Hallandale freezes payments for city development, jobs programs citing waste & fraud

By William Gjebre, FloridaBulldog.org 

Hallandale Beach City Manager Roger Carlton

Hallandale Beach City Manager Roger Carlton has ordered what could be a multi-million dollar freeze on all payments under two city jobs and business development programs, saying they “have lost their way.”

Carlton acted about what he said was “waste” and possible fraud weeks before a report by county investigators became public last week that accused City Commissioner Anthony Sanders of failing to disclose payments he received from a local community group awarded city funds, including money under the two programs, with his backing.

In a June 5 memorandum obtained by Florida Bulldog, Carlton, who was appointed city manager by a new reform-minded city commission majority, expressed outrage about the flawed city programs and public apathy about them.

“I am angry about this situation,” Carlton wrote. “… It is extremely disappointing that there is no outrage in the community about these programs. No demands for reform have been publicly made to date. No complaints regarding the fact that public funds, which should have been utilized effectively to build capacity of local contractors, or help individuals find work can be found.”

In a preliminary July 7 report, the Broward Inspector General’s office said Commissioner Sanders “engaged in a pattern of misconduct” when he “failed to disclose payments” made to him, other family members and his church, Higher Vision Ministries, by a jobs development group, Palms Community Action Coalition (PCAC) during a three-year period. Sanders voted to give PCAC three grants and backed seven funding agreements under the Community Benefit Program (CBP), resulting in the PCAC receiving a total of $893,320 from 2013 through 2015, according to the report.

Carlton’s directive was aimed at the CBP and the Hallandale Opportunity Project (HOP), the city’s administrative arm created to monitor job development, including placement and training, and the purchase and use of local subcontractors and residents, by firms that won contracts. Those gaining contracts under the program pledged a percentage of the contract to hire residents and subcontractors and/or earmark funds to train and create jobs for residents.

“It’s not a pretty outcome,” Carlton said in a brief interview with the Florida Bulldog, adding “millions of dollars” are at stake. The city manager also said the city will “recover as much as possible” of any misused funds.

“I have directed the Finance Department and the Capital Improvement Division to cease making any payments to consultants, contractors, design/engineering firms and/or individuals under the CBP/HOP program until a complete review … can be completed,” Carlton said in his memo.

Exception to freeze for a handful

“The only exception to this payment freeze,” he wrote, “will be to those individuals and firms who are doing actual physical work or are in a verifiable training program at a job site, and who are qualified participants due to their employment and residency status.”

Jeremy Earle, assistant city manager, has been placed in control of the troubled programs and was directed to reform them. The city’s review of the programs, Carlton’s memo said, “will include an analysis of waste, fraud and abuse.” It added, “Without equivocation, there has been waste. Fraud and abuse will be determined.”

“If necessary,” Carlton stated, “the results of our review will be brought to the appropriate authorities for their determination.”

In his memo, Carlton said the city must retool the programs – not terminate them — and make them effective by using “best practices across the country… We must also eliminate providers that are not contributing to program goals.”

The new controversy surrounding the Hallandale’s CBP is similar in some aspects to that involving the city’s troubled Community Redevelopment Agency, which came under investigation by the Broward Inspector General Office five years ago. The findings: The city’s CRA lacked effective city oversight, agency funds were mixed with city funds, a good deal of spending lacked documentation, and policies changed frequently or were not adhered to. The IG found $2.2 million in questionable CRA expenditures from 2007 to 2012, including inappropriate loans and grants to local businesses and nonprofits.

The IG’s new probe – as reported by Florida Bulldog in June 2016 – was already underway when Carlton took over as city manager on Feb. 6, 2017.  He didn’t like what he found surrounding the CBP and HOP.

“During the past six years, the CBP and the HOP programs have lost their way for a complex variety of reason,” Carlton said in the memo. Successful bidders for city contracts “have contributed to the CBP and HOP at a rate which has grown so rapidly since the recovery of the Great Recession, that there are not enough small contractors of unemployed/underemployed workers in the city of Hallandale Beach to feed into the program.”

The programs ran afoul, he stated, because:

  • Program personnel for both the city and companies awarded contracts were hired often without a competitive process or without demonstrating the ability met the goals of the programs.
  • City monitoring staffers were not given “uniform standards or criteria… to follow” and were not included in negotiations to understand CBP provisions of each contract; and sanctions for failing to comply were less severe than the cost of complying.
  • “City administrators did not demand the excellence and fair-dealing required for the effective use of public funds. That is our fault, and the city administration will resolve these issues going forward.”
  • “The city commission also needs to shoulder some of the responsibility for the difficulties in this program. The rumors, confrontations, accusations and innuendos regarding abuses in the CBP/HOP are not new. When my predecessor brought a series of reforms on October 19, 2016, these reforms were approved by the city commission in a 3/2 vote…, but were not made a priority. The turmoil that swirled around city hall at the time, in part, allowed the need to implement the reforms as a priority of the organization to go unmet.”

In its July 7 report, the Broward IG also stated that Commissioner Sanders solicited and received contributions from developments seeking to do business with the city under the CBP program during the period of the investigation.

The IG report revealed some possible payment discrepancies that could receive closer review by the city:

  • PCAC had an agreement to pay $1,000 a month to Higher Vision to transport job trainees to Sheridan Technical College in Hollywood, with payments totaling $31,000. But the report said no services were provided after May 16, 2015. It also said the city provided free bus passes to the trainees to get to the school.
  • The city provided $17,000 from October 2014 to September 2015 for PCAC to send 10 women to Sheridan Technical to receive training as nurse aides. But six of them dropped out.

