By William Gjebre, BrowardBulldog.org
Hallandale Beach City Hall
Two Hallandale Beach commissioners who backed generous retirement benefits for top city officials said they were never told that the program granted retroactive credit for years worked prior to the plan’s start in 2001.
Those extra years and subsequent improvements are allowing those ex-administrators to collect millions of dollars in enhanced benefits that some say amount to undue compensation.
The commissioners’ claim was buttressed when City Manager Renee Crichton said her office has been unable to find any official documents that authorize the granting of retroactive retirement credit
However, two ex-managers – Mark Antonio and Randolph J. “R.J.” Intindola – said commissioners were given details in an actuarial report on the pension plan back in 2001.
“It’s easy for them to say now,” said Antonio, a former city manager and finance director who has said the plan was developed and approved because the existing plan was inadequate.
The controversy surrounding the costly executive retirement plan has intensified as election day approaches. The flap surfaced as the Broward Inspector General’s Office continues its investigation into city management practices.
One current and one former city commissioner are now calling for an outside audit to review the plan and determine how it came to include the lucrative provision granting credit for past years of service – with an eye toward possibly rescinding or halting some of the benefits for those covered by the plan.
The plan was stopped in 2007 for new employees, however about 70 former and current employees continue to accumulate benefits under the program.
COMMISSIONERS KEPT IN THE DARK
Current Commissioner Dorothy Ross and former Commissioner William Julian, who is running again, say they were not aware of the richness of the perks when they backed the management retirement program 11 years ago.
“It was never explained,” Ross said. “Why do something for past years of service? I don’t see the reason for it.”
“When we voted on the pension plan that never was brought up to us,” said Julian. “I never saw any documents about free years. They should not be getting anything free.”
Former Mayor Arthur “Sonny” Rosenberg agreed.
Rosenberg, who was off the commission when the plan was voted on but attended meetings about it in the months before, said there was no discussion about retroactive service credit.
“Robbery, that’s what it was,” Rosenberg said of the plan. The city staff, he added, misled commissioners about the plan and its costs.
Rosenberg said he saw a memo from the finance department stating that the plan would cost “no more than $10,000 a year” and would benefit only about 15 employees with 15 to 20 years of service.
City Manager Crichton, who took over this summer, said she can’t find details on the pension agreement in the city record.
“The city does not have any item that speaks directly to the credit of back time,” Crichton wrote in her memo last week. She attached minutes of various city commission meetings in 2001 where the management plan was discussed and approved but there were no references to approving retroactive service credit.
CITIZEN STEPS IN
Crichton’s memo responded to a public records request filed by commission candidate and community activist Csaba Kulin.
“As I expected there is no authorization to grant all those extra years of service to managerial employees,” said Kulin. “It was done illegally….The three previous city manager, starting with R.J. Intindola, have given themselves and others, illegally, millions of dollars.”
While she could not find any reference to the retroactive credit, Crichton said it is possible the approval was “inherent” when the commissioners approved documents outlining the management plan. She said she has no intention of hiring an outside auditor to review the matter, unless instructed by the commission.
The chance of such a review would appear to increase if Julian and Kulin are elected next month. Both said they want one.
“The commission can reverse anything it wants,” Julian said.
City commissioner Keith London also entered the fray, saying that if he’s elected mayor next month he will seek an outside audit and obtain legal advice on what aspects of the plan can be reversed for current retirees or halted for future ones.
BrowardBulldog.org first reported last week how the management retirement plan has paid off big for some top city officials who helped set it up, or backed later enhancements. Three former city managers – Intinola, Antonio and Mike Good – are among those who have received generous payouts, including monthly pensions totaling $37,000.
Intindola received nearly 20 retroactive years of credit when he retired in 2002. In addition, the plan allowed him to purchase an additional four years without actually working. Without those 24 years his pension would be 96 percent lower. He currently receives an annual pension of $111,700. His highest base city salary was $118,664.
