When Daniel Alfonso was named Miami’s budget director in August 2011, he was greeted with a bare-bones city budget composed of a few pages of numbers — a far cry from the 300-page spending breakdowns most cities offer residents.
“That’s basically what I was given, a spreadsheet,” said Alfonso, now the city’s chief financial officer. “I’m looking at the spreadsheet and all I could say was, ‘wow.’ ”
The city was the target of a federal investigation into its finances after years of debilitating budget deficits that cut reserves razor thin. Employee salaries and benefits were being slashed to balance the books, and top financial administrators were leaving at a furious pace.
Two years later, challenges remain, after the U.S. Securities and Exchange Commission recently came down hard on the city for the “shell game’’ played by Miami financial leaders when they sold bonds in 2007 and 2008. Still, reserves are growing, the city’s books are balanced for the first time in six years, and leadership is stabilizing.
“We’re trending up,” said Jose Fernandez, the city’s newly hired finance director.
What accounts for the change? Certainly, hungry home buyers gobbling up real estate and lower pension payouts have helped shore up the city’s finances.
Perhaps more important, though, is that over the past two years Miami has raided Miami-Dade County of experienced financial administrators.
Alfonso spent 17 years at County Hall, serving as a budget coordinator before joining Miami. Two months ago, the city hired 21-year county employee Fernandez to head up finance. He was County Hall’s controller for PortMiami.
Later this month, Christopher Rose will join the city, adding 15 more years of county experience, mostly in the budget office. And City Manager Johnny Martinez, who worked most of his career with the Florida Department of Transportation, spent three years at County Hall before coming to Miami in 2010.
That amounts to 56 combined years of management skills overseeing multi-billion-dollar budgets and leading tens of thousands of employees at one of the largest governments in the southeastern United States.
Ed Marquez, the county’s deputy mayor who oversees finance, said the ex-county staff left with good reputations.
“The people they’ve hired have very good qualifications and they’re fiscally savvy people, they’re talented people. So I’d expect them to do well with the city,” said Marquez, a former city manager for Miami.
The roots of Miami’s most recent financial crisis were planted long before the current administration took office in November 2009. As property taxes poured in from 2005 through 2007, the city’s reserves were dwindling, mostly to pay off mounting pension costs.
A bulging $141 million reserve fund in 2003 had dwindled to $10 million seven years later. A series of Miami Herald articles in 2008 explaining how financial leaders were transferring money from construction accounts to operating accounts to balance the general-fund budget caught the attention of the SEC, which launched its investigation.
When Mayor Tomás Regalado was elected in 2009, he inherited budgets with whopping shortfalls. Leaders balanced the books by cutting salaries and benefits, mostly from 2,500-plus unionized employees. Some firefighters who had seen sharp salary hikes lost up to one-third of their total compensation.