Report: Hallandale commissioner Anthony Sanders “engaged in pattern of misconduct”

By William Gjebre, FloridaBulldog.org 

Hallandale Beach Commissioner Anthony Sanders and Jessica Sanders

A preliminary report by the Broward Inspector General’s Office says Hallandale Beach City Commissioner Anthony Sanders “engaged in a pattern of misconduct” when he “failed to disclose payments” made to him and other family members by a community group which Sanders voted to give thousands of dollars in city grants and other funding.

The July 7 report obtained by Florida Bulldog also said that Palms Community Action Coalition Inc. (PCAC) made contractual payments to Higher Vision Ministries, where Sanders is the pastor and the only paid full-time employee. The report adds that Sanders solicited and received contributions for the church from developers seeking to do business with the city.

PCAC is a Hallandale Beach-based nonprofit organization that provides job training and community development services to local residents.

The various payments occurred during a three-year period in which Sanders voted in favor of PCAC, according to the report.  “Commissioner Sanders continued taking a salary from his employer, continued accepting significant payments from PCAC on behalf of his employer, failed to abstain from voting, failed to disclose the voting conflicts to the voting body either verbally or in writing, directly and indirectly solicited developers to give contributions to his employer, and accepted those contributions on behalf of his employer,” the IG report stated.

The report said the Inspector General plans to refer the office’s findings about Sanders to the Florida Commission on Ethics and the Hallandale Beach city commission “for whatever action those entities deem appropriate.”

“We are filing against Commissioner Sanders an ethics complaint charging a violation of the Broward code of ethics to be tried by an administrative hearing officer,” the report said.

If sustained, the allegations would violate provisions of state, county and municipal codes that prohibit elected officials from receiving anything of value to influence their vote, take any action that provides undue benefit to family members and require refraining from voting to avoid conflict and disclosures in such cases.

The report apparently stems from an investigation opened by the IG’s office, as reported by the Florida Bulldog in June 2016, involving the city’s Community Benefit Program (CBP). The program requires contributions from private developers vying for city projects over $1 million to help fund recruitment, training and hiring of city residents and purchasing from local vendors.

PCAC partnerships

According to the IG documents, it was Sanders who “initially promoted the idea that local workers should be included in city development.” The city requirements made it difficult for developers to win a city contract without a program partner, which had to be named in bidding documents. The IG said PCAC was frequently designated as “partner” in bid documents.

The Bulldog story said investigators were looking for voting conflicts in their review of city commission and Community Redevelopment Agency (CRA) minutes. The inquiry came three years after the IG found the city “grossly mismanaged” millions of dollars in CRA funds. Sanders was investigated and cleared of any wrongdoing in the IG probe four years ago, but did not escape criticism in the latest probe.

Sanders did not return calls seeking comment on the Inspector General’s latest assertions.

The new investigation of Hallandale Beach covered a period from January 2013 through December 2015. During that time city commissioners, including Sanders, approved direct grants to PCAC three times and development contracts that included the group as a “benefit plan partner” seven times, according to the report.

The city requires companies seeking contracts above $1 million to set aside funds for things like job training programs.

The 10 grants and development contracts ultimately “benefited PCAC a total of approximately $893,320,” the report said. Funds collected from successful bidders were later transferred to PCAC, amounting to $695,870; the balance came from city grants.

The report outlined the connection between the commissioner and the community group. “The OIG [Office of Inspector General] substantiated that PCAC made contractual payments to Higher Vision Ministries…, that PCAC employed his [Sanders’] son; and that PCAC also made other consulting and employment payments to the commissioner’s wife and another son.”

Payments to Sanders’s wife

According to the report, PCAC paid Sanders’ wife, Jessica, for consulting and grant writing and paid two of Sanders’ adult sons for part-time employment. Jessica Sanders had been involved with PCAC in 2011. “We found that PCAC directly paid the commissioner’s immediate family a total of approximately $7,588 between January 2013 and December 2015,” the report stated.

In addition, the report said that PCAC made monthly $1,000 payments to Higher Vision Ministries to transport job trainees to classes. But, it added, neither the church nor PCAC documented any rides. The IG said it determined PCAC paid Higher Vision approximately $27,000 for 613 miles of transportation service – or about $44 for “each accountable mile” under the agreement.

“In all,” the report said, “PCAC paid Commissioner Sanders’s employer and immediate family a total of approximately $38,688 during this three-year period.”

“Following one of Commissioner Sanders’s votes in November 2013 for a Hallandale Beach multi-million public workers project that included PCAC as a community benefit plan partner, PCAC paid an extra (that is, over and above $1,000 per month) $2,000 to Higher Vision Ministries with a memo notation of Donation/Pastor’s Appreciation,” the report stated.

In another instance, the report said, “…following city commission approval for direct city funding to PCAC between October and November of the following year [2014], it [PCAC] made extra payments totaling another $2,100 to Higher Vision Ministries.”

“As described in this report,” the IG report stated, “the commissioner was well aware of the nature of these conflicting relationships and their bearing on the propriety of his voting. Yet, Commissioner Sanders admitted that he did not disclose these relationships or payments to the public at any time during the period he voted to benefit PCAC.”

The IG report said investigators “also established that, while they were at city hall for a commission meeting involving one of the development votes, Commissioner Sanders solicited one of the project awardees to make a direct contribution to the Higher Vision Ministries church, who then asked a second developer to do the same. Their companies’ two donations to the church totaled $1,100.”

