By William Gjebre, BrowardBulldog.org
The Broward County Commission
Broward County commissioners vowed to seek changes in state law to give them more oversight over municipal redevelopment agencies after learning they cannot audit alleged misspending by Hallandale Beach’s Community Redevelopment Agency.
“We want to get back some control from the state,” County Commissioner Sue Gunzburger said in an interview.
Gunzburger and other commissioners expressed frustration when told by county staff that their authority to audit was limited by both state law and the county’s 1996 agreement with Hallandale Beach that established its CRA.
The issue came before the commission last week when a Hallandale city commissioner and a former city commissioner, both critics of the way the city has operated the CRA, traveled to County Hall to urge the county to conduct a financial review.
The critics, Commissioner Michele Lazarow and former Commissioner Keith London, cited a recent Broward Inspector General’s report that found that the CRA had “grossly mismanaged” millions of dollars in public funds. The report had recommended a county audit with an eye toward recovering any misspent county funds.
A CITY DELEGATION TO COUNTY HALL
A delegation of city officials who have challenged the Inspector General’s report, led by Mayor Joy Cooper, argued successfully that the county has no authority to conduct an audit.
During the discussion, County Commissioner Tim Ryan noted that the Inspector General’s Office had cited possible violations of state law by the CRA, which is overseen by the Hallandale City Commission sitting as the CRA’s board of directors.
“Can we recoup [misspent funds]? Do we have the ability to act on violations?” he asked.
County Attorney Joni A. Coffey and County Auditor Evan Lukic gave the county commission the news that they were powerless to review $36 million in tax funds they have sent to Hallandale Beach for CRA purposes during the past 17 years.
Coffey explained that the county’s agreement with Hallandale Beach provided that oversight of CRA actions belongs to the city and the state, not the county.
Said Lukic, who reviewed the county-city CRA pact, “We have limited authority – but not to audit.”
Lukic said he and Coffey will work together in coming days to better define the scope of the county’s oversight authority.
CRA LIKE A PIGGYBANK?
The Inspector General’s report says that from 2007 through 2012 Hallandale used the CRA like a piggybank to improperly pay for the city’s general expenses and other pet projects, including donations to favored nonprofit groups and local businesses. In all, agents found $2.2 million in questionable CRA expenditures.
“The Inspector General has raised concerns about the use of money,” said Gunzburger, whose district covers part of Hallandale. “We send money to the Hallandale Beach CRA and it may be being used in inappropriate ways.
“They continue to use CRA for a piggybank,” Gunzburger added. “I am disappointed we are…not able to do anything about possible violations of law.”
Gunzburger and other commissioners asked the county’s staff to look into finding ways to change state or county laws, and make recommendations after the county commission returns from its summer recess.
“This has to be addressed through Tallahassee,” Commissioner Lois Wexler said.
The matter is “not a Republican or Democrat issue” but one of oversight of CRA spending, Commissioner Martin Kiar said.
Changes are needed “to protect the taxpayers’ money,” Commissioner Ryan added.
While the county’s elected leaders had a lot to say publicly about the matter, Hallandale Commissioner Lazarow informed them that her colleagues in Hallandale have remained mostly mum.
“There has never been an official action taken by the policy makers: No agenda item. No resolution. No motion. No vote,” she said.
Since the county commission meeting, the Florida Legislature’s Joint Legislative Auditing Committee, chaired by Sen. Joseph Abruzzo, a Palm Beach County Democrat, has jumped into the debate, asking city officials to explain how the funds were handled and spent.
By William Gjebre, BrowardBulldog.org
Hallandale Beach City Manager Renee C. Miller
After a brief period of independence, the Hallandale Beach Community Redevelopment Agency (CRA) is once again under the thumb of the city manager.
CRA oversight by Hallandale Beach city managers was a key issue in the year-long investigation by the Broward Inspector General’s Office which recently found that city officials had “grossly mismanaged” millions of dollars in CRA funds.
While the Inspector General expressed concern about a shift back to the city manager-directed CRA, City Manager Renee C. Miller said Hallandale was in line with the majority of Broward’s CRA cities – eight of 12 of which use the city manager to also head the CRA.
In its recent report criticizing the city, the Inspector General noted that CRA management improved briefly last year under the direction of former executive director Alvin Jackson who pushed through a number of changes that addressed the concerns of the county’s investigators. They included new measures to comply with laws and rules governing CRA grants and donations to community groups and to improve accountability.
