Riviera consultants busting budget
RIVIERA BEACH — The Community Redevelopment Agency has spent nearly $1 million on consultants over the past eight months, putting its budget more than $200,000 in the red, records show.
In light of the overspending, the CRA board, which is composed of the city council, recently hired California consultant Bernard Kinsey to take over negotiations with master developer Viking Inlet Harbor Properties and Ocean Mall Redevelopment.
The two projects are the cornerstone of the city's 400-acre waterfront redevelopment.
Debate over consultants among CRA board members prompted the recent resignations of CRA attorney Steven Cohen and special counsel Susan Delegal. Both attorneys, whose resignations are effective Thursday, have worked nearly two years advising the CRA on its $2.4 billion redevelopment project.
The latest CRA figures show the agency has spent $984,436 on consultants since Oct. 1, the beginning of the fiscal year. That's $234,436 over the $750,000 the agency budgeted for consultants in the budget year that ends in September.
CRA Executive Director Floyd Johnson will ask for an amendment to the agency's annual $1.6 million budget to cover the deficit. That request could come as early as the CRA's Wednesday meeting.
The biggest winner among consultants is PSA Constructors, an Orlando-based company brought in as program and construction managers. This budget year, PSA has received $424,190, accounting for almost half of the money the CRA has spent on consultants, although no construction has begun on any of the projects.
PSA President Patrick Aliu said the company is doing the job it was contracted to do. Whether to continue to pay the consultants in the face of the overspending is up to the CRA board.
"Every consultant is concerned about going over budget," Aliu said. "But I think it's the nature of the job."
CRA records also show that PSA has another $831,755 in disputed bills from past years. Johnson hopes to negotiate those with PSA.
Aliu said his company has the invoices to support the disputed bills. However, the company has made the concession to wait until the CRA gets more money.
"We have really made sacrifices for the city," Aliu said. "We don't ask them to pay us when they don't have the money."
PSA has been contracting with Riviera Beach since 2002, records show. Then, Mayor Michael Brown was one of PSA's biggest supporters.
Over time, however, the relationship soured. There were accusations that things went bad when a PSA employee stopped renting a house owned by Brown's sister and brother-in-law. Brown said that wasn't the case.
But he acknowledges concern about how much has been paid to PSA. Other than sitting in meetings and reviewing invoices, Brown isn't sure what PSA does for all of the money the company receives.
"We've had a feeding frenzy with these consultants," said Brown, who first met Aliu in 1994 while a Port of Palm Beach commissioner. The two were at the groundbreaking for CityPlace, Brown said.
This isn't the first time the CRA has come under fire regarding its spending on consultants. In 2004, the city put together an advisory panel to review the CRA's finances.
Tony Gigliotti, chairman of the Singer Island Civic Association, chaired the city's Financial Advisory Review Committee, which then found the CRA was $7 million in debt and concluded the agency was headed toward a "state of financial emergency."
Today, Gigliotti believes, the CRA is heading down a similar path of uncontrolled spending. Residents have been waiting patiently for the redevelopment to take off, but their patience is wearing thin, he said.
"I think it's a disgrace in what's happened with these consultants," Gigliotti said. "It's definitely raising eyebrows."
Gigliotti also said one of the committee's findings in 2004 was that PSA was getting nearly 50 cents of every dollar the CRA spent on consultants. Gigliotti's group was also among the community groups that pushed for the state to audit the city and the CRA's finances.
The audit, which began in January, is still being compiled, according to the state Auditor General's Office.
Most of the remaining consultants' costs went to lawyers. Both Cohen and Delegal billed the CRA at $265 an hour.
The law firm of Ruden McClosky got $121,781 for defending the CRA in a lawsuit against former consultant Florida Acquisition & Appraisal, which was hired to price homes and businesses that the CRA might have to buy for the redevelopment. The case was settled in September 2005 for $462,000.
CRA Chairwoman Ann Iles said she hasn't seen the latest report on the cost of consultants. But the CRA hired PSA to prevent excessive spending, she said.
Her is concern is bringing Kinsey to the table at such a late date and giving him a $3,000-a-day, six-month contract. She and CRA board member Liz Wade opposed hiring Kinsey.
CRA board members Vanessa Lee, Jim Jackson and Norma Duncombe voted to bring Kinsey on board. Brown also pushed the the Kinsey hiring.
Lee supported bringing in Kinsey, a former Xerox executive and West Palm Beach native, to move the redevelopment forward, after eight months of negotiations with few results. She also believes Kinsey will make the developers and consultants more accountable to the CRA board.
Iles, however, remains convinced that the CRA is better off without Kinsey.
"I don't think we need him at that price," Iles said. "It's an insult to bring somebody in when we're so close to getting both deals done."