 

New majority on Hallandale commission wants to know: Where did CRA millions go?

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 Hallandale Beach City Commission. From left to right: Anthony Sanders, Anabelle Taub, Mayor Joy Cooper, Vice Mayor Keith London, Michele Lazarow

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).

Broward’s Inspector General probes Hallandale Beach CRA – again

By William Gjebre, FloridaBulldog.org 

Hallandale Beach Mayor Joy Cooper is flanked on the left by Commissioners Keith London and Michele Lazarow and on the right by Commissioners Bill Julian and Anthony Sanders. The commission also sits at the city CRA's board of directors

Hallandale Beach Mayor Joy Cooper is flanked on the left by Commissioners Keith London and Michele Lazarow and on the right by Commissioners Bill Julian and Anthony Sanders. The commission also sits at the city CRA’s board of directors

The Broward County Inspector General’s Office has launched another inquiry into Hallandale Beach’s Community Redevelopment Agency, three years after finding the city “grossly mismanaged” millions of dollars in CRA funds.

The first probe led to reform and a grand theft charge against the director of a local cultural program for misspending CRA grant money. What triggered the new probe, however, isn’t known.

“I cannot comment,” said Inspector General John W. Scott, who leads the independent watchdog agency that investigates allegations of fraud, corruption and gross mismanagement at the county and Broward’s 31 municipalities. He’s asked the city and the CRA to submit the requested information by July 1.

A key focus of the inquiry, however, is the city’s Community Benefit Program (CBP). The program seeks to encourage private development and city-funded projects to recruit, train and hire city residents and local vendors.

Tuesday’s letter to the city from the Inspector General’s Office requested a variety of CRA documents from Jan. 1, 2013 to the present. They include: all voting conflict memos submitted by city commissioners, who also serve for directors of the CRA; the minutes of all city commission and CRA meetings; a list of all bid solicitations with a Community Benefit Program component as well as documentation from vendors identifying specific partners to be engaged in the program.

In addition, Inspector General Scott’s office requested documents related to two groups that received grants from the city and the CRA: the Palms Community Action Coalition and the South Florida Educational Development Center.

The latest inquiry set off another disagreement among city officials.

“While the CBP has good intentions,’’ said City Commissioner Keith London, “it is my belief the program has been hijacked and abused by insiders who have used their power and influence to steer contracts and jobs to unqualified persons and companies for no other reason than their political connections.”

London said residents should “review the voting record of each commissioner who has blindly supported the CBP policy, every CBP expenditure and bid sheet awarding millions of taxpayer dollars to firms whose major qualification was their connection to city hall.”

But Mayor Joy Cooper, who has differed bitterly with London in the past, played down the significance of the IG’s records request.

We have been in compliance”

Cooper cited the city’s Hallandale Opportunity Program that monitors grants and contracts. She said the program’s monthly reports have indicated compliance with city provisions, including by the Community Benefit Program. “We have tightened up” controls over grants and contracts, Cooper said. “We have been in compliance.”

City Manager Daniel Rosemond added the same internal group has monitored city funds going to South Florida Educational Development Center and there have been “no performance issues.”

Rosemond likewise sought to downplay the significance of the Inspector General’s inquiry, observing that he merely asked for some records.

“This is not an investigation,” Rosemond said in an interview, adding “I don’t believe there is anything substantive” to the inquiry, but rather that the IG has received some information and “has a fiduciary responsibility to look at it.”

In an email to commissioners, Rosemond said, “The nature of the [IG] request appears to center around the city’s Community Benefit Program, its administration and recipients.”

Palms Community Action Coalition members could not be reached; South Florida Educational Development Center members did not return calls for comment.

Palms Community Action Coalition (PCAC) is a group attempting to prevent and reduce crime, drug abuse and gang activity. The coalition came under scrutiny during the Broward Inspector General’s previous probe – although there was no finding of wrongdoing. Under a three-year agreement with the city, PCAC has received a total of $306,000.

According to state documents, the South Florida Educational Development Center, established six years ago, is a non-profit group that provides educational job training for youth and adults in underserved areas. It received $45,000 last year and again this year, and will receive the same amount next year under a three-year agreement ending Sept. 30, 2017.

City Commissioner Michele Lazarow said she and Commissioner London have questioned the effectiveness of the Community Benefits Program. In some instances, she said, city funds appeared to be going to only a few groups. There is also concern that some firms receiving city contracts may be having trouble fulfilling promised job slots because there are not enough qualified workers in the city.

A city ‘investigated twice’

“I wonder how many other Broward County cities have been investigated twice,” said Lazarow.

Commissioner Anthony Sanders could not be reached for comment. Vice Mayor Bill Julian said he could not comment because he hadn’t seen the IG’s letter.

In March 2013, after a 14-month investigation, the Inspector General’s Office found $2.2 million in questionable expenditures by the Hallandale Beach CRA between 2007 and 2012, including inappropriate loans and grants to local businesses and non-profits, as well as the improper use of bond proceeds.

The city, the report stated, improperly spent $416,000 in CRA money for parks outside the CRA boundaries. The spending, which was not always documented, was often done at what amounted to the whim of former City Managers Mike Good and Mark Antonio, the report said.

