Photos

Recent commentaries featured in the local press have taken the Board of County Commissioners roundly to task for pursuing legal disagreements with the Clerk of Courts. This public flogging resulted in some inquiries to me regarding the background and nature of the disputes. While discussing the issue with constituents, I realized that very few people understood the background or the true nature of the conflicts from the Boards perspective not surprising given the local editorial positions on the issue. Editors have opined that the Board is attempting to interfere with the Clerks right to safeguard public funds. Several opinions have characterized the Boards position in the dispute as silliness. This issue is far from silly  it centers on constitutional limits of authority and the appropriate balance of power between the Board of County Commissioners and one of our countys Constitutional Officers. All good government requires this balance. The Board and the Clerk clearly have different understandings of the nature of this balance. The Florida Constitution and Statutes provide little guidance to resolve our core disagreements. Case law is conflicting. Since no resolution otherwise has been reached, the answer has been sought in the courts, initially by the Clerk and eventually by the Board of Commissioners.

This dispute is not simply a local disagreement. It is playing out across the State of Florida. My prediction is that the conflicts eventually will force the legislature to step in and beef up or clarify the statutes. The language was drafted for a simpler time.  It does not address the complexities of contemporary government financing, restricted or earmarked revenue, and investment market concerns.

I am a firm believer in people having both sides of an issue to consider before arriving at conclusions. So here is the other side of the story regarding this dispute.

Between 1997 and 2004, the Clerk filed five cases against the County or its agents or employees. Not one case was decided in favor of the Clerk. The Board filed none.
After 2004, five suits were filed.  The Clerk filed two suits. The Board filed two suits-one in response to the suit filed by the Clerk and one in response to the Clerks announcement of a seizure of Board interest and his failure to amend his budget as required by law. A fire chief filed one suit in response to a suit filed by the Clerk. The Clerk lost four of the suits (one of these is pending an appeal) and won one as the result of appeal. That latter appeal is awaiting a ruling on a rehearing request by the Board.

These facts do not support the perception that the Board is harassing the Clerk.
To put things simply, at question is this: Who has primary responsibility and control of tax revenue collected and/or expended at the county level? Who can authorize its use? Who ultimately is accountable to the public for its use? The Board believes that the laws of Florida vest this authority with the Board of County Commissioners. The Clerk appears to believe it lies with him. 

First, let me be clear about two things. No one is contesting the statutory authority given to the Clerk to act as custodian of county revenue nor challenging his obligation with the Boards authorization to invest the countys surplus funds (e.g., tax dollars and impact fees that are collected when due and held to cover for future expenses). No one is disputing the Clerks right to pre-audit county expenditures and insure that they are accurate and authorized before disbursing funds. In fact, there is general agreement that he is obligated to do so and to account for all such investments and expenditures. In addition, I firmly believe that he is obligated to provide this accounting in a timely, transparent, and useful manner. 

If there is agreement generally, where is the dispute? The dispute lies internal to the two core issues: 
"    Investment of surplus funds and use of the interest income generated by those funds.
"    The availability of post-audit powers to the Clerk.
These two issues need to be considered separately.