“In August of 2012,” the report says, “the community redevelopment board finally provided for independent leadership of the CRA by promoting Dr. Jackson to the position of executive director. …Unfortunately, the city has since… receded from this course of action.” That’s a reference to Jackson’s January resignation under pressure from the mayor and the city commission, who also sit as the CRA’s board.
CITY MANAGER REGAINS CONTROL
The board then handed off the executive director’s duties to the city manager – the model that got the city into trouble in past years.
Except for last year’s blip, Hallandale Beach’s city manager has headed the CRA since its creation in 1996. Jackson was hired as CRA director in January 2011, but reported to then-city manager Mark Antonio.
Jackson quickly found the CRA lacked or was missing documents and had failed to create bylaws or establish a separate CRA trust fund to hold its funds. It also had not updated its operating plan, as required by law.
State law requires that each municipal CRA be led by an executive director, which can be a city manager or some other employee. It also requires the CRA to operate as an independent agency.
The Inspector General’s report said the CRA should create both a stable staff and “incorporate some level of independent management…whether the CRA executive director duties remain with the city manager or are again filled by an independent officer.”
Miller, who was not the city manager during most of the period investigated by the Inspector General, said she embraces those goals.
She said the CRA now operates as a separate entity even though she is in charge of both the city and the CRA. She said she also seeks a stable staff for the agency, and wants it to operate in a “clean, transparent” manner.
In that regard, Miller said one of her first actions was to hire in February a former colleague, Daniel Rosemond, as deputy city manager/CRA director at a salary of $146,300.
Miller did not advertise the job, or do any search, saying she had confidence in Rosemond because they worked together at city hall in Miami Gardens, she as deputy city manager and Rosemond as an assistant city manager.
LAZAROW RAISES QUESTIONS
Some residents, however, have raised questions about the hire.
For example, City Commissioner Michele Lazarow. She said the Inspector General recommended that the CRA executive director should have CRA experience, and that the job should be “separate and distinct from the city.”
Lazarow said Rosemond will split his time between his duties as CRA director and deputy city manager in charge of several other departments, including public works. She said the CRA has major projects to complete.
“The CRA requires and deserves a full-time director; not a part time employee,” Lazarow said. “I want to see a separate CRA director, like Hollywood and Dania. “We have the budget to support an independent, separate executive director,” Lazarow said.
Miller said Rosemond’s experience in the past and his additional work assignments as deputy city manager will allow for better coordination of projects involving the CRA. Public Works, she said, has tie-ins to CRA projects. She added that Rosemond’s dual positions will enhance accountability between the CRA and other city departments.
In the past, she said Rosemond has worked in community development for numerous cities. He’s also knowledgeable of budgeting, planning, permitting requirements. Having a top city official in charge of the CRA, Miller said, should assure that the CRA functions properly with other departments.
“I think he’s doing a fantastic job,” Miller said.
Mayor Cooper could not be reached for comment. It’s not surprising that she favored restoring the city manager as executive director of the CRA. She told Inspector General investigators that she preferred to have the city manager as CRA executive director rather than some other employee and had been opposed to Jackson’s promotion to executive director, according to the Inspector General’s report.
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 email@example.com
By William Gjebre, BrowardBulldog.org
Hallandale Beach City Hall
Current and former top Hallandale Beach officials defended – or offered excuses for – the handling of millions of dollars in community redevelopment funds to county investigators who have now accused the city of “gross mismanagement.”
The Broward Inspector General’s office slammed the city last week in a 50-page report, citing “numerous” improprieties and deficiencies.
Mayor Joy Cooper staunchly defended the controversial spending by the city’s property tax funded Community Redevelopment Agency (CRA), which she chairs, according to the report.
For example, the mayor said a $50,000 “loan” to the South Florida Sun Times, a local newspaper where she has been a columnist since 2003, was an appropriate 2009 CRA expenditure that she likened to an incentive for a struggling business.
“They were having issues and might fold,” Cooper said.
Under the terms of the deal, the Sun Times was only required to repay half of the loan – $25,000 – even though the paper’s owners paid themselves $469,000 in salaries the year before. Cooper told investigators she was unaware of those prior salary payouts when the CRA Board approved the generous loan.
Former city managers Mike Good and Mark Antonio, who oversaw the huge pool of CRA funds during most of the past 11 years, admitted to investigators that they never had any training regarding the state law (Chapter 163) that governs CRAs.