The Hallandale Beach CRA, like other similar agencies in other municipalities, was established under a state law that allows the agency to raise and spend a large portion of increased property tax dollars collected within the CRA’s boundaries on projects aimed at eliminating slum and blight. Nearly 50 percent of those funds come from Broward County, which approved establishment of the agency.

While city officials contended that all expenditures were permissible under state law, the Broward IG cited in its report a 2010 opinion by Florida’s Attorney General that CRA expenditures must be connected to “brick and mortar” capital projects.

At the conclusion of the last investigation, Hallandale Beach officials denied wrongdoing and challenged the authority of the Inspector General to oversee the city’s CRA.

Nevertheless, the city ultimately made changes as a result of the probe that included updating its CRA development plans and adopting procedures for awarding grants. The city also announced plans to repay the CRA for funds used for parks outside the CRA boundaries.

The IG’s finding also led Broward prosecutors to charge Palm Center for the Arts (PCA) director Deborah Brown with grand theft in May 2014. The IG reported finding probable cause to believe that Brown spent nearly $5,000 in CRA funds on herself and her family. The funds were designated by the city in 2010 to send children on a trip to Washington, D.C.

The criminal case remains pending in Broward Circuit Court, with the next hearing set for Sept. 22.

Hallandale commissioners cash-in on new travel allowance policy they approved

By William Gjebre, BrowardBulldog.org hallandalecityhall

Hallandale Beach’s new travel reimbursement policy has paid big dividends to city commissioners less traveled.

Five Hallandale Beach city commissioners pocketed nearly $35,000 of their unspent travel allowances last month under the new policy they enacted last year. Previously, unspent travel funds were returned to the city’s general budget.

The new policy, in place since Oct. 1, 2013, allows commissioners to take home any money that’s left in their individual travel accounts at the end of the city’s fiscal year.

Four commissioners got checks from the city shortly after Hallandale Beach’s fiscal year ended on September 30. A fifth commissioner, Alexander Lewy, got his travel allowance payout when he resigned in May. The payouts represented salary boosts of up to 53%.

Mayor Joy Cooper was the only commission member to turn down the payout. Cooper, who spent more city funds traveling than all of the other commissioners, declined $2,781 in unspent funds from her $15,000 travel budget, according to city officials. Cooper traveled extensively to attend local, state and national meetings and conferences.

The five commissioners combined spent $10,145.

“I have no problem receiving it,” said Vice Mayor Bill Julian of his additional income. “It was budgeted money and better than asking for a pay raise.”

“If they wanted a raise they should have voted for one,” said Cooper, who responded in an email to the BrowardBulldog.org. “Elected officials should be here to serve the public, not make a living.”

Julian, who spent only $201 on city travel, got the biggest travel payout, $11,882. His $10,000 allowance as a commissioner was increased by another $2,083 when he was appointed vice mayor to succeed Alexander Lewy, who resigned in May. The increase was to cover more extensive traveling expected of Julian after he took over for Lewy.

Julian said he was “surprised” when he received a note from City Manager Renee Miller increasing his travel budget. The additional funds, he added, were authorized under the new city commission travel policy approved.

This was the total of Julian’s travel spending for the city last year: $125 to attend three local community functions before becoming vice mayor, and another $80 to attend a church sponsored dinner-dance in Dania Beach after he became vice mayor.

“I didn’t go on many trips,” Julian said. He explained that he is the chief caregiver for his 91-year-old mother and found it difficult to be away for “more than a day or two.”

Commissioners Michelle Lazarow and Anthony Sanders each had travel accounts of $10,000. Lazarow spent $2,527 and was reimbursed $7,473. Sanders spent $3,844 and got a check for $6,156.

Commissioner Leo Grachow, appointed to the commission in May to replace Lewy, spent $76 from a pro-rated $4,167 travel account. He received a payout of out $4,091. Grachow lost a re-election bid this month to Keith London, who was sworn in to replace Grachow on the commission on Nov. 17.

Former Vice Mayor Lewy’s travel account for his seven months in office the past fiscal year was $8,750. He spent nearly $3,500 and got paid more than $5,200.

Excluding Cooper, the five commission members received payouts for unspent travel totaling $34,855, or 77.4 percent of their budgets totaling $45,000. Under federal laws, the travel payouts are considered income and taxable.

City commissioners received an annual salary of $22,378 last year. The travel payouts boosted the city income for Julian, by 53 percent; Lazarow, 33 percent; and Sanders, 27%.

Sanders, who did not respond to requests for comment, joined with Julian and Lazarow in voting to approve the travel reimbursement policy in a 3-2 vote in July 2013. Cooper and Lewy were opposed.

Lazarow, said via email that she now has some concerns about the policy and plans to ask the city commission to review it.

“In light of what has transpired since the policy was enacted, I do not believe the item [was] properly vetted, and as result, I will be bringing this back for reconsideration in the near future,” Lazarow stated.

Meanwhile, the city commission will be operating under the same travel policy during the current fiscal year that began Oct. 1.

Hallandale city manager’s going away gift of public money to departing commissioner

By William Gjebre, BrowardBulldog.org 

Hallandale Beach City Manager Renee Miller, ex-Vice Mayor Alexander Lewy

Hallandale Beach City Manager Renee Miller, ex-Vice Mayor Alexander Lewy

Thanks to Hallandale Beach City Manager Renee Miller’s generosity, former Vice Mayor Alexander Lewy collected a tidy gift of taxpayer cash after he quit the city commission last May before his term was finished.

To make it happen, Miller liberally interpreted a new and controversial city rule that commissioners’ enacted last year. The rule allows them to pocket thousands of unspent city dollars every year from their annual travel accounts.

