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Minutes 10-10-16
MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY BOARD HELD ON MONDAY, OCTOBER 10, 2016, AT 6:30 pm IN CITY COMMISSION CHAMBERS 100 E. BOYNTON BEACH BOULEVARD, BOYNTON BEACH, FLORIDA PRESENT: Steven B. Grant, Chair Michael Simon, Interim Executive Director Mack McCray, Vice Chair Tara Duhy, Board Counsel Justin Katz Christina Romelus Joe Casello I. Call to Order Chair Grant called the meeting to order at 6:38 p.m. II. Invocation Ms. Romelus gave the invocation, followed by Chair Grant leading the Pledge of Allegiance to the Flag. III. Roll Call All present. Vice Chair McCray asked why the meeting was changed and learned it was in observance of Kol Nidre. IV. Legal: A. Information Regarding Economic Development Grants to B &J Catering, Inc. d /b /a Culinary Solutions. Tara Duhy, Board Counsel, explained a subcontractor contacted CRA staff indicating the contractor for the above named CRA Grant recipient did not pay all his subcontractors and was seeking redress from the CRA. She explained the issue is outside of the CRA's grant program. She wanted to make it clear in the policy that the requirements from the contractor and property owner must meet the requirements of the contract, and there are no third party beneficiary issues created with the grant program. Any redress the CRA would have for violation of the grant terms would be to get the money back from the Grant awardee. Staff was seeking authorization to make this clear in the policy and the item would return to the Board. The relationship is between the CRA and the grantee. Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 V. Agenda Approval: A. Additions, Deletions, Corrections to the Agenda There were no objections to Attorney Duhy's suggestion to move XIII. Old Business, Item B, before Item A. Mr. Katz requested adding a discussion of costs associated with the 2016 Florida Redevelopment Association (FRA) Annual Conference for CRA and CRA Advisory Board members associated with this year's budget to New Business, as Item I, and adding clarification of the role of the CRA Advisory Board regarding the Executive Director's evaluation as a Future Agenda item. Mike Simon, Interim Executive Director, advised in reference to Old Business Items C and D, they received information from NuRock Development that the Community Benefits Agreement (CBA) still needs revision before they accept it. Attorney Duhy recommended tabling the item as they go through the agenda. Chair Grant explained when he attended the Florida League of Cities Growth Management, Economic Legislative Policy Committee, he learned there was a Grand Jury Recommendation on CRA's. He suggested this be added to new assignment for the CRA Advisory Board. Miami Dade's grand jury investigation had 29 recommendations how to make it better. He thought it warranted a review. Attorney Duhy recommended discussing as Item 15. C.2., CRA Advisory Board Assignments. B. Adoption of Agenda Motion Vice Chair McCray moved to approve as amended. Mr. Katz seconded the motion that unanimously passed. VI. Informational Items and Disclosures by Board Members and CRA Staff: A. Disclosure of Conflicts, Contacts and Relationships for Items Presented to the CRA Board on Agenda Items B. Informational Announcements Chair Grant, Vice Chair McCray and Mr. Casello had no announcements. Mr. Katz received a voice mail from Bradley Miller in reference to a new project, but did not yet have any details. 2 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Ms. Romelus commented Hurricane Matthew skirted the City and requested all keep those impacted in prayer and to watch for information in the press as she was seeking to aid Haiti. A press release was pending. VII. Announcements & Awards: A. International Festivals & Events Association Award Tracy Smith - Coffey, the Boynton Beach CRA Marketing and Business Development, Specialist, commented the CRA has won a total of 20 awards during the past budget cycle. Nine awards were from the Florida Festivals and Events Association; two were from the Florida Redevelopment Association and another nine from the International Festivals and Events Association, which was held on September 27 The following awards were received: ➢ Gold for Boynton Beach Celebrates MILK Best Street Banners; ➢ Gold for Haunted Pirate Fest and Mermaid Splash Best Event Photo; ➢ Gold for Haunted Pirate Fest and Mermaid Splash, Best Outdoor Billboard; ➢ Gold for Haunted Pirate Fest and Mermaid Splash Best Event Merchandise (the recycled banner bags); ➢ Silver for the Haunted Pirate Fest and Mermaid Splash Best Street Banners; ➢ Bronze for Catch the Holiday Spirit Street Banners; ➢ Bronze for Project Seahorse Best Video ➢ Bronze for Haunted Pirate Fest and Mermaid Splash Best Radio Promotion; and ➢ Bronze for Haunted Pirate Fest and Mermaid Splash Best Event Program. The CRA swept the Gold, Silver and Bronze for the Best Street Banner category. They are very prestigious awards as the CRA was competing with Singapore, Korea and other countries all over the world. The Gold award for Street Banners for the MLK Boynton Beach celebrates MLK will be shared with the MLK Committee. They will receive a plaque as would the other community partners. B. Movies in the Park Christopher Burdick, CRA Special Events Coordinator, explained the last Movies in the Park was cancelled due to Hurricane Matthew. The scheduled movie was Willie Wonka and the Chocolate Factory, which will be rescheduled for the end of the season in July. The next movie on November 4 th would feature Frozen. The event will start at 7 p.m. C. The 5th Annual Boynton Beach Haunted Pirate Fest & Mermaid Splash Lord Governor Henry Hyde and Lady Calliope Hyde were present to announce the 5th Annual Haunted Pirate Fest and Mermaid Splash. The free fun family event, hosted by the CRA, shall take place on E. Ocean Avenue between Seacrest Boulevard and Federal 3 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Highway. A kick off concert will be held on Friday, October 21 from 6 p.m. to 10 p.m. featuring Gold Dust Lounge, Grinda Nova. The Food Truck Invasion will also be onsite. The festival continues on Saturday from 11 a.m. on the 22 till 10 p.m. when the Pirate Town Hobbs Cove comes alive with the best entertainment to be found. There are 10 stages for entertainers, jugglers, acrobats, comedy acts, swashbucklers, swordsmen, gypsy dancers, and a plethora of interactive costumed characters. Many children's activities, shows, games and lots of pirates will be available. He invited all to see live mermaids and a mermaid pageant and parade. The festival continues on Sunday from 11 a.m. to 7 p.m. and is the second largest festival of its kind in Florida. Vice Chair McCray was concerned about traffic and requested police officers assist those crossing Seacrest Avenue. VIII. Consent Agenda: Motion Vice Chair McCray moved to approve the Consent Agenda. Mr. Casello seconded the motion that unanimously passed. A. Approval of Period Ended Sept. 30, 2016 Financial Report B. Monthly Purchase Orders IX. Pulled Consent Agenda Items: None. X. Information Only: A. Public Comment Log B. Marketing and Business Development Campaign C. CRA Advisory Board Agenda — Oct. 4, 2016 D. Minutes — CRAAB Meeting — Sept. 8, 2016 XI. Public Comments: (Note: comments are limited to 3 minutes in duration) Susan Oyer, 140 SE 27 Way, had spoken with Vivian Brooks, former CRA Director about changing the color of the up- lighting on Ocean Avenue and noted October was Lupus and Breast Cancer Awareness Month which are represented by purple and pink. She thought the lights should be changed as they have been blue for two or three months. 4 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Bernard Wright, 713 NW 2 nd Street, wanted to speak about items C and D which will be tabled. He noted the Coalition of Clergy does not reside in the City and did not understand why they were taking a position to represent the Heart of Boynton when they are not active in the community. If there is a Community Benefits Agreement, he wanted to be involved as a long -term resident. He pointed out he is clergy, but not part of the Coalition and he did not want them involved. He asked he be respected as he wants to be involved in the Community Benefits Agreement. Chair Grant explained the Board was tabling the matter and it will be reviewed by the CRA Advisory Board. No one else coming forward, Public Comments was closed. XII. Public Hearing: None XIII. Old Business: A. Consideration of Appointment of Interim Director and Terms of Position. Vice Chair McCray noted Mr. Simon was Assistant Director for three years and favored Mr. Simon serving as Interim Director until a Director is obtained. Mr. Casello met with Mr. Simon earlier in the day and agreed with Vice Chair McCray to adjust his salary to $125K. Ms. Romelus asked Mr. Simon to share his credentials with the Board and he divulged the following information: In 1995, he was hired by the City of Delray Beach as a Program Specialist handling CDBG, SHIP and HOME programs, handling City grant programs and he became the Development Division Coordinator. He worked with the CRA formulating housing and redevelopment activities along the W. Atlantic Avenue and N. Federal Highway Corridors to Pineapple Grove. He left the City to pursue a private real estate position while consulting with the CRA regarding their acquisitions because of the knowledge he had regarding the W. Atlantic Avenue corridor. Some of those acquisition included the Fairfield Inn, the LaFrance Hotel and others, and working with architects, project designers and managers. He became employed by the CRA permanently as Development Manager and then came to Boynton Beach in 2006 as a consultant regarding the Intown Project for the CRA and became a full -time Development Manager in 2007; later became the Development Director, and then the Assistant Director three years ago. He has worked for the Boynton Beach CRA for over 10 years. Chair Grant noted the Executive Director had a car allowance of $250 a month, which he wanted to include with the $125K. 5 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Motion Vice Chair McCray moved to approve. Ms. Romelus seconded the motion. The motion on the floor was to appoint Mr. Simon as Interim Executive Director, under the same terms of his current position, except with the salary at $125K and a car allowance of $250 a month. This would be retroactive to October 1 St and it would conclude when a new Director is found. Vote The motion unanimously passed. B. Discussion of Providing Severance to Former Executive Director. Attorney Duhy explained, after the Board decided not to renew Ms. Brooks' contract last month the issue of severance came up. Attorney Duhy had indicated severance was not due or required under the contract. Since then, facts came to light regarding the contract. The contract was entered into on the first day of October; however, it specified the term shall commence on the date approved by the Board for a one -year term. Ms. Brook's review was on the agenda on September 13, 2016. The question arose what the term of the contract was. One interpretation Attorney Duhy had provided was the term of the contract was from October 1st to September 30th, and the Board decided not to renew her contract effective September 30 however, paragraph 2.1 indicates the effective date was the day the Board approved it which was September 8, 2015. Under that reading, the term would have automatically expired. Attorney Duhy explained the question is what happened to the agreement as of September 8 There was ambiguity in the contract. Under the interpretation the effective date was September 8th, Ms. Brooks' contract automatically renewed because the Board did not have a formal proceeding before September 8, 2016. Chair Grant thought the easiest way to move forward was to provide two weeks' pay to the non - renewal of the contract. Attorney Duhy explained the most conservative approach is to assume the contract term began September 8 th and notice was given to Ms. Brooks that her contract would not be renewed and she would be let go on September 13, 2016. Ms. Brooks worked through September 30 To provide the 30 -day notice, October 1, 2016, to October 13 should be included. Under section 10, out of an abundance of caution, the Board could issue severance from October 1 St to October 13 at a minimum. Mr. Casello commented he received an email saying the CRA Board was in violation of termination of the contract and thought the Legal Department should have raised the issue last month. Under the terms regarding termination, Ms. Brooks would receive 30 days' notice by paying her for the additional two weeks. They are not renewing the contract. As to severance, Ms. Brooks was a good worker although they had differences. 6 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Motion Mr. Casello favored paying Ms. Brooks a week for each year of her 12 years of service as severance including medical benefits for the three months. Vice Chair McCray seconded Mr. Casello's suggestion. David Katz, 67 Midwood Lane, explained historically the contract renewal comes up the meeting before it would expire which would have given her the proper notice. He understood Ms. Brooks creates the agenda and he contended she was an obstructionist by not putting the item on the agenda the meeting before which helped created the problem. It was his opinion that 12 weeks severance plus medical for the three months was excessive. He thought it was interesting the CRA Advisory Board was making a recommendation as it would be like the Planning and Development Board reviewing Andrew Mack, or the Recreation and Parks Board reviewing Wally Majors' performance and/or severance. He thought the recommendation was not within the purview of the CRA Advisory Board. James DeVoursney, 2625 Lake Drive North, asked the Board to request the CRA Advisory Board reform the evaluation process. Giving someone an evaluation and praising or firing is not the most effective tool for an Executive Director. He wanted them to consider an earlier evaluation, perhaps at the six month point, as these are valuable people and they want to get the best out of them. When looking at the evaluations, Mr. DeVoursney commented the average of the 12 evaluations came out to good, almost always meets expectations and sometimes exceeds them. It was a pretty good evaluation and he thought the Board should look at different instruments when making decisions whether to terminate or not. He agreed three months with benefits for someone who put so much time and effort into the City would be appropriate and if the Board wanted good Executive Director candidates, the Board has to show they are going to reform the evaluation process as he would be afraid, as a potential candidate, to leave a position to take this position because of the way the Board does business. He commented paying severance would be a good way to show the Board's heart. Vice Chair McCray commented if the Board is going to permit the CRA Advisory Board to evaluate the Executive Director, then every board in the City should evaluate the City Manager. He was not in favor of doing so and explained they are elected officials. There are some realms only they must do. The Commission and Board have a fiduciary responsibility to all citizens and the evaluations should be conducted by the Board. Mr. Katz agreed and commented he added it as a future agenda item at the next meeting. At a prior CRA Advisory Board meeting, members brought up whether it was appropriate or if they had enough information to evaluate the position. This is the only advisory board that evaluates an employee's position and makes recommendations about renewing contracts. The CRA Advisory Board is to give advice regarding CRA activities and this 7 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 was an administrative obligation. He did not agree an appointed board should handle the matter. Ms. Romelus agreed, but understood Dr. DeVoursney's comments were the CRA Advisory Board would not conduct a review in addition to the Board; it was they would review the methodology to assess the Executive Director. Vice Chair McCray noted the evaluation the Board used for Ms. Brooks was created by Ms. Brooks. Whoever is hired should have an evaluation the Board has reviewed. He emphasized the City Commission should review the Executive Director, not the CRA Advisory Board. Chair Grant commented the CRA Advisory Board reviews everything the Board does, and a review of the Executive Director, which would have to be changed. An evaluation form should be discussed in the future. Ms. Romelus wanted a standard Bryan Fitzpatrick, 409 NE 1 St Street, commented, historically there was turmoil with elected officials and Ms. Brooks served throughout all of those periods. He requested she be given 12 weeks severance and thought it was reasonable. Susan Harris, Finance Director, explained the salary for three months would be $32,673 and benefits, medical, dental, vision and life insurance was $2,068 for a total of nearly $35,000. One month salary with medical benefits would total $11,647 and two months would be $23,294 with salary and benefits. Chair Grant noted there was no change to the motion. Vote The motion passed 3 -2 (Chair Grant and Mr. Katz dissenting.) C. Consideration of Community Benefits Agreement between the CRA and Ocean Breeze Housing Partners, LP (NuRock Development Partners, Inc.) for the Ocean Breeze East Project in the Heart of Boynton. Motion Ms. Romelus moved to table items C and D. Vice Chair McCray seconded the motion that unanimously passed. D. Consideration of Community Benefits Agreement between the CRA and Heritage at City View Housing Partners, LP (NuRock Development Partners, Inc.) for the 2.97 Acre Project Site Known as MILK, Jr. 8 Meeting Minutes CRA Board Boynton Beach, Florida October 1, 2016 This item was included in the prior motion to table. E. Consideration of Purchase and Development Agreement with Heritage at City