The Biltmore Hotel Management Wants A Free Lunch

July 28, 2010 Leave a comment

The comportment of the Biltmore Hotel is similar to that of Wall Street–their lemma is “Privatize the Profits and Socialize the Losses”.

The Biltmore management has suddenly discovered that they are losing money and they want the City of Coral Gables (meaning the taxpayers) to pick up their loses.  We cannot recall that they came forward to volunteer extra payments to the city when times were good and occupation rates were strong. Rather they have suddenly discovered millions of dollar in costs that they want reimbursed.

Sadly, the taxpayers of Coral Gables are not in a position to subsidize a Biltmore, an unprofitable company that benefits just a very people.

I say get another operator or return the Hotel to the US Government before taxpayers have to pay more property taxes or suffer reductions in their own services.

The Biltmore is an anachronism, it is the model of an earlier time when money was flowing.  It is time for the City Commissioners to side with their citizens in this matter; the US is entering a long period of austerity and the Coral Gables citizens should not have  to bailout the Biltmore.

Filed under Business and Commerce, Coral Gables, Finance

Coral Gables Budget–Read the Footnote on the Biltmore

July 26, 2010 Leave a comment

(Page 14)  “*The Biltmore is currently refusing to pay rent under the Biltmore Lease and the Management fees under the Biltmore Golf Operating Agreement to be $1,910,000.  If this is not resolved, the City will have to find additional sources of revenuue or have further reductions in personnel/operating costs.”

This states that the budget could be close to $2.0 million shortfall in the budget.  This means more taxes and/or reduced spending.  Let’s see what the city does with the Biltmore lease negotiation.  Almost certainly taxpayers will take another hit because of the Biltmore.

Filed under Coral Gables

Coral Gables Budget: Tax Time Again

July 26, 2010 1 Comment

The new budget requires another increase in taxes.  Be cognizant that the increase is truly what economists call “real” increases because there is no inflation–these increases, however small or large, are real dollars coming out of your pocket.

Last year’s tax rate was 5.895 per thousand of property values.  The so-called rolled-back rate is 6.189. This is the rate that keeps the city’s property tax revenues the same as last year–in essence the concern is with the “well being” of the city rather that the impact on the citizen.  [Maybe we should call the rate a “rolled-forward rate” since it is higher than the last rate].

The Budget estimate requires a tax rate of 6.072 millage rate.  This is the rate that a simple majority of the Commissioners can approve, without the usual recent past dissenters of Messrs. Cabrera and Kerdyk, who might certainly force the lower so-called TRIM rate of 6.072 or a 3% increase assuming that one’s property value is the same as last year.  Let’s see what happens in coming weeks, but certainly the plan is for everyone to pay more taxes here in Coral Gables and in Miami-Dade county.

Filed under Coral Gables, Finance, Property Values, Taxes and Fees

What’s in the Coral Gables’ Budget–Few Personnel Changes

July 26, 2010 Leave a comment

I am inclined to try to go through the 2011-2011 Budget submitted by the City Manager to City Commission on July 7, and presented in a workshop a few days later.  The following will try to highlight some of the most significant aspects of the first full budget prepared by Pat Salerno, City Manager.

The budget involves a reduction of 7.6 percent from last year’s budget (we don’t yet know the final outcome of last year’s budget).  The bulk of the decrease $7.1 million comes from cutting capital expenditures and $4.3 million cuts in the operating budget (and of this $3,6 million salaries and benefits).

Interpretation:

  • A reduction in capital expenditures from one year to the next is totally arbitrary since capital outlays can usually be postponed unless they involve special tied funds that have to go for specific purposes (e.g. road maintenance) required by law and cannot be shifted elsewhere in the budget.  Where did the City get the capital spending number of $4.3 million and why did they budget $11.5 million last year.  Last year’s capital budget could have been much smaller.  And I wonder whether last year’s budget of $11.5 million was really spent–my guess is not given the slowness in the execution of projects in Coral Gables.  So the big reduction in capital spending should be ignored for now.
  • Salary and benefit reductions are only 2.4% of last year’s budget,  a relatively small amount for a city.  And a net reduction in staff  of  17 positions (30 old positions-13 new positions) also is a relatively modest share, about 2%, of the total 791 positions.  All reductions are very low level positions and the new ones are not.  (We look at this in a later post.)

Next,  TAXES.

Filed under Coral Gables, Employees and Unions, Finance

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