HomeMy WebLinkAboutCC 2008-08-25 MinutesMINUTES OF BUDGET WORKSHOP OF THE
MIAMI CITY COMMISSION
On the 25th day of August 2008, the Miami City Commission met at the historic Miami City
Hall, 3500 Pan American Drive, Miami, Florida, in special session.
The meeting was called to order at 9:38 a.m. by Chair Joe Sanchez, with the following members
of the City Commission found to be present:
Commissioner Angel Gonzalez (District 1)
Commissioner Marc David Sarnoff (District 2)
Commissioner Joe Sanchez (District 3)
Commissioner Tomas Regalado (District 4)
ABSENT
Commissioner Michelle Spence -Jones (District 5)
ALSO PRESENT:
Pedro G. Hernandez, City Manager
Julie O. Bru, City Attorney
Pamela E. Burns, Assistant City Clerk
1 August 25, 2008
Chair Sanchez: Good morning, ladies and gentlemen. This is a properly -advertised budget
workshop meeting. This meeting is not a public hearing. This is a workshop scheduled by the
Administration and the Commission. The purpose of this workshop is for the City
Commissioner [sic] and staff to discuss the forecast for the upcoming fiscal year, the purpose in
the proposed budget for the 208 [sic] and 209 [sic] year. This will give us an opportunity to hear
from the Administration as they present their budget and have input from the Commission as to
the process of the budget. So at this time, I want to state that this has been a publicly -- properly -
advertised workshop. With us here present today, we have the City Manager, we have the City
Attorney; I am -- I believe there -- the only Commissioner who is not here is Vice Chair Spence -
Jones. So if we could get Commissioner Gonzalez, we could go ahead and start with the
workshop. So we'll go ahead with the --
Pedro G. Hernandez (City Manager): Mr. Chairman, if you --
Chair Sanchez: -- staff's presentation.
Mr. Hernandez: -- allow me, good morning, Commissioners. There will be two presentations
here today, one by Diana Gomez, director of our Finance Department, on our financial statement,
and that will be followed by a presentation by the Budget director, Michael Boudreaux; and
following that, we'll be more than glad to have your comments, feedback, questions. The plan is
for the Administration to present an orientation on the budget. And you will see at the very end
of the presentation that we do have a budget gap that we're proposing to balance with reductions
from the department operations and the implementation of other strategies, and our plan is to do
that after today' s meeting, and then having at least a couple of meetings with each one of you
that will help us in fine-tuning the budget before we present a balanced budget at the September
11 City Commission meeting. Our budget, in essence, has goals that we plan to achieve through
the process, which are to continue to provide and maintain the same level of service to our
residents, providing operational increases as needed in some departments, in some areas;
maintain a fund balance of a hundred million; maintain a stable financial condition; maintain
bond ratings, and on top of that, be able to minimize or have no impact to our existing
workforce. Those are the goals that you'll see through our budget and then through the
following meetings that we plan to have with you. If you allow me, I would like to then call to
the podium Diana Gomez to do the financial presentation first, to be followed by Michael
Boudreaux.
Chair Sanchez: Also, it's my understanding that the Finance Department will be presenting the
Comprehensive Annual Financial Report also to us.
Mr. Hernandez: Diana.
2 August 25, 2008
Diana Gomez: Diana Gomez, Finance director. Yes, we will be presenting the financial
statements, which is the Comprehensive Annual Financial Report. I had a presentation, but the
computer's gone. I'm not sure what happened to it, so I apologize. You do have the pamphlet in
front of you, which would be the slides. Okay. This year's financial statement audit was
performed by the external auditors McGladrey & Pullen, LLP. I have Donnovan Maginley,
director with the firm, here. He's going to say a couple of words and then I'll -- he'll turn it back
over to me to go forward.
Donnovan Maginley: Thank you. Good morning, Commissioners. Donnovan Maginley, with
McGladrey & Pullen. We were engaged to and we performed an audit of the City's September
30, 2007 basic financial statements that you should have in front of you. We have issued a
report, and on pages 1 and 2 represents the results of our audit report. I just want to emphasize
it's an unqualified report, which is a clean report to the highest level of assurance that we can
give as external auditors. However, we did -- we do emphasize a point that in this year's
financial statements, there was a restatement which basically represents a correction of an error
in the prior year's financial statements. During the course of the audit, we have -- we had full
access to management, we had full access to all records; we had no disagreements with
managements [sic] in the application of accounting principles or disclosures. All information
that was presented to us was incorporated in our work papers. In the process of putting together
a CAFR (Comprehensive Annual Financial Report), or financial statements like this, there is a
lot of judgments that's involve. We concur with management's judgments and estimates, and we
consider them to be reasonable. With that, I'll turn it back over to you, Diana.
Ms. Gomez: Thank you. Couple points that I want to make about this year's audit, there were
some issues that we encountered and I just want to highlight just a few. The first one being that
we did implement a new financial system, the Oracle system, this year. We went live with it on
October 1, 2006, so this was the year -- the first year that we closed our books on this new
system. This was a very difficult feat for the City. However, it was a successful
implementation. There are still ongoing implementation issues. We're still implementing new
modules, such as the fixed asset module, HR/Payroll, and labor distribution. Other issues that
we had were delays encountered, one being the new system; field work started a little bit late
because we did close the books a little bit later than normal because of the new system. We had
a change in external auditors. Last year we had a different auditor. That always is a little bit
challenging. We had a dispute with the prior -year auditors, which did delay us a little bit in
getting the work papers from the prior year. The restatement, as Donnovan mentioned, also
delayed us a bit. We are still pending the single audit report and the management letter. That is
still -- has not been finalized and it will be -- once it is finalized and issued, we will come back to
this Commission and present it. Okay. The financial statements has several different sections.
The first section is introductory section, which has the chart of principal officials, the letter of
transmittal, organizational chart of the City. The financial section has the auditor's report,
3 August 25, 2008
which, as Donnovan mentioned, is an unqualified opinion, that is, a clean opinion, the best
opinion that we can receive for our financial statements. The basic financial statements includes
all of the financial statements of the City, and you -- and I will touch upon each of them very
quickly in the next area. The statistical section includes trend information from various financial
and operating aspects of the City, financial trends, revenue capacity, demographics, economics,
so on and so forth. The statement of revenues and expenditures and changes in fund balance,
which is on page 17 of the report, you'll see that revenues for the fiscal year total $490 million.
This is on a fund level -- the general fund on a fund level basis, okay. Expenditures total 529
million; transfers in and out netted to 13.8 million. We did have a decrease in fund balance of
$25.8 million. The decrease was primarily a result of the fire fee settlement, union contract
payments that were resolved this -- for fiscal '07 and net effect of various inflows and outflows
throughout the year. Our ending fund balance in the general fund, on a fund level financial
statement basis, was 100,450,144. On the balance sheet, which is page 15 of the financial
statements, the fo -- again, focus on the general fund at the fund level. Assets were 178 million,
liabilities were 78 million. Fund balance. These are different components of the fund balance.
We have -- for the management initiatives, which is where we report the amount that's required
to be set aside in accordance with the financial integrity principle, we did meet that ten percent
rule of average three years of revenues. That amount is 41.9 million for the current year. The
statement of net assets is the government -wide basis, which is full accrual basis of accounting;
includes all the long-term liabilities, such as claims and payables and compensated absences of
the City. Net assets increased by 4 -- $7.4 million to $739 million. The statement of net
activities, which again is on a government -wide basis, is -- showed charges for services of 141
million, grants -- operating grants of 71 million, capital grants of 69 million; investing [sic]
earnings totaled $23.8 million. We did have and report an impairment of capital assets realized
from the demolition from the Orange Bowl Stadium of $23.6 million. Looking ahead to fiscal
'08, which we're in the -- we're at the tail end of. GASB-45 (Government Accounting Standard
Board) will be on the financial statements for fiscal '08. GASB-45 is the other post -employment
benefits. We are in the process of finalizing the City's liability. It is still in draft form, so I don't
have anything to present to you. Once it has been presented, we will present that to the
Commission. And then SAS (Statement on Auditing Standards) 112, which is communicating
internal controls related to the audit, this changes the way that the auditors are required to report
certain information to -- in writing, in the report and to management. It's going to change the
terminology of a lot of the accounting issues that are encountered with internal controls. Any
questions?
Chair Sanchez: Any questions? No? Thank you.
Ms. Gomez: Thank you.
Chair Sanchez: All right.
4 August 25, 2008
Mr. Maginley: Thank you.
Chair Sanchez: All right, let's go to the budget.
Mr. Hernandez: Michael Boudreaux, director of the Budget office.
Michael Boudreaux: Good morning, Commissioners. Mike Boudreaux, director of Management
and Budget. This morning I present to you the fiscal year 2009 budget outlook for the general
fund. During this presentation, I will discuss some significant economic issues, forecast the
impact to the City of Miami; give you an overview of the total collections in spending within the
general operating fund from fiscal years 2003 to projected yearend 2008; provide you a five-year
history of collections and spending by source and use, along with the average collections and use
during this period and show the trend between these periods. Finally, I will go over specific
fiscal impacts to the City of Miami, along with the forecast budget outlook for fiscal year 2009.
The economic issues, which are forecast to have a significant impact on the City of Miami are
the price of fuel and its related impact on utility costs, and a drop in market and taxable values in
both homestead residential and residential home prices in the City of Miami from tax year 2007
to tax year 2008. The City of Miami, like other cities, is forecast to pay more at the pump in
fiscal year 2009. The weekly price of regular grade gasoline, which peaked at an average of
$4.11 per gallon on July 14, is forecast to average $3.82 per gallon in fiscal year 2008-2009,
compared to $2.81 per gallon at the start of fiscal year 2008. Diesel fuel, which fell from the
average of $4.76 per gallon to $4.35 per gallon on August 11, is forecast to average $4.27 per
gallon in fiscal year 2009 compared to $2.88 per gallon at the start of fiscal year 2008. The City
of Miami spent an average of $4 million per year on motor fuel between fiscal years 2003 to
fiscal year 2007, and is projected to spend $5.8 million at the end of fiscal year 2008. Since the
beginning of fiscal year 2008, approximately two million dol -- $1.6 million was added to the
City's motor fuel budget from contingencies reserves to accommodate the changes in fuel prices.
Based on the forecast changes in fuel prices per gallon and the City's current motor fuel expense
trend, fuel expenses are forecast to increase 40 percent from 5.1 million at the start of fiscal year
2008 to 7.1 million in fiscal year 2009. On July 1 the Florida Public Service Commission
approved Florida Power & Light request to adjust the pass -through fuel surcharge on customer
bills in order to recover $746 million in unanticipated fuel costs. FPL (Florida Power & Light) is
expected to recover 50 percent of this cost between August and December of 2008 and the
remaining 50 percent in 2009. The effects of this adjustment is expected to increase a monthly
residential bill by approximately ten percent in 2009. However, the effects in 2009 may vary,
depending on such factors as fuel prices, weather -related events, and other impacts.
