BRADENTON, Fla. – The small Florida city of Opa-locka is on the verge of bankruptcy, according to the head of a state-appointed oversight board.
The panel's chairman, Melinda Miguel, blasted city officials Thursday during an eight-hour online meeting for failing to recognize its dire financial condition.
The city may also be in default of privately placed notes held by a local bank that could be accelerated – a problem that will be sorted out in consultation with Florida Division of Bond Finance Director Ben Watkins.
"I believe that we found that we are at ground zero of fiscal irresponsibility," Miguel said. "While the city teeters on the verge of bankruptcy we've had people ask what's in it for me.
"From creditors, to commissioners, to employees, to crooks, what's in it for me has to change," she said. "And we must all do our part."
In mid-June, Scott appointed the nine-member oversight board after the city in Miami-Dade County determined that it was in a financial emergency and entered an agreement to get professional assistance from the state.
Scott named Miguel, his inspector general, as the board's chairman. Members of the panel are not paid.
Acting city manager Yvette Harrell told the board that the city has $500,000 of bills due now but just over $354,000 in the general fund.
The city's payroll is due Aug. 10, which Harrell was authorized to pay.
However, no other bills will be paid until the oversight board determines what's left in the bank by the time it meets again in two weeks.
"Can a municipality go bankrupt?" asked board member Frank Rollason, who is the city manager for nearby North Bay Village.
Only the governor can authorize a Florida city to file for Chapter 9 bankruptcy, the panel was told.
Opa-locka, which has about 16,000 residents, also cannot issue any bonds or take out any other kind of long-term debt without Scott's approval.
Harrell also told the board that she will not meet an agreed-upon Aug. 1 deadline to submit a proposed budget for fiscal 2017 or a five-year financial recovery plan.
"Optimistically, I'm looking at the end of September before the city no longer has funds with which to operate," she said.
In a brief update on legal matters, the oversight board was informed that there are ongoing investigations by the Securities and Exchange Commission and the Federal Bureau of Investigation.
The SEC is looking into whether the city properly disclosed its financial condition in bond documents for as many as two issuances that were privately placed with local banks.
The FBI raided city offices and removed documents that are believed to be related to spending irregularities.
The state has provided no state money to assist in Opa-locka's recovery.
The oversight board has discussed the possibility of an advance from revenue-sharing funds to help the city through the lean months ahead before property tax collections come in.
"There's got to be some other demonstration of fiscal responsibility," Miguel said, noting the lack of a city budget or recovery plan, and the federal investigations. "I'm not inclined to make that recommendation."
At least twice during the meeting, Miguel reminded the city that no one is authorized to spend any money without the oversight panel's approval.
"I must just point out that absent a budget, absent a financial recovery plan, absent an audit, and further demonstration of a cooperation issue or lack of cooperation issue constitutes malfeasance and misfeasance under the agreement," Miguel said, referring to the city's financial recovery agreement with state.
