--- OCR page 1 of 58 --- M City of Vision, Spirit & Opportunity PO Box 1288 129 5" Ave NW Miami, OK 74355-1288 Ph: (918) 542-6685 Fax: (918) 542-6845 www.miamiokla.net FY 2014-2015 Administration Report Details on budget and status report on programs, projects, and assignments Prepared by: Office of the City Manager (May 2014) --- OCR page 2 of 58 --- TABLE OF CONTENTS City of Miami Organization ere) City of Miami Organization Chart cessed FY 2014-2015 Budget Message 2... 5-8 FY 2014-2015 Budget Highlights ....9-10 Page 2 --- OCR page 3 of 58 --- M City of Vision, Spirit & Opportunity City of Miami Organization Mayor Rudy Schultz Council Members Vacant — Northeast Ward | Doug Weston — Northwest Ward 2 Neal Johnson — Southwest Ward 3 Joe Sharbutt — Southeast Ward 4 Legal Department David Anderson — City Attorney Krista Duhon — Paralegal Department Heads Community Development — Chuck Childs Fire — Ronnie Cline Tourism — Amanda Davis Police — George Haralson Finance/Customer Service/Court — Lindsay Schnakenberg Library — Marcia Johnson Emergency Management — Glenda Longan Facilities/Technical — Kevin Browning Information Technology — Mike Richardson Public Works — Joe Waldon Human Resource — Kristi McClain Cemetery/Airport — Kim Horn Administration City Manager/City Clerk — Jeffrey Bishop Deputy City Manager — Jill Fitzgibbon Page 3 --- OCR page 4 of 58 --- 13] 3 3 18 i fells {| ¢ i<| : gre |i 4 LJ E Hy i u E allel] E B 5 # : LE . & P ae = g 3 g zi ss 2 || a8 i § Ell .il| é i 2 & |ensn: 7 ie z 22 z 2 8 =|| 2 : = ii 2 FE °o 2 . Brel] 2/3 --- OCR page 5 of 58 --- Mayor Rudy Schultz Jeffrey T. Bishop, City Manager Councilman Kristi McClain, Wand 1 David Anderson, City Attomey Councilman Doug Weston, Ward 2 Councilman Neal Johnson, Wand 3 Councilman Joe Sharbutt, Ward 4 CITY OF MIAMI, OKLAHOMA BUDGET MESSAGE FY 2014-2015 May 20, 2014 To: Honorable Mayor and Members of the City Council and the Citizens of the City of Miami For almost three decades I have been preparing budgets of some form or fashion. During those years it was common for me to name the budget or ascribe some type of theme for the budget. Contained herein is my 3“ budget for the City of Miami. This year being no different we are identifying this years’ theme as “all caught up.” And while there is plenty left to do in Miami we have reached a level of completion and restoration that deserves mention and reflection. When I was hired by the City Council in 2012 the municipal organization had many unique challenges. The City in essence was under siege by both outside and internal forces. Of particular concern was both litigation from citizen groups and former employees. In essence the City’s administrative capacity was strained as it also was subjected to a Special Audit from the Oklahoma State Auditor’s Office. This audit initiated by citizen petition was targeted at many of the business practices of the organization and alleged improprieties. But these were not the only challenges facing the city. The City was in a financial conundrum with declining revenues and an erosion of fund balance in the City’s major funds. Deficits were also building within the City’s self-insured health plan and in its self-funded retirement program. Since completion of my first budget with the City of Miami, we as an organization have processed and worked through most of these issues. The remaining issues have digressed to a manageable point. Specifically, all but one lawsuit with former employees have been resolved. The citizen initiated qui tam suit has been assigned to another jurisdiction for consideration. At issue is whether or not the statute of limitations has expired, regardless the prognosis for the City is positive. Each major subject outlined in the Special State Audit have been corrected or addressed. The City has new guidelines for procurement of capital improvements that have resulted in three cycles of error free contracting. The City’s street improvement program funded by a voter approved $0.65 sales tax will successfully come to a close this fiscal year. The City has successfully completed a number of other capital projects without complication. This includes the $8.8 million Red Robertson Event Center project which has been developed using the Construction Manager at Risk process and with the assistance