Ex-City Managers Mike
Good, left, and Mark Antonio
Good, in charge for most of that time, told Browardbulldog.org this week, “I don’t think anything was grossly mismanaged during my administration” adding “I will be vindicated” and so will the city.
Antonio did not respond to a request for comment.
The 14-month probe by the Inspector General began after a string of stories in BrowardBulldog.org about questionable city loans to local businesses and land purchases through the CRA.
Last week’s preliminary report found at least $2.2 million in “questionable” CRA expenditures between 2007 and 2012 – including loans to local businesses and grants to nonprofits. The report also found that bond proceeds had been improperly used.
The report said the city was supposed to set up a separate CRA trust fund in years past, but instead co-mingled CRA money with city funds. It also said CRA funds were improperly spent for parks outside the CRA’s boundaries and city fireworks displays.
In one case, investigators reported finding “probable cause” to believe that the founder of one local nonprofit diverted about $5,000 in grant funds for personal purposes, including making a payment on her Orlando timeshare. The matter was referred to the Broward State Attorney’s Office for prosecution.
City records regarding payments to non-profit groups were so lacking, the report said, that investigators were “unable to reliably assess the amount of possible losses suffered by the CRA as a result of ‘misapplication of funding by non-profits.”
Florida law does not permit the CRA to fund charitable donations to non-profits, the report said.
Hallandale’s CRA was established in 1996 under a state law that allows it to use an increase in tax revenues to rid slum and blight conditions in the designated area, in this case the entire city west of Northeast 14th Avenue.
The funding total since then has reached approximately $70 million, approximately one-half coming from the county and most of the other half coming from the city.
The five members of the city commission control that money because they also serve as directors of the CRA governing board.
Cooper, the leader of the city commission, had a different viewpoint than investigators on a number of issues. She contended that CRA funds can be used for expenditures such as Fourth of July fireworks held “outside the CRA boundaries” because such activities “also benefit and promote the CRA.” the report said.
While the Inspector General asserted that a 2010 Florida Attorney General’s opinion required CRA expenditures be related to “brick and mortar” projects, Cooper stated “she believed CRA funding for festivals was” permitted by the Attorney General’s opinion.
Hallandale Beach Mayor Joy Cooper
When investigators questioned Cooper about the CRA’s donations to local charities because they were not mentioned in the city’s CRA plan, Cooper said that “those donations were identified in the city budget” and “encompassed the actual goals and objectives of the CRA plan,” the report said.
Cooper also told investigators that the law that governs CRAs is “pretty general” and allows them “flexibility” to spend CRA funds as it sees fit to “address slum and blight,” the reported added.
Cooper would not be interviewed, said city spokesman Peter Dobens.
Good, city manager from 2002-2010, “had a free hand to implement anything for the CRA” and rarely asked for and considered any other opinions, former CRA director Kendrick Pierre told investigators.
Another former CRA director, Bobby Robinson, said he told his immediate superior about inappropriate spending and other problems, but nothing was done.
Good was given wide latitude in making CRA business loans. He OK’d the controversial $50,000 Sun Times loan under a program he created to assist businesses having financial problems, the report said. Like the mayor, he told investigators that he was unaware of information in CRA files that showed the paper’s executives had paid themselves $469,000 in 2008.
Good acknowledged his 2009 recommendation that the CRA waive a requirement that a startup business, Digital Outernet, own its business location in order to receive a $75,000 loan. The owners planned to install closed-circuit television screens in local businesses to provide information to the public, earning income by selling advertisements.
Digital Outernet made one installment payment of $2,284, then shut down after its local partner died suddenly. The city never obtained a signed guarantee document from the firm’s partners and was eventually forced to write off nearly $73,000.
“Sometimes in a blighted area, you take a risk,” Good told investigators.
Mark Antonio, who took over after Good was fired in 2010 due to chronic work absences and other reasons, told investigators that he, too, “never received any CRA-related training.” He served for two years, following stints as Good’s chief assistant and finance director.
Antonio told investigators that before 2011 “the CRA had no viable process in place for managing charitable donations it provided to non-profits.” He said city commissioners would use the CRA’s money to “fund whatever they wanted” and that “neither the city nor the CRA attempted to verify how they were spent,” the report said.
