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

Waiting for Transparency in City of Coral Gables Government (1)

We have been waiting for the fruition of all of the offers of Transparency that we heard form Messrs Cason and Quesada.  So far there there is not real evidence of increased transparency.

The city manager pulled out of the deck a $22 million debt increase and imaginary spending program.  The commission was content is hearing comments from two or three citizen who happened to present at the unvailing of the “Renassaince Debt.”

One commission, a local banker, who mentioned the “costless” refinancing during his campaign tried to sell us “pig in a poke” by saying that the program is free because we have money in the budget–as if there were on other use for the money, such as cutting taxes, raising needed reserves or compensating for the multi-million dollar revenue loss from the Biltmore fiasco.

Looks like the commission needs to go back to take Econ 101.

Explanation of “Renaissance Debt”–A Pig in a Poke

For the record this is the best description of what is happening.  Forget tax reductions for the near term.  Forget pension reform, if we can afford to add to our debt. This is what we call in the Midwest a “pig in a poke.”

This proposal adds $21 million to the long term debt of the city and extends the volume and payment period of that debt far into the future making it impossible to maintain, much less reduce the current excessive property tax rates. If the current course of retiring the bonds were followed, in 2017 we would have 39 percent less debt service on these bonds, in 2021 we would have 54 percent less, and they would be totally retired in 2033. Under the managers proposal the entire debt service would continue at its present rate until 2033. This proposal would not allow any room for reduction of our property taxes in the future. More ominously, it would not allow for the distinct possibility that the City will become responsible for a massive restoration project at the Biltmore hotel because of deferred maintenance by the present management company. This will have to be funded by new borrowing.

via Letter: Pat’s $21m railroaded ‘vision’ too costly.

Cost of Coral Gables’ “Renaissance Debt” Near $2 Million Yearly

A Simple Calculation.

Taking $22.5 million as the base, the cost of financing that over 20 years is said to be $35m.  That is about right at about 4 to 5 percent interest.

That is a cost of $145,000/month or $1,740,000 per year.

Also, the cost of maintenance of the new works should be added to the capital cost.

Give or take, the city will be spending $2,000,000 for the 17 capital projects.

No small sum and so quickly agreed to by the commission without much serious consultation with the taxpayers.

Are there any other better uses for all or part of this money?  Isn’t that the question?