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.”

 

Hallandale Beach halts advertising in local newspaper where mayor is a columnist

By William Gjebre, FloridaBulldog.org 

A column by Hallandale Beach Mayor Joy Cooper in the Sun Times

Hallandale Beach city commissioners have pulled the plug on city advertising in the local Sun Times newspaper featuring articles by Mayor Joy Cooper that drew fire from commission colleagues as “propaganda” for the mayor.

Cooper used the platform regularly before and after the weekly newspaper received a favorable — and controversial — $50,000 loan from the city’s Community Redevelopment Agency (CRA). The Sun Times, according to city documents, has been paid nearly $400,000 in city advertising to publicize events since 2003, most of the money coming after the loan was made during the 2008-2009 budget year.

The Florida Bulldog published a story about the loan, which later became a matter of interest to the Broward Inspector General’s Office in its 2012 probe. While the IG stated the Hallandale Beach CRA had “grossly mismanaged” millions of dollars, tallied $2.2 million in questionable expenditures and made inappropriate loans and grants to local businesses and non-profits, there was no finding of wrongdoing in the city’s Sun Times loan.

“The whole thing is a propaganda paper for the mayor,” said Commissioner Michele Lazarow, who moved at the Dec. 7 meeting to halt funding immediately.

While not voted on, the measure gained consensus support from the new majority of the five-member commission, and city staff said it would not place any more advertisements in the newspaper. Cooper had left the meeting before the item came forward.

In the past, the newspaper had the support of Cooper and commissioners who backed her. Lazarow, Vice Mayor Keith London, a long-time Sun Times critic, and newly elected Commissioner Anabelle Taub successful pushed the item to halt further advertising.

“The Sun Times is the mayor’s pulpit or podium for her to spin the truth,” Lazarow said at the meeting. “It has become a political rag during the political season.” Making matters worse, she added, the newspaper was unfair by not accepting or allowing “rebuttal.”

“I’m appalled that city funds go to the Sun Times,” Taub said at the meeting. “We should not fund the mayor’s political propaganda and personal vendettas and attacks.”

Taub said she was incensed during her recent election campaign when the Sun Times printed personal information about her that “could be used to commit fraud on me.”

“They have a one-sided view of city hall,” said London, adding that a reporter from the newspaper rarely attends a city commission meeting.

Mayor: ‘I will continue writing’

“They are entitled to their opinion,” Cooper told a reporter in response to the criticism from her commission colleagues. “I report on city business. I will continue writing. Everything I write is edited by an editor and it’s their choice to use it.”

Cooper began writing for the Sun Times in 2003, the year she became mayor. Her opinion piece last week was about Dr. Martin Luther King and political protest.

 

Sun Times officials said they were unfazed by the funding cutoff. “The commission has every right to do so,” said Craig Farquhar, president of the South Florida Digest, which publishes the Sun Times. As for the accusation that the newspaper has been a forum for the mayor’s propaganda, he said, “That’s their political opinion.”

The money paid by the city to the Sun Times, Farquhar added, “was to promote city events.”

City records showed that between 2003 and 2008, the city paid the Sun Times about $32,000 for advertising – an average of about $6,400 a year. But the relationship changed the following year.

That’s when the Sun Times became the first city business to receive a loan under a new program, funded through the CRA, to retain and to assist firms having financial difficulties. It received a 10-year $50,000 loan, with half of it forgiven, to be paid at two percent interest; the loan balance of approximately $7,500 is expected to be paid off in July 2019.

What raised questions about the newspaper’s financial problems was that Farquhar and another official of the newspaper, Cecile Hines, were each paid an average of over $200,000 in 2007 and in 2008, the years before the Sun Times received the city loan.

City advertising in the Sun Times, after the loan approval, also began to escalate. From 2008-2009 until the end of 2016, the city paid the newspaper $362,929, averaging more than $45,000 yearly during the past eight years, according to city documents.

