Mayor Carlos Alvarez and City of Miami Manager Carlos Migoya talk to Helen Ferre

See the March 5th Helen Ferre interview with Mayor Carlos Alvarez. He talks about union negotiations, public safety, the Urban Development Boundary, budget cuts, etc. We think it is an excellent interview, worth the view.

Also see the interview with new City of Miami Manager Carlos Migoya which aired March 5th. He talks about the pension problems in the City, i.e. life expectancy has made pensions unsustainable. He also sees salary raises as a problem.

Miami Herald on Virginia Key Beach Park Budget Cuts.

A few days ago on this blog, Greg Bush commented on this issue regarding Virginia Key Beach Park:

Digging deeper, Miami may cut once-untouchable agencies
BY ANDRES VIGLUCCI
aviglucci@MiamiHerald.com
Miami would shut down its network of NET offices, the problem-solving neighborhood outposts of City Hall, under a proposed budget that aims to close a yawning $118 million budget gap.

Mayor Manny Diaz's budget plan would also scrap the city's film office, responsible for the care and handling of cable TV's most popular summer show, Burn Notice.

And it would pull the financial plug on the nonprofit trust that runs the historic, formerly ``blacks only'' Virginia Key Beach Park, which reopened to great fanfare less than two years ago after a multimillion-dollar restoration.

The three agencies are among several city or city-supported programs targeted for outright elimination by the administration's budget writers, who have also recommended deep cuts in police, parks and other municipal services.

Those ``zeroed-out'' programs could still see at least some of their funding restored by the time the city commission finalizes the budget Thursday, subject to ongoing negotiations one commission aide called ``very fluid.''

But the fact that some agencies once seen as sacrosanct were singled out for no money illustrates the depths of the financial crisis besetting the city. Even if commissioners adopt Diaz's $511.4 million budget in its entirely -- an unlikely scenario -- it would still leave them with a $28 million hole to fill.

``People have to realize that the budget crisis in the city of Miami is much deeper than in the county, which is getting all the attention,'' said Dario Moreno, director of Florida International University's Metropolitan Center who has conducted campaign polling for Diaz. ``That's almost one-eighth of the budget that's disappeared. Their situation is dire.''

The political and practical difficulty of the choices couldn't be plainer than in the case of the Virginia Key Beach Trust, backed by much of the city and county's black leadership, or the proposed elimination of the NET offices, popular in many areas where a trip to City Hall is nearly inconceivable.

Virginia Key Park administrators and trust members spent much of last week in meetings at City Hall with administrators and two key commissioners, Marc Sarnoff, whose district includes the city-owned beach, and Michelle Spence-Jones, whose district encompasses most of the city's black neighborhoods.

APPEAL FOR SUPPORT

Spence-Jones said through an aide she wants some continued funding to the Virginia Key trust, to allow the group time to become self-supporting. She also strongly supports the continued operation of the NET offices, at least those in her district, the aide said.

Trust leaders say cutting off all $1.3 million in city funding so abruptly would jeopardize the park's future as well as other funding, in particular $20 million in bonds earmarked by the county for a planned museum focusing on the ecologically rich site's social and natural history.

``We were a bit blindsided. Our staff would be wiped out and all operations underway would grind to a halt,'' said trust Chair Gene Tinnie. ``The cost of the disruption to the taxpayers could exceed what's being saved.''

Other smaller city offices would also be eliminated by the budget plan, including the mayor's Office of Sustainable Initiatives, which coordinates environmentally friendly ``green'' programs and the Community Relations Board, as well as $750,000 for festivals and $1 million for parks and green space acquisition.

Among agencies facing a total shutdown, the loss of NET offices would be likely the most widely felt by city residents. Eliminating the agency would save $4.5 million and cost 49 city employees their jobs, including some members of the city's much-praised homeless outreach teams, which are managed and partly funded by NET.

The 13 NET offices, created in the 1990s at a time when City Hall came under intense public criticism for neglecting its neighborhoods, function as one-stop shopping for residents seeking municipal services, permits for tree cutting or block parties, or help with complaints ranging from potholes to noise and trash dumping.

NET officers also function as troubleshooters, monitoring neighborhood conditions and coordinating deployment of crews that clear illegal dumps, said NET administrator David Rosemond.

Support also runs deep for Virginia Key Beach, for decades during segregation the only one open to black Miamians and later closed for more than 20 years. It was revived after a 10-year campaign led by the late Athalie Range, the city's first black commissioner, spurred by plans the city floated to turn it over to private development.

