State officials won’t declare a “financial emergency” in the city of Opa-locka — just yet. But after a meeting with Florida’s auditor general in Tallahassee, city officials will need to develop a realistic plan to pay-off its debt.
Interim City Manager David Chiverton said at a special workshop Thursday that Opa-locka will need to explore new options to solve its $7.5 million deficit. The debt, according to the city, includes $4.6 million owed to the county and $2.9 million owed to vendors.
Opa-locka officials paid $1.8 million on Feb 12 to Miami-Dade County to avoid a water and waste moratorium placed on the city.
“Until we properly identify what the real debt is, we can’t clearly identify if we are in a financial emergency crisis,” Chiverton said, adding that the state’s decision will be based on the recovery plan.
Sign Up and Save
Get six months of free digital access to the Miami Herald
The city, according to Chiverton, has two possible sources of new revenue:
▪ If Opa-locka collects on delinquent utility bills and unpaid fines, it would almost have enough to bring the city out of debt.
Chiverton said collecting unpaid bills and fines could generate almost $1.5 million in revenue for the city.
“I’m not a fan of that,” Commissioner Joseph Kelly said.
There are more than 5,000 delinquent accounts and, with 39 percent of the city living in poverty, getting the money will be easier said than done.
“The utility bill, we often refer to that as the water bill, well, citizens already have enough challenges with it,” Kelly said.
The city is also looking to sell off unused property and is expecting up to $314,000 from the sale a few land parcels.
▪ If that doesn’t work, Chiverton said, the city will make cuts through furloughs, outsourcing departments, salary cuts (35-hour or four-day work weeks) and possible layoffs.
In a memo attached to a draft of the city’s financial recovery plan, Chiverton said Opa-locka still grapples with foreclosures and unemployment. The council will need to consider cuts as “factors to consider as hard decisions to ensure a balanced budget” and keep the city in good standing with the county and state.
“Provided that City Commission adopts policies to reduce expenses,” Chiverton wrote in the memo, “it is my belief that we will not be reporting a financial emergency condition for fiscal year 2015-2016.”
The city has given itself until April— about the time the council will vote on the mid-year budget — to resolve any issues in the recovery plan.