The City of Lauderdale Lakes
Lessons Learned from the
City’s Financial Storm
Managing a City Through a Financial Crisis….
1
Broward League of Cities
April 16, 2015
Jonathan K. Allen, MPA
City Manager
Presentation Overview
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City of Lauderdale Lakes Facts
The Perfect Storm
– Declining Taxable Value
– $9.0 Million Public Safety Debt
– Heighten Public Scrutiny and Lowered Public Trust
Visual Success Rather Than Failure
Development & Execution of a Strong Budget and Financial Plan
Don't Let a Good Crisis go to Waste
Tune Out the Noise and Criticism
Performance Over Politics
City of Lauderdale Lakes Overview
Style of Government
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Mayor – Commission – City Manager
Population
City’s Total Area (Sq. Miles)
Housing Stock
3,000 Multi-Family
7,000 Condo
4,283 Single Family
32,593
3.64
14,283
21%
49%
30%
CRA Area (500 acres/.8609375 sq. miles) 24%
Commercial Base
15%
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City of Lauderdale Lakes Facts
Trend History – Millage Rate
Millage Rate
Style of Government
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10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
9.50
6.50
5.43
7.00
5.76
Fiscal Year
9.50
9.50
8.95
Taxable Value (Millions)
City of Lauderdale Lakes Facts
Trend History - Taxable Value
1600
1400
1200
1000
800
600
400
200
0
1354
1232
1073
849
Fiscal Year
5
789
765
796
829
City of Lauderdale Lakes Facts
The Public Safety Factor - $9,021,129 Debt
Repayment Agreement:
Broward Sheriff’s Office Police and Fire Services
The City has entered into a repayment agreement with Broward Sheriff’s Office (“BSO”) for the repayment
of past due consideration for public safety services. Payment of the balance is due semi-annually with a final
lump sum payment due in April 2016. Annual interest is at a rate determined by BSO using the Annual
County Pooled Cash Rate percentage of September 30, 2013. The outstanding balance on the obligation as of
September 30, 2013 was $ 7,021,129. Future payments are due as follows:
Year Ending September 30
2014
2015
2016
Thereafter
$
1,300,000
1,450,000
4,271,129
NONE
$ 7,021,129
**Renegotiated Balance Request to Reduce BSO Debt by 50%
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Public Safety - Police
Police FY 2015
Fiscal Year
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
Consideration
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Ad Valorem
5,656,960
5,928,821
6,398,735
7,570,281
7,884,143
8,476,030
7,771,800
8,571,800
6,124,340
5,936,046
6,326,095
6,636,966
4,896,556
5,021,921
5,606,130
6,784,525
6,305,387
5,904,614
5,984,871
5,614,744
6,627,873
6,214,294
6,470,930
6,183,605
# of Positions,
incl. grant
65
65
69
77
73
73
70
70
47
47
49
50
percentage
116%
118%
114%
112%
125%
144%
130%
153%
92%
96%
98%
107%
Start of Financial Crisis, lost opportunity to restructure contract
Height of financial crisis
BSO As Percentage of Ad Valorem
10,000,000
180%
9,000,000
160%
8,476,030
8,000,000
153%
144%
8,571,800
7,884,143
7,570,281
7,000,000
125%
118%
116%
6,000,000
114%
6,398,735
5,656,960
5,928,821
112%
6,784,525
7,771,800
120%
6,627,873
6,214,294
6,470,930
6,305,387
5,606,130
5,904,614
5,000,000
4,896,556
140%
130%
5,614,744
6,124,340
5,021,921
5,936,046
100%
98%
96%
92%
5,984,871
107%
6,326,095
6,636,966
6,183,605
4,000,000
80%
60%
3,000,000
40%
2,000,000
20%
1,000,000
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0
0%
FY 2004
FY 2005
FY 2006
FY 2007
Consideration
FY 2008
FY 2009
Ad Valorem
FY 2010
FY 2011
# of Positions, incl. grant
FY 2012
percentage
FY 2013
FY 2014
FY 2015
Public Safety - Fire
Fire FY 2015
Fiscal Year
FY
FY
FY
FY
FY
FY
FY
FY
Consideration
2008
2009
2010
2011
2012
2013
2014
2015
# of Positions,
incl. grant
49
49
49
49
49
44
45
50
Assessment
6,226,818
6,502,425
6,864,758
6,416,937
6,815,189
6,725,780
6,948,618
7,612,778
2,841,496
3,190,279
3,210,669
3,222,812
4,077,295
4,424,031
5,704,875
5,910,770
percentage
219%
204%
214%
199%
167%
152%
122%
129%
Audit of FY 2012 Found $1M overpayment
BSO As Percentage of Ad Valorem
8,000,000
250%
219%
7,000,000
6,000,000
6,226,818
7,612,778
214%
204%
6,815,189
6,864,758
6,502,425
6,725,780
199%
200%
6,948,618
6,416,937
5,910,770
167%
5,000,000
152%
4,000,000
4,424,031
5,704,875
150%
129%
122%
4,077,295
3,000,000
3,190,279
100%
3,210,669
2,841,496
3,222,812
2,000,000
50%
1,000,000
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0
0%
FY 2008
FY 2009
FY 2010
Consideration
FY 2011
Assessment
FY 2012
# of Positions, incl. grant
FY 2013
percentage
FY 2014
FY 2015
Broward County OIG Findings
“Gross Mismanagement of Public Funds”
February 2012
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City went from $6 Million in General Fund reserves to
being unable to pay for BSO public safety services
CRA funds were improperly used for City operating
expenses.
