Hallandale commissioner Anthony Sanders resigns amid allegations of wrongdoing

Hallandale Beach Commissioner Anthony Sanders and Jessica Sanders

UPDATE, Aug. 11 By William Gjebre, FloridaBulldog.org:

Hallandale Beach City Commissioner Anthony Sanders resigned his commission seat today on the heels of a scathing report from the Broward Inspector General’s Office that said he “engaged in a pattern of misconduct” in the awarding of city grants and other funding.

“To the residents of Hallandale Beach and Mayor Joy Cooper…I have decided to end my term as Commissioner of the City of Hallandale Beach effective today,” Sanders said in his resignation letter. He said in his letter there was “toxicity” on the current commission.

Sanders, a commissioner for nine years, had generally supported Cooper in controlling the commission majority until the most recent election.  He denied any wrongdoing in his formal response to the IG report, which was finalized earlier this week.

City commissioners next week are expected to call a special election to fill Sanders’ seat because there is more than a year remaining on his four year term.

By William Gjebre, FloridaBulldog.org 

July 11 – 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).

Holness: Margate isn’t the only city that’s mishandled CRA funds

By William Gjebre, BrowardBulldog.org 

Broward Commissioner Dale V.C. Holness

Broward Commissioner Dale V.C. Holness

In the wake of a critical inspector general’s report that accused Margate of mishandling millions of dollars in community redevelopment funds, Broward Commissioner Dale V.C. Holness says he expects similar findings of wrongdoing about other cities as the county’s investigation continues.

“Unfortunately, this is not the only CRA (Community Redevelopment Agency) handling it this way; others are doing it,” said Holness. “Funds should be utilized…to rid areas of slum and blight, reduce unemployment and help businessmen. CRAs are going for big projects that don’t help neighborhoods and small businessmen.”

The inspector general referred the matter to the Broward Commission “for any action they deem appropriate,” stating the county may reclaim as much as $2.7 million from Margate’s Community Redevelopment Agency (MCRA). The commission has yet to debate the matter.

But Holness, the only member of the nine-member commission to respond to requests for comment, said he’s more interested in the Margate CRA using the funds “the way though should be used, but are not” rather than focusing on reclaiming any mishandled funds.

Attorney Frank Schnidman, a CRA expert and senior fellow at Florida Atlantic University’s School of Urban and Regional Planning, also expects county overseers to find that other CRAs mishandled funds similar to Margate. CRAs have “not paid attention as to how to account for funds left over” at the end of the year, treating their funds “as another [city] account and not as a trust fund” to be maintained separately, Schnidman said.

The county’s findings gives it “leverage to bring Margate to the table to get them to comply” with state requirements through an agreement that would tighten accountability, Schnidman said. If no agreement is reached, the county “has the legal right to the return” of the $2.7 million in county property tax funds that the IG identified in its report.

Should the county take no action, commissioners would be left to explain “to the taxpayers not going after the money,” Schnidman said.

The inspector generals’ July 22 report found that the Margate CRA had “engaged in misconduct in connection with the handling of tax increment financing (TIF) funds it received from Broward County and other taxing authorities.” TIF funds come from taxes levied on the increased value of property in the designated redevelopment area.

“We found that the MCRA has a pattern of intentionally retaining excess funds for the later use of whatever unspecified matter it desired,” the report state. “The MCRA’s failure to appropriate the money in accordance with any legally prescribed alternatives has resulted in a debt to Broward County of approximately $2.7 million for the TIF monies contributed in fiscal years 2008-2012.”

Under state law, the report said, the agency must allocate excess funds to projects to be completed within three years, to reduce existing debt, or to place money in accounts to pay down future anticipated debt. Otherwise, end of the year funds have to be paid back to the county, the city, or the North Broward Hospital District – the entities contributing funds to the Margate CRA.

The report cited one Margate CRA official who informed his board two years ago that the agency “had roughly $10 million in cash that was not committed to any project.”

The county’s report said Margate CRA officials claimed that the funds were allocated to the long-awaited City Center project. However, the report concluded, “…evidence plainly shows that the MCRA has never appropriated a single dollars of annual excess TIF monies for that project.”

In its response to the inspector general, the Margate CRA asserted that it was in “compliance with the spirit if not the letter” of state law, asserting said it “did not hoard public monies for improper purposes.” It nevertheless offered to “appropriate money it ‘hoarded’ to a more specific mandated option,” according to the response prepared by Rachel Bach, a Margate CRA official.

