Coral Gables Watch

The Mystery of Millage Rates

October 17, 2009 Leave a comment

City officials are repeatedly saying to us that the millage rate is “lower than two years ago”. (And why didn’t they mention that the millage rate is much higher than last year–more misinformation and misdirecting the commentary!). In fact, the millage rate is a simple residual after calculating the budget needs and other sources of revenue such as permit, fire and other fees. What counts for the city are property assessments and new construction and the budget requirements, and then comes the millage rate to calculate the revenues to fill the gap with the other income source.

The city fathers do us no favor by having a lower or higher millage rate. They do us a favor by better managing the city’s budget–that is the variable that counts. Why in the world does the city want to keep spending merrily on capital projects during a crisis–this gives the impression that the commissioners and city manager think that the recession will be over quite soon. Why can’t the city reduce the number of the senior managers now they have reduced the number of low level staff?

Now that the unemployment rates is 11 percent in Miami-Dade (this means really means 20 percent measuring discouraged workers and part-time employment at lower wages) and will certainly not be back to normal for several years, and is much higher than the national average of 9.8 percent.

Also, there is talk in financial circles of mortgage problems increasing among new groups of homeowners, not in the subprime category, but in conventional loan categories. The does not portend a good future for the city’s property taxes.

Another kind of silly statement is that the Coral Gables taxes are only (say) 27 percent of your total tax bill. Right, it is only a 27 percent, but two years ago it was a lower percentage of the tax bills. Now Coral Gables is the fastest growing share of our property tax bills.

Therefore, mayor and commissioners, plan for the worst and hope for the best. Let us see what happens in the coming months.

Filed under Coral Gables, Finance, Management

A Few Private Sector Lessons for the City of Coral Gables

October 17, 2009 Leave a comment

The City of Coral Gable is not following some of the most fundamental of preceps and experience of well managed private companies during a recession:

–Don’t be surprised by a recession by not having reserves and a backup plan;

–Most importantly, take advantage of the crisis to take the enterprise along a different path, reexamine it culture, evaluate its leaders, and refocus and strengthen services to consumers;

–During bad economic times, cut costs to retain the core staff;

–Cut way back on capital expenditures.

–Streamline the organization and its structure, including the redefinition of questionable units;

–Focus on the core values and services of the enterprise;

–Rethink the future path of expansion of the enterprise, there may well be a different path to prosperity in the future, very different from the past;

–It is a good time to refresh the staff with new ideas and training, and outstanding managers;

Filed under Coral Gables, Organization