Fred Nesbitt, a consultant for the Florida Public Pensions Trustees Association, said the city was taking “positive steps that will reduce the employer’s contribution.”
But some observers say the changes, many of which will only last two years, don’t go far enough. The general employees and sanitation workers unions, for example, will be paying less into their pension plans than they did this past year. And while changing the actuarial method takes pressure off the budget now, it isn’t a long-term solution.
“It’s a budgetary fix, but you are not correcting the true problem, which is an unfunded liability,” said David Matkin, an assistant professor at Florida State University who specializes in public financial management.
Despite hikes in spending, commissioners haven’t increased the amount of money flowing into the city.
They toyed with the idea of raising taxes this summer. At a meeting in July, Gort cast a key vote to advertise a slight tax increase, but reversed himself before the clerk could announce the final tally.
Gort said he had been confused. But observers said Gort changed his mind because he didn’t have political cover from Carollo, who indicated he might support the increase before voting against it.
Regardless of how the vote played out, Mayor Tomás Regalado had promised to veto any new taxes.
Moreno, the FIU professor, pointed out that Regalado’s base of support is working-class Little Havana, where pocketbook issues drive elderly voters to the polls.
“The mayor up to now has been a very popular mayor,” Moreno said. “He will continue to be a popular mayor unless someone makes the suggestion to raise taxes. That would be a very dangerous move on his part.”
The commission ultimately decided to reduce taxes — a move many community activists criticized.
“If you’ve got budget problems that are this bad, you don’t solve the problems by cutting the [property-tax] rate,” Coconut Grove attorney and activist Michelle Niemeyer said. “It costs money to provide police and fire services.”
Former Mayor Joe Carollo said the city would have more money if it made better use of city-owned properties. He pointed to the case of Linden Airport Services, the private company Miami hired to build and operate a heliport on Watson Island. Linden agreed to invest $1.45 million in the heliport infrastructure. But it was the rental agreement — $2,200 a month for the first two years — that confounded observers.
“Not only has the city neglected to maximize revenues they could be getting on a variety of properties, they have practically given away some of their prime waterfront properties,” Joe Carollo said.
Commissioners acknowledge the problem.
“There are definitely some major systemic things that need to be done for the city to be completely financially healthy,” commission chairman Francis Suarez said, ticking off a list of issues that included the city’s $50 million liability for accumulated sick and vacation time. Suarez, a commissioner for three years, said he plans to push the administration to come up with some solutions. He said City Manager Johnny Martinez should “drive” that process.
Spence-Jones is also putting pressure on the city manager.
“We have to have a plan,” she told him Thursday. “I am going to ask that you put together a plan to generate revenue.”
Martinez said the city will have breathing room to address some of its systemic problems when new union contracts kick in next month.
“We’re going in the right direction,” he said. “The two-year agreements put pressure on the administration to be efficient.”
Former City Manager Merrett Stierheim believes the broader problems can be fixed — but only if city leaders have the will to fix them.
“As a commissioner or the mayor, you have to make difficult decisions,” Stierheim said. “And they are loath to make those decisions.”