View Housing Partners, LP (NuRock Development Partners, Inc.) for the 2.97 Acre Project Site Known as MLK, Jr. Mr. Simon explained this item was based on a similar format to the Ocean Breeze East agreement. The application deadline for NuRock was December 8 There are achievement goals that will be required with the submission, such as application for a site plan by June 30 2017, provided the are awarded the tax credits, approval of the site plan from the City by December 8 2017, and contingencies for closing based on approval of the project's financing and the ground breaking ceremony to include the CRA Board and any other party they want to include. The parcel is appraised at $600K as of June 2016, and they are requesting the land to make the overall project more successful. The Board agreed to provide the next item a local government contribution of $1 million, to offset the acquisition and provide an abundance of potential points for the 9% tax credits for the senior housing application. Vice Chair McCray noted if the request fails, the CRA retains the land. The trigger is approval from the lottery system and approval of finance. The property would not close until all points are in place and NuRock takes over as owner, Motion Mr. Katz moved to approve. Vice Chair McCray seconded the motion that unanimously passed. F. Consideration of Interlocal Agreement between the CRA and the City for the Required Local Government Contribution in the Amount of $1,000,000 to Heritage at City View Housing Partners, LP (NuRock Development Partners, Inc.) for the 2.97 Acre Project Site Known as MLK, Jr, Motion Mr. Katz moved to approve. Vice Chair McCray seconded the motion that unanimously passed. XIV. New Business: A. Consideration of Additional Year Extension of Agreement of Real Estate Services between the CRA and Anderson and Carr, Inc. — Tabled 9/13/16 9 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Motion Vice Chair McCray moved to remove from the table. Ms. Romelus seconded the motion that unanimously passed. Mr. Simon commented the issue was if the property the CRA is interested in purchasing is represented by a listing broker and offering commission less than 5 %, if Anderson and Carr, Inc. would accept what was being offered. Robert Banting, President Anderson & Carr, 1434 SE Atlantic Drive, Lantana, responded under that scenario, they would be agreeable to the normal split so the CRA does not pay the brokerage fee. Chair Grant asked if he would be requesting a $3,000 flat rate commission, and Mr. Banting explained he could not answer the question right now. Chair Grant explained if there was a listing agent and they return to the Board with a contract would they get the flat commission. Mr. Simon explained if the contract went through and the Board approved entering into the contract, the only compensation Anderson & Carr would receive is what is offered by the listing broker and seller. The flat compensation rate they described is only when they are told to pursue a property and a contract is presented and the Board opts not to pursue the property. Mr. Banting commented if the CRA wants them to expend their time, energy and skill to negotiate a deal and then the Board decides not to buy the property, Anderson & Carr wasted their time. In one instance they wasted three months. Mr. Banting expressed it was not fair for the CRA to direct them to negotiate a property, they are successful in negotiating a deal they are told is acceptable, and then back out, under that scenario, they would still expect to get paid. Chair Grant explained in the future, the Board will be directing Anderson & Carr to the properties. Mr. Banting explained they would expect that term of the agreement to hold, depending on what they are told is acceptable, but has not been approved. Chair Grant explained there were several aspects the Board was unaware of regarding the dog park and the amount they would pay would be included on the agenda. Mr. Banting commented there are now a lot of developments by his office. The need for a dog park was evident and it was not a frivolous thing. Chair Grant suggested revising the language in the third paragraph of the contract, so if there is still a listing agent, Anderson & Carr would collect something for their time. The amount would be $3,000. Mr. Casello queried if it is considered good faith negotiations when the Board sends Anderson & Carr out to negotiate with set prices, and Anderson & Carr cannot make it happen if they would be paid $3,000. Mr. Simon explained after the meeting about the dog park, the Board directed staff not to negotiate on their behalf for property although it was very clearly identified in the plans as an important amenity. If the Board wants to say negotiate, staff would provide the Board with an appraisal beforehand so the Board would have an idea of what the property is worth. It would be money well spent. Mr. Simon noted; however, by doing so, the CRA will have given away its negotiating position via the 10 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 public meeting requirements. Mr. Simon commented there should be a reasonable expectation of what the Board would want before the broker makes an offer on behalf of the Board. He thought a range could be set up between the Board and Anderson & Carr. Mr. Banting commented they do appraisals all the time for different entities. Palm Beach Gardens uses Anderson & Carr and does not want the property owner to know who the buyer is as they do not want to show the CRA's hand by putting it in the public domain. They use a master appraisal agreement through Palm Beach County. Chair Grant requested a motion to approve with the following amendment: if they are a broker or acting on a property that does not have a broker and they bring back a reasonable contract to the CRA and they negotiated on behalf of the Board, if the Board does not accept the property, the Board agrees to pay the $3,000 flat compensation rate and if there is a listing agent with a contract price, Anderson & Carr will accept the commission on the list price. Mr. Banting explained each provision stands on its own. If there is a property listed with a valid listing agreement, Anderson & Carr would split commission with that broker and the CRA would not pay commission in that case. If a property was not listed and Anderson & Carr was asked to convince a buyer to sell at a reasonable cost, Anderson & Carr will receive 5 %. If Anderson & Carr successfully negotiates a potential acquisition under terms they are told that are generally acceptable and the Board declines the property, Anderson & Carr would receive at least $3,000 for their time and efforts. The graduated fee provision is not based on who has the listing, it is whatever the deals are that count towards the graduated scale. Motion Vice Chair McCray moved to approve what was stated. Mr. Casello seconded the motion that was unanimously passed. B. Consideration of the Selection Process for hiring a CRA Executive Director. Mr. Simon explained he and Attorney Duhy provided some options and inquired if the Board was searching for a single candidate, a firm to provide an Executive Director or if there is interest in an entity or firm to manage the entire CRA. There are three different variations. Vice Chair McCray asked if any CRAB used a firm instead of an individual and learned Pompano, West Palm, and Dania Beach did. Mr. Simon agreed to provide a list via email and advised there were quite a few CRAs, statewide that used firms. Mr. Simon explained two RFPs were attached as were sample RFPs and they drive different methods of soliciting. He asked if the Board wanted a firm to conduct a search and advertise the positions on the City and CRA website, or national redevelopment agencies, Downtown Development Authorities and Business Improvement Districts (BIDS). Mr. Simon noted the Board could extend or expedite the process, and asked if the Board wanted a different salary range. 11 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 David Katz, 67 Midwood Lane, explained former City Manager, Kurt Bressner, is a consultant and searches out high position managers at no charge, but learned he does not handle CRA's. Mr. Katz also expressed he would not consider the FRA as the gold standard as a resource for finding a Director. As far as using a company, RMA handles West Palm Beach and Pompano. He urged the Board to be careful and look at the contracts, because if awarding such a company a contract, the Board loses all control. James DeVoursney, 2625 Lake Drive North, agreed with Mr. Katz's position. When you outsource an important position, a close level of communication with the Director is lost. The CRA Advisory Board wanted a timeline, and thought having an individual compete with a management firm in the application process in 30 days may not be enough time for due diligence, and he did not understand the rush as they have a capable Interim Director. Management companies have boiler plate language and could issue an RFP within a day. The minimum competency should be the individual is acting as an Assistant or Executive Director. Vice Chair McCray did not favor a company. He wanted an individual and did not want a time line. Chair Grant asked if the Board wanted a company to search for an individual or list it as a job opening. Mr. Simon contacted the City to try to establish a process regarding using a search firm and was not in agreement with obtaining an agency. He did not know what their compensation would be and if they would be compensated whether they hire a Director or not. Mr. Katz advocated, pending cost, for a search firm to cast a wide net as they have the contacts to get the best applicants. Vice Chair McCray favored a search firm as did Mr. Casello, but the Board should write the criteria. He would not discount a management firm, as they only have one chance to get it right and then vet the candidates out. Mr. Katz agreed and favored an individual Director, but wanted to see all options. Attorney Duhy explained a firm would cost between $18K and $27K to do the work. She thought it would be about $20K. Chair Grant favored seeing candidates outside of the South Florida area. Motion Vice Chair McCray offered a motion they take their time as the CRA has an Interim Director. Chair Grant requested the CRA provide the funding for the firm to do the search. Attorney Duhy asked if staff would bring back alternatives to make presentations, or make a recommendation in the process to go out in search of a firm and bring it back. 12 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Mr. Casello thought it was incumbent on the CRA Director to find a search team that fits the criteria the Board is looking for. Mr. Simon agreed to bring as much information as possible to the next meeting and asked if they were comfortable with a 30 -day time period or if they would have a special meeting on the 18 regarding items pertaining to selection. A motion was needed as there will be items that come before the Board regarding a timeline that will also require motions. Staff needed to know if the CRA Advisory Board and the Board needed to decide if the CRA Advisory Board will be part of that process. Mr. Casello inquired about the timeframe to select a search firm. Mr. Simon thought 30 days would be sufficient and at the November meeting, staff bring back an RFP for a management firm and a proposal or two to act as a job candidate search firm. He did not know if a firm could provide both services, but thought there was direction they can take control of as an Agency. The City Manager and other CRAs could assist in the effort. A list of management firms, costs and costs for RFP could be assembled. Chair Grant asked if instead of issuing an RFP next month, to return again in December, if the Board could authorize solicitation of bids for $24,999. Mr. Simon explained he would search their firms and bring back costs and a draft RFP, which would go out at the same time. It would be great if the search firm could do both or if they authorize the search firm to obtain candidates based on the time the Board selects or at the same time the RFP is issued. They could be handled concurrently. Attorney Duhy explained the recommendation is Mr. Simon would bring back a proposal to retain a management firm. If at the time in November, as he had some management firms in mind, he could bring it forward, there is no process necessary. If an RFP is required, the Board needs to look at it as it will contain the job description, salary range, and other requirements the Board needs to be aware of. In November, staff would return with a recommendation on moving forward with the RFP /Solicitation to bring back candidates. Chair Grant expressed confusion about the definition of management firm and asked if it was the search firm or a management firm. Attorney Duhy clarified she was talking about the firm to be used to find an Executive Director position, which was a search firm.. Vice Chair McCray requested a hard copy of what was requested when they hired Ms. Brooks. Ms. Romelus asked what would happen to Mr. Simon in the event they chose a new Executive Director and learned his position would revert back to Assistant Executive Director. Attorney Duhy explained the Board could make a motion to make it clear, but it is inferred. The motion would be if an Executive Director other than Mr. Simon is chosen, he would resume his responsibilities as Assistant Director. Vice Chair McCray requested a motion. 13 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Motion Ms. Romelus moved to approve. Vice Chair McCray seconded the motion that unanimously passed. Mr. Casello received confirmation that Mr. Simon will bring a search list to the next meeting and the Board could review the candidate qualifications they want included in the search. C. Consideration of Fuel Discount Policy for Boat Slip Tenants at Boynton Harbor Marina. Catherine Ross, Esq. Lewis, Longman and Walker, explained the fuel discount was discussed at the last meeting, and she, Mr. Simon, and the Dock Master, Brian Smith, worked to have the language be consistent with the discussion. There were a few minor changes between the difference of cash, check and credit prices, but overall the point of the policy was tenants with vessels authorized to be at the Marina Basin, including Two Georges and the Seamist, will get the fuel discount for those authorized vessels. If the boat lives on the dock, it gets the discount. Motion Vice Chair McCray moved to approve. Mr. Casello seconded the motion that unanimously passed. D. Provide Direction to Staff for Potential Acquisition of 128 NE 11 Avenue. Mr. Simon explained this item is before the Board as directed, prior to being involved in negotiation. The property is owned by the Boynton Beach Faith Based Community Development Corporation (CDC) who is interested in selling the property. The property is adjacent to properties the CRA owns on the north side of MILK Jr. Boulevard and would be beneficial if the Board wants to grow the size of potential redevelopment there. The property appraised at $124,000 and there was discussion of that price from the former Director. The CDC is using it as a rental. Chair Grant asked if the CRA would be the management company of the rental. Mr. Simon responded they could add language to remove the tenants, have options or have the CDC handle. Mr. Casello asked if there would be relocation fees involved regarding the displaced tenants and learned it was not a requirement. but could be offered. Motion Vice Chair McCray moved to approve, Ms. Romelus seconded the motion. Staff will bring back the contract and present it to the Board. 