Miamis Oversight Board Ready To Show Finances In Order
Written by Paola Iuspa on October 11, 2001
By Paola Iuspa
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A board created by the state to supervise City of Miami finances is completing what could be its final report as it nears the end of a five-year term, members said.
Members of the Financial Emergency Oversight Board, created in 1996 when the city faced a $68 million deficit, say they will show Miami should be freed from its current high-risk status, making bond deals costly.
City officials plan to put a bond issue on the Nov. 13 ballot for about $255 million in infrastructure work to stimulate the local economy. Without the oversight board, the city’s bond rating should improve.
Board members are preparing to meet with Gov. Jeb Bush in mid-December, said Maria Camila Leiva, oversight chairman. Showing that the city has operated in the black for the past five years, board members are confident the governor will terminate the group as originally planned, she said.
"The city is in a good shape," Ms. Leiva said, "and we expect the oversight board to be dismantled."
Robert Nachlinger, assistant city manager who oversees finances, said Gov. Bush would still have to get the city’s final audit by an independent accounting firm.
"We believe the certified audit will be out in February," he said.
"The city came up with its own system of fiscal control," she said. "Budgets have been balanced, things are being done with transparency and they enacted an ordinance that forces the administration to be responsible. In 1996, the city did not even have a computer system that worked."
Another measure adopted in 1999 by city officials to help weather the economic crisis was the adoption of a 20% parking surcharge. So far, the city has collected about $12 million, but the surcharge was challenged in court and declared illegal in July. The city is appealing and officials are asking legislators to rewrite the law in January to make it constitutional.
If the ruling is not overturned, funds collected since the tax was adopted may need to be returned to taxpayers. In the meantime, Ms. Leiva said, city administrators are keeping the $12 million from the surcharge in an escrow account. Another $10 million is being collected from the parking fee during this fiscal year, ending Sept. 2002, but none of those revenues have been built into the current $538 million budget, Mr. Nachlinger said.
After a 4% cut in expenses, just approved in the 2001-02 budget, with $323 million in general funds, the city could fall short by almost $1.5 million, Mr. Nachlinger said.
He said the city does not plan to use money from reserve funds, projected to be $80 million, up from $75 million a year ago.
Russell Chuderewicz, professor of economics at Florida International University, said running Miami without the supervision of the board could mean many things. He said it could give the city more flexibility in the way it does business or end a spending discipline that put Miami back on track.
"There is a general concern about political bias," Dr. Chuderewicz said. "Politicians tend to look more for the short-run outlook than the long run when making decisions.
"In times like this, some politicians tend to keep their constituents happy and in some cases overspend" on programs that may help the community but hurt city finances.