Miami’s chief financial officer threatened to step down Thursday, just days after a court ruling that could unravel the city’s plans for a balanced budget, informed sources inside City Hall said.
Top city leaders convinced Janice Larned to stay.
But the threat of her departure was enough to raise further concerns about the city’s delicate financial situation — and showcased the mounting pressure at City Hall.
Miami has just five weeks to close a $40 million gap in its $485 million budget.
City officials were relying on a legal maneuver known as “financial urgency” that would have enabled them to force $40 million in employee concessions. But this week, a Miami-Dade circuit court judge said Miami had improperly invoked the fiscal tool, sending budget managers scrambling for alternatives.
In addition, the U.S. Securities and Exchange Commission may impose fines on Miami for misleading investors in advance of two bond issues. And a separate SEC investigation into bonds used to finance the new Marlins ballpark is ongoing.
Larned did not return calls from The Miami Herald.
Miami Mayor Tomás Regalado said City Manager Johnny Martinez met with Larned early Thursday.
“I know she was really stressed out about the bonds and the unions,” Regalado said. “She’s handling all of that.”
The mayor praised Larned’s nine-month tenure with the city, saying she had helped stabilize the budget in a short time.
“I hope she doesn’t leave,” he said.
Larned is part of a team hired last year to straighten out the city’s finances.
She replaced former CFO Larry Spring, one of several former employees deposed in the first SEC investigation. Spring resigned in June 2011 to pursue opportunities in the private sector, he said.
Miami finds itself in a precarious place regarding the budget.
Budget managers labored to balance the books by July — weeks earlier than in years past. But their plan depended on declaring financial urgency, a provision in state law that allows municipalities to unilaterally alter employee contracts when finances are strained.
Martinez, the city manager, moved forward with urgency last month. The action was voided Monday, when Miami-Dade Circuit Court Judge Abby Cynamon ruled that the city commission, not Martinez, has authority to invoke the law.
City officials are hopeful the order will get overturned on appeal. But if the ruling stands, the commission will have to declare urgency, or the budget team will have to come up with another way to cut $40 million. The city could also negotiate concessions with its four labor unions, though talks have been put on hold. It is too late to raise taxes.
The unions have criticized Miami for declaring financial urgency at a time of increasing revenues, and for continuing to cut from employees.