As the man who oversees Vero Beach’s daily municipal operations, City Manager Monte Falls understands that he can delegate authority to department heads and other staff supervisors.
He may not, however, delegate responsibility.
Ultimately, then, Falls must take the hit for the failure of his finance department to complete an annual audit of Vero Beach’s fiscal-year 2022-23 financials and submit the required report to the state on time.
And he knows it.
“Everything falls on my shoulders, and I accept that responsibility,” Falls said last week as he scrambled to mitigate the damage done by the debacle, which will cost city taxpayers at least $250,000 in sales-tax revenue, could jeopardize more than $30 million in state grant money and might impact planned bond issues to fund municipal projects.
“I own this,” he added emphatically.
In fact, Falls said Sunday he planned to further discuss the situation with City Council members this week during the one-on-one sessions he conducts with them each Monday, then provide a public explanation at Tuesday’s council meeting.
He said he would be willing to offer his resignation at that meeting if his conversations with individual council members revealed a lack of confidence in his leadership.
As of late Sunday, however, Falls said he wasn’t planning to resign – and didn’t believe he needed to.
Certainly, Falls was at fault for not showing a greater sense of urgency after Florida’s Joint Legislative Auditing Committee (JLAC) sent an Oct. 29th email to inform the city that it hadn’t yet filed its audited financial statement and needed to do so by Jan. 15 to avoid punitive action.
He should’ve demanded immediate action and no-nonsense accountability from City Finance Director Steve Dionne, who, according to Falls, created this mess by not doing his job.
Had Falls been tougher on Dionne, who was hired in June 2023 to replace the retired Cindy Lawson, the city could’ve avoided this uncomfortable and costly blunder.
But there’s plenty of blame to go around: The city’s outside auditing firm, the City Council and even Vero Beach voters all contributed to this fiasco.
We’ll start with Dionne, though, because filing annual financial statements – while among his most important duties, along with preparing budgets – should have been a routine task, especially for someone with 25 years of experience in accounting and budgeting.
Apparently, it wasn’t.
According to Falls, Dionne did not complete the audit or file the mandatory financial report in accordance with the state’s January deadline.
Worse, Dionne never responded to the JLAC’s Oct. 29th email, nor did he request a filing extension that Falls said likely would have been granted if it had been submitted in a timely fashion.
Dionne’s most inexplicable dereliction of duty, however, was that he never told Falls he hadn’t done either.
“I was flabbergasted,” Falls said after Vero Beach 32963 contacted him two weeks ago to inform him that the city hadn’t yet submitted its financial report with the state.
Vero Beach’s city manager since 2019, Falls said he promptly began an inquiry and quickly confirmed what he had been told. He felt blindsided and betrayed. He couldn’t believe that Dionne hadn’t warned him.
With good reason: It’s difficult to imagine any of Vero’s other department heads conducting themselves in such an unprofessional manner.
Falls meets with each of them on a weekly basis and, as recently as Sunday, he said he didn’t know why his finance director failed to take the actions necessary to avoid state-imposed sanctions.
What Falls did know was that he could no longer rely on Dionne, who put him in this predicament, to help get him out of it. That’s why he asked him to resign.
Dionne, who commuted to Vero Beach from his home in Port St. Lucie, could not be reached for comment.
Mayor John Cotugno, meanwhile, joined Falls in wondering why Cherry Bekaert, the city’s auditing firm, didn’t notify the city when it became obvious the 2022-23 financial statement hadn’t yet been completed.
“Where were the auditors?” Cotugno said. “They’ve been doing our audits for 10 years and they didn’t notice anything? They should’ve brought this to Monte’s attention, just to make sure he knew about it.”
To be sure, Cotugno and the City Council didn’t make Falls’ job any easier, either, allowing unnecessary distractions to become priorities that placed greater demands on an undersized staff already burdened with three major projects.
In addition to meeting the unprecedented challenges presented by the proposed development of the Three Corners site, planned relocation of the city’s wastewater-treatment plant and expansion of the municipal marina, Falls and his staff were too often forced to waste time and resources on frivolous issues.
For example: There was no good reason for the council to again address in 2023 the previously failed attempts to reduce traffic lanes along the Twin Pairs through the city’s downtown.
The time the staff devoted to the issue was considerable.
