Since the November, 2023 election, I have received various inquiries from members of the City Commission regarding the stipends and staffing resources provided to members of the City Commission. Initially, these issues were intended to be discussed at a Commission retreat. However, as a date for a retreat has not been identified due to scheduling conflicts, the City Commission will instead convene as a Committee of the Whole at the January 31, 2024 meeting to discuss and potentially take action regarding these matters.
To this end, and to allow for a comprehensive discussion of this issue in the Sunshine and avoid piecemeal, or competing, agenda items submitted by one or more members on the same subject, I have prepared this memorandum, in consultation with Human Resources, to summarize the relevant issues.
The City Charter establishes a salary of $10,000 for the Mayor, and $6,000 for City Commissioners. To help offset the expenses associated with their public offices, such as providing food for elderly and needy residents, purchasing tickets to attend a myriad of civic, non-profit and community events in order to engage with City residents, and sending newsletters and correspondence to the City’s residents to keep them apprised of City business, for many years the Mayor and City Commissioners have separately received a monthly stipend.
The monthly stipend for the Mayor is currently $2,000. This stipend has not been adjusted in approximately 18 years. The monthly stipend for City Commissioners is currently $2,250. This stipend has not been adjusted in over 5 years.
Based on the input I have received from multiple members of the City Commission, below is a list of possible issues for discussion/action:
1. Inflation adjustment.
At the City Commission’s discretion, the stipends could be adjusted for inflation, which has increased by approximately 23% since 2018. If the City Commission were to adjust the stipends for inflation during this relevant time period, the monthly stipend for the Mayor would increase by approximately $460, and the monthly stipend for City Commissioners would increase by $517.50.
2. The City’s tax treatment of stipends.
Based on the City’s election in 2018 to include the stipend payments under a “Non-accountable Plan” pursuant to IRS Regulations, the monthly stipend is now subject to Federal income tax withholding, thereby further reducing the net amounts available to members of the City Commission to offset their unreimbursed expenses. Specifically, the Tax Cuts and Jobs Act, signed into law in December 2017, resulted in the elimination of many itemized deductions commencing in 2018, including the unreimbursed job-related expense deduction, thereby exacerbating the deficit resulting from a stipend that has not been adjusted for inflation in five years.
At the City Commission’s discretion, the City Commission could elect to “gross up” the stipend payments to account for associated federal income taxes, similar to other stipends that the City Commission has adjusted for taxes, such as the housing rental stipend for fire rescue or law enforcement personnel desiring to live in the City of Miami Beach.
If approved, the monthly stipend would be adjusted by the net average federal tax rate of 24.8%.
3. Vehicle and Mobile Telephone Allowances.
Members of the City Commission receive a $500 monthly vehicle allowance and a $50 bi-weekly mobile phone allowance which has not been adjusted in many years. By comparison, as part of their overall compensation packages, Charter Officers receive an $800 monthly vehicle allowance. Most of the Charter officers receive a $100 bi-weekly mobile telephone allowance.
If the City Commission desires to address these allowances comprehensively and provide parity with the allowances provided to the City’s Charter Officers, the foregoing allowances could be adjusted, at the City Commission’s discretion, to an amount equal to that provided to Charter Officers, or to some other amount, at the City Commission’s discretion.
4. Automatic Annual Adjustments for Inflation to Avoid “Catch ups” over time.
If the City Commission were inclined to provide for such annual automatic adjustment to stipends and allowances each fiscal year, it is recommended that the adjustment be made by reference to the Consumer Price Index for the Miami-Fort Lauderdale-West Palm Beach, Florida area, as published by the Bureau of Labor Statistics of the United States Department of Labor. This is the same inflation index used by the City pursuant to Section 1-15 of the City Code, for annual adjustments to the City’s Fee Schedule.
5. Staffing
The City Commission may also wish to discuss the process for approving additional staff to better manage the workload of the office and respond to the public. This discussion could involve additional staff assigned to each commissioner, or shared staff assigned to multiple commissioners.
To this end, currently, at least two (2) commissioners have staff vacancies within their respective offices. At this time, it is not clear when either these vacancies will be filled and/or if the City Commission would prefer to reassign existing vacancies for different purposes, in an effort to better manage the workload of the office and respond to the public.
Finally, for reference purposes only, if the City Commission were to approve all of the above adjustments, the total aggregate monthly adjustment would approximate $1,650 for each member of the City Commission. The effective date of these adjustments would be at such date as may be determined by the City Commission.