Kenneth Oakes, City of Lake Worth Internal Auditor
When speaking of our new Casino building at the Lake Worth beach, Kenneth Oakes, our internal auditor, was quoted in Sunday's Palm Beach Post: "The common area maintenance fee was set at about $7 a square foot. The fee estimation was made before the casino opened its doors, by someone who is no longer here. (Finance director) Steve Carr has done his own analysis, and I think he estimated more than double that was needed. Now the question is, how can we change it?"
Now, the statement suggests that someone who is no longer in the city's employ is responsible for the low estimate on casino CAM. This is not Mr. Oakes' fault as he goes by what his bosses tell him. Who are his bosses? Why the present city commission, driven by politics, that wants to blame the past City Manager and City Commission for just about everything wrong with this city. So, just who is responsible?
In March 2009, the city received the report from Fishkind and Associates on its pro-forma analysis on the casino redevelopment that included a finance plan. Mark Bates was the finance director then and Bob Baldwin was the city manager. This plan was for the purpose of going out on a loan or bond for our casino construction. Fishkind's estimate on expenses was $6.98 per s.f. Baldwin finally left the city. In April 2009, Susan Stanton was hired as City Manager and she soon hired Steve Carr as finance director. The finance plan was thoroughly discussed on numerous occasions and later moved into many commission presentations and discussions. Even the Finance Advisory board got into the act. Everyone relied on our finance department and the projections it made at the time. A final meeting of the commission was on August 13, 2010 on the finance plan. Who was the Finance Director during all of this? Steve Carr.
The plan was to borrow $6 million from the City and then after rents start, repay the City the $6 million plus interest of approximately 2.5% per annum for the 16 months it borrowed the money. The City would then go out on a 20 year bank loan at 7.25% interest. By borrowing $6 million from the City’s Cash Portfolio, which has a balance of $60 million of unrestricted funds, the City would save $400,000. As everyone knows, it has been recommended by the finance director that we don't pay ourselves back this year as expenses were much higher than estimated.
I would imagine that Mr. Oakes did not know the above when he said the expense projection was made by someone no longer here. The final was presented by our finance department whose director is still with the city of Lake Worth. Steve Carr did the best he could do with the data given to him. There was no possible way under the sun of being accurate in expense estimates as the casino had no history under its belt other than the old casino that was totally neglected by the city. Now it has the information, one year later. One good thing, rents are at a much higher rate than originally suggested.
Truth can and often is re-written and sometimes facts are camouflaged by politics.
18 comments:
Thanks. It all does get a little fuzzy at times especially when we listen to Maxwell and watch him roll his eyes every time the casino financing is mentioned. It's that "I told you so" look he gives in utter disgust. He did it recently during the budget workshop.
Well.... he did say so, over and over again. There were many people, experienced in Commercial Real Estate Management who opined that the CAM rates were way too low and pointed out many deficiencies with the projections.
Just one more example of the city commission majority not listening to knowledgeable people and instead taking staff's recommendation, however flawed.
And now you complain that someone has the audacity to say "I told you so" when what he said comes true. I actually think he is showing a huge amount of restraint.
As much as you wish to point out that the new Charter required Internal Auditor works for the commission, the Finance Director does not. As you so correctly point out, he was hired and worked directly for the City Manager and so was forced to show numbers she wanted him to show. This all comes back to Susan Stanton.
Your HERO.
10:04--Thanks, Wes.
The second to the last sentence of yours is a bold-faced lie as well as suggesting that the former commission would not listen to knowledgeable people. Do you sit around all day and think up these things? Why in hell would anyone want to show false, misleading or inaccurate numbers? What a joke. Obviously, you want to continue your hate and not look at this situation objectively. It's all easy now to say the pro-forma was flawed. The finance Dept made a projection that did not pan out. And no, Stanton was NOT my hero. I just believe that she made many good decisions.
Thanks for the complement. Wes doesn't post anonymously as you are well aware. I'm just an observer and express my opinions as I see them. Of course, each side will paint the biggest smile they can on decisions that went the wrong way. That includes everyone including Wes. I like the analogy of trying to pick up a tyrd by the clean end.
