New resignations at Miami City Hall raise questions about financial outlook

Three top city of Miami officials are resigning their posts, signaling worsening problems with the city’s already strained financial outlook.

Resigning are treasury manager Mirtha Dziedzic, chief accountant Barbara Gray and capital improvements director Albert Sosa, city officials confirmed Sunday.

Chief financial officer Janice Larned threatened to quit on Thursday, but was convinced to stay.

The news troubled Miami city commissioners, who must approve a balanced budget by the end of September.

“These are the people who are responsible for our money,” Commissioner Michelle Spence-Jones said. “They are obviously not feeling secure with the situation.”

Said Robert Suarez, president of the firefighters’ union: “It’s embarrassing. It shows the condition that the city is in right now. There is so much dysfunction.”

Miami Mayor Tomás Regalado shrugged off concerns that the city’s financial team is unraveling at the height of the budget-building season.

“I would say it’s a coincidence,” the mayor said. “People are leaving for other opportunities.”

Regalado said key finance employees remain in place, and he remained confident in their ability to balance the books.

Miami City Manager Johnny Martinez would not comment on how the city plans to handle the departures.

There is no denying that Miami’s fiscal custodians are feeling the heat.

The city is facing a $40 million budget hole in its $485 million operating budget, largely because required pension contributions ballooned this year.

Martinez had planned to declare a state of “financial urgency,” a legal maneuver that would have enabled the commission to force $40 million in employee concessions. But last Monday, a Miami-Dade circuit judge said Martinez did not have the authority to declare urgency, stripping budget staffers of their Plan A.

If the court order withstands an appeal from the city, the budget team has just weeks to find $40 million in cuts.

The city could also try to negotiate concessions from its four labor unions. But prolonged bargaining could cost millions of dollars — and Regalado has said he would need to impose furlough days to cover the expense.

In addition to the budget woes, the finance department is under intense scrutiny from the U.S. Securities and Exchange Commission, which is conducting two separate investigations into Miami bond issues. In one of the cases, the SEC has threatened to fine the city for misleading investors in advance of a bond issue for street and sidewalk repairs.

Last week’s resignations put even more pressure on the city’s chief money managers. Although Sosa was not part of the finance department, he oversaw millions in capital dollars.

“The lack of stability isn’t good for the residents or the employees,” Commission Chairman Francis Suarez said.

Suarez noted that former City Manager Tony Crapp Jr. and CFO Larry Spring both gave notice during last year’s budget process.

“This year, it seems like the potential mass destruction of our finance department,” he said. “I’m concerned that there’s a pattern.”

Dziedzic, a 15-year city of Miami employee who was once budget manager, called her decision to leave “personal.”

“It has nothing to do with the city or its finances,” Dziedzic told The Miami Herald, adding that she was deciding among several job offers from both the public and private sector.

Gray, the outgoing chief accountant, could not be reached for comment. City records show she was hired by the finance department in 2011. She previously worked as director of accounting for Live Nation Worldwide Entertainment’s Florida region.

Gray’s colleagues said she was leaving for a job in the private sector.

Sosa also could not be reached for comment. His voicemail greeting said he would not be returning calls until Sept. 3.

Sosa was highly regarded around City Hall, and had recently overseen the launch of the trolley system. Regalado said he had accepted a high-level job with a private firm.

“The manager told [Sosa] that we couldn’t match the offer,” Regalado said.

Regalado said succession plans exist for each of the three departing employees.

“I wouldn’t reach too much into it [the resignations],” he told a Herald reporter.

But Fraternal Order of Police Vice President Javier Ortiz called the resignations telling. He and other union leaders have been critical of Regalado’s budget plan, saying it relies too much on employee concessions while ignoring the need for sustainable revenue streams.

“The mayor is in denial,” Ortiz said. “Apparently, everybody is seeing that the ship is sinking and they are all bailing.”