Antonio, the city’s finance director before he became city manager, retired in June and received 14.25 years of retroactive service. He also bought five additional years. Without those 19.25 years his annual pension would be 77 percent lower than its current $127,000. His highest annual salary as a city official was $165,000.
Antonio accumulated another $744,637 in a city DROP (Deferred Option Retirement Plan) savings account.
Good was fired in 2010 after eight years as city manager, for chronic work absences and for other reason. Good now receives a monthly pension of $17,522, or more than $210,000 a years, just $2,000 under his highest regular base pay of $212,000. He also cashed out $786,000 from his DROP account shortly before leaving city employment.
Good did not receive retroactive credit for past years of service in the management plan. Previously, he was in the city employee group pension plan, and his years and payments were transferred to the new plan.
By William Gjebre, BrowardBulldog.org
A short-lived, perk-laden retirement plan has paid off big for some top Hallandale Beach officials who helped set it up a decade ago – but today it’s costing city taxpayers extra millions of dollars.
Approved and implemented by the city commission in October 2001, the plan’s key provision granted those ranking city officials retroactive credit for prior years of service – even if they were in another retirement plan.
The Professional Management Retirement Plan also boosted pensions for top city bureaucrats in other costly ways. For example, the plan was calculated to equate the sedentary desk jobs of department heads and their assistants to the “high risk” street duties of city police and firefighters.
City commissioners were also eligible for the plan, but because their pay was so low, and their length of service varied, the financial impact was minimal.
Three former city managers who played key roles in developing the retirement plan or subsequent add-on benefits are now collecting pensions that are at or near their highest annual salaries when they were active city employees.
Ex-city manager Mike Good was fired in 2010 after eight years due to his chronic work absences and for other reasons. Today, at age 51, Good receives a monthly pension of $17,522, or more than $210,000 a year. His highest regular salary was $212,000.
But a higher monthly pension isn’t the only way that Good and his fellow city managers have benefitted from the management retirement plan.
Good, who started working for the city as a welder in the 1980s, cashed out $786,000 from his city DROP (Deferred Retirement Option Plan) savings account a few months before he departed. The account, established under the retirement plan, was funded largely by the city.
Good also received another $146,000 in accrued sick leave, vacation time and other benefits when he left.
The city commission closed the retirement plan, including the DROP program, to new employees in 2007 citing exorbitant costs. City records indicate that about 70 employees, active and inactive, are eligible to receive benefits under the plan that initially required employees contribute five percent of their salary, but was later hiked to seven percent.
“It’s outrageous: fat, oversized pensions,” said Csaba Kulin, a community activist and city commission candidate. “This was mismanagement…employees should not have gotten credit for past years of service. They should have begun accumulating benefits when the plan went into effect. It’s undue compensation.”
The pension disclosures come as the Broward Inspector General’s Office continues its investigation into suspected mismanagement and fraud involving city loans to local businesses and questionable land purchases by the city’s commission-run Community Redevelopment Agency.
PAYOUTS JACKED UP
Payouts to top city workers were further jacked up by management plan provisions that reduced the full retirement age from 60 to 52 with 25 years of service, inserted regular cost of living increases, and allowed workers to purchase additional years of service for time they didn’t actually work.
Some top employees also received two pensions because they were allowed to keep 10-17% of gross salary contributions by the city in the previous retirement plan.
Some details of the Professional Management Retirement Plan are unclear. BrowardBulldog.org asked the city clerk’s office to provide commission minutes and documents regarding the authorization of retroactive service credit for employees prior to October 2001, but was told those records are “not available.”
Mark Antonio, 56, is a former city finance director who succeeded Good as city manager in 2010 and retired at the end of June. In 2001, he explained aspects of the retirement plan to commissioners before it was approved. He now receives a monthly pension of $10,645, or $127,800 annually. City records state that his highest base city salary was $165,000.
Like Good, Antonio accumulated a considerable city-funded nest egg in his DROP account: $744,637 by July 31, 2012, according to city records. City officials said he was also due about another $100,000 for unused sick and vacation days and other earned benefits.