Additionally, consumption of electricity is expected to increase by an average of 1.2 percent
between 2008 and 2009 and electricity prices in the South Atlantic Region of the United States,
which includes the City of Miami, is anticipated to increase 15 percent from 8.6 cents per
5 August 25, 2008
kilowatt hours at the start of fiscal year 2008 to 10.1 cents per kilowatt hours in fiscal year 2009.
The City of Miami spent an average of $9.3 million per year on utility costs between fiscal years
2003 and 2007, and it's projected to spend 10.5 million at the end of fiscal year 2008. Based on
the uncertainty in fuel prices, the possibility of weather -related events, and the City's current
utility cost trend, utility costs are forecast to increase 20 percent from 10.5 million in fiscal year
2008 to 12.6 million in fiscal year 2009. The average taxable value of homestead residential
property in the City of Miami decreased 6.2 percent from 152,000 in year -- in tax year 2007 to
143,000 in tax year 2008. The decrease in taxable value is primarily due to the slowing housing
market and voter approval of Amendment 1 on January 29, which provided an additional
exemption in portability to homestead property owners. Further review also indicated the
average market value of both non -homestead and homestead residential properties in the City of
Miami decreased 6.3 percent from 350,000 in tax year 2007 to 329,000 in tax year 2008.
Overall, however, preliminary gross taxable values in the City of Miami increased 4.7 percent
from $39.1 billion to 40.9 billion. This increase is primarily as a result of new construction.
New construction added $1.8 billion to the City's tax roll in tax year 2008, compared to $1.1
billion in tax years [sic] 2007. The next few slides will provide an overview of how the City
collected and spent funds between fiscal years 2003 to 2007, which -- what is forecast at the end
of fiscal year 2008 and a five-year average between fiscal years 2004 to 2008. This information
was used in determining the projected budget in fiscal year 2009. As you can see from the bar
graph illustrated on the screen, the City of Miami experienced a period of growth in total
revenues. Total revenues and transfers from other funds increased 41 percent, from 392 million
to 553 million between fiscal year 2003 to fiscal year 2007. The City of Miami is projected to
collect a total of $511 million at the end of fiscal year 2008, which is 7.6 percent less than the
prior year. This is primarily due to a lower operating millage rate approved in the current fiscal
year. Most of the revenues collected between fiscal years 2004 to 2008 were from property
taxes, with charges for services the next largest category of collections. Charges for services
primarily consist of the solid waste fee, parking surcharge proceeds, and included the previous
fire assessment revenues collected between fiscal year 2003 to 2007. The fire assessment was
eliminated in fiscal year 2008. Total expenditures and other uses also increased significantly
between fiscal years 2003 and 2007 from 392 million to 579 million, an increase of 48 percent.
However, the increase in fiscal year 2007 consisted primarily of one-time costs related to
retroactive pay increases approved in all union contracts and the expense related to the fire
assessment settlement that was paid in 2007. The next slide illustrates the five-year average
expenditures and other uses by functional category. As you can see on the pie chart, public
safety, which consists of police and fire services, averaged 41 percent of total expenditures
between fiscal years 2004 to 2008 with pension costs next at 14 percent. Please note the average
totals indicated under each functional category consist of personnel and operating costs with
pension, risk management, and transfers, including all related costs from these functional areas.
I would like at this time to pass out information to each of you which illustrates the year-to-year
change in revenues and expenditures. The printout will show the amount and percentage for
6 August 25, 2008
each fiscal year so that you can see the year-to-year change which created the average I just
illustrated. Over this period, as you can see in the line graph illustrated, total expenditures and
other uses exceeded total revenues and other sources in fiscal years 2004, 2005, and in 2007.
Total expenditures and other uses are also projected to exceed total revenues and other sources at
the end of fiscal year 2008. The reason for the projected result at the end of fiscal year 2008 is
due to the anticipated use of contingency reserves to cover fluctuations in fuel prices, utility
costs, and other City services, and lower than expected collections in state -shared and half -cent
sales tax revenues from the State. The final graph is an illustration of the net change in general
fund balance between these periods. The City's total general fund balance decreased 41 percent
from 142 million in fiscal year 2003 to 100 million in fiscal year 2007. The City Manager has
made a commitment to maintain the City's fund balance at no less than $100 million. Specific
issues, in addition to the economic forecast indicated earlier, will also impact the City of Miami
in fiscal year 2009. These issues are, but not limited to, the continuation of House Bill lb,
Amendment 1, and Senate Bill 1588, also known as the Glitch Bill; the across-the-board
increases approved in all City union contracts, rising healthcare costs, and state revenue
estimates and their impact on the City's state -shared revenue. Once again, in fiscal year 2009,
the operating millage rate approved by the City Commission will be limited by the type of vote
required under House Bill lb. House Bill lb, which was passed by the State Legislature in 2007,
will limit the growth in the City's millage rate to the change in statewide per capita personal
income with a majority vote of the City Commission. The change in net -- in the per capita
personal income provide -- was provided by the Department of Revenue and is currently
estimated 4.15 percent. This millage rate can be increased up to ten percent with a four -fifths
vote of the City Commission, and can be increased greater than ten percent with either a
unanimous vote of the City Commission or voter referendum. In October 2007 the City of
Miami was removed from the List of Municipalities Under Special Financial Concern as a result
of a special session of the State Legislature. The removal of the City from the List of
Municipalities Under Special Financial Concern reduced the maximum allowable millage rate in
fiscal year 2008 from 7.2999 mills to 6.6429 mills. Although the millage rate approved by the
City Commission was the maximum allowable at the time of the vote, the removal of the City
from the List of Municipalities Under Special Financial Concern may affect the calculation of
the majority vote and four -fifths vote millage rates in fiscal year 2009. Since this may be the
case, the 6.6429 millage rate was used to determine the majority and four -fifths vote millage
rates for fiscal year 2009. As a result of using this 6.6429 millage rate, the maximum allowable
millage rate with a majority vote was set at 6.9764 mills instead of 7.4517 mills. The 7.4517
mills would have been the maximum allowable millage rate with a majority vote had the City not
been removed from the List of Municipalities Under Special Financial Concern. The calculation
of the four -fifths vote millage rate also changed from 8.4701 mills to 7.674 mills, as a result of
the change of the City off the List of Municipalities Under Special Financial Concern. The
7.6740 millage rate was approved and set as the millage rate cap for fiscal year 2009 and will
require a four -fifths vote if approved. The overall impact of removing the City from the List
7 August 25, 2008
represents a 9.4 percent reduction in both the majority vote and four -fifths vote millage rate.
Additional relief to property owners was provided on January 29, 2008, when voters approved
Amendment 1. Amendment 1, in fiscal year 2009, will provide homestead property owners with
an additional 25,000 in exemption on the third 25,000 in assessed value; provide a $25,000
exemption on personal business property, and provide portability of Save Our Homes, up to
$500,000. The impact of Amendment 1 on the City's preliminary gross taxable values reduced it
by $1.2 billion from 40.9 billion to 39.7 billion in tax year 2008. This made the overall year-to-
year change in the City's preliminary gross taxable values 1.6 percent compared to the 14.5
percent in tax year 2007. To limit the impacts of Amendment 1 on the City's rollback rate in
calculation of the majority vote millage rate, the State Legislature also passed Senate Bill 1588,
also known as the Glitch Bill. The Glitch Bill remove the effects of Amendment 1 from the
City's rollback rate and reduced the majority vote millage rate by 0.2251 mills from 6.9764 mills
to 6.7513 mills. The 6.7513 mills is the majority vote millage rate that will be established for
fiscal year 2009. At the City's current proposed millage rate of 7.6740 mills and with Senate
Bill 1588, City property taxpayers will receive a savings of more than $9 million in fiscal year
2009. Also included in next year's forecast budget are the across-the-board increases approved
for all City personnel, effective October 1, 2008. Based on the approved union contracts,
AFSCME (American Federal, State, County, and Municipal Employees) 1907 employees will
receive a three -percent salary increase; AFSCME 871 employees will also receive a three -
percent salary increase; IAFF (International Association of Firefighters) employees will receive a
five -percent increase; FOP (Fraternal Order of Police), a four -percent increase, and all other City
employees a three -percent increase. Based on the current annual salaries at July 21, the across-
the-board increases are expected to add $9.3 million to the annual salary costs in fiscal year
2009. Other issues which will also have a significant impact on the City in fiscal year 2009
includes a projected 14.2 percent increase in overall healthcare costs, from 36 million in fiscal
year 2008 to 41 million in fiscal year 2009; a 7.3 percent decrease in state -shared and half -cent
sales tax revenue from a previously forecast amount of 40.6 million to 37.3 million in fiscal year
2009, and the annual contribution to the City's OPEB (Other Post -Employment Benefit)
requirement of 20 million.
Commissioner Sarnoff: Can you -- could you state what the OPEB is?
Mr. Boudreaux: The -- there is a annual con -- there's a allocation of $20 million that was set
aside to meet the City's annual OPEB requirement for fiscal year 2009. OPEB is other post -
employment benefits, which is a requirement for the City to report in fiscal year 2008 for the cost
of retiree healthcare benefits. It's a liability for which the City has to now incorporate in its
financials to cover the cost of retirees. As a result of the anticipated changes in fiscal year 2009,
the City's total general fund revenues are forecast at 519.5 million. This represents a $4.2
million reduction over the prior fiscal year adopted budget and is mainly due to the zero use of
general fund balance beyond the $5 million in contingency reserves approved in the City's
charter, and the limitations in property tax revenue collections as a result of House Bill 1B and
Senate Bill 1588. Based on the changes anticipated for next year, total general fund expenditures
8 August 25, 2008
are forecast at $554.5 million. This represents a $31 million increase over the prior fiscal year
adopted budget and is primarily due to the impacts mentioned in the previous slides. Finally, as
a result of forecast changes in revenues and expenditures anticipated for fiscal year 2009, the
City of Miami is currently projected to have a $35 million shortfall as a result of total revenues
less than total expenditures. The staff in the Office of Strategic Planning, Budgeting and
Performance is currently reviewing its revenue estimates as more information becomes available
and has worked with all City departments to reduce expenditures over the next fiscal year. After
the workshop, the City Administration would like to meet with each of you, at least on two
separate occasions, before the September 11 first public budget hearing to discuss the budget for
the upcoming fiscal year. If you have any questions, I would be happy to answer them at this
time.
Chair Sanchez: Commissioner Sarnoff.
Commissioner Sarnoff: I noticed the -- going back to your revenue in -flow page, which is, I
think, your third slide from the back, you indicated a 2.8 percent change in the property taxes. I
thought you had said 1.8 -- was it 1.8 million? Was --
Mr. Boudreaux: And you --
Commissioner Sarnoff: Oh, go ahead.
Mr. Boudreaux: Yeah. I'm sorry.
Commissioner Sarnoff: No. That's all right. The 1.8 million, I thought, was represented to be
the new properties coming online.
