PB: Pariser’s Figures

by SDM

There is an old saw that says something like “figures lie and liars figure.” The aphorism came into SDM’s mind after contemplating the following attribution to Vice Mayor Pariser in the Miami Herald:

Pariser’s goal is to champion homeowners, he said, noting that 92 percent of the tax base in Palmetto Bay comes from residential property. (Emphasis added by SDM.

For Mr. Pariser to be correct, the term “tax base” must be defined as the total value of every plot of real property in the village. By this measure, it may be true that 92% of that value is derived from residential properties.

But, how relevant is this statistic? Not very.

You see, all real property is taxed ad valorem (on value). According to the village budget, all ad valorem property taxes taken together amount to 41% of Palmetto Bay’s revenues.

SDM agrees that it makes sense for a politician to concern himself with the well-being of a revenue source that represents 38% (92% of 41%) of village revenue and 100% of village voters. :)

But doesn’t it also make good conservative business sense for a politician to concern himself with the rest of the revenue picture?

SDM thinks so, and by inference, so does village staff. Palmetto Bay’s Finance Director, Desmond Chin, presented at the beginning of this week’s zoning hearing and his words make SDM’s point ( 2:50):

The fourth quarter budget to actual income report consists of revenues and expenditures for the fiscal year ending September 30, 2012.

The village has collected $13.4 million in revenues, which is 106.43% of the adopted budget. The operating expenditures are $11.8 million or 93.47% of the adopted budget. This resulted in a fiscal year surplus from operations in the amount of $1.6 million.

The surplus resulted from $812,000 in excess revenues and $824,000 in reduction in expenditures. The operating revenues exceeded nearly all areas of revenue sources.

Ad valorem is the only area of significance that did not exceed the budget. But the 98.2% collection [rate] is within the expected norm when compared to prior years. 

When these fourth quarter amounts are included in the adopted budget, I expect the ending fund balance for fiscal year 2013 to be approximately $10.1 million.

(Emphasis added by SDM.)

SDM Note: Later in the meeting, Mr. Chin stated that the published fund balance was $8.6 million. SDM checked the budget and found that FY11-12 published unassigned fund balance was $9.6 million. (See Village of Palmetto Bay ADOPTED OPERATING & CAPITAL BUDGET: FISCAL YEAR 2012-13 at p. 40.) (LARGE FILE) SDM believes the missing million dollars was the money used for the new police officers and other stuff the council added at the budget hearings.

SDM Code Breaker: The actual numbers reflect that Palmetto Bay collected (net) about $812,000 more in revenues than they announced a month or so ago. SDM says “net” because ad valorem revenue from property taxes was about $98,000 below the budgeted amount. This would seem to mean that a combination of other revenues* brought in about $900,000 more than expected.

*Franchise Fees, Utility Taxes, Licenses and Permits, Intergovernmental Revenue, Fines and Forfeitures, Charges for Services, Interest Income and Other.

To its credit, the village staff under the council’s direction spent $824,000 less than they anticipated. Certainly, abandoning Mayor Stanczyk’s wedding-venue-at-Thalatta-fiasco must count for a big chunk of that savings, though SDM invites correction on this point.

Now, you’re thinking “SDM, what does all of this mean? Numbers hurt my brain.”

SDM Code Breaker No. 2:

  1. The village’s fund balance is higher by about $500,000 over the published budget figure. The $1.6 million surplus may be accurate but the way it was presented at the meeting could be misleading to residents.
  2. Palmetto Bay picked up almost a million bucks in unanticipated revenue for which no elected official can claim any credit whatsoever. Don’t let village pols tell you otherwise.
  3. Residential properties are important to Palmetto Bay’s finances, though Mr. Pariser’s “92%” figure overstates the impact by almost three times.
  4. Pariser figures.

SDM Says:Vote for someone else.

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