Update: Jan. 23 – Hallandale Beach city commissioners Monday night gave initial approval to hiring an accounting firm to conduct a forensic audit of the city’s long troubled Community Redevelopment Agency.
Sitting as directors of the CRA, the commission designated the firm of Stanley I. Foodman, CPA & Advisor, to work with newly appointed City Manager Roger Carlton to determine the audit’s scope and cost. Carlton will present their proposal to commissioners for approval at a meeting next month.
Vice Mayor Keith London, who presented the item that won unanimous approval, said the audit will determine the CPA fund balances dating back to 2012, when a CRA fund was first established. The audit will also review prior land purchases by the CRA that forced $7.4 million in cuts from the CRA budget.
By William Gjebre, FloridaBulldog.org
The new majority on the Hallandale Beach City Commission will seek the first-ever forensic audit of all expenditures by its troubled Community Redevelopment Agency for the past five years, including finding out why $7.4 million had to be cut to balance the agency’s budget this fiscal year.
Current Vice Mayor Keith London and Commissioner Michele Lazarow had been frustrated in seeking such an audit by the previous commission majority headed by Mayor Joy Cooper.
The November city commission election resulted in London and Lazarow gaining the backing of new City Commissioner Anabelle Taub. Cooper was reelected, but failed to gain another commissioner to back her and her ally, Commissioner Anthony Sanders. They’re expected to vote on the audit, aimed at determining whether any wrongdoing occured, later this month.
“Let’s see where the money went,” London said. “We are going to get to the bottom of this.”
The new commission trio already has flexed its power in a remake of city hall.
It was responsible for the ousters of City Manager Daniel Rosemond and City Attorney Lynn Whitfield, and replacing them with long-time South Florida government administrator, Roger Carlton, and a new city attorney, Jennifer Merino. Merino was general counsel for the Broward Inspector General’s Office, which investigated and severely criticized the spending practices of the city’s CRA four years ago.
“It’s time to clean house of the city manager and the city commission … the collusion,” Lazarow said.
Now the new commission majority will be seeking answers about the spending of the much-troubled CRA.
‘We need to find out’
“We need a full forensic audit [of the CRA],” London said. “We need to find out about the $7.4 million, and we need to know what we have left.”
London was referring to last August when city commissioners, who are also directors of the CRA, were forced to cut $7.4 million from the proposed $25.9-million CRA budget for this year after being told by the city administration that the agency had counted land purchases by the agency as cash.
At that meeting, then City Manager Rosemond said an “adjustment” had to be made — the city commission had no choice but to approve the budget cut.
Prior to that, London said the city manager had given commissioners assurances that cash was available to the CRA, only to learn that the value of the city-purchased land by the CRA cannot be counted as cash.
Both London and Lazarow lobbied for a forensic audit of expenditures at that time, but lacked a third vote. The commission instead voted to seek a forensic audit that delved only into CRA land purchases.
Making matters worse, London said, Rosemond later came back and told commissioners that he was unable to engage any firm willing to conduct the forensic audit of land purchases — and, therefore, no firm was hired.
That all changed, however, with the November city commission election. Lazarow was reelected, along with newcomer Taub. London was not up for reelection.
Now in the majority, London said he wants audit to cover CRA spending back to 2012, the first year city commissioners established a separate funding account for the agency.
“We need to know what we have,” he said.
“We have to inquire about the $7.4 million,” said Lazarow, adding she plans to back London’s request for a forensic audit when he brings it up for a commission vote. Taub, who was not available for comment, is also expected to back the request.
City co-mingled CRA funds
Prior to 2012, the city had co-mingled CRA funds with city funds. That practice started in 1996, when the CRA was established under state law. The agency has been funded through property tax increases in the CRA boundaries.
It was only when the Broward Inspector General’s Office began its probe and issued a scathing report that some changes were made, including separating CRA-collected funds from other city tax revenues. Florida Bulldog had reported about questionable loans to local businesses and land purchases through the CRA nearly a year before IG investigators descended on city hall in April, 2012 seeking records and questioning officials as the probe became public.
After a 14-month investigation, the Inspector General’s Office in 2013 stated the Hallandale Beach CRA had “grossly mismanaged” millions of dollars in funds between 2007 and 2012. It found $2.2 million in questionable expenditures by the CRA, including inappropriate loans and grants to local businesses and non-profits, as well as the improper use of bond proceeds.
Before and after that report, London asked for a forensic audit of agency funds, but was outvoted by his commission colleagues.
Mayor Cooper denied the city had done anything wrong. The city commission majority at that time then ousted the agency’s recently appointed CRA executive director, Alvin Jackson, who won praise by the Inspector General for efforts to improve the CRA.
The city commission, over the objections of London, placed the agency once again under the direct management of the city manager. Except for Jackson’s short tenure, city managers have had full control of the CRA since 1996, during which the agency failed to keep adequate records, including changing loan and grant policies in violation of existing rules.
Both London and Lazarow said they are pleased with the new appointees, in particular Merino, 36.
“She has knowledge of our city,” said London, referring to Merino’s work with the agency that investigated the city’s CRA.
“Merino has a history [with the city],” Lazarow said. “She has been watching our meetings.”
Carlton, 69, has held several key positions with public agencies, among them: Miami Beach city manager (1992-1995), executive assistant Miami-Dade county manager (1977-1981).