Coral Gables’ New Mayor and Commission–First Big Step is Backwards
April 26, 2011 Leave a comment
Only with profound concern and disappointment one observes today’s vote of the new mayor and commission to increase the city’s debt to spend on millions of dollars of 17 new projects-albeit at a lower interest cost, but at the same annual servicing cost–completely independently of a deep discussion of our city’s budget and our overall financial condition.
This is classic big spending that we have lived with on the commission for the last ten years. This is indifference to the budget, taxes, spending, efficiency and everyday tax payers.
We still are a city that makes big financial decisions without having a multi-year financial plan, let alone a well analyzed annual budget.
Unfortunately, this action will almost certainly lead to unnecessary spending on low impact and low priority projects based on a “pile of money” or “free money” effect of the expanded debt. Once financed, you will have to spend the money, rather than following a more prudent approach of financing manageable packages of projects in shorter periods of time.
At no time did the city manager, mayor or commissioners mention that there is another financial alternative to increase debt to finance multi-million dollar projects, and that is to lower the costs of the debt payments to the city–this assumes we don’t need that money for other uses. If we say that the money might go into operating costs, then they are admitting that you have no control over our budget. This was rich–justify more debt and capital spending to help reduce operating expenses share in the budget.
Interest costs are only a small part of the costs of an investment program–more important are the unit costs of the projects, their relevancy, timing, cost escalation, these are the real costs.
(I was also wondering if the city’s financial advisors are receiving a commission base on the size of the package?)
It is very disappointing that this commission has not changed it ways, and again avoids wider community consultation and openness on important decisions.
This is a very surprising vote–I believe someone used the work “shocking”– given the serious financial questions that this city is facing. The new mayor and most of the commissions (except for Mr. Cabrera) choose to ignore the city’s financial problems.
About Stephen E. McGaughey
Coral Gables Watch 