BALANCE SHEET BLOG – HOLLYWOOD, FL


State Senator’s Audit
October 4, 2011, 2:33 PM
Filed under: Budget, City Commission

State Senator Sobel —  who in 2009  sought and was granted a $30,000 interest-free, non-recourse loan from the City of Hollywood to renovate 5,000 square feet of office space for her use —  has suddenly expressed great concern with the City’s finances.  She’s requested that the State of Florida audit Hollywood’s finances and her request has been granted.

“Sobel appeared at a meeting of the Joint Legislative Auditing Committee in the Capitol to ask for the audit, citing the city’s declaration of a state of “financial urgency,” a recent 11 percent property tax increase, lucrative pension and health benefits for city employees and overly optimistic revenue projections.

Sobel questioned the work of Munilytics, an Illinois-based financial consulting firm hired by the city. She also questioned the city’s administrative set up, which she said separates the city’s budget and finance departments, resulting in accountability problems.” excerpt from Miami Herald, Oct. 3, 2011

Senator Sobel appears not to have understood the Munilytics report she questions. She states as one of her concerns a problem the City corrected months ago after Munilytics raised it — the need to separate budget from finance functions. Since the Munilytics report was issued in mid-June, the City has gone to great lengths to put its financial house in order.

It will be interesting to see what State oversight can bring to Hollywood’s financial situation.  Let’s hope it will be helpful.  We suggest the State auditors begin by reviewing the 2009 loan made to Sen. Sobel herself for office renovations — an expenditure category that does not appear to be allowed State Senators for their district offices.  The solution reached was to categorize her loan payments as “rent.”

Despite this fiction, the bottom line here is that the City has allowed the Senator to repay the $30,000 renovation loan over time, while excusing her from paying any rent for the use of City office space.  The rent forgone could have provided a City employee salary.

We opposed this transaction back in 2009.  In part we wrote:

We think it is fiscally irresponsible for the City Commission to commit $30,000 taxpayer dollars for office renovation in these harsh economic times. Many Hollywood residents have lost their jobs, and even their homes. Which of them would not welcome a four-year no-interest $30,000 loan from the city?

Link to full Balance Sheet 2009 post.


18 Comments

The CRA in and of itself is a ‘slush fund’. It’s immoral in this financial climate to have your most lucrative piece of property in the CRA (beach) and then raise taxes on everybody. It’s ridiculous and should be illegal.

Comment by Hollywood Helper

How come Sobel’s actions have stirred up the Balancesheet Blog? She lite a fire. We need and Audit (honest audit) so the residents can see what is really going on inside and outside City Hall. Right on Elenor Sobel. You took Blattner’s rudeness and the Mayor’s uncalled for remarks back in June. Now she has step forward and look what it has done for the Balancesheet Blog.

Comment by Helen Chervin

I personally believe the CRA’s should be abolished…in complete agreement with Mr. Doe’s commentary.

Comment by Lawrence Legg

I’m very disappointed with your comments “balance Sheet Bog”
Senator Sobel is trying to help the residents of Hollywood and you are attacking her for 30k.
How about the millions that have gone to CRA coffers and developers? Over 400 million the last 30 years.
How about all the money that was given as grand’s to developers? Or the loans that the commissioners have forgiven?

Why are you one sided?

Do you realize that CRA districts are getting a free ride?
While community redevelopment CRA district property owners pay the same millage rate to the city of Hollywood like the rest of the city taxpayers only 28.24% goes towards city services, the rest 71.76% goes to redevelop the area within that CRA district. How fair is that? The money that goes into CRA account is used to redevelop that area helping property values rise faster within that CRA distinct but the rise does not benefit the city because the city’s take is frozen, meanwhile your property outside that area is paying for the services. And don’t forget that inflation that affects city services are not frozen in 1979.
Think about it. We that do not live in the CRA districts (downtown and Beach) pay for their services.
Do you remember what Mr Bober said before he became mayor? Let me remind you.

“Currently, 100 percent of tax increases from new development go to the CRA. Bober wants to study the possibility of reducing that percentage as a way of replenishing the general fund for long-overdue improvements to the city’s infrastructure and, perhaps, as a way of giving tax cuts. The idea figures to have broad appeal”

Full Story.

http://www.browardpalmbeach.com/2006-11-16/news/hooray-for-hollywood/5/

So what happened with the study?

This money is General Fund money, but they transfer it to the CRA and we get an 11% tax hike.
Do you realize that the frozen value of the 2 CRA’s is $ 649,048,437.00 and today’s combined value is
$ 2,618,618,080.00 a difference of $ 1,969,569,643.00 Yes a deference of 2 billion dollars. Hollywood only keeps the taxes on the frozen value, the taxes of the 2 billion goes to CRA and developers.

