2009 Deficit Surprises A Reeling City Of Miami
Written by Risa Polansky on March 25, 2010
By Risa Polansky
Miami is suddenly facing a $53 million deficit — in last year’s budget.
Already halfway through this year, the city must raid reserves to fill the surprise gap, Mayor Tomás Regalado revealed Tuesday.
This latest fiasco is in part fallout from fund transfers now under federal investigation.
Moving $18 million from the capital budget to the general fund but never stopping projects meant "the money was gone," the mayor said.
About $8 million in impact fees also got shuffled, he said, but "we don’t want to keep doing the practice of the past," so that money’s been moved back.
A puzzling $10 million that the mayor called a "line item that nobody can find" is also part of the newly tabulated $53 million hole.
"We thought originally that the deficit from last year’s budget was around $27 million, but we kept looking," Mr. Regalado said. "…They finally got their numbers in order. To me it was a very, very uncomfortable surprise."
Commissioner Francis Suarez also said he expected much less but called it "prudent" for the city to make "a gesture of good faith" and put the moved money back, especially amid the investigation.
Now, the mayor said, there’s "no other option" but to use reserves to close out fiscal 2009.
The move would drain the emergency fund to around $40 million, he said — less than half the minimum mandated by a mid-’90s memento of the city’s brush with bankruptcy.
Mr. Regalado said he has "several ideas" to bring reserves up to the needed $90 million but wouldn’t share them before talking more with officials.
Mr. Suarez said he awaits details on possibly selling assets and reworking union contracts — options already in the mix to cover this year’s still-unknown deficit, which Mr. Regalado said won’t be "as bad" as last year.