The county’s report on Margate stemmed from an investigation started last September of 10 Broward cities and appeared to center on their handling of end-of-year funds. Other cities included Hollywood, Fort Lauderdale, Lauderdale Lakes, Davie, Pompano Beach, Deerfield Beach, Plantation and Coral Springs.

The probe followed a yearlong investigation of the Hallandale Beach CRA in which county investigators found the agency made $2.2 million in questionable expenditures. The Hallandale investigation and report, issued in March 2013, followed a string of stories in BrowardBulldog.org about questionable city loans to local businesses and controversial land purchase through the CRA.

The inspector general’s office also previously determined that Lauderdale Lakes misspent over $2.5 million in CRA funds.

Margate, like Hallandale before it, challenged the authority of the inspector general to investigate the city’s CRA.

“No report should be issued in this investigation, and if it is, it should be issued to the MCRA or the City of Margate, and not Broward County,” the Margate CRA stated in its response.

The Inspector General has dismissed that jurisdictional claim, stating it has the authority to investigate and asserting that it will continue to probe expenditures of CRA funds.

Hollywood tenants pushed out for upscale housing sue for relocation assistance

By William Gjebre, BrowardBulldog.org 

Hollywood Circle's proposed 25-story housing and hotel project at Young Circle.

Hollywood Circle’s proposed 25-story housing and hotel project at Young Circle.

Residents of a Hollywood apartment building say they are entitled to relocation assistance after they were forced out of their homes on short notice to make way for a city-sponsored, multi-million dollar redevelopment plan.

The residents made the allegations in a class action lawsuit filed in Broward Circuit Court by Legal Aid Service of Broward County. The suit seeks monetary damages against the city of Hollywood and the project developer, Hollywood Circle LLC.

The city and the developer failed to establish a required tenant relocation assistance plan and to provide adequate public notice to Townhouse Apartments residents before approving the most recent development agreement, the complaint says.

Residents allegedly received no direct notice regarding possible demolition of their building. In addition, the suit claimed the operators of the complex used unfair and deceptive measures in renting the apartments in the months prior to the eviction notices.

Tenants were ordered to move at the beginning of the winter tourist season in late 2013, forcing them to incur higher rents or settle for less desirable housing than they could afford, the lawsuit says.

Those who were forced to move included a 70-year-old man who had lived at Townhouse Apartments for 19 years. The complex, just off Young Circle, was near shopping and public transportation, a convenience because some of the tenants did not have personal transportation.

WORKING CLASS PEOPLE FORCED OUT

“These were working-class people,” said Sharon Bourassa, the Legal Aid attorney who filed the lawsuit on behalf of most of the former residents. “It would be easy [for the developer] to do the right thing. But they would rather fight this and pay big legal fees…than settle with these people [tenants]. … They want to put up a big money-maker.”

Legal Aid provides free civil legal advice, representation and education to the disadvantaged of Broward County.

Townhouse Apartments, at 1776 Polk St., and other properties near Young Circle in downtown Hollywood, have been designated by the city as being located in a blighted area as defined under the state’s Community Redevelopment Act. With that designation, the city would divert increased property taxes to developers to spur urban renewal.

Developer Hollywood Circle, which currently does business as Townhouse Apartments, plans to build a 25-story upscale housing complex with 397 apartments and 104 hotel rooms.

The lawsuit, filed in May, asserts that ousted residents are due relocation assistance, but that the city failed to set up a plan under both state law and a related city ordinance governing community development projects. The developer’s agreement with the city obliges the developer to do the same, the lawsuit says.

In response to Legal Aid‘s lawsuit, the city last week denied that it had any responsibility to assist the tenants and asked the court to dismiss the case. The city has rejected requests by Legal Aid to pay each tenant $4,000 in relocation assistance, according to City Attorney Jeffrey Sheffel.

‘PREPOSTEROUS’ LAWSUIT

“We believe it’s preposterous,’’ Sheffel said of the allegations in the lawsuit.

According to Sheffel, the city provided adequate notice of public hearings about the redevelopment project. He said residents were aware of possibly having to move because they had been paying rent on a month-to-month basis.

“There was an abundance of affordable rentals in that area,” he said. The lawsuit acknowledges that rentals existed, but said they were generally less desirable or more expensive.

Lawyers for Hollywood Circle said their client was under no obligation to provide a relocation plan or assistance, arguing that the lawsuit “improperly seeks to join Defendant City of Hollywood with Defendant Hollywood Circle as if they have the same obligation and duties.”