Mr. Boudreaux: The category that you see for property tax revenue that shows a 2.8 percent is
the category that also includes the collection of delinquent taxes, which we've seen an increase
in. The previous illustration only showed personal property and residential property changes, so
that category includes all other areas of property tax collections, which we did see an increase in
delinquent taxes being collected.
Commissioner Sarnoff: So the 2.8 percent is the new properties coming online together with
delinquent property owners together with anyone else?
Mr. Boudreaux: Yes, sir.
Commissioner Sarnoff: Or is that it? Those are the two categories?
Mr. Boudreaux: Those are the three primary -- personal property, residential property,
delinquent taxes are the three primary areas that makes up the property tax category.
Commissioner Sarnoff: So property taxes includes personal property in that --?
Mr. Boudreaux: Yes, it does.
9 August 25, 2008
Commissioner Sarnoff: Okay. Thank you.
Chair Sanchez: Does that conclude your presentation?
Mr. Boudreaux: Yes, sir.
Chair Sanchez: Okay, questions. Commissioner Regalado.
Commissioner Regalado: Thank you, Mr. Chairman. Number one, in your presentation, you're
saying that City property owners will save $9 million in fiscal year '09, correct?
Mr. Boudreaux: That is correct.
Commissioner Regalado: Okay. Those are the actions of the City Commission. But the
question is how much will be add to the bill of the City of Miami property owners if the County
moves ahead with the proposed budget that Mayor Alvarez has presented? Will that completely
upset the reduction of taxes and add new taxes to the property bill?
Mr. Hernandez: Commissioners, I believe the answer to that question is yes. I don't know
exactly what the figure is, but their proposed increase to the countywide tax may, in essence,
wipe out reductions that we will provide at the City level. Michael, do you have any specific
numbers?
Mr. Boudreaux: I don't have the specific numbers from the County. I just know what exactly
the impact of the millage rate will have on the City collection for property tax revenues, but I
will check with the County and get back with you.
Commissioner Regalado: Okay. The other question is the fuel and the energy. What you're
giving us is your projections as we stand now in terms of usage --
Mr. Boudreaux: Yes.
Commissioner Regalado: -- right? The national trend is less use, less driving -- no. The Federal
Department of Transportation said that in last June people drove 2.9 billion miles less. Actually,
the number of people killed in the roads have gone down in the last three or four -- six months to
the levels of when John Kennedy was president. So the question is, is there any measures -- and
cities throughout the United State [sic] have taken extraordinary measures -- to decrease the use
of fuel and energy in terms of saving the extra money that we have to spend? And I'll give you
an example. City of Dallas, mandatory: cars cannot be running when people are not in -- Dallas,
which is a city which we can compare to the weather here -- actually, hotter than us. Arizona,
same measures taken by several municipalities. So the question is -- this is not about hybrids or
anything. This is just about the regular use of electricity and fuel, what are the measures that we
can take?
10 August 25, 2008
Mr. Hernandez: Commissioner, the first one that you mentioned is one that we are moving
forward with, which is not to have the cars just idling while they're not in use. That -- I've
discussed that with even the police chief, the fire chief, and also the other departments that have
inspectors out on the road. Also, we're looking at every one of our facilities to make the
facilities more energy -efficient, from this building to the MRC (Miami Riverside Center), so we
consume less energy and we're more smart in the way that we operate.
Commissioner Regalado: And you're saying, Michael, that we expect less revenue from the
sales tax. Is it because the collection is down, or is it because there are other circumstances?
Mr. Boudreaux: As you note in the news recently, the State has once again changed its estimates
on its budget, meaning that they've now -- have the projections now by approximately $1.8
billion from their previous estimates. We also experienced the same event in 2 -- fiscal 4 --
fiscal year 2008 where we had to adjust down our anticipation of the half -cent sales tax revenue
and state -shared revenue by approximately $1.6 million to accommodate their earlier correction.
So with the anticipation that some of the corrections will occur again in fiscal year 2009 to
include the $1.8 billion correction that they already made, we are showing a less forecast
collection from these state -shared revenues to be conservative.
Commissioner Regalado: And the federal -- the revenue sharing?
Mr. Boudreaux: The federal revenue sharing. We get -- the City of Miami gets
intergovernmental revenues from -- primarily from -- the general fund doesn't see a lot of
intergovernmental revenue except for the state -shared revenue, and also from the Off -Street
Parking collections that we also get. So as far as federal sharing revenues, I have not noted any
federal sharing revenues coming into the general fund.
Commissioner Regalado: And on the Off -Street Parking, do we get a percentage or do we get a
set number?
Mr. Boudreaux: We get a set number, which is estimated at $1 million for next year.
Commissioner Regalado: Okay. The reason I'm asking this, Mr. Manager, is because it seems
that parking meters are growing everywhere. I mean, like Melaleuca, it's -- they're invading
even residential streets. So the question is if there are more parking meters, then there must be
more revenue, and if there are more parking meters, certainly there are more fines being used and
issued because the enforcement is very aggressive not only on the parking meter section, but in
other areas. And enforcement of Miami Parking Authority is a very good one, but my question
would be what do we get from the thousands and thousands of new parking meters that are being
set around the City. How do we know the income, and what can we offer the residents in terms
of services versus the enforcement that they are getting?
Mr. Hernandez: Commissioner, I think that we will be best served by doing an audit of the
number of meters they have been adding and determine whether we need to have a different form
to share on their revenues. As Michael said, it's flat today -- it's a flat rate and maybe it should
11 August 25, 2008
be figured differently than the way we're doing it today because they are aggressive in the way
that they enforce and collect.
Commissioner Regalado: No. I understand that, but we are about to approve a budget. We are
about to make some cuts, so it's not fair for employees and residents that we do not know; that
we just keep on living as we were three years or four years ago, so we need to understand.
Larry Spring (Chief Financial Officer): If you would allow me, Mr. Chair. In addition to that,
we could go to the Miami Parking Authority. As you know, this Board approves the parking
rates at the end of the day also, so that may be something you want to consider, maybe a
resolution or a directive of some type; although their board needs to take that action and bring it
forth to the Commission. I know, generally, monthlies have been kept and parking meter rates
have been kept -- I don't want to say artificially low, but you know, low in certain areas to make
sure it is consistent with the business community in those areas, so it may be something to
consider.
Commissioner Regalado: In which area because I --? Not in my area.
Mr. Spring: Not in your area?
Commissioner Regalado: No, sir.
Mr. Spring: Oh. I would say our downtown, Allapattah, certain areas in the City; and
particularly on monthlies, we are lower than the market. I know that from good order.
Commissioner Regalado: No, no. The -- I'm not talking about the rates. I'm talking about the
income --
Mr. Spring: No. I understand.
Commissioner Regalado: -- generated by thousands of new parking meters and parking spaces
with that new machines.
Mr. Spring: I understand. I'm just giving -- offering another suggestion to that same revenue
source.
Commissioner Regalado: Thank you.
Commissioner Sarnoff: And with that suggestion, if -- I could yield for a moment -- you know,
I've asked this of Miami Parking Authority. I know they're looking at it, but we should create
incentives for people to drive hybrids, to drive smart cars so that they receive a benefit from
government. Certainly, FDOT's (Florida Department of Transportation's) doing it on the
expressway on the -- what do they call that? The -- I always call it the Lexus lane. What is the
right name for that?
Mr. Boudreaux: Express lane.
12 August 25, 2008
Commissioner Regalado: That's the --
Mr. Hernandez: I think it's the --
Commissioner Regalado: -- rich lane.
Commissioner Sarnoff: Rich lane.
Commissioner Regalado: It's called the rich lane.
Mr. Hernandez: I know they also call it -- the concept --
Commissioner Regalado: Ten bucks.
Mr. Hernandez: -- is congestion pricing -- I don't know the exact name of the lane, but it's the
Lexus lane.
Commissioner Sarnoff: In the Lexus lane, they're allowing hybrids and, I think, smart cars to, I
think, go for free, if I'm not mistaken.
Chair Sanchez: The State allows --
Mr. Hernandez: Yes.
Chair Sanchez: -- HOVs (High Occupancy Vehicles) -- I mean, in the HOV lanes --
Commissioner Sarnoff: Right.
Chair Sanchez: -- if you have a hybrid, they're free.
Mr. Hernandez: And if you have, I believe, that three or more individuals in the car, it's also
free.
Chair Sanchez: It's also free.
Commissioner Sarnoff: But my point is we, as a city, could equally incentivize people to, on a
parking basis -- maybe it's half off, maybe it's twenty-fi -- I don't know what the right number
is, and I haven't done the -- obviously, Art Noriega is the best person to do this, but I think it
needs to come. We went through, you know, the $4 a gallon price issues and now we're at the
high 3.70s. but I think it's time that we give incentives to people -- you know, before you hit
them with a stick, give them a carrot; and the carrot being, if you drive a hybrid or a smart car or
something that gets upwards of 45 miles to the gallon or more, you know, you should -- the City
of Miami should be incentivizing you to change that car from an SUV (Sports Utility Vehicle), a
14 or 10 or 15 -- you know, 15 miles to the gallon. The other thing I heard Commissioner
Regalado say on fuel -- and if you'll allow me -- We were looking at, Mr. City Manager, creating
13 August 25, 2008
a carpooling effort for the City of Miami. Now, if I'm not mistaken, the City will pay for the
fuel for people to drive home, is that correct, when they get their own use of a car? That includes
Mr. Hernandez: That's for the individuals that have a 24-hour use of the car, yes.
Commissioner Sarnoff: Right. Well, for those individuals, there should be an effort made by the
City to create a carpooling situation. We actually studied this a little bit in our office, and you
can actually start -- create -- there're a great many people in the City of Miami that live in
Broward. That's a pretty long stretch for the City of Miami taxpayers to pay for them to go
home. I'm not suggesting they can't do it. But just think about this. If you put two people in a
car, you've cut that part of the bill in half. Put three people in a car, you've reduced it by two-
thirds. There should be an incentive created by -- or a mandate created by you to require people
to carpool in whatever necessary means you determine because it -- maybe they need their cars, I
understand that. But on the other hand, they may not need their cars everyday. And this goes to
Commissioner Regalado's suggestion, how can we reduce that $4 million anticipated fuel charge
for this year? I think carpooling, number one, sends a great social message to everybody out
there listening to this, that the City of Miami is concerned; and all you need to do is look at your
employee list and categorize -- and we did it by numbers. Where the people are coming from?
A great deal are coming from Miramar. A great many of them are coming from, you know,
certainly Broward west; and only you can determine who needs their car and only you can
determine who's possible and feasible to carpool. Now, in general, people should carpool, but
when it comes to our taxpayers' dollars paying for the fuel charge, it should be your obligation
and it should be your mandate to say who can carpool and, you know -- for you to make those
calls. I apologize.
