Feds Probe Mi­ami Gar­dens

South Florida Times - - FRONT PAGE - BY FRAN­CISCO AL­VARADO Flori­daBull­dog.org

The U.S. Se­cu­ri­ties and Ex­change Com­mis­sion is in­ves­ti­gat­ing Mi­ami Gar­dens to de­ter­mine whether city of­fi­cials vi­o­lated fed­eral laws in con­nec­tion with its $60 mil­lion gen­eral obli­ga­tion bond is­sue ap­proved by vot­ers in 2014.

Us­ing the state’s pub­lic records law, Florida Bull­dog ob­tained city doc­u­ments de­tail­ing the non-pub­lic in­ves­ti­ga­tion, in­clud­ing SEC let­ters ask­ing the city to pro­duce a va­ri­ety of doc­u­ments about the 2014 bonds. The most re­cent SEC let­ter was sent Dec. 12.

In­vestors who pur­chased the bonds were told pro­ceeds would be used to up­grade 18 city parks and tech­nol­ogy used by the city po­lice depart­ment. But progress on those cap­i­tal im­prove­ment projects has been slow, and records show the SEC is now seek­ing to learn whether Mi­ami Gar­dens of­fi­cials il­le­gally di­verted bond pro­ceeds to pay for day-to-day city op­er­a­tions, in­clud­ing em­ployee pay­roll and ex­penses of the seven coun­cil mem­bers.

The city was no­ti­fied of the probe in a Sept. 27, 2017, let­ter sent by Scott Lowry, se­nior coun­sel in the SEC’s Mi­ami re­gional of­fice, to Mi­ami Gar­dens City At­tor­ney Sonja K. Dick­ens.

In his 18-page let­ter, Lowry re­quested thou­sands of pages of fi­nan­cial doc­u­ments from the city, although he stopped short of ac­cus­ing Mi­ami Gar­dens politi­cians and ad­min­is­tra­tors of any wrong­do­ing. “This in­ves­ti­ga­tion is a non-pub­lic, factfind­ing in­quiry,” Lowry wrote. “The in­ves­ti­ga­tion does not mean that we have con­cluded that you or any­one else has vi­o­lated the law.”

How­ever, Hol­ly­wood-based at­tor­ney Lee H. Schillinger, who spe­cial­izes in com­plex se­cu­ri­ties lit­i­ga­tion, told Florida Bull­dog the SEC would not launch such an in­quiry with­out some solid ev­i­dence.

“The SEC doesn’t do any­thing willy-nilly,” Schillinger said. “Some­body must have let the SEC know some­thing is go­ing on for the SEC to do this type of in­ves­ti­ga­tion with this level of de­tail. Whether the funds were prop­erly or im­prop­erly used is some­thing the SEC has to de­ter­mine.”

A ‘SE­RI­OUS IN­QUIRY’

Danny Crew, Mi­ami Gar­dens city man­ager from 2004 to 2013, agreed “The SEC would not be do­ing this if they didn’t sus­pect that there could be a prob­lem,” Crew said. “It ap­pears to be a pretty com­pre­hen­sive, se­ri­ous in­quiry.”

Ryan White, an SEC spokesman, de­clined to comment.

Mi­ami Gar­dens Mayor Oliver Gil­bert III re­ferred Florida Bull­dog’s ques­tions to City Man­ager Cameron D. Ben­son.

Ben­son did not re­spond to in­di­vid­ual email and voice­mail mes­sages seek­ing comment. Nei­ther did Vice Mayor Erha­bor Igho­daro, nor coun­cil mem­bers Lisa Davis, Rod­ney Har­ris, Lil­lie Odom, Feli­cia Robin­son and David Wil­liams Jr.

In­stead, Deputy City Man­ager Ver­nita Nel­son pro­vided a reporter with an email state­ment that de­fended the city’s man­age­ment of the bond pro­gram with­out ad­dress­ing the SEC in­ves­ti­ga­tion.

“The City of Mi­ami Gar­dens is ded­i­cated to the ef­fec­tive and ef­fi­cient use of city re­sources on be­half of its res­i­dents and trans­parency to en­sure con­fi­dence in gov­er­nance,” Nel­son wrote. “With re­gard to the $60 mil­lion gen­eral obli­ga­tion bond, the city does this in sev­eral ways.”