“I made judgment calls,” Miller said when asked about the city’s $5,253 farewell payout to Lewy.

Miller said she decided Lewy was entitled to a payout even though he left his commission seat just seven months into the fiscal year. Likewise, she acknowledged hiking Lewy’s payout by raising his yearly travel account to $15,000. Commissioners’ standard travel budget per year is $10,000.

“I didn’t ask for it,” said Lewy, who quit to work for a lobbying group. He pointed out that he voted against allowing city commissioners to be paid for unused travel funds.

Lewy compared the travel fund payouts to other city benefits, like health insurance. “It’s not my fault that I benefited by it,” Lewy said. “I didn’t receive anything I didn’t deserve.”

Lewy said the commission authorized the increase to $15,000 as a way of providing additional funds for the mayor and commissioners who travel more on city business, but the approved resolution says each would receive $10,000 apiece. The city manager was also authorized to establish “an additional travel account” to cover such travel.

At the July 2013 meeting where the new travel policy vote was taken, Miller suggested $5,000 more for Mayor Joy Cooper plus an additional $5,000 for those traveling frequently on behalf of the city, according to city commission video.

In interviews, Commissioners Michele Lazarow and William Julian raised concerns about Miller’s payout to Lewy. Each said the city administration should have asked the commission’s approval before increasing a commissioner’s travel budget beyond $10,000.

“It was not voted up,” Lazarow said, adding the higher budget for Lewy “is a surprise.”

“It’s not right to get money if he leaves” before the end of the budget year, Julian said. He said the notion that anyone would leave early wasn’t contemplated when the policy was adopted.

Without consulting the commission, Miller said she decided to pay Lewy for unused travel on a prorated basis for the year. She also authorized $15,000 travel accounts for both Lewy and Cooper, who also voted against the travel payout policy, because they were tasked with attending numerous local, state and national conferences and meetings on the city’s behalf.

When Lewy quit he’d only spent $3,497 of the $10,000 in his city account. Miller, however, pro-rated his payout based on a $15,000 travel budget.

The city manager’s calculations allowed Lewy to receive nearly $3,000 more than he would have had his benefit been calculated using the standard $10,000 travel budget.

In 2012-2013, both Cooper and Lewy traveled extensively on the city’s behalf, each exceeding their $10,000 travel budget. The commission approved an extra $5,000 for both that year.

Records show that through Aug. 18, Cooper had spent $10,814 in travel. If she spends no more by the end of the fiscal year on Sept. 30, she’ll be entitled to a payout of $4,186 from her $15,000 travel account. The fiscal year ends Sept. 30.

Here is the comparable travel spending for the three commissioners who voted to approve the travel policy. The number in parentheses is the current amount each would be due after Sept. 30: William Julian, $277 ($9,723); Michele Lazarow, $2,333 ($7,667); Anthony Sanders, $3,844 ($6,156).

Commissioner Leo Grachow, appointed by the commission in May to fill Lewy’s seat, has a $5,000 travel account this year. He’s spent $76, and stands to collect $4,924 after Sept 30.

 

Hallandale commissioners approve taking from the city, giving to themselves

 

By William Gjebre, BrowardBulldog.org 

Commissioners Anthony Sanders, Bill Julian and Michele Lazarow

Commissioners Anthony Sanders, Bill Julian and Michele Lazarow

Hallandale Beach city commissioners have created a new policy they can use to boost their take home pay by allowing them to pocket up to $10,000 a year in unspent funds from their individual travel accounts.

The city’s five commissioners each earn about $22,000 for their part-time service. In addition, each gets a  $10,000 annual travel allowance.

Before the change took effect October 1, the city had a use-it, or lose-it policy and unspent travel dollars reverted to the city budget. But now commissioners get to keep travel account cash they choose not to spend while on city business.

By a 3-2 vote in July, the commission directed that unspent travel funds be reimbursed to commissioners after the end of the city’s fiscal year on September 30.

Voting for the new reimbursement policy were the three commissioners who traveled the least in 2012-2013 and had leftover funds: Anthony Sanders, Bill Julian and Michele Lazarow.

Mayor Joy Cooper and Vice Mayor Alexander Lewy opposed the change. Both exceeded their $10,000 travel fund last year and even received additional city travel funds – Cooper $7,500 and Lewy $5,000, city records.

SPLIT REACTION

The change drew both criticism and support. “I think it’s a betrayal of trust,” community activist Charlotte Greenbarg said of the cash in policy. Referring to the $50,000 total travel allocation for commissioners, she said, “They shouldn’t be traveling that much.”

“I don’t see any problem with it,” said Csaba Kulin, another community watchdog and former unsuccessful candidate for a seat on the commission.

The idea of refunding unused travel expenses to commissioners was suggested at the July 29 meeting by Commissioner Sanders. He noted it has been done with unspent health insurance funds for years.

The new travel reimbursement policy could benefit Sanders the most. In 2012-2013, he spent  $1,040 from his $10,000 travel account, according to city records. If he spent the same amount this coming year, he would be reimbursed $8,960, representing a 40% salary hike.

Lazarow spent $2,329 last year. If she spent the same in the coming year, she would be reimbursed $7,671, representing a 34% salary increase.

Julian spent $4,265 last year. If he spent the same this year, he would be reimbursed $5,735, representing a 25% salary hike.

The trio defended the policy change, which was in addition to a 2.5% cost of living increase for commissioners approved at the same July meeting.