14 Meeting Minutes CRA Board Boynton Beach, Florida October 1, 2016 Vote The motion unanimously passed. E. Consideration of moving the Nov. 8, 2016 CRA Board Meeting to Wed., Nov. 9, 2016. due to the National Election Day Schedule. Motion Vice Chair McCray moved to approve, Mr. Katz seconded the motion that unanimously passed. F. Discussion of Legal Representation of the CRA Advisory Board (CRAAB). Mr. Simon asked if legal attendance at the CRA Advisory Board meeting was desired, if it be available on an as- needed basis, or if the Board should ask the City Attorney to attend the CRA Advisory Board as it is a City Advisory Board. The City has legal representation at some of their meetings, but not all. The Planning and Development Board, Board of Adjustments and Appeals, and the Pension Board have counsel. Other Boards such as Arts Commission and Historic Preservation Board do not have counsel present. The CRA Advisory Board did not discuss the issue. Mr. Casello commented they had discussed this afternoon that the Advisory Board recommendations come to the Board who has legal counsel. He did not think another legal level was needed and did not favor counsel being present as did Vice Chair McCray. Ms. Romelus suggested providing counsel on an as- needed basis, i.e. the CRA Consolidated Plan, when the Board so desired. She agreed with Mr. Casello, but thought it may be necessary in some instances. Mr. Katz did not feel the cost would be justified on a monthly basis. Attorney Duhy clarified no motion was necessary. There was consensus unless specifically requested by the CRA Board or City Commission, that Legal Counsel is not needed at CRA Advisory Board meetings. G. Consideration of Casa Costa DIFA Assignment. Attorney Duhy explained the CRA received a request to have the Casa Costa rights and obligations under the Direct Incentive Funding Agreement (DIFA) transferred /assigned to another entity in its entirety. The current agreement requires Board approval because substantial completion, under the definitions in the DIFA, has not been completed. The only amendment she saw would be to make it explicitly clear that the assignee is taking on all of the obligations and understands it relieves the assignor of all its responsibilities and obligations pursuant to a provision in the DIFA. Mr. Katz asked if the CRA was legally obligated to transfer the DIFA and learned the assignment is within the Board's discretion, 15 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 and is not to be unreasonably withheld. If there is a reasonable basis within the Board's purview to deny it, they could. Mr. Katz commented the language required efforts to be made to fill the retail to qualify for the DIFA on an annual basis and there was no language that said they must. He wanted to amend the contract to say you have to take on tenants and thought it was unacceptable in certain situations to give money away when the retail units are vacant. He wanted stronger language to fill vacant retail locations. Chair Grant commented the language indicates no tenant would be unreasonably dismissed. William Sklar, Carlton Fields on behalf of the owner, PRH, advised the proposed assignee, Andrew Podray,* was present. Mr. Sklar explained this item is in conjunction with 12 commercial units, three of which are occupied and it is intended the assignee assume all the obligations. He commented he would be happy to add language to make it as clear as can be that all the obligations under the DIFA as amended will be assumed and performed by Mr. Podray. Mr. Casello commented there are 12 retail units and for the last six years, CRA made $2.3 million in DIFA payments and only three of the 12 units are occupied. Mr. Sklar explained much of it was attributable to the sale of other units, not only the commercial space. When PRH purchased the residential units, there was turnover in the Association. There have been efforts made to lease the space and the leasing broker was also present. He could not attest to what was done or not done regarding the retail space, but there were three commercial tenants put in place and he had to defer to others regarding the efforts to fill up the other units. Mr. Casello thought future DIFA agreements with other developers should not be transferred with the sale of the property. He thought each one should be undertaken on an individual basis with the new owner. He understood the CRA may be legally bound to make the transfer, but in the future, when offering millions in taxpayer money without results, the Board should renegotiate with the new buyer and did not think the DIFA should not be a selling point for the property. Chair Grant noted new development was not asking for the DIFA. Mr. Casello agreed but commented it should be done for those that ask for the DIFA. Andrew Podray, 800 N. Road, founded a company named American Housing Enterprises. It is a real estate development firm that holds many types of assets such as multi - family, office, retail, industrial site acquisition and development of empty land. Mr. Podray explained he has unique expertise in filling plazas such as Casa Costa. He provided his expertise and development background, mostly with bank foreclosurers and empty properties. He anticipates, if the Board approved transferring the DIFA to him, he anticipated 40% to 50% occupancy rate within the first 18 months to two years, and after that, a 70% to 80% occupancy rate in about three years. He would accomplish this by docking the rents. He gets good deals on the property; he pays cash and closes quickly, 16 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 and passes the savings onto the tenants. Chair Grant asked if Mr. Podray was aware of the grant programs for new retail tenants and advised he was apprised of them. Ms. Romelus ask if Mr. Podray was willing to put a timeline in the agreement and Mr. Podray responded to the best of his knowledge that is the timeline to lease up the property and it only benefits him to do so. He has no incentive to keep the development empty, and would start by removing the paper on the retail glass windows. Vice Chair McCray asked Mr. Podray if he was in agreement with what was being proposed as the assignee in the agreement. Mr. Podray responded he was. Chair Grant understood he was referring to 40% filled and the eight retail units within three years. Mr. Podray explained based on his experience, it would not be overly difficult and he does not benefit if the units are empty. Mr. Sklar explained this was conditioned on the sale and closing to Mr. Podray within the next 30 days. If not he would hopefully return with another buyer. Motion Vice Chair McCray moved to approve the DIFA as counsel had indicated would be drafted with stronger language which Mr. Podray had agreed too. Attorney Duhy clarified Vice Chair McCray's motion was to approve the proposed assignment of the DIFA as drafted with the amendment Attorney Duhy had suggested acknowledging the transfer of all developers obligations and rights under paragraph 9.2 of the DIFA. Mr. Katz seconded the motion that passed 4 -1 (Mr. Casello dissenting.) H. Consideration of ILA between the City of Boynton Beach and the CRA for the Neighborhood Officer Policing Program. Mr. Simon explained this item is to approve the Interlocal Agreement (ILA) between the CRA and the City for the exchange and processing for the funding for the Neighborhood Officer Program. The budget was attached. The costs permitted by Statute were clearly delineated. Vice Chair McCray explained he represents District 11 and a citizen asked where the Segways were as he did not see anyone using them. He understood they were in operation for one year, but he thought they needed more visibility on the streets, reaching more young people. He did not receive a definite return, but would support the program for another year. 17 i Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Motion Vice Chair McCray moved to approve. Chair Grant commented he received an email detailing the program activities for the past eight months. They are supportive of the Village initiative with the Boy Scouts. Vice Chair McCray commented the initiative with the Boy Scouts was fine, but they are paying for Officers to be seen on the streets. He never sees them and wanted them to be visible in schools and when students get out of school. He thought there was still room for improvement. Mr. Casello explained they planned to have computers available for afterschool programs when the program began for job searches and homework. Vice Chair McCray commented the other Neighborhood Officer had stated to Vice Chair McCray that he understood they were not doing all Vice Chair McCray had wanted them too, and asked for another chance. Vice Chair McCray requested the program be given another year. Sergeant Henry Diehl, Neighborhood Police Officer, explained the office does not have specific hours and they do not have the computers. If they did have the computers, they would be available during certain hours. Vice Chair McCray had given Officer Diehl contact information for Rick Maharajh from the CRA Advisory Board. They met with Officer Diehl and he looked at what they had in the office, but has not heard back from him since then. He clarified that occurred around July and he would follow up. They still mentor youth and each Tuesday they go to the Cub Scouts and mentor them. They earned a merit badge for Crime Scene and Forensics. Mr. Casello asked Sergeant Diehl to give a report about the computers for the next meeting. Ms. Romelus asked if this was a donation from Mr. Maharajh and learned it was because it was not a budgeted item. Vice Chair McCray understood he would also look at the Hester and the Carolyn Sims Centers. There was not enough space and he asked if they were willing to reach out to the public and do things in the community. He thought computers were fine, but visibility was important. They used to have Neighborhood Police Officers on bicycles and they would always be in the community speaking with the youth. The program was working in the past and was stopped due to the downturn in the economy. He wanted the officers to sell themselves Sgt. Diehl explained they provide reports on a quarterly basis to CRA staff and understood it would be given to the Board as well. Vote Ms. Romelus seconded the motion that unanimously passed. I. FRA Conference 18 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Mr. Katz explained some members made plans to attend this conference, but this conference was in the next few days and the funds for them typically do not extend to advisory boards. If they go on paid conferences, it opens to door for all advisory boards to request similar treatment. He did not think it was a prudent use of CRA funds and it was a slippery slope to extend paid training to advisory boards as there are dozens of them. Mr. Simon explained the cost to send five individuals was almost $5,000. Mr. Katz did not favor singling out the CRA Advisory Board and it would add up to be a pot of money that could be better spent. Mr. Simon indicated to Vice Chair McCray the Board voted to send the Advisory Board members, but Vice Chair McCray did not recall doing so. Mr. Casello recalled speaking with Ms. Brooks who indicated training would be good for the CRA Advisory Board, but also did not recall voting to approve the travel, although he agreed in principal. He wanted to see when the vote was taken to allocate the funds. Mr. Simon had provided the information in regard to the general fund budget. There was $12,000 for attendance and the justification was to cover the cost of CRA Advisory Board attendance and training. Also at the August 9 th meeting, under New Business, Ms. Brooks explained funds were budgeted for all the members to attend and were still trying to get the final numbers of those in attendance or who would desire to attend. Under information only on September 13 the conference was already included. Mr. Simon noted, the budget could be amended to reflect that decision or the Board could wait until June or July. Mr. Casello agreed with Mr. Katz. Mr. Simon explained the intent of the CRA Advisory Board is under the Board's purview. It was staff's impression, the more knowledge the Advisory Board had, the better advice and training they could provide. The CRA Board is a different entity than the City. The Planning and Development Board has a Statute to operate under and receives direction under the City Attorney. The CRA is its own private entity and it was staff's recommendation that those involved in making decisions on spending would benefit. Staff will wait for the Board to direct funds in next year's budget and will not offer those funds. Vice Chair McCray commented the funds are still tax dollars. Vice Chair McCray explained Ms. Brooks did not run the Agency; the CRA Board did and Ms. Brooks made a recommendation. He commented all 12 members did not have to attend. He asked if the prior seven member board attended any conferences and learned they did. He favored the Board reviewing the issue again after the members returned, as they need to be more responsive to when it comes to being a fiduciary member. Chair Grant agreed it was tax dollars. David Katz, 67 Midwood Lane, advised the two members that attended the conference in the past were CRA Board members and not Advisory Board members. He distributed the Boynton Beach CRA Travel policy with highlighted portions. He read the authorization and reimbursement policy prior to travel, the member is to complete a conference and travel request form and submit it for approval with a description of the conference. As approved at the October 9, 2007 CRA Board Meeting, all travel by CRA Board members, 19 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 not advisory board members, must be approved in advance by the CRA Board. The minutes that Vice Chair McCray mentioned, had no mention of a CRA Advisory Board member. He read Section D, travel approval and reimbursable expenses indicated authorized travel is defined in the annual CRA Budget as approved by the CRA Board for non - local, local and regional travel and entertainment expenses related, to a public purpose. The CRA Advisory Board does fall under the heading of public purpose for the travel as they are an Advisory Board. The next page said "CRA Board member travel shall be approved by the CRA Board Chair or Vice Chair and Executive Director, in advance by the CRA Board at a regularly scheduled meeting. He pointed out it was never an agenda item at any meeting. Mr. Katz had reviewed the Advisory Board minutes. He thought it was a fairly large sum of money and it is a fairly large volunteer board. The conference was a Florida Redevelopment Association conference, and there were members of the Planning and Development Board who are more qualified in development and redevelopment than the CRA Advisory Board. Mr. Katz explained the Planning and Development Board members attended a seminar which they paid for on their own and the members were not afforded the $25 fee. Florida Statute 163 only gives CRA Board members reimbursement of certain travel and expenses incurred during a properly authorized and legally approved travel vote which was not done. It would involve putting travel on the CRA Board agenda and voted on by Board members. He noted this was done for the CRA Board members as Ms. Romelus was attending. He approved of Ms. Romelus attending, but not the CRA Advisory Board members. He asserted if the CRA staff initially suggested and authorized an inappropriate expenditure to the CRA Advisory Board members, then maybe there needed to be additional changes or a training session as CRA tax dollars are not a piggy bank for advisory board member travel, cell phones or computers which was recommended by the former CRA Director when no other board has them He commented this inappropriate and possibly illegal expenditure is in direct conflict with the CRA's own travel policy which was approved October 9, 2007. It was Mr. Katz's opinion that F.S. 163 does not afford the latitude of sending advisory board members on this travel, and he would appreciate as a taxpayer rescinding their travel, saving taxpayers that money which could be better used in the HOB. James DeVoursey, 2625 Lake Drive North, understood $5,000 is a lot of money, but understood members were attending and it was approved already. He commented the curriculum of the conference was outstanding and attendance would afford the CRA Advisory Board to bring their A game to the meetings. He thought a cost benefit analysis should be conducted before taking any action to see what kind of benefit they have. The four Advisory Board members would bring back information and the other members would benefit as well. He thought it was a small investment with a great return. He respectfully requested the matter be analyzed. 20 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 Mr. Casello inquired why the estimates differed and learned it was due to different mileage and events. Vice Chair McCray asked if they would set a precedent if they approved the item and if it was within the Board's purview. Attorney Duhy responded it is discretionary and any action the Board would take would not affect the Board's future rights to change their mind or reprioritize their funds. He asked Mr. Simon if reservations were made and all was set to go and learned they were. Vice Chair McCray commented travel in the future is a Board decision. He did not want to tell the members to unpack. The motion was for the CRA Advisory Board to attend since they already had reservations. Motion Vice Chair McCray moved to approve it and next time the Board will be more responsive in a fiduciary fund. Mr. Casello seconded the motion. Ms. Romelus added she believes in education and the conference will yield a better product. She was surprised to learn they were attending and thought it was not a luxury that would be afforded to them, but she was glad they were going. She suggested in the future, limiting conferences each year so only a few Advisory Board members attend. She agreed the Board needed to be fiscally responsible to the taxpayers, but thought the public would not mind allowing members in the City to serve them in the best possible way. Vote The motion unanimously passed. XV. CRA Advisory Board A. Reports: None B. Pending Items: 1. Discussion of the Feasibility of a Regular Art Walk Event on Ocean Avenue Chair Grant reviewed the Advisory Board thought this item should be referred to the Arts Commission to develop and it would be discussed on the City Commission level. 2. City Services Survey for the CRA The Advisory Board tabled this item to their next meeting. C. New Assignments: 21 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 1. Research for a Potential CRA Grant for Job Creation Chair Grant commented the CRA Advisory Board is researching programs offered by the Career Source/Workforce Alliance. 2. Grand Jury Recommendation on CRA's. Chair Grant commented he wanted the CRA Advisory Board to review the Miami /Dade Grand Jury report and return with recommendations to see if they need to make changes to the CRA Board. Motion Chair Grant passed the gavel and moved to add. Ms. Romelus seconded the motion that unanimously passed. XVI. Future Agenda Items: A. Responses to Cottage District RFP /RFQ B. Discussion of District Clean Program C. Disposition of 222 N. Federal Highway D. Results of the 5 th Annual Boynton Beach Haunted Pirate Fest & Mermaid Splash E. Executive Director Review Evaluation Chair Grant commented the Board had added Item E. Mr. Katz explained from reading the CRA Advisory Board September meeting minutes, the Advisory Board had concerns about the Advisory Board reviewing the Executive Director. The CRA Advisory Board has only been in existence for a few months and the Board already tried to hone in on the Advisory Board's purpose. It was his opinion that administrative issues such as hiring and firing or retaining or renewing employees or the Executive Director, should wholly remain within the CRA Board's purview and other advisory boards do not evaluate their City liaisons. He thought it should be exclusive realm of the Board. There was consensus. Motion Vice Chair McCray moved to approve any future activity regarding the evaluation or retention or hiring or firing of the Executive Director should be within the sole purview of the Board and not the Advisory Board. Ms. Romelus seconded the motion. Vote The motion unanimously passed. 