Broward Auditor looks at Hallandale Beach CRA with eye toward recovering misspent funds

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.