By William Gjebre, BrowardBulldog.org
Hallandale Beach has failed to properly track city land acquisitions, developer agreements and loans to businesses, according to a draft of an audit obtained by the Broward Bulldog.
Suspecting there were problems, city officials in August 2010 ordered the audit by an outside firm to review management of the city’s Community Redevelopment Agency (CRA), which handles agency-owned property and provides loans to businesses.
Three-fourths of the city falls within the CRA district, which collects property taxes to be used for property acquisitions and to promote business growth through loans and other programs.
The mayor and city commission serve as the governing body of the CRA, which is operated by a director and supporting staff.
The draft was dated Aug. 24 and marked for “Discussion Purposes Only.”
The initial audit findings “are no surprise to most people in Hallandale,” said Mike Butler, a community watchdog who operates ChangeHallandale.com. “People have asked about these exact issues.”
ChangeHallandale reported in 2009 that the city paid twice the assessed value for many of the properties. The website also reported that property purchases were often brought up without notice on the city commission agenda under “other” business at the end of evening meetings.
Butler said problems found in the draft, “points to a culture where no one followed the rules.”
While one city commissioner said the report exemplified past management woes, the mayor and other city officials said the initial report was incomplete and the final version will show fewer problems.
PROBLEMS FOUND WITH LAND RECORDS
The CRA reports owning 84 properties purchased for about $28 million as of 2010. The agency began in 2001. Some parcels were donated to the city.
Auditors could not find files for 30 of the properties owned by the agency, including files of 13 properties the city had sold.
“The city was unable to locate and we were unable to review supporting documentation for any of these dispositions…” the draft says about the missing records for the 13 properties.
In the files that were available it stated, “…we noted exceptions [missing or lacking information] in forty-eight (48) of the forty-nine (49) acquired properties….”
Among the audit’s Initial findings:
- Most files reviewed lacked details on right of ways, maintenance requirements, zoning classifications, code enforcement oversight and proof that the city attorney had filed for tax exemptions on the parcels.
- Files on 27 of the 49 purchased properties “did not contain a purchase authorization from either the City Manager or the City Commission.”
- Files for 28 of 49 properties included no information about “assessed value, improvements, lot size, legal description and owner of record.”
- 34 of the 49 property files “did not include tax information, existence of tax certificate or tax deed, amount of existing mortgage, status of payments.”
PROBLEMS WITH BUSINESS LOAN DOCUMENTS
The draft also reviewed the CRA’s business and commercial loan program, which handed out $1.5 million in assistance as of June 2010.
The government loans are designed to provide up to $200,000 to a business for expansion, renovation and job creation; up to $100,000 for correcting code violations; and up to $50,000 for smaller business loan category.
The draft made the following observations:
- There were missing documents in 31 loan files.
- 25 of 31 loan files had loans forgiven that did not adhere to a 15 percent threshold established by the city. The city loans forgive 15 percent of amounts borrowed, but the report said 14 of the 25 loans had a forgiveness rate above 15 percent, four of those as high as 50 percent.
- 24 of the loans had interest rates that were either less than or more than a established lending rate of 4 percent
- 23 files failed to have documentation showing approvals from the city manager or the city commission.
Auditors also reviewed the city’s 24 agreements with developers. They found that a third of those agreements lacked “executed” [completed, signed off} documents. They also found that in several projects, the city issued certificates of occupancy before payments or conditions were met.
Hallandale Commissioner Keith London blasted former city manager Mike Good about the report’s findings.
“[Good] ran the city into the ground. He was a micromanager. He did it his way. He did whatever he pleased,” London said.
London was also critical of his colleagues. “The commission gave authority away to the manager who was running amok.”
Good, a city employee for 25 years who was hired as city manager in 2002, was fired by the city commission in June 2010 after chronic absences from work. News reports stated an uncommunicative work style and questionable contracts also were cited as reasons for Good’s dismissal.
Good could not be reached for comment.
Mayor Joy Cooper declined to discuss the preliminary report’s findings in detail. She said, however, that city officials already knew there was a leadership void in the CRA and problems with record keeping, and that was why the audit was ordered.
Cooper was critical of the auditors. She said they never asked the city manager or department directors to help locate documents that could not be found. She said new City Manager Mark Antonio reports he has most of the missing documents concerning land purchases and developer agreements.
Cooper also said there were still missing documents regarding one or two of the CRA loans and that the matter was being looked into.
“There was no fraud; there is no stealing,” Cooper said.
The mayor was also upset about the release of the report, saying it was a “total breach of ethics” by whoever provided it to Broward Bulldog. “It’s not a complete report,” she said.
The audit report was the work of Marcum Rachlin, Accountants and Advisors, of Fort Lauderdale, a division of Marcum LLP, founded in 1951, which, according to its website, is among the top 15 accounting firms in the nation.
Calls to the firm seeking their response to the mayor’s remarks received no response.
CRA director Alvin Jackson Jr., hired in January, acknowledged that he found many CRA files incomplete when he became head of the agency. There was not a system in place to make sure there was a complete set of documents for each transaction, he said, adding no one was assigned the task in the past.
He said he is working on the problem.