22 Meeting Minutes CRA Board Boynton Beach, Florida October 10, 2016 XVII. Adjournment Motion Ms. Romelus moved to adjourn. Vice Chair McCray seconded the motion that unanimously passed. The meeting was adjourned at 8:55 p.m. Catherine Cherry Minutes Specialist 23 � I CRAs: THE GOOD,THE BAD AND THE QUESTIONABLE I. INTRODUCTION Midtown, South Beach. Lincoln Road Mall. Those who have lived in Miami-Dade County long enough will remember when Midtown hadits share of blight and consisted of a number of vacant railroad yards. South Beach was populated by a majority elderly population who lived in an assortment of old hotels,apartment buildings interspersed with warehouses and a dilapidated dog track located at the southern tip of the beach. Lincoln Road was a walking mall that contained a hodge-podge of old restaurants, shops, drug stores and offices housed within decaying buildings. However,the blight and seedy nature of those areas are long gone,replaced by an infusion of new businesses,upscale residences and trendy restaurants. The transformation was accomplished, in large part, through various Community Redevelopment Agencies ("CRAs"). • Community Redevelopment Agencies (CRAs) are a common government tool for redevelopment in Florida, and.they Operate on a budget generated by the increase in property taxes within the redevelopment areas. Once the CRA is established,a percentage of the increase in real property taxes goes to the CRA. This primary source of revenue for CRAB is known as tax increment financing (TIF). The TIF is used to fund and finance redevelopment projects outlined in.each CRA's Community Redevelopment Plan. CRAs are formed to address issues of slum, blight and the shortage of affordable housing within a designated area.' The laws governing the formation and operation of CRAs are found in Florida Statute Chapter 163,Part III. CRAs can be formed by a city for a designated area within its boundaries or can be formed by a county to address issues within a designated area. } We undertook our investigation after learning of several examples of mismnpatement of large amounts of public dollars. Because of those instances of mismanagement, we anticipated widespread misuse and mismanagement of public monies by CRAs. While we discovered ongoing issues with several CRAs,we also found several CRAs which effectively and efficiently 'During our investigation we noted that the acronym"CRA,"which is primarily used to refer to the community redevelopment"agency,"is sometimes used to refer to the community redevelopment"area,"i.e.,the geographical area within the agency's boundaries. All CRA references herein will refer to the agency. 1 used their funds to accomplish the intended goals of the Community Redevelopment Act and their community redevelopment plan. !! i ' Before we address our findings, we want to acknowledge that there are many qualified, hardworking, good-intentioned and dedicated people that make up the staffs and boards of CRAs. We found that CRAs,when run in a manner consistent with the intention of the law, are a very useful tool with which to address some very challenging community issues. We have included a number of recommendations herein which we hope will be adopted and result in better operations of CRAs,not just in Miami-Dade County,but throughout the State of Florida. IL OVERVIEW OF CRAB The original statute governing CRAs is entitled the"Community Redevelopment Act of . 1969." The definitions, guidelines and requirements therein have not been substantially changed since their inception. That is significant because we found what we believe to be a systemic practice of skirting the intent of the statute by overly broad interpretations of the definitions and requirements contained therein. To start, it is important to understand the intent of the CRA statute and the issues or problems meant to be addressed by the statute. Decades ago, when the statute was originally !! written, the legislature found and declared that issues of slum, blight and affordable housing were problems affecting the health, safety and welfare of the residents of some Florida communities. The Community Redevelopment Act of 1969 allowed for the formation of CRAs which would address the slum, blight and shortage of affordable housing for low and moderate income residents. However, in order to form a CRA it was first necessary to demonstrate that slum, blight or a shortage of low and moderate income affordable housing actually existed iii the proposed redevelopment area. This "necessity" requirement is set forth in Florida Statute • 163.355. Creating a Community Redevelopment Agency A. The Finding of Necessity Once a city or county decides that it wants to designate a specific area as a community redevelopment area and create a CRA, the first important step is a finding of"necessity" as set 2 • forth in Florida Statute 163.355.2 A"finding of necessity"means that the designated area meets the definition of "slum" or "blighted" as set forth in the statute or there is a shortage of affordable housing for low or moderate income residents, including the elderly, within the designated area. The statute is specific to the extent it gives explicit definitions for slum and blight.The statutory definitions are set forth below. I. Slum As defined in its entirety from the statute: "Slum area"is an area having physical or economic conditions conducive to disease, infant mortality,juvenile delinquency,poverty,or crime because there is a predominance of buildings or improvements,whether residential or nonresidential,which are impaired by reason of dilapidation,deterioration,age,or obsolescence,and exhibiting one or more of the following factors: (a)Inadequate provision for ventilation,light,air,sanitation,or open spaces; (b)High density of population,compared to the population density of adjacent areas within the countyy or municipality;and overcrowding,as indicated by government- maintained statistics or other studies and the requirements of the Florida.Building Code; or (c)The existence of conditions that endanger life or property by fire or other causes.3 2. Blight As defined in its entirety from the statute: "Blighted area"means an area in which there are a substantial number of deteriorated or deteriorating structures;in which conditions,as indicated by government-maintained statistics or other studies,endanger life or property or are leading to economic distress; and in which two or more of the following factors are present: (a) Predominance of defective or inadequate street layout,parking facilities,roadways, bridges,or public transportation facilities. 2 163.355 Finding of necessity by county or municipality.No county or municipality shalt exercise the community redevelopment authority conferred by this part until after the governing body has adopted a resolution, • supported by data and analysis, which makes a legislative finding that the conditions in the area meet the criteria described in s. 163.340(7)or(8).The resolution must state that: (1)One or more slum or blighted areas,or one or more areas in which there is a shortage of housing affordable to residents of low or moderate income,including the elderly,exist in such county or municipality;and (2)The rehabilitation,conservation,or redevelopment,or a combination thereof,of such area or areas,including,if appropriate, the development of housing which residents of low or moderate income, including the elderly, can afford,is necessary in the interest of the public health,safety,morals,or welfare of the residents of such county or municipality. J Florida Statute 163.340(7) .1 3 • t ` (b)Aggregate assessed values of real property in the area for ad valorem tax purposes have failed to show any appreciable increase over the 5 years prior to the finding of such conditions. (c)Faulty lot layout in relation to size,adequacy,accessibility,or usefulness. (d)Unsanitary or unsafe conditions. (e)Deterioration of site or other improvements. (f)Inadequate and outdated building density patterns. (g)Falling lease rates per square foot of office,commercial,or industrial space compared to the remainder of the county or municipality. (h)Tax or special assessment delinquency exceeding the fair value of the land. (i)Residential and commercial vacancy rates higher in the area than in the remainder of the county or municipality. (j)Incidence of crime in the area higher than in the remainder of the county or municipality. (k)Fire and emergency medical service calls to the area proportionately higher than in the remainder of the county or municipality. (1)A greater number of violations of the Florida Building Code in the area than the number of violations recorded in the remainder of the county or municipality._ (m)Diversity of ownership or defective or unusual conditions of title which prevent the free alienability of land within the deteriorated or hazardous area. (n)Governmentally owned property with adverse environmental conditions caused by a public or private entity. (o)A substantial number or percentage of properties damaged by sinkhole activity which have not been adequately repaired or stabilized. However,the term"blighted area"also means any area in which at least one of the factors identified in paragraphs(a)through(o)is present and all taxing authorities subject to a. 163.387(2)(a) agree, either by interlocal agreement with the agency or by resolution, that the area is blighted.4 3.Redevelopment Section(9)of Florida Statute 163.340 defines"community redevelopment"or "redevelopment"as follows: p { "Community redevelopment"or"redevelopment"means undertakings,activities,or projects of a county,municipality,or community redevelopment agency in a community l. redevelopment area for the elimination and prevention ofthe development or spread of shuns and blight,or for the reduction or prevention of crime,or for the provision of affordable housing,whether for rent or for sale,to residents of low or moderate income, including the elderly,and may include slum clearance and redevelopment in a community redevelopment area or rehabilitation and revitalization of coastal resort and tourist areas that are deteriorating and economically distressed,or rehabilitation or conservation in a community redevelopment area, or any combination or part thereof, in 4 Florida Statute 163.340(8) 4 s. 1 i accordance with a community redevelopment plan and may include the preparation of such a plans 4. Affordable Housing for Low or Moderate Income Residents Although affordable housing is mentioned in the community redevelopment statute, it is not defined therein, The CRA statute speaks specifically to affordable housing for low or moderate income residents. As the U.S Department of Housing and Urban Development(HUD) administers programs that address affordable housing we looked to HUD for guidance and assistance.6 As part of its programs, HUD develops standards, guidelines and definitions for certain income levels. HUD also has certain designations that it assigns to various income levels. The designations of income levels include extra low, very low, low and moderate. To determine the income limits assigned to each designation HUD must first determine the Area Median Income (AMI). Based on census data and other statistical information,collected, HUD determines the median income for a certain metropolitan area.Each area of the county, state and country has an Area Median Income. For instance, the HUD income limits applied in Miami-Dade County in 2015 are based on an AMT of$49,900. The AMI is adjusted on an annual basis. Once the AMI is known, HUD has predetermined percentages of the AMI, the calculation of which will determine a family's income designation of very low, low, moderate, Oz. For example, regardless of what metropolitan area is being considered, a family whose income is 50%of the AMI will always be designated Very Low Income. Similarly,regardless of what metropolitan area is being considered, a family.whose income is 80% of the AMI will always be designated Low Income. The income levels are adjusted for family size.. As an example,for fiscal year 2015, the income guidelines for Miami-Dade County are as follows:7 HMFA FY 2015 AMI: 49900 Family Size 1 2 3 4 VERY LOW INCOME 23700 27100 30500 33850 LOW INCOME 37950 43350 48750 54150 s Florida Statute 183.340(9) 6 The CRA statute does not require or suggest using the HUD income guidelines but we feel that HUD's guidelines are a reliable source.. https://www.huduser.govfportal/datasets/ild12015/2015summary.odn _J 5 Accordingly,residents within these income limits,and the elderly,would be the primary recipients of any affordable housing which would be created utilizing CRA funds. B. CRAs and their Boards Once a finding of necessity is made, the county or municipality can then move forward with forming a community redevelopment agency. The agency is responsible for carrying out community redevelopment for the designated area in which necessity was found. As part of the formation of the agency, the statute also requires that a board of commissioners be appointed to exercise the powers of the redevelopment agencies.8 The,board of commissioners is designated as the governing body of the county or municipality under which the CRA falls. Instead of appointing a board, the governing body of the county or municipality can also declare itself to be the agency and act as the board.9 This is what most municipalities have done. For instance, the CRA board for the City of North Miami is comprised of the City of North Miami City Council. Once formed, the board has all powers necessary or convenient to carry out and effectuate the purposes and provisions of the statute,with a few exceptions that are reserved for the county or triunicipality.19 During the course of our investigation, we discovered that the composition of CRA Boards varied greatly. For instance, many of the CRA boards have members who wear two (2) hats. They serve in their capacity as an elected official, i.e.,on the city council,city commission, etc. They also serve as a member of the CRA board. The boards, in a number of the CRAs we examined, are comprised solely of the elected officials who also serve on the council or commission. In those instances, often the CRA board meetings are held on the same day and either immediately before or inunediately after the city commission/city council meeting. Another model, like the Delray Beach Community Redevelopment Agency, has a CRA that is governed by a 7-member volunteer board. Those members are appointed by and report to the Delray Beach City Commission. The Delray Beach CRA employs an executive director, who oversees the agency and runs the day-to-day operations of the CRA. The volunteer board 8 Florida Statute 163.356(3)(b) Florida Statute 163.357 J°Florida Statute 163.358 6 members serve 4 year terms." They prioritize where the funds will be utilized within the 8 sub- areas of their CRA. With a few exceptions, the volunteer board is delegated all the power and authority to carry out the redevelopment activities. The board has authority to appropriate funds, make expenditures and approve the budget. Similar to the Delray Beach model, a majority of CRAB administered in unincorporated Miami-Dade County are made up of citizen appointees with no elected officials. For example, the Naranja Lakes CRA Board is a nine-member board appointed by the County Commissioners, Because the Naranja Lakes CRA is administered by the county,county staff acts as its executive director. 1. Appointment of Citizens to CPA Boards We are deeply concerned that most CRA boards are composed of only the elected officials of the city in which the CRA sits. We discovered several examples of CRA boards spending large amounts of taxpayer dollars on what appeared to be pet projects of the elected officials. Additionally, there is, at a minimum, a perception and appearance that certain CRA boards are controlled by the commissioner or councilman within whose district boundaries the CRA operates. Under these circumstances, we believe there is significant danger of CRA funds being used as slush funds for the elected officials. Even when misfeasance or malfeasance occurs,we are led to believe that there would be little that anyone could do, There does not appear to be any enforcement mechanisms for violations of the CRA statute or misspending of taxpayers'money by CRA board members. For that reason, the grand jury stronglybelieves that there should be additional oversight of CRA board actions as well as additional persons involved in the governing process. Specifically, as indicated below,the Grand Jury recommends that non-elected lay persons be appointed to serve as full-fledged voting members on CRA boards. Florida Statute 163357 "presently" provides that a governing body (i.e., a city • commission or city council)may, by adoption of a resolution, declare itself to be a community redevelopment agency. In that situation, "all the right, powers, duties, privileges, and • immunities vested... in any agency will be vested in the governing body of the county or 11 http://dekaycra.org/wp-content/uploads/2014/1O/2014-CTIA-I'lam-Amendment-PTNAL-10-15-I4.pdf 7 _J - municipality...."tz More important for this discussion are subsections (c) and (d) of that same statute. Subsection(c)provides as follows: (c) A governing body which consists of five members may appoint two additional persons to act as members of the community redevelopment agency, The terms of office of the additional members shall be for 4 years, except that the first person appointed shall initially serve a term of 2 years. Persons appointed under this section are subject to all provisions of this part relating to appointed members of a community redevelopment agency.13 (emphasis added) This grand jury recommends that the statute be amended so that the word "may" be changed to "shall." Clearly, these are taxpayers' monies that are being spent by CRA boards. "But for" the existence of the CRA, those ad valorem general fund tax dollars would be deposited in the coffers of the county's general revenue fund and used for the benefit of the entire county. If the county had use of that money, what additional services and benefits could be provided to the citizens who live in geographical areas of the county that do net have a CRA? Also, how important is it for residents who live within the redevelopment areas to be involved in the decision-making process of where the Tax Increment Financing funds will be spent and determining the priority of how those funds will be used? As the amount of TIF funds flowing into some CRAB has grown to millions of dollars,we believe it is critically important that citizen participation becomes a mandatory component of every CRA operating within the State of Florida. Accordingly, the Grand Jury recommends that the Florida Legislature amend Florida Statute 163.357 (c) to read as follows: (c)A governing body which consists of five members • shall appoint twa additional persons to act as members of the community redevelopment agency. Mandating citizen participation on boards and authorities is not a novel idea in this state. Such requirements can be seen in Florida Statutes Section 159.605 (Housing Finance Authority), Section 343.53 (South Florida Regional Transportation Authority) and Section 348.0003 (Expressway Authority). For each of the aforementioned Authorities, appointments are made by, inter alia, members of the board of county commission.t4 Moreover, for some appointments, the statute specifically provides certain eligibility requirements for civilian " 163.357(1Xa) 13 163.357(1)(e) 14 Housing Finance Authority,Florida Statute 159.695(1);South Florida Regional Transportation Authority,Florida Statute 343.53(2)(b);and Expressway Authority,Florida Statute 348.0003(b),(c)and(d). 