Homestead Budget Workshop Seeks Savings and Federal Money

Homestead Mayor Steve Losner opened the City’s first budget workshop on Thursday July 9 with all Councilmembers attending online.

Councilmembers had been briefed with copies of the preliminary City budget.

Mayor Losner first asked City Development Director Joe Corradino who is also the Mayor of Pinecrest, to report on a League of Cities coalition meeting with County Mayor Gimenez.

Corradino said $470 million from the federal CARES Act was available to the County, covering shortfalls due to the COVID pandemic. The cities want a portion of that to cover their COVID losses. The issue in dispute was the methodology to use for distribution.

“At first the (County) Mayor didn’t want to release anything,” said Corradino. “It was decided to share on the basis of population, although that tends to double-count the unincorporated parts of Miami-Dade. We can fight about that later.”

“The money must be distributed within the parameters of the formula based on the meeting this morning,” said Mayor Losner. “If cities get 57% of their (shortfall) on a per capita basis, with a population of 75,000 Homestead could get $13 million. The County has not yet ceded that issue of splitting the (federal) money in half.”

“Correct – we’re still talking,” said Corradino. “Getting the money without an agreement, we’d have to ask the feds to keep it. The fear is the County will spend the money before we can agree on a distribution.”

For budget preparation, Mayor Losner said he read program proposals from all Council and from staff. “Unfortunately, all ideas cost money,” said the Mayor. “We’re in a position of looking for coins in the sofa cushions.”

He said Council would be asked to set the millage rate upon which taxes are based after discussing the issues. City budget hearings are set for September 8 and September 23.

Homestead’s Finance Director Carlos Perez’s July 14 memo to Council said a budget gap was expected this year.

Keeping the millage rate the same would wipe out any additional tax revenues from increased property values, due to the gap.

Staff recommendation was for Council to approve a millage rate for 2021 between the current rate (including library tax and debt service) of 6.2055 and the state-controlled maximum cap of 10 mills. More information should be available about any state and federal assistance and possible expense reductions for the City’s final budget hearing when the millage rate could then be determined.

“We have the potential to meet our debt service this year with some drastic deductions,” the Mayor asked the staff. “We’re not at risk of defaulting on any debt service.” Staff assured the Mayor that was correct.

City Manager Cate McCaffrey said, “Based on estimates we have, we know there’s going to be a significant gap at the end of this year. Very early on in this COVID situation, we closed all but essential services, deferred all capital projects – about $600,000 worth – and the last several weeks we’ve cut overtime to about 50% of pre-COVID numbers.”

“The Mayor says I’m an optimist,” said Manager McCaffrey. “We expect $5.7 million from the County Commission later this month thanks to continuing efforts by our lobbyists and the Mayor. A meeting was held with our Mayor, Congresswoman Debbie Mucarsel-Powell, Senators Rubio and Scott about (assistance). These (federal legislators) actually assigned personnel to come to City Hall and work with our staff to process our $10 million claim for Hurricane Irma reimbursement.”

“Then of course there’s the $470 million in CARES funds and we expect some of that money,” she continued. “We’ve taken a lot of steps to address the problem and I’m confident we’ll see some of that money coming in; it’s very encouraging.”

Mayor Losner added that the COVID losses were significant in terms of budget hits to City planning going forward.

Mayor Losner spent the majority of the meeting going through the draft budget looking for further potential savings and questioning proposed expenditures. He questioned fuel allocations, telephone usage, election costs, the Seminole Theatre contract, as well as CRA expenses.

Staff explained all planned costs and also presented a tutorial on how New Market Tax Credit revenues impacted the financing of Homestead’s downtown revitalization.

“Have all contingencies been swept over to cover the $1.7 million in police overtime as a result of COVID that was not budgeted?” the Mayor asked. “Tell me how we covered this.”

Staff described these funding sources from grants, FEMA reimbursement, and other federal relief. Because 2020 budgets are still operating, staff was confident there was sufficient money to cover already expended overtime costs.

“We’re not going to borrow the money,” said Manager McCaffrey.

“It was money well spent as it saved lives and its effects were quite evident.”