Commissioner Regalado: No, no. That's -- just -- we should be aware too that the Metro --
Miami-Dade County Metro Transit Authority has a plan to eliminate 19 routes, at least six of
them serves the City of Miami. Actually, one, Mercy Hospital; the other, the hospitals in the
Civic Center, so that would increase the use of cars and that would increase people paying
parking meters. So this is not just an idea. I think that we should pursue and we should
understand what is the revenue, what is the money that the City is entitled because, after all,
these are the streets of the City of Miami and these are the people that live and work in the City
of Miami. Thank you, Mr. Chairman.
Chair Sanchez: Okay. Commissioner Gonzalez, you're recognized for the record.
Commissioner Gonzalez: Thank you, Mr. Chairman. I think a couple of months ago, maybe
three or four months ago, I made a suggestion that the City start doing a study in reference to
what many cities have already adopted, and it is a ten-hour, four -day work. I don't know if you
have cared to do that or maybe, you know, since it came from this Commission, you disregard it
and went ahead with your own plan. Also, we debated for about 45 minutes the possibility of a
trash pick-up once a month. That will produce a big saving to the City of Miami. For at least six
months, I have been listening to the FOP leadership complaining that they have been trying to
meet with the Administration to present a proposal that will save the City of Miami, I believe,
some $15 million or $20 million on the City contribution to the pension plan.
14 August 25, 2008
Mr. Hernandez: Commissioner, we have always been more than available to the FOP to meet
with them. I -- you know --
Commissioner Gonzalez: Well --
Mr. Hernandez: -- I hate to hear those statements because I don't think that they're --
Commissioner Gonzalez: -- what is the --
Mr. Hernandez: -- correct.
Commissioner Gonzalez: -- problem then? Because, you know, if you're willing to meet with
them, and they're willing to meet you, and you can meet and we can -- because I have already
been accused -- I have been already accused of interfering with the personnel management
because I have been advocating in favor of the unions, all right? So I got to be very careful. I
understand there was someone from the Law Department that insinuated that I was violating the
Charter, and you know, they started the rumor and they started the game because they love to
play games. But you know what? Now it's my time to play games during budget time, so I
might start playing. As of today, I might sit down with my chief of staff and go through the
budget and then I might start playing myself, play with the numbers, play with, you know --
because after all, this is the only chance that we have, okay, to get back and put the reals [sic] in -
- things in real perspective. And in this season of the year, it happens that every city department
pays a lot of attention to this Commission; I don't know why. You know, different than -- on
regular year, but you know -- but --
Mr. Hernandez: Commissioner --
Commissioner Gonzalez: -- Mr. Manager, what -- Madam City Attorney, let me see if I'm
within the City Charter purview. Am I allowed to finally procure a meeting between the FOP
and the City Manager so the City can save $15 million, or should we leave it at that and wait
until they finally one day decide to have a meeting?
Julie O. Bru (City Attorney): Commissioner, at this time you are giving the Administration your
policy directives as to how you want fiscal matters to be addressed, and it's completely within
your purview and your authority to direct the Administration to undertake certain specific efforts
that you would interpret to create a savings in any particular area.
Commissioner Gonzalez: Okay. Is there a violation of the City Charter for me to direct the City
Manager to have a meeting with the FOP as soon as next week to discuss the possibility of
cutting the City expenses by 15 or 18 or $10 million or $5 million or $0.50, whatever the amount
is, but to finally have a meeting and discuss the issue and come to a solution? Is that a violation
of the City Charter?
Ms. Bru: You're clearly within your authority to direct the Manager to undertake measures that
would implement the policy objectives that you're trying to embrace for this budget.
15 August 25, 2008
Commissioner Gonzalez: All right. So based on the City Attorney's opinion, that is my
directive to you, Mr. Manager, because I can't direct to him but to you.
Mr. Hernandez: Yeah. Commissioner, I don't know why the FOP, in essence, makes those
allegations and statements. I know that staff met with them two weeks ago. I know that Hector
Mirabile has a meeting with them tomorrow. We're more than willing and always available to
meet with them, and we'll do what is necessary.
Commissioner Gonzalez: But I can't understand why should they be telling me that they can't
have a meeting with you to discuss the saving on the City contributions to the pension plan, and
they've been at it for the last six months, I mean. It has been the issue of the saving to the
contribution of the City of Miami, and also the issue of the detaining officers, right? That has
been an issue. I mean, we approve that -- I believe it was last year that we approve the hiring of
some detention officers a year ago, and we budgeted a year ago; and we continue to use sworn
police officers to book detainees into Dade County Jail and to process paperwork, and we're
losing manpower of people that we need to have on the streets processing prisoners while we
already approve the positions and the budget a year ago; and we have been playing with that
issue for an entire year, and that's a way to waste money and to waste resources. But you know -
- but it has to come to a budget time so we can bring it up and discuss it and put it in the right
perspective and see if we finally, you know, can achieve something out of it. Because I don't
know why -- many times we -- you know, we're presented with plans and budgets for
departments and operations and then we approve them, we give them the okay, and they're never
implemented.
Commissioner Sarnoff: Well, in that vein -- if you don't mind?
Commissioner Gonzalez: Yeah.
Commissioner Sarnoff: -- we approved 35 police officer positions; 24 have been filled, 11 are in
the process.
Commissioner Gonzalez: Okay.
Commissioner Sarnoff: PSAs (Public Service Aides), we did close to, what, I think -- and I
suspect everybody here voted for the budget based on the fact that we were all concerned about -
Commissioner Regalado: Police.
Commissioner Sarnoff: -- anticipated crime. We had 55 PSA allocations, so that's -- all we
could do as a Commission is allocate the money. Fifty-one were filled. I understand three are in
the process of being filled and one is still remaining vacant. Now, here's your point. Ten
detention officers, we filled none. I've asked you -- or park rangers, 25 we approved; all are
vacant.
16 August 25, 2008
Commissioner Gonzalez: Right.
Commissioner Sarnoff: You know, we sit up here believing that when we allocate money, the
money will be used for the reason we allocate it; and maybe we're remiss not -- maybe not
getting a report card every quarter how are we doing on those new positions.
Commissioner Gonzalez: Right.
Commissioner Sarnoff: So I hear you well. I -- these are positions -- I know this is part of the
reason I voted for the budget.
Commissioner Gonzalez: Right.
Commissioner Sarnoff: Certainly police, certainly the PSAs; and I got an issue. The detention
officers, we're doing that crime study. You're dead right. These are taking police officers off
the street. Park rangers, a lot of new parks came online. We thought it was a good idea to have
park rangers out there, but -- I yield, and I apologize for actually --
Commissioner Gonzalez: No, it's all right. Another issue that I insist every year on at budget
time, how are we doing in the collection of certificate of use and occupational license and
permitting in the City of Miami? Because let me tell you, I know for a fact -- and when I tell you
that I know for a fact, I'm like the late Arthur Teele. You know, when I tell you that I know for
a fact, it's that I can take you right now to the place and we can do an inspection and I know of
places in Allapattah that they don't have a certificate of use, they don't have an occupational
license, they don't pay any permits and they are operating businesses. I know places -- and this -
- I've been saying this every single budget session. There are warehouses in Allapattah that have
25,000 square foot and they pay certificate of use based on a 1,000 square foot location or 1,500.
You know, but it seems that it is very hard to have a measuring tape and measure the actual
location and issue the right certificate of use and collect the right amount of money. And this is
something that I've been saying every year. I remember two years ago I mentioned that and we -
- and the City created a task force and they went out there and they collected $1.5 million --
Mr. Hernandez: Commissioner, my understanding is that --
Commissioner Gonzalez: -- on occupational license and certificate of use that they never
collected before.
Mr. Hernandez: -- we continue to use that task force that you just mentioned.
Commissioner Gonzalez: You do?
Mr. Hernandez: Yes. And I think that Michael may have the numbers that I would think proves
that.
17 August 25, 2008
Commissioner Gonzalez: And where are they working? What -- okay. When I said we created
a task force, we created a task force three years ago that was only addressing occupational
license and permitting. We are not using -- we were not using Code Enforcement because -- I
see Mariano standing up. I didn't -- we didn't use regular Code Enforcement officers that are
looking for other issues in the City of Miami to check on occupational licenses, okay, and
certificate of use. The only time that his inspectors, I understand, go into the issue of certificate
of use and occupational license is when they are part of the quality of life task force. Am I right?
No?
Mariano Loret de Mola (Director, Code Enforcement): No. We got the quality of life -- Loret de
Mola, Code Enforcement director. We got the revenue task force, which is three inspector on a
constant basis they go out, and in conjunction with the license department division, we sit and we
go to different places. And we collected over a million dollars every year for the last 30 years,
and we have done a lot of inspections. We got the records. We do them on a monthly basis. I
don't know how many -- over the thousand inspectors -- inspections on businesses just for
license, for CU (Certificate of Use) and operational licenses. And like I said, we got the record.
For the last three years, we go over a million dollars that we collected, and that's money on the
hand. I mean --
Commissioner Gonzalez: Yeah. That's money in the hand.
Mr. Loret de Mola: -- because when we go over there, we do the inspection, we call the fire
department, and we collect the money.
Commissioner Gonzalez: Okay, glad to hear that.
Commissioner Sarnoff: Wait, wait. Mariano, as long --
Commissioner Gonzalez: They're finally doing it.
Commissioner Sarnoff: -- as you're up there, can I just --? How -- I heard this number and it
kind of floored me, and I want to hear if I'm right. I saw something in here that you collected $5
million last year.
Mr. Loret de Mola: Five millions?
Commissioner Sarnoff: Is that right?
Mr. Loret de Mola: No.
18 August 25, 2008
Commissioner Sarnoff: What was -- what were your -- how much did you send in citations and
what was the collection?
Mr. Loret de Mola: On citations --
Commissioner Sarnoff: Whatever it is that you thought appropriately a citizen had violated or
the property had violated, what is that number? What's that big number?
Mr. Loret de Mola: All the citations and all -- on the citywide?
Commissioner Sarnoff: Yeah.
Mr. Loret de Mola: Over 50,000.
Commissioner Sarnoff: Fifty --
Mr. Loret de Mola: Um -hum.
Commissioner Sarnoff: No, no, no, but the number of mil -- in terms of how much money.
Mr. Loret de Mola: Of money?
Commissioner Sarnoff: Yeah.
Mr. Loret de Mola: Oh, that -- I cannot give you that money. I would have to go and get all that
money, Commissioner.
Commissioner Sarnoff: I thought I had heard you --
Mr. Loret de Mola: Because the fines go from 250 --
Commissioner Sarnoff: Right.
Mr. Loret de Mola: -- to $500 to 150 to 75.
Commissioner Sarnoff: I heard -- I thought I heard that you had written close to -- it was over
$50 million in fines and whatnot and your collection, after you go through the Code Enforcement
Board, is something in the neighborhood of $500,000.
19 August 25, 2008
Mr. Loret de Mola: I haven't --
Commissioner Sarnoff: Would you check on that?
Mr. Loret de Mola: I can check what -- how many violations we have issued and the amount of
violations --
Commissioner Sarnoff: Right.
Mr. Loret de Mola: -- and each one of them.