 

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 Beach skyline to change with massive Diplomat expansion

By William Gjebre, Florida Bulldog.org 

A rendering of the proposed four-tower project adjacent to the Diplomat Golf Resort and Spa in Hallandale

A rendering of the proposed four-tower project adjacent to the Diplomat Golf Resort and Spa in Hallandale

A proposal for a massive, four-tower project in Hallandale Beach featuring three hotels, 938 rooms and a 250-unit high-rise condominium under the Diplomat brand will be officially unveiled to nearby residents at a meeting Thursday in the city’s Cultural Center.

The four towers will elevate the city’s skyline and represent a significant expansion of an existing 60-room hotel at the Diplomat Golf Resort and Spa, placing its room count on par — and then some — with the nearby 998-room Diplomat Resort and Spa, on Hollywood Beach.

The project is estimated to cost $100 million.

Hallandale city officials said owners of the new mixed-use development, to be called the Diplomat Hotel and Country Club, have said the two facilities are not directly tied and are apparently separate operations. Previously media reports, however, have linked the two to the Thayer Lodging Group of Annapolis, Md.

The two facilities will nonetheless share facilities, with country club visitors being able to use the beach services at the Diplomat in Hollywood beach, whose visitors will be able to use the golf course a short distance away in Hallandale Beach.

In this early planning stage, the biggest challenge facing owner-developer Diplomat Golf Course Ventures LLC is the project’s impact on local traffic.

Hallandale Beach City Manager Renee Miller

Hallandale Beach City Manager Renee Miller

“This is a significant development,” said Hallandale Beach City Manager Renee Miller. “There is fear from the community about traffic.” But, she added, “We will work with the developer to see how to mitigate the impact on the surrounding community.”

“The traffic impact is a big concern,” said City Commissioner Michelle Lazarow, adding little information has been presented to nearby residents to date.

Other commission members, Mayor Joy Cooper, Vice Mayor Bill Julian, Keith London and Anthony Sanders, did not respond to requests for comment.

The developer’s lawyer is Debbie Orshefsky, with Holland & Knight. She did not return phone calls seeking comment, but instead had former State Rep. Joe Gibbons call.

Gibbons said the huge project “will blend in” with the property and surrounding area. Still, he noted “everyone wants to know about the traffic.” He said traffic questions would be addressed at Thursday’s meeting.

Gibbons said the new Diplomat Hotel and Country Club would cost close to $100 million and make Hallandale Beach even more of a tourist destination than it already has become and add to the city’s tax base.

“We will learn more after the presentation,” City Manager Miller said.

The make the project a reality, Diplomat Ventures will be seek various proposed zoning changes. They include establishing a planned development use for the property and rezoning some commercial land for residential use.

Those changes would allow for construction of three hotel towers of 20, 24 and 30 stories, 70,000 square feet of retail and other accessory hotel space and another 30-story residential tower with 250 units. The developer will also seek to rezone six-tenths of an acre near the existing marina to allow for four new single-family homes.

City officials said the 100-acre golf course itself would remain unchanged. All the new construction will take place on 12-15 adjacent acres.

The development group is sponsoring Thursday’s community meeting at 6 p.m. in the Cultural Center, 410 S.E. 2nd Ave.

Hallandale’s Development Review Committee (DRC) and its Planning and Zoning Board will review the project. If the project passes muster there, it is expected to go to the City Commission for approval next year.

The Miami Herald reported in 2014 that Diplomat Ventures, an affiliate of Thayer Lodging Group and Concord Wilshire Management, paid $20 million for the 18-hole golf course and hotel, at 500-501 Diplomat Parkway. The Herald also reported then that another Thayer affiliate, Diplomat Hotel Owner LLC, bought the Diplomat Hotel and Spa for $460 million.

Gibbons said he was unaware of the relationship between the two facilities, but added they are apparently operated separately.

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.

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

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.

