Where are the City’s Reserves and Capital Improvements?

September 26, 2009 1 Comment

In the recent Budget Hearing the mayor and commissioners (e.g., Mr. Withers) explained the need for high wages and pensions for public security staff (and by implication all other employees) and justified this by a tight labor market in Miami.

A cursory look at Bureau of Labor Statistic data for the last decade in the Miami area for firefighters and police patrol officers do not show a rise in salaries similar to that which occurred in Coral Gables during the period 1999 and 2007 (overall wage payments rose by about 7 percent on average in Coral Gables).

In the Miami regions the average salary for firefighters increased from $42,000 in 1999 to $54,000 in 2007. This an average annual rate of 3.2% per annum that approximately covers inflation during the period. For police patrol staff the wages increased from 44,100 in 1999 to 57,800 in 2007. This is also an average rate of 3.4% in the period without in major fluctuations on a year to year basis.

This suggests that the market for these workers was not especially tight in the period in which Coral Gables dramatically increased salaries and benefits and wages were good and they more than kept up with inflation.

City income increased dramatically during the real estate bubble that lead to an average annual increase in property tax revenues for the city of almost 12%, and total revenues increases of about 10%. Under these circumstances the city should be sitting on an ocean of reserves and top notch capital improvements.

Rather the funds were squandered in exaggerated salaries and pension benefits that has left the city with immense pension liabilities that have “come home to roost” because tax revenues are falling dramatically now and will not grow in coming years.

Filed under Coral Gables, Employees and Unions, Government, Management

Simple Budget Reductions: CGGAZETTE.COM did the Manager’s Job

September 26, 2009 Leave a comment

Coral Gable’s Commission likely nemesis, George Volsky did a “back of the envelope” budget reduction.

Question? Couldn’t the city manager had an estimate ready at the last Budget Hearing, or did he want more time to pressure the Commission into accepting a higher millage rate–in other words, a simple, old fashioned, delaying tactic.

TOTAL: $3,944,000

The…savings do not represent major personnel firings. It suggests retiring several highly paid (and less-than-efficient) directors who continue in their jobs even though under DROP they could voluntarily leave at any time. By continuing to work they accumulate additional retirement payments from the city already enmeshed in a serious pension crisis.

Filed under Coral Gables, Finance, Government

The Country Club Negotiations–Down the Drain. Another Hit for Taxpayers!

September 23, 2009 Leave a comment

Negotiations that began during the reign of David Brown with the only company interested in leasing and managing the Coral Gables Country Club have collapsed because the Commission did not accept the scheme (including an outdoor restaurant facility) for the facility.  The taxpayers are left holding the ball, the bills and the debt.

In a move to primarily defend property values among owners near the club (among them the Mayor and his frequent archenemy President of the Coral Gables PAC, Vincent Damian) the President of Liberty Entertainment Groups (as reported in cggazette.com) has abandoned negotiations.

When told about Di Donato’s decision , Finance Director Don Nelson said it would have a “huge” – presumably extremely adverse effect on city finances. Another official said that the impact might be equivalent to “a bureaucratic atomic bomb.” In the last six years, Coral Gables has invested in and borrowed about $10 million for the club, adding greatly to city debt. It is paying annually large amounts in interest; despite that investment the building appears externally and internally in shambles. The city is currently financing a very costly petroleum decontamination, must replace a leaking roof and do major repairs of the swimming pool.

This will give the city manager another good reason to justify keeping millage rates up, instead of reducing spending on salaries and capital projects.

Filed under Business and Commerce, Coral Gables

Fire Fee Approved; Two No Votes; Fees Are General Revenues, Not for the Fire Department

September 22, 2009 Leave a comment

Messrs. Kerdyk and Cabrera voted against the $50 fee that will raise about $1.5 million for the city budget. Based on questions raised by Mr. Kerdyk and Cabrera, and the city manager’s response, it is quite clear that the fees are additional taxes and funds that will be included in the budget without regard to their final use.

Earlier comments of the Mayor that property taxes will be reduced by the amount of the fire fees has not happened. In practice that will depend on this evening’s vote on the millage rate.

Clearly, the intention is that the fire fee will be raised annually (with a majority vote) to supplement property taxes increases (approved with a super majority of 4 votes) and other revenues.

Filed under Coral Gables, Finance, Taxes and Fees

My Letter to the GGG Committee

September 21, 2009 Leave a comment

Dear Mr. Alvarez:

Thank you for your note about the meeting your group had with the City Manager and Director of Finance. That is quite a special privilege in itself. I would have loved to have been in attendance.

I agree very much with the view that the conversation about the budget should be civil in all respects and it is unfortunate that a very few people get agitated and frustrated with our commissioners and city management (although perhaps sometimes with good reason).

In any case, I am against impolite public behavior, but it is equally valid that there have been a number of people at the recent budget hearings who honestly, forthrightly and respectfully spoke against new fees and higher millage rates. I personally spoke against additional taxes and fees and the need to face our problem head on this year.

I would very much like to have an opportunity to attend any future meetings of GGG with city management or for any other purpose. Please keep me on your mailing list.

For your information, I personally submitted specific questions on the budget to the office of the Director of Finance and later to the Mayor but never received a response or even recognition of my questions by the Director of Finance or the city manager. This is the kind of response that creates frustration among some of the taxpayers.

Sincerely,

Stephen E. McGaughey

Filed under Community, Coral Gables, Finance

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