Miami Lakes residents won’t see their property rate tax increase if the proposed $20.7 million spending plan is approved for next year.
But the budget is lean, and if a hurricane strikes, it could have a serious impact upon town finances.
Which is why Town Manager Edward Pidermann asked the council to let him apply for a line of credit worth up to $20 million, or nearly as much as the budget.
“We’re going to suffer a cash flow problem should we get hit by one or two storms,” Pidermann said on Sept. 10.
Limited reserves and a delay by the Federal Emergency Management Agency in reimbursing Miami Lakes after Hurricane Irma in 2017 put the town in a tight spot.
And Hurricane Dorian’s destruction of the northern islands in the Bahamas over Labor Day weekend was a reminder of what could happen again here.
“Dorian was staring us right in the eyes,” Pidermann said. “Thankfully, Dorian spared us.”
Pidermann said Miami Lakes spent $4.5 million in clean-up and recovery costs after Hurricane Irma, and the federal agency only reimbursed the town $240,874 so far.
But that’s about to change.
“We hope to start receiving more money soon, the balance spent after Irma,” Pidermann said.
For future disasters including storms, Pidermann said he’s seeking the line of credit that will be drawn upon only if needed for costs related to hurricane damage.
It’s been a difficult task for Pidermann trying to balance his first budget as town manager.
Council members tentatively decided to keep the existing 2.31267 millage rate
A homeowner whose property is assessed at $250,000 would pay an estimated $550 in the town portion of his or her tax bill, based on the 2.3127 millage rate.
Overall those ad valorem taxes would generate about $7.3 million in revenues for the town.
Pidermann had to cut $500,000 to balance the proposed budget without raising taxes after the council rejected his plan on Aug. 27 to increase the FPL franchise fee —and utility charges on customers’ bills — from 3 to 6 percent.
Miami Lakes and the utility reached a 30-year agreement in which the town is expected to receive about $1.2 million a year.
However, those payments won’t begin until June 2020 and will only total about $390,000, leaving an estimated $800,000 gap, Pidermann said.
So Pidermann cut administrative costs, including the town’s $24,000 membership in the Florida League of Cities and Miami-Dade County League of Cities well as $15,000 for council members’ travel costs to Tallahassee for lobbying.
Pidermann also drew from a reserve account -- funds put aside in case FEMA didn’t pay back the full amount owed to the town – to balance his plan.
Councilman Josh Dieguez said his colleagues can use their $400 monthly stipends for travel expenses.
“I think we can live without them for a year,” he said. “But if we can find the money, I would only keep the membership with the league of cities.”
Council member Carlos Alvarez said keeping the funding for travel to Tallahassee may pay big dividends for the town.
“As a team, we have to represent our town,” he said. “Even if we have to drive to Tallahassee to cut costs, we must back up our legislative priorities this year.”
Pidermann said he will try to find the money to restore membership with the two organizations and council members’ expenses for Tallahassee before the second and final budget hearing. It is scheduled for 7:30 p.m. Sept. 24 at town hall.