Miami facing $10 million mid-year budget shortfall, may have to dip into reserves
By Yudislaidy Fernandez
A $10 million mid-year budget shortfall could force the City of Miami to dip into a $5 million contingency fund.
The newly discovered red ink has already forced the city to freeze hiring and cut overtime hours, Miami's Chief Financial Officer Larry Spring says.
By ordinance, the city must build into its budget a contingency of at least $5 million, which it expects to use to cover some of the budget gap, he said.
The mid-year adjustment, conducted yearly, revealed a forecasted shortfall of $10 million, caused mainly by drops in sales tax collections and as well as city fee and permit revenues, he said.
The city began a hiring freeze last week but does not plan layoffs. Mr. Spring said departments are instructed to spend efficiently as the city works to fill the multi-million-dollar gap.
"We are making sure expenditures being made are absolutely necessary," he said.
In September, the city cut its budget by $48.5 million to $525 million. It cut 67 positions and froze or eliminated 176 vacant spots.
To balance the budget, the city is closely watching overtime spending.
In understaffed departments such as police and fire, overtime runs high, with some employees working extra hours because vacant positions have not been filled.
"We will be closely monitoring overtime," Mr. Spring said.
The shortfall affects the city's summer park programs — ready to kick off soon — because the city needs funds to hire temporary staff.
Mr. Spring said the city is using federal stimulus aid to hire staff to run the summer camps in many of Miami's 100-plus parks.
"We plan on implementing summer programs utilizing those dollars for youth hiring to cover the shortfall," he said.
"We feel confident we will meet the budget."