Public wrath startles port commission
Tax plan stirs ire
09/25/1989 3:01 AM
09/08/2014 5:33 PM
The people at Port Everglades lived the good life. Now the good life has turned on them.
For years, the port paid top dollar for everything from vodka to plane trips, from private attorneys to administrators' salaries. It maintained a fleet of 30 take-home cars, for everyone from the port director to a publicity assistant. Commissioners jetted around the world first-class and entertained clients at $40,000 stone-crab luncheons in New York.
Year after year, as free spending helped drive the commission budget up a staggering 421 percent, taxpayers didn't much care because port profits, not property taxes, were footing the bill.
All that changed in July. The port announced a $300 million expansion and said it would need taxpayers' cash to pay for it. Suddenly, the spotlight was on Port Everglades. Taxpayers, county officials and business groups wanted to know how the port was spending its money.
Port commissioners likely will face those furious questions at 5 p.m. today from the hundreds of taxpayers expected to descend on the final public hearing on the tax, the first in six years.
After the public has its say, commissioners expect to approve a tax rate of no more than 57 cents per $1,000 of assessed property value. The owner of a $100,000 home would pay $42.75 -- one of the highest port taxes in the country.
Like the 200-plus taxpayers at the first public hearing, today's crowd is likely to agree with port watchdog Helen Ferris. Had the port been less extravagant, she says, it would have money today to pay for some of the expansion instead of tapping taxpayers so heavily.
"We should not be saddled with the tax," she said last week. "The money that is spent on frivolous things adds up."
The tax revolt of 1989 has forced commissioners and port administrators to figure out where their money is going. Some of the answers, compiled by their consultants and staff and reporters, have surprised even them:
* The port pays top dollar to its administrators, up to $40,000 more than at other ports. Director Joel Alesi makes $105,000 a year; the national average is $69,000. Attorney Linwood Cabot earns $90,000, far above the $51,000 national average. In all, 21 port administrators earn at least $50,000 annually.
* Since 1988, the port has hired 20 new executives, secretaries and administrative aides, many at top dollar. Four of the commissioners have their own full-time assistants. Port consultant Booz-Allen & Hamilton said the aides aren't needed and noted only one other port in the country -- Seattle -- hires aides for its commissioners.
* The port paid $3.1 million between January and July for private attorneys, consultants and lobbyists, many with political and personal ties to the port. Former port commissioner Jean Fitzgerald works for one consultant, former port Director C. Thomas Burke for another. Current port Chairman Walter Browne works for a lobbyist.
* Booz-Allen says the port wastes $3 million a year on 53 unnecessary employees, most of them in engineering, operations and public safety.
* The port has 30 take-home cars, for everyone from Alesi to a publicity coordinator to employees in the public works department. Booz-Allen says that's far more than other ports allow.
* In the past two years, commissioners and administrators have jetted to Aruba; Milan, Italy; London; Bermuda; Brazil; Belgium; the Bahamas; San Francisco; New York; New Orleans; and Los Angeles. They often flew first-class, stayed in $255-a-night hotel rooms, ate the best food and drank the best liquor: filet mignon, Maine lobster, Absolut vodka, Tanqueray gin.
Booz-Allen concluded that the port's revenues had doubled over the past five years -- to $24.9 million in 1988. But the port's 1988 net income of about $8 million was only slightly higher than the net income in 1983 and had declined steadily for the past three years.
The main reason for the declining profit margin: "Expenses over the past five years have grown 40 percent faster than revenue," Booz-Allen said.
Port Chairman Browne said last week that one commissioner or another always raised questions when another employee was hired or another big expenditure made. But compared to the revenue that the project was likely to generate, no one was overwhelmingly concerned about one more person or one more contract.
"I don't think it has gotten out of hand intentionally," Browne said. "But the momentum has gotten to the point of almost runaway speed."
In addition to cutting employees, Booz-Allen recommended a long list of changes to increase the port's profits: streamlining the port bureaucracy; freezing cost of living increases for three years; operational changes at the foreign trade zone; letting private business buy huge, expensive-to- maintain cargo cranes.
Commissioners are studying the consultants' report and acknowledge they could have been thriftier. But they say they never imagined taxpayers would turn on them with such virulence after ignoring them for so many years.
"We were flying higher than Donald Trump," Commissioner Joseph DeLillo said. "We never really knew that they would react as violently as they did."
Said Commissioner Betsy Krant: "I think the people were caught off guard. The port was caught off guard."
The problem, they said, is that the public doesn't recognize -- or appreciate -- how successful the port is today. It has grown from a backwater to the world's second busiest cruise ship port in just five years, trailing only Miami. The containerized cargo business has boomed too, doubling since 1986.
Success like that costs money, they say, and around-the- globe traveling helps them lure new business. The new tax revenue will pay for a new hub for cargo and allow the port to attract more cruise business, more jobs and more money for Broward County, commissioners told taxpayers during the Sept. 5 public hearing.
Those taxpayers weren't swayed. Nearly three dozen took the podium to raise Cain, saying they don't see how they benefit from port expansion. One irate man called commissioners "spoiled children."
The criticism has been so intense, the port has scaled back expansion plans, trimmed the tax proposal by 43 percent and vowed to curtail their spending and entertaining.
Eleven yet-to-be-filled jobs were cut, including an aide for Commissioner Jim Kane. DeLillo wants to slash the commission's budget in half and says the port should set a limit on what it pays for outside lawyers and consultants.
Battered though commissioners may be, taxpayers' fury has helped them "grow up," Krant said. The public wrath and future scrutiny will force commissioners to watch their spending more closely.
"I think this is going to be a very positive thing for the port, to take that health exam, get a prescription and try to apply it," Krant said. "I think we will come out with a tighter ship and an improved bottom line."
Said Kane: "This will be a better port in the long run because we faced this tax issue. It means we're going to tighten our belts and be more responsible to the taxpayers."
Herald Staff Writer Ron Ishoy contributed to this report.
Join the Discussion
Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.