M E M O R A N D U M
To: Honorable Mayor and Town Council
From: Rafael G. Casals, Town Manager
Date: April 19, 2017
Re: Selection of Consumer Price Index for Inflation Rate Calculations
REQUEST
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A RESOLUTION OF THE MAYOR AND TOWN COUNCIL OF THE TOWN OF CUTLER BAY, FLORIDA, DESIGNATING THE USE OF A SPECIFIC CONSUMER PRICE INDEX TABLE FOR CALCULATING THE INFLATION RATE; AND PROVIDING FOR AN EFFECTIVE DATE.
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BACKGROUND AND ANALYSIS
Section 2.6 of the Town Charter provides that the compensation of the Town Council shall be increased, but not decreased, by the Consumer Price Index ("CPI") on an annual basis. Historically, via adopted operating and capital outlay budgets, the Town Council has approved Cost of Living Adjustments ("COLA") to Town Staff and Charter Officials using the same percentage increase as determined for the Town Council.
The Town Charter does not indicate which CPI table to use, nor the method of calculation. In an effort to bring consistency to the annual calculation, it was decided several years ago, to use the COLA percentages utilized by the Social Security Administration ("SSA") for its beneficiaries. The SSA typically followed the CPI nation-wide index when computing its COLA adjustments, but recent changes have modified the SSA's calculations, resulting in lower than typical COLA adjustments for its beneficiaries, including those set for the Town Council and Town Staff, since the Town has been using the COLA percentages adopted by the SSA.
In an effort to move away from the SSA's revised calculations, and to better reflect consumer price changes in the Town's geographic area, it is believed it is in the best interest of the Town to formally adopt, and consistently follow, the CPI for All Urban Consumers for the Miami-Fort Lauderdale, FL region, as published by the Bureau of Labor Statistics.
The inflation rate adopted for the budget commencing on October 1st each fiscal year shall be the inflation rate calculated ...
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