America’s Most Miserable Cities by Forbes

Miami  is a playground for the rich and famous. Celebrities flock to parties at South Beach clubs and then return to their $10 million mansions in Miami Beach and Key Biscayne. It’s a leading city in culture, finance and international trade. But away from the glitz and glamour, many ordinary Miamians are struggling.

A crippling housing crisis has cost multitudes of residents their homes and jobs. The metro area has one of the highest violent crime rates in the country and workers face lengthy daily commutes. Add it all up and Miami takes the top spot in our ranking of America’s Most Miserable Cities.

The most famous way to gauge misery is the Misery Index developed by economist Arthur Okun in the 1960s, which combines unemployment and inflation. Our take on misery is based on the things that people complain about on a regular basis.

We looked at 10 factors for the 200 largest metro areas and divisions in the U.S. Some are serious, like violent crime, unemployment rates, foreclosures, taxes (income and property), home prices and political corruption. Other factors we included are less weighty, like commute times, weather and how the area’s pro sports teams did. While sports, commuting and weather can be considered trivial by many, they can be the determining factor in the level of misery for a significant number of people. One tweak to this year’s list: we swapped out sales tax rates for property tax rates. Miami would have finished No. 1 under the old methodology as well (click here for more details about the criteria for the list).

In Miami there is a growing divide between the top 1% and the rest of the metro area. Life is good for the likes of LeBron James and Latin pop crooner Enrique Iglesias, who’s building a $20 million compound on a private island with girlfriend Anna Kournikova, but if you’re among the 75% of households with an annual income under $75,000, it can be a hard place. The median home price is down 41% the past three years, sixth worst in the country, to $169,000. It’s great news for first-time homebuyers; not so great for the 47% of homeowners in Miami sitting on underwater mortgages.

A whopping 364,000 properties in the Miami area have entered the foreclosure process since 2008, according to RealtyTrac. The number of foreclosure filings slowed in Miami and across the country last year, but the housing market is far from a comeback.

Miami voters are fed up. Last year 88% voted to throw Miami-Dade County Mayor Carlos Alvarez out of office in the biggest recall ever of a municipal government official. They were dissatisfied with property tax hikes he pushed though during Miami’s real estate meltdown, while doling out raises to staffers at the same time. Miami residents were further outraged by the city and county covering 80% of the cost of the Florida Marlins $634 million stadium set to open in April despite the Marlins turning fat profits in recent years.

To replace Alvarez, Miamians selected retired firefighter Carlos Gimenez in an election that featured Luther Campbell of 2 Live Crew fame, who famously was brought up on public obscenity charges for performing songs from his album “As Nasty As They Wanna Be.” The controversial rapper, who promoted an exotic dancer tax during his mayoral campaign, finished fourth with 11% of the vote. Consider: 11% of voters thought “Uncle Luke” would be the best choice to run the eighth most populous county in the U.S.

Gimenez’s office took issue with Forbes’ use of some data from 2010 for our ranking.  “We’ve completed a number of initiatives and infrastructure projects during the past two years, which if used in the measurement criteria for your report, would dramatically change its result towards a much more positive position for Miami-Dade county,” the mayor’s office said in a statement. “In addition, our crime rate has been moving downward steadily, our property taxes were dramatically reduced last year by over $200 million, and our unemployment rate has been reduced by around 30% since last summer and continues to move downward.”

Miami has local company in misery on our list: the West Palm Beachmetropolitan division ranks fourth and Fort Lauderdale is seventh. Both areas have been hit hard by the housing crises.

South Florida politics have long been stained by corruption, which we factor into our list based on data from the Public Integrity Section of the U.S. Department of Justice on the number of politicians convicted of crimes. Southern Florida has had 354 public officials convicted of crimes over the past decade, which is one of the highest rates in the country on a per capita basis.

The latest trouble in the West Palm Beach area involves the mayor of Boynton Beach, Jose Rodriguez, who was suspended from his office last month by Gov. Rick Scott after Rodriguez was arrested for allegedly using his position to obstruct a child abuse probe involving his wife’s estranged daughter.