“We have to have reasonable income to spend more time at the office and not need another job,” said Sanders, a minister.

“I don’t go on many trips,” said Julian, noting that his commission salary is his only steady income and helps him take care of his elderly mother who lives with him in a rented duplex. The travel reimbursement, he said, would be taxable and “added income.”

Lazarow said the change was a way to adjust commissioners’ pay without increasing their base salary.

Meeting minutes record that Mayor Cooper opposed the change and instead supported allowing for an increase in travel allowances when commissioners exceed their budget and have been selected to represent the city at state and national meetings.

In an interview, Cooper said that if commissioners’ wanted higher pay they should have sought a salary increase.

BIG TRAVELERS

City records indicate that when Cooper exceeded her $10,000 travel account last year the commission added $5,000, and later another $2,500 to cover additional business travel expenses.

Cooper traveled to attend meetings of the National League of Cities in Boston and Washington D.C., and the U.S. Conference of Mayors in Las Vegas, San Francisco and Washington D.C. City records show she spent all but $439 of her $17,500 travel budget last year.

Lewy, a Democratic candidate for a state House seat, said in an interview that letting commissioners keep their unspent travel cash was a “disincentive” for commissioners to travel on city business because they may view use of funds as “taken from their own pocket.”

Lewy, who had his travel budget increased to $15,000 last year, went to National League of Cities meetings in Boston and Washington D.C. and also took other trips to the nation’s capital in connection with the city’s attempt to obtain U.S. Postal Service property near city hall. He had $1,131 remaining in his $15,000 travel budget at the end of the fiscal year.

The 2.5% cost of living increase raised salaries for four commissioners to $22,378. Mayor Cooper’s base salary, however, is slightly less at $21,727 because she turned down an increase several years ago during tougher economic times, according to the city’s Human Resources department.

Hallandale commissioners this year also get a $12,531 annual stipend to cover their purchase of health insurance. They are the only city officials eligible to have any left over funds refunded to them personally.

Last year, four commissioners got back money from unspent medical insurance funds. Commissioner Lewy received $5,402 and Commissioner Sanders got $1,235. Commissioners Lazarow and Julian, who were elected in November, 2012, received $1,030 and $1,501, respectively.

Mayor Cooper had no excess funds to claim last year. However, she was reimbursed $11,314 – the amount of last year’s stipend – after providing documentation to support her claim that she obtained outside coverage for at least that amount, according to city personnel official Radu Dodea.

Dodea declined to disclose what plans commissioners purchased from outside sources citing federal laws governing the privacy of medical records.

 

Two senators short-circuit Legislature’s plan to audit troubled Hallandale Beach CRA

By Willliam Gjebre, BrowardBulldog.org 

State Sen. Eleanor Sobel, D-Hollywood and State Sen. Oscar Braynon II, D-Miami Gardens

State Sen. Eleanor Sobel, D-Hollywood and State Sen. Oscar Braynon II, D-Miami Gardens

A Florida Legislature’s joint auditing committee is dropping its inquiry of Hallandale Beach’s questionable use of local redevelopment funds at the urging of two area state senators, one a long-time acquaintance of Mayor Joy Cooper.

Democratic Senators Eleanor Sobel and Oscar Braynon II, representing portions of Hallandale Beach, could not be reached for comment, despite repeated calls, to elaborate on a letter they signed recommending against a state audit or any action related to the controversial city spending of Community Redevelopment Agency (CRA) funds.

In addition, the committee will not ask the Florida Attorney General for an updated opinion on how CRA funds can be used. This was a contentious issue between the city and the Broward Inspector General’s Office which found that Hallandale Beach had “grossly mismanaged” millions of dollars in CRA funds while ignoring a 2010 opinion that limited CRA spending to “bricks and mortar” redevelopment projects.

‘NO ONE STEPPED TO THE PLATE’

“Broward has a huge (legislative) delegation and no one stepped to the plate and said let’s take a look at what happened to the $80 million” received by the city’s CRA from property tax dollars since 1996 to battle slum and blight, said Frank Schnidman, an attorney and senior fellow at Florida Atlantic University’s School of Urban and Regional Planning.

The Joint Legislative Auditing Committee “depends on local input and two delegation members said don’t…look back.” Schnidman said.

With the Broward County Commission recently having conceded it has no authority to order an audit of the Hallandale Beach CRA under an existing operating agreement, the Legislature’s audit committee was an opportunity for an analysis of the city’s CRA spending, said Schnidman, who worked as a consultant to Hallandale’s CRA for about a month earlier this year.

“State law has to [be amended] to establish clear criteria so cities, counties and CRAs can be held accountable,” said Schnidman.

Hallandale Beach’s CRA is funded by a portion of property taxes collected with its boundaries, roughly three-fourths of the city west of the Intracoastal Waterway. By law, the funds are to be used to revitalize the area.

Sen. Joseph Abruzzo, D-Palm Beach, chaired the Legislature’s auditing committee in June when he and vice chairman Rep. Lake Ray, R-Duval, sent a certified letter to Hallandale Mayor Joy Cooper city citing the Inspector General’s report and seeking further information about questionable spending. The letter warned that if expenditures were found to be improper the city might have to restore the money to the CRA trust fund.

In an interview, Abruzzo, now the committee’s vice chairman, said not a single Broward legislator “came forward to ask that we take it up. We can’t do anything until we have a request [from a legislator].”

Instead, the committee has only the joint letter from Sobel and Braynon.

