Delray Beach accused of overcharging neighbors

A state committee has ordered an audit into Delray Beach’s finances after local legislators accused the city of overcharging neighboring Highland Beach for fire-rescue servicesand then withholding key information.

The Joint Legislative Audit Committee’s decision Monday for a state Auditor General review came one day before municipal elections, leading to allegations that politics may be a factor.

The audit request came from Republican State Rep. Peggy Gossett-Seidman, a former town commission member for Highland Beach, a barrier island town with about 8,500 seasonal and 4,150 full-year residents, most of whom are retirees.

The larger Delray Beach has provided fire and emergency response services to Highland Beach since 1994. But Highland Beach commission members decided in 2021 not to renew the contract when it expires in April 2024, citing high costs, and is creating its own department. Since then, town officials have questioned the accuracy of Delray Beach’s billings.

For the 2021-22 year, the city projected Highland Beach’s costs would be just over $5.1 million, but sent a final bill that was $5.5 million. Highland Beach officials say Delray officials haven’t provided documents to justify the nearly $400,000 difference that year or a $121,514 difference the prior year.

Highland Beach Town Manager Marshall Lab a diet old the committee“we’ re concerned about what numbers are accurate and correct ,” saying the amounts Delray Beach requested from Highland Beach don’t match the numbers published in city budget documents or turned over to auditors.

“It is unfair for a larger town to prey on a smaller town and assume they can fill the gap in their budget and then not portray any reasons for doing so,” Gossett-Seidman said. “Highland Beach is done with Delray Beach, and I’m asking Delray Beach to show us the money.”

Gossett-Seidman said Delray Beach has ordered Highland Beach to file public records requests for information about the contract — at a cost of $10,000. Delray Beach City Attorney Lynn Gelin calls that allegation a “flatout lie.”

Gelintold the South FloridaSun Sentinel her city charged Highland Beach $228 for public records related to the contract in 2021. There was a recent request for personnel files of every member on the fire-rescue force, most of whom don’t work in Highland Beach, and many files would have to be redacted, Gelin said. The city provided an estimate of $8,000, which Highland Beach hasn’t paid, she said.

“That’s an extensive use of staff time, and it didn’t relate to the contract,” Gelin said.

Delray Beach City Manager Terrence Moore told the Sun Sentinel he was surprised by Highland Beach’s concerns, saying he has had several discussions with town leaders, including a meeting at his office Jan. 24 to go over billings. He said this is the first time he’d heard the city was being uncooperative.

“I always do what I can, not only myself but my executive leadership team, to be responsive and attentive to questions,” Moore said. “We provided the data analysis to support the calculations.”

No city of Delray Beach officials attended Tuesday’s hearing, saying the meeting was noticed late, and there was confusion over whether it was happening. City officials retained Tallahassee lawyer Mark Herron on Friday, who attended the meeting and read a statement.

“While the need for an audit from the city’s point of view is unclear, the city does welcome the opportunity and will cooperate fully with the representatives from The Office of the [Auditor] General,” Herron said.

Committee co-chair Mike Caruso, R-Delray Beach, suggested there may be some larger issues happening in Delray Beach than just a contract dispute. He noted a consent agreement signed by city and state Health Department officials over water quality said the city failed to maintain proper documents and made some false statements. The city agreed to pay $1 million.

“What I see here is the internal controls, as well as the operational controls, appear to be very lacking when it comes to the city of Delray Beach,” Caruso said.

The timing of the meeting, one day before a contentious Delray Beach election, as well as Caruso’s harsh criticism, has raised questions of whether politics was at play.

Caruso’s wife, Tracy Caruso, ran a heated campaign against Delray Beach Mayor Shelly Petrolia in 2021, narrowly losing. Caruso’s top ally on the commission, Juli Casale, is on the ballot in Tuesday’s municipal election. Many of Caruso’s supporters in 2021 are supporting Casale’s opponent, Rob Long.

“I have requested audits in the past, and I’m in favor of audits,” Casale told the Sun Sentinel. “I don’t know if this is about good practice or bad politics.”

Committee co-chair Sen. Jason Pizzo, acknowledged the meeting’s timing might have been problematic.

“This is not a committee that’s going to be weaponized for political purposes,” he said. “Anyone having an election tomorrow should not take this audit and this request as anything other than a bookkeeping function. ... It is sterile. It is clinical and it has to do with math, not personalities, and not politics. So I apologize that the timing of this meeting comes on the eve of a municipal election.”