Ex-City Manager Mike Good
Randolph J. “R.J.” Intindola, under whose administration the retirement plan was adopted, retired as city manager in 2002. He receives a monthly pension of $9,308, or $111,700 annually. His highest base city salary was $118,664.
Intindola, now 61, retired a year after the plan was implemented citing health concerns. At the time, the plan did not allow him to have a DROP account. He did receive a payment of $139,000 for accrued sick, vacation and other benefits, according to city documents.
Two city commissioners who backed the plan in 2001 now wish they hadn’t.
“My thinking today is ‘no,’ ” said Commissioner Dorothy Ross. “We can’t go back to that time.”
William Julian, who left the commission but is now running again, said he had “no experience with pensions” when the matter was brought up years ago by City Manager Intindola and staff. He said they told him the plan was “normal” for top city officials.
“Looking back, we should never have offered the plan,” said Julian, especially the granting of credit for past years of service. “I was new,” Julian said. “It sounded logical and we took staff at their word, but I wouldn’t take it now.”
The cost of the plan is in the millions, said Julian. He added that cost includes the $900-a-month he began to receive last year. He was credited for service on the commission from 2001 until 2010 when he was not reelected.
Mayor Joy Cooper, who has been on the commission since 1999, was the lone vote against the plan back in 2001. “I did not feel comfortable,” she said.
She said she also now opposes the idea of equating top management jobs to those of police and firefighters – something she voted to approve in 2003.
“Police and firefighters are in a different category,” Cooper said. “They put their lives on the line.”
EX-CITY MANAGERS LIKE THE PLAN
Each of the three former city managers defended the management retirement plan, though only Intindola acknowledged that it has elevated costs to taxpayers by millions of dollars.
“Absolutely, it was okay,” said Antonio, who got retroactive credit for the 14.25 years he worked for the city before the plan went into effect in 2001. He also purchased an additional five years of service credit at a cost of 8% of salary for each year purchased.
Without credit for those 14.25 years, Antonio’s pension would be about 57% lower. Without those years and the extra years he purchased, his pension would be approximately 77% lower.
Antonio said commissioners implemented the management retirement plan to address a lack of fairness regarding pensions for top managers. At the time, the city was contributing 10 to 17 percent of gross salary to their 401a retirement accounts.
Intindola agreed. “It was a good thing,” he said. “We had to improve the [existing] plan; we had a high turnover.”
Intindola began working for the city in February 1982. He received nearly 20 years of retroactive credit under the management retirement plan, and also bought another four years of service.
Without those nearly 24 years of credit, Intindola’s pension would be about 96 percent lower.
HOW MUCH DOES IT COST?
The 2001 switch to the management retirement plan was not supposed to be costly, Intindola said. The amount the city was then paying in benefits was expected to cover most of the new plan.
But changes made after he left, including the addition of a cost of living adjustment (COLA), and a guaranteed 8 percent annual increase to DROP accounts, proved to be “a killer” – driving up annual pension costs by $2 million, Intindola said.
Radu Dodea, a Hallandale personnel official who administers the management pension plan, said he has no estimate as to how much the city will have to pay management plan participants over their lifetimes.
But city activist and commission candidate Kulin said those cost estimates are exorbitant. He estimated the long-term cost to city taxpayers for the years of service and other benefits total about $10 million.
A city financial report from 2002 obtained by BrowardBulldog.org stated those payouts could amount to nearly $9 million. The report said the initial estimate for unfunded costs, including covering past years of service for employees, was approximately $1.7 million.
The change that Intindola said caused the city’s costs to spike occurred while Good was city manager.
Good, unlike the other ex-city managers, said he did not receive retroactive credit for years of service because he had been in the General Employees Pension Plan since the day he started in March 1985. He switched to the management plan for its superior benefits when it was approved in 2001 and transferred money he and the city previously contributed. By then he was director of Public Works.
It was also under Good in 2007 that the management plan was finally shutdown for new employees.
