Conservancy rakes in cash at taxpayer-owned Miami Beach Botanical Garden

By Francisco Alvarado, FloridaBulldog.org

A non-profit group turned the Miami Beach Botanical Garden into a cash cow by obtaining federal pandemic aid funds and charging top dollar for hosting booze-filled events. But the Miami Beach Garden Conservancy fattened up its coffers without giving the city its fair share, and without contributing any money for maintenance of the taxpayer-owned flora facility, an internal audit found.

Miami Beach’s inspector general Joe Centorino determined city staff has provided lax oversight in tracking the revenues and finances of the conservancy, including overpaying the organization that manages the three-acre public green space by $153,000 between 2018 and 2021, according to the report.

During the same time period, the conservancy obtained a Small Business Administration (SBA) loan and two Paycheck Protection Program (PPP) loans totaling about $338,000 that helped swell the non-profit group’s cash assets to $1.2 million — a sign the city should be contributing less money for garden expenses, Centorino concluded in the Sept. 6 report.

In an Aug. 4 response letter to a draft of the audit, the conservancy’s board of directors attacked Centorino and his team of investigators and auditors, all of whom have also sustained fire for doing their jobs from some elected city officials. In November, Miami Beach commissioners Ricky Arriola and David Richardson unsuccessfully sought to have Centorino fired because he spoke out against their proposal to transfer his office’s auditing powers to the city manager.

In justifying his reasons for wanting to terminate Centorino, Arriola previously told Florida Bulldog that city employees have told him that they “felt harassed, intimidated and threatened” by the inspector general, his investigators and his auditors.

UNHAPPY CONSERVANCY BOARD MEMBERS

The conservancy’s board members — including president Jeanette Dorfman and vice president John Elizabeth Aleman, a former Miami Beach city commissioner — made similar complaints in their letter. They claimed Centorino used his “audit functions to inappropriately assess the non-profit conservancy as if it were a for profit enterprise.” They also accused Centorino’s staff of “oftentimes using a threatening and aggressive tone in their interactions with conservancy staff” during the audit.

The conservancy’s board also asserted that the non-profit is not required to reimburse the city anything, and rejected the audit’s findings. Miami Beach Garden Conservancy executive director TL Brown did not respond to three Florida Bulldog voicemails and an email requesting comment. Dorfman and Aleman also did not respond to multiple voicemails seeking comment.

Centorino declined comment, but he did not hold back in his report. He denied that his auditors’ interactions with conservancy staff was “threatening and aggressive,” and that no one had presented any evidence to the contrary. The inspector general noted the conservancy was seeking to deflect from the audit’s findings that show the organization took advantage of the city’s lack of controls.

“The management agreement is not favorable to the city as would be expected with a city-owned asset,” Centorino wrote. “The city is not being adequately compensated for usage of the botanical garden.”

A NO-BID GARDEN STEWARD

Since 2001, the conservancy has held onto a no-bid management contract approved by the Miami Beach City Commission. Last July, the city renewed a five-year deal signed in 2017 for another four years.

The conservancy is in charge of providing staff and programming at the botanical garden, a green oasis near the Miami Beach Convention Center with flowering trees, orchids, philodendrons and more than 100 palm species. Amid the lush greenery, the garden also features a koi pond, fountains and an indoor event space.

Admission is free, but the conservancy primarily generates revenue through party and corporate event rentals offering alcohol sales, according to the inspector general report. The conservancy charges at least $3,000 to $5,000 per event, and the organization employs seven full-time and two part-time employees.

Tasked with making sure the conservancy is compliant with its contract, the asset management division of the Miami Beach Facilities and Fleet Management Department has done a poor job, Centorino’s auditors concluded. For instance, the division is supposed to monitor the conservancy’s annual budget to determine the city’s yearly contribution to the garden’s operations.

Under the contract, any revenues leftover after paying expenses are supposed to offset Miami Beach’s quarterly subsidy, which averaged roughly $38,000 during the five-year audit period, the report states. In 2019, the conservancy’s net income hit $115,579, but the city’s contribution was not offset accordingly because asset management staff did not thoroughly review the annual budget, the auditors found.

In another lapse, the conservancy’s net income ballooned to $403,364 in 2021, which meant the city did not have to subsidize the garden’s operations that year. But the asset management division still remitted a $38,000 quarterly payment that wasn’t returned by the conservancy. The division agreed with Centorino’s conclusion that the conservancy should reimburse the city $153,579 for 2019 and 2021.

In addition to the annual subsidies, Miami Beach provided four grants, as well as paid for maintenance repairs and utilities for a total of nearly $600,000 in tax-payer money used for the botanical garden during the five-year audit period. Meanwhile, the conservancy raked in $2.8 million in revenue from facility rentals and alcohol beverage sales between 2018 and 2021, the report shows.

PANDEMIC AID FLOWS AMID PAYROLL INCREASES

Apparently, that wasn’t enough dough to sustain the small-staffed conservancy during the pandemic. In April 2020, a month after the garden temporarily closed to the public to help slow the early spread of the COVID-19 virus, the conservancy scored a $100,000 PPP loan, the report states. A month later, the organization nabbed a $150,000 SBA loan with a 30-year term and a 2.75 percent annual interest rate. And a year later, the conservancy obtained the second PPP loan. It was for $87,991.

Susan Askew, the conservancy’s interim executive director at the time, informed auditors that the first PPP loan was forgiven, and that the conservancy planned to apply for forgiveness on the second loan. The SBA loan was supposed to be a “cash buffer to continue to meet operational expenses during the period of decreased revenues,” but “the money had not been used and was sitting in the conservancy’s bank account,” Askew said, according to the report.

Yet between 2019 and 2021, the conservancy’s payroll blew up by 32 percent to $487,000, and the conservancy handed out $23,300 in employee bonuses during the same three-year period, the auditors found.

Centorino recommended that the asset management division consider having city staff take over management of the botanical garden; reworking the existing contract so that the conservancy bears more of the expenses and sharing revenues with the city; or putting the contract out for competitive bidding.

In a Jan. 18 email response to Florida Bulldog, Miami Beach spokeswoman Melissa Berthier said that the city withheld the conservancy’s 2023 $152,000 subsidy to offset the money owed, and that the asset management division has corrected the oversight deficiencies identified in the audit.

“The city has also submitted an invoice to the conservancy for the net difference of $1,579,” Berthier said. “We will continue to work closely with the conservancy to ensure all deadlines and requirements are met.”

However, the city is not about to kick the conservancy out of the botanical garden, Berthier said. “The city has not determined which, if any, of these options [suggested by Centorino] are most beneficial going forward,” she said. “Prior to the current agreement expiring, the city will determine if this [contract] will undergo the formal RFP process or consider other options.