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
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
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
The Broward Inspector General’s final report on the “gross mismanagement” of millions in tax dollars by Hallandale Beach is sharply critical of city leaders it says have shown a “basic misunderstanding” of what’s gone wrong.
Hallandale Beach city managers past and present, the city attorney, the mayor and other city officials defended the handling of funds of the city’s Community Redevelopment Agency in formal responses included in the 56-page report released last week.
The Inspector General, after a year investigating, determined 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.
By law, CRA is a limited purpose special district whose funds are only to be spent to address slum and blight conditions within a defined area. It receives 95 percent of the taxes collected on the appreciated value of properties within its boundaries, or about $70 million since it began in 1996
Some of the report’s bluntest words rebut claims by Mayor Joy Cooper and City Attorney V. Lynn Whitfield that the Inspector General had no authority to investigate the CRA’s activities.
Hallandale Beach City Attorney V. Lynn Whitfield
Whitfield’s “assertions ignore the fact that the OIG (Office of Inspector General) has authority over all municipal officials in identifying mismanagement of public resources,” the report says. “A municipality cannot avoid OIG oversight by spending taxpayer funds through an agency that is independent in name only.”
Likewise, the report ripped “another common theme” of the city’s defenders that the Inspector General mistakenly relied on a Florida Attorney General’s advisory opinion that the Inspector General said precluded the city from spending CRA funds as it had.
City Attorney Whitfield’s arguments “reflect the basic misunderstanding that is at the core of the gross mismanagement identified in this report: the city has failed to comprehend that the CRA has a limited purpose and that the powers of the CRA to expend CRA…funds is not equal to the power of the municipality to expend general funds.”
The report urged Hallandale Beach’s leaders to ask the Attorney General for another opinion if they don’t like the original one.
CITY MANAGER MILLER CRITICIZED
The report also criticized City Manager Renee Crichton Miller, who it said made “unsupported” arguments to support Cooper and Whitfield’s erroneous claims that the Inspector General had incorrectly determined that CRA funds were improperly used to repay city bond obligations for park improvements in other parts of the city.
City officials contended that it was always the city’s intention to repay any CRA funds spent on parks outside the CRA boundaries, The report, however, says those arguments failed to “address the plain fact that $416,365 in CRA funds – deemed ‘negligible’ by (Miller) – have already been expended on parks outside the CRA boundaries” without any repayments or any plan for repayment.
Miller, hired last summer and not identified in the report as being responsible for past mismanagement, stuck by her arguments in an interview after the report’s release, saying the city has every intention to repay funds owed the CRA. She said it does not have to do so now because those projects have yet to get underway.
“We have a difference of opinion with the Inspector General,” said Miller. “I would not disparage their view.”
Hallandale Beach Mayor Joy Cooper
Asked for comment, Mayor Cooper referred a reporter to her statements in the Inspector General’s report.
Said former City Commissioner Keith London, who lost a race for mayor to Cooper last November, “I hope the State Attorney’s office will look into this further.”
BrowardBulldog.org first reported the Inspector General’s preliminary findings last month. Last week’s final report incorporated the responses of city leaders.
Investigators found at least $2.2 million in questionable CRA expenditures, including inappropriate loans to local business and grants to local non-profits. The city improperly also spent $416,000 in CRA money for parks outside the CRA boundaries, the report said.
The report also said there is “probable cause” to believe that Dr. Deborah Brown, the founder and director of the Palm Center for the Arts engaged in criminal misconduct. In one case, the center allegedly spent nearly $5,000 to make a payment on Brown’s timeshare at the Westgate Resort in Orlando, and make payments to Brown and her brother. The matter was referred to the Broward State Attorney’s Office for criminal prosecution.
In her response to the Inspector General, Brown provided a document of expenditures and details of youth activities that she said provided “positive, measurable results” at her Palm Center for the Arts. The report, however, said there was a lack of supporting documentation for those expenditures.
“Her submission does not alter our determination that there is probable cause to believe that Dr. Brown may have engaged in criminal misconduct,” the report says.
Brown could not be reached for comment.
CITY LOANS DEFENDED
In their responses, Cooper and former city manager Mike Good defended various CRA loans to local businesses, including a $75,000 loan in 2009 to Digital Outernet Inc., a startup firm that planned to earn income from advertising on televisions screens it hoped put in local businesses.
Digital Outernet closed a short time later when its principal owner died. But the city failed to secure a guarantee of repayment from other investors and waived a provision in the deal that would have given it some collateral for the loan.
Cooper said the Digital Outernet loan was “not gross mismanagement” because it attempted to help establish a minority-owned business, according to the report. Good said the loan was “properly made,” adding that at it was “unfortunate that some paperwork had not been signed,” the report said.
Good, too, defended a $50,000 loan to the South Florida Sun Times weekly newspaper, saying it was “justified” because the newspaper needed assistance. The 2009 loan, under terms so favorable that half of it need not be repaid, was made under a new program Good had established for assist struggling businesses.