Trust leaders say they now fear the same concept may be in the offing again, as city administrators urge them to explore ``partnering'' with developers to establish overnight accommodations or other profit-making ventures.

``We have had very casual and perfunctory conversations about this,'' Tinnie said.

``I'm not opposed to talking to private interests, but we have a vision. It's as if I'm hearing no kind of understanding of the idea that an open natural space is an economic asset in and of itself.''

$1 MILLION AT ISSUE

The trust oversaw renovations and runs the 82-acre park, which is on the National Register of Historic Places. This year it supplemented city funding with nearly $1 million in income from donations and parking, concerts, festivals and rentals.

But those events would end without the staff to run them, trust administrators say.
The city money helps pay for a staff of 15 full-time employees to maintain the beach, plan and manage ongoing renovations and the museum, and run history and nature tours.

While the beach would not close, its operation would be taken over by a parks department that is already stretched thin and is itself facing a 25 percent budget cut.

At least one ``zeroed-out'' agency doesn't face folding, however. The Bayfront Park Trust, the semi-independent agency that runs the downtown park, earns most of its $3.6 million budget from paying events. Its finances were recently shored up by a deal with Live Nation to manage its popular amphitheater. The concert promoter put up more than $2 million to renovate it.

The budget plan would cut the city's entire $585,000 contribution to the park, which would force cuts in services, pay rollbacks and frozen positions, said Bayfront trust Director Timothy Schmand. Even though business has been down because of the economic downturn, Schmand said he will seek more paying events to compensate.

``One of the beauties of being Bayfront Park is we have the ability to make money. We're optimistic,'' he said.

Budget: The City of Miami uses the County Playbook.

Just as Miami Dade County did, the City of Miami voted to keep the tax rate flat. The Miami Herald said about the budget meeting:

Taxpayers flooded Miami City Hall Thursday for the first of two budget hearings -- a meeting so volatile a screaming match broke out between a commissioner and the mayor.

The City of Miami has a $118 million budget gap - not even close to the County's half a billion gap. The vote for the flat tax was unanimous at the City because Commissioner Michelle Spence-Jones, who wanted a delay, left the dais and did not vote.

If the Commissioners go with Mayor Diaz's proposed budget, the gap will be more manageable, only $28 million.

Federal help on the way to homeowners facing foreclosure.

The Miami Herald reported today that effective August 15th:

Financially troubled homeowners who have an FHA-insured loan can apply for a modification under a program parallel to "Making Home Affordable" to help lower their payments and avoid foreclosure.

With reports that County and City taxes are expected to rise, this will be a welcome relief to some South Florida homeowners.

City Commissioner Sanchez requests date change for Miami 21

According to the Coconut Grove Grapevine a local Blog:

The public has been quite upset today after finding out that Mayor Manny Diaz called for a Miami 21 meeting early next month. Commission chairman Joe Sanchez issued a statement today urging the mayor to cancel the August 6 Miami 21 meeting party because of the outcry but also because there is a Commissioners workshop on the budget for next year, scheduled the same day.

"It is our mandate from the people to focus 100 percent on the budget crisis," said Comm. Sanchez in a letter to the mayor.

There were two budget workshops scheduled weeks ago by Sanchez's office so, unlike other years, when they go into budget meetings in September the Commissioners will be educated and knowledgeable about the budget issues and will have had a chance to ask hard questions of the administration, and will be able to knowledgably address the financial crisis that the City is in and deal with the out-of-control salaries and pensions. He considers that the highest priority.

In all reality, it was a slimy decision on the mayor's part to have a Miami 21 meeting in the dead of summer when many interested parties are out of town. On the other had, the Commissioners' budget workshops do not involve the public, the public budget meetings are in September when most people are back in town.

Frank Rollason says: The financial crisis gives Miami a chance to get back to basics.

Opportunity in Adversity appeared in the "Biscayne Times," a monthly publication about the Biscayne Corrridor, published by Jim Mullin.

It’s budget time for local governments, and the pressure is on like never before. The county’s newly elected property appraiser has already sounded the alarm, delivering the “bad news” to municipal leaders that the assessed value of real estate has dropped significantly. That will have a negative impact on governmental coffers. The leaders have only two choices -- they can raise their millage rate or cut their budgets.