“The economy went kaput and defined pension plan costs were rising and they wanted to cut costs,” city Human Resources director George Amiraian said.
A rendering of the proposed Beachwalk tower from developer's plans filed with Hallandale Beach
UPDATE: June 21 — Hallandale Beach commissioners gave final approval Wednesday night to developer Jorge Perez’s plan to construct Beachwalk – a $100-million, 31-story hotel-residential complex on the Intracoastal Waterway.
The proposed 305-foot tower at 2600 E. Hallandale Beach Boulevard will contain 216 two-bedroom hotel-condominium suites, 84 residential units, a 1,225-square-foot restaurant and a five-story parking garage.
Commissioners also gave approval for Perez’s Related Group of Florida to spend $2.5 million to create a lush park, with a two-story restaurant and concessions, at the city’s nearby oceanfront North Beach Park.
The group will manage the facility, but the city commission said the public would still have access to the oceanfront. The term of the lease was reduced from a proposed 30-year agreement to 15 years.
In approving the project, the developer received various zoning exemptions and concessioners, including a giveway by the city of more than a third of an acre of right-of-way along portions of Diana Drive to allow for more residential units. – William Gjebre
By William Gjebre, BrowardBulldog.org
June 7 – Hallandale Beach commissioners unanimously gave a tentative green light Wednesday night to Miami developer Jorge Perez’s plans to construct Beachwalk — a $100-million, 31-story, hotel-residential complex on the Intracoastal Waterway where the popular Manero’s restaurant once stood.
At the same time, commissioners put off until later this month a vote on a another aspect of the deal that would give Perez long-term control of a nearby prime parcel of city-owned oceanfront property to develop as a park with a restaurant.
The proposed 305-foot tower, at 2600 E. Hallandale Beach Blvd., would contain 216 two-bedroom suites that could serve as hotel rooms or condominiums, as well as an additional 84 apartments dedicated to being condominiums only. Plans include a 1,225-square foot restaurant and a five-story parking garage.
Final approvals are to be voted on June 20.
The developer, PRH-2600 Hallandale Beach LLC, is a Miami company controlled by Perez, chairman of the Related Group of Florida. If finally approved, the developer will receive various zoning exemptions and concessions, including a giveaway by the city of more than a third of an acre of right-of-way along a portion Diana Drive to allow for more residential units.
Local activist and commission candidate Csaba Kulin complained the project was too massive and that the city should not be awarding a 30-year contract for the development of the city’s one-acre oceanfront parcel.
“I’m against any giveaway of the beachfront area,” said candidate Kulin.
Kulin believes the deal would give another nearby Perez development access to the ocean and the developer control of 91 public parking spaces at the nearby residential Beach Club.
Kulin previously urged commissioners to defer the tower project because many of the residents are snowbirds and won’t be back in town until the fall.
“The problem is they are trying to shoehorn too big a building on a small site,” Kulin said.
The total site is 1.68 acres, including the land from Diana Drive.
Mayor Joy Cooper said earlier that negotiations with the developer were continuing.
“A lot of things can change,” said Cooper said, who noted that a parking shortage at the tower might not be as severe as it appears.
Cooper said she was not necessarily concerned about Perez’s group developing and managing the city’s North Beach park property, especially since he will pay for the improvements in accordance with the city’s master plan for parks. The city will be paid a percentage of the revenues from the restaurant and other concessions made available in the park, she said.
Cooper said Hallandale Beach needs new hotel space, especially at the oceanfront to attract tourists and visitors. The restaurant in the park will provide a wonderful oceanfront setting for dinners, she added.
Commissioner Keith London, who is running against Cooper, agreed.
“There is a need for quality hotel space in Hallandale.”
“The park,” London said, “has not been upgraded in well over a decade; this is an opportunity to upgrade without using taxpayer’s money.”
Perez, known as Miami’s “condo king,” did not appear at Wednesday’s meeting to talk about Beachwalk.