8 r- appointees. For instance, not less than a majority of the members of each Housing Finance Authority"shall be knowledgeable in one of the following fields: labor,finance or commerce.s13 The grand jury believes imposing such a requirement for appointees to CRA Boards will not only strengthen the boards, but also result in a broader knowledge base of the overall membership of that board. Accordingly, • We recommend that the Board of County Commission make all civilian appointments pursuant to amended Florida Statute 163.357(1)(c) • We recommend that civilian appointees to CRAs shall be knowledgeable in one of the following fields: architecture,finance, construction, land use or other education or professional experience in the area of community redevelopment. One of the issues we have not yet discussed in this report is the provision of the CRA Act that allows a CRA to use its TIF funds to fund bonds. This is another reason justifying citizen participation en CRA boards. Under the Florida Constitution, city and county elected officials cannot use ad valorem general fund tax dollars to fund bonds without first obtaining voter approval. Such is not the case if those same elected officials are sitting as a CRA board, using taxpayers' monies that have been designated as TIF funds. A CRA board is not required to obtain prior voter approval before issuing bonds. It can issue bonds to fund lofty, expensive and/or grandiose gr projects without any input, discussion or approval from the very people who will be paying taxes to pay-off the debt from the issuance of those bonds. In fact,the CRA board has the authority to act in this manner, even if their actions are against the express wishes of the voting public. Amending subsection(c)of Florida Statute 167.357 (1)would at least ensure that citizens would be involved in the planning,discussions and decision-making process involved.in determining whether taking such a step would be appropriate or prudent for the residents who live within the redevelopment area. 2. Appointment of County Commissioners to CRA Boards Similar to subsection (c) of Florida Statute 163.357, which permits the appointment of civilians to CRA boards, subsection(d)of the same statute,permits the participation of County Commissioners on CRA boards. We believe utilizing this statutory provision will allow for 's Florida Statute 159.605(1) 9 more oversight, more diversity and more input on the CRA boards of the municipalities within Miami-Dade County. Florida Statute 163.357(1)(d)provides as follows: (d) As provided in an interlocal agreement between the governing body that created the agency and one or more taxing authorities, one or more members of the board of commissioners of the agency may be representatives of a taxing authority, including members of that taxing authority's governing body,whose membership on the board of commissioners of the agency would be considered an additional duty of office as a member of the taxing authority governing body.(emphasis added) Simply put, this statutory provision allows members of the Board of County Commissioners to sit and serve as representatives on the municipality's CRA Boards. Based on the information we received during our investigation, we believe there is only one CRA in Miami-Dade County presently operating under this arrangement, The 7-member Miami Beach City Commission serves as the Redevelopment Agency Board (RDA) for the Miami Beach CRA. The Miami Beach City Manager serves as its executive director. The most recent addition to Miami Beach's RDA is Bruno A, Barreiro,County Commissioner for District 5. This Grand Jury believes that having a county commissioner serving as a member of a CRA or RDA is a great idea. We recognize that each CRA is located within the commission district of one or more county commissioners.. As such, within the redevelopment area of each CRA are constituents of both local and county elected officials. For many CRAs, the bulk of their TIF funding comes from ad valorem taxes, money that would ordinarily be controlled and spent by the Board of County Commission for the benefit of all of the constituents in every commission district Where a CRA exists, however, neither the residents nor the respective commissioners have any say so in how those diverted ad valorem taxes get spent. We strongly believe that having the involvement of a county commissioner on a CRA will inure to the benefit of the voters and residents living within the collective boundaries of the CRA.and commission district. Alternatively, we believe giving individual commissioners the power to appoint a designee to serve on the CRA board would achieve the same purpose. We recognize that pursuant to the statute, having a county commissioner serve on the governing board of a CRA must be accomplished through an interlocal agreement entered into between the governing body that created the agency(the Board of County Commission) and the 10 community redevelopment agency. We were advised that the opportunities for entering into interlocal agreements are rare and would probably only occur in connection with the CRA making a request to the county commission. Such an opportunity could come in the form of a request for an extension of boundaries or a request for an extension from a CRA whose existence was about to cease or sunset. From our perspective, either request puts the BOCC in a tremendous bargaining position. In that regard, we were pleased to learn that one of our county commissioners drafted several resolutions Which we hope in time,-will accomplish what we are recommending here. Specifically, in 2009 and 2011 respectively, with the Board's adoption of Resolutions Nos. R- 1382-09 1382-09 and R-871-11, the county established a policy directing the Mayor or,the Mayors' designee: "to negotiate amendments to the interlocal agreement with each taxing authority andfor CRA to provide for the appointment of one County • Commissioner to the hoard of commissioners for each CRA."16 That portion of Resolution No.R-13$2-09 dealt with existing CRAs. Section 2 of the resolution speaks more to the desires of this Grand Jury. It establishes: I " . . . as a policy of this Board that as a condition for the creation of a new CRA that one County Commissioner shall be appointed to each CRA's board. of Commissioners within Miami-.Dade County,'7(emphasis added) An amendment to those resolutions was passed in 2015. The amendment, in the form of Resolution No. •R-599-15, allows a .county commissioner who is unable to serve as a commissioner of a community redevelopment agency the option to appoint a designee to serve as a commissioner of such community redevelopment agency. As Resolution No. R-599-15 has passed, the County Mayor or the County Mayor's representative is presently able to negotiate inclusion of a provision in the interlocal agreement that will permit service as a community redevelopment agency board member by at least one .s county commissioner or an appointed designee of a county commissioner. The amended resolution applies to any new interlocal cooperation agreement as well as any amendment to an • existing interlocal cooperation agreement with a community redevelopment agency. As we . 16 Resolution No.R-1382.09,Section 1 17 Resolution No.R-1 382-09,Section 2; sa Whereas clause of Resolution No.R-599-1 5. 11 • believe this will achieve additional oversight and provide more transparency to the operation of • our CRAs, • We strongly reconunend that the County Mayor or County Mayor's designee diligently and affirmatively seek out opportunities to achieve the intent of • Resolution No. R-599-15, namely, to amend every existing interlocal•cooperation agreement to provide for service on that CPA Board by at least one county • commissioner or alternative appointment of a designee by a county commissioner. • We also strongly recommend that the County Mayor or County Mayor's designee should not finalize negotiations of any CRA's new interlocal. cooperation • agreement or amendment to an existing Interlocal cooperation agreement that agreement or amendment does not include a provision for service on that CRA Board by at least one county commissioner or alternative appointment of a designee by a county commissioner. C. Community Development Plan and Trust Fund Once an agency is formed and a board is established, a community redevelopment plan must be created to describe how the agency is going to address the issues of slum, blight and affordable housing in the redevelopment area.Redevelopment plans have included proposals for 1 • streetscapes and road improvements, building renovation and construction, flood control . initiatives, parking lots and garages, neighborhood parks, sidewalks and street plants, land acquisition, demolition and. removal of structures, redevelopment, improvements, and rehabilitation. Additionally,redevelopment plans may include recommended changes in zoning and planning, land uses,maximum densities and building requirements.18 Redevelopment plans submitted must also provide for the development of affordable housing or state the reasons the plan does not allow for the development of affordable housing in the area. Plans can also include redevelopment incentives such as grants and loans for such things as facade improvements, • sprinkler system upgrades, signs and structural improvements. The redevelopment plan is a living document that can be updated to meet the changing needs within the CIA; however, the boundaries of the area cannot be changed without starting the process over from the beginning.�9 The development or redevelopment plan must be submitted to the governing body of the county or municipality for approval. In Miami-Dade County redevelopment plans are submitted 18 Florida Statute 163.360 19 http://www.rniamidado.gov/redevelopment/plans.asp • 12 to the Board of County Commission. If the CRA falls under the governing body of a municipality, the CRA and the municipality must each get approval from, andenter into an - interlocal agreement with, the county. Once the plan is approved and all agreements signed, the redevelopment plan can be carried out. Once a plan is in effect, the CRA creates a trust fund to deposit revenues that fund operations snd•investments 2° The primary source of revenue for CRAB is tax dollars known as tax increment financing (TIF). Tax increment financing is a unique tool available to cities and counties for redevelopment activities. It is used to leverage public funds to promote private sector activity in the targeted area. The dollar value of all real property in the Community Redevelopment Area is determined as of a fixed date, also known as the"frozen value." Taxing authorities,which contribute to the tax increment,continue to receive property tax revenues up to the amount of the frozen value. These frozen value revenues are available for general government purposes. However, any increases in tax revenues above the "frozen value," referred to as "increment," which are due to increases in real property value, are deposited into the Community Redevelopment Agency Trust Fund and dedicated to the redevelopment area. It is important to note that property tax revenue collected by the School Board and any special district are not affected under the tax increment financing process2' The Community Redevelopment Act calls for private sector involvement to the maximum extent'possible, to coordinate public and private sector initiatives and successfully revitalize communities which would otherwise further decline. Tax increment revenues can be a) used immediately, b) saved for a particular project, or c) bonded to maximize the funds available The initial term of a CRA is limited to 30 years, Without an extension, a CRA's existence sunsets at the end of the 30-year period. After the sunsetting of a CRA,or in the event that all TIF revenues cannot be reserved for, or open on.any eligible projects, any remaining CRA Trust Funds are returned to each taxing authority on a pro-rata basis. 20 Florida Statute 163.387 lmp://redevelapment.aet/cra-resources/q-a-for-teas/ Y2 h, • // tufa lana '•d. ;'v/rectev- o t/ab*ut + . i -. veto n-areas., c 13 i III. MIAMI-DADE COUNTY CRAs There are currently 178 Community Redevelopment Areas in the State of Florida. The Miami-Dade Board of County Commissioners has approved the creation of 14 community redevelopment areas that are administered by the Community Redevelopment and Municipal Services Division ("CRMS") and overseen by the County. The BOCC has also delegated Authority to eight municipalities to operate ten CRAB 24 Four additional CRAB operate in unincorporated areas of Miami-Dade County.25 The agencies that we reviewed all had executive directors to run the day-to-day operations.26 Many of the agencies were staffed by employees of the city or county where the CRA was located. The CRAs pay a portion of the employees' compensation based on the amount of work performed for the CRA. Some of the agencies had executive directors and a few full-time staff And some agencies had numerous fill time staff members, the largest of which was over 10 full-time staff While the executive director and staff run the day-to-day operations, it was clear from the testimony that the CRA boards decide where monies will be spent and approve all expenditures. IV. OPERATIONS &.EXPENDITURES There are two aspects of where and how CRAB expend money that we must distinguish for the purpose of this report. First, there are the specific projects, events, services,acquisitions, etc., in which CRAs choose to spend taxpayer dollars. Second, there are the policies and procedures (or lack thereof) that CRAs use to distribute monies which may include grant fl programs, paying bond debt, formal or informal bidding processes and formal or informal requests for quotes. Most significantly, we found that CRAs can unilaterally choose to give taxpayer dollars to a person or company without the exercise of any process of due diligence, without justification and without recourse. According to the statute, CRAs have wide latitude in spending TIF money to "finance or refinance any community redevelopment it undertakes '3 http:/hedeveloptnent.net cra-resotuces/q-a-for-etas/ 24 A listing of all CRAB operating within Miami-Dade County is set forth in Exhibit 13 to this Report. "Attached hereto as Exhibit A is Map showing the geographical boundaries of each community redevelopment area presently operating within Miami-Dade County 26-The Miami-Dade County CRAs are run by Jorge Fernandez,Office of Management and Budget,whose responsibilities are consistent with an executive director. 