South Florida

Miami-Dade cuts off Opa-locka’s money lifeline over misspending

Opa-locka Councilman Terence Pinder
Opa-locka Councilman Terence Pinder

With Opa-locka on the verge of financial collapse, the city was hit with another blow on Thursday: The county stopped funneling hundreds of thousands of dollars for critical road repairs and other services.

The reason: City leaders broke their own rules by tapping into the special surtax money to fill budget gaps and other basic costs that have spiraled out of control.

The problem was discovered this week after Miami-Dade auditors dug through city records to find nearly $800,000 was missing from an account that should have been used to upgrade the city’s aging streets, sidewalks and other amenities.

“We did things wrong,” said City Commissioner Terence Pinder. “It’s tough. It’s not easy being here. … We can’t continue to operate this way.”

The city’s suspension from the county program that collects a half-penny sales tax follows just days after Opa-locka leaders announced they were on the edge of financial failure and in need of a state takeover.

Hundreds of vendors, including car leasing companies, suppliers and contractors have yet to be paid at least $3 million.

The loss of the surtax revenue was just one of the troubling findings highlighted during a tense commission meeting on Thursday to address the city’s crushing debts.

The other: questions over the whereabouts of at least $200,000 in federal forfeiture money that was only supposed to be spent for police cars, vests, and other law enforcement purposes.

So far they can’t determine where the money went.

“At this point, we just don’t know,” said City Manager Steve Shiver.

The revelations unfolded as the commissioners tried to come up with a deadline to present a plan to the state for a recovery that could take as long as seven years.

So far, the city owes about $8 million — more than half to the county for water, sewer and other crucial services.

Commissioner Joseph Kelley pleaded with his colleagues to set aside their differences — including a recent spat between Mayor Myra Taylor and City Manager Shiver — to rein in the city’s spending.

“The manager is the manager until we say not,” he said. “There is no way we are going to get through this if we are not on the same page.”

Shiver said he was willing to meet with the mayor on a continual basis to move a plan forward, but said he was still struggling to determine the true state of the city’s finances.

“We truly don’t have any controls in place,” said Shiver, who was hired in September, in part to help balance the city’s budget.

He said that despite statements by elected officials that he was exaggerating the city’s woeful condition, a recent review of the budget made it clear that Opa-locka was in trouble.

“It’s been said that I’m crying wolf or over-exaggerating, but I have no purpose to over-exaggerate. It’s apparent that we owe a tremendous amount to outside vendors. It’s apparent that we owe a tremendous amount to the county.”

Kelley said he is getting calls every day from local businesses that are owed money from the city, including a welder who is still waiting to get paid $200.

In addition to vendors not getting their checks, he said he is troubled by the possibility of losing the city’s free bus service now covered by the surtax program. Hundreds of the elderly and poor use the shuttles each day.

We truly don’t have any controls in place.

Steve Shiver, city manager

Commissioners agreed during the meeting to search for the money to pay for the buses — about $15,000 a month.

What’s not clear is how long the city will be cut off from the county program, which was created to help communities pay for expensive projects, including road and sidewalk repairs and even ramps for the disabled.

For Opa-locka, the money is critical.

Miles of roadways have been resurfaced over the years, and entire sidewalks have been built. Every year, the city gets about $700,000, records show.

Kelley, a former mayor and one of the longest-serving elected leaders, said he is disappointed Opa-locka was temporarily booted.

“It’s very concerning to me,” he said. “We have sidewalk construction that is long overdue. I was looking forward to using those funds.”

The county was alerted to the problem when officials reviewed a city audit from last year, which indicated Opa-locka had about $800,000 in unspent surtax money. However, city officials later admitted the money was spent on bills that had nothing to do with projects covered by the surtax program.

When Cathy Jackson, chief auditor, asked to talk to the city’s private auditor, Roderick Harvey, he declined to meet with her until the commission gave its approval.

Jackson said she also requested records that have yet to be turned over.

“This unfortunately leaves the trust with no option other than to withhold surtax funds until the issue is clarified and resolved,” said Charles Scurr, executive director of the Citizens’ Independent Transportation Trust, which oversees the surtax money.

Miami Herald reporter Douglas Hanks contributed to this report.