Commissioner Sarnoff: What I'm looking for is the reduction by either the Code Enforcement
Board or the special master, and I'm just curious if I'm right -- the number was either -- it was a
five -- it was 50 million, and I think you're going to end up having received about 500,000 from
-- and I want to know what board or what special master is -- if I'm right -- reducing our fines by
$ 5 0 million. And some of them I'm sure are appropriate, but on the other hand, I think that's a
trend that needs to be looked at. And I've seen a document in my office -- and I'll try to have
somebody look for it before I -- the end of this --
Mr. Loret de Mola: You're talking about mitigation, Commissioner?
Commissioner Sarnoff: Yes.
Mr. Loret de Mola: They are -- the mitigation is in a special hearing that is afforded to the
citizens to come back and try to mitigate their fines. Those fines probably are fines that
accumulated throughout the years, all right. Some of them are --
Commissioner Sarnoff: Right.
Mr. Loret de Mola: -- three, four years old.
Commissioner Sarnoff: Right. Do you know that number?
Mr. Loret de Mola: I know what they mitigate and base -- but that's not all the fines that we
write.
Commissioner Sarnoff: Could -- so would you be able to give --?
Mr. Loret de Mola: That number is issued by the Hearing Department, based on the mitigation
when they come to mitigation.
20 August 25, 2008
Commissioner Sarnoff: Okay. Here's my instruction to you then `cause I want to -- I happen to
think your department is not only a valuable department but probably an underused department.
I want to know, for the next time I sit down and I look at your department for a budget, how
much you wrote in fines and how much some board or some magistrate wrote down your fines
to. You -- do you understand the general question?
Mr. Loret de Mola: I can give you how much I wrote on fines. I can give you that.
Commissioner Sarnoff: Okay, and --
Mr. Loret de Mola: For how many years you want?
Commissioner Regalado: If I may.
Commissioner Sarnoff: I may be using the wrong words.
Commissioner Regalado: No. I think it's about -- mitigation is about compliance.
Mr. Loret de Mola: That's correct.
Commissioner Regalado: And if you comply, that's the whole purpose of threatening you with a
fine. But the other thing is there are many people that are buying houses that have issues, and
what they are trying to do is just to fix it. And I know -- my son couldn't buy a house in the
Shenandoah area because it had a huge lien, and when it -- when they came to the City, they said,
well, you have 30 days to comply. Impossible. So he move on. He didn't even touch the house
because it had illegal units that he had to demolish, an illegal bathroom, illegal structures, no
permits, a whole mess. So it's very complicated because there are people that have huge fines
but they want to comply. Some people do comply, and this is, I guess, the mitigation. I guess
that our goal should be compliance, not --
Mr. Loret de Mola: They cannot come to mitigation unless they comply. The requirement to go
to the mitigation hearing is compliance.
Commissioner Sarnoff: And you know, let me illustrate it in terms of an actual property. And I
think the chairman of the DDA (Downtown Development Authority) will agree with me on this.
We have the Lerner building, for instance. From day one, I know the chairman and myself have
been trying to get the Lerner building taken down because it was an absolute dilapidated
building. So it's down now. Unfortunately, in its place we now have a pond. Luckily, we've
gotten through our drought, but we now have a fishpond out there. Whether Macy's is
21 August 25, 2008
concerned about that -- which I don't know how they would not be, but I know there's been
some communication that they're not that concerned -- I know the chairman has to be concerned;
I know I'm concerned because there were three other properties adjoining that particular place. I
know they're getting $250 a day in fines. That doesn't take care of the fact that there still exists
a fishbowl out there today. And I don't -- I hope you could break down that number to what I
call "incs." All you have to do is give me the incorporateds after that.
Commissioner Gonzalez: Yeah, but that is exactly the problem. The problem is, you know, a
place get fined $250 a day, and then they let it run and run and run and run, and at one point,
they show up in here and they have $750,000 in fines, and then it gets mitigated to $5,000 --
Commissioner Sarnoff: Right.
Commissioner Gonzalez: -- $3,000. So you know, there is no incentive to comply and take care
of the problem and pay the fine. You know, there -- and that is something that the Legal
Department needs to get involve in because only the Legal Department knows how to find a
system or a way or -- you know, where we can make people pay their fine on time and comply
on time. Either if it is taking them to court on, you know, certain amount -- and you're also an
attorney. You can also, you know, work with the City Attorney on -- because we need a system.
That has been the problem. I remember when I was a member of the Code Enforcement Board
back in 1997. We had those issues, people coming before the board that own a property back
then that was worth maybe $30,000, and they had $400,000 in fines, you know. And then on top
of that, there -- they were homestead properties, and they said, oh, you know --
Commissioner Sarnoff: I'm not going to pay.
Commissioner Gonzalez: -- hey, I don't care. If it goes to $2 million, I'm not going to pay
anything, and you know, you're going to have to wait until I die to collect. So you know, it has
become a joke. That is something that needs to be taken care of once and for all because, you
know, it's been a joke. It's been a joke, and that is exactly -- what you're saying, Commissioner,
is exactly what happens. They accumulate the fine and accumulate the fine and accumulate the
fine, and you know, I have seen fines of $500,000 on a property. It's ridiculous.
Commissioner Sarnoff: Well -- and my only point in bringing it up is -- sort of in the words and
the communications of Commissioner Gonzalez, you know, today we matter, or certainly, this
week we matter, and I suspect part of next month we'll matter, and we like to matter and I'd like
to hold your budget. I think Code Enforcement is what's right and wrong with the City. I've sat
up here for -- I'll be going on my second year in No -- December this year. Pete, all due respect,
I've seen your ADMs [sic]. I've heard that we're going to start foreclosing. I've yet to see
anybody foreclosed upon. I've yet to see the great, big stick -- and I'm not talking about
22 August 25, 2008
people's carports. I'm not talking about people's homes. I'm talking about the downtown where
I don't feel like I hold up my part of the bargain with Commissioner Sanchez being -- you know,
I'm supposed to be the stick. I'm supposed to be the District 2 Commissioner that is out there
making sure that everybody's in compliance because I happen to think that's one of the ways that
the downtown will improve. But I have yet to see anybody foreclosed upon. I have yet to see
any legal action taken to imperil some out-of-town owner's property who doesn't take care of his
building. And I've seen -- Pete, I've seen your e-mails (electronic), I've seen your memos, but
I've yet to see the action taken.
Mr. Hernandez: Well, Commissioner, I think that the Lerner demolition was a result of
litigation, otherwise, it would have never happened.
Commissioner Sarnoff: I agree.
Mr. Hernandez: And besides Lerner, we have taken down at least maybe a dozen buildings, so
we have been quite active in demolishing buildings. We have to do much better on foreclosures.
Reference the issue of mitigation, we have an ordinance that we'll hopefully bring before you in
the month of September to change -- to control the mitigation to be able to have more access
where the Code Enforcement Board will have less leeway and we'll be able to have a hammer
rather than what we have now.
Commissioner Sarnoff: And by Code, by the way -- and I apologize for taking so much time on
this -- we don't have to have a Code Enforcement Board, do we?
Mr. Hernandez: My understanding is that no.
Mr. Loret de Mola: We have special masters.
Commissioner Gonzalez: We can have a special master.
Commissioner Sarnoff: In other words, we could have special masters as opposed to --
Mr. Loret de Mola: Correct.
Commissioner Sarnoff: -- a citizen board --
Mr. Hernandez: Right.
Mr. Loret de Mola: Whatever you choose as the Commission.
23 August 25, 2008
Commissioner Sarnoff: Okay.
Commissioner Gonzalez: All right. Another question that I have is I've been asking about
numbers on the water park, how much has come in, how much have spent, and we've been
asking that for about two or three weeks. It seems that we're not able to come up with the
numbers, and I can't understand because there we go again. We approved, I don't know, maybe
$12 million for IT (Information Technology) for --
Frank Castaneda: We've been asking since May.
Commissioner Gonzalez: Oh, we've been asking since May. Since we opened the water park,
we've been asking for numbers. We approved and we allocate a lot of money to IT, to Finance
Department, to Parks Department, to every department, and it's as simple as anybody running a
hardware store. You got so much money coming in and you have so much money coming out,
and you deduct your expenses from your income and you have your net. I mean, I don't see why
it's so difficult and so hard. I have to hear numbers from the people inside the park. I have to
hear numbers from the guy that has the concession at the water park telling me how much -- hey,
last week I paid so much to the City, and the week before I paid "X" amount of money. And I
can't get it from my own people, from my own staff. I don't know what the problem is. What --
you know, what's the mystery.
Mr. Hernandez: Commissioner, I was just talking to the folks from Finance, and they told me
they've done it, so if --
Commissioner Gonzalez: Yeah, but that is --
Mr. Hernandez: -- they --
Commissioner Gonzalez: -- the problem.
Mr. Hernandez: No, no. They've done it --
Commissioner Gonzalez: That is exactly -- but Pete --
Mr. Hernandez: -- and it's been sent.
Commissioner Gonzalez: -- that is the problem. That is the problem. That is the problem. We
asked for some data, and we keep asking and asking and asking and asking, and then whenever
we have a Commission meeting, hey, you know what? They just got it.
24 August 25, 2008
Mr. Hernandez: No. My understanding is that --
Commissioner Gonzalez: But I'll tell you what. If we wouldn't have another meeting until
October 20, I wouldn't get the numbers until October 21 or 19. I mean --
Mr. Hernandez: Commissioner, my understanding is that --
Commissioner Gonzalez: -- it's a joke.
Mr. Hernandez: -- it was done some time back.
Commissioner Gonzalez: It's a joke, and it's not only with your Administration. It has been
with the prior manager and the other manager. I mean, it's a joke. It's a constant joke. When I
started working with -- when we started working with the drop of the police department, it took
us two months to get partial numbers. I mean, it seems like everything that has to do with
finances and with money in this city is a secret well kept among the department managers and
among the personnel of the City, and it's something that constantly being kept from us. I don't
know what the problem is. I mean, it's a mystery. It has been -- listen, I've been sitting in this
chair for seven years now, and it's year after year, year after year. Every time I ask about
numbers, it's a tremendous problem to get numbers. I don't know.
Mr. Hernandez: Commissioner, if we haven't, I apologize, because I've been told that we've
been sending it every month --
Commissioner Gonzalez: Well --
Mr. Hernandez: -- so I'll find out.
Commissioner Gonzalez: Frank, what you been doing with the reports? Have you taken them
home or what you doing with them?
Mr. Castafieda: I'm sorry. The last communication that I have was that it was being sent to
Budget; that they wanted to make -- check it to make sure that the figures were correct, and that
was the last time we heard of it.
Chair Sanchez: Put your name on the record.
Mr. Castafieda: Frank Castafieda, chief of staff to Commissioner Angel Gonzalez.
Commissioner Gonzalez: All right. So tomorrow I'm going to have the numbers?