Former Finance Director inflated revenue estimates of
over $18 Million
City revenue streams were over-estimated in disregard
for economic data that showed revenue decreasing
City revenues were declining and expenses were not
being reduced
Broward County OIG Findings
“Gross Mismanagement of Public Funds”
February 2012
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The City Manager was responsible for proposing the
Budget but delegated the task to the former Finance
Director
In FY2008, the City’s total fund balance declined
from $6.3M to $4.4M or by 29.6%
In FY2009, the City’s fund balance declined from
$4.4M to $921,853 or by 79.4%
In FY2011, the City owed BSO $9M for public safety
services and the CRA $2.5M
City Management & City Commission didn’t monitor
and manage it’s budget effectively
New City Management Team Response
First 100 Days Into Recovery – Sept 2011
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Imposed a hiring freeze
Implemented a 10% across the board salary
reduction and 3% retirement reduction
Negotiated/Executed a new debt repayment plan for
$9M owed to BSO for public safety services
Negotiated/Executed a Forbearance agreement for
$2.5M owed to the CRA
Consolidated City Departments to realize cost
savings
New City Management Team
First 100 Days Into Recovery – Sept 2011
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Held Training Session on Understanding Municipal
Financial Management for City Officials
Established & Maintained Open Communication with
External Stakeholders
Cooperated with State’s Joint Legislative Auditing
Committee and Broward County Auditor to complete
external assessments of the City’s financial condition
Established New Monthly Financial Reporting
Format and Regular Budget Reports
Visual Success Rather Than Failure
4 Year Performance Measures
FY 2010
FY 2011
FY 2012
FY 2013
Government Wide
Total Net Assets:
Total Cash and Cash Equivalents:
20,814,900.00 20,205,763.00
18,147.00 1,725,412.00
24,051,959.00
30,859,631.00
5,303,554.00
6,930,087.00
11,339,121.00 10,306,950.00
-1,415,269.00 -4,853,499.00
10,493,401.00
13,831,552.00
1,045,437.00
4,418,132.00
3,550,387.00
3,863,443.00
3,344,620.00
-1,396,103.00 -1,735,562.00
33,336.00
18,147
384,410.00
243,410.00
2,361,890.00
2,140,436.00
Governmental Funds
Total Fund Balance (All Funds)
General Fund
CRA Trust Fund
Fire Rescue Fund
Total Cash & Cash Equivalents
3,442,513.00
Proprietary Funds
Total Net Assets
3,775,416.00
1,888,287.00
3,775,416.00
6,015,475.00
Stormwater Fund
2,754,715.00
1,390,683.00
2,754,715.00
4,146,140.00
Solid Waste and Recycling Fund
1,080,174.00
907,831.00
1,080,174.00
1,691,666.00
Financial Indicators Overall Rating Favorable as compared to the Benchmark Group.
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Development & Execution of a
Strong Budget & Financial Plan
Action Items in Dealing with Financial Crisis….