For one, Nel­son wrote, a bond over­sight com­mit­tee made up of res­i­dents meets monthly to track the progress on projects and bond ex­pen­di­tures. “This al­lows the peo­ple to re­view how their money is be­ing spent,” Nel­son wrote. “Ad­di­tion­ally, in­for­ma­tion on the progress of bond-re­lated fa­cil­i­ties is dis­sem­i­nated through a news­let­ter.”

Fur­ther­more, Nel­son wrote, the city’s in­de­pen­dent au­di­tors an­nu­ally rec­on­cile all the city’s func­tions, in­clud­ing the gen­eral obli­ga­tion bond ex­pen­di­tures. “They also ex­am­ine whether bond funds have been prop­erly seg­re­gated,” she said. “This serves as an ex­tra set of eyes to en­sure that all rev­enue is be­ing han­dled prop­erly.”

Af­ter this story was posted on­line by the Mi­ami Her­ald, Mayor Gil­bert of­fered this state­ment:

“We have pro­fes­sional staff, city Res­i­dents, and in­de­pen­dent au­di­tors that all make sure the city is do­ing ev­ery­thing cor­rectly with its funds.

‘‘It’s clear that im­ple­men­ta­tion of the City’s Gen­eral Obli­ga­tion Bond is not mov­ing as fast as we would like but we con­tinue to move steadily for­ward. Not­ing, that re­me­di­a­tion of more than three decades of ne­glect of our pub­lic parks and pools takes time.

“We are be­ing in­ten­tional and dili­gent with the im­ple­men­ta­tion of the bond; we would rather go slow and do it right, then move too fast and have to re­visit an er­ror born out of haste.

“We are com­mit­ted to fully im­ple­ment­ing the bond and trans­form­ing pub­lic spa­ces into what I like to call ‘imag­i­na­tion em­po­ri­ums’ that will ex­pand hori­zons for fu­ture gen­er­a­tions of Mi­ami Gar­dens res­i­dents and make us an even bet­ter place to live.”

THE 2014 VOTE

Prior to the April 21, 2014, vote, Mi­ami Gar­dens’ elected of­fi­cials, in­clud­ing Gil­bert, touted the $60-mil­lion bond pro­gram by promis­ing im­prove­ments and new build­ings in the city’s 18 parks, as well as new tech­nol­ogy for the po­lice depart­ment, in­clud­ing li­cense plate read­ers and sur­veil­lance equip­ment.

The ref­er­en­dum, done by mail-in bal­lot, was ap­proved by 62 per­cent of vot­ers, but only 13 per­cent of the elec­torate took part in the ref­er­en­dum. More­over, the bal­lot did not in­clude a de­tailed break­down of ev­ery project that would be built at the var­i­ous parks or how much each will cost Mi­ami Gar­dens tax­pay­ers.

Al­most a year af­ter the bond mea­sure passed, the coun­cil ap­proved a bond im­ple­men­ta­tion plan that was still light on de­tails about spe­cific im­prove­ments and still did not spell out each project’s costs, ac­cord­ing to city res­o­lu­tions re­viewed by Florida Bull­dog. Bunche Park would get a new sports com­plex with an in­door run­ning track and stu­dios for gym­nas­tics, dance and mar­tial arts. A stu­dio for science, tech­nol­ogy, en­ter­tain­ment and math classes ad­min­is­tered by Mi­ami-Dade Pub­lic Schools is slated for Risco Park. There is also a de­scrip­tion for a se­nior ci­ti­zen cen­ter and culi­nary arts fa­cil­ity with a com­mer­cial kitchen and food stor­age ar­eas.

Last month, as the SEC’s in­ves­ti­ga­tion qui­etly con­tin­ued, Mayor Gil­bert put out a six­page news­let­ter ti­tled “Your Bond Dol­lars at Work” with up­dates on the var­i­ous bond projects. The costs of those projects was not dis­cussed, nor was there any men­tion of the SEC in­ves­ti­ga­tion.

In fact, no de­tailed cost es­ti­mates are made avail­able un­til project-re­lated con­tracts come up for a vote be­fore the city coun­cil. Deputy City Man­ager Nel­son pro­vided Florida Bull­dog with copies of the bond over­sight com­mit­tee meet­ing min­utes and the city’s bond news­let­ter dat­ing to June 2016. But nei­ther the min­utes nor the news­let­ters pro­vide fi­nan­cial in­for­ma­tion or bud­get costs for the projects.