Here is a link to the CRA budget look at page 7 to see frozen value and assessed 2010 values.
http://www.hollywoodcra.org/pdf/CRA_AnnualReport2010.pdf

Comment by Jon Doe

However and whatever her motivation is, a real audit, one that looks at how revenue projections are made and accounted for, one that looks at how money is moved from one fund to the other, and one that looks at how money is really spent here, should be welcomed by all. If indeed financial urgency was justified, then an outside audit would help prove that .

it is difficult to see the Balance Sheet praise the Munilytics audit, as in my opinion, it was incomplete with little real detail as to how things got the way they are. Comissioner Asseff’s comments , and i am paraphrasing here, that the problems ” were just bookkeeping errors ” is indicitive of our elected officials that simply dont want real detail to come out.

After the way that former comissioner Sobel treated both Ken Gottlieb and Ryan in the most recent election cycle, does it really surprise anyone that she is now calling for an audit ?

She is consistently ranked among the bottom of effective legislators and she has been part of the machine that has existed in Hollywood for years.Much the same with representative Schwartz.

Let an outside firm , WITH NO TIES TO THE CITY , conduct an audit. if the answers are not what we want to hear , then so be it. We fix it, make changes and move on.

The facts will set you free !

Comment by Jeff Brodeur

Good comment, Jeff. Just to clarify, we are not praising the Munilytics report. It was not an audit in any case. It focused mainly on revenue predictiions. It did criticize the city’s failure to separate budget and finance functions and the City promptly changed its staff organization accordingly. Nor are we opposed to an independent, politics-free audit. As we said, let’s hope this audit coming from the State rises to that level.

Comment by Balance Sheet Blog

I hope this is not just a simple audit that will only report where the money went and stops at that.

I hope this is an audit that can have consequences if there is mismanagement.

I find it very disturbing that in 2012 the city’s General Fund will transfer $ 12,944,510.00 to the CRA for more development.

This 13 million dollars does not include the 12 million that the county will transfer to the CRA. Remember county money is you money to.

9231 Community Redev-Increment 2,767,261
9232 Beach CRA-Increment 10,177,249

http://www.hollywoodfl.org/budget/pdf/FY2012ProposedBudget.pdf

Page 4 or 5th page from the top you can see the money that is going from general fund to CRA.

So we got an 11% property tax increase higher fees and the developers get our 13 million for their bank accounts.

Who is comfortable with this? Who accepts this? How can anyone accept their taxes to go up and then transferred to the CRA that has more power than elected government. It even sometimes supersedes the US constitution. You want proof? Read here. Page 14 163.370

http://www.cityoflakewales.com/city/agenda_cra/cr090528/4%20-%20CRA%20Fla%20Statute.pdf

One small part.

(e) Within the community redevelopment area:
1. To enter into any building or property in any community redevelopment area in order to make inspections, surveys, appraisals, soundings, or test borings and to obtain an order for this purpose from a court of competent jurisdiction in the event entry is denied or resisted.

Another small part.

163.370 Powers; counties and municipalities; community redevelopment agencies.–
“(1) Counties and municipalities may not exercise the power of eminent domain for the purpose of preventing or eliminating a slum area or blighted area as defined in this part; however, counties and municipalities may acquire property by eminent domain within a community redevelopment area, subject to the limitations set forth in ss. 73.013 and 73.014 or other general law.”

Imagine that, they can just enter your property and inspect it. WOW.

This is where your 11% tax increase is going. Great going Hollywood Voter.
Oh and don’t forget the 12 million the county will transfer to the CRA. That will bring the total to 25 million dollars to CRA that has the right to enter your property or even take it away from you by imminent domain. So the developers can make more money. Meanwhile we just fired 1400 teachers. Great going Hollywood Voters.

Comment by Jon Doe

Thanks for your comment. We’re working through the issues you raise, which takes time. The City budget is very hard to read and it appears you have studied it extensively. Regarding the roughly $12 million that is transferred from the General Fund to the CRA (Accounts 9231 and 9232), it’s our understanding that these funds ARE the county portion of the CRA’s annual income. The Broward Revenue Collector transfers the county funds to the City and the City then transfers them to the CRA. If Broward would send the money directly to the CRA, these amounts would not show up in the General Fund at all. The General Fund is in no position to subsidize the CRA; in fact, the City has been using the CRA (along with the enterprise funds) as a little slush fund to prop up the General Fund. In any case, you’re certainly right that it’s all our tax money.

