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Independent special districts: Where lobbyists ride free and the public is in the dark

 

By Dan Christensen, BrowardBulldog.org  

Florida's sprawling water management districts spend hundreds of millions of dollars every year, but do not require lobbyists to register. Photo: Florida Department of Environmental Protection

Florida’s sprawling water management districts spend hundreds of millions of dollars every year, but do not require lobbyists to register. Photo: Florida Department of Environmental Protection

Nearly 1,000 special-purpose governments across Florida that raise and spend billions of dollars in public funds every year do not require lobbyists who appear before them to register, pay fees or disclose any information about themselves or their clients.

Lobbyist registration and disclosure have been mandatory for years in Tallahassee and in many city and county halls across the state, where lawmakers found it necessary to preserve the integrity of the decision-making process. Violators can be fined and barred from lobbying for up to two years.

But Florida’s independent special districts are a separate class of government – a hodgepodge of obscure taxing and other authorities that, with few exceptions, offer the public no information about lobbyists or what they’re up to at their agencies.

BrowardBulldog.org, supported by a grant from the Washington-based Fund for Investigative Journalism, spent months documenting that sweeping lack of government accountability; a free ride enjoyed by lobbyists at independent special districts around Florida with the power to tax, assess fees and/or sell low-interest bonds to finance government spending.

“The issue is transparency: who is getting the benefit of governmental largess,” said Frank S. Palen, a West Palm Beach attorney who specializes in government law and special districts.  “If people don’t have knowledge it undermines legitimacy, but as a practical matter it would depend on the scale of the entities.”

Independent special districts have been around for 100 years. The oldest, the Hastings Drainage District in Putnam and St. Johns counties, was created July 1, 1913, according to Jack Gaskins Jr., who runs the state’s Special District Information Program.

Eric Draper, executive director Audubon of Florida

Eric Draper, executive director Audubon of Florida

Today, these agencies offer dozens of specialized governmental services – from water management, mosquito control and community development to public hospitals, children’s services, ports and airports.

Hundreds of districts, like the Choctawhatchee River Soil and Water Conservation District in Florida’s Panhandle, are so small they’re unlikely to see lobbyists looking to influence policy or a contract award.

MANY DISTRICTS SPEND BIG

But many independent districts with big money to spend, like the $622.2 million South Florida Water Management District, regularly encounter lobbyists.  The state’s largest water district collects property taxes in 16 counties and is run by a governing board appointed by the governor and dominated by real estate, agribusiness and development interests.

The environmental group Audubon Florida sees a problem in the lack of lobbyist registration at government agencies like the South Florida Water Management District.

“There are consultants to the sugar industry who are spending time with and influencing the thinking of South Florida Water Management District governing board members and they should be registered as lobbyists,” said Audubon Executive Director Eric Draper. “We see them, but it’s too shadowy to know exactly what they’re doing.”

Florida’s five water management districts levied $480 million in property taxes statewide in 2012, yet none register lobbyists. Draper said the Legislature should adopt statewide lobbying rules for all special taxing districts.

“We should know who is lobbying, who is being paid to lobby and who they are lobbying,” Draper said.

Florida Department of Revenue data obtained in response to a public records request identified 93 independent special districts with annual budgets of more than $10 million in 2012. chart2

BrowardBulldog.org surveyed dozens of independent districts, including the 38 largest with budgets in excess of $50 million. Only three districts reported having some form of lobbyist regulation; another prohibits lobbying in its bylaws. The rest, with cumulative annual spending of $7.1 billion, said they do not require lobbyists to register.

A half-dozen attorneys and officials who represent or work for special districts in Florida, including Palen, said they were aware of no other independent districts that register lobbyists.

Integrity Florida, the Tallahassee-based nonprofit and nonpartisan government watchdog, said change is needed to ensure accountability.

“If you’re spending taxpayer money and there’s a lobbyist involved in the spending of that money then there should be at least some basic lobbyist disclosure,” said Integrity Florida Research Director Ben Wilcox. “This situation has never really come up and been discussed that I can remember.”

O’Neal Bardin Jr. is president of the Florida Association of Special Districts and is also executive director of the $28 million Northern Palm Beach Improvement District. He said registration would help those who work at special districts better understand those who may approach them.

“Are they trying to persuade me of a position based on their remuneration or employment? It’s a matter of understanding who you are talking to,” said Bardin. “It seems based on a sense of uniformity that it would make sense that we do the same thing about lobbyists as the county or the city or the school board does. It would certainly further transparency.”