Investment and Use of Surplus Funds and Interest

Historically in Collier County (as in most non-Charter counties), the Clerk was designated a budget officer. (For reference, this is the same designation carried by the Sheriff and the Supervisor of Elections, two other constitutional officers). Under this designation, the Clerk submitted an annual budget to the Board for approval and then paid his office expenses in keeping with that budget. Surplus revenue collected by the Clerk was allocated back to the countys overall budget. This method worked well until a dispute arose between the Clerk and the Board when the Clerk applied additional county revenue, not derived from court fees but from the Board-controlled funds, to line items in amounts beyond his approved budget.
Despite the fact that the Clerk is merely the custodian, not the owner, of the general funds, the Clerk held that he was entitled to use the interest on all invested County revenue to balance his budget without any oversight by the Board. Also, as budget officers do not have the right to amend their budgets without oversight, he declared himself a Fee Officer. Under this designation, he could set his own budget.
The Board disagreed that he had the right to spend interest from county general revenue without oversight or approval of the Board, which has the statutory authority and responsibility to authorize the use of those funds for public purposes. We also believe, in keeping with other Florida case law, that interest from earmarked funds must be spent for the same purposes as the funds. We requested a full and detailed accounting of the excess expenditures using standard accounting principles. We didnt get it. Ultimately, the Board filed a lawsuit. The Board prevailed at the lower court level. The Clerk appealed and prevailed in the higher court. The Board subsequently filed a motion for a rehearing based on facts we believe were not taken into consideration in the first ruling and to Certify a Question of Great Public Importance to the Supreme Court of Florida. The Florida Association of Counties and the Florida Association of County Attorneys have asked to appear as Amici Curiae in support of our motion.
Florida Clerks of the Court in 2007 generated $1,466,721,863 on county investment portfolios.  Thats your tax dollars destined to be spent for your needs. I believe it is too much money to be seen as discretionary income for the 67 Clerks to spend without oversight.
How much is at stake in Collier County?  In FY-2007-08, the Clerk earned and kept over $31.5 million of interest income on the Boards investment portfolio.  On October 31, 2008, the Clerk returned just under $24.4 million to the Boards General Fund. The Clerk spent $7.2 million plus of the General Fund interest income.  Of this, about $3.9 million was used for the Court-required registry deposit.  However, $3,912,600 was used to fund other elements of the Clerks operations without the Boards permission.
Should this matter be pursued?  We are awaiting a response from the court on our rehearing request. In the meantime, everything remains status quo. While we all are waiting their decision, ask yourself this:  Do you want the interest on your tax dollars spent at the option of the individual with custody of those funds - at his sole discretion - for the use of his office? Or, do you want such expenditures authorized as a part of a formal budget process - in consideration of the needs of the county as a whole - in the sunshine? 

Post -Audit Powers

A post-audit is an examination of a transaction after its occurrence. We use post-audits to determine if the countys policies and procedures were followed in the financial transaction.  I can hear you say, Well, why shouldnt the Clerk be able to do this? Here is the reason. The Clerk has the obligation to pre-audit. He is one who is supposed to make sure that transactions follow the rules beforehand. By policy and in keeping with formal accounting practice, the Board hires an outside firm to come in and conduct an annual, certified audit of all the countys books. This system provides a solid and orderly check and balance system to our financial record keeping.

There is an additional check and balance. If the Board has reason to believe something is amiss based on information provided by the auditor, the Clerk or any other person who has reason to believe an error has occurred, the Board can ask the Clerk to conduct a post-audit of any transaction. Prior to 2004 when the Clerk sued the Board over this matter, the Board had never denied a request for a post-audit.
The Clerk sued for the right to conduct post-audits on his own initiative. He lost. He has appealed. 
Although random post-audits may occasionally uncover errors or wrongdoing, history shows us that such activities, when conducted on a single individuals initiative, can lead to abuse of power for political gain. They also increase overall auditing expenses, waste staff time, and disrupt systems designed to prevent political interference in contracting. It disturbs the balance of power, our system of checks and balances, and appropriate division of authority. Frankly, we dont need this. The Clerk can ask for and receive permission for a post-audit anytime he presents a reasonable suspicion of malfeasance.

Where does all this leave us?  As you are aware, the county is sharing the national financial crisis.  We are struggling to meet obligations on greatly reduced revenue. Every nickel matters. Every financial decision requires careful scrutiny. We cannot get the information that we need from the Clerk to do our job.  We asked the Clerk to meet with the Board and provide us with information about interest revenue projections. He refused, directing us instead to visit his website for the information. I looked. The information is not there. In this crisis environment, a summary budget with no line item detail, no fund balances, and no projections of interest income, simply doesnt cut it. Go to the website. See for yourself.
This dispute isnt about the Board tilting at windmills or trying to knock the White Knight off his horse.  It is about getting the information needed to run the government in the public interest. It is also about efficiency, accountability, transparency in the use of public funds, and achieving balance of power.
I hope this gives you a clearer understanding of this serious issue.

Remember it is by working together, we make a difference. Sandra Lea, my Aide, can assist you to reach me or schedule time with me if the need arises. You can reach her at 252-8097.  My phone number is 252-8390; email me at FrankHalas@collliergov.net.
 

Frank Halas