25 August 25, 2008
Mr. Hernandez: Commissioner, the direction that I gave to staff was that we wanted to do a
monthly statement -- every month to have a statement --
Commissioner Gonzalez: So they told me --
Mr. Hernandez: -- as to the monies coming in, the monies coming out, everything so you could
see the complete financial picture of the park.
Commissioner Gonzalez: That's what they told me back in May when we opened the park.
Mr. Hernandez: You'll have it.
Commissioner Gonzalez: They told me that we were going to do it once a month. We were
going to have a balance sheet every month and we were going to know how much the park was
producing. Okay, how much -- who has the information? How much did it make last month?
Mr. Spring: We've been -- I don't have that specific number.
Commissioner Gonzalez: How much income did we get last month?
Mr. Spring: We've made, since the park opened, just under -- gross revenue, about $700,000.
On the expense side, I know we've spent a great -- close to that number. I want to say the net
number is around 150,000 to date, through today.
Commissioner Gonzalez: Since the park opened?
Mr. Spring: Yes.
Commissioner Gonzalez: You have made what, 700,000?
Mr. Spring: Net --
Commissioner Gonzalez: Net.
Mr. Spring: -- but a net 150.
Commissioner Gonzalez: Okay.
Mr. Spring: Net 150.
26 August 25, 2008
Commissioner Gonzalez: Net 150.
Mr. Spring: Right. I know one of the issues, as Frank was saying, when we looked at that
statement was you had your gross revenue and I know that number's produced and it's there
every month, every week actually. On the expense side, pulling out the indirect costs associated
with running the park, i.e., you don't get the pension cost in there, you don't get the healthcare
benefit cost. You don't -- the -- certain costs associated with chlorine and other expenses
because they're -- the way they're procured don't go directly to that cost center, so that's been
one of my concerns, which was what Frank was saying, about issuing a number. I would not
want to give you a false number. We didn't want to give you a $700,000 figure and you're
saying, oh, well, we're making 700,000 when, in actuality, the park is being subsidized, you
know, from the general fund, if you will. So I will make sure -- you don't have to wait `til
tomorrow. You won't have to wait two hours. As soon as I get to my computer, I will e-mail it
to you --
Commissioner Gonzalez: Very good.
Mr. Spring: -- `cause I do have it.
Commissioner Gonzalez: Thank you very much.
Commissioner Sarnoff: Wait. Larry, while you're up there --
Commissioner Regalado: Can --?
Commissioner Sarnoff: -- and I apologize. Could I just make sure --? I know the City does
something in my opinion is odd. When we factor in what we pay an employee, for some reason,
we don't factor in their pension, we don't factor in their healthcare costs. It goes into a whole
nother general section of your budget. But I'd like to know, soup to nuts, what does a rookie
police officer make? And I want you to factor in his car. I want you to factor in his insurance. I
want you to factor in -- you don't need to tell me that right now.
Mr. Boudreaux: I can definitely give you that information, Commissioner. I just need time to
compile it and send it to you.
Commissioner Sarnoff: That's all I'm asking.
Commissioner Gonzalez: How much?
27 August 25, 2008
Commissioner Regalado: Mr. Chairman, just about a park and has to do -- Commissioner
Gonzalez is totally right because we need to understand -- as a board of director of a business --
this is a multimillion corporation -- you need to understand if things work or they don't because
if they work, it -- maybe we want to do another park, water park. If it doesn't work, then we
won't do that. So on that line, Virginia Beach, it's getting more popular throughout the work
that the City has done and the Trust has done, but I went there the other day and it's very
interesting. In order to go, you have to pay for the toll, right, the parking. It's -- City residents
are not supposed to pay as much as nonresidents, right?
Mr. Spring: This is on the historic black beach side?
Commissioner Regalado: No, no. This is --
Mr. Spring: On the regular side.
Commissioner Regalado: -- to go to our --
Mr. Spring: On our side.
Commissioner Regalado: -- on our side. So -- but I just want to understand something.
Ernest Burkeen: Ernest Burkeen, director of Parks & Recreation. It's only one fee, $3,
residents/nonresidents.
Commissioner Regalado: I'm sorry?
Mr. Burkeen: It's just one fee.
Commissioner Regalado: Residents --
Mr. Burkeen: And nonresidents.
Commissioner Regalado: -- and nonresidents.
Mr. Burkeen: Right. It's just $3.
Commissioner Regalado: So the residents don't have a benefit of our only beach, but that's not
the issue. The issue is that if I say I'm going to Jimbo's, I don't pay. And the word has gotten
around, so everybody says, I'm going to Jimbo, and they park and they go to the beach.
Actually, do you know how many cars that went -- that said that they wanted to go to Jimbo' s
28 August 25, 2008
went to the beach in one single day? Twenty-five to forty, count it. It's interesting because I
would -- I should say I want -- I'm a City of Miami resident and I don't pay `cause it's my
money, it's my beach. So I think that it doesn't make sense because those who are in the know
don't pay, and those who don't know, even residents, pay. So just wanted to understand that
which I really don't understand.
Chair Sanchez: I think we just balanced the budget right there.
Commissioner Gonzalez: I'm done.
Chair Sanchez: You're done?
Commissioner Gonzalez: Yeah.
Chair Sanchez: Anyone else? You want to address an issue before --?
Mr. Spring: Just one issue. Just because I know the market is always watching, I do want to
clarify one point. You are the board of this organization. Every month you receive an e-mail
with a link to the monthly financial statement that is produced by the Finance Department which
has the City's overall picture in it, and that e-mail has been sent religiously every month for the
last several years, so you do have that information. I want -- citywide. I just need to put that on
the record.
Chair Sanchez: Okay.
Commissioner Gonzalez: So (UNINTELLIGIBLE) word, we have a deficit of $35 million,
right?
Chair Sanchez: Thirty-four.
Mr. Boudreaux: Has a forecast budget shortfall of 35.
Commissioner Gonzalez: And do we already know how we're going to address that?
Chair Sanchez: Well --
Mr. Hernandez: I made a statement at the beginning of the meeting -- you had not come in yet --
that we, through the budget process, asked every department to reduce their budgets, and we also
have other strategies that we plan to put in place that we feel will cover the gap.
29 August 25, 2008
Commissioner Gonzalez: But --
Mr. Hernandez: However, what we wanted to do was to have the opportunity to be able to meet
with every one of you at least a couple of times between now and September 11 in order to fine-
tune that plan and present a balanced budget on September 11.
Commissioner Gonzalez: As a matter of curiosity, how much did you ask each department to cut
themselves? Two percent --
Mr. Hernandez: It varies.
Commissioner Gonzalez: -- five percent?
Mr. Hernandez: What we did was that we assigned Fire and Police an arbitrary amount, and then
the rest was evenly distributed among all the other departments, and that's how it was done. And
the thought was to arrive at a certain reduction point knowing full well that then we have to
redistribute it and also we have to add some services at some departments. Services, for
example, in Parks, we have new facilities. We have to maintain those facilities, so there's an
increase. So there are things that we need to increase, there are things that we need to reduce and
that together with other strategies that we have will make a balanced budget.
Commissioner Gonzalez: All right. Because things are not going to get better. I think things are
going to get worse.
Mr. Hernandez: You're right, Commissioner. And probably the 2010, the following budget a
year from now, will probably be just as difficult if not more, and as we do this budget, we have
to start thinking ahead and planning for the next year.
Commissioner Gonzalez: All right. Thank you.
Chair Sanchez: Mr. Manager --
Commissioner Regalado: But how 'bout [sic] --? Oh, I'm sorry.
Chair Sanchez: No. It's okay.
Commissioner Regalado: The last question.
Chair Sanchez: I would yield to you.
30 August 25, 2008
Commissioner Regalado: How 'bout [sic] new revenues?
Mr. Hernandez: Commissioner, that is something that we have been discussing, and I would like
to take a look at fees in general in the City.
Commissioner Regalado: No, no. No fees. New -- unexpected new revenue. We didn't have
the murals. We didn't have the --
Mr. Hernandez: Slot machine.
Commissioner Regalado: -- Rusty Pelican lease. The Rickenbacker --
Mr. Hernandez: Right.
Commissioner Regalado: -- Marina lease expires now. And these are new revenue, no fees
increased, new revenue. The murals, the signs in the parks --
Mr. Hernandez: Right.
Commissioner Regalado: -- the --
Mr. Hernandez: Slot machines.
Commissioner Regalado: -- slot machines.
Commissioner Gonzalez: The billboards in the parks.
Commissioner Regalado: Huh?
Commissioner Gonzalez: The billboards --
Mr. Hernandez: Yes.
Commissioner Gonzalez: -- in the parks.
Commissioner Regalado: The billboards in the parks. That's what -- so --
Mr. Hernandez: We have many of those, Commissioner. And like the one you mentioned at
Rusty Pelican, we're moving forward in meeting with them and developing a plan --
31 August 25, 2008
Commissioner Regalado: And the marina.
Mr. Hernandez: -- that will work. And the marinas also.
Commissioner Regalado: The marina lease expires in a few months, so it's either you do
something --
Mr. Hernandez: We're working on those two, on the Pelican and also on the marinas to develop
a consolidated plan that will not only be more operationally efficient but also give us more
revenue.
Commissioner Regalado: But that's new revenue that is not included on the $35 million deficit.
Mr. Hernandez: Correct. That's not there.
Commissioner Regalado: So the -- if we are able to achieve all this, it would not be 35 million
deficit.
Mr. Hernandez: You're correct, Commissioner. There -- some of those items and those
revenues that I believe are not part of the number that we're working with. Michael.
Mr. Boudreaux: That is correct.
Commissioner Regalado: So the slot machines in Miami Jai -Alai and in Flagler Dog Track, this
-- we don't know the limit. We don't know the number because it's impossible to know, and I
understand that, but we need to understand for the projections -- as we project the fuel cost, we
should also project the revenues because it can't only not be bad news all the time, you know.
We do have new sources of revenue.
Mr. Hernandez: Yes, we do, Commissioner. I think that we have been a little prudent working
with the Budget Office in being on the safe side of not assuming too much, too heavily. Because
we don't know, for example with the gambling, as to when it's going to come on line and when
those revenues will be realized. So we know they're there, but we have been prudent in
incorporating them.
Commissioner Regalado: But it's not only the gambling. It's the new construction. It's the new
construction going on on those sites --
Mr. Hernandez: Yes.
32 August 25, 2008
Commissioner Regalado: -- which is going on right now in Flagler Dog Track.
Mr. Hernandez: Yes, it is.
Commissioner Regalado: Thank you. Thank you, Mr. Chairman.
Chair Sanchez: You're welcome. Mr. Manager, this process which basically started for you and
the Mayor and now it comes to the Commission based on our fiduciary responsibility by state
law, we must approve a balanced budget. This every year is a complex process. It is a tough
process. It gets tougher when you are faced with "X" amount of dollars that you have to cut.