The Miami Heat brought Florida sports fans much joy when it paired James and Dwyane Wade in 2010 and the duo led the Heat to the NBA Finals. The rest of the Miami pro sports scene is pure misery, with the Miami Dolphins, Miami Marlins and Florida Panthers all among the worst teams in their respective sports last year (the Panthers have rebounded this season).

Michigan’s troubled duo of Detroit and Flint clock in at No. 2 and No. 3 among the most miserable cities. The cities have been reeling for decades due to the decline of the U.S. auto industry and in recent years have been demolishing houses to change their city landscapes. Detroit has closed schools and cut wages for government employees, while Michigan appointed an emergency manager last year to take over Flint’s budget and operations. Detroit and Flint rank No. 1 and No. 3 when it comes to violent crime, and unemployment over the past three years in both communities has also been among the worst in the U.S.

Last year’s most miserable city, Stockton, ranks No. 11 this year. Stockton got a boost as housing prices have stabilized to some degree after a 45% drop between 2006 and 2008. They also benefited from our replacement of sales tax rates with property taxes in the methodology (Stockton would have finished No. 6 under the old methodology). Stockton still has plenty of problems, though. It ranks among the country’s six worst when it comes to unemployment, foreclosures and violent crime.

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Location (Miami/West Palm Beach)

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A new tactic has been developed by Association Financial Services of Miami, Florida that has proven to be a boom to financially hurt condos and HOAs. Condominium and Homeowner Associations have been hit hard during the last five years by writing off amounts owed to them after a bank forecloses on a unit or home owner. When a bank forecloses on a condo or HOA, associations are often stuck with the debt accrued by the old delinquent owner, in effect leaving the association holding the bag for thousands of dollars in losses. A little known fact is that this money is still personally owed to the association and Association Financial Services has just taken the lead in recovering that money for Condos and HOAs.

Association Financial Services (AFS), a collections and finance company based out of Miami, Florida, rolled out the Write-Off Recovery™ and to the delight of the community associations who have just signed up it has been effective. According to senior Account Executive Mitchell Drimmer who has been bringing this service to condos and HOAs, “the success has been phenomenal and associations are now lining up to sign up for this program.”

“When Association Financial Services recently brought this product to my attention, I asked my client association to sign up not really expecting to see any money come back to the association” said Carlos Mejia, President of Global Management Services in Miami Lakes. “Since there was no cost and no risk, and we had already written off the loss, I advised my board to sign the agreement. We had nothing to lose.” Mr. Mejia continued, “So when Association Financial Services recovered thousands of dollars for Magnolia Lane which is one of the associations my company manages you can imagine my surprise and delight. You can be sure that I will now bring this agreement to all of my clients for review.”

Ken Arnold, CEO of Association Financial Services further elaborates, “What people don’t realize is that a foreclosure of the property does not discharge or extinguish the debt owed to the association from the former unit owner, and that money is in fact recoverable.” With Write-Off Recovery™, AFS pays all the costs and fees of collection, so there is absolutely no risk to the association. Mr. Arnold continues, “Many individuals and investors who walked away from their condo or HOA have plenty of income or assets to pay the associations what is owed. It’s just a matter of having the unique systems and skill set in place to collect this particular type of debt.”

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MIAMI — The Securities and Exchange Commission is investigating the financing of the Miami Marlins’ new downtown stadium.
SEC subpoenas to the city and Miami-Dade County are seeking a long list of documents and records, including those involving meetings and communications between government officials and executives with the Marlins and Major League Baseball.

The executives include baseball commissioner Bud Selig, ex-MLB president Robert DuPuy, Marlins owner Jeffrey Loria and the team’s president, David Samson. Copies of the subpoenas, dated last week, were provided Monday by city and county officials to The Associated Press.

“We are trying to determine whether there have been any violations of federal securities laws,” SEC Senior Counsel Drew Panahi said in a letter accompanying the county subpoena. “The investigation and the subpoena do not mean that we have concluded that Miami-Dade County or anyone else has broken the law.”

