Mayor Cason’s Promises–How Is He Doing?

I would say that Mayor has a way to go in meeting his promises on transparency, controlling pension benefits, controlling millage rates, city efficiencies, having open management, and making suggestions (hopefully not in secret).

We will see if this government is more than cutting ribbons and letters to new residents.

MY 10 PROMISES TO YOU

  1. I will be a full time Mayor.
  2. I will work in the best interests of the citizens of Coral Gables and be respectful of their concerns.
  3. I will support transparency of City Hall’s government.
  4. I will control pension liabilities moving forward in order to reduce Unfunded Actuarial Accrued Liabilities. (UAAL)
  5. I will avoid conflicts of interests and favoritism.
  6. I will fight to keep millage rates low.
  7. I will seek greater efficiencies in City management and not tolerate waste, fraud, mismanagement and improper employee conduct.
  8. I will question all aspects of current operations and suggest alternatives.
  9. I will make sure that management keeps the commission well informed on: new or change in ordinances, issues and contracts that will be presented before the commission and offer ample time for discussion before voting is implemented.
  10. I will be an active Ambassador for our City and foster an open and collegial environment for current residents, business owners and visitors.
(Quoted from Mayor Cason’s campaign literature and website.)

Just Like The City Manager Of Coral Gables

The city manager planned–as was bought into later by the city commissioners (except one)–and hid his designs for a huge post-election investment program and, and along with one commissioner (real estate broker and banker), distorted the real cost of the financing the program by stating that since the debt payments had been budgeted, there is no additional cost to the city of the refinancing.

A first year economics student at UM can tell you that this is pure baloney.

Indifference to public opinion in Miami-Dade, including Coral Gables, is because of voter indifference and politicians’ dislike for good, transparent and participatory government.

Of course neither the White House nor congressional leadership has shown the slightest interest in keeping the American people informed about any step of this process, and they have evinced even less interest in reflecting the values and opinions of the American people. Public opinion counts for almost nothing these days in guiding public policy.

via Jeffrey Sachs: Restoring American Democracy.

Coral Gables Debt Surge–Take Note, Interest Rates Will Stay Low

One justification for the Debt Surge in Coral Gables for its so-called Renaissance is that the city will lose a window opportunity of low interest rates.  This is nonsensical since interest will stay low for a long time, and the dange of overspending on the Renaissance projects is far greater that the rush to refinance now.

The following is from today’s Federal Reserve statement:

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent.  The Committee continues to anticipate that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

via FRB: Press Release–FOMC statement–June 22, 2011.

Be Careful Coral Gables, The Future is Very Uncertain–No Time for More Debt

Le’t hope that the commission and city manager of Coral Gables think hard again about the city’s economy and the need for more debt at a very uncertain time.  Paciencia!

Even the optimists are nervous about the next few months. It’s possible that some of the gloomy data reflect excessive caution ahead of several key events: The end of the Federal Reserve’s asset purchases, the resolution of the U.S. debt-ceiling soap opera, the resolution of Europe’s fiscal disaster, and the ability of the developing world to achieve its soft landing.

If all of those go well or even just OK, the future might look a little brighter at the end of the summer. And if they don’t? We may look back on this spring with fond memories.

via Will the economic slump last? MarketWatch First Take – MarketWatch.

Volsky on “Craig Leen Saves City At Least $40,000”

GEORGE VOLSKY

CRAIG LEEN SAVES CITY AT LEAST $40,000

Coral Gables will save over $40,000 by a decision of its  new  attorney who had recently nullified a parting gift his predecessor bestowed upon her three outside legal consultants on her last day in the city.

City Attorney Craig E. Leen has conformed that hourly legal fee increases, which  former city attorney Elizabeth Hernandez unilaterally  and retroactively gave her long-time labor consultant lawyer James Crossland and his two associates, were null and void. The increases, he indicated, were economically and professionally unjustified at the time when the city, under the pressure from residents, is making a concerted effort to cut expenses.

Leen said that he personally communicated his determination to Crossland, who apparently accepted it without discussion.

In a broader sense, the invalidation of the Hernandez fee increases  appeared to indicate that  Leen is actively reviewing  the modus operandi of the former city attorney. Hernandez disliked to be sullied by mundane legal functions and, at a large expense to taxpayers, would hire outside attorneys at a drop of a hat for even most elementary chores, among others writing simple letters. By contrast Leen is described as a professional  who is willing and eager to undertake most of the city’s legal work himself. This could represent a considerable additional saving for Coral Gables.

