Want City Property? Just Wait
Here we go again! The city's reserves, which were $114 million in 2003, may drop to less than $10 million.
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MIAMI - NOVEMBER 02: City of Miami mayoral candidate Tomas Regalado does last minute campaigning before voters head to the polls tomorrow on election day on November 2, 2009 in Miami, Florida. Regalado is squaring off against fellow city commissioner Joe Sanchez to become mayor of the city. (Photo by Joe Raedle/Getty Images) *** Local Caption *** Tomas Regalado
Have you started a fledgling republic?
Need a home with hundreds of offices?
Feel like a cathartic bonfire after your last tax bill?
Make an offer on City Hall. They just might take you up on it.
A projected $45 million dollar budget shortfall -- made just months into the new fiscal year -- has City of Miami officials in what commission chairman Marc Sarnoff called "crisis mode." Ballooning pension obligations, plummeting property tax collections, and rising costs may force the city to plunder its already vulnerable reserves and sell off assets to balance its books.
The staggering shortfall, revealed last week to the commission by new Mayor Tomas Regalado, comes just three months after the city scrambled to meet a $118 million shortfall in the last budget.
It also follows mere weeks behind the revelation that the Securities and Exchange Commission is investigating to determine if the city committed fraud while balancing its budget for bond ratings services. That inquiry is the most signficant since corruption, mismanagement, and loose controls caused the State of Florida to take over the city's finances in 1996.
If the current deficit can't be met through budget cuts, the city will continue to siphon funds from its reserves -- something that, rather unbelievably, was already happening during the real estate boom when the fund topped $114 million and the city was awash in record property tax collections. Based on current projections, the city might be left with less than $10 million in reserves by September.
That, according to a report in the Miami Herald, would cause the state to take over the city's books all over again.
"There are cuts we can make between now and the end of the year to help us come in on budget," said CFO Larry Spring. It may not be enough to save several projects that depend on bond issuance; a tunnel to the Port of Miami and affordable housing are most at risk.
Of course, even if the city does sell off some of its property -- Regalado declined to say what might be up for grabs -- the current market means they likely won't get the full value.
In that case, we'll take Virginia Key for $100. Call it civic duty.
Posted Sunday, Jan 31, 2010 - 10:15 AM EST
