Homestead Council met virtually as a Committee of the Whole on Tuesday July 14. The agenda included setting the City’s 2021 operating millage rate based on a proposed budget discussed at the July 9 workshop. Like many government units, Homestead faces a revenue shortfall because of COVID responses such as extended overtime and a reduction in income.
City Finance Director Carlos Perez released a memo to Council July 14 warning of the expected budget gap. He informed Council of the legal requirement to set a millage rate by August 3 or 4 in order to include it in property owner’s TRIM notices.
TRIM notices must be mailed by the end of August. TRIM reflects annual property taxes and fees based on assessed property values including all exemptions.
Director Perez advised Council that the millage was preliminary to be finalized at the September 22 budget hearing for the new 2020-2021 fiscal year starting October 1.
City Manager Cate McCaffrey both told Council final expense numbers should be available by September.
There also is uncertainty over how much revenue assistance Homestead would receive from county COVID assistance and federal relief.
Mayor Steve Losner led the discussion, saying, “We’re doing this backwards. Adopting a random number doesn’t require staff to ‘laser-focus’ on the budget. This is kicking the can down the road again without taking a hard look at what’s necessary.”
City Manager McCaffrey responded, “Our challenge is not knowing how deep an impact the loss of revenue is going to hit us.”
“To me it’s a philosophy of looking at expenses first when I do budgets, not looking at potential income,” said Mayor Losner. “I will not support anything in addition to that base rate that’s been proposed.”
Homestead’s current millage rate of 5.9215 has been used for several years garnering revenue increases through growth of local property values. That extra revenue will be wiped out this year because of COVID expenses causing the shortfall, according to Perez’s memo.
County library taxes of .2840 will be added to TRIM notices as a reallocation this year, not an increase in taxes. Base proposed millage is thus 6.2055% per $1,000 of value. Residents are charged a debt reduction millage of .4485 which will not change.
Perez advised a millage rate between 6.2055 and the state capped maximum of 10%. Once accepted, the City millage rate could be reduced but could not be increased City Manager McCaffrey said staff was focused on reducing expenses. “If in fact council decided it wanted body cameras or more staff, we take that into consideration. There’s a great cost to body cameras and it would be difficult to do.”
Mayor Losner said, “I want us to be lean without being mean.”
He said Council was not really setting a millage but a range of revenue to be expected. The Mayor thought it difficult to budget when significant CARES Act money may or may not come in.
Councilmember Larry Roth said he was not for raising taxes. “But we’re handcuffed by future unknowns,” he said. “We must work within the parameters and look at our true expenses. This gives us options once we learn in a few weeks what the shortfall will be.”
Councilmember Steve Shelley also was uncomfortable setting a specific millage rate. “We don’t have enough information in front of us and staff doesn’t. This is preliminary – that’s the reason for the range. There are some real monetary issues here caused by outside forces that are going to cause us to potentially change the millage rate.”
Councilmember Roth moved a preliminary millage rate of 10%, seconded by Councilmember Shelley, passed by Council six to one with Mayor Losner’s no vote.
Council unanimously appropriated $63,150 for an engineering study on possible changes to the City’s groundwater applications.
Public Works Director Julio Brea explained that Homestead is permitted to withdraw 10.5 mgd (million gallons a day) from the Biscayne Aquifer for the production of public water, a limit set by the South Florida Water Management District in 2007. This requires the City to purchase 1.9 mgd from Miami-Dade County to meet its needs. City pumps can handle 16 mgd for production from the eighteen City wells.
The feasibility study proposes repurposing a water well drawing 2.59 mgd from the Aquifer to cool a power plant generator. Raw water is then discharged into an unlined canal to return to the ground.
However, the City currently is not credited now for returned water. Mayor Losner said the City is at zero return credit. With construction of a rapid infiltration trench, the City can recharge the Aquifer and avoid discharging into a canal.
Director Brea assured the Mayor there was enough water to serve our current development pace. He explained water usage is managed on a regional basis. If more water is needed, it can be drawn from a deeper brackish aquifer that requires more treatment.
Councilmember Shelley asked if this project would free up enough gallons to increase the City’s water pressure. Brea said it would if successful because the system could fill to full capacity at elevation providing system-wide pressure.
The CDBG annual action plan to HUD was approved after discussion on the potential funding for local school programs. Councilmembers Jenifer Bailey and Patricia Fairclough-Staggers spoke in favor of this repurposing.
The City’s HUD consultant said passing community development money between agencies caused problems within the federal program. He also recommended using vendors that already vetted for CDBG money.
Council approved a Florida Department of Economic Opportunity infrastructure grant of $4.5 million to repair and upgrade the water system for Avocado Village damaged by Hurricane Irma. A hired grant consultant found the state program that exactly met the need of this western neighborhood.
A feasibility study of the Biscayne/Everglades Greenway Trail final three miles within the City was approved at a $62,200 cost. The 23-mile trail includes six miles within Homestead limits, in two separate projects of three miles each. The eastern section is ready for construction permitting. This western section would share City streets as it crosses town.