Miami on Monday fired budget director Michael Boudreaux amid continuing questions about the city’s deficit and the budgets’s structural balance.
At the same time, the Securities and Exchange Commission is investigating whether the city disclosed potential problems to investors in recent bond sales.
Boudreaux is the second high-ranking member of the administration to leave since the news earlier this year that the SEC had notified the city Dec. 10 that it was conducting an inquiry into Miami bond sales in relation to the budget.
City manager Pete Hernandez resigned Feb. 19. A week later, former banker Carlos Migoya took the post after he was appointed by new Mayor Tomas Regalado and was confirmed by the City Council.
The SEC requested documents relating to recent bond financings as well as an audit by Miami’s internal auditor general, Victor Igwe. The auditor questioned the structural balance of the budget as well as interfund transfers and expenditures by some city departments. The audit also found that the unreserved general fund balance reserves were $289,510 less than the amount required.
The city still has not determined the extent of its deficit, much of which is related to pension funding.
Boudreaux in January said in an interview that all actions related to the budget were approved by the city commission. But he admitted the last two to three years many expenses were paid from reserves.
This was not the first time Miami faced an SEC investigation over potential disclosure violations.
In 1999, the commission determined that city officials failed to disclose their deteriorating financial condition in bond documents connected to 1995 debt sales, as well as in secondary market disclosures.
Miami had a $65 million deficit in 1995 that it failed to disclose to bondholders and in its financial statements. That also led to years of oversight for the city.