Similarly, the council continues to ignore the will of the city’s voters, who in a November referendum sent a loud-and-clear message that they’re fine with the evolution of the downtown district and see no need for any significant revitalization.
Just last month, though – the council caved to pressure from a small-but-passionate group of downtown advocates and held a special-call meeting at night to explore the city’s options in the wake of the failed referendum.
That meeting required Falls and other staffers to prepare for and attend the two-hour session, squandering valuable time and energy that could’ve been put to far better use.
Falls and his staff also have been required to deal with: a tenant-insurance crisis at the Vero Beach Regional Airport; a failed attempt to remove Police Chief David Currey; a county resident’s requests for hundreds of public records; and the council’s change of plans for replacing the Humiston Beach boardwalk.
Oh, and let’s not forget the city’s all-hands-on-deck response to – and cleanup following – the Hurricane Milton-spawned tornadoes that tore through the Central Beach area in early October.
More recently, Councilman John Carroll requested Falls’ staff provide extensive updates on the progress of various city projects, requiring department heads to make presentations.
Such asks are not unreasonable.
Then, however, there’s Councilman Taylor Dingle directing Falls and his staff to needlessly waste more time and resources looking into the possibility of removing fluoride from the city’s drinking water – even though that decision will almost certainly be made at the state level. That kind of silliness needs to stop, especially as the continuing surge in the county’s population places increased demands on the city’s infrastructure and services.
Given the city’s relatively small size and limited resources, the council might already be taking on too much at the same time, asking Falls’ undermanned staff to juggle three major projects.
There’s no margin for error.
So when one department head doesn’t do his job – and doesn’t tell anyone – the city finds itself confronting a systemic failure that could have catastrophic consequences.
None of these reasons, though, excuse Falls’ failure to hold Dionne’s feet to the fire, especially after the city received the Oct. 29 non-compliance notice from the state.
Falls should have recognized the potential consequences, especially with the city engaged in several major projects, and ordered Dionne to promptly respond to the notice – then made sure that he did.
He should have required Dionne to send him a copy of the city’s response by the end of the next business day and regularly followed up by demanding to see hard evidence of his progress on the audit.
Instead, Falls forwarded the JLAC email to the finance department and trusted that Dionne would do his job.
“I did check in with him,” Falls said. “I went to him in November and again in December, and I asked him if he had everything he needed to get the audit done. I asked him: ‘Do you need anything? Do you need extra resources? Do you need help?’
“He said no, and I took him at his word,” he added. “I meet with my department heads every week, and every time I asked the finance director about the audit, he said they were working on it.
“I can’t solve a problem I don’t know exists.”
That’s true, but Falls knew a problem existed on Oct. 29 – and he should have done more than simply offer additional resources. He should have known his trust was misplaced.
Now, Falls is confronting an emergency and doing damage control, working to minimize the repercussions by making sure another deadline isn’t missed after learning last week that the JLAC had told this newspaper it would not grant the city an extension.
But he continues to hold out hope that the committee’s members might yet be swayed by the intervention of State Representative Robbie Brackett, a former Vero Beach mayor, and a detailed explanation of the obstacles the city encountered in producing its financials.
To ensure the city submits its financial audit before the end of the state’s fiscal year on June 30 and avoids further penalties, Falls is bringing in an additional outside accountant, Sea Oaks resident Michael Haesche, on a contract basis to help now-interim Finance Director Lisa Burnham.
Falls said he contacted Lawson, who served as the city’s finance director for 12 years before retiring in April 2023, in hopes that she might be willing to ride to the city’s rescue. She turned him down.
Since Lawson’s departure, the city’s finance department has been rocked by turnover: During Dionne’s 20 months as her successor, two assistant directors resigned and two were hired, the most recent of which was Burnham.
“She’s competent and pleasant,” Falls said of Burnham, who worked in municipal government in Michigan for 25 years before joining the city last month.
She’ll also need to be dependable to ease the angst Falls has felt the past couple of weeks, which he described as the most stressful stretch of his 34 years in the city’s employ.
But Falls isn’t going anywhere.
He cares about the city and takes pride in his performance. He has proven himself to be competent, and he’s generally well-liked and respected by city staffers.
Could Falls have handled this situation better? Yes, but to jettison him over Dionne’s mind-boggling inaction would’ve been shortsighted.
Falls did what honorable leaders do: He delegated authority, and when it went bad, he took responsibility.