The Missing Numbers Case A George Burgess Mystery
Written by Michael Lewis on July 16, 2009
By Michael Lewis
For three months leading up to the last vote that could avert an ill-conceived 40-year debt for a Florida Marlins stadium, county executives pushing the plan hid crucial facts that might kill the deal.
Although their shocking documents would reveal that two clusters of stadium bonds would cost taxpayers more than $2.4 billion for less than $300 million of construction funds, they never showed the numbers to commissioners who voted July 1 on the bonding.
That cover-up or colossal failure to communicate — you choose which — was finally admitted by County Manager George Burgess last week, a day after Miami Today had recounted his inability under questioning to recall the $2.4 billion bottom line, a day after Miami Today and the Miami Herald first reported the $2.4 billion, and more than a week after the deadline to halt the stadium deal.
As three commissioners repeatedly requested that bottom line in six hours leading up to a final vote, Mr. Burgess kept telling them that they already knew the number and it hadn’t changed since April — but he said he was unable to produce the total himself, though early on he had promised to do so.
He didn’t even offer an estimate.
Afterward, in a remarkable memo to commissioners, Mr. Burgess notes halfway through five dense pages that he thought commissioners already had all the figures they sought since April. An unnamed someone, he says, slipped up:
"Up front, let me state that staff mistakenly advised me that an assumed amortization schedule was attached to the CDT [Convention Development Tax] bond resolution when presented to the board on April 7, 2009. There was no such schedule and that answer was incorrect."
Did Mr. Burgess ever stop to wonder why none of the 13 had asked him anything about those numbers in three months? Or why three commissioners kept asking over and over on voting night for the bottom-line number? Does he think all 13 are simpletons?
Now, it’s possible that in good faith he thought all 13 knew what they would be voting to spend though he himself couldn’t come up with the bottom line and never used the word "billion" during hours of questioning — nor did he use the word or mention the $2.4 billion total in his five-page explanatory memo eight days later.
It’s also possible that the county won’t have to rape operating funds to repay the bonds based on highly optimistic revenue estimates that Mr. Burgess unveiled only after it was too late for commissioners to back out.
That repayment schedule presumes rapid and undiminished annual growth in tourist tax receipts starting at 10% in 2011 and never dipping below 5% thereafter through 2049. Who believes 38 years of uninterrupted growth? Ever hear of hurricanes?
It’s also possible that the county won’t face hundreds of millions in change-order charges that the stadium developer, a Marlins subsidiary, could try to shove onto taxpayers.
It’s even possible that the Marlins will actually be able to fund all construction cost overruns without once turning to taxpayers.
All of those are possible. So are three feet of snow in July on the stadium site. And they’re equally likely.
While awaiting that snow job, commissioners should dig deeper into the The Missing Numbers Case, also known as Burgessgate.
This county manager who took the lead in pushing a ballpark at any price and cut the deal himself couldn’t come up with the bottom line within six hours — though for three months it had been in county documents with which he was intimately familiar and he has a battalion of aides to help find those documents.
Mr. Burgess is specialized in finance. Since joining the county in 1982 he’s been a county budgeting analyst, capital budget coordinator, deputy budget director, budget director and, in a short hiatus, school system chief financial officer. "I have a pretty good feel for the budgetary direction of county government," he told us when he became manager in 2003.
But Mr. Burgess had no idea after years of work to build a baseball stadium how much taxpayers will take out of pocket to repay $300 million of the stadium construction. No idea.
Or maybe he just didn’t want to mention the billions in case the commissioners who didn’t know the true cost might change their votes.
It’s one or the other: he didn’t know or he wouldn’t tell. Neither makes a good case for fulfilling the manager’s fiscal responsibilities.
Commissioners who were kept in the dark for three months might also want to ask how much more than $2.4 billion the public will end up paying for stadium construction.
After all, the county must still issue $50 million in general obligation bonds for the stadium, plus we have no idea how much the $100 million in variable rate stadium bonds already sold will cost us because the interest rates change weekly.
The incredible backloading of bond paybacks is another matter. Our children and grandchildren will pay $118 million annually for years for one bond issue that produced only $80 million for the stadium.
That’s just horrid judgment, as is the deal to give the Marlins virtually all revenues from a stadium for which taxpayers will pay over $3 billion.
Decent folks can make mammoth errors in judgment in good faith. They aren’t the folks we want in the manager’s chair, but they’re still decent folks.
On the other hand, it’s hard to believe that repeated failures to share vital facts with elected commissioners over three months can occur in good faith.
Can George Burgess possibly be that clueless and inefficient? Or did he ever intend to reveal the numbers before forcing commissioners to vote on a deadline that he made certain had not a single day of wiggle room?
I’ve raised the question. Will commissioners? After all, they spent the billions in the dark. Will they now shed some light?