When Alvin Jackson was named the CRA’s executive director last August, he was the first person to head the agency that did not take orders from the city manager.
With that independence, he pushed through a number of changes that addressed investigators‘ concerns. He created a separate CRA trust fund and bylaws; hired an independent finance director to conduct an annual audit; employed an attorney experienced in CRA law and established an accountability system for grants to local groups.
But Jackson resigned under pressure from the CRA board in January following a dispute with some commissioners.
Today, Hallandale Beach once again is operating the CRA under the city manager model that got it into trouble.
“Whether the CRA executive director duties remain with the city manager or are again filled by an independent officer, the CRA should incorporate some level of independent management for CRA issues,” the report recommended.
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 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
Hallandale Beach City Manager Renee Crichton
New Hallandale Beach City Manager Renee Crichton has hired an independent auditor to review the controversial $1.1 million purchase last year of property from a charter school company run by former Broward County Congressman Peter Deutsch.
Crichton retained former longtime West Palm Beach internal auditor Imogene Isaacs to determine how the purchase was approved and who actually bought the property – the city or its Community Redevelopment Agency.
“It is paramount to me as an administrator to always strive for integrity and transparency in my operations,” Crichton told city commissioners in an Aug. 31 memo. “The time involved in doing a proper inquiry may be extensive.”
The city’s attempt to sort things out regarding the 1.9-acre parcel at 416 NE Eighth Avenue comes amid a broader investigation by the Broward Inspector General’s Office into allegations of mismanagement and possible corruption involving questionable city loans and CRA land deals.
The property was purchased in July 2011 from Deutsch’s Hallandale School LLC, which had planned to open a Ben Gamla Charter School there. Deutsch, a Democrat who served in Congress from 1993 to 2005, pushed hard for city support, but the plan wilted in the face of stiff neighborhood opposition.
Still, Deutsch’s group, which owned the property for just three years, netted a $600,000 profit on the sale to the city.
In her memo, Crichton said City Commissioner Keith London raised questions about the acquisition at last month’s meeting of the CRA’s board of directors. The directors are the five members of the city commission.
Commissioners, sitting as CRA board members, authorized acquisition of the “Ben Gamla” property with CRA funds.
But that’s not what happened.
Former City Manager Mark Antonio’s administration instead used city funds – not CRA dollars – to buy the land, and then titled it in the city’s name, not the CRA.
“No official action was taken by the city commission” to acquire the property using city funds, Crichton said in an interview.
In her memo, Crichton said Isaacs’s job will be to “review the circumstances surrounding the approval process and use of funds associated with the purchase of the Ben Gamla School property; to issue a report on the findings, including recommendations on how to improve the process.”
Several months ago, BrowardBulldog.org reported that all 59 properties purchased with CRA money in recent years are in the name of the city – not the CRA. The CRA has been seeking to re-title 43 of the properties in its name, with 16 others remaining in the name of the city.
PLAYING GAMES WITH MILLIONS?
London, who is running for mayor against incumbent Joy Cooper, said he was “disgusted and disappointed” that city officials “would play games with millions of dollars in funds.”
The money that actually paid for the Ben Gamla property was leftover dollars that developers put up to help pay for traffic, sewer and park improvements. “The money has been sitting there for years,” London said.
Commissioners had expected the funds to come from the CRA, and what happened was not authorized, according to London.
“This is sleight of hand with our money,” he said. “I’m looking forward to…the auditor’s report on who is responsible,” London said.
OLD PRO CALLED UPON
City Manager Crichton turned to a veteran auditor to get to the bottom of what happened.
Isaacs has 37 years of internal audit experience, which includes 25 years of work for West Beach Beach and Lakeland. She also worked in the Inspector General’s Office of the U.S. Department of Housing and Urban Development for 12 years.
Earlier this year, Isaacs resigned as West Palm Beach’s first internal auditor after a dispute with City Commissioner Keith James who had instructed her not to meet with “any person from outside the city” without permission, according to a story in the Palm Beach Post.
In stepping down, Isaacs, 71, said she saw “some attempts at controlling the independence of the internal auditor,” according to the Post story.
In 2007, she wrote a critical audit of West Palm’s federally funded program to re-roof low-income housing after recent hurricanes, according to another Post story. Eventually, according to the Post, the city had to pay back the federal government $1.67 million.
Crichton said Isaacs will be paid $50 an hour. She expects the total cost of the audit to be as much as $3,000.
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