Surprise budget surplus prompts Miami City Commission to delay vote on bond issue

News of the surprise $45 million budget surplus also prompted union leaders to request that their contracts be reopened.

11/15/2012 1:17 PM

11/15/2012 7:35 PM

One day after city of Miami budget officials surprised the City Commission with news of a $45 million surplus, commissioners delayed a critical vote on a proposed bond issue.

Commissioners said they needed to digest the revised budget numbers before making a decision on the bond issue, which is already behind schedule. They also slammed the administration for underestimating the size of the surplus by about $37 million.

Leading the charge for more time: Commission Chairman Francis Suarez and Commissioner Michelle Spence-Jones.

“I just can’t get comfortable with it,” Suarez said of the discrepancy, calling his perspective “a reflection on the way business has been handled by our administration.”

Commission Vice Chairman Marc Sarnoff, however, urged his colleagues to cast aside “personal aspirations” and approve the bond issue.

The comment was a clear shot at Suarez, who has become a more vocal opponent of the administration and Mayor Tomás Regalado over the past three months. Regalado is up for reelection in 2013.

On Thursday, Suarez told The Miami Herald he was “strongly considering” running for mayor, but that his political aspirations were unrelated to his desire to delay the vote.

Commissioners have a small time window to wrap up the bond issue, which would also be $45 million. Miami needs the money to pay off a short-term bank loan that financed its share of the PortMiami tunnel dig. The balance is due in January.

The commission was supposed to approve the bond issue Thursday. But they voted to push off the vote until Monday evening.

Chief Financial Officer Janice Larned advised against delay.

“I’m not sure what another week buys this transaction,” she said. “I think the citizens are owed a decision.”

But a representative from Wells Fargo bank, which has agreed to underwrite the bond, said a few extra days wouldn’t prevent the city from meeting its deadline.

City Manager Johnny Martinez said he was confident the commission would approve the bond issue Monday. “After that, there’s no more cushion,” he said.

The budget surplus came to light late Wednesday, after Budget Director Danny Alfonso circulated a memo saying he had been too conservative with his original projections of an approximate $8 million surplus. Though the city’s computers now show a $45 million surplus, Alfonso said the figure was likely closer to $37 million because several transactions had yet to post.

Alfonso took heat from several commissioners who accused him of withholding information.

“In my heart, there was no attempt to deceive anyone,” he responded.

Martinez conceded that the administration “could have managed expectations a little better.”

Said Regalado: “I stand 100 percent behind Danny Alfonso and the way that he runs his department. I stand behind the manager. He is doing the right thing.”

Still, commissioners and union leaders were fuming. The unions asked the commission to reopen contract negotiations in light of the surprise surplus.

“You told us to dig into our pockets and we did — for four consecutive years,” Fraternal Order of Police Vice President Javier Ortiz said, pointing out that the unions agreed to millions in employee concessions over the summer because the city was projecting a $40 million budget shortfall. “Now that apparently times are good and we have $45 million, direct the manager to meet with us and reopen our contracts.”

Regalado said Martinez would sit down with the unions after Thanksgiving.

“Maybe we can use a little of the money to buy new uniforms or police cars or fire trucks,” Regalado said. “But to say that we are going to restore every concession, to me, that would be irresponsible.”

Administrators are recommending that the bulk of the surplus be stashed in reserves, which remain below the $93 million balance required by a city ordinance.

In other business, the commission extended the agreement that allows Scotty’s Landing restaurant and Grove Key Marina to operate on city-owned property in Coconut Grove.

The 35-year lease for the eatery and marina expired earlier this year, and the city sought proposals from businesses interested in taking over. But administrators halted the bid process in July, citing procedural irregularities.

Director of Public Facilities Henry Torre said he plans to get started on a new bid process later this month. Because the property sits on the waterfront, any new contract must be approved by public referendum.

Until then, Scotty’s Landing and Grove Key Marina will be able to operate under an agreement that can be revoked for any reason with 30 days notice.

The commission approved the agreement 4-1, with Commissioner Frank Carollo voting in opposition.

Sarnoff, whose district includes the Grove, urged administrators to move forward with the new bid process as quickly as possible.

Join the Discussion

Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Terms of Service