Just like every budget, you could probably compare it to your house budget, where you cannot
live on or exceed what your income is. That's rule number one. Rule number two is you
shouldn't count on anything you don't have. As a young child, my father used to say, if it's not
in your wallet, it's not yours. So based on that responsibility, I think the first step that we take is
a step today in this workshop. But I think the first step that we need to do is -- and I think it's
important that we understand the plight of the working families in a tough economy. It is a
tough economy for the people who live in our city, for the people who pay our taxes. It is a
tough economy for government. We need to understand that. That is the reality and we need to
face it. Based on the statements put forth here by our financial director and those conditions
where the voters approved property tax cuts, it puts a burden on local government. Not only that,
but we also have a sinking housing market, and based on your projections, they're alarming.
Now I want to make sure that this budget is not a blue sky budget. I want to make sure that this
budget looks at all the forecasts, you may say clouds that may end up being a perfect storm in the
near future as we move forward. We know that not only the tax breaks that'll be coming but also
all the additional expenses that'll be brought to the taxpayers, such as the increase of Florida
Power & Light and other matters. We need to look at and see how we, as a city, can reduce $34
million -- or should I say trim $34 million -- in the 208 [sic] - 209 [sic] budget. That's our
spending. We have to cut that. So the bottom line of any budget is basically to, in this situation,
is to trim fat. That is what we should be talking here. As of today in this workshop, the reports
that I've gotten from the Administration and from the Mayor, who are the ones that present the
draft budget for us to work with you and finally vote on it, I have not seen any as to numbers and
papers as to what has been reduced by the departments. I think it's important based on these
meetings, which basically we will have additional meetings. We'll be able to iron out some of
these -- some of the differences, but I think the real test comes in how we prioritize and manage
our expenses. That's where the real test comes in. We understand that we're going to have to cut
expenses and those expenses are going to have to come from what we have. So every
department head out there who has participated in this process as to the reduction of 10 percent,
15 percent, whatever it is, I don't know yet, I need to see those numbers because I don't know
exactly where you're at. Have you cut 10 million? Have you cut 15 million? Have you cut 20
million, or should we just go home because you've resolved the whole issue and based on what
33 August 25, 2008
you said and some of the parking over at Virginia Key, we've balanced the budget already?
That's the concern that I -- I don't know those numbers. But I could tell you that from listening
my colleagues today in this meeting, which we cannot speak as -- you know, under the Sunshine,
I know that we have -- obvious we have the same concerns. Services is the last thing that we
should be looking into decreasing right now, and I will not do that unless I know that this
government has done everything within their power to cut as much fat without bleeding to death.
And there is fat in government. There is fat in government here in the City. There is fat in
government in the County. There is fat in government in Tallahassee. And I could assure you
there's plenty of fat in Washington. So we need to work together to resolve these issues, to
resolve those $34 million cut. Now what I don't want -- and I'm hoping that you would present
a budget that we could support that promotes delivery of services not only for political
expedience. We cannot afford to do that this year based on projections of this year and next
year, according to what you're telling me on these reports. But now based on the information
that I've gotten from you and the Mayor, who's presented this budget, I'm seriously looking into
a zero base budget for each department because I don't know how much fat you could trim off a
department. And let me tell you, government at times is not the solution; it's the -- it is the
problem. If you look at some of the departments -- and I'm not going to mention any department
because it should not be personal. Before I move on, let me say we're all blessed to have a great
job. While we sit here, I would say a large percentage of us -- and I was there when I was a state
trooper -- have job security. Let me tell you, a lot of people out there don't have that security. A
lot of people this year did not get a bonus. A lot of people this year lost their jobs. A lot of
people lost their jobs after 21, 25 years at a business. That's tough. Put yourself in their shoes.
So we're blessed. We're blessed to have a job. And having said that, I'll go back to what I was
stating. We need to identify, which I have not seen yet, and I'm looking forward to meeting with
you, looking at all the departments, looking at every reasonable cut that will not affect services
or fire anybody in this city. Looking at the numbers, I don't think we'll get to that point, but if it
is, this legislative body's going to have to make tough decisions. The people voted for us to
make these tough decisions. At times, you're going to end up being the skunk at the family
picnic. There's a saying I always say in budget time and I'm going to say it again. The issue
here is everybody wants to go to heaven but nobody wants to die. Folks, these are tough times
and we need to work with the Administration. We need to work with our City staff to get to that
point where we're able to cut those funds and make sure that nobody loses their jobs. Now a lot
of things have been said here that I think have a lot of valid concerns. I have a lot of issues I'll
bring with you personally when we meet with the Administration, and then I'm sure they'll be
discussed when we have more meetings pertaining to the budget. The 4-day workweek sounds
good, but the Administration needs to show me the numbers, that they work, it is a savings to our
city, the level of service would not be decreased, and maybe it's good for some of the employees,
especially parents or mothers who have small children that they could spend more time with.
But -- you know, you could save on fuel. You could save on other matters which I don't know,
but you'll present that to us. Solid Waste was another issue that we could talk to. Now I'm
34 August 25, 2008
open-minded about it. I'm not saying that I'm going to support it or not support it. It's up to the
Administration to present those facts to us, at least to me, and then I will decide my vote what I
think is best. But you could look at some of the recommendations that -- that were made at the
City where maybe reducing the garbage once every week to maybe once a month for the heavy
garbage. Maybe you come up with the idea of maybe once a week trash pickup. I'm telling you,
at my house, I could use it once a week, and there's four of us in our house. I don't fill it up
twice a week, but that's just me. Maybe there's other people out there, but that'll be up to -- the
numbers that come back to us. Then we need to explore a lot of things, the people that take
home cars; not the union `cause they have a contract and it's a binding contract, but people that
have cars they take home. Maybe we could look at options. Listen, the employees are going to
have to work with us on this. Maybe we could carpool. Maybe -- you know what? Maybe, if
you live in the City or close to the City, you could drive your own car home. These are tough
times. So these are just one of many things that will be discussed in this whole process. So at
the end of the day, we face our responsibility, we do it in a cordial and diplomatic manner, that
we don't end up looking like the School Board or other governments, and we could get this
accomplished. Thirty-four million dollars is a lot of money to cut. I'm telling you right now, I
will not cut public safety. I will not do that, and I think the message here is very clear. But I'll
tell you this much. No department or outside agency, inside agency, there are no sacred cows.
There should not be no [sic] sacred cows because from one department maybe you could take
"X" amount of cuts and put it back into manpower. Maybe that could be done with the police
department. I don't want to take a police officer off the street. I want to put more police officer
off [sic] the street, but you should look at their budget and see how -- maybe there are some cuts
where you could take that cut and maybe we'll come up with additional police officer. I think
there will be a push from this Commission -- as the Chair, I will push for that to put additional
police officer out on the street. Why? Because the City continues to grow. We need to provide
a safety. And the one issue that we need to provide in our City is that we are a safe city.
Because if you don't have the reputation of being a safe city, then you're affected. And let me
remind you, our biggest provider right now, we're in the service industry, tourists. People come
to our city to have a good time and enjoy themselves. We don't need to be understaffed in the
police department. That we don't need. But I'm disappointed in this process and I'll tell you
why. I should have been here today knowing exactly how much money you've already cut, Mr.
City Manager and from where it was coming so I could address the departments. It isn't
personal. I have a responsibility; they have a responsibility. But I've yet to know what
department is giving what and what department isn't giving any. Now I would know later and I
would meet with you, but then I don't have the opportunity to address, and that's where the issue
of Commissioner Gonzalez comes in.
Commissioner Gonzalez: And if you allow me --
Chair Sanchez: I would yield to you.
35 August 25, 2008
Commissioner Gonzalez: -- I just want to make a point. And I remember back in 1996 [sic] I
was watching the City Commission at home. I wasn't a Commissioner back then. I didn't even
thought of being a Commissioner back then.
Chair Sanchez: You don't have to remind me `cause some of the staff here still remember that
day.
Commissioner Gonzalez: But I remember that you stood here and it was your initiative that you
asked every department director to come back with a ten -percent cut. And you stood in this
Commission chamber until 3 : 3 0 in the morning. They couldn't come up with a ten -percent cut.
They couldn't come up with a five -percent cut. They couldn't come up with a three -percent cut.
So you know, my issue is that eventually we're going to have to decide how much we're going
to need to cut and where we need to cut because voluntarily nobody is going to cut their own
budgets. That -- you know, that -- we have seen that year after year after year after year. And --
sorry for taking your time, but it's something else that I want to add. I'm also in total support of
law enforcement, and I will not vote to cut a penny from law enforcement because as economic
conditions get worse and worse and worse, there is an increment in crime. And we are seeing in
the City of Miami not only an increment in crime, but violent crime, okay. So as a matter of fact,
we need more law enforcement officers out there, not less, but more. So, you know, we need to
keep -- we need to make sure that we provide law enforcement enough money and enough
resources and enough equipment and everything that they need to perform the job that they do
out there every single day. Thank you.
Commissioner Sarnoff: You know, let me just add to that because District 2 will not support
your budget unless, by the end of fiscal year '09, you've increased law enforcement people by 50
patrol officers.
Chair Sanchez: Fifty?
Commissioner Sarnoff: Five -oh. Now let me just say something to you with regard to that, and
I've handed you a memorandum. This came from the City -- actually, Miami Herald website.
And I'm going to ask you to do this across-the-board, and I'm going to ask you to provide this to
every City Commissioner. Overtime. Just so everybody understands something about overtime,
overtime is not there to compensate the employee because he worked the extra hours. It is there
to serve as a penalty to the employer from the federal government saying you're not staffed
sufficiently. It is a penalty. Time and a half -- that one-half time is a penalty to the employer
because it is the policy of the United States government -- and I would think of every
government -- that you employ as many people as you need to employ, versus employing a few
and making sure they're overworked. Now with that being said, I provided you a memo from
36 August 25, 2008
the City of Miami web -- City of Miami Herald web site. There are two police officers -- I won't
mention them publicly -- on this memo that have received -- their total compensation was
240,000. The other one was 277,000. Their salaries were 74,000 and $68,000, respectively.
That means that they're receiving 165,000 and $208,000, respectively, in overtime pay. Now
that should tell you, Mr. Manager, one of two things. Either the police department is
understaffed or these two men need to become directors immediately `cause they're so valuable.
They're so valuable to the City of Miami that they should be the directors of their departments.
Now I'm being facetious, but I want to know -- and I think every Commissioner here wants to
know -- how much is the City of Miami paying in overtime. If we're paying overtime to police,
if we're paying overtime to fire, if we're paying overtime to the general services, then we need to
ask you why are we not properly staffed. And if it's only a select few, why those few? Are they
so good, are they so valuable? Maybe you should promote them to assistant directors or
directors. You shouldn't be paying -- I know you can't not pay overtime. But if you look at the
Herald website --
Commissioner Gonzalez: But if you allow me on behalf of the department, if you remember, I
came up with the initiative of extending the DROP (Deferred Retirement Option Plans), and one
of the reasons that I alleged to do that, even though there was some resistance, was the fact that
the department was not able to retain officers and they could not hire enough officers fast
enough. So -- also, we had the level of salaries that our officers were making was inferior to
other departments, so people rather go somewhere else than being a Miami police officer. Well,
the issue of the salaries was solved --
Commissioner Sarnoff: Right.