“Out of respect for the two, the committee will not go forward with an audit,” said committee staff coordinator Kathy Dubose.

INSPECTOR GENERAL’S REPORT

The committee had waded into the thorny issue of Hallandale Beach’s CRA spending after receiving the Broward Inspector General’s 56-page report that found city officials had co-mingled CRA redevelopment funds with city funds for many years and misused CRA funds for grants to nonprofit groups and for such expenditures as fireworks displays. The committee asked the city to explain the allegation of misuse of funds.

At the same time, the committee urged the city commission to ask the Florida Attorney General for an updated opinion to clarify how CRA funds can be spent, and to abide by the decision. The city rejected that request in a 3-2 vote in July supported by Mayor Joy Cooper and commissioners Alexander Lewy and Anthony Sanders.

Neither Sobel nor Braynon responded to multiple requests for comment about their letter recommending against a state audit.

Their letter, however, Sobel and Braynon’s letter urged the committee to “abandon” any plans to audit the city or its CRA as “unnecessary and duplicative.”

While not mentioning the county’s inquiry found “gross mismanagement” of tax dollars by top city leaders, including questionable loans and grants to businesses and nonprofits, the two senators embraced arguments that paralleled the city’s arguments. They noted the city cooperated by providing requested documents and that city personnel gave interviews even though it was the city’s position that the Inspector General did not have jurisdiction. The city also implemented many of Inspector General’s recommendations, including a reorganized CRA staff and procedures, the letter said.

“It is our opinion that the city and the Hallandale Beach CRA are being punished because they asserted their right to express a difference of opinion with the OIG,” the letter said. “Finally, we are concerned that the state legislature is being used to further political agendas at the local level.”

Former city commissioner Keith London said he was disappointed the committee has backed off its probe. “It has egg on its face and its tail between its legs,” he said.

London, who lost a bitter race for mayor against Cooper last year, also said he was not surprised Sobel made a recommendation against a state audit because she and Cooper have been friends for years.

Cooper acknowledges her 14-year friendship with Sobel, but says it had nothing to do with the senator’s opposition to the Legislative audit. Sobel’s stand was based on her review of the situation, nothing more, the mayor said.

“I think she responded knowing Hallandale Beach and what we have done and how much we have accomplished,” Cooper said. “Why go any further?”

Cooper blamed London for attempting to keep the issue in the public eye. “We have a sour grapes person who lost an election,” said Cooper. “I think the city is doing wonderfully.”

While the committee’s plans for a Hallandale audit appear over, Abruzzo said the matter could resurface if a member of Broward’s legislative delegation steps forward to ask for one.

Defiant Hallandale commissioners reject call for new legal opinion on CRA spending

By William Gjebre, BrowardBulldog.org hallandalelogo

Hallandale Beach city commissioners have shot down a request from a legislative committee that it seek a new opinion from the Florida Attorney General on how community redevelopment funds can be spent and abide by the ruling.

Sitting as directors of the city’s Community Redevelopment Agency (CRA), commissioners voted 3-2 Wednesday night to approve telling the Florida Joint Legislative Joint Auditing Committee that the CRA “cannot at this time advocate seeking the requested” Attorney General opinion.

The action raised the likelihood that state legislators could order an audit of the city’s CRA spending. “I’m not concerned if they order an audit; they can do that regardless,” CRA Attorney Steven Zelkowitz said after the Wednesday meeting.

The state committee got involved after reviewing a highly critical report by the Broward Inspector General’s Office that found Hallandale’s CRA had “grossly mismanaged” and misspent millions of tax dollars.

The Inspector General’s report relied heavily on a 2010 Attorney General’s opinion that said CRA funds should be used for “brick and mortar” projects. City officials, however, have questioned that interpretation of state law and said that the use of CRA funds for things like handouts to local nonprofit groups and city fireworks displays are legitimate expenditures.

Hallandale’s defensive posture appears to have prompted the legislators to suggest the city seek a new legal opinion that it would agree to live by.

The city’s resistance to that idea was clear in a four-page report to the legislators that was submitted to the CRA’s board – Hallandale’s five commissioners for their approval.

“The questions the committee has requested to be posed to the Attorney General will have an impact on (CRA’s) on a statewide basis,” the report said. “The city and (its CRA) cannot legally bind themselves to abide by a yet to be issued [opinion].”

Zelkowitz, City Manager Renee C. Miller and City Attorney V. Lynn Whitfield wrote the report.

“I’m very disappointed,” said Commissioner Bill Julian, who with Commissioner Michele Lazarow favored seeking the Attorney General’s opinion but were outvoted.

“I’m not surprised” by the vote, Lazarow said.

Mayor Joy Cooper, who attended via phone, Vice Mayor Alexander Lewy and Commissioner Anthony Sanders voted for the report. After the meeting, Lewy said the city has made numerous improvements to the CRA recently.

In response to several other matters raised by the state committee, commissioners agreed to reply that is their position that state law and a few case rulings do not prohibit the questioned expenditures. “In fact, the statutes and case law provide a broad framework for the expenditure of CRA monies,” the report said.

On another issue, the city’s report to the legislature noted that while Hallandale had co-mingled city funds with CRA money in the past — which the Inspector General said was improper — it established a separate CRA trust in May, 2012 and reported the fund balance is approximately $15 million at present.

At the meeting, commissioners also unanimously approved an eight-page report outlining the city’s response to recommendations made by the Inspector General.