of the Long Range Planning Department at Oklahoma State University. To date this project has progressed within budget and without serious imposition to Page 5 --- OCR page 6 of 58 --- either Northeastern Oklahoma A&M College or the Miami Public School District. Once completed. this fall, the facility will not only represent a fine example of the cooperative spirit in Miami it will also leave an undeniable impact on the City’s skyline. This budget also represents the second budget to see real growth in the City’s major fund balances. The FY 2012-2013 budget projected ending fund balances in the City’s main funds of approximately $6 million but this year’s fund balances have risen to slightly over $11 million by the 3" quarter -- resulting in an 84% increase in financial reserves. The projected beginning fund balance for those same funds in the FY 2014-2015 budget however is just slightly over $10 million dollars. The decline between the 3“ quarter’s ending fund balances and the beginning fund balances for FY 2014-2015, while appearing significant, also represents a major improvement in the City’s financial well-being. By the 3" quarter of FY 2013-2014 the deficit in the City’s self-funded health plan had almost approached a million dollars. The overall increase in the City’s reserves has allowed for a transfer to alleviate the deficit in its entirety while still protecting a respectable investment base for the City. This year’s budget reflects the first time that fund will begin the year with a positive fund balance. As for reserves this past year the City Council by ordinance officially created three reserve accounts and those accounts will total over $6 million in the FY 2014-2015 budget. Half of those funds are set aside for major infrastructure failure and the third is designed to offset a major revenue shortfall. History has shown us in Miami that disaster is unfortunately just around the corner. Lessons learned from the 2007 Miami flood and the 2011 Joplin tornado disasters is that the City’s revenues could suffer a major and unforeseen disruption second only to the harsh impact it would have on our affected families. The Special Audit also targeted the City’s self-funded retirement system. Before completion of the audit, however, the City successfully merged the pension program into the Oklahoma Municipal Retirement Fund (OMRF). This transfer not only provided the employees with a better plan it successfully transferred liability for investment performance from individual council members to the trust officers at OMRF. That liability created a conservative approach to investing the reserve funds for the pension. As a result, low yields produced by so called safe investments were not keeping pace with actuarial prescription. The plan had become underfunded. While the plan remains underfunded it has experienced improvement since the transfer. Investments in the pension fund in the previous year produced only 1% in return on investment (ROI). This past year the plan realized a ROI of slightly under 9%. The resulting effect was a lower than normal increase in the amount of supplemental funding required to support the plan. The attached budget also provides more funding for capital improvements. For the past few years the budget has provided for $500,000 to be transferred to the Street and Alley Fund. This year’s budget continues that trend but increases the amount transferred to $1 million per annum. At the end of this proposed budget’s life, the fund balance in the Street and Alley fund should exceed $2.5 million. This is in addition to the fund balance growth in the major funds as previously described. This allocation of funding is testimony to the governing body’s commitment to continue street improvements after completion of the voter approved street improvement program. Another concern raised in the Special Audit was the structure and management of the Miami Downtown Redevelopment Authority (MDRA). The audit was critical of the City’s lack of financial oversight in the management of the trust. Since then the City and the Board of Trustees of Page 6 --- OCR page 7 of 58 --- the MDRA have agreed to a reorganization of the trust that included seats for two council members on the board and designated the city manager as the ex-officio trust