11
FY 2011-12 --
FY 2012-13
FY 2013-14
FY 2009-10 FY 2010-11 I FY 2011-12 I FY 2012-13 I FY 2013-14
I on Charges for Service; $234,934 1 $235,423 I $259,982 I $242,628 $268,001
a Expenses $508,494 $291,418 $362,205 $299,209 $701,959
To improve operating efficiencies of the Storm Water Utility Management Fund, the
following task have been identified:
1 Table 4. Storm Water Utility Management Fund Tasks
Begin Completion
Task
Date Date
Establish an operating reserve and minimize 4/2016 6/2016
operating expenditures.
Conduct an internal study to compare all storm
water rates and penalties with neighboring 5/2016 7/2016
municipalities. Adjust as necessary.
Utilize the City Attorney's office to review and
update Opa-locka's code with respect to storm 4/2016 7/2016
water.
Solid Waste Management Fund
The Solid Waste Management Enterprise Fund is used to account for commercial and
residential solid waste collection services. Opa-locka has franchised the collection and
Page 20 of 25
disposal of commercial solid waste and budgeted $360,000 in franchise fee revenue for
FY 2015-16. Opa-locka has contracted with the same private company to collect
residential garbage and trash for its 2,526 residential units and assesses a solid waste
fee of $562.00 per residential unit. In addition, the City has contracted with Miami-Dade
to provide recycling service. While Opa-locka's comprehensive annual financial report
(CAFR) has not been completed for fiscal year 2015, the CAFRs for the previous five
(5) years detail revenues and operating expenses for the solid waste management fund
as follows:
Chart 13. Solid Waste Management Fund Revenues & Expenses
$1,400,000
$1,200,000
$1,000,000
$800,000
1 II
$600,000 "
1
$400,000
$200,000
FY 209-10
FY 2010-11
FY 2011-12
FY 2012-13
FY 2013-14
FY 209-10 I FY 2010-11 FY 2011-12 l FY 2012-13 FY 2013-14
•Charges for Servicel $1,014,622 I $1,142,852 I $1,260,520 I $975,544 I $1,137,874
•Expenses $1,070,098 I $1,203,020 } $1,145,855 $1,214,902 1 $1,225,943
To improve operating efficiencies of the Solid Waste Management Fund, the following
task have been identified:
{ Table 5 Solid Waste Management Fund Tasks
Begin Completion
Task
Date Date
Issue request for proposal for the collection and
disposal of commercial and residential solid
waste. Negotiate an initial three(3) year 5/2016 7/2016
contract that will provide up-front payment for a
portion of, or all of, the commercial solid waste
franchise fees and reduce the cost of residential
Page 21 of 25
solid waste collection and disposal.
Conduct an audit of the commercial solid waste
franchisee to confirm payment of any and all 3/2016 4/2016
franchise fees due to the City.
Pursue the collection of fines or fees due from
all commercial solid waste accounts that are not 3/2016 Ongoing
contracted with franchisee.
Conduct an internal study to compare all solid
waste rates and penalties with neighboring 4/2016 7/2016
municipalities. Adjust as necessary.
Utilize the City Attorney's office to review and
update Opa-locka's code with respect to storm 5/2016 8/2016
water.
Present the proposed solid waste franchise and
residential agreements to the Opa-locka City 7/2016 7/2016
Commission for approval.
A request for proposal has been issued for commercial (franchise) and residential
(contract) solid waste collection and disposal. Based upon receipt and concurrent with
the awarding of new solid waste agreements, an assessment of the solid waste
commercial and residential fee structure will be completed and any appropriate
recommendations submitted to Opa-locka City Commission for consideration.
Nonetheless, the prior fiscal year solid waste-related obligation to Miami-Dade is
$485,531 and the monthly payment, with an annual interest rate of 1.5%, is calculated
to be $8,351.91.
Operating Efficiency
While there are opportunities to increase revenues, Opa-locka's administration has
undertaken the additional efforts with respect to operating efficiency:
I Table 6. Operating Efficiency Tasks
Begin Completion
Task
Date Date
Review existing, review, and establish new 4/2016 9/2016
Internal Financial and Operating Controls.
Establish an electronic asset management
database and implement a physical inventory of 4/2016 9/2016
all City assets.
Re-evaluate and upgrade the computerized 4/2016 9/2016
management system for water/sewer accounts.
Re-evaluate and upgrade the computerized 4/2016 9/2016
management system for occupational licenses/
Page 22 of 25
business tax receipts (BTRs) and permits.
Generate monthly expenditure and revenue
reports relative to the adopted budget at the 12/2015 Ongoing
department level.
Enhance and improve the way the City does
business through business process re- 12/2015 Ongoing
engineering.
Utilize the City Attorney's office to re-evaluate
all vendor agreements throughout the City to 1/2016 Ongoing
determine necessity, potential for revision and
termination options.