14 • pursuant to the approved community redevelopment plan." The statute does not set forth any guidelines for the policies and procedures that CRAB must follow to distribute monies. As proof of this last point, in analyzing questionable spending by CRAs in general, we received information that one CRA Board was spending close to 80%,of its annual TIF funds on _ salaries, benefits and other administrative costs. Because of several failed projects the TIF revenue was down to $400,000. The CRA board was spending$300,000,in salary and benefits to 3 employees who were managing the remaining$100,000 in TIF funds. -We find this practice to be abusive,and a clear violation of the spirit,purpose and intent of the CRA. The Grand Jury is aware that Chapter 163 of the Florida Statutes permits the use of TIF funds for administrative and overhead expenses necessary or incidental to the implementation of a community redevelopment plan. However, we believe imposing a cap on CRA expenditures for administrative costs will be an effective measure to prevent abuses such as indicated above. For that reason, • • We recommend the imposition of a cap on annual CRA expenditures used for administrative costs. • We further recommend that the _Florida Redevelopment Association be tasked with analyzing this issue and include within its "best practices and standards for operating CRAs', a recommendation for a percentage cap that should be imposed on annual CRA expenditures used for administrative carts.z7 Florida Statute 163.387 (6) further articulates that moneys in the redevelopment trust fund may be expended from time to time for undertakings of a community redevelopment agency as described in the community redevelopment plan for the following purposes,including, but not limited to: • • (a) Administrative and overhead expenses necessary or incidental to the implementation • of a community redevelopment plan adopted by the agency. (b) Expenses of redevelopment planning, surveys, and financial analysis, including the reimbursement of the governing body or the community redevelopment agency for such • expenses incurred before the redevelopment plan was approved and adopted. (c)The acquisition of real property in the redevelopment area. a'For additional information regarding the Florida Redevelopment Association,what it does and our recommendations to the FRA,please so pgs.26-31. J 15 • (d) The clearance and preparation of any redevelopment area for redevelopment and relocation of site occupants within or outside the community redevelopment area as provided in s. 163.370. (e) The repayment of principal and interest or any redemption premium for loans, advances, bonds,bond anticipation notes,and any other form of indebtedness, • (f) All expenses incidental to o_r connected with the issuance, sale, redemption, retirement, or purchase of bonds, bond anticipation notes, or other form of indebtedness, including funding of any reserve, redemption, or other fund or account provided for in the ordinance or resolution authorizing such bonds,notes, or other form of indebtedness. (g)The development of affordable housing within the community redevelopment area. (h)The development of community policing innovations. Setting aside policies or procedures for disbursement, we learned that CRAB commonly spend monies on such things as streetscapes and road improvements in business and residential areas, infrastructure improvements such as water and sewer; facade improvements to commercial, industrial and retail businesses, purchase of land for development of affordable housing, subsidies for development of affordable housing,educational and employment services, policing, neighborhood parks development and upgrades and payments on bond debt for such things as garages and cultural centers. For each of these types of expenditures, we learned of successful projects that addressed the intent of the statute and benefitted the community. However, our investigation uncovered large scale spending on projects that did not address slum, blight or affordable housing. Nevertheless, the people responsible for the decisions to spend money on such projects can justify it because the statute governing CRAs is written so broadly. As such, CRAs often times spend money and find a way to say it fits within "the approved community redevelopment plan." We learned of a wide range of projects, events, services and acquisitions in which spending was justified only when the interpretation of the community redevelopment plans was stretched beyond the pale. For example, it is apparent that "social services" are something that TIF monies are being used for at an increasing rate. This has resulted in TIF money being used for fairs, carnivals, and community entertainment, We found it alarming that various CRAB justified spending hundreds of thousands of dollars, if not millions of dollars, on projects that clearly did not directly address any slum;blight or affordable housing. 16 The State of Florida has specific laws in place that govern the procurement process for various goods and services." The intent of the laws is to provide fair competition, reduce opportunity for favoritism and create an ethical process. But CRAs are not bound by many of the laws that govern the procedures by which the state, counties and municipalities can award and distribute money on similar projects. A glaring example is that the CRA statute does.not require agencies to engage in a formal bidding process when expending monies. That means those who operate CRAs, or the board members who approve expenditures, are free to solicit a particular person or company to do a specific project without a competitive bidding process. We believe that such lax laws and regulations are fraught with dangers of cronyism, collusion, inflated or exorbitant costs as well as other issues that lead to corrupt practices, We heard from several witnesses that the reason the statute does not include rules and standards for the awarding and distribution of monies is because the statute is meant to facilitate a more expedient way to address slum and blight. We are not swayed by the reasoning, nor do we think that stricter controls will hinder CRAs ability to address slum and blight and affordable housing. In addition to there being no strict laws governing bidding processes(or even requiring a bidding process), there are no laws or guidelines for distributing monies in the form of grants, which is a common Method that CRAs use to distribute hundreds of thousands and even millions of dollars. We learned that some CRAB adhere to internal guidelines they have set for operation of their CRA. For instance, when distributing grants some CRAs distribute monies only on a reimbursement basis. Others award grants only upto a certain limit or certain percentage of the project. Still other CRAs only distribute monies only after a project is complete or distribute monies only for projects that address certain types of work such as "brick and mortar"projects." 2 Florida Statute 287.001 -Legislative intent—The Legislature recognizes that fair and Open competition is a basic tenet of public proccurement, that such coin/Mitten reduces the appearance and opportunity fur favoritism and inspires public confidence that contracts aro awarded equitably and economically;and that doceimentation of the acts taken and effective monitoring mechanisms are important moans of curbing any improprieties and establishing public confidence in the process by which commodities and contractual services are procured.It is essential to the effective and ethical procurement of cotmnodities and contractual services that there be a system of uniform procedures to be utilized by state agencies in inanaging and procuring comniodittes and contractual services; that detailed justification of agency decisions in the procurement of commodities and contractual services be maintained; and that adherence by the agency and the vendor to specific ethical considerations be required. 29 CRAB often distinguish between "brie and mortar"costs for a project and otter costs that are particular to a specific business. For example, a CRA may give a private business money to Install water and sewer fines for a restaurant but may decline to pay for such things as tables,kitchenware,rent etc. This is because,if the restaurant goes out of business and closes,the investment made by the CM in the water and sewer lines is still available for use by another business to start within the CM area. 17 J - On the other hand, we learned of examples where large grants were awarded and the monies were distributed without any identifiable standards or guidelines in place for the awarding or distribution of those monies. Regardless of the justifications that we heard, it is clear to us that monies are often times awarded without regard for any standards or guidelines. Using guidelines for awarding and distributing grants consistent with those mentioned above has several benefits. It insures that grantees use the monies for the intended purpose, requires the grantees to invest some of their own money in the project, increases the likelihood that projects will get completed and provides a long-tern benefit to the area. We agree that, if monies are going to be awarded via grants to assist private business,establishing and instituting these guidelines and similar practices are good policies to adopt and follow. While several of the CRAs that we studied have policies and practices that mirror the formal requirements associated with counties and municipalities, using such formal policies and practices is completely discretionary with the CRA. It is clear that the lack of formal bidding requirements and the lack of guidelines for awarding grants can lead to (and has led to) mismanagement, waste, collusion and corruption. There is evidence te. suggest that some of these problems exist in the operations of CRAs in Miami-Dade County. Mandating formal processes reduces the likelihood of problems and allows for greater transparency and more citizen confidence in the work of these CRAs. While there are some CRAs that utilize policies and procedures that insure the best use and handling of the public monies, we have several concerns with the lax laws that govern CRAs'expending money and how.CRAs interpret these laws when spending public monies. In very broad terms, Florida Statute 163.387 sets forth how monies can be spent by CRAB and it is being interpreted to permit the expenditure of funds for anything even tangentially related to the community redevelopment plan. For this reason, we believe there should be more oversight of CRAs. • We recommend that the state statutes governing CRAB be amended to include requirements that all CRAs mirror the formal procurement guidelines associated with the county or municipality in which they sit. • 18 • r- • We also recommend that CRAB follow the best practices guidelines for grant programs (to include solicitation, review and award) that we hope will be developed by the Florida Redevelopment Association,3° • A. What Happened to the Affordable Housing? _- Some CRAs have used TIF money to purchase property to build affordable housing. This appears to be the exception and not the rule for CRAs. Although CRAs acquire property with affordable housing in mind, generally CRAs do not desire to do the actual developing or contracting. The land purchased is used by CRAs to attract private developers who can obtain other incentives that help make affordable housing profitable for the developer. We think it is admirable that CRAB are working with private industry to achieve the goals of its redevelopment plan. However, while we acknowledge the challenges. associated with developing affordable housing,we found it perplexing that there are CRAs with low and moderate income affordable housing needs within their boundaries that have not taken any steps to address the need. Evidence presented to us indicates that affordable housing is not a priority for many of the existing CRAB. The common excuse used for not developing affordable housing was that it was cost prohibitive 3' However, we find this reasoning to be disingenuous given the large amounts of monies being spent on other projects. It is disturbingly transparent,to us that CRAs are spending millions of tax payer dollars on other projects and programs, yet-at the same time saying that they cannot afford to build affordable housing. More so, a review of the community redevelopment plan for those same CFAs shows that the redevelopment plan includes representations that the CRA will address affordable housing. Additionally, we note that there are examples of CRA boards that went back to the county and requested that their boundaries.be expanded to include areas of low income housing,yet their CRA is not addressing the issue of affordable housing. Based on the testimony regarding the cost prohibitive nature of low and moderate income affordable housing, we question why affordable housing is included in some redevelopment plans at all. Maybe it is simply necessary to get the redevelopment plan approved. Maybe it is just politically expedient. 7°For additional information regarding the Florida Redevelopment Association,what it does and our recommendations to the FRA,please sat pgs.2641. To demonstrate the amount of money flowing into CRAB operating within Miami-Dade County,Exhibit B attached hereto,lists each Community Redevelopment Agency with the amount of tax improvement funding each received for this past fiscal year, 1.9 • As suggested by CRA board members, in addition to affordable housing for low and moderate income being unattractive because it is expensive, it also is not a good "investment" because it does not produce sufficient revenue. Economic development and increased TIF revenue for the CRAs is clearly self-serving. Some CRAs fall prey to their own success, and instead of investing in affordable housing, they continue to invest solely in opportunities that increase economic development within certain sections of f the redevelopment area. It was apparent from our investigation of numerous CRAs that investing in economic development is an early building block necessary for the long term success of a CRA's redevelopment goals. Economic development32 entails making investments that will result in an increase in property values. The increase in property values will increase the TIP monies going to the CRA. As was described to us, these were the benefits of investing in commercial, retail or industrial areas. Simply stated, Investing in other needs such as providing low income or affordable housing does not directly result in an increase in property.values. Accordingly,'making such an investment will not increase the TIF. As further examples of economic development, witnesses testified that CRAs invest in such things as infrastructure improvements for businesses, improvements to commercial or industrial building facades, as well as other"brick and mortar"projects that will benefit private business. The objective of such investments is not only to benefit the business owner but also to increase the value of the business which results in more tax revenue and more TIF money for the CRA. As a result of the increase in TIF monies from the economic development investments,we believe CRAs are betterpositioned and more able to address other objectives contained within their respective economic development plans, such as affordable housing. 'However, for many CRAs this is not the practice. While we understand the logic of early or initial investments focused on economic development to increase the TIF, we are concerned that in this process CRAs lose sight of the need for affordable housing. It becomes more popular to continue to spend or invest in opportunities that will grow TIF income rather than put money back into needs that do not yield the same return on the investment. However, CRAB are not formed to see how profitable they 32 Economic development is not defined in the statute. The meaning as set forth herein is based on Information provided by witnesses. 20 can become, They are formed to address the needs of the community. In many of those communities,one of the major needs is that of safe and sanitary affordable housing. Remove the Blight; Leave the Slum Many CRAs use TIF funds for infrastructure improvements. Such improvements have • involved improved roadways, landscaping and streetscaping. As several witnesses described to us, these infrastructure improvements may include improvements or installation of any combination of the following: • Paver brick walkways,sidewalks and cross-walks • Decorative lighting • Roundabouts • Sidewalks • Curbing • Guttering • Street.replacement As many of our witnesses described, removing blight includes infrastructure improvements. A lot of these improvements have taken place in business, commercial and downtown areas. The rationale for this is by improving the look of the area, it entices new businesses and shops to move into that area. Eventually, this results in more jobs, more opportunities and, as property values increase due to the improvements, more money for the CRA. For the most part, such improvements are not taking place in purely residential areas. Again, the thought is making such improvements in business districts and business corridors bring more bang for the buck. Although this may be true, it causes some serious concerns for the Grand Jury. We have seen the "before" and "alter" pictures and have heard the testimony of how many of these areas, which were eyesores, have been completely transformed and are now thriving. We also appreciate the fact that property values have increased, resulting in a • concomitant increase in revenues from the TIF. Finally, we are also aware that the use of these funds for the purpose of removing blight is specifically authorized by state statutes.33 From out view, it appears that many of the CRAs have taken great strides, and in many cases, been 33 Florida Staple 163.340(8) 21 • successful in removing blight. However, our concern is that Section 9 of the same statute also allows such funds to be used"for the elimination and prevention of the development or spread of slues."34 The"white elephant"in the room from this practice is that although"blight"may have . been removed,"slums"still exist within the boundaries of those CRAB, For our purposes, "slums" are those areas of our communities that are dominated by multifamily housing structures that are unsafe, unsanitary and overcrowded. The living conditions in some of these units may include rat infested and roach infested apartments. As we observed from news coverage of unsafe and unsanitary living conditions in areas of our community, there are residents within Miami-Dade County who are living in apartment buildings with unrepaired roof leaks that result in ceiling collapses, non-working plumbing equipment that results in toilets overflowing, and faulty electrical wiring that is so dangerous that officials are forced to shut down electrical power for an entire building until repairs are made. It is unfathomable to us that in this day and age, citizens in our community live in housing units where sewage backs up within their apartments or overflowing sewage being release&on the grounds of their apartment buildings are a regular occurrence. This,while millions of dollars are being spent annually to fund ball stadiums,performing arts centers and dog parks is an outrage. One alternative for alleviating slums located within CRA redevelopment areas is for the CRA board to focus on rehabbing existing units rather than restricting its options to new construction projects. The price tag associated with a rehab construction project should be much cheaper than what would be required for construction of new affordable housing units in the area. Investing TIF funds in such a project would at least ensure that the low income residents living within the redevelopment area would have access to safer and more sanitary housing within which they can raise their families. If a CRA can expend close to half a million dollars for a dog park so "dogs" can have open spaces in the places where they"play," that CRA board should feel compelled to spend more than that amount to ensure that."people" have better "ventilation, light, air, sanitation or open spaces"in the places where they"live." 