Budget in Brief

Section 1

Mission Statement


The City of Hallandale Beach is committed to providing those core services that ensure and promote public safety and a vibrant quality of life for its residents, visitors, and businesses.

Budget Calendar

Budget Overview

Position Summary


Below you will find a summary (by fund, department) of the City of Hallandale Beach's personnel. Overall, the FTE decreased by 0.6150 units and the position count stays the same as prior year. The largest decrease was in the Building Fund at 7.2 FTE units and 5 position units due to the City entering into a contract for Building division services to provide full-time staffing to perform technical building services, including administration, inspections, and plan review. Other changes include the Finance Department increasing FTE due to changes to the organizational structure of the Department, moving positions into and out of other departments for operational efficiency, as well as temporary solutions to help alleviate some of the short-term challenges like continuity of operations and successful completion of projects/initiatives being worked on by members of the team in the position allocation across the different funds and the restructuring of the Finance and Human Resources departments.

Details can be shown in the chart below:

Revenue Analysis and Forecasting



The City’s budget is funded through multiple sources of revenues, such as taxes, fees, charges for service, grants, fines, etc. One of the major sources of revenue is property tax, also known as ad valorem taxes, which is a locally levied tax imposed on property based on assessed values. The citywide operating millage for the FY 2023-24 Budget is based on 8.2466 mills, which mean $8.2466 per thousand of valuation net of various deductions. The FY 2023-24 Adopted Budget includes debt service for the General Obligation Bonds approved by the voters. The full proceeds of the bond were issued in June 2016 with the related debt millage of 0.5522 for the third-year repayment of the debt. The combined operating and debt millage rate in the FY 2023-24 Budget are 8.6647 (8.2466 for operating and 0.4181 for debt), which is a decrease of 0.0765 FY 2022-23.


Property taxes (at 8.2466 mills) are budgeted at $61,473,485 (with discount) in the General Fund, this represents 53.62% of the General Fund as well as 46.38% of the entire budget including the Enterprise and other funds.

The July 1, 2023 Taxable Value increased 17.88% above the prior year, from $6,586,958,194 to $7,765,003,907. The City is 2nd in percent change in taxable value in Broward County due to due developments coming into the City.

Where Does My General Fund Tax Dollar Go?

Expenditures


Following is a chart which reflects the increases and decreases in the six major fund types of the City. The FY 2023-24 Budget for all City Funds totals $208.7 million or $25.7 million (14.04%) above the prior year’s adopted budget. The increase in the total budget is primarily attributable to the General Fund and Special Revenue Funds. The increase taxable property values of 17.88% resulted in an increase of $9.7 million with $1.9 million in Tax Increment Financing payment to the CRA. Other increases include appropriations for the last tranche of the ARPA funds of 5.4 million transfers for Capital Projects and a proposed increase in property insurance premiums due to rising costs.


Fund Highlights


The City establishes a budget for 23 separate funds which can be segregated into six major fund types consisting of the General Fund, Special Revenue Funds, Debt Service Funds, Capital Funds, Enterprise Funds, and Internal Service Funds.


The following chart illustrates the major funds and their groupings, the various expenditure increases and decreases over FY 2022-23, and several of the most notable items that affect the overall budget.

The largest fund is the General Fund, which provides $111.9 million in funding for the many services available to City residents such as Police, Fire, Parks/Recreation, Human services, and all Administrative services. The General Fund increased $12.7 million or 12.83% from the previous year. This can be attributed to the increase in taxable values, an increase of 17.88% or $9.7 million and revenues such as Sales Tax, Utility Service Tax and Franchise Fees to name a few.



The Special Revenue Funds, total $19 million and includes the Renewal & Replacement Fund and ARPA Fund, Police Training Fund, Police/Fire Outside Services Fund, Police Equitable Sharing Fund, Three Islands Safe Neighborhood District, Golden Isles Safe Neighborhood District, Grant Fund, Transportation Fund, Law Enforcement Trust Fund and the Permits and Inspections Fund. The funds under the Special Revenue Funds increased by $6.9 million or 56.10% from the previous year mainly due to $5.4M in budgeted appropriations in ARPA revenue.



The Debt Service Funds total $5.3 million for the payment of debt service for the Parks General Obligation (GO) Bond issued June 2016 and for the Capital Improvement Refunding and Revenue Bonds, Series 2016. The Debt Service Funds decreased by $31,822 from the previous year.