Conclusion: Difficult Decisions are Necessary
Opa-locka has paid approximately $2 Million for obligations to Miami-Dade and various
vendors from FY 2015-16 funds, the obligations were primarily from the previous fiscal
year. The remaining balance of $93,314 owed to various vendors, along with a
$267,277 in General Fund obligations owed to Miami-Dade County that will be paid
from FY 2015-16 funds, as part of the mid-year budget amendment; the budget will be
amended for un-budgeted expenditures. Excluding inter-agency transfers, the FY 2015-
16 operating revenue is $13,854,280. The efforts to increase revenue and minimize
operating expenses will not be fully realized during the current fiscal year and therefore,
a reduction in the budget will be required to structurally balance by the end of this fiscal
year. As noted, the budget reductions include the unfortunate need to restructure and
reduce the workforce. Other administrative actions being considered include:
• increase in fees for services
• increase in ad valorem taxes for next fiscal year
• furlough days for City employees
• implementation of a four (4) day work week
• exploration of public/private partnerships for City services
• outsourcing of the City's service departments
Finally, I am mindful that without a comprehensive plan for economic and
community development, Opa-locka's tax base is likely to remain flat. Without
growth in its tax base, a more aggressive approach to appropriately charge for
service and adherence to prudent financial matters, Opa-locka will be challenged
in providing basic municipal services to its residents. With a boundary of only 4.3
square miles, adding new housing stock and commercial/industrial properties are
essential keys to Opa-locka's continued longevity.
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PLAN OF ACTION FOR IMMEDIATE IMPLEMENTATION
The City is in a state of Financial Emergency as defined by Part V of Chapter
218, Florida Statutes (The "Local Government Financial Emergencies Act"),
Under the Local Government Financial Emergencies Act, the Governor of the
State of Florida has the authority to implement measures as set for the in
Chapter 218.50 — 218.504, Florida Statutes, to resolve the Financial Emergency.
Such measures may include but are not limited to:
Requiring approval of the City's Budget by the Governor.
Authorizing a State Loan to the City and providing repayment of the same.
Prohibiting the City from issuing bonds, notes, certificate of indebtedness, or any
other forms of debt until such time as it is no longer subject to this section.
Making such inspections and reviews of records, information, reports and assets
of the City.
Consulting with the officials of the City and the appropriate state agency
regarding steps necessary to bring the books of account, accounting systems,
financial procedures and reports into compliance with state requirements.
Providing technical assistance to the City.
Establishing a Financial Emergency Board to Oversee the Activities of the City.
Requiring and approving a plan, to be prepared by the appropriate State Agency
in conjunction with the City. Prescribing actions that will cause the City to no
longer be subject to this action.
THE FIVE YEAR FINANCIAL RECOVERY PLAN
On June 1, 2016, the City will reduce by twenty-five (25%) each of the approved
budgeted expenditures of the General Fund for 2015 —2016.
The General Fund Approved Budget is $13,854,280 and will reduce to
$10,390,710.
By June 1, 2016, the City will make sure that each of the Enterprise Funds (Solid
Waste, Water & Sewer, and Storm Water Utility) are operated in compliance with
the rules.
The Solid Waste Management Fund: City will manage the Solid Waste Fund by
Managing the Commercial and Residential Solid Waste Collection Services. The
City has franchised the collection and disposal of the Commercial Solid Waste
services and the Residential Garbage and Trash Services. The City two-
thousand five hundred twenty-six (2526) residential units that we assessed a
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Solid Waste Fee of five-hundred sixty-two dollars ($562.00) per residential unit.
We will monitor the performance of the service before we authorized payments
for performance. The four hundred eighty-five thousand five hundred thirty-one
dollars ($485,531.00) obligation that the City owes to Miami-Dade County is as a
result of the City paying the contracted vendor without inspecting the proper
performance for the services per the agreement.
The Water & Sewer Enterprise Fund; the City will manage the Water & Sewer
Enterprise Fund as a business. We will operate the system to make sure that we
are in compliance with the 1.15 ratio to cover all of the debt service, infrastructure
improvements, operational cost and deprecation for the system. We will make
sure that the new rates cover the new 8.9% increased sewer cost from Miami-
Dade County.
The 2016 — 2017 Budget years for each budget year thereafter will limit the
Police Budget allocation so that we do not exceed sixty (60%) percent of the
property taxed levied for the tax year. Today, the police budget for Fiscal Year
2016 is $5,882,015 which is more than ninety (90%) of the $6,168,810 of the Ad
Valorem Tax Revenue for 2016.
On June 1, 2016, the City will begin to repay each of our small vendors over the
next thirty-six (36) months. We will continue to do business with them if they are
willing as we will make current payments every thirty (30) days.
On June 1, 2016, the City will begin to repay our large obligations to Miami-Dade
County over a sixty (60) month period. We will remain current with payments
every thirty (30) days for goods and services provided by Miami-Dade County.
We will assign a staff person and or hire an outside firm to work for the City to
improve the Property Appraiser's Assessment of the values of the property
values with the City of Opa-locka has not been fair.
The City will make sure that it operates within its approved budget and do not
permit expenditures that are not budgeted for and funds are available for the
expense.
All wages will be frozen for the next three (3) years. In year four (4) the wages
can be increased up to ten (10%) percent. In year five (5) the wages can be
increased up to 10%. In year six (6) the wages can be increased up to ten (10%)
percent.
We will carefully manage the Citywide Infrastructure Capital Improvement Plan.
At the end of this five (5) year Financial Recovery Plan, we will be ready to move
forward to a bright future; a "Renewed Opa-locka."
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