Miami Gardens - Opa-locka

Opa-locka gets failing grades on financial recovery from state auditor general

Opa-locka’s distinctive, decaying old City Hall has become a symbol of the city’s decay.
Opa-locka’s distinctive, decaying old City Hall has become a symbol of the city’s decay. Miami Herald

The times may not be as brutal in Opa-locka as they were three years ago when the governor declared a state of financial emergency, but they haven’t improved much either since the city was on the brink of bankruptcy.

A state auditor general has given out failing grades across the board to the city’s administrators, citing 99 issues of government mismanagement and incompetence that generated questionable costs and avoidable losses of about $5 million in Miami-Dade’s low-income minority community.

“Our audit disclosed a pervasive lack of adequate controls necessary to promote and encourage compliance with applicable state laws [and] city ordinances,” state Auditor General Sherrill F. Norman wrote in the 231-page report issued in late June. “Our audit also disclosed numerous instances of potential fraud, waste and abuse.”

A city commissioner who was elected among a wave of reform-minded political newcomers in late 2018 — ending the era of Mayor Myra Taylor — did not mince words after digesting the state’s sour assessment of Opa-locka’s government.

“This place is a big mess,” Commissioner Alvin Burke said on Friday. “We are going to need a real professional manager to come in and look at our policies and procedures if we ever expect to get back on track.”

Alvin Burke
Alvin Burke. Miami Herald

To that end, City Manager Newall Daughtrey, who is seen as a caretaker until a permanent replacement is found, met with the five-member City Commission in late June to discuss the state’s scathing audit and his plan to deal with the intractable budgetary problems cited in the report. Daughtrey could not be reached on Friday to comment on the audit or his proposed solutions.

For Opa-locka, the one consolation, at least for now, is that the worst might be over. Seven people associated with the city’s government were convicted between 2016 and 2018, when an FBI-led corruption investigation into shakedowns of businessmen seeking permits and licenses hung like a pall over City Hall. Among those who pleaded guilty to bribery conspiracy charges: City Commissioner Luis Santiago, City Manager David Chiverton and lobbyist Dante Starks, who was known as the “shadow mayor” because of his behind-the-scenes influence.

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Former Opa-locka Mayor Myra Taylor in 2016. PATRICK FARRELL pfarrell@miamiherald.com

But while the period of corruption might be over, the city is still struggling to right itself as its government remains under the control of a state oversight board appointed by then-Gov. Rick Scott in June 2016.

The auditor general found that Opa-locka’s leaders failed to meet the targets of a five-year financial recovery plan that was initially due in August 2016. The city also failed to set aside enough savings and continued to run a water department that issued grossly inaccurate and erratic bills to residential and business customers. Last but not least, Opa-locka’s leaders failed to foresee the challenge of paying $7.9 million for a new City Hall property, which depends on a steady stream of rents from private tenants.

Operationally, the root of the financial crisis was the city’s inability to perform any reliable annual audits, resulting in no accurate accounting of revenue collections and spending. As a result of not providing the state with required financial audits, Florida agencies withheld about $1.2 million from Opa-locka’s government.

An audit exhibit also highlighted about $1.7 million in “questioned costs,” including $217,476 in “unsupported employee pay increases,” $192,029 in “unsupported disbursements,” and $781,849 in “unsupported electronic fund transfers.” Among the dubious payments at City Hall: No records of $9,000 doled out to the mayor and city commissioners between October 2015 and June 2016.

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Newall Daughtrey, Opa-locka’s city manager Miami

When the state oversight board started approving the city’s spending in the latter part of 2016, it issued an edict ordering Opa-locka to stop allowing commissioners and the mayor to use leased cars, among other questionable expenses. They ignored the order.

“The city, with no apparent legal authority, provided automobiles for the mayor and city commissioners’ use,” the audit says.

The city’s administrators not only kept sloppy books but they also mishandled insurance policies for government property and vehicles. The state audit noted that Opa-locka “may have paid for insurance on vehicles that it did not own and may have operated vehicles that were uninsured.”

The audit also noted that the city stiffed the state of Florida on its share of red-light-camera fines collected in Opa-locka. Under law, cities in Florida are required to share that revenue with the state. As of August 2018, the city had failed to pay $3 million to the state.

“In response to our inquiry, city personnel indicated they did not know why former city personnel did not make the required weekly transfers to the [state] during the period June 2013 and July 2018,” according to the audit.

One of the main reasons for Opa-locka’s persistently unstable financial condition is its high turnover in senior management, including more than a half-dozen city managers since 2015. According to the audit, the turnover “may have contributed to the numerous control deficiencies and instances of noncompliance [with state and local laws] disclosed in this report.”

How corruption and mismanagement pushed Opa-locka to the edge of insolvency.

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