BRADENTON, Fla. - Miami adopted a fiscal 2014 budget without declaring a fiscal emergency but the city faces several legal hurdles, including defending a federal lawsuit filed by the Securities and Exchange Commission.
The $895.6 million total budget includes $524 million for the general fund, and takes effect Oct. 1. It is a $52.6 million increase over the current year’s spending plan.
Most speakers addressing the City Council at the final public hearing on the budget late Thursday did not complain about the property tax rate, which will go down or remain flat for most. They did complain about the lack of police and security.
Miami, hit hard during the recent recession, refused to increase taxes and cut services and benefits to close budget deficits.
Declaring fiscal emergencies from 2010 to 2012 allowed city officials to reduce pay and benefits to unions, including police. Their representatives told the City Council Thursday that they cannot keep officers with starting salaries below $40,000.
Many officers have received training through the city, and left for higher-paying jobs at nearby municipalities.
“I urge you to find the funds to make our police stay with our city,” a resident told council members. He also reminded them that Miami is a “world-class destination,” and to invite visitors “to be victims of crime is not good.”
Other speakers, supporting more officers, spoke about increasing burglary rates.
The fiscal 2014 budget includes funds to hire 95 new officers.
The budget also allows Miami to meet all contractual obligations without the need to declare a financial emergency, according to acting City Manager Daniel Alfonso, who is also chief financial officer.
The budget is “sustainable and sensible,” Alfonso said, while warning that the city faces several financial challenges.
Alfonso said the cost of the Affordable Health Care Act is unknown, and issues with the Department of Justice may require “significant” funding. The Justice Department has monitored Miami Police for years as part of a civil rights investigation.
There was no mention at the council meeting about potential expenses related to the SEC’s charges that the city misled investors in 2009 bond offerings about its deteriorating financial condition in 2007 and 2008 audits. A lawsuit charging Miami with securities fraud was filed July 19, and the city has promised to defend itself “vigorously.”
The city is also under investigation by the SEC for bonds sold in 2010 to finance parking garages for the Miami Marlins baseball stadium, and the Internal Revenue Service is auditing the city’s arbitrage compliance on 2007A and B general obligation bonds.
The two SEC cases and IRS audit could cause the city to incur significant expense, according to Miami’s 2012 audit.
Firefighters and police in July filed a federal lawsuit claiming that Miami misled them into taking early retirement in 2010. The suit asserts that they were told incorrectly they would lose pension benefits.
The firefighters and police are represented by the Miami law firm Feldman Morgado PA, which said on a special website that it is the first “in a number of related cases” to be filed.
