Commissioners Criticize Downtown Development Authoritys Tax Cap
Written by Jacquelyn Weiner on July 30, 2009
By Jacquelyn Weiner
In approving the Downtown Development Authority’s half mil tax-rate cap last week, Miami commissioners criticized the agency for maintaining the same millage while businesses that pay the tax are making do with less.
Commissioner Marc Sarnoff said the authority should not be hoarding funds while municipalities like Miami face crippling deficits.
"You’ve been overtaxing your people and holding on to the money," Mr. Sarnoff said, calling for cutbacks from the authority.
Miami’s deficit could be as high as $118 million, city officials say.
The development authority levies taxes on commercial property owners in Brickell and downtown. It is the only taxing authority in the county seeing an increase in property values this fiscal year.
The authority’s taxable value rose 9.5% between last year and this, according to the 2009 preliminary tax roll analysis from the county Office of the Property Appraiser.
Its preliminary taxable value rose from $10.1 billion in 2008 to $11 billion in 2009.
The authority would have faced a 17.9% drop had it not been for $2.7 billion in new construction.
Authority officials have said that because they expect its taxable value to drop in coming years, it must continue to bring in money in anticipation of revenue declines.
Neisen Kasdin, vice chair of the authority’s board, said the authority shouldn’t have to apologize for being prudent.
This year, $1.4 million in revenues have not been used, bringing in savings on hand to $4 million, Mr. Kasdin said.
"What we’ve been doing… is saving that money to be used for the critical projects downtown that are needed more than ever," he said.
Of that, $1 million is to fund multi-year capital improvements in the Brickell area, Mr. Kasdin said.
"All the money that we have has been committed to projects", said Alvin West, authority treasurer and board member.
The development authority’s proposed cap, a half mil, is the same rate the authority has levied since its formation in 1965.
That amount is 14% less than the rollback rate of .58 mil, said Deputy Director Meredith Nation. The rollback rate is the millage that would generate the same amount of revenue in the new fiscal year as the current year.
Thus while the millage rate is to remain the same, property-tax payments will fall an average of 18%, Mr. Kasdin said.
"Taxes are going down in downtown," he said.
Still, Commissioner Tomás Regalado said the authority should be sending residents a comforting message by lowering their tax rate.
"The right message to send to the people is that government is holding your hand," Mr. Regalado said. "That’s the whole point of government right now. People are really struggling."
In addition to criticizing the authority for its taxing plans, Commissioner Sarnoff said the authority needs to keep cutting personnel costs.
"Everyone is going to have to take a reduction in their compensation packages," Mr. Sarnoff said.
The authority has a track record of being wasteful, he said, citing salary increases rising from $94,000 in raises in 2006 to $126,000 today.
"Saying bloated would be an unfair characterization," he said. "They’re excessive."
Mr. Sarnoff’s district encompasses the development authority’s taxing area.
Mr. Kasdin said the authority has been cutting administrative costs for the past two years, reducing personnel compensation by 7%.
In fiscal 2007-2008, the authority’s personnel costs were $1.32 million, which have been reduced to $1.24 million for the coming fiscal year, he said.
"We understood that we had to operate leaner," Mr. Kasdin said.
The Downtown Development Authority faced public scrutiny in 2007 when an audit by Victor Igwe, Miami’s auditor general, revealed inaccurate payment of some staff salaries, frivolous spending and other administrative concerns.
Dana Nottingham, then the authority’s head, resigned soon after.
Since then, the authority has undergone an overhaul in its board members and administration.
Almost all problems discovered under the audit, except for some administrative filing issues, have been taken care of, said Mr. West, the treasurer and board member.
"We should have the full audit resolved by the end of this fiscal year," Mr. West said at the meeting.
The Downtown Development Authority’s final millage rate is to be decided when the commission votes on the authority’s budget by the end of the fiscal year.
When that time comes, Commissioner Sarnoff said he wants to see salary cuts and more concentration on capital improvements.
What’s most important is that citizens see that the public sector is cutting back too, he said.
"Every time we discuss budget or the Marlins, I’ve been saying the same message from the day I got on this dais," Mr. Sarnoff said. "There’s going to be a taxpayer revolt. And they’re coming."