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Developed a Balanced and Conservative Budget
Developed 5-Year City Financial Plan
Adopted City Financial Integrity Principals and
Financial Procedures
Produced Monthly Financial Reports by the 15th day of
each month
Completed Budget Transition to GASB Requirements
Coordinated Comprehensive Budget & Purchasing
Management Workshops with Facilitators
Dr. Lee facilitating City’s Financial Training Session on
Understanding Municipal Financial Management
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Don't Let a Good Crisis Go to Waste
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Dollar Tree Stores
Auto Zone Store
Two Race Trac Developments
Florida Medical Center & Infastructure
Investments
American Land Ventures
–
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$50 million Multi-Family Development
Performance Over Politics
FY2013 Budget Summary
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Adopted budget with a City property tax rate of 9.50 mills
Budget continued the City sound budgeting practices in accordance with generally
accepted accounting principles (GAAP) including conservative revenue streams
Budget Trend: Reduction in overall property tax millage rate of -3.11% from the roll
back of 9.8046
Provided funds for law enforcement, emergency medical services and fire rescue
services through BSO
Adopted fire assessment fee to pay for operating and outstanding debt costs
Budget provided for the replenishment of Fund Balance of $211,489
Budget included a slight increase in the tax rate for the voter approved 2005
General Obligation Bond due to increase in the debt service
Funded CRA Forbearance payment in the amount of $150,000
Funded BSO repayment in the amount of $1,184,500, including interest
Performance Over Politics
FY2014 Budget Summary
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Adopted budget with a City property tax rate of 9.50 mills
Budget continued the City sound budgeting practices in accordance with generally
accepted accounting principles (GAAP) including conservative revenue streams
Budget maintained a reduced City workforce and implemented cost effective
service delivery models
Provided funds for law enforcement, emergency medical services and fire rescue
services through BSO
Adopted fire assessment fee with increased revenue to cover operating and
outstanding debt costs
Budget included a slight increase in the tax rate for the voter approved 2005
General Obligation Bond due to increase in the debt service
Funded CRA Forbearance payment in the amount of $150,000
Funded BSO repayment in the amount of $1,410,475, including interest
Performance Over Politics
FY2015 Budget Summary
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Adopted budget reduced the City property tax rate from 9.50 mills to 8.95 mills
Continued the City sound budgeting practices in accordance with generally
accepted accounting principles (GAAP) including conservative revenue streams
Received $125,000 Federal COPS Grant to fund a School Resource Deputy
positon
Funded general government services including parks and human services,
development services, public works, and other municipal services at current levels
Funded law enforcement, emergency medical services and fire rescue services
through BSO and related BSO debt obligations
Modified fire assessment fee to include a multi-family category
Continued effective use of City resources
Funded infrastructure and capital improvement projects within the City
Funded the continuation of economic and community development initiatives
Continued improvements to the City’s overall financial condition
Performance Over Politics
Grant Awards
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$750,000 FEMA Grant for Emergency Operations Center
$400,000 County Recycling Grant
$1.5 million SAFER Grant to restore Fire Services
Positions
$521,000 CDBG Grant for Comprehensive Park
Improvement
2013 COPS Grant for $250,000 to fund two School
Resource Officer Positions
2014 COPS Grant for $125,000 to fund a School
Resource Officer Position
Proposed FY 2015
Assessment Rate Comparison
Millage
Fire
Assessment
Stormwater
Assessment
Solid
Waste/Recycling
Assessment
City of Lauderdale
Lakes
8.9500
$ 302.60 (res)/
$378.25 (multi)
$ 132.00
$ 280.80
City of Lauderhill
7.3698
$ 388.00
$ 162.36
$ 237.84
City of Oakland Park
6.4315
$ 196.00
$ 72.00
$ 255.00
City of Tamarac
7.2899
$ 265.00
$ 121.87
$ 273.75
**Information available as of July 2014
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FY 2015 Rate & Per Capita Comparison
Millage
Population
Taxable
*Per Capita
Levied
(2011 Population Estimates)
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Value
Total Taxes
Lauderhill
7.3698
66,709
$1,940,295,798
$214
Lauderdale Lakes
8.9500
32,766
$829,495,272
$227
West Park
8.9200
14,078
$371,744,173
$236
Weston
2.3900
65,237
$7,082,007,793
$259
Margate
6.5261
53,714
$2,242,395,006
$272
Tamarac
7.2899
60,619
$2,741,474,787
$330
Oakland Park
6.3995
41,459
$2,379,597,572
$367
Lighthouse Point
3.5893
10,377
$1,884,891,938
$652
Southwest Ranches
4.6607
7,345
$1,191,355,934
$756
Pembroke Park
8.5000
6,099
$575,451,918
$802
Lauderdale-By-The-Sea
3.8000
6,074
$1,933,633,651
$1,210
Hillsboro Beach
3.8000
1,875
$1,057,227,189
$2,143
*Per Capita –
per unit of population; by or for each person
**Information available as of July 2014
Positive Outcomes from having a
Strong Budget & Financial Plan
Fiscal Year FY 2014/2015 Financial Trends
Factors
Financial Condition
Improving
Business Development
Improving
Outstanding BSO Debt
Decreasing
Cash Balance
Increasing
Capital Investment
Increasing
Property Values
Improving
CRA Debt
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Trend in 2014/2015
Decreasing
Lessons Learned
Managing a City Through a Financial Crisis
Increasing property taxes
 Reduced Taxes from 9.5 to 8.95
Reducing salaries and benefits
 Restored salaries and benefits
to pre-crisis levels
Closing City Facilities
 Re-opened facilities to limited
programming
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Eliminating or Changing Services
 Implemented the hybrid model
for service delivery
Selling Assets
 Re-evaluated and no longer
needed
Reducing the Workforce
 The City is maintaining current
staffing level
State Intervention – AVOIDED!
 The City continues to provide
monthly financial information
but it is no longer required
Closing Remarks
Managing a City Through a Financial Crisis
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The City will continue to monitor the Taxable Value Trends
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Monitor and Manage Public Safety Costs
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Participate in Financial/Budget Training Workshops
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Active City Manager involvement in the Budget and Audit Process
Questions
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