A month after the stunning news broke that Vero Beach had failed to complete and file its 2022-23 audited financial statements, causing forfeiture of at least a quarter of million dollars in state funds so far and putting more than $32 million in grant funding and hundreds of thousands in police pension funds in jeopardy, no member of the City Council seems to care.
So far only Finance Director Steven Dionne has lost his job. Despite mounting evidence in public documents, and in records and videos of public meetings of the city’s Finance Commission and Police Pension Board, that City Manager Monte Falls knew (or certainly should have known) much more than he’s letting on, Falls remains untouched.
Last week, Falls told the City Council he plans to ride it out in his $185,000-plus-benefits job until 2028. “The City Council has given me their support to continue in the position of City Manager,” Falls said in a response to questions.
No one on the City Council – including Mayor John Cotugno, who also did nothing after getting an official letter in October, just like Falls, telling him Vero had not complied with state law and was in danger of losing state funding – has shown any sense of urgency or desire to hold anyone’s feet to the fire.
It is now clear that Falls did not effectively supervise Dionne, as evidenced by the current financial mess and by Falls’ own public statement that Dionne failed in his “most basic duties.”
Falls says he frequently checked in with Dionne and asked him if he needed anything additional to do his job, to which Dionne apparently said no. But the job was obviously not getting done.
Falls failed to give Dionne an annual review on paper for 15 months, and did not review Dionne’s performance the entire 2024 calendar year, despite Dionne missing major state deadlines in June and September.
Dionne was neither reviewed nor placed on probation in October when Falls, like Cotugno, got a letter from Tallahassee telling him the city had not complied with state law on filing the previous year’s audit and was in danger of losing state funding.
Did the two of them discuss the problem they had been alerted to? Only the two of them know. But neither informed other members of the City Council.
While Cotugno may not bear the same responsibility for the city’s current financial woes as Falls and Dionne, he clearly should have called urgent public attention to the matter on Oct. 29 when he got that notice from the Joint Legislative Auditing Committee.
Had Cotugno brought the failure to complete and file the audit to public attention at that time, most of the state’s enforcement actions and the lost revenues could have been avoided.
Falls also did not review or put Dionne on probation last summer or fall, when the Finance Department repeatedly failed to produce final benefit calculations, delaying police pension payments for months. The city got official letters about the pension funds from the state on July 10 and Nov. 21.
And Falls did not review or put Dionne on probation in November when the Florida Department of Management Services began holding back police pension contributions. Not only has the state withheld hundreds of thousands of dollars since November, but the pension plan has also lost whatever interest or dividends might have been earned on that principal.
After the city files its 2023 annual report for the police pension plan (which can’t be done until the 2022-23 audit is complete), state officials must approve the plan for Vero to begin receiving funds. “If the plan has not been approved by fiscal year end 2024 … any resulting funding deficiency must be contributed by the city,” the Nov. 21 letter states.
In other words, Vero taxpayers must make the police pension plan whole if state funds are not restored by June 30.
When a “flabbergasted” Falls was informed on Feb. 11 by Vero Beach 32963, and formally by the state on Feb. 12, that the Florida Legislature was taking action to hold back and even forfeit funding from the city, Falls waited six days to inform the city council.
What did he do during that time instead? Falls contacted a previous boss, former Vero mayor Robbie Brackett, now a well-respected member of the Florida House of Representatives, hoping Brackett could “fix” the problem. As it turned out, Brackett couldn’t.
Meanwhile, excuses abound at Vero Beach City Hall. City Council members continue to say Falls was too overtaxed with lofty projects to ensure that critically important, basic municipal functions were being carried out.
While spending time on pricey pipe dreams like Three Corners and downtown redevelopment, Falls and the Council have neglected basic municipal services.
And now, their solution appears to be to hire an assistant city manager, at an additional cost of $200,000 or more inclusive of fringe benefits, despite the city manager’s job shrinking substantially since the sale of Vero electric.
Vero downsized to nine departments and fewer than 320 employees after the electric sale, even though that number has crept back upward to 344 employees in 2024. Previous city managers, including Jim O’Connor and Jim Gabbard, managed 400-plus employees and 10 major departments without the luxury of a deputy.
The steady rise in the number of staff not only has increased the annual municipal payroll from $13.4 million to $15.6 million over the past three years, but as payroll increases, so do benefit costs. Pension contributions have risen from $3.1 million to $4.2 million, and the city’s portion of employee health premiums has climbed from $2.5 million to $3.3 million.
Professional and contractual services in the general fund also have increased by almost 50 percent over the past three years from $625,000 to $925,000 as the city hires more pricey consultants.
In just three years, Vero’s general fund budget has soared 25 percent from $27.6 million to $34.6 million thanks to ballooning property values.
Since the Covid pandemic, Vero’s property tax rate has increased 10.8 percent from $2.50 per $1,000 of taxable value to $2.77 per $1,000. Property tax receipts have increased from $7.3 million to $12 million since 2020.
So-called “admin. charges” paid by utility customers inside and outside the city, plus airport and marina users, have increased 53 percent from $1.9 million in 2020 to $2.9 million this year.
Utility taxes have increased 20 percent from $2.5 million to $3 million annually.
As for the current audit debacle, the City Council has tried to scapegoat the outside auditing firm, Cherry Bekaert, but public records show the auditors working diligently to keep the city’s Finance Department staff on task and in compliance with government accounting standards.
Last week, in a further attempt to deflect from Falls and Cotugno, the City Council even tried to blame former finance director Cindy Lawson, who retired two years ago, for today’s problems. Lawson, in her 12 years of service, consistently exceeded expectations and won accolades for managing the city’s finances.
