By William Gjebre, BrowardBulldog.org
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.
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.
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