After weeks of controversy and a series of delays, the Miami Commission on Monday approved a $45 million bond issue needed to pay off a short-term bank loan.
The unanimous and drama-free vote was a victory for Mayor Tomás Regalado and City Manager Johnny Martinez, who had struggled to garner support for the measure.
Time was running out. The loan, which financed Miamis share of the PortMiami tunnel dig, must be paid off in January, and a bond issue can take weeks to complete.
Despite consensus on the dais, there were doubts behind the scenes about the citys finances, and the surprise surplus that the budget team announced last week.
Among the chief questions: When did the administration know the surplus would be four times the $8 million that had been projected? Did they know in September, when city leaders asked employees for $40 million in concessions to balance the budget?
Chief Financial Officer Janice Larned declined to comment.
Budget director Danny Alfonso said the city manager and the finance team found out on Nov. 2, when the city did a soft closing on the previous budget year. Alfonso said he learned about it on Nov. 6, when he returned from a two-week vacation.
Regalado knew by Nov. 8, according to an email he sent to top city administrators. In the note, the mayor suggested using some of the surplus money to pay off the tunnel loan a proposal that went nowhere.
Some of the commissioners, however, didnt find out about the surplus until Nov. 14.
I wish he had told us earlier, Commission Chairman Francis Suarez said of the mayor. You have an obligation to tell the commissioners as early as possible when you find out something like this.
Commissioner Michelle Spence-Jones said she, too, was concerned that commissioners received the news at the 11th hour and only one day before a key vote on a major bond issue.
Were talking about 10 percent of the citys budget, she said.
Alfonso said he and other city administrators wanted to verify the figures before taking them to the commission.
It took us about a week to be fully comfortable with the numbers, Alfonso said.
The announcement about the surplus delayed the vote on the bond issue, which was supposed to be completed by Thanksgiving.
At a meeting last week, commissioners said they needed more time to digest the new numbers. They convened a special meeting Monday to revisit the issue and cast a final vote.
The bond issue had been controversial from the start, in part because the city waited until the fall to publicly address the tunnel loan.
Adding to the intrigue: The city had sought proposals from private equity companies interested in holding the debt, but tossed the sole pitch it received. Gates Group Capital Partners, which wanted to loan the city $48 million by taking control of a city-owned building as collateral, later claimed it had been used as a stalking horse.
Commissioners also raised concerns about the administrations recommendation to have Wells Fargo underwrite the bond as opposed to several other underwriters that had been procured through the competitive bidding process. City finance officials said Wells Fargo was the natural choice because it held the original loan.
Commissioners twice put off voting on the issue.
During that time, Finance Director Steven Petty resigned his post after it came to light that he had been hired without meeting the minimum qualifications for the job.
After the 5-0 vote Monday, city staffers congratulated the mayor and manager.
It was the right result, said Commission Vice Chairman Marc Sarnoff. It was the fiscally responsible thing to do. I just wish it had happened a little sooner.
Funding the tunnel dig is technically the responsibility of the Omni Community Redevelopment Agency, a quasi-independent city body tasked with eliminating blight in the Omni neighborhood.
The city took out the short-term loan and will issue the bonds. But the CRA has promised to make the debt-service payments using the special tax dollars it collects.
With interest, the bond issue will end up costing the CRA about $71 million, Martinez said.