Similarly, the developer’s court filings maintain that public hearing notices on different aspects of the development agreement were the obligation of the city. They also denied that deceptive and unfair practices were used in renting the apartments before the order to vacate.

Matthew J. Feeley, of Miami’s Buchanan, Ingersoll and Rooney, represents Hollywood Circle. He did not respond to a request for comment.

Real estate developer Charles “Chip” Abele Jr. is Hollywood Circle’s managing director. He did not respond to a request for comment via a public relations firm.

DEMOLITION PERMIT ISSUED

The owner of the current Townhouse Apartments, a 12-story building, is Block 55 LLC, which merged last year with the Hollywood Circle development firm. It obtained a demolition permit from the city on June 19.

Legal Aid Service countered last week by seeking an injunction to block demolition of the old building until the lawsuit is settled. A hearing on the request for an injunction is scheduled for today, July 2.

The case is before Broward Circuit Judge John J. Murphy.

The move to redevelop the Townhouse Apartments property began in July 2004, when the city of Hollywood and its Community Redevelopment Agency entered into a development agreement with SFD@Hollywood LLC to replace the building with a project of 500 “upscale residential units,” 125,000 square feet of ground floor commercial space and parking. The estimated value at completion was $250 million.

To assist the project, the agreement called for the city and its redevelopment agency to pay the developer up to $14.5 million over a period of approximately 20 years.

That agreement changed in October 2006, including the addition of a provision that “…developer will coordinate any tenant relocation program with and through the city’s Housing Division.” Some time afterwards, SFD transferred the agreement and interest in Townhouse Apartments to Block 55.

The development agreement was altered again in 2012 to reduce the number of residential units in the proposed 25-story high rise to 397 and to add 104 hotel units, commercial space and parking. The new agreement also excluded the 2006 provision regarding relocation assistance.

Months later, Block 55 merged with Hollywood Circle LLC, which acquired the development agreement, according to the lawsuit.

PROPERTY TAXES FOR DEVELOPER

The 2012 agreement also changed the payment structure. It stated the developer would receive half of the property tax increase generated by the project once completed. City documents stated the payments would continue until the expiration of the current Community Redevelopment Agency in 2025.

Legal Aid’s lawsuit contends that many of the tenants faced severe hardships when they were forced to leave Townhouse Apartments on short notice last year.

Glory Harris, 62, moved into the complex on June 1, 2013, paying first and last month’s rent and security, for a total of $1,800. Less than four months later, on Sept. 27, she received notice to vacate. Had she known of the owner’s intent she would not have moved in, the suit says.

Harris ultimately borrowed $2,160 to move to a more expensive apartment away from nearby shopping. Because she does not drive, she now pays someone to take her shopping.

Six-year resident Eanis Levinson, 68, asked management last August about a rumor that the building was going to be demolished. She paid September’s rent after being assured  “she had nothing worry about.”

On Sept. 27, she received notice to relocate and was soon “threatened and harassed” daily about moving. The stress led her to depart the following month, but she could only afford a room in a nearby house. Instead of a kitchen, she only has a hot plate.

Earl Martin, 70, a 19-year resident living on a fixed income, got a similar termination notice the same day. He found an efficiency apartment, but because of its small size had to dispose of much of his furniture and other belongings.

Hollywood planning board members quit after conflict of interest warning from city attorney

By William Gjebre, BrowardBulldog.org 

Hollywood City Attorney Jeffrey Sheffel

Hollywood City Attorney Jeffrey Sheffel

Two Hollywood Planning and Development Review Board members have resigned after being warned by the city attorney of potential conflicts if they continued to serve while doing work for projects needing board approval.

Joseph B. Kaller an architect, and Gary Bloom, an engineer, stepped down after being informed by City Attorney Jeffrey Sheffel in a Jan. 23 email that they “have legal conflicts” because of their membership on the board.

Sheffel told Kaller and Bloom that it was not enough for the two to recuse themselves – as they have done in the past – from voting on matters in which their firms did work on behalf of projects.

“You must either resign you (sic) membership on the Board or cease to represent clients that come before the Board for approvals,” Sheffel said.

The two men quit a few days later.

Neither Kaller, who operates Joseph B. Kaller & Associates of Hollywood, nor Bloom, owner of Fort Lauderdale’s GBB Engineering, responded to phone calls seeking comment. Kaller’s term was to have expired at the end of June. Bloom’s term didn’t expire until June 30, 2016.

