To fill COVID-19 gap, Miami Beach dips into reserves and plans reduced trolley service

Laveta Brigham

In order to balance its budget for the upcoming fiscal year, the city of Miami Beach will use about $8.5 million in reserve funds and continue cost-cutting measures it began at the onset of the coronavirus pandemic. The City Commission passed the operating budget Tuesday evening after facing a $32 […]

In order to balance its budget for the upcoming fiscal year, the city of Miami Beach will use about $8.5 million in reserve funds and continue cost-cutting measures it began at the onset of the coronavirus pandemic.

The City Commission passed the operating budget Tuesday evening after facing a $32 million budget gap caused by COVID-19 losses and an additional $6 million gap due to projected decreases in property values.

On top of hiring restrictions and expenditure freezes enacted months ago, the City Commission voted to renegotiate contracts to save about $5 million, reduce public trolley service to the tune of $5 million in savings and trim about $800,000 in police overtime costs. To address immediate pandemic-related impacts, the city used $2.8 million in reserves during the current fiscal year.

The city suspended its free trolley program in March and has not announced when service will resume. Under the new budget, its fleet will be reduced to 15 from 25 vehicles and the frequency of its stops will increase to 30 minutes from 20 minutes. The new hours of service will be 8 a.m. to 9 p.m., and the city will eliminate the 11th Street Loop and modify the Belle Isle Loop.

“It is important to note that trolley vehicle assignment, service frequency, and service hours will be subject to change based on demand, and the service levels could be increased incrementally, depending on budget availability,” City Manager Jimmy Morales wrote in a memo to the commission. “The Administration is currently pursuing dedicated Freebee service for seniors.”

The $328 million operating budget also includes the elimination of 45 full-time positions, including 40 in the parking department. All employees affected by the layoff were offered new jobs with the city, but 17 parking employees either declined or did not respond to the city’s offer, according to a city presentation. The city administration withdrew its proposal to privatize some of its enforcement resources and instead the City Commission voted to earmark $1.2 million in reserve funds to keep on the 17 employees for one year.

Several parking employees, including some who remain on furlough, called into Tuesday’s meeting to tell the commission they can make the department financially viable.

“I do appreciate the help and the thought given,” said longtime parking officer Manuel Lago. “All I’m asking is for us to have a chance to get on track.”

Citywide, as many as 49 full-time workers and 192 part-time employees remained on furlough as of July, Chief Financial Officer John Woodruff said.

While the city’s operating millage rate will remain flat, the average homesteaded property owner will see a $286 annual tax increase associated with the voter-approved general obligation bond program that passed in 2018.

Next year, without the benefit of an unusually high $1.3 billion in new construction projects, Woodruff said the city could see a $10 million gap due to worsening property value trends.

“It saved our behinds this year that we had so many projects come online,” said Commissioner Ricky Arriola at a June meeting of the Finance and Economic Resiliency Committee, which he chairs. “But to the extent that we delay or don’t approve new economic development, future years are going to be that much more difficult.”

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