manager. This move allowed the City more direct input into the governing of the trust and allowed for inclusion of the day-to-day operation of the Coleman Theatre Beautiful and the Coleman Ballroom into the City’s organization. This month, a new managing director was selected for the Coleman Complex and the MDRA is projected to finish FY 2013-2014 within budget and without need for a year end infusion of cash. Revenues for FY 2014-2015 are generally projected as flat. In fact this year’s total budget of $77,657,635 is almost $200,000 smaller than last year’s budget. Yet operating margins continue to improve thus the increase in fund balance. This effect represents the product of the governing body’s priorities and goals. In FY 2012-2013 the City of Miami plotted a course through the “C’s of Change.” Core to these goals was the creation of financial capacity. The comer stone of this effort was the voluntary reduction in workforce created via an early retirement offering and the subsequent reorganization of the Public Works Department to a pooled labor base. These changes continue to produce positive operating margins. This work will continue with the delivery of new solid waste trucks this year reducing crew size by 67%. Another contributing factor was the decision to contract out our peak workload eliminating the need to over staff. Two paths are open to municipal organizations when attempting to develop financial capacity. The easiest path is to spend less, yet it has an effectiveness ceiling. The primary function of a municipal organization is service delivery. To that end spending constraints face the law of diminishing returns. The other option is to increase revenue. But with the political culture of Oklahoma a tax increase is not only unlikely it is totally unpalatable to the governing body. Therefore the most logical approach to increase revenue is to focus on growing the economy. The FY 2014-2015 Budget includes up to a quarter of a million dollars for economic development purposes. Two councilors and the city manager have been engaged in a dialogue with key members of the business community on economic development. The product of this dialogue is the potential formation of a consolidated effort at business recruitment, retention and expansion. While still in its infancy, the process does show great promise. However, the city council remains committed to improving our capacity and accordingly these resources will be available to affect financial growth even if this discussion fails to produce a workable product. In conclusion it is my special pleasure to present the FY 2014-2015 Budget as a balanced and progressive plan to meet the goals and objectives of the City of Miami. Respect ey P; City Manager Page 7 --- OCR page 8 of 58 --- Budget Highlights The following are highlights of the proposed budget: e° General Fund (GF) co The General Fund Transfers: = The total of the 3.65% sales tax ($6,000,000) the City collects will be transferred into the Miami Special Utility Authority (MSUA) for debt service and debt coverage requirements, all but the voter approved .65% sales tax will be transferred back to the General Fund ($4,931,507) plus $1,700,000 for operating costs. o Salaries and Benefits: = The proposed budget provides $550 per employee per month for health insurance; this is up $10 per employee per month. = Retirement contributions are budgeted at 13.22% of enumeration which is up from .4% in the FY 2013-2014 budget. o Contracted work with outside organizations is budgeted at $174,550. © Property insurance rates are projected to rise from $372,060 for FY 2013-2014 to $400,000 in the proposed budget. o In FY 2013-2014, $1,722,912 was transferred to the general fund for operating costs; for FY 2014-2015, $1,700,000 will be transferred. e Miami Special Utility Authority (MSUA) o Transfers: * $1,700,000 will be transferred out of this fund to balance the General Fund. = The total of the 3.65% sales tax ($6,000,000) the City collects will be transferred into the Miami Special Utility Authority (MSUA) for debt service and debt coverage requirements, all but the voter approved .65% sales tax will be transferred back to the General Fund ($4,931,507). o The budget includes: * $11,100,000 for the projected GRDA expense * $1,000,000 to the Street & Alley