Miami commissioners late last week approved the sale of $92 million of bonds to build parking facilities for the Florida Marlins’ new baseball stadium, which is under construction.
The sale was postponed in October after questions were raised about the cost, which could have required the city to sell $120 million of bonds. City officials renegotiated the construction contract and received a lower cost but then delayed the debt sale after questions were raised about disclosure practices in prior bond deals.
On Dec. 10, the Securities and Exchange Commission sent Miami a letter seeking documents pertaining to the city’s budget and auditing reports, as well as its Series 2007A and B bonds, and its Series 2009 bonds.
The SEC inquiry followed the release of an internal city audit critical of some budget practices. The annual audit is part of Miami’s procedures for following “financial integrity principles” that were adopted in 2000 following a fiscal emergency in the 1990s that required state oversight for several years.
The auditor said that for fiscal 2008, Miami did not comply with four of the 13 principles. The auditor also questioned the structural balance of the budget as well as interfund transfers.
Miami budget director Michael Boudreaux said in an interview that the auditor had cited some of the same concerns for several years but all budget transfers and expenditures, including departmental cost overruns, were approved by the City Commission.
In November, Standard & Poor’s assigned an A rating to Miami’s special obligation parking revenue bonds secured by convention development taxes. Moody’s Investors Service assigned an A3.
According to published reports, Miami plans to sell the parking bonds in March. The city may be required to disclose the SEC inquiry in bond documents for the sale.