'a Florida Statute 163.340(9)"Community redevelopment"or"redevelopment"means undertakings,activities,or projects of a county,municipality,or community redevelopment agency in a community redevelopment area for the elimination and prevention of the development or spread of slums and blight,or for the reduction or prevention of crime,or for the provision of affordable housing,whether for rent or for sale,to residents of low or moderate Income,including the elderly,and may Include slum clearance and redevelopment in a community redevelopment area or rehabilitation and revitalization of coastal resort and tourist areas that aro deteriorating and economically distressed,or rehabilitation or conservation in a community redevelopment area,or any combination or part thereof,in accordance with a community redevelopment plan and may include the preparation of such a plan. 22 • Every CRA that has expended or disbursed funds from its TIF has, by those actions, set the priority for what it wishes to focus on within its redevelopment area. Each such CRA has also determined how much money will be used for those priorities. As a result of setting those other priorities, the alleviation of slum and the creation of safe and sanitary affordable housing • for low and moderate income residents who live within CRA boundaries is almost non-existent. To correct this shortcoming-we have recommendations that we hope Will be adopted by the Florida Legislature,Board of County Commission and each CRA. As previously stated, the life of most community redevelopment agencies span several decades; If each CRA was required to set aside a certain percentage of TIF funds every year (which could only be used for the creation of affordable. housing) over an extended period of time,there could be a sizeable pot of money that would be available to help alleviate slums and provide affordable housing. This would especially be true for CRAs which; due to their alleviation of blight, have substantially increased the amount of TIF funds available for use by their respective CRA. Accordingly, for each CRA whose redevelopment plan was based in part on a finding that slum existed within the boundaries of the redevelopment area or that was based on a finding that there was a need for affordable housing, we recommend that the county commission draft • and approve an ordinance that requires each CRA in its annual budget to spec/fiddly ally state how much money it spent in the previous year and how much money it expects to spend in the coining fiscal year on affordable housing. For CRAs that are not providing affordable housing but that have low and moderate income affordable housing needs Within their redevelopment area,we recommend that the legislature amend the state statute to require CRAB to set aside TIF revenues annually to be used to provide affordable housing. Furthermore,because affordable housing is costly and it often takes a number of years to generate sufficient TIF revenues to invest in affordable housing,it is essential that the statute contain a provision to allow for CRAs to save income. Accordingly, a We recommend that every CRA whose annual TIF revenue exceeds$1,000,000 after its fifth year in existence, be required to set aside a minimum of 10%of its annual TIF income to go towards and benefit low and moderate income affordable housing. .(fthe CRA does not designate for use the monies set aside for affordable housing within 23 • five years, the money shall revert back to the respective taxing districts(on pro-rata basis)for use towards affordable housing. • We also recommend that the state stature require all CRAB whose TIF income exceeds $5,000,000 annually be required to set aside a minimum of 20% of the total annual TIF income to be used for affordable housing for low or moderate income residents. If the CRZi does not designate for use the monies set aside for affordable housing within'lye years, the money shall revert back to the respective taxing districts(on pro- rata basis)for use towards affordable housing. • Because statute 163.387(7) significantly limits a CRA's ability to carry over monies, we further recommend that the statute•be amended to include a provision that permits CRAs to cony over TIF monies that have been set aside for use for affordable housing for low or moderate income residents. V. AUDITING AND OVRRSIGHT Florida Statute 163.387 provides that "Each community redevelopment agency shall provide for an audit of the trust fund each fiscal year and a report of such audit to be prepared by . an independent certified public accountant or firm. Such report shall describe the amount and source of deposits into, and the amount and purpose of withdrawals from, the trust fund during such fiscal year and the amount of principal and interest paid during such year on any indebtedness to which increment.revenues are pledged and the remaining amount of such indebtedness. The agency shall provide by registered mail a copy of the report to each taxing authority.s3S The statute also provides that each agency shall report the following to the Florida Department Of Community Affairs: (1) A listing .of business firms and individuals assisted by the community-based development organization during the reporting period. (2) A listing of the type, source, purpose, and amount of each individual grant, loan, or donation received by the community-based development organization during the reporting period. • (3) The number of paid and voluntary positions within the community-based development organization. (4) A listing of the salaries and administrative and operating expenses of the community • - based development organization. (5)An identification and explanation of changes in the boundaries of the target area. (6)The amount of earned income from projects,programs,and development activities. 35 Florida Statute 163.387(8) 24 (7) The number and description of projects in predevelopment phase, projects under construction, ongoing service programs, construction projects completed, and projects at sell-out or lease-up' and property management phase, and a written explanation of the reasons that caused any projects not to be completed for the projected development phase. (8) The impact of the projects, as a result of receiving funding under this act, on residents in the target area, and the relationship of this impact to expected outcomes listed in the organization's annual revitalization plan. (9) The number of housing units rehabilitated or constructed at various stages of development,predevelopment phase,.construction phase,completion and sell-out or lease- up phase, and condominium or property management phase by the community-based development organization within the service area during the reporting period. (10) The number of housing units, number of projects, and number of persons served by prior projects developed by the organization, the amounts of project financing leverage withstate funds for each prior and current project, and the incremental amounts of local and state real estate tax and sales tax revenue generated directly by the projects and programs annually. (1 1)The number of jobs, both permanent and temporary,received by individuals who were directly assisted by the community-based development organization through assistance to the business such as a loan or other credit assistance. • (12)An identification and explanation of changes in the boundaries of the service area. (13)The impact of completed projects on residents in the target area and the relationship of this impact to expected outcomes listed in the organization's annual revitalization plan. (14)Such other information as the Department of Community Affairs requires.36 While the law speaks to the different auditing and reporting requirements, there is nothing in the statute that addresses what review is to be Undertaken by those who receive the audit or what remedies exist if the informationcontained in the audit or report is found (if reviewed) to be questionable or deficient. To put it simply, the law does not set forth any standards for review of the information. The reporting requirements appear to be more form over substance. Further, in addition to the auditing requirements of the Florida Statute, CRA boards operating within Miami-Dade County are also required to submit their budgets to the County on an annual basis. The budgets are to be.approved by the Board of County Commission. Theoretically,these budgets should be approved prior to any disbursements or expenditures from the CRA budget for the ensuing fiscal year. Unfortunately,that is not the case. 76 Florida Statute 163.461 25 We were informed that often the annual budgets submitted by the CRA boards are not being submitted in a timely manner. As a result, the CRA boards, in accordance with their new budgets,are spending money in the new fiscal year before the Board of County Commission has approved their budget. We understand in some instances Commission approval of the budget is granted months after the effective date of the new budget. The Grand Jury believes this practice must stop. We are aware that for any new interlocal cooperation agreement or an amendment to an existing interlocal agreement, the Mayor or Mayor's designee shall negotiate a provision That requires the CRA to submit timely budgets for approval by the Board of County Commission prior to the CRA borrowing money, advancing funds or incurring indebtedness proposed to be repaid from or secured by the CRA's tax increment financing funds.37 • Accordingly, the Grand Jury recommends that all CRAs must submit their annual budget requests with sufficient lead time so that the Board of County Commissi©n will be able to review I approve the CRAs budget priorto the start of the fiscal year for which the budget relates. • The Grand Jury further recommends that the county amend its Interlocal agreements to provide that if the CRA board fails to timely submit its annual budget, then it will be precluded from spending money in the CRA's new fiscal year until after the BOCC has approved the CPA board's annual budget. We find that there is no significant oversight for specifying on which projects,programs or services CRAB choose to spend monies. The boards can decide where to distribute monies and in what method to distribute monies without any consideration for the best practices in the industry. We believe that better oversight is needed to insure the best use of public dollars and reduce the risk that CRA monies can be used as a slush fund for politicians. To that end, we recommend that the state statute and Miami-Dade County require a yearly audit be performed by the inspector general fir the county in which the CRA lies. The audit shall be conducted to determine whether the expenditure of monies and theprocedures for the expenditures comply with the laws governing CRAs and conform to the best practices guidelines as established by the Florida Redevelopment Association 38 The CRAs shall be responsible.for reimbursing the inspector general for the costs associated with the audit. If there is not a county inspector general in the county where the CRA is located, the inspector general for the State shall perform the "Resolution No.R471-11. "See Grand Jury recommendation to Florida Redevelopment Association on p.29,fisted as Recommendation 24 on p. 36. 26 • N • T audit. Again, this audit is intended to determine whether CRAs are complying with the best practices for CRAB as established by the Florida Redevelopment Association. } inspector after completing the audit,the r pe ns ctor gen eral concludes that a CRA failed to engage the best practices in spending monies, the inspector general can recommend to the Board of County Commission that the CRA be placed on heightened monitoring for a period of no less than 12 months and no longer than 24 months. During the course of heightened monitoring,the CRA shall be required to create and implement a corrective action plan for approval by the inspector general. While under heightened monitoring, a CRA shall submit to a best practices audit by the inspector general every six months. The CRA shall be responsible for reimbursing the inspector general for the costs associated with the monitoring and auditing. If,after the period of heightened monitoring,the CRA continues not to engage in the best practices, the Board of County Commissioners can remove the board of the CRA. The county shall act as the board or appoint a new board in accordance with the laws set forth in Florida Statutes Chapter 163. VI. FLORIDA REDEVELOPMENT ASSOCIATION Founded in 1974, the Florida Redevelopment Association (FRA) is a not-for-profit organization dedicated to assisting Florida professionals and volunteers in community revitalization efforts. With its mission of "transforming spaces, revitalizing places," ERA is committed to providing a forum for its more than 300 members to share knowledge and common experiences regarding revitalization opportunities and issues throughout Florida! FRA encourages adoption of legal and financial tools and programs favorable to community growth and serves as a statewide clearinghouse for redevelopment information. The Florida Redevelopment Association is available for technical assistance, legislative advocacy and redevelopment educational resources. The FRA is focused on the revitalization and preservation of Florida's communities. Operated under a contract with the Florida League of Cities in Tallahassee,Florida,its purpose is to promote the improvement of downtowns and other urban areas through redevelopment and development activities under the Florida Statutes; encourage Florida's communities to create a healthy mix of affordable workforce and market rate housing; provide a forum for networking, training and technical assistance; be an advocate for its membership; and monitor legal and 27 legislative issues.39 This Grand Jury believes the FRA could be a valuable asset to CRAs and should take a greater role in improving the management and operations of CRAs in this state. We have some recommendations herein that we believe will accomplish that goal. A. Educational/Training Certification Requirement 1. The FRA Redevelopment Academy One of the training and educational programs that the FRA offers is a Redevelopment Academy. The Redevelopment Academy is akin to an accreditation program designed to promote a high level of knowledge and professionalism in the field of redevelopment. It also encourages development and maintenance of professional competence for practicing redevelopment administrators. The goals of the redevelopment academy are: . •To educate on the benefits of and need for economic redevelopment; •To provide an industry standard for professional redevelopers in the State of Florida; • To provide a service and benefit to the FRA membership while promoting the services offered by the association; •To provide practical,practitioner-based education of consistently high quality. We were so impressed with the information we received regarding the FRA that we recommend to the CRAs that FRA membership should be mandatory for all CRA staff and board members. B. Best Practices The FRA hosts an annual conference in various locations around the state. Members from all over the state come to participate in this yearly event. Reportedly after the conference, many of the attendees were amazed at the quality of the information shared and the many tools and options that were available to community redevelopment agencies and their commissioners. As a place for networking and sharing information, commissioners and directors became aware of innovative and effective practices that were being used by other CRA boards. The classes offered by the FRA include such things as Redevelopment 101, Operations and Capacity $wilding, Budget, Funding, and Reporting, Creating and Using Redevelopment Incentives, Capital Project Management and Redevelopment Housing. Through successful completion of "hags/edeveloptr ent.nel/abouti 28 courses and testing, members of the FRA can even earn special designations such as Redevelopment Administrator or Redevelopment Professional. The outcome of training, education, networking and the sharing of ideas through participation in the FRA is a higher standard of competence and conduct by those who make up the staffs and boards of CRAs. When CRAs across the state continuously share experiences, ideas and practices,a standard of best practices evolves within the industry. We recommend that the FRA establish industry best practices and standards for operating CRAs, relating to such things as .expenditures and programs for spending money such as grants, bonds, bidding processes, and other standards for measuring accountability as it relates to best industry practices. C. Ethics - In addition to providing access to experience and knowledge, training and technical assistance and educational resources, the FRA has its own code of ethics. The code of ethics promotes training and development, high standards Of professional conduct, integrity 'and discourages dishonesty conduct.40 41 We have considered the Ethics Training offered by the FRA in conjunction with what is required of CRA Commissioners operating within our jurisdiction. On June 4,2013,the Miami- Dade Board of County Commissioners amended Section 2-11.1,of the County Code to require that all County and Municipal elected officials"shall, within ninety(90) days after being sworn into office, submit to the Clerk of the Board a certificate of completion of an ethics course offered by the Miami-Dade County Commission on Ethics and Public Trust." The course is to include, at-a minimum, a review of the Conflict of Interest and Code of Ethics Ordinance; the as FRA Code of Ethics: The Florida Redevelopment Association is a professional organization dedicated to quality redevelopment in the state of Florida,and to providing training and individual developrr►ent ier piofessianals engaged in redevelopment administration. In Ruttier these goals,we the members of the Florida Redevelopment Association are enjoined to adhere to legal,moral,and professional standards of conduct In the fiiifillrnent of our professional responsibilities,as set faith in this Code of Ethics. We shall conduct ourselves with integrity In all working relationships with public ofliicials,staff,and the citizens whoa we serve. We shall not condone or knowingly present any tato or,misleading Wenn**or o nit any Ithrmatian that is essential to maising an informed decision. We shall abide by all applicable laws and regulations,of the State of Florida and these of our individual local jurisdictions.We shall net be involved with,or by our actions condone;any illegal activity. We shall conduct ourselves objectively and not seek or accept personal gain that-could influence the conduct of our official duties. We shall not use public runes for penal gain. We shail'not reveal or improperly use confidential Information. We shall accurately represent our ptofbssional qualifications,education,and affiliations. "httpJ/redavelopment.netlata-resOurcalq-a-fbr-aas/. 