The $634 million retractable-roof stadium, set to open for the 2012 season, has been controversial from the start because more than three-fourths of its costs are being borne by taxpayers. More recently, Miami city officials raised concerns about having to pay the county $2 million in property taxes for adjacent parking garages operated by the Marlins.

The 37,000-seat stadium is ushering in a new era for the Marlins, who changed their name and uniforms and have been on a spending spree for high-level free agents including ex-New York Mets shortstop Jose Reyes and new closer Heath Bell. The Marlins are also pursuing St. Louis Cardinals superstar Albert Pujols.

City and county officials said they would cooperate in the SEC probe, which requires documents to be turned over Jan. 6. It wasn’t immediately clear Monday if the Marlins also had received a subpoena; the team issued a statement saying it was aware of those received by the city and county.

“Of course, we will fully cooperate with the SEC’s investigation as needed and assist in whatever way possible,” the team statement said.

The parking garage tax issue is specifically mentioned by the SEC. Investigators also want records about the Marlins’ ability to contribute to the stadium complex’s financing, the team’s revenues and profitability, and whether any Marlins employees gave “any payments, loans, campaign contributions or any offers of anything of value” to city, county or state government officials.

The SEC also wants detailed information about the bonds used to finance the stadium and whether investors might have been misled.

SEC enforcement actions typically end in settlements that can include fines and other penalties, but investigators can refer individuals or companies to the Justice Department for potential criminal prosecution.

For original article, please go to: http://www.cbsnews.com/8301-505245_162-57336784/sec-probes-financing-of-new-marlins-stadium/

By Lance Wimmer and Dick Lindenmuth

The recession and current economy have caused a great deal of cutting.  Dr. Donald B. Bibeault (a Verto Partner) in his book Corporate Turnaround: How Managers Turn Losers into Winners observed,  ”Like a human on the mend, after a serious operation, a corporation may outwardly have the appearance of total recovery without having its old capabilities intact”.  Companies that muster through this economy with the growth engine intact will be the winners!

Our last article (Self Funded Growth) talked about developing and implementing an internally funded “free cash flow” organic growth strategy.  In this article we address how to establish a disciplined approach for defining a growth strategy.

The defining and development of a company’s growth strategy requires a comprehensive strategic planning process which encompasses a broad range of descriptive characteristics such as products, markets, competition, facilities, financial and manpower resources, together with a myriad of internal and external constraints.  A thorough assessment of all these factors and characteristics is essential for laying a sound foundation for a company’s growth strategy.

Internal (Organic) Growth

 Which way does a company want to grow?  Internal or external?  Internal growth, often referred to as organic growth, is usually given first consideration because it is a natural extension of a company’s existing capabilities.  Most companies already have products on the drawing board that have been under consideration.  Companies often turn to external growth, typically acquisitions, because they want to score more significant incremental growth gains in a shorter time frame.

The exercise of defining a growth strategy based on product line extensions begins with an examination of the industry, markets and customers currently served coupled with the products offered and their relative competitive strengths and weaknesses.  For a company with a limited product offering to a narrow market segment this examination can be a simple task.  However, as the product offering broadens to include multiple market segments or even different industries and different customers this examination becomes much more complex.  As this complexity increases it becomes critical to segment and define each distinct market and customer base to determine its relative attractiveness given the competitive hurdles, the market development and plant and equipment costs and the financial returns for the expanded product offering.  A careful analysis of these and other related factors will provide a critical assessment and validation process as the basis for a successful product extension growth strategy.

There can be significant benefits to an organic growth strategy based on product line extensions.  By rigorously adhering to a disciplined product line development process, over time, a company builds a solid foundation and body of knowledge in its product offering that can provide significant competitive advantages.  Take a look at Apple Computer as an example.  Steve Jobs built an iconic example of the ultimate product line extension process by constantly and rigorously identifying what consumers want and designing and building it into one product line extension after another.  By comparison, RIM’s Blackberry, once the penultimate hand held communication device for the corporate world, has fallen on hard times as it lost touch with its customer’s needs as newer, better technology eclipsed Blackberry’s iron grip on the market.

Market Research

So how does a company stay on top of its customer’s needs for its products and make sure its products stay in the forefront?  The answer is a continuous monitoring of the market using market research to identify emerging trends and demand shifts.  All too often companies adopt a “buggy whip” mentality of sticking with the tried and true.  They fail to reach out to become aware of the subtle changes that are happening every day all around them and make course corrections accordingly.  The fear of making a misstep and not understanding the messages that customers are sending destroys product innovation and, ultimately, the core value of any company.

External Growth

When and why should a company explore external, acquisitive growth?  The most compelling reason to seek acquisitive external growth is when a company’s products and markets have matured to the point of stagnation.  As an example, the automotive market in the US leveled off almost overnight due to the economic downturn coupled with increasing foreign competition.  Suppliers to the automotive market experienced dramatic revenue declines.  Those that had the financial resources to do so sought acquisitive growth to replace the lost revenue.

The external acquisitive growth strategy requires very careful planning and execution to be successful.  Is the company seeking ways to provide existing customers with new products and services that will enhance existing customer relationships?  Or, does the company want to broaden its customer base to become less dependent on a single market segment and its associated customers?  These and other questions about a company’s overall strategic plan must be addressed prior to exploring the acquisitive external growth path.

Acquisitive growth can be very costly.  First there is the cost of the acquisition that must address what is being acquired at what cost.  An often dangerous pitfall is the mistake of paying for the “synergistic” benefits that can be expected from the combination that subsequently never materialize.  When this occurs, the acquisition capital invested does not achieve the expected return and the company’s value is actually diluted, along with its stock price.  These “synergistic benefits”, while apparently reasonable and practical are seldom achieved due to a failure to execute a disciplined post-merger acquisition integration process.  (refer to our Verto article on the pitfalls of poorly executed Acquisition Integration)

Growth Strategy Implementation

Having defined the company’s growth strategy, whether internal, external or a combination of both, the key to its success is teamwork support at every level of management and in every organizational discipline.  This requires the following steps:

• Developing a  well-defined set of objectives
• Establishing benchmark performance milestones
• Putting together a plan to achieve the performance milestones and objectives
• Communicating the growth strategy plan throughout the organization

Developing Growth Strategy Objectives and Performance Milestones

A company’s growth strategy objectives must be realistic so that their achievement can be embraced by the management team.  For example, for a company that chooses to follow an internal organic growth strategy with an objective of achieving 10% annual growth in an industry that is only expected to grow at a modest 3 or 4% per year, results might not equal expectations.  If, however, the company has a well define product roll out strategy that is expected to surpass its competition the 10% growth objective, together with the capture of increased market share, might be reasonable.

As an alternative to internal growth alone, a company might augment growth with an acquisition plan blending internal with external growth.  This blended approach for achieving greater than expected industry growth helps to insure that a company reaches its objectives.

Complementing the setting of growth objectives is the establishment of performance milestones.  Assuming a three year strategic growth plan, a company might consider quarterly or semi-annual checkpoints to measure results and, if necessary, make course corrections.  If the company is falling short of expectations product introduction plans may have to be ramped up or acquisitions may have to be more aggressively pursued.

Communicating the Growth Strategy Plan

A company’s growth strategy is its blueprint for success.  A well thought out growth strategy plan must be embraced at all levels and across all functional disciplines for its execution to be successful.  The growth strategy is the backbone of the overall strategic planning process and it defines the future direction of the company.

At the Board of Directors level the growth strategy communicates the definition of who and what the company is today, who and what the company will be tomorrow and how management intends to get it there.

At the executive management level it needs to clearly define the objectives and milestone expectations, the execution strategy and further interpret and expand this information into the specific contributions and expectation of every functional discipline.

From the executive level it is pushed down through every level of the organization in a disciplined process until it is satisfactorily understood and embraced.

This all sounds easier said than done and nothing could be more true.  In our corporate strategy assessments we seldom find that the critical elements of the company’s growth plans have been adequately communicated throughout the organization.  We find that this lack of understanding of where the company is going and how it intends to get there is often the most fundamental reason companies fail to achieve their performance expectations.

Summary

Developing and implementing a growth strategy is a critical management task.  Performing a strategic assessment of the company’s strengths and weakness and assessing the market conditions and competitive landscape are fundamental steps to enable the establishment of the foundation of a disciplined growth strategy.

Deciding on an internal organic growth strategy or an external acquisitive growth strategy will be dependent upon industry and market conditions, competitive barriers, available resources and, most importantly, the need to grow to meet management, Board of Directors and investor expectations.

Once a growth strategy path has been determined it is essential to establish milestone benchmarks of performance communicate expectations to all levels and functional disciplines of the organization and to periodically measure performance and make course corrections to stay on track.

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 Verto Partners, LLC (www.verto-partners.com) is a performance improvement firm serving the middle market as advisors to management, as interim management or in Board of Directors roles.  Verto works collaboratively with management bringing the capabilities of highly skilled operations practitioners with a goal to significantly “move the shareholder/owner value needle”.  Our track record with financial sponsors, lenders and companies is unparalleled. 

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Growth Oriented Residential Real Estate Acquisition, Investment and Management Firm is looking for an ASSET MANAGER for our South Florida Office. We welcome candidates with residential experience, both industry and analysis (construction, modeling, etc.)

Job Responsibilities (including but not limited to):

• Identify partners the fund can invest with in multiple markets across the US in residential and multifamily asset classes
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JOB DESCRIPTION

Responsible for directing the Company’s Accounting functions, preparation of accurate and timely financial statements, reports and analysis to management.
The position requires an energetic, hands-on individual who can embrace organizational change and work collaboratively with others.
Must have ability to identify areas for process improvement, cost savings and implement automated solutions to increase efficiencies.

Summary of Responsibilities: 

MUST HAVE GREAT PLAINS (FRX is a plus)
• General Accounting, AP, AR, Payroll, Billing/Collections and Cash Management, purchasing, intercompany cons.
• Executes monthly financial statement close and analysis.

Experience with Equity Cap Tables
• Prepares financial reports and presents findings and recommendations to CFO.
• Coordinates external audits.
• Implements and drives process improvements
• Supports ongoing implementation of Great Plains
• All other duties and assignments approved by CFO.

Supervise staff of 1 (Billing/Collection staff)

 Education/Experience/Other Requirements:
• Requires a minimum of 6 year’s experience.
• Bachelor’s degree in Accounting required. CPA, a plus.
• Ability to manage multiple activities
• Self-starter, sense of urgency, meets deadlines, responds quickly.
• Excellent verbal and written skills
• Requires Great Plains experience
FRX experience is a plus

Please send your resume to: jobs@miamifinanceforum.com

When the recession squeezed Miami’s budget in recent years, officials reached into funds raised for road repairs and other projects to plug the shortfall.

Now, the city is paying a price. The moves triggered lawsuits and a federal investigation, in a brouhaha that holds ramifications for how municipalities nationwide maneuver around unprecedented money problems.

Cities and states across the country are using money designated for specific purposes—such as fixing roads or sewers—in order to fill financial holes elsewhere, according to public officials and records. The moves are exposing municipalities to controversy, as federal regulators and local auditors are more heavily scrutinizing their finances to protect bond buyers and taxpayers.

In Miami, the Securities and Exchange Commission is wrapping up an investigation into whether the city used funds intended for roads and other purposes to fill budget gaps elsewhere, according to people close to the probe. Bondholders are suing, saying the moves obscured the city’s true finances. The city’s former budget director is also suing, claiming he was fired for cooperating with the SEC and the Federal Bureau of Investigation.

Then, in late October, the city’s former auditor sued, alleging in the suit that he lost his job because he flagged problems then “participated, at the request of the Securities and Exchange Commission, in an investigation into whether the City of Miami was engaging in behavior tantamount to stock fraud in the marketing of its municipal bonds.” Both so-called whistleblower cases are filed in a circuit court in Miami-Dade County.

“If I had looked the other way, I’d still have my job,” said Victor Igwe, who had worked as Miami’s internal auditor for 12 years until late June, after his contract wasn’t renewed.

City officials declined to comment on the departure of the two officials.

“The city is cooperating fully with the investigation,” said Ivan Harris, an attorney at Morgan Lewis & Bockius LLP who is representing Miami in the SEC matter. He said the city “stands by the accounting for the transfers” because some of the funds had been unused for their designated purposes and other funds were replaced.

The SEC declined to comment.

For municipalities, the legality and potential penalties of moving money around range widely. Misusing money raised by publicly sold infrastructure bonds, for example, could violate civil laws protecting bond buyers. Other cases could violate federal or state public-finance disclosure laws, accounting rules, or regulations governing how agencies spend federal funds.

Some cases are being handled on a local level.

In Modoc County, Calif., officials were ordered last year by the state controller to repay more than $13 million they moved, including state and federal tax dollars earmarked for schools, roads, welfare programs and other projects. The county, as late as 2008, channeled some of those restricted funds into its main hospital.

“Modoc’s unlawful use of funds to mask its deep budget deficits was a disturbing finding,” said state controller John Chiang in an email. “The misuse of public dollars, poor bookkeeping and substandard financial audits are not isolated to this county.”

Modoc officials said they learned the transfers were illegal during recent audits by Mr. Chiang. The alternative, they say, was to possibly close the hospital—the county’s biggest employer. “We just have to keep tightening our belts,” said County Supervisor Jeff Bullock.

The county so far has been unable to repay, and officials declined to comment on whether further action will be taken.

The shuffles, public officials say, have picked up steam during the recession.

When Ecorse, Mich., ran into a financial crunch in 2008 and 2009, the city used more than $2 million intended for schools and other areas to fill budget shortfalls, according to a state audit. The city’s mayor says that the issues are in the past.

Portland, Ore., over the past five years used money raised for water and sewers to pay for other purposes, including remodeling a building for the nonprofit foundation that runs the city’s Rose Festival, according to a March report by the city auditor.

The project may have helped the public, wrote city auditor LaVonne Griffin-Valade, but state law, city code and bond covenants require that utility ratepayer money be spent for utilities. Misusing the funds could reclassify the money as an unauthorized tax.

A Portland city council member who oversees sewers, Dan Saltzman, said the council “has been getting more lax about how we’re allowing ratepayer dollars to be spent.” He has proposed an independent utility commission.

Elaine Greenberg, who runs the SEC municipal unit, said the agency is looking for cases where governments might use money from a bond offering for purposes not specified in the offering documents.

“You can’t float a bond for one thing and use the money for another,” she said. The agency also is on the hunt for governments moving money reserved for specific purposes.

Ms. Greenberg wouldn’t confirm or deny the existence of any investigation.

A municipal borrower that misleads investors in borrowing documents or uses money raised for other purposes could violate antifraud provisions. Municipalities deemed at higher risk of default typically pay higher interest rates on bonds. By obscuring financial problems, they may underpay bondholders.

Historically, the SEC has avoided financially penalizing municipalities, since taxpayers ultimately pay the penalty. So last year the agency tried a new approach—it fined individual officials in San Diego to settle allegations the city had misled bond investors.

In Miami, any new case would be a second offense. In 2003, the SEC ordered Miami to cease and desist from future violations of antifraud provisions after concluding the city had misled bond buyers by moving money among agencies to mask a deficit. The city maintained it did nothing wrong.

The SEC began re-examining Miami in late 2009. Regulators have investigated transfers into the general fund. They also have questioned the use of gas taxes paid by drivers, which Mr. Igwe’s audit report said was supposed to be used for transportation-related projects but was instead used to operate street lights and decorative lights in parks.

Among those in Miami questioned by the SEC was Michael Boudreaux, who was fired as budget director in 2010. In his pending lawsuit against Miami, Mr. Boudreaux said city officials discovered a “major budget shortfall” and directed him to locate funds. Those officials declined to comment.

“There was no deception on my part,” Mr. Boudreaux said in an interview. He says others implemented the ideas and that he was fired after speaking to federal investigators.

Marc Sarnoff, a city commissioner, said that he and others weren’t aware that moving the funds was a potential violation of rules.

To view an original article please refer to:

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