Why Coral Gables’ Refinancing and Capital Spending Decision Is Not Urgent–What Happened To Community Participation and Consultation?
May 2, 2011 1 Comment
The city manager of Coral Gables had a few cards up his sleeve, so to say, at the last meeting and he sold the commission on three bad ideas.
First, he said that it is urgent to refinance the city’s debt. I take it that this is because he believes that interest rates will soon rise. I guess he believes in that there is inflation at our doorsteps.
The economic facts don’t justify that view in the slightest. Our economy is growing slower than thought, the Chinese are dampending their growth, Japan is stagnant and Europe, except for Germany, Europe is weak. Inflation is a recent blip in energy and some materials caused pay political uncertainty in the Middle East. The Fed has announced that it will continue with its low interest rate policy. There is at least one banker on the commission–he should have known better.
Conclusion: It is not urgent to refinance without first thinking a bit more about the use of the monies and consulting with the citizenry.
Second, he sold the commission on the idea that the $22 million from the refinancing is free–but it will cost about $35 million. He says we won’t spend more on debt financing than we are paying now. That is wrong. By refinancing existing debt we should spend less, not more.
Conclusion: Refinancing of existing debt would reduce the amount we pay on the current debt and free up money for other purposes.
Third, the city manager has sold the commission on the idea that he has come up with a good list of capital projects. But the city manager admitted that he had concocted this list pretty much on his own without community participation, and the new mayor and commissioner apparently did a sort of “shoe leather” test of what we need. Shouldn’t a new, large spending program be consulted with the taxpayers.
Conclusion: What happened to open government, invited and active consultation and participation–on these terms, the new mayor’s and the commissioners’ campaign promises stand out as pure fiction.