29 . ' I Sunshine Law; the Public Records Law and the Citizens' Bill of Rights;42 Moreover, last year, the Florida Legislature also imposed a requirement that all "elected municipal officers" must complete 4 hours of ethic's training annually.43 Elected municipal officers who serve as commissioners on CRA boards are not required to complete ethics training due to their service on the CRA board. Yet, by the actions of the BOCC and the State Legislature, it is clear that ethics is an important component of serving in public office. We strongly believe that ethics training should be mandatory for commissioners serving on CRA boards. As we believe the • ethics training provided by the FRA is tailor made for CRA board commissioners, we recommend that the Florida Legislature mandate FRA specific ethics training 51-annually for all CR4 board commissioners. . As previously stated, many of the CRA boards in Miami-Dade County are comprised solely of the governing body of the municipality. Fortunately, Section 2-11.1 of the Code of Miami-Dade County ensures that the elected officials serving on those CRA boards will be required to receive training on ethics and conflicts of interest. Similarly, Florida. Statute 112.3142(b) also has a requirement that all elected municipal officers complete 4 hours of ethics training each calendar year. ' There are other CRA boards operating within the State of Florida, but outside of Miami- Dade County, that appoint civilian members to their boards in accordance with Florida Statute 163.357 (c). As such,there are CRA commissioners serving in this state who have rio obligation to receive ethics training. We believe this is a major short-coming and therefore,we recommend that the Florida Legislature amend Florida Statute Section 112.3142 to require four (4) hours of ethics training each calendar year for all CRA board commissioners. 42 http://ethics.miamidade.gov/training.asg 43 Florida Statute Section 112.3142(b)and(c)Ethics training for specified constitutional officers and elected municipal officers. (b)Beginning January 1,2015,all elected municipal officers must complete 4 hours of ethics training each calendar year which addresses,at a minimum,s.8,Art.II of the State Constitution,the Code ofEthlcs for Public Officers and Employees,and the public records and public meetings laws of this state.This requirement may be satisfied by completion of a continuing legal education class or other continuing profbssional education class,seminar,or presentation if the required subjects are covered (c)The commission shall adopt rules establishing minimum course content ibr the portion of an ethics training class which addresses s.8,Art.Il of the State Constitution and the Code of Ethics for Publio Officers and Employees. 30 Many of the CRA boards are operated by executive directors who are neither elected I i officials nor government employees. Other CRA boards are managed and operated by persons who are governmental employees and who wear dual hats. They may serve as city manager and as managing director or executive director of that municipality's CRA board. However, under 1 the specific language of the County's Elected Officials Ethical Training Ordinance, neither the governmental nor non-governmental executive director is required to receive such training. The Grand Jury believes this is a serious oversight. Additionally, at least one CRA operating in Miami-Dade County utilizes an Advisory Board. Obviously,neither the county's ordinance nor Florida Statute 112.3142(b) applies to the members of the Advisory Board. We recommend that the Miami-Dade Board of County Commission enact a new ordinance or amend an existing ordinance that requires annual ethics training for all members of CRA Advisory boards and the board's Executive Director. Similarly, as reported above, we haveincluded recommendations herein that we hope will result in the appointment of citizen residents to CRA boards within Miami-Dade County. These lay residents serving on these boards would have the same voting power and authority as the elected officials serving on the board. We recognize that if this effort is successful, neither the county,ordinance nor the Florida Statute will apply to these"unelected" officials serving on the CRA board. Accordingly, we recommend that the Miami-Dade Board of County Commission enact a new ordinance or amend an existing ordinance that requires annual ethics training for all "unelected"officials serving on CRA boards. We learned that the Florida Redevelopment Association is au organization that educates people who govern and manage CRAs. The training and tools of the FRA' promote best practices. We feel that the training offered by the FRA is an essential•tool for the operation, management and oversight of CRA staff and board members. As a result, we recommend the legislature amend the statute to include the following: o We recommend that the FRA establish and maintain a best practices training program that is provided to, and mandatory for, all CRA stc1'rtnd board members; o We recommend that the FRA establish an auditing and review program relating to best practices in which all CRAs(members)must comply This audit and review program is to insure compliance with best practices standards as established by FRA. 1 31 VII. What Happens When the"Necessity"No Longer Exists? Each of the CRAB we reviewed were specifically created to address issues of slum, blight or affordable housing. However,as a result of their successes,some CRAs have eradicated slum or blight within their areas. Nevertheless, those same CRAs continue to receive large amounts of revenue from TIF dollars. It is important to note that in the CRAB where slum or blight was substantially or completely eradicated, we found there is no apparent danger of the area regressing to a slum or blighted area. Significant private investinent now exists in those areas. This is important because the CRAs that continue to operate in the areas where slum or blight has been eradicated rely on the part of the statute that provides CRAs can be used for the "prevention" of shun and blight or rely on examples of slum or blight that do not represent the overall condition of the area within the CRA's boundary. As a result, the amount of money going to those CRAs far exceeds the 'remaining necessity. We think that this result is inconsistent with the statute and the statute is being interpreted in an overbroad manner that enables suchareas to continue to receive public tax dollars that could be better spent elsewhere. We recommend the following changes to address this issue: • • Remove or better define what is permissible under the "prevention of slum or blight" provision of the Florida Statute 163.340. • Amend Florida Statute 163.340(8) to eliminate the last paragraph which states,' "However, the term "blighted area"also Means any area in which at least one of the factors identified in paragraphs.(a) through (o) is present and all taxing authorities subject to s. I63.387(2)(a) agree, either by interlocal agreement with the agency or by resolution, that the area is blighted." The finding of blight should require a finding that two or more of the factors, as set forth In(a) through(a), exists. • Whenever there is a request for renewal or extension by a CRA; require an updated finding of necessity. 32 • } VIII. CONCLUSION As we referenced at the beginning of this report,through the effective use of TIF revenue by CRAB, there are a number of drastic improvements that have taken place in various communities throughout our county. Neighborhoods have been transformed and new businesses have opened in revitalized shopping and commercial districts. The results of the effective work conducted by the CRAs include job creation, removal of eye-sores, increases in property values 1 and the attraction of more tourists to South Florida. From our prospective,this is all good. However, one of the truths we have uncovered during our investigation is that while rlCRAs have excelled in the above areas,for the most part,many of theca have failed miserably in fulfilling their mission as to othernspects of their redevelopment plans. Specifically,most of the CRAs have not even attempted to tackle the overwhelming shortage of quality affordable housing that exists within the redevelopment areas of their CRAs. The persons who suffer from this CRA failure are low income residents living in shuns and the elderly. From our perspective, this is all bad. 1 Finally,in connection with our investigation,we discovered that due to a failure of many CRAs to adopt or implement specific rules or guidelines for spending tax payer monies,millions of dollars in grants have been given to certain businesses,companies or individuals. Some of the grants and awards of monies appeared to be clear conflicts of interest for some of the members serving on the CRA board. Another CRA board rejected a recommendation fromits advisory board and made the decision to give millions to a specific company in what proved to be a failed construction project: In addition to giving taxpayer monies to questionable people,CRA boards have implemented questionable practices when deciding to use taxpayer monies for questionable purposes. For the good,the bad and the questionable,we have made a number of recommendations which we hope will be adopted and acted upon by our legislature,Board of County Commission, CRA boards and the Florida Redevelopment Association. We believe implementation of these recommendations will prevent some of the prior CRA abuses, provide for citizen participation, more transparency, more oversight, better management and operations 'of CRAs and an improvement to the Iives of the elderly and low income residents living in our county and state. 33 . j IX. RECOMMENDATIONS This Grand Jury recommends that: • 1. Non-elected lay persons be appointed to serve as full-fledged voting members on CRA boards. (p. 7) 2. The Florida Legislature amend Florida Statute 163.357(1) (c)to read as follows: "A governing body which consists of five members may shall appoint two additional persons to act as members of the community redevelopment agency. (p. 8) 3. The Board of County Commission make all civilian appointments pursuant to amended Florida Statute 163.357(1)(c) (p. 9) 4. Civilian appointees to CRAB shall be knowledgeable in one of the following fields: architecture, finance, construction, land-use or other education or professional experience in the area of cominiunity redevelopment. (p. 12) 5. The County Mayor or County Mayor's designee diligently and affirmatively seek Out opportunities to achieve the intent of Resolution No. R-599-15, namely, to amend every existing interlocal cooperation agreement to provide for service on that GRA Board by at least one county commissioner or alternative appointment of a designee by a cowuy commissioner.(p. 12) 6. The County mayor or County Mayor's designee should not finalize negotiations of any CRA's new interlocal cooperation agreement or amendment to an existing interlocal cooperation agreement if that agreement or amendment does not include a provision for service on that CRA Board by at least one county commissioner or alternative appointment of a designee by a county commissioner. (p. 12) 7. The imposition of a cap on annual CRA-expenditures used for administrative costs. (p. 15) 8. The Florida Redevelopment Association accept the task of analyzing the issue of • excessive administrative costs and include within its "best practices and standards for operating CRAs", a recommendation for a percentage cap that should be imposed on annual CRA expenditures used for administrative costs. (p. 15) 9. The state statutes governing CRAB be amended to include requirements that all CRAs mirror the formal procurement guidelines associated with the county or municipality in which they sit. (p. 19) 10. CRAB follow the best practices guidelines for grant programs(to include solicitation, review,and award) that we hope will be developed by the Florida Redevelopment Association.'°(p. 19) 44 Establishing best practices guidelines,as referenced in this recommendation,is a recommendation sot forth in this report under VI.Florida Itedeveloprnent Association. 34 11. The county commission draft and approve an ordinance that requires each CRA in its annual budget to specifically state how much money it spent in the previous year and how much money it expects to spend in the coming fiscal year on affordable housing. (p. 23) 12. Every CRA whose annual TIF revenue exceeds $1,000;000 set aside a minimum of 10% of its annual TIP income to go towards and benefit low and moderate income affordable housing. (p 24) • 13. The state statute require all CRAs whose TIF income exceeds$5,000,000 be required to set aside 10%of the income to be used for affordable housing for low or moderate inc©me,residents. If the CRA does not use the 10%for affordable housing within five years, the money shall revert back to the county for use towards affordable'housing. (p. 24) 14. Because statute 163.387(7) significantly limits a CRA's ability to carry over monies, . we recommend that the statute be amended to include:a provision that permits CRA: to carry over TIF monies that.have, been_designated for use for affordable housing for low or moderate income residents. (p 24) • 15.All CRAs submit their annual budget requests with sufficient lead time so that the Board of County Commission will be able to review/approve the CRAB bildget prior • to the start of the fiscal year for which the budget relates. (p. 26) • 16. The county amend its interlocal agreements to provide that if the CRA Board fails to timely submit its annual budget, then U will be precludedfrom spending money in the • CRA's new fiscal year until after the BDCC has reviewed andfor approved the CRA Board's annual budget. (p. 26) 17. The state statute and Miami-Dade County require a yearly audit be performed by the inspector general for the county in which the CRA is located. (pp. 26-27) 18. CRAB mandate FRA membership for all CRA staff and board members. (p. 28) 19. The FRA establish industry best practices and standards for operating CRAB, relating to such things as expenditures and programs for spending money such as grants, bonds, bidding processes, and other standards for measuring accountability as it relates to'best industry practices. (p. 29) 20. The Florida Legislature mandate FRA specific ethics training bi-annually for all CRA board commissioners,.(p. 30) 21. The Florida Legislature amend Florida Statute Section 112.3142 to require four (4) hours of ethics training each calendar year for all CPA Board commissioners.(p. 31) 22. The Miami-Dade Board of County Commission enact a new ordinance or amend an existing ordinance that requires annual ethics training for all members of all CRA Advisory Boards.(p. 31) 23. The Miami-bade Board of County Commission enact a new ordinance or amend an existing ordinance that requires annual ethics training for all "unelected" officials serving on CRA Boards and the board's Executive Director. (p. 32) 35 • 24. The FRA establish industry best practices and standards for operating CRAs, relating to such things as expenditures and programs for spending money such as grants, bonds, bidding processes, and other standards for measuring accountability as it relates to best industry practices. (p, 29) 25. The FRA establish and maintain a best practices training program that is provided to, and mandatory for, all CRA staff and board members. (p. 32) 26. The FRA establish an auditing and review program relating to best practices in which all CRAB(members)must comply. This audit and review program is to insure compliance with best practices standards as established by FRA. (p. 32) 27. Remove or better define what is permissible under the `prevention of slum or blight" provision of the Florida Statute 163.340. (p. 32) 28. The legislature Amend Florida Statute 163.340(8) to eliminate the last paragraph which states; "However, the term "blighted area" also means anyarea in which at least one of the factors identified in paragraphs (a) through (o) is present and all taxing authorities subject to s. 163.387(2)(a) agree, either by interlocal agreement with the agency or by resolution, that the area is blighted." The finding of blight should require a finding that two or more of the factors, as set forth in (a) through (o), exists. (p. 33) 29. Whenever there is a request for renewal or extension by a CRA, require an updated finding of necessity. (p. 33) • { 36