Just a day after beleaguered City Manager David Chiverton stunned elected leaders by resigning his office in the course of a federal criminal investigation, Opa-locka officials announced they were close to broke and would not be able to pay their workers — including police officers — come September.
With just $350,000 left in the general fund, Opa-locka may have to consider bankruptcy, officials said.
“We are at ground zero,” Florida Inspector General Melinda Miguel told city leaders during an emergency oversight board meeting on Thursday. “We are at the doorsteps of one of the lowest points in the history of Opa-locka.”
The developments came in a stunning sequence for the impoverished city, which has been under the oversight of a state financial emergency board since June but has been unable to halt a mushrooming deficit. The governor’s inspector general said she was riled by the city’s failure to meet critical deadlines in filing a budget and recovery plan by Aug. 1 in what was once a firm deadline.
During the meeting at Sherbondy Village community center, Miguel blasted the city’s elected leaders, saying they were not doing enough to keep costs down or tackling the critical problems that threaten the entire operation of the city.
“One of the biggest tests to resolving a problem is realizing you have one,” she said by phone from Tallahassee, as Opa-locka Mayor Myra Taylor and commissioners sat in the front row staring at the local members of the state board.
The revelations about the city’s grim finances — far worse than Opa-locka’s own projections a month ago — provided even more drama to a meeting that began with news that Chiverton had stepped down from a job he once coveted.
A target of an ongoing FBI probe into corruption in Opa-locka, Chiverton took a leave of absence this spring after the Miami Herald revealed he paid himself tens of thousands in unused sick and vacation pay to which he was not entitled.
“I just want to move on,” he said on Thursday in a brief interview, adding he had hired a lawyer for what appears to be a mounting legal defense.
The Herald reported in May that local business owners now working as informants for the FBI paid Chiverton and other city officials thousands of dollars in bribes — many of the payments recorded on video in secret meetings — to get operating licenses and water connections. Asked about the FBI probe, Chiverton declined to comment.
Other targets of the probe: Mayor Taylor and Commissioner Luis Santiago.
Though the resignation came as a surprise to dozens of people in the audience on Thursday, the focus of the meeting centered on the impending insolvency of a city that pledged just weeks ago that it was going to balance its budget.
From the start, Miguel criticized the city for failing to stem spending at a time it is losing hundreds of thousands every month in revenue. She said the city had been raiding restricted funds to fill budget gaps and was in danger of defaulting on major payments.
“Our message has been and continues to be: Not business as usual. And it still appears to be a leadership deficit in the city. ... While the city teeters on the brink of bankruptcy, we’ve had people ask: ‘What’s in it for me?’ From predators to commissioners to employees to crooks.”
Because Chiverton is resigning on Aug. 1, he would qualify for healthcare benefits through the end of the month. But the oversight board chair put an end to any other perks, mainly because Miguel said she was troubled by his decision to cash in his unused vacation and sick time — totaling nearly $40,000 — before he went on temporary leave in May.
Miguel said she did not want Chiverton to receive any final salary-related payment from the city until the board reviews it. She also demanded that Chiverton turn in his city-leased Ford Expedition along with his cellphone and laptop. She insisted that city officials cut off his access to all Opa-locka government computers and to City Hall immediately.
“Before we cut that final check, everything gets turned in,” board member Frank Rollason, city manager of North Bay Village, said before the oversight panel adopted Miguel’s recommendation.
Taylor, the mayor, tried to talk about the terms set by the board, but Miguel stopped her from speaking.
Miguel urged city commissioners and administrators to continue to make “drastic cuts,” saying the city needed to be far more judicious about how much it was spending on items such as cellphones for employees.
The most serious issue now confronting the city: the cash flow.
Acting City Manager Yvette Harrell, who had replaced Chiverton in May, told the board the city currently has just $354,121 in the general fund — far below the millions that once filled the coffers. The city also has $1.7 million in the water and sewer fund and $1.2 million in a restricted reserve account that’s not supposed to be spent.
With all of the city’s obligations, including payroll for Opa-locka’s 160-plus employees, it will run out of money by September, said Harrell.
“Optimistically, by the end of September,” she said. “Realistically, it will be closer to the beginning of September.”
For a tense moment, board members debated whether the city could dip into the water and sewer fund — money set aside to fund Opa-locka’s badly deteriorating water system.
Harrell said that if the city didn’t tap into the fund, Opa-locka would be broke within a couple of weeks. “Then, it’s lights out,” she said.
As it stands, the city will not be able to pay scores of vendors — including contractors and health insurers —in order to make its next payroll in early August.
In addition to the budget breakdowns, Miguel turned the board’s attention to the other looming threat: the FBI’s corruption probe, which was launched three years ago.
Vincent Brown, the city’s attorney, said several Opa-locka employees have been interviewed by FBI agents and have testified before the grand jury in Miami. “It’s ongoing,” he said.
Miguel urged members of the community to contact the FBI in case they witness suspicious activities among elected leaders or city administrators. “If you have any questions,” she said, “call the office of inspector general’s hotline. 800-543-5353. Be the eyes and ears of the board.”