Hallandale diverts millions from CRA’s budget to pay for non-redevelopment programs

Hallandale Beach City Hall

Hallandale Beach City Hall

By William Gjebre, BrowardBulldog.org 

Hallandale Beach has diverted nearly a third of its Community Redevelopment Agency’s $11.6 million annual budget to pay for various city programs, including some apparently outside state guidelines for CRA expenditures.

That $3.5 million in questionable spending, identified by BrowardBulldog.org, is in addition to millions of dollars in CRA funds that Broward’s Inspector General has said were misspent as a result of “gross mismanagement” by city leaders.

Hallandale City Manager Renee C. Miller defended as legitimate each of the program allocations that were spread among numerous city departments.

Miller also challenged the authority of a Florida Attorney General’s opinion – cited repeatedly by the Inspector General in his highly critical report – that says CRA money should be used only for “brick and mortar” redevelopment projects to reduce slums within the CRA’s boundaries

“It’s an opinion,” Miller said. “What we dispute is the idea that we can never use [CRA] funds for anything other than bricks and mortar (projects).”

In Hallandale, the CRA covers about three-fourths of the city from I-95 to 14th Avenue and from Pembroke Road to County Line Road.

Hallandale Beach City Manager Renee C. Miller

Hallandale Beach City Manager Renee C. Miller

The Inspector General’s Office issued its final report about Hallandale in April after a yearlong investigation that was triggered by stories in BrowardBulldog.org and other news outlets. It was silent about funds parceled out to city departments.

Hallandale’s CRA is ostensibly autonomous, but like many other municipal CRAs around the state it is run by the city’s five commissioners, who also serve as its board of directors.

The CRA’s fiscal year runs from Oct. 1 to Sept. 30. Records show its funds were channeled to various departments:

  •   Police — $1,175,474 to pay for three programs aimed at    reducing crime and enhancing safety. Each program pays for two to four police officers. The cost for those programs was $181,000 more than the previous year.
  • Public Works/Utilities and Engineering – $690,000 for capital projects, such as pedestrian and crosswalk improvements; $138,906 for project management; $148,500 for landscaping and maintenance. That was about $100,000 less than was spent last year.
  • Parks and Recreation – $376,695 for three new programs at Johnson and Foster parks for after-school care for students.
  • Human Services –$159,600 for an after-school tutoring program; $217,661 for social worker services; $203,000 for jobs training. The cost of those programs was up about  $16,000 from the previous year.
  • Development Services — $175,246 for code compliance and $20,000 for planning and zoning related to matters that have regional impact. There were no CRA charges for these services in the previous year.
  • City Hall operations — $236,000 to reimburse the cost of services provided to the CRA by the city manager, city clerk, and various city departments. This cost was $900,000 last year.

City Manager Miller said those funds were properly spent to reduce slum and blight in the CRA area, which covers three-fourths of the city.

“We want to have a higher level of service for the CRA area,” she said.

Miller said state laws governing CRAs specifically mentions the use of CRA funds for policing. She added that CRA funds for Parks and Recreation are allowable because they meet social service needs in the community.

CRA money sent to code enforcement is necessary to redo the city’s “archaic code” and is aimed at aiding redevelopment, she said.

Miller said Hallandale follows “best practices” guidelines, that its expenditures are allowable under state law and that they are in accordance with the city’s CRA program.

The $236,000 in operational fees that the city charged the CRA included $16,000 to rent offices at City Hall.

Other city departments are not charged rent. The city charges the CRA because it is a separate city agency that receives its own funding from a portion of property tax dollars collected in its area.

Hallandale, however, rents space in City Hall to the Hallandale Beach Area Chamber of Commerce for $1 a year.

“That’s comparing apples to oranges,” Miller said.

Still, Miller said Hallandale appears ready to change the way it spends CRA funds.

“There is a shift on the [commission] dais,” Miller said. “I think changes are coming, placing emphasis on bricks and mortar.”

That could be because the city has acquired considerable land around City Hall for park development. Within the past year plans have been outlined for a City Hall park and for other sites that fall under the scope of the CRA, including a new central fire station.

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