By con­trast, Mi­ami-Dade County Pub­lic Schools listed its pro­posed cap­i­tal im­prove­ment projects and ac­com­pa­ny­ing costs for each school be­fore a 2012 vote for a $1.2 bil­lion gen­eral obli­ga­tion bond and the city of Mi­ami pro­vided an item­ized list of 134 projects that would be fi­nanced with a $275 mil­lion bond be­fore vot­ers ap­proved it this past Novem­ber.

Mean­while, the Mi­ami Gar­dens park im­prove­ments have been lag­ging. The city has com­pleted one project: the ren­o­va­tion of the Bunche Park pool. And only con­tracts for work at six parks have been ap­proved.

WHAT SEC SEEKS

As Mi­ami Gar­dens strug­gles to break ground on the cap­i­tal projects, the SEC is now ask­ing for doc­u­men­ta­tion from the city that would prove of­fi­cials are not us­ing bond pro­ceeds to cover costs un­re­lated to the bond pro­gram. In his Sept. 27, 2017 let­ter, SEC se­nior coun­sel Lowry re­quests among other proof:

▪ Doc­u­ments suf­fi­cient to show the ac­tual use of the 2014 Bonds pro­ceeds and whether any pro­ceeds have been used for any pur­pose or ob­jec­tive not de­lin­eated in the June 25, 2014 of­fi­cial state­ment, in­clud­ing, but not lim­ited to, meet­ing pay­roll or per­sonal ex­penses of city em­ploy­ees.

▪ Doc­u­ments suf­fi­cient to iden­tify each ac­tual or an­tic­i­pated project to be funded by the 2014 Bonds, in­clud­ing for each such project, the cur­rent amount funded, the to­tal amount an­tic­i­pated to be funded, the cur­rent sta­tus of the project and the es­ti­mated or ac­tual com­ple­tion date of each project.

▪ Doc­u­ments and com­mu­ni­ca­tions con­cern­ing trans­fers of funds or ac­count bal­ances to or from the Cap­i­tal Projects Fund.

▪ All doc­u­ments and com­mu­ni­ca­tions con­cern­ing ex­pense re­ports for the mayor, vice mayor, city coun­cil mem­bers and the city man­ager.

Based on the fol­low-up let­ter Lowry sent to Mi­ami Gar­dens City At­tor­ney Dick­ens in De­cem­ber, the city did not fully com­ply with the SEC lawyer’s ini­tial re­quest for records. For in­stance, Lowry in­formed the city at­tor­ney that Mi­ami Gar­dens did not pro­vide doc­u­ments and com­mu­ni­ca­tions con­cern­ing the ac­count bal­ances and fund trans­fers, or city of­fi­cials’ ex­pense re­ports. Lowry gave city of­fi­cials a dead­line of Jan. 12 to pro­duce the doc­u­ments that were not pro­vided, as well as other de­tailed in­for­ma­tion in­clud­ing names of ven­dors, proof of pay­ment to ven­dors, pay­ment dates and the ledger ac­count to record each trans­ac­tion.

When asked if the city met the Jan. 12 dead­line, Nel­son said via email that she did not know. “I will for­ward your ques­tion to the ap­pro­pri­ate party,” she wrote on Feb. 6. But Florida Bull­dog did not hear back from her or any other city of­fi­cial.

Ex-City Man­ager Crew, who re­viewed both Lowry let­ters, said Mi­ami Gar­dens of­fi­cials need to take the SEC probe se­ri­ously. “The SEC got the first pro­duc­tion of doc­u­ments and they didn’t par­tic­u­larly like it,” he said.“My main con­cern would be to get the an­swers to them quickly be­fore they get up­set.”

PHOTOS COURTESY OF CALVIN, GIOR­DANO & AS­SO­CIATES AND VOTERSOPINION.COM

Ques­tions about use of Mi­ami Gar­dens $60 bil­lion bond are be­ing asked by the The U.S. Se­cu­ri­ties and Ex­change Com­mis­sion. In­set: Mi­ami Gar­dens’ Mayor Oliver Gil­bert.

PHOTO COURTESY OF CITY OF MI­AMI GAR­DENS

Mi­ami Gar­dens City At­tor­ney Sonja K. Dick­ens.

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