His Fort Lauderdale attorney, Debbie Orshefky of Greenberg Traurig, told commissioners, “We are confident that it will be successful.”
London and other commissioners hope to extract some concessions before the final vote, including a pledge from the developer that the beach park project will be completed first. Another request: regular monitoring of parking around the facility.
Residents who spoke at the meeting were equally divided on both sides of the project.
City staff endorsed the project. London, however, said he wasn’t happy that it took nearly two years to reach the commission, and that some agreements between the city and developer were incomplete.
City documents say the developer has vowed to spend up to $2.5 million to reshape the rundown North Beach park area with a two-story, 4,000-square foot structure to include the restaurant, restrooms and changing facilities for both beach goers and diners. There would be an additional 3,000 square feet of patio area facing the ocean.
Plans for the full-service restaurant call for indoor seating for 80 persons and outdoor seating for 100. Patrons could rent beach chairs, umbrellas, paddle boards and canoes. A volleyball area is planned.
For the first 10 years of the 30-year lease, the city would collect a minimum of $5,000 a month or 2.5% of gross park concession receipts, whichever is greater. The percentage would go up a notch to 3% in years 11 through 20, and rise another half-percent to 3.5% from years 21-30.
The concessionaire would pay all operating and maintenance for the park facility, and also give the city $200,000 to maintain other city parks.
Prior to issuance of the first building permit for the high-rise tower, the developer would give the city another $550,000 — $250,000 to be used for public improvements and $300,000 for improvements to affordable housing.
William Gjebre can be reached at firstname.lastname@example.org
By William Gjebre, BrowardBulldog.org
Hallandale Beach Mayor Joy Cooper's newspaper column
A weekly newspaper in Hallandale Beach got a $50,000 city “loan” under terms so favorable that half of it – $25,000 – amounted to a taxpayer giveaway because the city did not require it to be repaid.
The for-profit South Florida Sun Times obtained the loan even though the paper’s two top executives reported incomes averaging more than $200,000 each for two years prior to receiving the city loan in 2009.
The Sun Times also benefited in recent years from an increase in city spending on advertising. The city’s no-bid ad purchases and loan averaged $65,000 annually during the past three years.
Throughout that time, and currently, the weekly Sun Times has featured Hallandale Beach Mayor Joy Cooper as a prominent columnist, with a link to her writings about city issues on the front page of the paper’s web site.
The newspaper, which often writes upbeat stories about advertisers, circulates in Dania Beach, Hollywood and Pembroke Pines south to North Miami and Surfside. Cooper, who is not paid, is the only elected official listed on the paper’s site as having a regular column.
The paper’s arrangement with Mayor Cooper is under fire.
“How can you be independent if you are dependent on the city?” said community activist Csaba Kulin. He criticized the Sun Times for neglecting to print comments from readers in response to stories.
“It’s propaganda for the mayor,” complained City Commissioner Keith London, a rival of the mayor who has sought unsuccessfully to halt city spending for ads in the Sun Times. “There’s no fact checking and no rebuttal; the city pays a lot of money for a bully pulpit for the mayor.”
Mayor Cooper said she was invited to write for the paper about five years ago. She sees “no conflict” in her writing a regular column and the city’s advertising and loan to the paper. She said she had nothing to do with those deals, adding that they were recommendations of former City Manager Mike Good.
Cooper said, too, that she has not used her column to gain any political advantage.
“I’ve written to inform residents what’s going on,” Cooper said. “I try to make it informative. It’s not always about city business. It’s also been about individuals, about the environment, about veterans. I’m like a reporter. I don’t get paid.”
Cooper also said her columns were not part of the city’s expenditures for advertisements in the newspaper.
The mayor generally writes about community activities, city government operations, and city commission actions from her perspective. There is no mention of oppositional or different viewpoints – if they exist.
In April 2009, the Sun Times became the first city business to receive a loan under a new program, funded through the Community Redevelopment Agency (CRA), to retain and to assist firms having financial difficulties. The CRA, a special taxing district that covers most of the city, is controlled by city commissioners and the mayor.
