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.

Filed under Budget, Community, Coral Gables, Finance, Government

Namon on Coral Gables’ $35 Million Increase in Spending

May 1, 2011 Leave a comment

I reproduce the comments by Mr. Richard Namon on the first meeting of the Cason Commission.

On Tuesday April 26, Coral Gables had its first official Commission Meeting.  It’s clear who was in charge of the City Commission – City Manager Salerno.  He was decisive and dominating.  By restructuring the City’s current debts and increasing the years of debt obligation, the City Manager said he would raise about $22,155,000 of “new” money.

That money will be used for his vision of a Neighborhood Renaissance.  Using a tactic commonly used by conmen he urged: If you don’t act now, you will lose this once in a lifetime opportunity.   He pushed his vision for the City’s most important needs through the Commission.  The only other participant on the dais wearing pants was Commissioner Ralph Cabrera who voted NO on the proposal.  Ralph felt a Vision for The City Beautiful should come from resident meetings that would guide the Commission – not from the City Manager.  No one else dissented.  The City Manager keep pushing saying this was only an approval to go forward, not a final approval.

In his presentation Salerno droned away, making his $28 million Vision sound boring.  I wondered how much we would save in taxes if he only refinanced the existing debt.  No one on the dais asked.  After the meeting I asked Don Nelson, the head of the Finance Dept. how much this $22 million of found money would cost the taxpayers when it was paid off?  He estimated $35 million!

Our new Commission, at its first public meeting, has agreed in principal with the City Manager’s vision that costs $35 million over the next 20 years.  During the pre election campaigns, the main talking points were fiscal conservatism and dealing with City debt.  As a start this is not only ominous, it is disappointing.

Richard Namon, Sr.

via Home Page.

Filed under Budget, Coral Gables, Finance

A Test For Democracy: Will City of Coral Gables Start Spending Again?

April 17, 2011 2 Comments

Seems like there is certain pressure from businesses and a willing disposition of the city manager and some commissioners to start spending big on city projects.  It is said that we can do that because interest rates are low–not a good financial reason.

There is pressure from Chamber of Commerce, Miracle Mile businesses and the IBD to undertake the Miracle Mile and Giralda Streetscape Project.  This is (and I underline) estimated to cost $16 million.  You can bet that the project will cost more after government and businesses get their hands on the “vision” project.  Why is this called the Miracle Mile Streetscape anyway, when it includes Giralda.  Why include Giralda?  Are you sure that this project will “pay for itself?”

One commissioner has already talked about spending money on parks and a senior center and speaks fondly of the free (subsidized) trolley and the Ponce street upgrading.  Good projects, but can we afford more of them now?  I think not.  Why should the taxpayers subsidize the trolley. (By the way, subsidizing the trolley takes business away from the city parking lots, so the real subsidies are much larger than the operating and maintenance costs of the trolley).

Let’s hear from the mayor and commissioners just three goals: we need to fix pensions and hold salaries down for several years, freeze or reduce taxes and fix the Biltmore lease, and freeze and reduce salaries.  Please, no more studies are needed–just decisions and actions by the commissioners.

Failure to do any of these will mean failure for the city’s finances and more taxes for us all in Coral Gables.

Filed under Budget, Business and Commerce, Coral Gables, Finance, Taxes and Fees, Transportation

Please, Mr. Kerdyk, No More Spending

April 15, 2011 Leave a comment

I sincerely wish that Mr. Kerdyk at his investiture this morning had not listed his spending priorities, including purchasing more green space.  While green space is a highly laudable and good priority with which I agree, we should start by fixing our financial problems, avoiding more taxes, fixing pensions, etc. (we know the list), before we start spending money on green space or even Miracle Mile.  Borrowing money, even at a low rate, still has to be repaid by future generations of taxpayers.

Filed under Budget, Coral Gables, Finance

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