In an interview, Sheffel could not provide specific cases in which Kaller or Bloom had done work for clients who appeared before the board. He said, however, that there were several times when both refrained from voting on matters before board that makes final rulings on development projects and zoning issues.

“They have recused themselves,” Sheffel said, “both more than a couple of times, Kaller more so.”

Sheffel began researching conflict issues after being informed that Hollywood’s Community Redevelopment Agency (CRA) had selected Kaller’s firm, in partnership with another group, for work on a proposed 300-vehicle public parking garage at 327 Nebraska St.

In February, the city agreed to sell the half-acre site, which previously housed a fire station, to the CRA for $1.7 million. The project is likely to come before the planning board for review and approval if the project goes forward, Sheffel said.

The city attorney’s opinion was based on prior rulings by the state Commission on Ethics, which were provided to Kaller and Bloom. A key ruling involved a 2011 case out of Vero Beach that held a conflict was created when a planning and zoning board member’s business did work for a client after the client’s matter had come before the board, regardless whether the board member worked on the issue for the client.

In the same case, the commission ruled that a board member should not serve if he has substantial private interests regarding a matter coming before the board and should also refrain from serving if he has employment or contractual agreements that would create a continuing or frequently reoccurring “conflict” with his public duties.

After stepping down, Kaller appeared before the planning and development board on February 13 seeking the board’s approval of a modification on plans for a previously approved townhouse project.

Kaller’s January 27 resignation letter “due to conflicts with the city’s ethics policy,” said it had been an “honor” to serve on the board.

Bloom, on the other hand, initially resisted Sheffel and suggested he ask the city commission to remove Kaller and he from their appointed positions.

“I think you should do some more research on the extent of this far reaching conclusion that you recently reached, since Joe and I have been serving on city board for the past 15 years without this issue being presented,” Bloom said in a Jan. 27 reply email. “You can then explain to the commission why for the past 15 years…we were allowed to serve and recuse ourselves when an item was presented that created a potential conflict arose.”

Sheffel fired back: “Just saying ‘it has always been done that way’ is no argument at all.” He added that if Bloom did not voluntarily resign he would ask the commission to remove him.

“I cannot allow the city to engage in a continuous ethical violation once it has been brought to my attention.”

A short time later, Bloom resigned.

The nine-member planning Board and the city administration have come under criticism recently for supporting a zoning exception for the controversial Ben Gamla Charter School to build a 300-student middle and senior high school in a traffic congested neighborhood across from city hall.

Neighborhood and civic groups objected to the approval. City Commissioner Peter Hernandez, who represents the area where the school will be built, said the board and the city administration are pro development. “There are people on the board who endorse whatever staff recommends,” Hernandez has said.

“Pressure over the recent Ben Gamla approval, and the longstanding practice of these board members recusing themselves due to conflicts of interest finally came to a head,” said Nancy Fowler, secretary for the North Central Hollywood Civic Association.

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.

Hallandale finds allies amid aggressive response to county’s request for CRA documents

By William Gjebre, Broward Bulldog.org hbcralogo

A group of Broward cities have reached an agreement with the county Inspector General’s Office to turn over financial documents from their redevelopment agencies, temporarily heading off a possible court battle over the county’s claim that it has jurisdiction to investigate those agencies.

The Inspector General’s Office requested those Community Redevelopment Agency (CRA) documents earlier this month citing its authority under the county charter, but after encountering resistance agreed instead to request them using Florida’s public records law.

Hallandale Beach city commissioners, criticized this year by the Inspector General for mishandling millions of dollars in CRA funds, sounded the battle cry at a meeting on Monday with a vote to explore teaming up with other CRA cities to obtain a legal ruling about the county’s authority over CRAs.

Commissioners approved several aggressive measures aimed squarely at the Inspector General’s Office, including a requirement that the county pay the city copying and other fees for any CRA financial documents it receives under the Public Records Act.

Commissioners authorized the city to file its own public records request for the Inspector General’s file on its completed yearlong probe of Hallandale Beach, including information about the sources of the allegations that helped start the investigation. Likewise, the commission also approved asking the Inspector General to specify the authority it believes it has under county law, or any legal ruling, to investigate CRAs.

MILLIONS AT STAKE

The Inspector General’s request for CRA records from city halls’ across the county signaled the opening of a broad inquiry into the potential misuse of funds and a possible attempt to recover from those cities millions of unspent taxpayer dollars.