Commissioner Gonzalez: -- by the increase. Then we extended the DROP, which also allow us
to retain, believe it or not, close to 30 officers that were about to leave, okay, and we are
achieving a better recruitment pool at this time. So I believe that, you know, some of the
overtime -- not that amount because that's very excessive -- but some of the overtime that was
put into the police department was justified by those three causes, I believe. I'm not the chief. I
don't run the department, but just by being out on the streets and see what's going on, I -- you
know, they were really understaffed. I mean, they had to have officers, after completing their
shift, continue into the next shift because they could not have officers to cover the next shift.
Commissioner Sarnoff: Well, I think -- if we should find out there's 30 police officers that are
going to receive overtime because we can't staff it and they're so sensitive, then I could live with
that report. However, I think we, as a Commission, need to know how much of our needs are we
staffing with overtime because you, as a city manager, should be not paying the penalty, which is
truly paid by the taxpayer. The taxpayer pays the penalty for staffing decisions that theoretically
you, as the City Manager, make. Now the Commission doesn't make staffing decisions. We
37 August 25, 2008
only make budgetary decisions, but unless and until we understand who's paying overtime, what
the reasons for the overtime are, then we'll never understand. Really 80 percent of everything
we're talking about is salary. Let's not kid ourselves. Everything up here -- most of what we're
deciding are salaries. If we don't get an understanding, as a Commission, why we pay so much
in overtime, then we're never going to get past the 80 percent of our budget. I mean, sure,
somebody can cut notepads and no more pens, and that's nickel-and-diming it. And if what
you're saying is true, Mr. Manager, and this is a problem -year budget but next year is even
worse, let's start cutting it down now. Let's start understanding the budget now. It's a request
from District 2 -- I hope every City -- every other Commissioner wants to get an understanding
of overtime pay, but I thought I'd give you three other areas that I'm going to look very hard at,
and I don't think I'm going to be voting for cuts. Parks. I don't see myself voting for a
reduction in Parks, so I'd like the Parks director and yourself to come to District 2 and explain to
me how he can make a cut, where he can make a cut, and why he can make a cut. The other
person I'd like you to come into my office with is Code Enforcement. I do not see District 2
voting for a cut in Code Enforcement, but you know what? I'm asking you to bring the director
to my office with yourself and you could explain to me any cuts you think he can make. And
finally, Public Works. As you continue to build things in the City of Miami -- we are great at
building, we really are. My hat's off to you. Your CIP (Capital Improvements Program)
Department probably should win an award, but I don't think we take care of anything that we
build, and I think that comes under Public Works. And if I'm wrong, you'll tell me; you'll tell
me it's another department. I think we need to maintain -- I think that's the expectations of
citizens that -- maybe our visions get a little bit smaller because our pocketbook gets a little bit
smaller. Maybe what you could do, as the City Manager, is clean up our image a little bit for
when we build something we can maintain what we build. And --
Chair Sanchez: I agree with you.
Commissioner Sarnoff: -- I -- so I just want to give you -- please, Parks, Code Enforcement,
Public Works. I fully intend -- I have no intentions of cutting police, unless you show me for
some reason there was way too much overtime paid. Parks, you're going to have to explain that
to me because that -- a good parks program and you have less crime. Code Enforcement, I'll be
after you on this. Three years after you leave as City Manager, I'll still be calling you.
Chair Sanchez: All right.
Mr. Hernandez: Commissioner, I --
Chair Sanchez: You want to answer his question? Then I'll finish `cause I yield to two
Commissioners and I haven't gotten the floor back.
38 August 25, 2008
Mr. Hernandez: -- basically concur with your statements. The approach that we took in asking
reductions from the department was in a proportionate way, knowing full well that at the end,
then you prioritize based on the needs of the City and the directions from this Commission, like
in the case of Parks, like in the case of Public Works, Code Enforcement. Obviously, safety is an
extremely high priority, and I wouldn't recommend cuts that would have an impact on our police
presence on the street, no way. I think that Commissioner Gonzalez talked about the long-term
plan of being able to reduce and control overtime. You just can't do it overnight.
Commissioner Sarnoff: Right.
Mr. Hernandez: We have been through the DROP program, through being more aggressive on
recruitment, through increasing the salaries of police coming into the City. We have taken steps,
but it takes time for that to show because from the time that we recruit a police officer `til I have
him working by himself on the street, 18 months go by, so it's a long process, but we're in that
direction. And I do appreciate your support in helping me get there, but it's not easy. Today the
overtime of Police is between eight and ten million. Now that's --
Commissioner Sarnoff: Right.
Mr. Hernandez: -- difficult to eradicate because you always have some needs, but you want to
have more control over it. And the only way is to -- by having more presence, more officers.
Now in the case of the example you gave me, I think that it's a question that maybe we need to
look at better distribution of that work, where a couple of individuals apparently are getting too
much of that and I don't think it's safe when they're out on the street working so many hours.
Commissioner Sarnoff: Either that or we promote them to directors right away so we make sure
they're supervisors and they no longer get salaries [sic].
Mr. Hernandez: Thank you.
Chair Sanchez: Mr. Chairman -- Mr. Manager, getting back to the numbers that I wanted. I
don't have those numbers, but have you done a study as to how much savings we could save on
the different options that you have put on the floor as to one -- four -day --
Mr. Hernandez: On the four-way [sic] week, we have been working over the last two months on
considering --
Chair Sanchez: Well, but it --
Mr. Hernandez: -- the benefits.
39 August 25, 2008
Chair Sanchez: -- see, but it's simple. I mean, why reinvent the wheel? There're universities,
there's other cities doing it. I mean, it's out there already. It's been done as to --
Mr. Hernandez: Well, the benefits accrue to different individuals. The benefits accrue to the
individual himself, accrue to the community at -large because you have less individuals out at
peak traffic. They accrue to the environment because you reduce the carbon footprint. As to the
benefit to the City from a budgetary standpoint, I don't think it's that significant when you look
at the black and white, and you can ask Budget. However, there are other benefits, so it depends
how you look at it and whose benefit is something that we value a lot.
Chair Sanchez: Solid Waste. Have you looked and explored Solid Waste as to --
Mr. Hernandez: Yes, we have.
Chair Sanchez: -- not reduction --
Mr. Hernandez: We --
Chair Sanchez: -- of staff, but the reduction --
Commissioner Gonzalez: I have to defer on that because, you know, I mean, if you don't spend
the same amount of money -- you're talking about one of the expenses that -- one of the
increments that we have, according to you, is going to be in fuel, and if you use -- stop the cars,
okay -- how many cars do we have in the City? I don't know how many cars we have in service,
but if you stop all of those cars one day, how much do you save in fuel? If you don't have to
cool every building in the City of Miami and energize, you know, turn all the lights and all --
how much do you save in energy in one day? So there is a savings.
Mr. Hernandez: Right. Commissioner --
Commissioner Gonzalez: When you multiply that for 52 weeks, you know -- I would like to sit
down with you and see those numbers and go through the numbers because one thing I know
how to do is add and multiply.
Mr. Hernandez: Our -- and I'm glad you brought that up because one of the considerations that
we were doing in doing this analysis was that in that fifth day, the one that you would cut, that
we would still provide inspection services out on the street. The Building Department, the Fire
Department would continue to provide inspections without having to come to the office in order
40 August 25, 2008
not to reduce the level of service. If we're able to take that day away and don't do any
inspections, then we may be able to, yes, save more, but that -- we were not counting on that.
Commissioner Gonzalez: Yeah, but let me ask you. How much are we building in the City of
Miami on these days that we need to do inspections every day? Nothing is being built.
Mr. Hernandez: Well, the impact right now is being felt on the plans review side, but on the
construction, there is a lot of construction still going on that requires a lot of activity. If we can
remove that one day and we just pack the inspections in four days, it can be more significant.
Chair Sanchez: All right. Well, I need to see all those numbers. And -- no, no. I need to see all
those numbers. I think it's prudent that we see all those numbers, and I'm going to give you a
simple task. There should be no rock left unturned. And we're not going to solve this crisis by
nickel-and-diming it. Just want to say that so -- all right. Anyone else?
Commissioner Sarnoff: Just real quick. Michael, you said that 9.3 million is the increase from
'08 to '09 in salary. Did I hear you correctly?
Mr. Boudreaux: That will be the increase as a result of the across -the -boards that's going to be
provided on October 1, just the across -the -boards.
Commissioner Sarnoff: Right. In other words, the same folks that we employed in '08 that --
let's put it like this. This is a great way to say it. There're 31 days in September? Yes? All
right. September 31 [sic] to October 1, same people, same employment. We now have $9.3
million more that are being -- that are going to them in compensation.
Mr. Boudreaux: That's correct.
Commissioner Sarnoff: Okay. I just want to make sure I understood that correctly.
Chair Sanchez: All right. Any further questions?
Commissioner Regalado: Just one. I think it's important -- thank you, Mr. Chairman -- Mr.
Manager, that you understand that we need to make decisions. And I think, you know, like you
said, the four-hour -- the four -day week, it's what is politically correct, but it doesn't -- it would
not show in the millions and the millions of dollars. It's a good idea. Some cities have done it
because it's environmentally friendly, but the most important thing are the expenses of the City.
There are many, many expenses. And I, for one, am willing to reduce my office budget because
you should start with the example; the Mayor should start with the example. We should lead the
way in reducing what we feel we can work with. It's important to send the message to the City
41 August 25, 2008
employees. But you need to understand that, number one, we need to be clear in sending a
message to the people of Miami that we will not neglect public safety, that we will not neglect
the services in terms of parks and public works. The -- if we want to be a city that is
internationally famous, we need to have some kind of infrastructure support, but we also need to
look at the money that we spend in the lobbying issue in the state, in the county, and in the
federal government because as of now, all the money have been waste. We have not been able to
get what we deserve as major city in the United States from Tallahassee or from Washington, or
even from the County. You just admit that the residents of the City of Miami will be losing what
we gave them because of a County's decision of passing the burden to City of Miami. We still
don't know if the County is going to move forward with the -- trying to place on the ballot
elimination of the Miami Fire Department. Hopefully, the issue of the absentees need to be
ready on the -- today or tomorrow for the November election because the troops abroad will
avoid having that on the ballot. But we cannot be the biggest city in the county and in the state
of Florida and always have a sword hanging our heads. We need to have either good people that
lobby or we need to lobby ourselves, and that's -- is something that we need to understand
because in the last legislative session, federal or state, we didn't get what we deserve or what we
send to the federal and state government. Thank you, Mr. Chairman.
Chair Sanchez: All right. Any more questions? If not, anything the Administration wants to
add or any --? If not, the workshop has ended. Thank you so much.
Mr. Hernandez: Thank you, Mr. Chairman. Thank you for the input.
42 August 25, 2008