The millage is the rate at which we are taxed on our real property, and it is set by our local elected officials. Right now in the City of Miami, we have a millage rate of 8.25, which means that we pay $8.25 for every $1000 of assessed value. So if the value of your home is currently set at $400,000, you multiply the millage rate (8.25) times 400 (the number of thousands at which your home was valued), resulting in real-estate tax imposed by the city alone in the amount of $3300. Your total property taxes, including those levied by all the taxing authorities (the county, the school district, and the state) would be $8862.

Now, let’s say your assessed value has dropped 20 percent to $320,000 and the millage rate remains the same. Your new City of Miami taxes would be $2640 -- a reduction of $660. However, here comes the rub. If the current millage rate is maintained, the available property taxes to the city government will drop by the same 20 percent. You can see the dilemma facing our elected officials. They must either raise the millage to make up the difference, cut the budget by the amount of lost tax revenue, or enact some combination of the two. No elected official wants to sit in the “raise taxes” hot seat.

Before commissioners finalize the budget, they must first set the maximum millage rate for the coming year. They can lower it at the final hour, but once set, they cannot raise it. So to hedge their bets, they will almost surely raise the millage rate to a level that will produce enough revenue to run the city -- based on projected new property assessments. Therefore it is our elected city commissioners and no one else who ultimately determine what our taxes will be.

The commissioners and the mayor set the tone for what kind of budget the city administration will propose. For instance, if the commission were to pass a resolution directing the city manager to present a budget requiring no millage increase, the administration would have clear marching orders to develop a budget significantly reduced from last year.

Such a directive would, in turn, elicit a response from the administration that services will most certainly have to be cut, usually through staff layoffs. This is known as the “sky is falling” scenario. All the doom-and-gloom predictions are delivered to the elected officials with a basic message: “Sure, we can cut the budget, but you commissioners will be responsible for cutting those services your constituents now enjoy, from police and fire protection to trash pickup, parks programs, road maintenance, and much more.”

You can imagine the commissioners squirming, then posturing, as they prepare us for the inevitable.

We taxpayers recognize the realities facing us and that something has to give. First, our basic services (police, fire, solid waste) are not going to be cut -- that would be political suicide. We will probably end up with a hybrid of the two options, some cuts and some millage increase, with the hope that property values will come rise over the next few years and the millage can be lowered.

The main issue to be addressed is how we got into this position. Governments have a tendency to grow in size and expenditures, consuming greater and greater amounts of money until the squeal factor kicks in -- that’s the point at which taxpayers start raising hell. When times are good and residents are sharing in a booming economy, it’s easier to spend more without sparking complaints.

It’s been relatively painless for our elected officials over the past few years because the cash flow has increased as a result of property values rising at an unprecedented rate. The assessed values have increased so much, in fact, that Miami commissioners have been able to lower the millage side of the tax equation while revenues actually increased. Though they boast that they’ve lowered our taxes, they really have not. They’ve just lowered the rate at which taxes are calculated. Today, however, the “cheese is binding,” as they say, and something must change. I suggest the following actions be taken by our elected officials:

• Keep the millage exactly where it is right now. Because that will mean a drop in revenue, the stage will be set for meaningful budget cuts.

• Direct the city manager to develop a “zero-based budget” (ZBB) instead of the “line-item budget” currently employed. A ZBB process requires city departments to begin with zero dollars and build up their proposed budgets from there, starting with required or mandated expenses (union contracts, service contracts, fees, and so on), and working their way toward the end product. This method quickly and clearly identifies discretionary expenditures that can be eliminated -- just as you and I do every day, depending upon our available cash.

The line-item-budget process allows departments to begin planning where they left off the previous year and make adjustments, usually by implementing five-percent or ten-percent reductions. The “damaging results” of those cuts (the doom-and-gloom scenario) are then presented to the commission by the city manager. Keep in mind that roughly 80 percent of Miami’s budget is consumed by salaries and fringe benefits. Significant cuts are simply not possible without impacting employees. By utilizing the ZBB process, the impact on the employees will be greatly reduced as unnecessary programs and expenditures are ferreted out.

• Eliminate all departments and offices not specifically called for in the city charter. It’s time to get back to basics, and there is no better way to trim the fat than to eliminate those functions not dictated by the voters of the city. If a function is truly necessary for the health, safety, and welfare of the residents, just place it before the voters and have it approved and made a mandate of the charter -- plain and simple.

It’s also time for our elected officials to bring the mission of the municipal government into focus. The pending budget crisis should be viewed as an overdue opportunity to get the city back on track providing the basic services for which it was formed, building up reserves for lean times, and making this community an affordable place in which to live, work, raise a family, and retire without the constant fear of being pushed out because of taxes that are out of control.