Leave it to Vero to get cute with DOGE response

EDITOR’S NOTE:  Late in the afternoon of April 8, following questions from Vero Beach 32963, the City of Vero Beach amended its response to Gov. Ron DeSantis’ DOGE Team to disclose its failure to file its fiscal year 2022-23 audit, and the missed contributions to the fire and police pension plans. The amended response was sent to Tallahassee after this week’s print edition had gone to press.

Local governments here have all filed their responses to letters from Gov. Ron DeSantis’ Department of Government Efficiency Team, designed to give them a chance to explain any potential red flags as state DOGE technicians dive into city, town and county data, assisted by artificial intelligence-fueled software.

Yet instead of being transparent with the governor’s new auditing team about the current challenges impacting city pension funds, Vero Beach at the 11th hour and 59th minute decided to take its chances parsing words.

The DOGE letters on March 18 asked local officials for five categories of financial disclosures, ranging from failure to make payments on loans or bonds, payments to creditors more than 90 days past due, “failure to transfer taxes, social security contributions, or retirement plan contributions as required by law,” and fund-balance deficits in any major fund for two consecutive years.

Sebastian and Fellsmere sent their responses back the very next day, followed by Orchid on March 25, then Indian River Shores and Indian River County on April 4. The four Indian River County municipalities all told the DOGE Team that they had not experienced any of the difficulties mentioned in the letter and had nothing to disclose.

But as of 11:30 a.m. Monday with the deadline just hours away, Vero City Manager Monte Falls was still “discussing our response with Councilmembers” and said in an email, “We will respond by the deadline and provide you a copy as requested.”

Instead of disclosing and explaining that city pension contributions had not yet been made due to Vero’s audit noncompliance causing state funds to be held back, the city staff decided to parse words with the DOGE Team, because technically, the pension contributions were not missed “due to a lack of funds.”

Finally at 4:31 p.m., Councilman Aaron Vos provided Vero Beach 32963 with Falls’ just-drafted response.

“After careful evaluation, we confirm that our municipality has not failed to transter at the appropriate time, due to lack of funds, taxes withheld on the income of employees, or employer and employee contributions for federal social security, or any pension, retirement, or benefit plan of an employee.

“Moreover, our municipality has not failed to pay, due to a lack of funds, the following: (1) wages and salaries owed to employees; (2) retirement benefits owed to former employees; (3) short- term loans or obligations when due; (4) debt service payments on bonds, loans, or other debt instruments when due; and (5) uncontested claims from creditors for more than 90 days. In addition, our municipality has not maintained an unreserved or total fund deficit in the general fund or any major operating fund that persisted for two consecutive years,” Falls wrote to the governor’s office.

The missing 2022-23 audit was not mentioned in Vero’s response.

Indian River County was forthcoming with the DOGE Team, however, reporting that one of its funds for beach replenishment ran a deficit and was still $9.3 million in the red at the start of the current fiscal year because the county fronted the money for grant-eligible beach replenishment projects.

“As reported in the county’s annual Comprehensive Financial Report, at September 30, 2022, September 30, 2023, and September 30, 2024, the Coastal Engineering Fund, a major governmental fund had deficit fund balances of $5,841,494, $4,067,329 and $9,339,175, respectively,” said County Office of Management and Budget Director Kristin Daniels.

“These deficits are due to Indian River County awaiting reimbursement for FEMA obligated project worksheets, as well as approved State grant funding pertaining to beach renourishment projects that the county has already completed.”

Six weeks since the City of Vero Beach’s failure to complete and file its 2022-23 audited financial statements with the state came to light, the city’s audit is still in the works, with Vero officials reporting staff plus a consultant are making good progress working with the outside audit firm of Cherry Bekaert.

The city hopes to have the audit completed by April 30, which would give Vero 60 days to be deemed back in compliance before the June 30 drop-dead deadline. The entities that must weigh in are the Florida Joint Legislative Auditing Committee, the Florida Auditor General, the Florida Department of Revenue, which as of April 3 was withholding state tax and fee sharing, and the Florida Department of Management Services, which has held back $709,000 in pension fund contributions since August.

The city has been widely criticized for displaying apathy about the matter. One local resident rose to the podium at the April 1 Vero Beach City Council meeting to point out that the City Council had nothing on its published agenda addressing the audit – no status report, no discussion, nothing.

The citizen was correct, there was no mention of the audit on the publicly noticed, published agenda.

But Falls requested to add two items to his matters – an action typically reserved for emergencies that were unknown to the city when the meeting agenda closed. One item was about a March 19 settlement with the Teamsters Local 769 which will cost Vero taxpayers and estimated $518,000 between now and 2027. The second was a statement about the overdue audit.

In a defiant, carefully worded statement, Falls declared, “There is no financial crisis in the City of Vero Beach.”

Falls blamed media reports for whipping up concern about the city’s finances and his job performance, and he directly contradicted the city’s own Police Pension Board officials by saying “No retirees have gone without a pension,” because technically, retired Det. Lee Evans, after waiting four months for his first pension check due to missing calculations from finance staff, has been made whole retroactively.

“No funds have been lost to date,” Falls said. The JLAC staff told Vero Beach 32963 the first scheduled state revenue payment that would be impacted by enforcement actions was set for April 15, so if you don’t count the $709,000 that did not get deposited into the employee pension fund accounts on time in 2024 to begin earning returns, Falls’ statement was technically true.

But Falls did admit that up to $260,000 in upcoming sales tax revenue could be forfeited.

Falls doubled down on his February claim of being “flabbergasted” and also on blaming everything on former finance director Steven Dionne.

“Yes, we were late on our audit. We missed the deadline. I was misled by a finance director. He no longer works here. Had I known that we were not going to meet the deadline, I would have been at the JLAC Committee in Tallahassee explaining exactly why we were late,” Falls said.

“I was not aware that he (Dionne) had missed the submittal until I got the notification from Tallahassee,” Falls said, failing to explain how he had missed glaring signs of trouble, such as audit fees in 2024 running more than double the budgeted amount.

Falls recounted his trip to Tallahassee with Mayor John Cotugno and City Attorney John Turner, which failed to secure a reprieve for Vero. Falls admitted that city officials made the long drive to the state capitol without booking an appointment to see JLAC Co-chair Sen. Jay Collins during the busy legislative session.

“Without an appointment we were able to get into his office, and he was very generous with his time with us,” Falls said, noting that he did not make the trip “out of desperation.”

Cotugno also made a statement which mostly echoed Falls. The city published edited versions of the two statements on its social media pages, prompting a backlash from local residents. Vero then shut down comments on its own official page due to the overwhelmingly negative tone.

To date Cotugno has taken no responsibility for the fact that an Oct. 29 non-compliance letter from the JLAC, addressed to him personally, was ignored for nearly four months, resulting in a Feb. 10 JLAC vote to take financial enforcement action against Vero beginning April 3. While under this action, the state will hold back payments of shared state revenue, and payments of state grant funds.

Efforts last week by Falls and Cotugno to deflect the public’s attention from the city’s audit crisis – in part by blaming media outlets covering the issue – largely backfired.

Though locals could only comment on one post on the city page for a short time before comments were cut off, the city’s posts got dozens of shares and hundreds of comments on local Vero neighborhood pages.

Commenters’ chief complaints were that the words of the mayor and city manager seemed disingenuous, and that neither Falls nor Cotugno has accepted any meaningful responsibility for the failures.

Screenshots