Special districts are independent or dependent. Dependents, which include ubiquitous community redevelopment agencies (CRAs), are vassals of municipalities and typically follow their rules regarding lobbyist registration.

ANTI-CORRUPTION LAWS DON’T EXTEND TO SPECIAL DISTRICTS

There are 992 active independent special districts, according to the Florida Department of Economic Opportunity’s special districts database. They outnumber Florida’s counties, cities, towns and villages better than two to one yet operate largely in the shadows of their better-known municipal counterparts.

The Uniform Special District Accountability Act of 1989 obliges special districts to comply with many of the same accountability standards that apply to state and local governments, like open meetings and public records. But state anti-corruption laws requiring lobbyists before the Legislature and the Executive Branch to annually register, pay fees and disclose their clients and compensation don’t extend to special districts.

“I haven’t heard why the Legislature didn’t include special districts,” said Bardin. “But they could easily have overlooked it…we’re not the first group that comes to mind when you talk about governments.”

“You can’t think of everything,” said attorney Palen.

Florida law also does not require counties, cities and other municipalities to enact lobbyist registration rules, although many have. In jurisdictions with no lobbying rules, like rural Sumter and Highlands counties, that means dependent districts don’t register lobbyists either. chart1

Florida has authorized 136 independent districts, many run by unelected boards, to impose ad valorem taxes on homeowners and businesses in one or more counties, according to the Department of Revenue data. Not all exercise that power, but in 2011 – the most recent year for which complete statistics are available – those that did levied more than $1.82 billion in property taxes.

Seven districts account for half of that total. They are: the South Florida, Southwest Florida and St. John’s River water management districts; the North Broward Hospital District, also known as Broward Health; the Health Care District of Palm Beach; the Children’s Services Council of Palm Beach and The Children’s Trust in Miami-Dade.

Their cumulative 2012 property tax bite: $936,700,000.

The Children’s Trust is the only one of the seven with a registration requirement. It doesn’t handle the task itself; rather, it voluntarily follows the county’s rules and advises lobbyists to register there, President and Chief Executive Charles Auslander said in an email.

ONLY TWO DISTRICTS REGISTER LOBBYISTS

Only two districts in the state register lobbyists themselves: the Greater Orlando Aviation Authority, which runs Orlando International Airport, and the South Broward Hospital District, also known as Memorial Healthcare.

The information they collect and its accessibility to the public varies.

For example, Greater Orlando requires lobbyists to file annual expenditure reports detailing how much they spent on entertainment, research, advertising, travel, hotels and the like. South Broward does not. Also, Greater Orlando posts lobbyist information online; South Broward does not.

The Broward’s Children’s Services Council, with 2012 revenues of $59.5 million, prohibits lobbying in its bylaws.

Smaller districts, which provide services such as lighting, drainage, fire protection and community development, have budgets that typically run between $750,000 and $2 million a year, according to special districts association president Bardin. Many of those entities, like the Choctawhatchee River Soil and Water Conservation District in Defuniak Springs, had budgets of $50,00 or less in 2012.

Lobbyists generally have little interest in those small-money districts.

“Someone is not going to hire a lobbyist for a $10,000 janitorial contract,” said Bardin, whose association represents about 200 mostly small special districts.

Yet a small district with a contract worth a million dollars a year is another matter.

LOBBYISTS AND LAWN MOWERS

The obscure Capital Regional Community Development District (CDD) raises revenue through assessments to operate and maintain several planned communities in Tallahassee. Several years ago, it bid out a three-year lawn-mowing contract worth $3 million.

“That’s the only time I was approached by a lobbyist,” said David Ramba, a lawyer and lobbyist for the special districts association who also chairs the Capital Region CDD.

Smaller districts with large public works projects are also attractive to lobbyists.

Frank S. Palen, West Palm Beach attorney who specializes in government law and special districts

Frank S. Palen, West Palm Beach attorney who specializes in government law and special districts

The $12 million Lake Worth Drainage District has for several years been exploring the establishment of a regional water utility to address southeast Florida’s future drinking water supplies, said Palen. It would involve a re-plumbing of much of western Palm Beach County to make drainage flow to the south to replenish aquifers in Broward and Miami-Dade.

“The project may involve a $1 billion investment in infrastructure, land acquisition, etc.,” said Palen. “It should attract a lot of interest.”