Hallandale Beach maintains the Inspector General does not have the authority to investigate CRAs, and that CRAs are under the jurisdiction of the state.

“The jurisdiction question has to be resolved,” the Hallandale Beach CRA’s attorney Steven Zelkowitz told the CRA’s board of directors Monday. In Hallandale, as in many other cities, the city commission also sits as the CRA’s board.

Zelkowitz is expected to seek support for any legal action from eight other cities that challenged the IG’s request under the county charter for the financial documents. Those cities are: Lauderdale Lakes, Dania Beach, Fort Lauderdale, Hollywood, Coral Springs, Deerfield Beach, Pompano, and Davie.

“I feel comfortable that we have support,” Zelkowitz told Hallandale commissioners. The cost of any legal action would be spread among the participating cities, he said.

Plantation, the tenth city to receive a letter from the Inspector General, is not part of the challenge. Mayor Diane Bendekovic said her city had already provided the requested documents under the original request.

Hallandale Beach Mayor Joy Cooper, who leads the pushback effort against the county, blamed county officials for “a witch hunt” against cities whose CRAs receive property tax funds from the county.

“I’m tired of the Inspector General wasting taxpayers’ money,” Cooper said. “We welcome an investigation by the proper authority,” Cooper said, adding that the Inspector General is not that agency.

OTHER CRA CITIES CONCERNED

Hostilities between Hallandale and the county flared again following the Inspector General’s letter to Hallandale Beach and nine other Broward cities seeking a variety of CRA financial documents. This time, Hallandale’s concerns were shared by others.

Attorneys and officials representing eight CRA cities challenged the Inspector General’s assertion of jurisdiction under the county charter. They met last week with Jennifer Merino, general counsel for the Inspector General.

Zelkowitz said an agreement was reached in which the Inspector General’s Office would rescind its letter citing charter authority and re-issue a letter seeking the information under Chapter 119 of Florida’s statutes, the public records act.

The county also agreed to push back the date when the documents were due to be produced by about two weeks. The records had been due on Friday.

Merino told Browardbulldog.org her agency agreed only to “clarify” its request letter, saying the agency always wanted the documents under the public records law even though the original letter cited the county charter. She also said her agency is only conducting an “inquiry” for information and not an investigation.

According to Zelkowitz, the Inspector General’s office refused a request by the cities to jointly seek a ruling in Broward Circuit Court on whether does or does not have investigatory authority over CRAs. He also said the Inspector General failed to cite specific provisions giving it investigatory authority over CRAs.

Merino, maintaining that the Inspector General’s Office has the authority, said her office felt it “was not the right time” to seek such a court ruling.

“We are not trying to throttle any investigation,” Zelkowitz told Hallandale commissioners. “We want the right investigative agency to do the investigation.”

In June, Broward County commissioners, expressed frustration when told by county staff that their authority to audit Hallandale Beach’s CRA was limited by both state and county law. They vowed to change state law to gain control. The commissioners created the Inspector General’s Office several years ago.

In Hallandale, several of Mayor Cooper’s colleagues expressed a different kind of frustration as the tug-of-war continues with the Inspector General’s Office.

“We spent enough taxpayers’ money on this,” said Vice Mayor Alexander Lewy.

But Commissioner Michele Lazarow, the lone dissenting vote in Monday’s commission action, has called for state officials to seek an Attorney General’s opinion on the city’s use of CRA funds, and for an outside audit of the CRA to determine if funds have been misused in the past.

William Gjebre can be reached at wgjebre@browardbulldog.org

Broward opens broad inquiry into misuse of property tax dollars by CRAs; millions at stake

By William Gjebre and Dan Christensen, BrowardBulldog.org iglogo

The Broward Inspector General’s Office has opened a broad inquiry into the potential misuse of public funds across the county with written requests sent to at least nine cities with a Community Redevelopment Agency to hand over a variety of financial records for inspection.

One official with knowledge of the inquiry told BrowardBulldog.org the Inspector General’s review is “the beginning of a long term process.”

Frank Schnidman, an attorney and senior fellow at Florida Atlantic University’s School of Urban and Regional Planning, said the Inspector General’s request for records is all about millions in tax dollars and who should control them.

“It’s about time that somebody was trying to hold CRAs accountable. The Inspector General’s Office might not be the right mechanism to do that, but it’s about time,” Schnidman said.