At the time, the two top executives of the for-profit newspaper reported to the IRS that they’d paid themselves $469,000 in salaries in the two years before receiving the loan.
Cooper told the Inspector General that the salaries of those seeking loans are now part of the loan evaluation process, the report said.
But the Inspector General’s report said Hallandale Beach’s failure until recently to take any steps to empower the CRA as an independent body that might “act as a check on the improper use” of CRA tax funds is problematic.
“While we are encouraged by the remedial steps taken by the city and the CRA in the last year, the OIG remains concerned that the city has not acknowledged the statutory limit on the use of TIF (tax increment financing) funds diverted to the CRA,” says the report, which makes a number of recommendations it said would ensure the CRA’s independence.
Hallandale Beach is not the only Broward city to have misspent CRA funds. Within the last year, the Inspector General found $2.5 million misspent by Lauderdale Lakes and the Florida Auditor General identified “several significant expenditures” by Hollywood that did not follow state law.
“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 OIG will continue to examine the expenditure of CRA funds by municipalities.”
The report also recommends the county assess its legal options “to prevent the ongoing abuse of the CRA process and recover those funds that may have been misspent.”
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, BrowardBulldog.org
Hallandale Beach officials altered city pension guidelines to enable the son-in-law of former city manager Mike Good to join a lucrative management-only pension plan after it was closed to additional employees.
The policy revisions made by top city staff – apparently without city commission approval – extended the defined-benefit plan’s cutoff date, allowing Douglas Grant Baber to participate.
City records obtained by BrowardBulldog.org state that in 2006 then-City Manager Good ordered the plan shut to new management employees effective January 1, 2007.The move followed complaints by city commissioners about the plan’s escalating costs. Instead, those employees would enter a 401(a) defined contribution plan.
But that deadline would soon change.
On March 5, 2007 then-Assistant City Manager Mark Antonio sent an email to Human Resources Director George Amiraian, with a copy to Good, with the subject line “Pension Options for Douglas Baber.”
Baber was hired as an administrative analyst in early 2006 and in February 2007 he was promoted to personnel analyst. It was a position that would have made him eligible for the management retirement plan if it were still in effect, and Baber wanted in.
Antonio’s memo says that because of the January 1st deadline he had “assumed” Baber would instead enter the other plan.
“However, based on our recent conversations, it appears Doug (Baber) is expecting to enter the Defined Benefit (management) Plan and I’m not sure how to accomplish that without a new pension plan amendment and ordinance,” Antonio said. “Please set up a meeting to discuss with me and or the city manager.”
No record of that meeting could be located. But handwritten notes on a copy of the same email maintained in city files indicate that Good OK’d Baber’s entry into the management plan.
“Sent Doug app. for DB plan per C.M.,” the notes on Antonio’s email say.
Baber, now 37, married Good’s daughter on March 31, 2007.
Good, a 25-year city employee who served as city manager from 2002 until his dismissal for excessive absences and other reasons in June 2010, did not respond to requests for comment.
Baber, who no longer works for the city, declined to comment.
Antonio’s solution, it turned out, did not require an amendment to the pension plan or a new city ordinance.
He explained his decision in twin memos to Amiraian and representatives of the company that administers the pension plan, the Principal Financial Group, on May 17, 2007.
The memos state in part that employees hired prior to Oct. 1, 2006 and promoted to a “professional/management” position prior to Oct. 1, 2010 – a description that fit Baber – “will be eligible to enter the defined benefit (management) plan.”
Antonio’s memos cite no authority for that decision, nor do they explain why the change was being made.
The city clerk’s office said it could not locate any reference to the policy change in city commission minutes.
Browardbulldog.org asked Amiraian how Baber was allowed into the management pension plan after it was closed. His assistant, Radu Dodea, later cited Antonio’s memos to show how it was accomplished.
A Principal Financial Group enrollment form in Baber’s personnel file showed he was placed in the management plan as of his promotion date on Feb. 5, 2007. That form is dated April 18, 2007.
The Professional Management Retirement Plan, approved and implemented by the city commission in 2001, boosted pensions for top city bureaucrats in several costly ways. For example, it was calculated to equate their jobs to the “high risk” duties of police and firefighters and granted retroactive credit for prior years of service even if they were in another city retirement plan.
Baber, whose annual salary was $65,000, resigned after five years of city employment on Feb. 22, 2011. When he left, he took a pension plan payout of nearly $20,000.
Today, the city is suing Baber for failing to repay $6,400 in tuition reimbursements he received. Baber, however, has sought bankruptcy protection in federal court in Fort Lauderdale.
Antonio, who succeeded Good as city manager and retired last June, would not discuss the policy changes, saying he could not recall the circumstances.
Former City Commissioner Keith London, who lost a race for mayor in November, said the reason for the retirement plan deadline change is apparent to him.
“It’s obvious it was for Doug Baber,” London said. “This was all Good’s doing. Who else could do it?”
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 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.