Stanton's comment about "why" to NOT fund the internal auditor position and the idiotic opinion from our city attorney (who supposedly works for the commission, NOT the city manager) that they "could" choose to not fund the position, gave me all I needed to hear from that bunch of clowns and phonies.
It seems that each time I bring up these faux pas' of Stanton, and you agree that you didn't agree with that particular decision i.e. The Illegal Hiring Hall, pushing to make Lake Worth a Sanctuary City, etc., and it happens over and over, it diminishes your overall approval of her many other decisions. I too think she made a few good decisions, (Unions) but some of the bad ones were doozies.
We now have an internal auditor and a very good one by what is coming to the surface. I can't wait until he gets his claws into the utility to further help you understand why we need NOT be in the Electric Distribution business. (one more item you and I disagree on)
Pick up the clean end of THAT one.
Twisted
How much does the damned gym cost the city? Anybody ? The city has REFUSED to provide the answer to that question. So how much does this neighborhood ONLY asset SUCK from our city?
The word is COMPLIMENT.
As far as Elaine the city attorney agreeing with Stanton not to fund the IA, so what? There is NOTHING IN THE CHARTER that says that we must fund an internal auditor. There were a lot of austerity measures then and they were good ones. So take your clowns and phonies comments as they are on the dirty end of that turd. Stop trying so hard to sell our electric utility. The voters will say no, unless of course you once again put out the lies and false banners.
@ 12:34. You may be correct that we shouldn't be in the electric business. and I guess you say that because of mis-management, etc. But we are! So, why not make it the best little utility around and run it like a business for the benefit of the end user...stop the waste and unnecessary spending. Let's devote all that energy in turning it around.
Making Ms. Margoles project manager on the beach project was a monumental mistake.
Perhaps. She took over after Rachel left. However, we paid for and had a project manager for our pool and you know how that turned out. We should have hired an independent contractor to look out for our interests and to ensure what was going into the building was top quality, etc. You do the best you can with the skill sets you have and she had many. Kathleen was not a building contractor however.
Lynn, "Kathleen was not a building contractor however." Why was she given the job and who appointed her?
At that stage of the game, there was no one to appoint. She was the assistant city manager under Stanton. The casino was mostly built when she had to assume the job because Rachel Smithson had left thanks to the constant harassment of Scott Maxwell. Now, get this straight--I always said then and still believe to this day that we should have hired a contractor looking out for our best interests although there is never a guarantee. It was going to cost us around $200,000, money we did not have. The feeling then was that the contractor building the place would be doing the right thing. His reputation was and is impeccable.
Lynn, believe me i am no fan of scott m. it appears the commission was not up to speed and maxwell was right. but, as usual he pontificated without any solutions. he leans on people to do his research, and passes it off as his own. he will probably get elected again. it is obvious that most commissioners read the agenda and back up on the fly on the dais.
This commission wants to tell us that they think out of the box. However, they take staff recommendations on EVERYTHING, and Mike Bornstein protects his staff.
Lynn, last year we needed transformers etc. for hurricane prep, this year for routine scheduled maintenance. Are we being snowed?
As Chip Guthrie said last night, we go through this every year at the end of the budget cycle. If they don't spend it, they lose it...maybe... It is about damn time that we ran this utility like a business. They made a horrendous decision years ago to go with the 26kv system. That cost us about $6 to 8 million.
Lynn, do you agree that maxwell is a bore, mcvoy wished he lived in 1905, the mayor is totally unprepared, amoroso is consumed with downtown activities, szerdi talks in circles, and the c.m. is in over his head with terrible advisors?
Guess you did not agree with 10:19. These are my honest observations after listening since 2012.
Thanks for your thoughts, anonymous. I think you have an interesting perspective.
I honestly think none of them are as prepared as they should be but you have to trust staff. Also, it would be a full-time job just to keep on top of it all. I find Maxwell to be very entertaining at times. None of them, other than McVoy, get my nod because of what they did on the Charter Amendment and spitting in the eye of the voters.
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