As Debts Mount, Some See Doom Over Miami

As this scandal-rocked city descends toward bankruptcy and a likely state takeover, momentum is building behind a move to abolish the municipal government and literally wipe Miami right off the map.

“Moon Over Miami”?

Make that “Moon Over Dade County.”

Just three months after three of Miami’s top officials were ensnared in an undercover federal corruption probe, the city is threatened with financial collapse and outright extinction via a petition drive aimed at asking voters to turn over control of Miami to Dade County.

“The reason for Miami’s existence ended with the creation of Dade County in 1957,” said Gene Stearns, a prominent Miami attorney who is leading the abolition movement. Since that time, Stearns argues, Miami has become a tax-burdened cluster of downtown businesses surrounded by rundown neighborhoods populated primarily by low-income Latinos, Haitians and African Americans.

“In fact,” Stearns said, “our flagship city is the third-poorest city in the country.”

Indeed, Miami is nearly broke. With an annual budget of $275 million, a projected shortfall of $68 million this fiscal year could result in the inability to pay police, firefighters and trash collectors as early as February. Standard & Poor’s has lowered the city’s bond rating to B--junk-bond status.

Miami’s financial woes began at least six years ago when--according to Thomas Tew, a special counsel to the city--expenses began to exceed revenues from taxes and other sources. Unions received favorable concessions from the city, land was sold off at bargain prices, and a sewer fund was raided to cover expenses in the solid waste department. Day-to-day expenses were met with money set aside for long-term projects.

When the ready cash was gone, Tew said, Miami borrowed by selling bonds. “Technically, the city probably went bankrupt a couple of years ago,” said Pan Courtelis, a businessman and outspoken backer of the abolition movement.

In a year that was to be devoted to celebrating the city’s centennial, the 350,000 residents of Miami instead have been battered with tales of greed and graft that have toppled the popular Cuban-born city manager and the lone African American member of the City Commission. Cesar Odio, chief executive and administrator since 1985, and Commissioner Miller Dawkins resigned last fall to face charges that include bribery, embezzlement and witness-tampering.

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The third official, finance director Manohar Surana, also resigned and pleaded guilty to corruption after wearing a body wire to secretly record conversations in which, according to the FBI, he and others conspired to accept kickbacks from city suppliers.

Merrett R. Stierheim, a former Dade County official who was acting city manager after Odio’s resignation, has proposed a blueprint for recovery that includes land sales, budget cuts and fee increases. Among the most controversial suggestions is a doubling of the $160 annual garbage fee to raise $10 million a year. A commission vote on it was put off until Dec. 12.

But even that plan may be too little too late. Last week, Miami Mayor Joe Carollo met with Gov. Lawton Chiles and explained that the city faces a “financial emergency” worse than previously thought. Carollo told Chiles he would not oppose a state takeover or a filing of Chapter 9 bankruptcy that would allow the city to nullify union contracts, renegotiate city leases and turn over garbage collection to private enterprise.

Chiles’ decision to appoint a Financial Emergencies Board to oversee city operations could come as early as today.

Although the effort to dissolve Miami would hand over the territory to metropolitan Dade County, which has a population of 2 million, the ultimate objective of abolition supporters is not to create bigger government entities, but smaller. “The lesson being learned all across the country is that big government doesn’t work,” Stearns said. “The goal is to create community governments of 20,000 residents or less and let them take care of local functions like police and trash collection, while metropolitan government is responsible for services such as airports, seaports and major planning.”

Thus, even if the city of Miami disappears, the name could live again to identify a smaller municipality governing the downtown business section, Stearns suggests.

Citizen disgust over the corruption scandal has aided the abolition movement. But graft alone did not plunge the city into financial chaos, according to Stierheim. Like cities elsewhere, Miami fell victim to miscalculations over revenues and expenses, exacerbated by a failure to collect overdue lease payments. The Securities and Exchange Commission also is looking to see if municipal bond funds were used to paper over shortfalls.

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Proponents of abolishing the city say they have more than the 13,000 names required to get a referendum on the ballot by April. If the move was approved next year, the city would be dissolved in September 1998, Stearns said.

Opponents include former Miami Mayor Xavier Suarez. “The city is just the right size, with good economies of scale,” said Suarez, who is considering a run for another term as mayor next November. “All it takes is a little streamlining, a little belt-tightening.”

He added: “The abolitionists don’t have a snowball’s chance in hell.”

But Courtelis said the city of Miami is “an outdated concept, so big now that not even money will fix it.” He acknowledges that a vote doing away with Miami will be an emotional test, especially for tens of thousands of Cuban and Haitian immigrants who found economic and political refuge here.

“But what is Miami?” asks Courtelis. “Isn’t it the people, the spirit of the city? Do we want to preserve a bloated, corrupt bureaucracy? This is a crucible for what the rest of the country will look like, an ethnically diverse community. But we pay the highest taxes in Dade County. I think people will vote their pocketbooks.”