Hernandez’ decision to increase Crossland’s hourly fee from $200 to $225, and Denise Keekin’s and David Miller’s reportedly from $180 to $200 each, was spelled out in a letter to Crossland at Bryant Miller Olive law firm, where the three work . Her action caught the city’s commissioners and City Manager Patrick Salerno by surprise. Written apparently in violation of city procedures, it  was dated December 30, 2010, Hernandez’ last day as the city attorney.

Several weeks earlier, Hernandez announced she was resigning at the end of 2010. According to well-informed City Hall sources, her departure was far from voluntary. “She saw the writing on the wall,” one official said. “She realized that because three commissioners were privately very critical of her performance, she could have been fired at any moment.” At the time, only Commissioner Ralph Cabrera and former mayor Don Slesnick were known to be in her corner.

(Cabrera continues to be her close friend and, as it were, a custodian of the vestige of her influence in the city. Several City Hall “insiders” said  they would be extremely surprised if the two didn’t see each other  regularly, exchanging emails frequently, sometimes even texting during  commission discussions.  Crossland, whom Hernandez hired and  who worked with her for years, is a good friend of Slesnick. Earlier this year, apparently for the first time, he and his wife each gave $500 to Slesnick’s re-election campaign.)

In her Dec. 30 letter to Crossland Hernandez wrote: “Please forgive my lateness in responding to your request last month. As we discussed, at the beginning of December, your letter for a fee increase as follows is approved: James Crossland $225 an hour; Denise Heekin and David Miller $200 an hour. Effective December 1, 2010.” The letter was not copied to anyone in Coral Gables, or elsewhere.

Hernandez’ fee raises represented at least 12.5 percent of the amount that the city annually pays Bryant Miller Olive. City records indicate that in the 2009-2010 fiscal year BMO law firm was paid about $400,000. According to city officials, except in cases of an immediate necessity to expend funds, such as during and after hurricanes,  any substantial increase  in budgetary expenditures, and Hernandez’ action certainly was one, has to be found justified and approved by  the city manager, with the acquiescence of the City Commission. Before writing her letter,  Hernandez had not sought consent of anybody.

Late in January, after learning about the letter, Vice Mayor William Kerdyk at a commission meeting demanded that the Interim City Attorney Lourdes Alfonsin review the issue and inform him and his colleagues  why Hernandez, who by law had to report to the commission,  acted  behind its back, and whether the fee raise at the time of budget cuts was really necessary.  Perhaps out of loyalty to Hernandez, Alfonsin  proceeded for months without due diligence and alacrity, leaving the decision up to her new boss who took over as city attorney April 11.

Alfonsin’s inaction, despite Kerdyk’s demand for clarification, in effect put the fee raise in abeyance, and prevented the city from paying Crossland and his two associates, for whom their law firm had already submitted  invoices with increased  honoraria. Bryant Miller Olive has recently resubmitted the bills with the previous attorney fee rates.Cr

Why Coral Gables’ Refinancing and Capital Spending Decision Is Not Urgent–What Happened To Community Participation and Consultation?

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.

Mr. Cason’s Commission–Meet the Big Spenders

The first major decision of the Cason Commission was apparently innocuous, but it was a decision to spend $22 million of newly borrowed money for vaguely defined capital projects.  This is the local equivalent to doubling down on the current national debt crisis.

This is your household’s equivalent of getting a bigger mortgage to add a room or two to your house in middle of a financial crisis.

This decision doesn’t stand up under the most elementary financial and economic analysis.  The Cason Commission, with the exception of Mr. Cabrera, has shown itself incapable of asking even the most basic questions about this “surprise package.”

Aren’t you supposed to make these kinds of decisions by first looking at the city’s budget?

No public discussion, no community involvement in the project list, no serious questions from the commission about the economic, social and financial feasibility of the investments.  The Cason Commission took the city manager’s word that we have a $6.5 milliion reserve:  are we sure this is enough, what is our income, what is out total spending.

Has the Biltmore problem been solved?  Have the pension problems been ameliorated?  Has the organizational inefficiency of the city been improved?  Have taxes been reduced from last year?  Where are the questions?

Why hasn’t the Cason Commission begun to resolve or just talk about our really important financial and institutional problems before running out and spending $22 million.