Spurred by alleged misspending in one city, the Broward Inspector General’s Office has opened a broad inquiry into at least nine municipal Community Redevelopment Agencies.
The CRAs manage tax money set aside for improvements in districts designated by local governments as redevelopment areas.
Officials in nine cities received letters from the IG, asking them to hand over an array of records. A 10th city says it is expecting to get the letter.
One official with knowledge of the inquiry told BrowardBulldog.org the Inspector General’s review is “the beginning of a long-term process.”
The request follows reports in the BrowardBulldog about alleged abuses in the Hallandale Beach CRA, including nearly $5,000 that went to pay the Orlando time-share bill of a grant recipient and hundreds of thousands went to improvements outside the redevelopment area.
The Miami Herald has also reported on systemic abuses in the city of Homestead, where millions of CRA dollars went to a gutted theater run by a political backer and business associate of the recently suspended mayor. Thousands more went to a badly bungled “holiday home makeover” program run by a previous mayor, who also convinced the CRA to buy a chunk of his depressed real estate for $2 million. Those problems were highlighted in a Miami-Dade County audit.
Frank Schnidman, an attorney and senior fellow at Florida Atlantic University’s School of Urban and Regional Planning, said the Broward 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 a community redevelopment areas.
Tax increment financing is used to fund CRAs — meaning they 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.
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 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.
“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.”