The Capital Project Funds are used to budget capital projects, which total $4.4 million and include the Parks General Obligation (GO) Bond Fund, and Capital Projects Fund. This fund also includes salaries and wages related to the projects appropriated.


The Enterprise Funds total $53.6 million, which is an increase of $554 thousand. These funds are supported by revenues from specific services or commodities provided to consumers. These funds include Utility, Sanitation, Cemetery, Stormwater and Utility Impact Fee. This increase is due to proposed increases in the utility fees.



Finally, the Internal Services Funds discussed herein include General Liability Self-Insurance, Workers’ Compensation, and Fleet Services. These funds provide services to departments within the City. These funds total $14.1 million, increased by $4.9 million or 53.70%. The main contributor to this increase is due to a rise in property insurance premiums which have increased at an unprecedented rate.

Highlights - Capital Improvements Projects

The City of Hallandale Beach has substantial infrastructure needs. The Capital Improvement Program enables a process whereby projects are evaluated and prioritized. The approved projects reflect the City's commitment to enhance the quality of life for our citizens and to provide a resilient infrastructure. Items contained within the Capital Improvement Program are defined as physical assets, constructed, or purchased, with a useful life of at least 10 years, and a minimum cost of $20,000.


A total of $45,217,304 is presented in the FY 23/24 Capital Budget. This total includes funding in various City funds (e.g., Capital Projects Fund, Stormwater Fund, Utility Fund, Utility Revenue Bonds).


There are eight categories of projects: Public Safety, Facilities, Mobility, Sustainability, Parks and Recreation, Stormwater, Utility and Transportation. The largest portion, over $38.6M, is for Utility Improvement projects using the Utility Revenue Bond as a funding source. The next largest allocation, totaling over $4.4M, is various capital improvement projects that are funded by the Capital Projects fund by way of a transfer from the General Fund.


A summary of the City funded FY23/24 projects is provided below (please see the Capital Improvement Section of this publication for additional details on projects in the Capital Improvement Program).


  • Reroofing Generator Pump Room – Re-roofing of the Auxiliary Generator Pump Room
  • Reroof Fleet Building– The roof has deteriorated past its useful life
  • Railroad Crossings Safety Project – To maintain the quiet zone designation
  • Scavo Park Artificial Turf – Install dog friendly K-9 artifical turf
  • Police Department Locker Room – Renovation of the Police Department and the complete redesign and replacement of both the men's and woman's locker rooms
  • EV Transit Bus Fleet Parking, Charging & Maintenance– Construct a facility for EV Bus Fleet parking, charging, fleet operations and maintenance
  • SW SE 3rd Street Sidewalk Improvement Project – Improve sidewalk and ADA ramps along SW/SE 3rd Street (between SW 6th Ave and Federal Highway)

Financial Policies

Guidelines


The budget process and format shall be outcome-based and focused on goals, objectives, and performance indicators. The budget will provide adequate funding for maintenance and replacement of infrastructure and equipment.



Basis of Budgeting


The budget for general government type funds (General Fund, Special Revenue Funds, and Capital Funds) are prepared on a modified accrual basis for accounting and budgeting purposes. Under this method, revenues are recognized only when they become measurable and available to finance expenditures of the fiscal period. Available means collectible within the current period, or soon enough thereafter, to pay current liabilities.


Expenditures are recognized when the fund liability is incurred except for un-matured interest on general long-term debt which is recognized when due, and the noncurrent portion of accrued vacation and sick leave which is recorded in a general long-term debt group. At year-end, open encumbrance balances lapse. However, encumbrances related to Capital Projects are generally re-appropriated as part of the following year’s budget.


The Enterprise Funds (Utility, Utility Impact Fee, Sanitation, Stormwater and Cemetery Funds) on the other hand, are budgeted on a full accrual basis. Not only are expenditures recognized when a commitment is made (such as through a purchase order), but revenues are also recognized when they are obligated to the City (for example, water user fees are recognized as revenue when bills are produced, or service is provided).


The City also utilizes Internal Service Funds (Workers’ Compensation, General Liability Self-Insurance, and Fleet Services Funds), which are budgeted on a full accrual basis.



The differences between the budget basis and the full accrual basis of accounting include: (1) budgeting the full amount of capital expenditures as expense rather than depreciating the expenditure, (2) not budgeting interest earnings on restricted funds and impact fees, and (3) presenting debt service expense net of restricted investment proceeds.