The city’s Business Retention and Expansion Program provided for 50% to 80% forgiveness on loans up to $50,000, with the balance to be repaid at two percent interest over 10 years.
The Sun Times received the maximum loan amount, $50,000, with half of that amount “forgiven” under the program in its loan agreement with the city.
Richard Cannone, who oversaw the CRA as the city’s director of development services, wrote a memo in December 2008 that then city manager Good had approved the $50,000 CRA loan to the Sun Times. In another memo, Cannone stated the funds were “loaned to rescue the newspaper from financial hardship that had befallen their company over the past few years.”
No other CRA loan program has the forgiveness percentage that the Sun Times received under the new program. CRA code compliance loans, allocating up to $100,000, and CRA Business Incentive and Enticement loans, allocating up to $200,000, provide for forgiveness of 15% of loans, with balances to be repaid at four percent interest over 10 years.
Craig Farquhar, president of the South Florida Digest, which publishes the Sun Times, declined to discuss the newspaper’s financial dealings with the city, its editorial policies, or its relationship with the mayor.
“This is old news,” he said. “I have nothing else to say.”
Hallandale Beach took other action beneficial to the Sun Times’ owner.
In 2010, according to CRA records, the city agreed to subordinate its position on the loan balance so the newspaper could refinance a mortgage loan. That meant the city gave up its claim as first in line for repayment in case of a default — putting taxpayer funds at increased risk.
BIG SALARIES AND CITY MONEY
City documents also show that before the loan “rescue the newspaper” was made, its two top executives drew six figure salaries.
Farquhar likewise declined to address the newspaper’s need for the city loan in view of the hefty incomes of he and South Florida Digest Vice President Cecile Hiles.
CRA files contain federal income tax returns showing that South Florida Digest paid salary and wages to Farquhar totaling $259,193 in 2007 and $239,054 in 2008, as well as an additional $41,239 in pension and annuity payouts. Hiles received $192,052 in 2007 and $229,010 in 2008.
Current CRA Director Alvin Jackson said the wages Farquhar and Hiles were paid would not have disqualified the Sun Times from receiving the $50,000 loan. The information about their incomes was required by the city to determine the newspaper’s ability to pay back the loan, he added.
Jackson said the paper asked for the loan to survive a downturn in the economy. The paper had lost advertising and had cut jobs and reduced benefits, he said.
Hallandale Beach has also come to the rescue of the Sun Times with increased advertising purchases made without competition.
City records show that for the five-year period between 2003 and 2008, the city paid the Sun Times about $32,000 for advertising.
Those numbers jumped the next year, when the city bought about $42,000 in advertising and issued the $50,000 loan . The city bought $52,000 in advertising in 2009-2010, and $53,000 in 2010-201. It has agreed to buy $50,000 in advertising this fiscal year.
The most recent advertising buy was included in the current budget approved by the city commission on Sept. 26, 2011 in a 4-1 vote. Cooper voted yes; London was the lone dissenter.
PURCHASES WITHOUT BIDS
The city advertised in the Sun Times without seeking bids. The mayor said that’s because it was the only local newspaper in the city. City code, she said, provides for giving preference to local businesses and those which are one of a kind. “There is no other provider,” Cooper added.
Because the Sun Times is not a newspaper of general circulation in the county, like the Sun-Sentinel or The Miami Herald, the city has to place its legal notices in other area newspapers.
Cooper has been a strong advocate in the community for the Sun Times. She urged local businesses to advertise in the newspaper in a 2008 letter on city stationery, co-signed by then city manager Good. Today, she says she favors future city support for the only city-based newspaper.
“To the naysayers, it’s not about” the column being used as a political platform, said Cooper. “It’s a service to the community to inform.”
Not everyone sees Cooper’s writing as useful.
“The mayor’s column: I used to read it,” Kulin said. “But it’s one-sided. It’s feel good stories about herself and the city.”
William Gjebre can be reached at email@example.com