Comment by Balance Sheet Blog

The City self-declared that it has problems. How could anyone be opposed to an independent audit to restore taxpayer confidence?

Did the City say it didn’t want or need the audit? No. I like the fact that local taxpayers don’t have to pick up the tab. Perhaps an independent audit will help the city’s house in fiscal order.

Go Eleanor!

Comment by Matt

We have an independent audit each year as a matter of law. One must only read it and interpret the results, in connection with the audits and actuarial reports, to see quite clearly the City is insolvent to the tune of nearly $300 million. Another audit is a waste of taxpayer cash. What is needed is design and execution of a business-wise plan. That takes leaders who are technically adept and politically independent. As of yet, we still have a large void.

Larry Legg

Comment by Lawrence Legg

Always “all talk and so little action” that really benefits her district!!
Let’s have a new vote!!

Comment by wksutton

This is simply retribution for the outcome of the recent referendum which has been initiated by union bosses using their buddy in the Florida legislature to punish the current city administrators and commissioners for their much needed push to shore up city finances. What ever happened to “we the people”? The Senator is a disgrace to Hollywood. It would be a breath of fresh air if we “take her out” in the next election cycle.

Larry Legg, CPA

Comment by Larry Legg

In response to the comment by Howard Sher:
I was chair of the HCCA nominating committee. Sara had nothing to do with or say about our recommendations. Of course one who has little knowledge of parliamentary procedure wouldn’t understand the process, and obviously wouldn’t let that lack of understanding get in the way of flinging accusations.

Re: Senator Sobel; if one were to take the time to comprehend the verbal gymnastics involved in her no interest loan that morphed into rent payments, one might not be so quick to fling even more accusations.

Flinging, however tawdry and distastefully done, seems to be one’s reason for existence. What an insult to the First Amendment.

How much better it would be if questions were posed and issues actually comprehended in order to facilitate intelligent, rational discussion.

Comment by Charlotte Greenbarg

question…is she paying the city with her own funds, or is she getting an allowance from the State for a field office? If so, I would assume that the State expects its members to pay taxes, or at least interest.

Also interesting that she received an enormous amount of money for her last campaign from a disgraced doctor and his PAC.

And, all this follows her mass mailing supporting No vote in the referendum,which was supported the fire fighters union; she now uses the PBA as her avatar.

Comment by dick blattner

OH MY!!! I am so tired of Eleanor Sobel and her antics. When she became School Board member, it was just another one of her antics. Six + years ago, at a lunch with us, five ladies, who are very involved with the school, one of us asked her if she was running for that position, for future aspirations in politics. She told us that this was her passion, to be there for the children, for a long time. Of course we did not believe her. And that was what she did, leave an empty seat in only a year and a half. And run for Senator. Unfortunately she won….I still remember the day when we confronted her at a meeting at South Broward High School, about her leaving an empty School Board seat so soon, with all the problems that that created. And Eleanor blatantly lied to us, saying that she never said that, and that she did not remember us!!
Clearly she was an advocate for herself and lied when she promised the good residents of Broward that she would serve full term. It is so sad how she used our children for her political aspirations. She is such a fake. And why would the city give her all that money????

Comment by Connie

Am I to understand according to the Balance Sheet that Senator Sobel should not call for an audit of what we all know was a totally faked financial urgency claimed by the city of Hollywood for the purpose of breaking the unions. Is this to mean that because Sobel took funds which were questionable but paid back, she is not qualified to carry out any functions as State Senator? Please explain, what does one thing have to do with other. That is a typlical Tea Party kind of attack when there is nothing sensible to say. Somehow it would seem that the BS is somehow getting more and more out of balance. It appears that the BSh has become the “New Balance Sheet” and new spokes service for the city. How about Sara Case not renewing Cliff Germano as vice president of the HCCA. Has Sara given a fair and reasonable explanation of that action. It appears if you disagree with HCCA your are out – has the word democracy some been trashed when not convenient? Where is the BS on the fact that we are being overcharge for garbage compared to any city we have checked in Florida? Where are they on the recent resignation of Albert Perez who was immediately hired back as a consultant to utilites at the daily rate that equals $364,000 a year? What has happened to you people at the BS?

Comment by Howard Sher

Good thoughts, Mel. I would also suggest that the auditors examine whether the Senator paid the City back.

Comment by Charlotte Greenbarg

COULD IT BE THAT THE SENATOR IS PANDERING CERTAIN GROUPS FOR HER RE-ELECTION BID?

I would suggest that the city ask the Senator to find new office space.

Comment by Mel Pollak




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