Doubts On The Budget For The City of Coral Gables

The follow summarizes my doubts about the budget and where we stand with city taxing and financing.  My largest concern is that this budget assumes that the economy will come roaring back along with tax revenues.  This is completely wrong–we are headed into multiple years of slow growth, unemployment and underemployment and a shortage of State and Federal funding to mitigate local problems.
The city is basically holding taxes steady this year, when they should be reduced.
  • tax rates–still too high and they should be cut to help local taxpayers.  Taxpayers are not getting any real relief with the current proposal for a minuscule tax rate cut.
  • staffing–staffing reductions havestagnated and certain staffing is being increased to manage the so-called renaissance plan.
  • unfunded pension liabilities–these liabilities are still quite high (about $200 million) and management has elected to pay in the minimum legally required contribution.  When will the city pay them off.  Is the city praying for a sustained stock market recovery.
  • The debt surge seems wrong in the face of the other problems of the city.  These monies are needed to pay unfunded health benefits and pensions.
  • When will the unresolved Biltmore lease dispute get resolved.  We are out of pocket substantial funds that are being paid for by taxpayers–that in part explains the trivial tax cut planned for this year.
  • The Miracle Mile is stagnant if not in plain decline relative to other shopping centers.
  • The city has the practice of promoting over spending on unproductive public works, museums, i.e., the renaissance investment plan and debt surge.
  • The real estate market will be stagnant for years to come.  Right?
  • Incomes and employment will stagnate in South Florida for years ahead.

Coral Gables 2011 Budget–First Impressions

My first impression in one of some relief that the city manager is proposing a tax rate reduction–actually it is a tiny reduction, so let us call this holding taxes that same as last year.

My second impression is that this budget is very expansionary by making such a small reduction in taxes.

The city took from us quite a large increase in taxes last year, so one would have hoped that the city would have given that increase back, just like Miami-Dade county.

We would have hoped for larger staff reductions and operating cost reductions at this time.

Therefore, tied with the proposal for a large investment program that will have to be repaid in 20 years (instead of the refinanced debt in four years),  this is a very agressive expansionary budget that will come back to bite use in the coming years.

 

 

 

Budget Letter from City Manager City of Coral Gables

This is the budget transmittal letter of the city manager, summarizing the 2011-2012 budget proposal for the city of Coral Gables.

It’s Budget Time for Coral Gables

The Miami Herald reviews the budget proposal.

Are here is the new budget:

http://www.citybeautiful.net/CGWeb/documents/finance_docs/CCG_Budget_2011-2012.pdf

Here is the page with the previous budget documents and annual reports of the city:

http://www.coralgables.com/CGWeb/dep_documents.aspx?DeptID=DeptID16

Coral Gables Note: Unfunded Pension Liabilities Will Increase

The current slow patch in financial markets is likely to increase pension liabilities for Coral Gables with the decline or slowdown in returns of pension investments.  In any case, the unfunded pension liability is about $2oo million and the city has elected to make the minimum necessary contribution in the next budget cycle.  Rather the city prefers to increase its debt and expand capital spending, rather than try to deal with its big liabilities.

Are you sure that Mayor Slesnick was defeated?

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.

The Debt Surge and Management in Coral Gables

The Commission (except for one of the commissioners) is missing the point of the city manager’s renaissance spending plan (the $22.2 million Debt Surge).

The Debt Surge was conceived in the dark, pulled out of the sleeve of the city manager at the first commission meeting after the election, and its funding comes first, rather than last after priority spending should have been discussed with the community.

The financing package makes no sense with permanently low interest rates that are certain to not rise for years (not months, not weeks), with refinancing could easily be done in stages in tandem with spending needs, and the savings used to solve intractable financial weaknesses.

Apparently, some of the outgoing commissioners are looking for projects on which to stick their names, the city manager projects his new role as the “Machiavelli of Coral Gables”and he marks the end of the “Middle Ages” (i.e., the Slesnick Years) to redress the Decline of Coral Gables.

This city cannot afford a period of pharaonic spending to glamorize the city’s progress.  The Commission needs to fix the city’s pension liabilities, maintain its infrastructure, fix the Biltmore mess and hold down taxes for a few years and build its reserves,i.e. place the city on very sounding financial footing.

Above all, we need a city manager who is committed to the highest standards of democracy, citizen participation and transparency–something we didn’t have for years and we still don’t have.

The city manager, it would appear, has fully assimilated the methods of the Slesnick era (the “Middle Ages”) with secrecy, back room negotiations and resentfulness of citizen comments and participation.