Daily Business Review – Judge Sides With Sweetwater Mayor in Budget Fight (July 12, 2016)
By Kluger, Kaplan, Silverman, Katzen & Levine, P.L. July 19, 2016
Judge Sides With Sweetwater Mayor in Budget Fight
Days after warning Sweetwater commissioners that the city will be broke by August, the mayor won court approval Monday to use his version of the budget.
Miami-Dade Circuit Judge Barbara Areces ruled that the commission had violated Florida law by balancing the budget with the anticipated proceeds from the sale of a real estate parcel that, at the time, hadn’t even been listed.
The budget the commission approved at a September meeting also reinstated salaries for city employees laid off by Mayor Orlando Lopez and excluded pay for Lopez’s hires in the west Miami-Dade suburb. Areces found the commission did not have the power to appoint or remove administrative employees reporting to the mayor.
“Basically, this mayor’s back in charge of the city, and they’re running off his tentative budget, which is a balanced budget,” said Alan Kluger of Kluger, Kaplan, Silverman, Katzen & Levine in Miami. Kluger and his colleagues Todd Levine and Jorge Delgado represented the mayor.
Jesus Suarez and John Genovese from Genovese Joblove & Battista in Miami represent the commission.
“We strongly disagree with Judge Areces’ ruling and are evaluating how to proceed, being mindful of the city’s financial state,” Suarez said in an email.
Sweetwater is moving toward bankruptcy in the aftermath of a troubled administration led by former mayor Manny Maroño, who was sentenced to 40 months in prison after corruption stings.
Lopez has called for Gov. Rick Scott to declare a state of emergency and take over Sweetwater’s finances. The city is overdue to pay off a $1.9 million line of credit from Regions Bank.
The mayor proposed an increase in taxes for the 20,000-person city, but when the commission voted down the idea, he decided to lay off 30 people, including 15 police officers. Police were involved in the earlier corruption.
The commission put those employees’ salaries back into the budget, adding $2 million in expenses. To try to balance the budget, commissioners then included as revenue $2 million from the sale of five parcels near the Dolphin Mall.
The property is now under contract with a developer, and the sale awaits voter approval in a referendum scheduled for Aug. 30.
“The $2 million revenue line-item [the commission] added to the final budget in order to make it appear balanced was not ‘available,’ is not ‘available’ and will not be ‘available’ as Florida law requires,” Areces wrote in her order for final summary judgment.
The order authorized Lopez to use his proposed budget, and the commission is set to consider tax increases later this month.
“I’d be surprised, based upon the court’s ruling and the situation that the city is in, if the commission did not approve a higher [tax] rate for this year,” Levine said.
On Monday night, commissioners approved Lopez’s choice for police chief, one of the new hires that the commission had previously refused to fund.