The report – a copy of which will be sent to the state audit committee – said Hallandale has:

*Stabilized CRA staff by naming City Manager Miller executive director and hiring a new Deputy City Manager to serve as CRA director and supervise key departments that interact with the CRA.

*Provided training to top city officials regarding provisions of the state law, Chapter 163, governing CRAs, and established a process and standards for awarding funds/grants to nonprofit groups, as well as on-going performance evaluation.

*Trained staff on policies and procedures for all CRA programs; established legal and financial reviews of loans and other financial funds, and implemented controls to monitor all CRA expenditures.

William Gjebre can be reached at wgjebre@browardbulldog.org

 

 

Hallandale may seek Attorney General opinion on CRA spending; statewide impact seen

By William Gjebre, BrowardBulldog.org hallandalewateretower1

Hallandale Beach city commissioners on Wednesday will consider asking the Florida Attorney General for a ruling on how community redevelopment funds can be spent, a decision that could have a far-reaching impact.

“This is an opinion that would affect every CRA in the state of Florida,” Hallandale Beach Community Redevelopment Agency (CRA) attorney Steven Zelkowitz cautioned city commissioners at a recent meeting.

Commissioners will also review the city manager’s draft response to recommendations made by the Broward Inspector General’s office, which has criticized the city for “grossly mismanaging” millions of dollars in CRA funds.

While stating they are complying with many of the Inspector General’s recommendations, city officials continue to challenge the accusation that community development money was misspent, primarily by funding certain nonprofit groups.

With both sides at odds, the push to involve the Attorney General’s Office is coming from a state committee that has injected itself in the matter.

The Florida Legislative Joint Auditing Committee, expressing concerns about questionable spending cited by the Inspector General, recently invited the city to seek a new legal opinion that might clarify CRA spending rules.

The committee made the request after noting that Hallandale Beach officials questioned a 2010 Attorney General’s opinion that held CRA funds should be used for “brick and mortar” projects. In its letter to the city, the legislative committee also asked the city to agree to adhere to any new legal ruling.

Hallandale CRA attorney Steven Zelkowitz

Hallandale CRA attorney Steven Zelkowitz

City officials have argued the 2010 opinion does not limit CRA spending only to brick and mortar projects, and contend the ruling was nonbinding anyway.

The state committee also has asked the city to explain its questioned expenditures and to provide a copy of its response to the Broward Inspector General’s recommendations.

CRA attorney Zelkowitz could not be reached for comment. But during his remarks at a June 17 CRA board meeting, he noted that it was unusual for the committee to have asked the city to seek a new legal opinion and warned about the pitfalls in doing so.

“We have never seen a request that actually goes so far as to say we would like you, as a board, to request an Attorney General opinion as to certain matters and…(to) abide by it,” said Zelkowitz. “This is not to be taken lightly.”

A majority vote by Hallandale Beach’s five city commissioners, who also sit as the CRA’s board of directors, is needed to get an opinion, Zelkowitz said.

Zelkowitz told commissioners the state legislative auditing committee could order an audit of the CRA even if the city receives an Attorney General opinion that favors the city’s position or if the city does not ask for a legal opinion.

City Manager Renee C. Miller’s eight-page draft response regarding the Inspector General’s recommendations cites the 2010 legal opinion in defense of the city’s actions. It states that “…a close reading of this opinion will reveal that the Attorney General gives no definite answer as to whether or not all grants to nonprofits are outside the scope of the Community Redevelopment Act.”

Much of the remainder of the response outlines how the city has altered its practices – many of them absent or disregarded in the past – in an effort to comply with the Inspector General’s recommendations and comport with state law governing CRAs.

The response said the city has:

*Stabilized CRA staff by naming Miller executive director and hiring a new Deputy City Manager to serve as CRA director and supervise key departments that interact with the CRA.

*Provided training to top city officials regarding provisions of the state law, Chapter 163, governing CRAs, and established a process and standards for awarding funds/grants to nonprofit groups, as well as on-going performance evaluation.

*Established a separate CRA trust account – CRA property tax funds were commingled with city funds before – and indicated it would provide information on the trust fund balance by the end of the fiscal year.

*Trained staff on policies and procedures for all CRA programs; established legal and financial reviews of loans and other financial funds, and implemented controls to monitor all CRA expenditures.

In another development, the city commissioners have agreed to pay Zelkowitz’s law firm $40,000 more for additional legal work stemming from the Inspector General’s report. Zelkowitz told commissioners his firm had exhausted $60,000 in its contract with the city because of the extra work.

Wednesday’s meeting was scheduled after a dispute among commissioners on the need for a public hearing. Mayor Joy Cooper and Vice Mayor Alexander Lewy wanted to have Miller and Zelkowitz prepare responses and brief commissioners individually.

They were outvoted, 3-2, in favor of a public meeting. It was backed by commissioners Michele Lazarow, Bill Julian and Anthony Sanders.

The Inspector General’s probe involved a review of the city’s purchase of property from Sanders’ nonprofit High Vision Ministries at 501 NW First Ave. The Inspector General, however, cleared Sanders of an allegation that the CRA showed favoritism toward him by substantially overpaying his nonprofit group for the property.

Higher Vision brought the property in 2001 for $45,000 and sold it to the city in 2009 for $235,000. Appointed to the commission in 2008, Sanders did not vote on the purchase.  In between the purchase and the sale, the CRA gave the group $46,000 for property improvement; the group was required to repay only $31,000 of the loan, with the balance forgiven.

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