CRA’s administer programs within districts designated by local governments under state law as community redevelopment areas.  Boards made up of local government officials or persons appointed by the local government run them.

Tax increment financing is used to fund CRAs, which receive tax revenue generated by increases in real property value in their area over a baseline number determined when the CRA is created. By law, those revenues – the “increment,”— are put into a CRA Trust Fund that’s dedicated to the redevelopment of the area.

KEEPING TABS ON CRAS

In sending letters to the CRAs the Inspector General’s Office is carrying out a vow made earlier this year amid its investigation of Hallandale Beach’s CRA to keep close tabs on municipal redevelopment groups that receive half their funds from property taxes collected by the county.

Identical records requests were sent to at least eight of the 10 Broward cities with CRAs that receive county funding – Hallandale Beach, Hollywood, Fort Lauderdale, Lauderdale Lakes, Davie, Pompano Beach, Margate, Deerfield Beach and Plantation. An official in Coral Springs, the 10th city, said that city has not received a letter but expects one soon.

While some CRA officials express uneasiness, others welcomed the Inspector General’s action.

“I think they are looking for general information, but they may want to see if there is anything that’s improper,” said Will Allen, administrator at the Davie CRA. “They won’t find anything wrong here.”

In Hallandale, City Commissioner Michele Lazarow said, “I don’t think it is an accident that the letter was sent” shortly after the Inspector General issued a critical report against the Hallandale Beach CRA.

Earlier this year, the Inspector General charged that Hallandale Beach city officials had “grossly mismanaged” millions of dollars in CRA funds. The office said it found at least $2.2 million in questionable expenditures between 2007 and 2012.

Mayor Joy Cooper challenged many of the county’s allegations. Asked to comment about the Inspector General’s new request for documents, she said the city “will respond accordingly.”

The Inspector General’s office asked the cities to produce:  

*A copy of the ordinance that established the CRA Community Redevelopment Trust Fund. Hallandale Beach, for instance, did not have a separate fund for the first 16 years of the agency’s existence.

*Bank statements for the redevelopment trust fund accounts for the months of September and October for the years 2009-2012.

*The CRA’s general ledger account ending balances from 2009-2012

*Any and all CRA capital improvement plans for 2009-2012.

*Documentation for the disposition of all money remaining in the redevelopment trust fund at the end of fiscal year ending September 20, 2012 that was later used to reduce indebtedness for pledged funds.

*Records regarding all money deposited into escrow accounts from 2009-2012 for repayment of CRA debts.

Schnidman said the records that were sought indicate that the county’s agents are attempting to determine if the CRAs have complied with the requirements of state statute – 163.387(7) – regarding how tax increment trust fund balance amounts are to be treated at the end of the fiscal year.

Under the law, Schnidman said, those balances are supposed to be proportionally returned each year to each taxing authority, such as the county, that paid into the CRA.

“What the Inspector General is doing is he’s trying to figure out which of the county’s CRAs are in violation of the law and need to return all this money they’ve husbanded away,” said Schnidman. “It’s millions of dollars.”

WILL OTHER COUNTIES FOLLOW BROWARD’S LEAD?

At a time of tight municipal budgets, the Inspector General’s gambit could reverberate it city halls across the state.

“I wonder if other counties will follow this effort by the Broward IG’s Office in the continuing revenue discussions between some counties and their CRAs,” said Schnidman. “The threshold question is by what authority is the Broward IG seeking this information from Broward County Dependent District CRAs that it arguably does not have jurisdiction over?”

City officials in Hallandale briefly challenged the Inspector General’s authority over its CRA, but later backed off that position.

In Margate, where the CRA has focused on “streetscape” improvements along Atlantic Boulevard and State Road 7, City Attorney Eugene Steinfeld took a wait-and-see approach to the county’s inquiry.

“It sounds like they are just gathering information,” Steinfeld said.

Lauderdale Lakes CRA executive director J. Gary Rogers welcomed any new oversight.

“They are doing their job,” said Rogers.

In 2012, following up on a story the year before by BrowardBulldog.org about missing redevelopment funds, the Inspector General found that Lauderdale Lakes had misspent $2.5 million in CRA funds. The city is repaying the money to the CRA.

“We were investigated and employees were terminated,” Rogers said. “We came close to a big financial disaster” under a previous administration, added Rogers who was not with the city at the time.

“I got no problem with them looking at us,” Rogers said. “They want to make sure we are spending money appropriately.”

William Gjebre can be reached at wgjebre@browardbulldog.org

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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