Miami City Commission balances $485 million budget, lowers tax rate
The Miami City Commission finalized the 2012-13 budget and approved a slight decrease in the tax rate.
09/26/2012 6:00 AM
09/27/2012 11:17 PM
After months of high drama, the Miami City Commission passed the city’s $485 million budget Thursday in a way few expected: quickly and without much debate.
Commissioners did, however, voice concerns about a looming expense.
In January, Miami must make a $45 million payment on a loan it took to finance its share of the PortMiami tunnel dig. The quasi-independent Omni Community Redevelopment Agency is responsible for the expense and is working to secure private financing. But with just three months to go, time is running out, and the city could end up on the hook.
“We have not budgeted the $45 million to pay the amount due,” Commissioner Frank Carollo said. “We have to make sure we do this within the next three months.”
Commission Chairman Francis Suarez likened the loan payment to an approaching hurricane.
Vice Chairman Marc Sarnoff, who chairs the Omni CRA, said the agency is actively exploring options for paying off the loan. He assured his colleagues that the city would not be saddled with the $45 million payment.
That discussion aside, there was little discord during Thursday’s final budget hearing.
It lasted just two hours, making it one of the shortest budget hearings in years. There was no late-night horse trading, no fireworks on the dais. The hearing stood in sharp contrast to the months that preceded it, when Miami struggled with union negotiations, an unexpected legal battle and a string of high-level staff resignations.
Miami had to fill a $40 million budget hole, much of it created by poorly performing investments by the city’s two pension boards.
To close the gap, city budget officials eliminated vacant positions, scaled back spending and changed the actuarial formula used to calculate Miami’s pension contribution.
Additionally, the four labor unions agreed to about $20 million in employee concessions as part of new, two-year contracts. The police, general employees and sanitation workers ratified their agreements this week, city officials said. The firefighters union was scheduled to finish voting Friday.
While employees had to give up some pension benefits, union leaders were pleased to have a two-year contract in place.
“We’re very happy with the outcome of this deal,” sanitation workers union President Joe Simmons said.
The new tax rate — $8.47 for every $1,000 of taxable assessed property — represents a slight decrease from last year.
Mayor Tomás Regalado had pledged to balance with budget without raising taxes.
“We balanced the budget with no forced concessions, no tax increases, and we increased services,” including expanded trolley services and recycling efforts, Regalado said. “This is the light at the end of the tunnel.”
Regalado said he believes the tunnel payment is unlikely to impact the city’s bottom line.
“The CRA is committed to pay that,” Regalado said. “We don’t foresee any crisis at all.”
The commission approved the budget 4-1, with Commissioner Michelle Spence-Jones voting in opposition. Spence-Jones said the city needed to find ways to raise new revenues to avoid making painful cuts to employee salaries and benefits. Still, she was among the chorus of commissioners who praised Budget Director Danny Alfonso for his efforts.
The budget-building process wasn’t always so smooth.
For the third time in as many years, Miami declared financial urgency, a legal maneuver that would have enabled the city to force employee concessions.
Regalado anticipated forced concessions would be necessary— until the police union won a legal challenge alleging the city had failed to follow procedure when invoking the urgency law.
The Third District Court of Appeal ultimately overturned the lower court, opening the door again to forced concessions. It never came to that.
In other business, the commission bid farewell to longtime City Clerk Priscilla A. Thompson, who is retiring after 32 years. In a tearful speech, Spence-Jones called Thompson “the voice of conscience for all of us up here on the dais.”
City Elections Coordinator Dwight Danie will replace Thompson through January, when the commission will approve a permanent replacement.
Commissioners also approved a pair of high-profile contracts Thursday.
One agreement will enable the Pennsylvania-based convention center management firm SMG to take over operations at the James L. Knight Convention Center in downtown Miami. The city will pay $78,000 for each year of the three-year contract, Public Facilities Director Henry Torre said.
The previous operator, Global Spectrum, had submitted a proposal to continue as the management firm, but lost in the competitive bidding process.
Commissioners also signed off an agreement that will allow the television series Burn Notice to film a seventh season at the old Coconut Grove Convention Center.
Sarnoff had wanted to raze the waterfront convention center to make way for a new public park. But he ultimately agreed to let the series have an additional year in exchange for $450,000 in rent — a $210,000 increase over the current year.
The producers rebuffed Sarnoff’s suggestion to blow up the convention center in the last episode.
Burn Notice has yet to be picked up for a seventh season, but the producers are hopeful they will get the green light soon. The series has pledged not to ask for an eight season at the Coconut Grove site.
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