Basis of Accounting


Basis of accounting refers to the time when revenues and expenditures or expenses are recognized in the accounts, and relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for by using the modified accrual basis of accounting. Their revenues are recognized in the period in which the revenue becomes susceptible to accrual, i.e., when the revenue becomes both measurable and available as expendable financial resources to pay liabilities of the current period. Ad valorem taxes and charges for services are susceptible to accrual when collected in the current year, or within 60 days after year-end, provided the amounts received pertain to liabilities through the end of the fiscal year.



Intergovernmental revenues, franchise fees and utility service taxes are recorded in accordance with their legal or contractual requirements as earned. Interest is recorded when earned. Licenses and permits, charges for services, fines and forfeitures, and other revenues applicable to the current period are recorded as revenue when received in cash because they are generally not measurable until received. License and permit revenue collected in advance for periods of which they relate are recorded as deferred revenue.



Expenditures are generally recognized under the accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt, which are recognized when due where funds are not specifically reserved for such purpose.


The reporting practices for the Proprietary Fund Types closely parallel comparable commercial financial reporting. Both recognize revenue when earned and expenses when incurred (the accrual basis) including depreciation on its exhaustible fixed assets. Earned, but unbilled service receivables are accrued as revenue in the Enterprise Fund.



The Annual Comprehensive Financial Report (ACFR) shows the status of the City's finances based on "Generally Accepted Accounting Principles" (GAAP). In most cases, this conforms to the way the City prepares its budget. There are two exceptions: the treatment of depreciation expense and compensated absences. Depreciation expense is not budgeted but instead the budget reflects the full purchase cost of capital improvements. The ACFR shows depreciation expense for Enterprise Funds as required by GAAP.


Compensated absences are included in salary projections in the budget whereas the ACFR reflects both sick and vacation as accrued liabilities as required by GAAP. The ACFR shows fund expenditures and revenues on both a GAAP basis and budget basis for comparison purposes.


The hierarchy for reporting and budgetary control is as follows:



1. Fund

2. Department

3. Division

4. Function

5. Object Code

Fund Structure

General Fund – During the FY 2019-20 Budget Process, an ordinance was approved by the City Commission to update the Reserves Policy for the General Fund.


The minimum level of unassigned fund balance for the General Fund shall be sixteen percent (16%) of the current audited General Fund operating expenditures (excluding transfers). This is equivalent to the total amount needed to cover two (2) months of regular General Fund operating expenditures. The minimum unassigned fund balance shall be determined based upon the most recently audited Annual Comprehensive Financial Report (ACFR). In the event, after the annual audit, that the unassigned fund balance falls below 16% of the General Fund operating expenditures, the City Manager will prepare and submit a plan for replenishment (e.g., committed, and/or assigned fund balance reduction, expenditure reductions and/or revenue increases) to the City Commission. The City shall act when necessary, to restore the unassigned fund balance to acceptable levels within three (3) fiscal years. This target is not inclusive of any non-spendable, restricted, committed, or assigned amounts.


Special Revenue Funds – By definition, Special Revenue Funds are created to account for the proceeds of specific revenue sources (other than expendable trusts or for major capital projects) that are legally restricted to expenditures for specified purposes. As such, no specific reservation of fund balance is created by virtue of enactment of this ordinance; rather the amount of any reservation of fund balance shall be governed by the legal authority underlying the creation of the individual fund. Except for the funds listed on the table above.


Enterprise Funds – The City has created five Enterprise Funds to account for the following services: Cemetery, Sanitation, Utility, Utility Impact Fee and Stormwater Management. In the Enterprise Funds, there will be a reservation of retained earnings of no less than one to two months of regular operating expenditures for each fund if that specific fund is not mentioned on the table above.


For the purposes of this calculation, the current fiscal year budget shall be the total budget as originally adopted by ordinance in September. This budget shall be prepared on the modified accrual basis of accounting, and therefore includes such items as capital outlay and operating transfers out. This reserve shall be in addition to all other reservations of retained earnings, including but not limited to amounts reserved for debt service and/or amounts reserved for renewal and replacement of long-lived assets.