Fund, up $500,00 in FY 2013-2014 = $235,050 to the Utility Improvement Fund = $30,000 to the Health Insurance Fund «$775,000 to the Oklahoma Water Resource Board (OWRB) as a loan for the pretreatment plant = $800,000 to the Oklahoma Water Resource Board (OWRB) as a loan for water/sewer line replacement * $1,785,750 in capital improvement projects Page 8 --- OCR page 9 of 58 --- o The electric rates had their last incremental increase January 2014 although water, and sewer are scheduled for an incremental increase through 2019. ° Capital Outlays | Police Dept | $ 50,000 | To be decided by department head | Fire | § 45,000 | (4) SCBA $20k, (4) bunker gear $8k, saw $1.5k, pos pressure fan for E11 $2.5, i " computers both stations $5k, recliners both stations $4k, beds both stations $4k PD Dispatch $ 45,000 | 911 Board funding Metal to cover paint on St Barn $30k, St Barn HAVC unit $7.5k, mechanic shop Street $ 88,000 | door $7.5k, salt spreader $23k | SS Lr Cemetery $ 23,400 | copier $7.6k, Gator $10.8, paint fence $5k | remodel airport $25k, (40) tables $5k, (5) chairs $1.5k, video/audio mixer bd $5k, Facilities $ 65,500 | HD cameras for chambers $5k, Billing Ofc security $7.5, gates between buildings | $7.5k, tint or curtains for west windows $4k i $57,000 _| lease 2 mowers from R&R $25k/yr for 5 yrs, sand pro $32k | | Approved for almost the same $ in FY 13/14: Table with built-in power strips | Library $ 10,400 | $1.5k, seating for the Internet Café $1.3k, Multifunction copier $5.5k w/ coin op | $2.1k IT $ 75,000 | Cloud email $55k, Virtual Desktop $20k {+ | Phasing Stx $3.5k, High Voltage Tester $4k, 4x4 trk for mgr $30k, mini excavator | , | Elec $ 54,500 | $70k (lease 5 yr $17k/yr) [Row __| $ 4,200 | Pruning Stx $1.2k, Stumper teeth $3k Water Prod $32,500 | dump trk motor $10k, 4x4 supervisor trk $15k, hammer hd piercing tool $7.Sk i svc tool trk $90k (18k/yr for 5 yrs), (4) 12 volt pumps for leak repair $4k, (3) hyd Water Distrib : $ 38,100 | trash pumps $11.k, tapping machine $4.6k | sludge press belts $5.2k, polymer chemical feed pump $2.5k, elec actuator x2 | WW Treatment | $ 31,400 | $7.6k, press washwater pump $3k, solenoid valves for press x2 $1.6k, Kevlar tubes x2 $6k, 1 ton gantry crane $2.5k, convoyer replacement parts $3k | (2) 2 Cubic Yard Cans $10k, Solid Rubber Tires for Trash Loader $25k, Grapple Solid Waste $ 132,000 | Bucket for Skid Loader $7k, Pens for Animal Shelter $65k, Polycarts $15k, Office | Furniture and Fixtures Animal Shelter $10k | | GIS Current yrly subscription $12k + $4k Elec Module, Sanitary Sewer Meters & Comm Dev $ 45,000 | training - investigate 1&1 problem est $20K 1st yr, Joint proj w/ Co Assessor for i GIS $7k, document mgmt system - unknown cost $??? ° Rainy Day Fund © The FY 2014-2015 proposed budget maintains the Utility Repair & Replacement Reserve at $2,000,000 and Utility Emergency Reserve at $1,000,000. © The stabilization line item within this fund is budgeted at $3,106,340. Page 9 --- OCR page 10 of 58 --- Certification of Rainy Day Fund Balance for FY 14/15 By approval of Miami City Council on May 20, 2014, the Rainy Day Fund balance will be accounted for as follows: 1. Emergency Stabilization Management $3,106,340.00 2. Emergency $1,000,000.00 3. Repair and Replacement $2,000,000.00 These funds shall only be utilized in accordance with City of Miami Ordinance 1608. JO. Lh ) “yf Z li Cech ete €guncilmember Shdrbutt 7 ep Councilmember Vacant / _ ) A f & Cd do Oe, ATTEST: Councilme Weston Mayor S¢hfltz Jill Fitggibbon, Deputy City Clerk Page 10 --- OCR page 11 of 58 --- SPEREROREROREDRRERE| Bo dt ep lal (eVideg ey EPEAT] 3 z Hitt gle) aE PLETE IRE tds ; g | yee) | ae cn | PA ii y a2 PTET EPR) Fr CLELEELERL “doce BY TTY rASORRDPEERRGRRRGEEES LR Se BE a i, rly S| es reed PEEL T TY hi] iI | ul #8 PT an SRERORARERA ak ce klk a PY EEEEETH veg up eel ak PPR a a ed PPP HL] 4 deb) 6 8 ae] aa ELTA HIERIAALL a lai TH ROFPATARRERUTASIAMRUATE u Bey || AN PUOERGOREDRRODHGOREDA ae a ae ‘| AL. gels ig) | aan | 111 mut rid : eBay aa By THT hill Ht u 38, 13) | 8a) SSI rid ii] Hy q i iol| (ct Ia lel ke So bee avnenndin RACARRRRREE segegesaa” BEB FF = nnn Islas clcletzlelaletalclalate, sgaaiae | gis) || ig) lel le a< ac | alata ese WURREWEG 7 ae rf a,| 2850043 228 qREER? 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