Opa-locka finance chief: City can’t pay its bills – Miami Herald

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In a city government close to collapse, Opa-locka’s top financial officer broke ranks and warned her supervisors the city will run out of money after its payroll next week and that its recovery plans will not be enough to save Opa-locka from insolvency.

In an unprecedented move, Charmaine Parchment sent an email to acting city manager Yvette Harrell on Sunday saying that the budget deficit is three times larger than what the city has revealed to taxpayers and demanded that her name be removed from a city recovery plan submitted to the state.

“After the next payroll, the city will not be able to pay its bills,” Parchment wrote in an email chain obtained by the Miami Herald.

The director’s messages represent a far bleaker picture than what’s been stated for months by top administrators, including City Manager David Chiverton, who pledged at a public meeting earlier this month that the troubled city would have a balanced budget by the end of the fiscal year.

Parchment said that she had been warning supervisors “for many months” of a growing shortfall that she said will soon reach $4.5 million — an amount equal to a third of Opa-locka’s budget.

On Monday, another key manager, budget director Keith Carswell, weighed in on the controversy in his own email, saying he agreed with Parchment’s assessment of the city’s failed finances.

Chiverton took a temporary leave last week for medical reasons just days after a Herald story revealed that he paid himself nearly $40,000 in unused vacation and sick time for benefits to which he was not entitled.

Harrell did not respond to interview requests on Monday but fired off an email to Parchment and Carswell demanding that they provide an explanation for projecting such a large deficit.

“I cannot in good conscience allow the last messages to go unanswered,” said Harrell, an attorney who became Chiverton’s assistant in April. An emergency commission meeting is scheduled for Tuesday at 5 p.m. to discuss the unfolding crisis.

The grim predictions follow weeks of discussions between city leaders and the state over the future of Opa-locka, whose top leaders — including Chiverton — remain targets in a growing FBI corruption investigation into bribery and kickback schemes in nearly every layer of government.

Under Florida law, Gov. Rick Scott has the power to declare an emergency and take over the city’s operations, but he has yet to act on the problem, even as the city’s revenues plunge in one of the worst economic crises of any city in Miami-Dade in decades.

Twice this spring, the county has warned the state that Opa-locka was in danger of shutting down.

Now, for the first time, one of Opa-locka’s own senior officials has stepped forward and revealed that the city is about to go broke.

Parchment said she was taken aback to find her name in a proposed recovery plan sent to the state two weeks ago that did not accurately portray the scope of the city’s “dire finance condition.”

“Let me be perfectly clear,” wrote Parchment, who returned last week from a family medical leave. “Myself and the finance department did not review and were not consulted on the city’s final report and financial recovery recommendations to the state.” Carswell said he, too, was never consulted as the budget director.

While there is no dispute that a financial emergency exists, what’s unclear is whether the city has enough money to pay its workers — now numbering about 165.

In a report sent to the state, the city stated there was $2.2 million in the general fund, but Parchment and Carswell said the amount was closer to $774,506.

One longtime city employee who spoke to the Herald on condition of anonymity said that while workers have already been on edge, they have always believed they would at least get paid. “Judgment day is here,” he said.

$6 million Opa-locka’s estimated property-tax revenue, now nearly spent

The challenges by Parchment and the budget director raise questions about the city’s ability to wage its own recovery in one of the poorest communities in South Florida, where nearly 40 percent of the residents live in poverty.

For months, Opa-locka’s elected officials, led by Mayor Myra Taylor, were warned about the imminent financial collapse. But they put up resistance, saying they could solve their own problems without outside interference.

City Manager Steve Shiver was fired in November after he alerted the state about the mounting debts that reached $8 million, and months earlier, a financial task force warned that the city would have to make drastic cuts.

“They kept kicking the can down the road,” said City Commissioner Terence Pinder.

Pinder said the finance director’s emails reveal what he has suspected all along: Opa-locka is running out of money and the recovery plan will not be enough to save the city.

After the next payroll, the city will not be able to pay its bills.

Charmaine Parchment, Opa-locka finance director

Part of the problem is that Chiverton has not fully divulged the scope of the city’s fiscal problems, including its growing debts, Pinder said.

For example, Chiverton’s plan states that the city owes its largest creditor, Miami-Dade County, $3.5 million. However, county officials said the amount owed is $1 million higher.

Chiverton said the city will balance its budget by the end of the fiscal year, but its biggest source of revenue — $6 million in property taxes — is nearly all spent. For more than a year, the city has been dipping into its water and sewer funds to cover the budget shortfalls.

Chiverton’s moves to reduce the work week to 32 hours for most employees and lay off workers will save hundreds of thousands, but it does little to lower the debt, estimated to be at least $6 million.

Pinder and other critics said the recovery plan is built partly on an aggressive effort to annex surrounding land to expand the tax base. But it’s not clear that residents in those targeted areas would want to be part of a city with plunging property values and a high crime rate.

“The recovery plan is all show-and-tell,” Pinder said. “There is nothing in it that’s going to save our city.”

Opa-locka finance chief: City can’t pay its bills – Miami Herald}