Community development districts, like Capital Regional, assess fees on homeowner’s lots and have issued billions of dollars in low-interest municipal bonds to pay for local roads and other infrastructure. They account for more than half of Florida’s independent special districts.

During the build-out phase, developers run the CDD’s governing board. Later, homeowners take control.

Miami Lakes investment advisor Richard Lehmann publishes the Florida Community Development District Report. He said he doesn’t see the lack of lobbyist registration at CDDs as a problem.

“Developers run things as if they were paying the money themselves,” said Lehmann. “For homeowners, it’s money that’s coming out of their assessments and therefore it’s not like a government spending other people’s money.”

PURITY IN PURCHASING

Janet Tutt is the district manager of The Villages, the fast-growing retirement community about 20 miles south of Ocala. The Villages is comprised of 13 CDDs and one dependent utility district in Sumter County that work together via inter-local agreements.

“We have $250 million in budgets,” said Tutt. “Some of our contracts are quite large.”The Villages has no lobbyist registration, but discourages lobbying “as a matter of custom,” according to Tutt. “The purchasing process is only as good as how pure it’s kept.”

Purity is a word not necessarily associated with special districts.

In 2012, Gov. Rick Scott ordered a thorough review of Florida’s 1,600 special districts with an eye toward finding efficiencies and increasing accountability.

“We’re still working on it,” said Scott’s press secretary, Jackie Schutz.

In 2011, BrowardBulldog.org reported about the South Florida Water Management District’s $1.5 million purchase in 2007 of 15 large electric pumps that quickly failed, and how the company that sold the pumps was refusing to honor its warranty. At the time of the sale the company had an undisclosed inside connection: its lawyer/lobbyist was vice chairman of the district’s nine-member governing board. The lack of lobbyist registration served to veil that relationship.

Other special districts in the news:

  • The billion-dollar North Broward Hospital District, which has a long reputation for political favoritism and a lack of transparency in contracting, is the focus of an ongoing federal anti-kickback inquiry that’s examining allegations of bogus Medicare and Medicaid claims.
  • Prosecutors in Orange County are investigating two board members of the troubled Orlando Orange County Expressway Authority (OOCEA), which collects hundreds of millions of dollars in tolls, for possible Sunshine law violations regarding their alleged efforts to oust the authority’s former director, according to the Orlando Sentinel. In 2007, an authority contractor was indicted for bribery after he gave $2,600 in theme-park tickets to OOCEA’s chairman in hopes of keeping his contract.
  • The Lee County Mosquito Control District, with a $22 million annual budget, has a bug-killing air force and its own airport. It’s been criticized for overspending. In 2012, then-Republican Sen. Mike Bennett called it “truly a showcase of out-of-control special taxing districts,” according to the Fort Myers News Press.

None of those districts has lobbyist registration. Yet each pays lobbyists to influence matters of policy or procurement in Tallahassee, where they must register.

COSTS TO REGISTER LOBBYISTS PROHIBITIVE?

Many other independents pay lobbyists, too, including smaller districts where the cost of registering lobbyists is considered prohibitive.

Terry E. Lewis is a Palm Beach lawyer and lobbyist. He represents a dozen special districts, including independents like the Port of Palm Beach.

“For the South Florida Water Management District, maintaining a lobbyist list would be a blip on their financial radar screen…On the other hand, I’ve worked with some special districts that literally have one employee and a budget of $25,000. So you’ve kind of got the disparity complaint, that it’s a financial burden,” Lewis said.

Broward County confronted the cost problem two years ago during a rewrite of its ethics ordinance. It was decided then to hold down expenses by confining its monitoring and enforcement of lobbyist registration requirements to the county and all municipalities. Special districts were left out.

“It became too expensive to monitor others,” said County Commissioner Lois Wexler. “This is something that should be addressed by the Legislature.”

In the meantime, one independent district in Broward surveyed for this article, the Downtown Development Authority of Fort Lauderdale, has decided to change.

“Your question intrigued me, so I talked with counsel and we will be starting a registration system,” said Executive Director Chris Wren, whose agency is spearheading development of a $142 million streetcar system called The Wave. “We will post the information online.”

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Latest comments

  • To further support your hard-hitting report, the following is from the North Broward Hospital District’s Operating Budgets for FY 2000 and FY 2013.

    Cost of Lobbyists
    2000 $383,070
    2013 $1,090,105
    .
    John deGroot

  • New York has a similar situation. As only one example, the Albany metro area, population roughly one million, boasts 770 separate taxing districts.

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