The Stierheim Report

An old pro is recruited to undertake a very disagreeable mission: Dig into the stinking mess at Miami City Hall. Here's what he found.

So then, well, let's get into this budget. We spent the next weekend working for twenty hours in budget hearings with the departments at Riverside Center [the city's main office building]. All the unions were there, all the departments came in and out. Some of the department heads stayed for the whole two days. I started making calls the first weekend to corporate presidents because I knew I needed help. And I began to get the commitments from American Bankers and Florida Power & Light and all the companies that are providing people. In the meantime, I called County Manager Armando Vidal, I called [Miami Beach] City Manager Garcia-Pedrosa, I called some people that had been with me, and I gathered a small team that became the nucleus of my personal task force.

You've said the city staff is uniformly talented and hard-working. Why did you need to bring in these outside specialists?

I didn't have the time to handle all of the details and projects that are the normal activity of the city administration. There are only so many hours in a day! There were some days where I was going eighteen hours a day. I'm not exaggerating, because I'd go to sleep and I'd wake up because I'd start thinking about the problems.

These young people are all bright. And they have a lot of experience with crunching numbers. I brought in [veteran consultant and former city employee] Mike Lavin and put him in as acting finance director. He's not permanent, but he's got a good background and I have known him off and on for years. And I felt I can trust him. I had to get somebody into finance that -- if you will -- was my man.

Now, that takes nothing away from Dipak [Parekh, Odio's deputy finance director, whom Stierheim retained]. I mean let's face it, there are a lot of people who were very concerned because Mr. Surana had his organization there while the problems developed. But I have to tell you that Dipak, [assistant finance director] Mr. Phil Luney, [debt service coordinator] Mr. Pete Chircut -- they've been superb. Other people have been terrific. Everybody has really tried to be cooperative. Three or four people [who work] with Mike Lavin in the finance department, they went till 5:30 a.m. I was there with them until 3:30 a.m. on my birthday. So it wasn't just me; there was a group of us crunching these numbers, and we compressed into about ten days a budget process that would normally take, say, three or four months. That's how we came up with the multimillion-dollar budget deficit.

How bad is the problem?
The problem is just exactly as I've reported it. You know, the unions are going crazy. I spent a good part of yesterday with them, going through and crunching numbers. We've given them our computer disks and given them all the information we have. There's no secret to it. And if they come up and find five million dollars, God bless 'em! God bless 'em! We'll all thank them and I'll say, "Hey, you know, I am not Superman." We are all capable of making mistakes, but I think the numbers are pretty hard and pretty real. The one number I'm really concerned about more than anything is the capital budget deficit. [Stierheim estimates the deficit at $20 million, $2 million more than previously reported.] I mean that capital is: Whoo! That is a mess! We haven't heard the end of that one. [The capital budget covers bricks-and-mortar projects such as storm sewers, sidewalks, roads, buildings -- physical facilities that have an extended life span.]

Why are you so concerned about the capital budget?
I think I have said it really is only the tip of the iceberg. The city has to pay its bills. I wanted to know what projects were out there that would require cash flow over the next year or two years. What have we committed to do or can't back away from, that we can't put on the shelf? For example, the Melreese golf course will cost $3.9 million. The city has already spent $3.1 million. There is another $800,000 that needs to be spent. Where is the money?

The capital budget is very important. You can't take your eye off it. It is money the city has to spend.

The truth of the matter is the general fund owes the capital fund considerably more than $20 million. It could be 30, 40, 50 million. I don't know yet. When is that money going to be paid back?

There has been a lot of talk about possible culpability of the external auditors, but that talk seems to have died down. Looking back, what is your assessment of the service provided by the auditors?

In my judgment, the external auditor is the watchdog for the elected officials. Really the only protection an elected commission has is the external auditor because they are looking at what the manager, the finance department, and all the departmental agencies are doing with the money -- taxpayers' money, very sacred money. And quite obviously the commission was not satisfied [with the auditor] and disengaged. [The auditor, Deloitte & Touche, was fired by the commission on October 7.] They also instructed me, with the city attorney's help, to talk to different law firms to explore whether or not there were legitimate questions of liability here. That process is going on. I have talked to at least two law firms and we will talk to more.

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