More on The Dire Economic Future

August 28, 2010 Leave a comment

This could well be the future we are in for, and this is what the City of Coral Gables should consider in reorganizing government, reducing staff and rationalizing pension funds and other benefits.

It could happen that property values will not return for many, many years.  Does this mean that the City of Coral Gables, Miami-Dade County and the State of Florida can keep raising taxes, indifferent to the financial conditions of their residents and businesses?

Read the following for taste of reality (and history).  This explains why my parents, who lived through the Great Depression, were so frugal and conservative with their money.

The Reinharts examined 15 severe financial crises since World War II as well as the worldwide economic contractions that followed the 1929 stock market crash, the 1973 oil shock and the 2007 implosion of the subprime mortgage market.

In the decade following the crises, growth rates were significantly lower and unemployment rates were significantly higher. Housing prices took years to recover, and it took about seven years on average for households and companies to reduce their debts and restore their balance sheets. In general, the crises were preceded by decade-long expansions of credit and borrowing, and were followed by lengthy periods of retrenchment that lasted nearly as long.

via Carmen Reinhart Warns That Economic Recovery Could Be Slow – NYTimes.com.

Filed under Coral Gables, Economy, Miami-Dade County

Aid Failures in Haiti: Not A Big Surprise

August 4, 2010 Leave a comment

On a somewhat different subject, but relevant for South Florida–

The procurement procedures of the international organizations (the UN System) and multilateral development banks (World Bank, Inter-American Development Bank) and bilateral aid agencies (USAID, EU) have deeply ingrained historical procedures that involve strict control and supervision of the project design, execution format and competitive multi-stage procurement procedures that allow for extensive frequent and detailed challenges by the losers during the competitive bidding process.   This slows down the implementation of projects and may delay them by years.  (The procurement procedures of the City of Coral Gables may be considered light weight and efficient by international standards).   International procedures and the culture of control that exists in multilateral and bilateral institutions will make the process of reconstruction in Haiti very difficult indeed.

As co-chairs of the Interim Haiti Reconstruction Commission, [President] Clinton and [Prime Minister] Bellerive have been expressing frustrations with not just donors, but also the World Bank — the trustee in charge of managing a multidonor trust fund dedicated to the reconstruction.

The source of the friction is what the World Bank’s role should be and the projected costs for small projects. Both Clinton and Bellerive say that the fees charged by the bank for administering the reconstruction trust funds are too high for small-scale projects.

The procedures, the commission complains, are too bureaucratic and further threaten to slow down the rebuilding by adding months to the approval process with “redundant technical reviews.” The commission would like uniform vetting procedures.

via Leaders look to end dispute over Haiti earthquake aid – Haiti – MiamiHerald.com.

Filed under Florida, Miami-Dade County

P.S. Miami-Dade Holds the Line on Taxes! And now Coral Gables?

September 18, 2009 Leave a comment

The Miami-Dade County Commissions have approved an austerity budget with a flat tax, significant salary and reductions of positions.

At 5:01 a.m., exactly 12 hours after the meeting began Thursday evening, county commissioners approved a $7.4 billion budget.

The winners: elderly residents who get county subsidized meals and community-based service organizations paid for through the commissioners’ discretionary funds. Both saw most of their county funding restored.

The losers: county employees who stood to lose $106 million in salary cuts under the mayor’s original budget and now stand to sacrifice another $68 million in assorted benefits.

But the number of proposed layoffs has been reduced from 1,700 to 945.

Is there a lesson for Coral Gables? Based on the well known views of Commissioners and the City Manager, the answer seems to be No.

Filed under Coral Gables, Finance, Miami-Dade County

Compare three South Florida Mayors: Alvarez, Diaz and Slesnick

September 17, 2009 Leave a comment

Three important mayors in South Florida are due a comparison.

Mayor Alvarez (Miami-Dade County) fought to get a strong mayor form of government and he has used this power to increase salaries of colleagues and employees at the highest levels in the Mayor’s office and heads of the police force; this at a time in which literally hundreds of employees and positions will be dropped.

Mayor Diaz (City of Miami) has taken on the financial crisis to present a strongly, austere budget, he is holding the line on tax increases and he is threatening the police union with reductions unless they go along with contract changes.

Mayor Slesnick (Coral Gables) strongly favors a city spending increase returning to amounts of two years ago when taxes reductions were forced on the city (thanks to Florida legislation); the initial presentation of a large millage increase 20 percent, lowered to 14 percent in the first budget hearing; the imposition of a fire fee, and a new fee on emergency medical services in the city. The Mayor is satisfied with a modicum of positions cuts, a healthy capital projects budget and merit increases to the employees in the middle of a financial crisis.

Filed under Coral Gables, Government, Miami, Miami-Dade County

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