Lessons Learned from the City’s Financial Storm The City of Lauderdale Lakes 1 Managing a City Through a Financial Crisis…. Jonathan K. Allen, MPA City Manager Broward League of Cities April 16, 2015

Presentation Overview 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 2

City of Lauderdale Lakes Overview Style of Government  Mayor – Commission – City Manager 3 Population 32,593 City’s Total Area (Sq. Miles) 3.64 Housing Stock14,283 3,000Multi-Family21% 7,000Condo49% 4,283Single Family30% CRA Area (500 acres/ sq. miles) 24% Commercial Base15%

City of Lauderdale Lakes Facts Trend History – Millage Rate Style of Government 4

City of Lauderdale Lakes Facts Trend History - Taxable Value 5

6 City of Lauderdale Lakes Facts 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 Annual interest is at a rate determined by BSO using the Annual County Pooled Cash Rate percentage of September 30, The outstanding balance on the obligation as of September 30, 2013 was $ 7,021,129. Future payments are due as follows: Year Ending September $ 1,300, ,450, ,271,129 Thereafter NONE $ 7,021,129 **Renegotiated Balance Request to Reduce BSO Debt by 50% The Public Safety Factor - $9,021,129 Debt

Police FY Public Safety - Police

Fire FY Public Safety - Fire

Broward County OIG Findings “Gross Mismanagement of Public Funds” 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 9 February 2012

Broward County OIG Findings “Gross Mismanagement of Public Funds” 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 10 February 2012

New City Management Team Response First 100 Days Into Recovery – Sept 2011 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 11

New City Management Team First 100 Days Into Recovery – Sept 2011 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 12

Visual Success Rather Than Failure 13

Development & Execution of a Strong Budget & Financial Plan 14  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 15 th day of each month  Completed Budget Transition to GASB Requirements  Coordinated Comprehensive Budget & Purchasing Management Workshops with Facilitators Action Items in Dealing with Financial Crisis….

Dr. Lee facilitating City’s Financial Training Session on Understanding Municipal Financial Management 15

Don't Let a Good Crisis Go to Waste Dollar Tree Stores Auto Zone Store Two Race Trac Developments Florida Medical Center & Infastructure Investments American Land Ventures – $50 million Multi-Family Development 16

Performance Over Politics  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  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 17 FY2013 Budget Summary

Performance Over Politics  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 18 FY2014 Budget Summary

Performance Over Politics  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 19 FY2015 Budget Summary

Performance Over Politics $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 20 Grant Awards

21 Millage Fire Assessment Stormwater Assessment Solid Waste/Recycling Assessment City of Lauderdale Lakes $ (res)/ $ (multi) $ $ City of Lauderhill $ $ $ City of Oakland Park $ $ $ City of Tamarac $ $ $ **Information available as of July 2014 Proposed FY 2015 Assessment Rate Comparison

FY 2015 Rate & Per Capita Comparison 22 Millage PopulationTaxable*Per Capita Levied (2011 Population Estimates) ValueTotal Taxes Lauderhill ,709$1,940,295,798$214 Lauderdale Lakes ,766$829,495,272$227 West Park ,078$371,744,173$236 Weston ,237$7,082,007,793$259 Margate ,714$2,242,395,006$272 Tamarac ,619$2,741,474,787$330 Oakland Park ,459$2,379,597,572$367 Lighthouse Point ,377$1,884,891,938$652 Southwest Ranches ,345$1,191,355,934$756 Pembroke Park ,099$575,451,918$802 Lauderdale-By-The-Sea ,074$1,933,633,651$1,210 Hillsboro Beach ,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 23 Fiscal Year FY 2014/2015 Financial Trends FactorsTrend in 2014/2015 Financial Condition Improving Business Development Improving Outstanding BSO Debt Decreasing Cash Balance Increasing Capital Investment Increasing Property Values Improving CRA DebtDecreasing

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 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 24 Lessons Learned Managing a City Through a Financial Crisis

Closing Remarks  The City will continue to monitor the Taxable Value Trends  Monitor and Manage Public Safety Costs  Participate in Financial/Budget Training Workshops  Active City Manager involvement in the Budget and Audit Process 25 Managing a City Through a Financial Crisis

Questions 26