Internal Service Funds – The City has created three Internal Service Funds to account for costs of ensuring the City in the areas of General and Auto Liability, costs of providing Workers’ Compensation insurance coverage to employees of the City and Fleet Services. In the Internal Service Funds, a reservation of retained earnings is guaranteed in an amount necessary to ensure that unreserved retained earnings in the fund as of the end of each fiscal year is greater than or equal to zero. A provision in the budget ordinance has set a floor for each of the Internal Service Funds as listed on the table above.


Revenue Policies

The City endeavors to maintain a diversified and stable revenue system to shelter from unforeseeable short-run fluctuations in any single revenue source.


The City estimates its annual revenues by an objective, analytical process. The City will project revenues for the next year and will update this projection annually. Each existing and potential revenue source will be re-examined annually.


Each year, the City will recalculate the full costs of activities supported by user fees to identify the impact of inflation and other cost increases.


The City Commission provides authority for the use of unpredictable or one-time revenues, such that these revenues are not relied upon for ongoing expenditures. The City conservatively projects difficult to predict revenues such as building permits for new construction based on high probability of receipt.


The City Commission identifies the way fees and charges are set and the extent to which they cover the cost of the service provided. This is accomplished in revenue meetings held with the City Manager and Department Directors, in which all fees are reviewed and the level of cost recovery plus a reasonable cushion is determined and submitted to the City Commission for approval. Costs which are not recovered are documented and fully disclosed to the City Commission in the budget workshop sessions held with public participation. In simple language, if the reserves are necessary to balance a segment of the budget, this will be disclosed.


Debt Management Policies

The City’s primary objective in debt management is to keep the level of indebtedness within available resources and debt limitations established by state law. In this regard, the City continues to act very conservatively and tries not to obligate current resources. In November of 2014, the citizens voted for a $57.5 million General Obligation Bond to improve and construct additional parks around the City. Implementing this program is now well underway.



The City has a general obligation legal debt limitation not to exceed 10% of total assessed valuation of the taxable property within the City boundaries. The current calculated general obligation debt limit is $655,444,515 and the balance of the GO debt as of September 30, 2022 is $49,590,000.


For the first time in the City’s history, in FY 16 the City has obtained a financial credit rating. The City issued two (2) bonds in FY 16, the GO Bonds, and the Capital Improvement Revenue Bond. The issuance of the GO Bonds in June provided the capital resources to complete the Parks Master Plan, which was approved through a referendum held in November 2014. Fitch Ratings and S&P Global Ratings have assigned the GO Bonds a rating of AA+ and AA, respectively. The Capital Improvement Bond were issued for the refunding of the 2007 Series A Revenue Bonds to take advantage of lower interest rates and to provide funding to build the Main Fire Station. The assigned rating to the Capital Improvement Bonds from Fitch Ratings and S&P Global Ratings were AA and AA-, respectively


The City issued General Obligation (GO) Bonds, Series 2016 on June 21, 2016 in the amount of $57,500,000. The GO Bonds were issued for the purpose of funding the costs of construction, expansion, renovation and improvements of City-wide parks and recreation facilities in accordance with the City’s Parks Master Plan. The bonds bear interest at rates ranging from 3.00-5.00% and are to be repaid from ad valorem revenue. Interest is to be paid semi-annually on January 1 and July 1 of each year; and the first principal payment was due on July 1, 2017 and each July 1 thereafter until the maturity date of July 1, 2046.


The Revenue Bonds, Series 2007A were issued for the purpose of financing the acquisition of park land. The bonds were refunded in FY 15/16 and are now known as “Capital Improvement Refunding Revenue Bonds, Series 2016” with an issuance date of June 29, 2016. The bonds are not a General Obligation Bond. The interest rates are ranging from 4.00-5.00% and are to be repaid solely from non-ad valorem revenue. Principal is payable annually on October 1 with the first payment due October 1, 2018 and interest is to be paid semi-annually on April 1 and October 1 of each year. The bonds mature on October 1, 2027.


In addition to the refunding of the Revenue Bonds, Series 2007A, an additional $8,270,000 for the construction of the Main Fire Station was added to this issue. The bonds are not General Obligation Bonds; bear interest at rates ranging from 2.00-5.00% and are to be repaid solely from non-ad valorem revenue. Principal is payable annually on October 1 with the first payment due October 1, 2017 and interest is to be paid semi-annually on April 1 and October 1 of each year. The bonds mature on October 1, 2035.


A summary of annual debt service requirements as of September 30, 2023 is as follows: