By William Gjebre, BrowardBulldog.org
The Florida Legislature’s joint auditing committee is wading into Hallandale Beach’s questionable spending of local redevelopment funds, demanding that city officials explain the use and handling of those funds.
Legislators who head the committee also are urging the city commission to ask Florida’s Attorney General for a new opinion to clarify how Community Redevelopment Agency (CRA) funds can be spent. City leaders have challenged a previous opinion.
In a separate but related development, the Broward State Attorney’s Office issued subpoenas last week to Hallandale Beach officials -including Mayor Joy Cooper -in connection with a criminal investigation into the alleged misuse of city funds by a nonprofit group, the Palm Center for the Arts.
BrowardBulldog.org obtained one subpoena served on the city clerk asking her to produce the transcribed minutes and tape recordings of a March 17, 2010 commission meeting, a copy of a $5,000 check issued by the city to the Palm Center and any correspondence between the nonprofit group “and/or founder Dr. Deborah Brown” regarding that check.
City Clerk Sheena James is to appear at the State Attorney’s Office with the records and to testify on June 24 at 9 a.m. The subpoena is signed by Assistant State Attorney Deborah Zimet.
A YEARLONG INVESTIGATION
The subpoena and the audit committee’s inquiry stem from a yearlong investigation by the Broward Inspector General’s Office that found city officials had “grossly mismanaged” millions of dollars in CRA funds.
Hallandale Beach Mayor Joy Cooper
The CRA is funding by a portion of the property taxes collected within its boundaries.
Inspector General John Scott’s office said it found “probable cause” that Brown, the Palm Center’s founder and director, had engaged in criminal misconduct and asked the State Attorney’s Office to investigate.
Hallandale Beach officials have denied any misspending of CRA funds and defended how those funds were handled. They have also challenged many of the Inspector General’s findings, including criticism that the city wrongfully funded nonprofit groups, paid for fireworks displays and provided loans to businesses.
A delegation of city officials, led by Mayor Joy Cooper, went to County Hall last week in the wake of talk about a possible county audit of CRA tax funds it had sent to the city to inform Broward commissioners they don’t have the authority to do that.
County officials acknowledged that only the state has the authority to review CRA actions.
The Legislature now appears interested.
Sen. Joseph Abruzzo, a Palm Beach County Democrat who is chair of the Joint Legislative Auditing Committee, and Rep. Lake Ray, a Duval County Republican who is the vice chair, began asking questions on Thursday after being contacted by “a concerned citizen.”
Abruzzo and Ray sent a certified letter to Mayor Cooper. Copies were sent to Florida Auditor General David Martin, Broward’s commissioners, county Inspector General John Scott and City Manager Renee C. Miller.
Citing the report by Scott’s office, the legislators asked Cooper to respond to accusations that Hallandale had improperly co-mingled city and CRA funds and justify more than $2.2 million in questionable spending.
Abruzzo and Ray’s letter says that if the city fails to provide “specific authority” under state law, or if the expenditures were not included in the city’s CRA plan, Hallandale may have to restore the money to the CRA trust fund.
The legislators also suggested that city commissioners, who also sit as the CRA’s board of directors, seek a new Attorney General’s opinion regarding what constitutes allowable expenditures.
Abtruzzo and Ray also want to know if the city is complying with recommendations by Broward’s Inspector General, including whether the city has established policies to comply with state law and ensure the CRA operates independently.
Cooper said she has informed the committee that lawyers for the city and the CRA will respond to their questions. “I reaffirmed my position and that of our attorneys that expenditures by the CRA are within the authority of the statute to address slum blight, crime and economic development,” she said.
County agents have asked the city to provide a status report on their recommendations by July 16.
THE MAYOR’S SUBPOENA
Cooper said prosecutors subpoenaed her as a witness in their criminal case.
“I cannot comment any further on the matter. I was asked to go in as a witness on the 25th, but have asked to come in earlier due t o my schedule,” the mayor said.
Prosecutors’ investigation of The Palm Center for the Arts follows the Inspector General’s allegations that nearly $5,000 in city funds were used to make a payment on Brown’s timeshare at the Westgate Resort in Orlando and to make payroll payments to herself and her brother and for miscellaneous personal expenses.
City Commissioner Bill Julian said in an interview that the city clerk’s office informed him a subpoena had arrived for him, too. He had not seen the subpoena, but was told it requires him to appear at Zimet’s office on June 25th.
Julian believes that many of the same city officials who previously were questioned by the Inspector General’s Office were issued subpoenas. “I’ll go there and answer questions,” he said. “I have nothing to hide.”
Commissioners Anthony Sanders could not be reached for comment. Likewise, Brown could not be reached. Commissioner Alexander Lewy said he did not receive a subpoena.
PALM CENTER PAYMENTS
Palm Center received at least $107,000 in CRA funds over a three-year period. Brown was also listed as a principal and director of Zamar School of Performing Arts. About three years ago, Zamar received $25,000 in CRA funds.
Both programs operate on city property at 501 NW First Ave. The city leased the property to Palm Center in 2009 for a one-time payment of $10. While Palm Center was prohibited from subletting the facility, the city later modified the agreement to permit Zamar to operate a summer camp there in 2009.
The city property was once owned by a group headed by Commissioner Sanders. The Inspector General’s Office probe involved a review of the city’s purchase of the property from Sanders’ nonprofit Higher Vision Ministries.
Higher Vision bought the property in 2001 for $45,000 and sold it to the city eight years later for $235,000. Sanders, appointed to fill a commission vacancy in 2008, did not vote on the purchase.
In between the purchase and the sale, the CRA gave Sanders’ group a $46,000 property improvement loan. Sander’s group was only required by the city to repay $31,000; the rest was forgiven.
In its report, the Inspector General cleared Sanders of an allegation that the CRA showed favoritism toward him by substantially overpaying his nonprofit group for the property.
By William Gjebre, BrowardBulldog.org
County Commissioner Sue Gunzburger and Broward Auditor Evan Lukic
The Broward County Auditor’s Office has begun looking into whether Hallandale Beach should be required to repay some of the millions in tax dollars allegedly misspent due to “gross mismanagement” by city officials.
The preliminary review was undertaken recently at the urging of a county commissioner and a former Hallandale Beach city commissioner. It was also recommended by the Broward Inspector General’s April 18 report that was highly critical of the city’s handling of those public funds belonging to its Community Redevelopment Agency (CRA).
“Based on the final report of the Inspector General I believe we should recover any funds that were misspent,” said County Commissioner Sue Gunzburger, whose district covers parts of Hallandale Beach.
Broward Vice Mayor Barbara Sharief, who also represents the city, did not respond to calls for comment.
The county has an interest in the CRA funds because it approved establishment of the Hallandale Beach CRA in 1996. Since then the county has sent the CRA approximately $36 million in tax revenue, with the city putting up a matching amount to help rid slum and blight areas.
“The OIG report is problematic,” said County Auditor Evan Lukic. “If the funds were not used for the intended purpose in accordance with state law then money may be due back to the county.“ He said his review could take up to two months.
Following a yearlong investigation, the Inspector General reported that from 2007 to 2012 city leaders used the CRA like a piggybank to improperly pay for the city’s general expenses and other pet projects, including donations to favored charities and loans to local businesses. In all, agents found at least $2.2 million in questionable CRA expenditures.
The report urged the county government “to independently determine” whether Hallandale Beach expenditures were outside the scope the governing state statute, and if so to “determine what legal options are available to prevent ongoing abuse of the CRA process and recover those funds that may have been misspent.”
Hallandale officials, including Mayor Joy Cooper, objected to many of the report’s findings. They also asserted it was riddled with “numerous factual inaccuracies” and even challenged the Inspector General’s authority to investigate the CRA. City commissioners sit as the CRA’s board of directors.
Inspector General John Scott’s office replied that Hallandale’s top leadership, including the mayor and city manager, showed a “basic misunderstanding” of what’s gone wrong.
Cooper could not be reached for comment about the auditor’s inquiry.
City Manager Renee C. Miller said, “I would understand that they are looking into this… We will communicate and will reach out to them.”
Miller said the city continues to work to improve CRA operations, which includes “having and retaining a stable staff.”
Auditor Lukic said his review would determine what spending authority the Hallandale Beach CRA was given when it began. Hallandale got one of the first CRAs, he said, and there were fewer restrictions placed on them at that time.
Should he find the county’s authority lacking, there will be “no recourse” to recover funds from Hallandale Beach, Lukic said.
The County Commission will address the matter at its regular June 4 meeting. One of those who will speak is former Hallandale Beach city commissioner Keith London, who has called for a full county audit.
London, who frequently challenged CRA expenditures when he was on the commission, said a county audit is necessary not only because of the Inspector General’s findings. He accused his former colleagues of skirting “their fiduciary responsibility to the taxpayers” by ignoring both the Inspector General’s recommendations and a relevant 2010 Attorney General’s opinion.
That opinion held that CRA expenditures should go toward “brick and mortar” projects. The Inspector General, however, determined that Hallandale CRA’s violated that guideline with spending on grants and donations for favored charities.
City officials have countered that the Attorney General’s advisory opinion was non-binding, and does not prevent the city from making such grants.
By William Gjebre, BrowardBulldog.org
Hallandale Beach City Manager Renee C. Miller
Hallandale Beach officials have fired back at county investigators who last month found “gross mismanagement” of tax funds at the city’s Community Redevelopment Agency, accusing them of “numerous factual inaccuracies” and challenging their legal authority.
In its official 10-page response to the Broward Inspector General’s report, the city also said the OIG had misinterpreted the state statute governing the CRA.
“It is this failure which results in the OIG (Office of Inspector General) erroneously coming to certain conclusions that the city and CRA grossly mismanaged public funds,” says the report approved by City Manager Renee C. Miller.
The Inspector General’s preliminary report in March, after a year-long investigation, concluded that top city officials had grossly mismanaged millions of dollars in public funds “entrusted to the care of its” CRA. It identified at least $2.2 million in questionable CRA expenditures between 2007 and 2012, including inappropriate loans to local businesses and grants to nonprofits.
More than $400,000 in bond proceeds also were said to have been used improperly, according to the Inspector General’s report.
The report identified several contributing factors to the mismanagement: the city commingled CRA money with city funds instead of setting up a separate CRA trust fund in years past; the city improperly spent on parks and other activities outside the CRA’s boundaries; and it failed to access and verify work performed by nonprofits that received grants.
The CRA was established in 1996 under a state law that allows it to collect tax revenue to be used to rid slum and blight conditions. It receives 95 percent of the taxes collected on the appreciated value of properties within its boundaries. Hallandale’s CRA has received approximately $70 million since it began.
Florida law does not permit the CRA to fund charitable donations to nonprofits, according to the Inspector General’s report. And a Florida Attorney General’s opinion in 2010 said CRA expenditures should be used only for “brick and mortar” projects, it said.
Yet in its April 4 response obtained by the Browardbulldog.org, the city challenged many of the Inspector General’s assertions, including that one.
“A close reading of this opinion will reveal that the Attorney General gives no definite answer as to whether or not grants to nonprofits are outside the scope of the community redevelopment act,” says the response, noting the opinion was advisory and nonbinding.
City Manager Miller declined to discuss the response in detail. “We asserted our objections,” she said.
City Attorney V. Lynn Whitfield and CRA attorney Steven Zelkowitz helped Miller prepare the response, which included the assertion, first raised last June, that the Inspector General does not have regulatory authority over the CRA.
Mayor Joy Cooper, who like her fellow city commissioners also acts as a CRA director, did not respond to a request for comment.
But Hallandale Beach’s response made it clear that city officials were not backing down and asserting they had acted properly and in accordance with state law.
“There is very little case law or authority providing guidance as to what types of projects may or may not qualify as a community redevelopment project,” stated the response.
The response pointed out that in a case involving the Panama City Beach CRA, a court ruled the state statute governing CRA expenditures for public projects.
The city objected to the Inspector General’s finding that the city had failed to create a separate CRA trust fund until last May, saying in its response that a fund was established in 1996 by city ordinance. The response adds that state law does not require that the trust fund “be maintained in a separate bank account.”
The city also parried the Inspector General’s assertion that the CRA had failed to create an update its redevelopment plan saying, “there is no statutory requirement to update the plan.” The city noted, however, that it is currently updating its plan.
The Inspector General’s critique that the city had failed to established standards for awarding grants to charitable organization was met by a similar defense. The city argued that state law “does not require a transparent process or standardized criteria” — and because of that cannot be accused of “gross mismanagement.”
The city said, however, that it has adopted a formal process for applying for grants that will go into effect next year.
The city’s response acknowledges a good practice would have been to monitor how non-profits spent the money the CRA gave them, but once again contended that state law did not require this.
“The legal requirement is that the funds be utilized for a public purpose,” the response said. “It is the responsibility of the government board to determine whether or not it is a public purpose.”
The city attacked the Inspector General’s criticism of the CRA loan program saying it had failed to understand the need for “flexibility in the administration of its programs” and that some businesses may not qualify for regular private financing.
“This is the nature of community redevelopment,” the response stated. “In certain instances, such may result in financial losses and require the waiver of certain loan terms. Such does not necessarily constitute gross mismanagement….”
Likewise, the city took issue with the Inspector General’s concern that CRA bond funds were used to pay costs related to the upgrading of two parks outside its boundaries, Scavo and South Beach.
“The city objects to the inclusion of this matter in the report,” the response said.
City officials have said a plan is in place to repay any CRA funds used for those parks once work actually gets underway.
The city noted, too, that changes have been made in the past year to improve CRA management and operations.
These include hiring an experienced CRA attorney and a financial analyst; amending CRA policies on loans and grants; assuring accountability for loans; creating standards and accounting for charitable loans to nonprofit groups; fiscally separating CRA funds from city funds; ensuring city and CRA priorities are aligned; maintaining clear and consistent lines of communications regarding for plans and projects.
“It is our mission to continue to implement enhanced internal controls as well as stabilize the administration of the CRA and the city,” the response concludes.
The Inspector General’s Office has said that once it receives the city’s response it will finalize its report and officially release it.
William Gjebre can be reached at firstname.lastname@example.org
By William Gjebre and Dan Christensen, BrowardBulldog.org
Broward’s Inspector General has found that Hallandale Beach officials “grossly mismanaged” millions of dollars in public funds “entrusted to the care of its Community Redevelopment Agency,” according to a report obtained by BrowardBulldog.org.
“The OIG (Office of Inspector General) investigation substantiated the allegations and uncovered numerous deficiencies in the city’s administration of the CRA,” says the 50-page preliminary report that has not been released publicly.
Investigators said they found at least $2.2 million in questionable CRA expenditures between 2007 and 2012, including inappropriate loans to local businesses and grants to local nonprofits – as well as the improper use of bond proceeds.
The city improperly spent $416,000 of CRA money for parks outside the CRA boundaries, says Tuesday’s report.
The spending, which was not always documented, was often done at what amounted to the whim of former city managers Mike Good and Mark Antonio, the report says.
Former Commissioner Keith London told investigators that his colleagues “looked at the CRA fund as one big pile of money and they didn’t care how or where the money went,” the report says.
Mayor Joy Cooper, however, offered a different take. “She was not concerned with the CRA administration’s lack of (expenditure) verification because the CRA Board members observed the work of the nonprofits when they went out in the community,” the report says.
Cooper and the rest of the city commission also sit as the CRA’s board of directors.
“This report vindicates everything I have stated for the last six years,” London said Tuesday night.
Cooper could not be reached for comment.
Former commissioner Keith London
The probe began 14 months ago following a string of stories in BrowardBulldog.org about questionable city loans to local businesses and land purchase through the CRA. It surfaced publicly last April when county agents sought a multitude of records at City Hall.
In some cases, the report says, the CRA awarded funds despite a 2010 Florida Attorney General opinion that CRA expenditures must be connected to “brick and mortar” capital improvements – not, for example, to promote economic development or promote socially beneficial programs by nonprofits.
In one case, the line of what’s legal was apparently crossed and a crime may have been committed, the report says.
The Inspector General’s findings about Hallandale Beach are the latest to cite serious mismanagement of CRA funds. A year ago, for example, the Inspector General slammed Lauderdale Lakes for misspending $2.5 million in CRA funds. More recently, the Florida Auditor General identified misspending by Hollywood’s CRA.
“It is becoming increasingly apparent that the gross mismanagement of CRA funds by a Broward County municipality is not a unique occurrence,” the report says.
The CRA was established in 1996 under a state law that allows it to collect tax revenue to be used to rid slum and blight conditions. It receives 95 percent of the taxes collected on the appreciated value of properties within its boundaries. The county has provided Hallandale’s CRA with approximately $35 million since it began.
Inspector General John Scott’s report includes what amounts to a warning to other Broward cities that his office will be eyeballing their CRA’s to see how they spend their property tax dollars.
“The OIG will continue to examine the expenditure of CRA funds by municipalities,” says the report.
The final report will recommend to the county that it look over its legal options “to prevent the ongoing abuse of the CRA process and recover those funds that may have been misspent,” the preliminary report says.
In Hallandale, there was an apparent lack of regular monitoring by the CRA of who got its funds and how that money was spent.
In one case, the report says, a nonprofit grant recipient spent nearly $5,000 in funds to make a payment on her time-share at the Westgate Resort in Orlando, make payroll payments to herself and her brother and on other things.
Dr. Deborah R. Brown with former Congressman Kendrick Meek
“We found probable cause to believe that Dr. Deborah Brown, the founder and director of the Palms Center for the Arts (PCA), engaged in criminal misconduct in the handling of a $5,000 award the PCA received from the CRA,” the report says.
Brown could not be reached for comment Tuesday night.
The matter has been referred to the sheriff’s office and the Broward State Attorney for prosecution.
The Inspector General’s report also clears Commissioner Anthony Sanders of allegations that the CRA showed favoritism toward him by substantially overpaying his nonprofit, Higher Vision Ministries, for property it purchased in 2009 at 501 NW First Ave.
“The investigation did not substantiate the allegations, although we found that the CRA fomented an appearance of favoritism by failing to consider the purchase of the property in a fully transparent manner,” the report says.
The report also cites “institutional deficiencies in the establishment, organization and function of the CRA” that it says contributed to numerous instances of gross mismanagement. They include:
• Failure for nearly 16 years to establish a CRA trust fund, as required by law, which led to the commingling of CRA funds with city funds in the city’s bank account. A trust finally was set up last May.
• Failure to operate the CRA independently from the city. Former CRA executive director Alvin Jackson told investigators the CRA “was treated like any other city department and that the city had ‘free rein to tap into CRA funds.
• Failure to timely generate detailed CRA plans and adhere to them, as well as a lack of a “stable and empowered CRA staff to ensure compliance” with the law.
“We also identified multiple instances where city officials ignored warnings from CRA staff of various deficiencies in the management of the CRA,” the report says.
The report notes that before Jackson there were several CRA managers under City Manager Good’s heavy managerial thumb. “More troubling is evidence that Mr. Good and other senior officials lacked understanding of” state statutes governing the CRA “and did not require compliance.”
The report notes that in 2011, after news reports about CRA problems in BrowardBulldog.org and elsewhere, it undertook “remedial steps” to improve its management and effectiveness.
But the Inspector General indicated those steps, including the establishment of the trust fund, are not enough.
The report includes a half-dozen recommendations intended to “ensure the independence of the CRAs,” including building a stable and knowledgeable staff with the authority to ensure compliance with the law, and diligent future monitoring of expenditures.
By Dan Christensen, BrowardBulldog.org
Broward Sheriff Scott Israel
New Broward Sheriff Scott Israel has shuffled his office’s outside lobbying team, signing $7,000-a-month contracts with a pair of well-connected lobbyists with clients whose interests sometimes conflict with BSO.
The contracts with Fort Lauderdale’s William Rubin and Tallahassee’s Brian Ballard, both of whom are known for their close ties to Republican Gov. Rick Scott, were signed by Democrat Israel three weeks ago.
Out the door: Tallahassee lobbyists David Ericks, an ex-Plantation cop, and his daughter, Candice.
“Ballard Partners and The Rubin Group are BSO’s only external lobbyists,” said BSO general counsel Ron Gunzburger. They will represent the sheriff “before the state legislature and other governmental entities,” Gunzburger said.
Rubin recently registered to lobby for the sheriff at Broward County, along with his associate Heather Turnbull. It is apparently the first time a Broward sheriff has paid someone to lobby county staff and the elected commissioners who fund his office.
“I think it’s a waste of money. My door is wide open to the sheriff and his staff on any issues he has,” Commissioner Lois Wexler said Wednesday.
Mayor Kristin Jacobs and Vice Mayor Barbara Sharief did not respond to requests for comment.
“Wow,” said former Broward Mayor John Rodstrom. “I wonder how effective it will be. If it comes down to a budgetary issue I think commissioners will come down on their own behalf and not the sheriff’s behalf.”
Fort Lauderdale lobbyist William Rubin
Rubin represents two of BSO’s biggest vendors. Coventry Health Care provides medical and other insurance coverage to BSO’s 5,800 employees. Miami’s Armor Correctional Health Services provides care to approximately 4,600 inmates in the county’s five jails.
Rubin’s clients also include American Traffic Solutions – the red-light camera company that uses BSO personnel to review violation notices in the sheriff’s jurisdictions – and Deerfield Beach, which contracts with BSO for local police services.
Will Rubin’s connections to the sheriff give his clients an inside track in resolving disputes or negotiating future contracts? Gunzburger, the sheriff’s general counsel, said no.
“It was made very clear that they (and their employees/partners) could not play any role in lobbying BSO on behalf of any of their other clients,” said Gunzburger. “They both understand this, and the conflict language confirming this is in the contracts.”
Rubin’s 15-page BSO contract contains an eight-paragraph “conflict of interest” section. It does not, however, prohibit Rubin from lobbying the sheriff on behalf of other clients, but does require him to disclose when a client “has or may potentially have an interest adverse to the interest of the sheriff.”
The conflict section in Ballard’s contract is a single paragraph. It says Ballard represented that his work for BSO had not created any conflicts, and he agreed to notify BSO should a conflict arise.
Ballard’s long client list does not appear to include any BSO vendors or BSO contract cities. He and Rubin, however, are both registered to represent Davie’s Nova Southeastern University, according to Florida Senate records.
BSO and Nova are partners in a number of educational initiatives including college degree programs, research and conferences in criminal justice. Another joint effort is the Executive Leadership Program, a 17-week study course for public safety professionals that costs $1,995.
Rubin and Ballard also represent GEO, the Boca Raton prison company.
GEO had a multi-million dollar contract with BSO to run a detention facility on Powerline Road in Pompano Beach until 2007, and it was said to be interested later when there was talk about privatizing the county’s jail system.
The idea never went anywhere, but BSO’s 1,500 detention deputies are always alert to signs of a change that could affect their jobs.
The Federation of Public Employees represents the guards. President Dan Reynolds said Wednesday that he’s spoken with Sheriff Israel and he’s not concerned.
“I believe the sheriff when he tells me he’s opposed to privatization,” Reynolds said.
By William Gjebre, BrowardBulldog.org
The Broward Inspector General’s Office appears poised to ask Broward prosecutors to investigate a Hallandale Beach group that received at least $25,000 in city funds.
The Zamar School of Performing Arts had been slated to get another $50,000 from the city’s Community Redevelopment Agency last week. The deal fell apart, however, shortly after it was discovered that Zamar was ineligible for the funds because its status as a tax-exempt 501(c)(3) non-profit had expired.
CRA Attorney Steven Zelkowitz said the county’s Inspector General’s office has informed him investigation of Zamar by the State Attorney’s Office was “ongoing.” The Inspector General has been investigating allegations of mismanagement at the city and its CRA since last spring.
City Manager Renee Crichton Miller and CRA executive director Alvin Jackson confirmed that a the state’s investigation involving Zamar was underway, although both said Zelkowitz was the source of their information.
A spokesman for Broward State Attorney Mike Satz said Friday that the matter has had some review, but that no criminal investigation was underway.
“I’m told that we have not received anything formally on this yet,” Ron Ishoy said on Friday. “The case was apparently discussed last month at the public IG Oversight Committee meeting that (Assistant State Attorney) Tim (Donnelly) sits on.”
Inspector General Scott declined to comment.
Zamar’s president and director Deborah Brown did not respond to repeated phone messages seeking comment. A person who answered the phone at Brown’s office initially advised a reporter to hold for her. A short time later the line went dead and follow-up calls to Zamar were sent to an answering machine.
Zamar provides arts and education programs and job training and job placement, according to city documents.
County investigators are believed to be nearing the end of a months-long examination of city grants and contributions to community groups, CRA land buys and loans to local businesses. City commissioners – who do double duty at the board of directors of the CRA – and various city employees have been interviewed, and thousands of pages of city records examined.
In June, Browardbulldog.org reported those records included files on eight community-based groups that received city funds, including Zamar.
Zamar, which got $25,000 in CRA funds three years ago, operates on city property at 501 N.W. 1st Avenue – in a building once owned by a group headed by City Commissioner Anthony Sanders.
The city leased the property for a one-time payment of $10 to the Palm Center for the Arts in 2009 shortly after acquiring the property. While Palm Center was prohibited from subletting the facility, the city later modified the agreement to permit Zamar to operate a summer camp there in 2009.
When the Inspector General asked the city this year for records about Zamar and Palm Center, state corporate records listed Brown as president of Palm Center and a principal and director of Zamar. At that time, Palm Center had received at least $107,000 in CRA funds over the past three years.
The IG’s probe has also involved a review of the city’s acquisition of 501 N.W. 1st Avenue from Commissioner Sanders’ nonprofit, Higher Vision Ministries. The group purchased the property in 2001 for $45,000 and sold it to the city eight years later for $235,000. Appointed to fill a vacancy in 2008, Sanders did not vote on the purchase.
In between, the CRA gave Sanders’ group a $46,000 property improvement loan. The city only required Sanders’ group to repay $31,000 of that loan, the rest was forgiven.
The Inspector General’s office has yet to say why it is interested in Zamar and why prosecutors should look at it.
City Manager Miller said Zelkowitz was likely contacted about Zamar by the Inspector General because it involved the CRA, whose directors are the five members of the city commission. She added she has no other information on the nature of the Zamar probe.
“I’m concerned when a non-profit is under scrutiny,” said Miller.
Zelkowitz declined to elaborate.
Earlier last week, Zamar had a setback when it was announced that the group had withdrawn its request for CRA funds for this fiscal year.
Commissioners, as CRA board members, were to vote on the $50,000 GRANT on Dec. 17. Shortly before, however, city staff learned the group did not have current 501(c)(3) nonprofit status, making it ineligible for the funds.
By William Gjebre, BrowardBulldog.org
Mayor Joy Cooper
Hallandale Beach city commissioners last night fired the executive director of the city’s embattled Community Redevelopment Agency after just two years on the job.
Alvin B. Jackson Jr.’s termination comes amid an ongoing investigation by the Broward Office of the Inspector General into management practices at both the city and the CRA prior to Jackson’s arrival.
Mayor Joy Cooper led the ouster, saying commissioners “expected competency, transparency, and communications” that Jackson failed to deliver despite “second and third chances” to improve.
“It’s not just trust,” said Cooper. “It’s the work product,” she said. “It’s been frustrating….I have not seen many of the plans he’s developing.”
“It seems we have lost trust” in Jackson, said commissioner Anthony Sanders, who along with commissioner William Julian backed Cooper’s motion to terminate Jackson “without cause.”
Removing Jackson “without cause” allows him to receive a severance package of health insurance for nine months after his final workday, January 18, 2013, and 20 weeks of pay (about $50,000), in accordance with his contract.
The commission, sitting as the CRA’s board of directors, voted 3-2 to oust Jackson.
Vice Mayor Alexander Lewy and newly elected commissioner Michele Lazarow opposed Jackson’s firing.
Lewy said he favored holding a public hearing at which commissioners would have discussed their specific complaints about Jackson’s performance. If cause for dismissal was established, the city would not have to pay Jackson any severance.
Cooper, however, said she did not want a hearing about cause to avoid airing the city’s “dirty laundry.” She declined to elaborate after the meeting.
Jackson was stoic after the termination vote.
“I’m done,” he said. “When you’re being asked to leave you’ve got to do what’s best for the community. I did not want to impede progress (of projects).”
CRA Executive Director Alvin B. Jackson Jr.
The mayor became upset with Jackson when he approved CRA staff salary hikes, including for himself, during the 2011-2012 fiscal year without guidance from city commissioners.
She also complained when the CRA staff failed to discover that a community group recommended for a city grant had failed to maintain its status as a non-profit group, making it ineligible for the funds.
The CRA collects and oversees the use of property tax dollars to promote business and revitalize neighborhoods. Those dollars are supposed to be spent on projects within the district. Three-fourths of the city, including the area around City Hall, is within the CRA’s boundaries.
When Jackson took over two years ago, the CRA was under the controversialdirection of the city manager’s office. He was hired shortly after city commissioners fired City Manager Mike Good for excessive absences and other problems.
After Good’s departure, an outside auditing firm found that the CRA had failed to properly track city land acquisitions totaling more than $28 million and loans to local businesses.
The Inspector General’s Office began its probe last April. City officials have been questioned and thousands of pages of documents have been obtained about those land deals, loans and various city grants and donations to community groups.
As they dismissed Jackson, commissioners also acknowledged that the CRA had greatly improved under his leadership.
Among other things, Jackson initiated a broad plan for the CRA district and created procedures to ensure accountability for loans and grants.
“We are better off now than under Mike Good, “ said Lewy.
“When he took over the CRA was a train wreck,” said Julian. “There is a good staff now, important projects are underway.”
Julian said he thought Jackson deserved a “second chance” despite some admitted mistakes. But the idea faded when Jackson told commissioners he thought the time had come for him “to move on.”
While some speakers at last night’s public meeting backed the vote to fire Jackson, others faulted it and complained about the lack of improvements in the city’s low-income, predominantly blacknorthwest section.
“He should not be dismissed,” said resident Gerald Dean, who complained that the CRA’s few efforts there have been ineffective.
Mary Washington, a northwest area civic activist, noted the city used the rundown conditions in the northwest section to establish the CRA in 1996.
“I thought by now we’d have decent housing,” she said, adding it hasn’t happened.
“All the CRA money is being spent in the eastern portion of the CRA,” Washington said. “It’s time the northwest to get the balance of the money. Please follow through; we want our community back.”
Cooper told commissioners that after Jackson leaves, City Manager Renee Crichton will temporarily guide the CRA until a new permanent director is found.
By William Gjebre, BrowardBulldog.org
Initial findings by Broward’s Inspector General of mismanagement at Hallandale Beach City Hall have led officials to revise plans for a $12.7 million bond issue, according to city and county records obtained by BrowardBulldog.org.
Exactly what has gone wrong at City Hall remains unclear as the Inspector General’s investigation continues, but it’s now known to involve an alleged mistake with the bond issue, and a possible violation of state law.
“We are pleased that your administration has ultimately acted to address the issue identified by the investigation,” Inspector General John W. Scott told City Manager Renee Crichton in a Nov. 7 letter.
“Clearly, we remain concerned with the circumstances that allowed such an immense oversight to occur in the first place,” Scott wrote.
“Our final investigative report will detail those circumstances and contain recommendations which we hope will, if enacted, create institutional controls that will prevent such misappropriation from occurring in the future.”
Although Scott has prompted action at City Hall, the head of an agency under scrutiny is questioning the county IG’s authority to investigate, and to allow partial information on that investigation to become public.
Hallandale CRA Executive Director Alvin B. Jackson Jr.
“Nowhere in the (county) code is the Inspector General provided with the general authority to act as a watchdog agency by providing correspondence making allegations and recommending future courses of action,” said Hallandale Beach Community Redevelopment Agency (CRA) Executive Director Alvin B. Jackson Jr. in a Nov. 13 letter to Scott.
Jackson criticized Scott for expressing his concerns in letters to the city manager and city commissioners that “are now public record” and “can cause unnecessary negative publicity.”
“We would respectfully request that the Inspector General refrain from sending any further correspondence concerning” the CRA, Jackson said.
The Redevelopment District was established by the City Commission to collect and oversee the use of property tax dollars to promote business and revitalize neighborhoods. Those dollars are supposed to be spent on projects within the district.
The IG’s office has been investigating city management practices, including those at the CRA, since April. Agents have questioned city officials and asked for records concerning CRA property acquisitions and business loans and city grants and leases with community groups.
In his Nov. 5 letter, Scott wrote that he was concerned about a Nov. 7 city commission agenda item regarding $12.7 million in revenue bonds. The bonds would complete Phase One of the city’s $23.2 million bond issue approved by the city commission in 2007 for park improvements and land acquisition.
“The OIG (Office of Inspector General) has obtained substantial evidence that the funding appropriated for the capital improvements of Joseph Scavo Park and South Beach Park, two parks included in Phase One, would constitute a violation of the Florida Community Redevelopment Act, which requires that Community Redevelopment Agency (CRA) funds should only be expended for capital improvements within the CRA boundaries,” Scott said in his letter.
“Upon questioning by OIG Special Agents, city and CRA officials have verified that the CRA is scheduled to pay the bond over 20 years, even though the parks in question are located outside of the CRA boundaries,” Scott said. “Therefore, the City will risk violation of Florida law if it expends the funds as presently appropriated.”
“The OIG is particularly concerned that city staff have acted unilaterally in accessing the funds for city — not CRA– purposes and in doing so, have neglected to consult the CRA Director,” Scott said.
Scott went on to “strongly recommend” that commissioners halt the use of CRA funds to pay for parks outside the district’s boundaries.
Hallandale Beach City Manager Renee Crichton
In her Nov. 6 response letter, City Manager Renee Crichton challenged Scott’s interpretation of events, saying he had “misrepresented certain facts.” She suggested that included wrongly accusing the city of using the CRA – governed by Hallandale’s five city commissioners – to cover its bond obligations.
SHARING COSTS TO PREVENT TROUBLE
Crichton said the city would make sure debt service payments are proportional between the city and the CRA. She noted city projects outside the CRA district accounted for only 22 percent of the $25 million in bond funds.
The city manager’s assurances seemed to satisfy Scott that the bond would be paid back appropriately. Still, he pointed out in his reply that if not corrected the city could have gotten itself into bigger problems.
“Both the city’s finance director [Patty Ladolcetta] and Dr. Jackson have recently admitted to the OIG special agents that the CRA was intended to pay 100 percent of the bond, despite the fact that the bond was in the city’s name and several hundred thousand dollars had already been spent outside the CRA district,” Scott stated. “This fact was corroborated by various documents obtained by the OIG.”
“As a watchdog for the taxpayers of your municipality,” Scott added, “we believe it is our duty to inform the commission of concerns which might jeopardize the funding of the overall project.”
“After reviewing the city’s revised approach, as outlined in your letter, we agree…the city could correct its initial misappropriation of the CRA-funded bond.”
By William Gjebre, BrowardBulldog.org
Hallandale Beach Mayor Joy Cooper
The Broward Inspector General’s probe of Hallandale Beach financial management practices has reached a critical stage: the questioning of the five members of the city commission this week.
The interviews got off to a false start on Friday, when Mayor Joy Cooper was to have been questioned by investigators.
Cooper said she went to the IG’s office but there was a miscommunication involving City Attorney V. Lynn Whitfield who had been out of town and was not available to attend. As a result, Cooper said, she was scheduled to meet with IG investigators Monday.
“I’m looking forward to being interviewed and the completion” of the investigation, Cooper said before her scheduled appearance. She could not be reached Monday evening for further comment.
Vice Mayor Anthony Sanders and commissioners Dorothy Ross, Alexander Lewy and Keith London confirmed they would meet with IG investigators this week. The meetings, at the IG’s office in Plantation, are by invitation, not subpoena.
The commissioners, who are also the directors of the city’s embattled Community Redevelopment Agency (CRA), may be the last group to be interviewed in the probe.
Investigators have interviewed former City Manager Mark Antonio, former City Commissioner William Julian, CRA Executive Director Alvin Jackson, Human Services Director Marian McCann-Colliee, and Jennifer Frastai, an administrator in the city manager’s office.
Investigators apparently also met with Richard Cannone, a former director of the city’s Development Services Department. When asked if he met with investigators, Cannone referred request for comment to the IG’s office.
INVESTIGATION MARCHES ON
County investigators are reviewing grants and contributions to community groups, CRA loans to businesses and land acquisitions, and management practices. They are expected to eventually issue a report on their findings, with recommendations, and they may also refer some issues to state agencies, such as the Broward State Attorney’s Office.
Vice Mayor Sanders, who along with his wife Jessica, appear to be a focus of the probe, declined to comment or say when he would meet with investigators.
“I wish I could talk to you,” he said.
Investigators have asked for files of several community groups that received city funds and are linked to Sanders or his wife. They have also asked about the city’s purchase of property once owned by a group headed by Sanders.
Ross said she was not sure of the date of her appointment because it had been changed. “I’m going to ask the city attorney to go with me,” she said.
Lewy declined to say what day he will meetwith investigators. He previously stated he believes the investigators have been “fishing for information.”
London, who is running against Cooper for the mayor’s seat, disagreed with that assessment. “This is not a fishing expedition,” he said.
London said he is to meet with investigators at their office on Thursday morning. “I don’t know who else they can talk to. It doesn’t take six months to find people innocent. I look forward to the final report.”
Former commissioner William “Bill” Julian, who is seeking to regain a commission seat this fall and who voluntarily spoke to the IG weeks ago, said he thinks politics is behind the IG’s investigation.
“I don’t see any wrongdoing,” Julian said.” I think we have solid policies. Any problems in the past have been corrected. I don’t see where they can point any finger at anything criminally wrong. I’d say it’s politically motivated investigation.”
The meetings end a short-lived impasse between the Inspector General’s Office and the city regarding investigators attempts to interview city commissioners.
Earlier this month, an attorney for the city’s Community Redevelopment Agency (CRA), whose directors are city commissioners, had maintained that the IG had no authority to probe the CRA under state and county law because it was an independent special district. Prior to that, the City Attorney’s Office informed the IG that the city manager’s office would not voluntarily schedule meetings between city commissioners and county investigators.
Why the city decided instead to cooperate was not immediately clear.
Steven Zelkowitz, the CRA’s lawyer, and Hallandale Beach City Attorney Whitfield could not be reached for comment. Inspector General John Scott declined comment on any aspect of the probe.
Commissioners didn’t seem to know what had changed and indicated they did not inquire.
London, often at odds with fellow commissioners, said he believes Zelkowitz was trying “to protect his clients (city commissioners) ” when he issued his opinion to the IG’s office.
The city’s opposition to having commissioners interviewed may have dissipated because it was only this past March that it officially constituted the CRA as an “agency” under state statutes. Up until then, the CRA, which began functioning in 1996, had been a sub-department or a department of the city.
Another factor could be the IG’s aggressive oversight of another Broward city where elected commissioners also comprise the city’s CRA.
In a report this March, the year-old agency concluded that Lauderdale Lakes “had grossly mismanaged public funds…The OIG investigation also substantiated allegations that the city’s CRA funds were improperly used to pay city operating expenses….”
Or it could be that city commissioners felt public pressure to at least be questioned rather than having this as an issue during an election year.
William Gjebre can be reached at email@example.com
By William Gjebre, BrowardBulldog.org
Hallandale Beach paid $235,000 to buy this property in 2009 from a nonprofit whose officers included Vice Mayor Anthony Sanders and his wife Photo: William Gjebre
A former Hallandale Beach commissioner said he voluntarily met with Broward Inspector General investigators Monday who questioned him about the city’s embattled Community Redevelopment Agency, its purchase of property once owned by a group headed by Vice Mayor Anthony Sanders and a city loan to a local newspaper.
The former commissioner, William “Bill” Julian, is currently running for city commission. He declined to discuss details of his four-hour interview with three investigators because “they asked me not to talk about anything.”
For more than a year, however, Broward Bulldog has reported about questionable city loans to local businesses and land purchases through the CRA – whose board of directors are also the city’s commissioners.
The IG’s office investigates suspected misconduct that includes fraud, corruption and mismanagement. IG investigators appear to have begun focusing on Hallandale Beach and its CRA this spring with a trip to City Hall in April. In response to their requests, the city recently turned over thousands of pages of records.
Records indicate that investigators are examining the CRA and a city grant program that funneled hundreds of thousands of dollars in grants and donations to eight local non-profits, including several linked to Vice Mayor Sanders or his wife, Jessica.
In 2009, after Sanders’ appointment to the commission the year before, the city spent $235,000 in CRA tax dollars to purchase a building and land at 501 NW First Avenue owned by Higher Vision Ministries, a not for profit corporation whose officers included Sanders and his wife.
Sanders, who did not vote on the city’s purchase, was a director of Higher Vision Ministries when it bought the property in 2001 for $45,000. The nonprofit received a $46,000 property improvement loan from the city not long after the purchase.
The terms of the loan immediately forgave $7,500 in principal. An error by the city at the time the property was sold in 2009 doubled that forgiveness to $15,000 – meaning Higher Vision Ministries only had to pay back $31,000.
LOCAL NEWSPAPER DEAL
Julian, who served as a commissioner and vice mayor from 2001 to 2010 when he was defeated for reelection, said the investigators also asked about a CRA loan to the for-profit South Florida Sun Times.
The weekly newspaper, which regularly features a column by Mayor Joy Cooper, received a $50,000 CRA business loan under favorable terms in 2009.
Half of the loan — $25,000 – was forgiven even though for two years prior to the loan the newspaper’s two top executives each reported incomes averaging more than $200,000.
Julian told Broward Bulldog there has been turmoil at the CRA, with several directors being removed in past years. He added that CRA funds were used for a variety of charitable contributions to community groups.
“I didn’t question use of CRA funds for charitable contributions,” Julian said of his time on the city commission. Commissioners, he added, wanted to “take a load off the general fund…I don’t know if that was legal. That will have to come to light.”
“I don’t know of wrongdoings by commissioners or myself,” Julian said. “I don’t know if I did something wrong.” Julian added that if something was done incorrectly “let’s fix it.”
VOLUNTEERED TO TALK
Julian said he contacted the IG office Friday and volunteered to be interviewed because “there’s a cloud of suspicion over me.”
He said he was compelled to come forward because of public comments on recent stories about the IG investigation and what his involvement might have been while in office.
“I want to be as open as possible,” Julian said. “I have never been accused of anything in my life.”
Inspector General John Scott did not respond to a request for comment.
Julian is one of six candidates vying for two at large commission seats up for grabs on November 6. The other candidates are Vice Mayor Sanders, Gerald Dean, Ann Pearl Henigson, Csaba G. Kulin and Michele Lazarow.
Dorothy Ross, a commission member for 17 years, is not seeking reelection.
CITY BALKS AT COOPERATION
County investigators have asked to speak with each of the commission’s current members. The City Manager’s Office has informed them that it won’t schedule any interviews until the IG’s office informs the city about its intentions.
In addition, CRA attorney Steven Zelkowitz recently told the IG’s office by letter that the CRA is “a separate legal entity” and not subject to the authority of the IG under county and state laws.
Historically, however, the city administration and commissioners have treated the CRA as a part of the city government.
*The CRA has been operating since 1996, but it wasn’t until March that its board of directors – the city commissioners – voted to establish it as a separate “agency” reporting directly to the board in accordance with state law. Until then, the CRA functioned mostly as a subdivision of the city’s Department of Development Services.
* All 59 properties purchased with CRA funds are in the name of the City of Hallandale Beach – not the CRA. The CRA is now seeking to re-title 43 properties to itself, but 16 will remain in the name of the city.
*Hundreds of thousands of dollars in past city grants and charitable contributions to local non-profit community groups did not clearly spell out how much CRA money was used in those taxpayer-provided gifts.
*CRA business loan policies changed frequently under former city managers, allowing for some loans to exceed established limits, some funds to be distributed without repayment agreements, and questionable forgiveness arrangements.
A critical study of city and CRA record keeping this year by an outside auditing firm recommended that a financial manager be hired. The recommendation was also in agency bylaws adopted by city commissioners sitting as the CRA’s board of directors. In June, however, those same board members voted down a CRA staff request to hire a financial manager.
That study was ordered after it had become clear that management problems existed. The commission, however, authorized a limited review rather than a more intensive financial audit. Aside from poor record keeping the recent report by the auditing firm said some $20 million in vendor contracts were never reviewed because city staff failed to provide them.
William Gjebre can be reached at firstname.lastname@example.org