OPINION by Dr. Myles Riner
Imagine you live in a General Improvement District that provides utility services and a wide range of recreational venues and facilities for all its residents and property owners, and most residents seem to feel that the District does a pretty good job of it. Now imagine that there is one particular homeowner who has a grudge to bear against the District. The reason for this grudge isn’t so important, but it is longstanding and motivating. Let’s also imagine that there are a few other property owners who, for a variety of reasons, have similar negative feelings about the District. For example, some may not like the idea of contributing to the support of recreational facilities they don’t use. “It’s a form of socialism,” they complain.
Imagine this group of disgruntled citizens decide, separately or together, to dismantle the District, in fits of righteous indignation. How would they go about it?
First, and most importantly, they would have to launch a sustained campaign over several years to undermine the community’s faith in this institution and the managers and staff that operate the District and run all of these amenities and services. To achieve these goals, these perpetually aggrieved residents might:
• Come to every District Board of Trustees Meeting to gripe about every perceived fault and error, no matter how petty, in the operations of the District.
• Hurl insults and unsubstantiated accusations at, and challenge the professionalism, honesty, integrity, and capability of nearly all the managers and staff, and even certain Trustees, of the District. Use these tactics to encourage staff to leave District employment for more encouraging work opportunities.
• Flood the district with innumerable Public Documents Requests on a sustained fishing expedition looking for any discrepancy in accounting or failure to adhere strictly to District policies to substantiate their accusations of malfeasance and ineptitude. These constant requests in turn distract from and undermine the staff’s ability to perform their duties.
• Use social media to broadcast these negative narratives about the District and the staff to as many residents as possible, and to challenge, denigrate, and abuse anyone who disagrees with these narratives.
• Create a website to promote these same negative narratives and expound on the unfounded accusations and assertions of malfeasance levied against the District.
• Argue that these ‘poorly run’ facilities should be sold off to commercial entities, or managed through outsourcing to private recreation business management companies.
• Contradict the idea that investment of taxes and fees in the District’s amenities and facilities are good investments for property owners, and sustain and increase their property values.
• Use frivolous lawsuits in an attempt to undermine the District and distract District leadership from performing the tasks required to operate the District, and waste taxpayer money in defending these suits.
• Find and support three like-minded Trustee candidates for District elections so as to form a Board majority in support of these objectives, using substantial financial contributions and other financial incentives to cement this support, and even compromise the integrity of these Trustees.
Once they have a majority of Trustees on the Board, these Trustees can then:
• Make it difficult, if not impossible, for a very popular and effective District General Manager to continue to serve the interests of the District and the community through micromanagement, unfair performance evaluations, and unreasonable demands; and effectively force this GM to negotiate a separation agreement, costing the District hundreds of thousands of dollars.
• Likewise, force the District’s Director of Finance, Director of Public Works, Director of Golf, Director of Human Resources, Director of Food and Beverage, Controller, the District’s attorney, and other key and experienced staff and managers to leave the District due to a toxic work environment reflecting multiple violations of the Trustee Code of Conduct.
• Attempt to explain away this exodus of talent and institutional memory by stating that such turnover often happens when the General Manager leaves their position. Infer instead that senior staff left to avoid having to take responsibility for their underlying fraud and malfeasance.
• Make disparaging comments about the quality, accuracy, and trustworthiness of the IVGID’s financial reporting and underlying accounting, and claim that under their direction new accounting and financial reporting revealed significant operating losses and corrected financial errors by District staff, without acknowledging the role of serious financial and accounting department staffing shortages that perpetuated these deficiencies. Fail to acknowledge that the District has always had very good audit reviews and the staff have been consistent in getting recognized for the team’s work by the Government Finance Officers’ Association.
• Insinuate fraud and malfeasance on the part of staff in failing to follow internal accounting controls or keep ledgers in balance even though there are no material accounting outages known or any evidence of fraud or malfeasance in District accounting. This narrative represents a significant breach of a fiduciary duty to the district by promoting an unsubstantiated narrative that the District’s financial statements cannot be relied on; and thus erode the general public’s and lender’s faith and confidence in the District, causing irreparable harm, leading to both civil and criminal exposure.
• Appoint long-standing critics of the District who have questionable qualifications or a history of inappropriate behavior towards District staff to significant roles on important District committees, despite clear conflicts of interest in making these appointments.
• Turn down a generous donor’s pledge of $26M to renovate and expand the District’s Recreation Center; and attempt to justify this incomprehensible decision using frivolous and nitpicking excuses that are rejected in an outpouring of negative community feedback.
• Turn down, for no apparent reason, the donation of an ice skating rink that many residents have expressed the desire to add to the District’s amenities.
• Insist that all major recreational and other service venues in the District be self-supporting and not rely on fees assessed to property owners to subsidize operating expenses, even though these venues often have limited operating seasons. This in turn would require an increase in fees and a reduction in discounts for residents using these venues, thus limiting the opportunity of residents with fixed or limited incomes to access these facilities.
• Implement auditing changes that are designed to support the effort to require each of the District’s amenities and facilities to be self-supporting or profitable, and to highlight when they require operational subsidies; even though these entities were never expected to operate as profitable businesses. They were created through investments of property taxes and fees as high-end amenities, existing for the enjoyment and benefit of all the District’s residents: the main purpose of a general improvement district.
• Claim to have addressed inconsistencies in contracting by the District to reduce risk and ensure the District is legally protected, but with this aggressive oversight give the District the reputation of being difficult to contract with, and make it harder for the District to obtain bids.
• Fail to move forward with many long-planned repairs and improvements of existing District facilities, and initiate the construction of new facilities and recreational venues long sought by property owners and residents; thus increasing the potential cost for these projects, and cause the budgeted finances set aside for these projects to remain unused. Use this ‘overcollection’ of fees to justify elimination of the Recreation fee, setting the stage for a subsequent financial crisis for the District.
• Eliminate one of the most appreciated benefits (beach accesss) for District employees without searching for an alternative way to maintain this benefit, thus further undermining employee morale even as it gets more difficult to recruit replacements for those that leave.
• Fail to come to the defense of District employees who are inappropriately abused and maligned in public or on social media, or take any action to keep members of the public or other Trustees from making inappropriate, slanderous, or rude personal attacks against District staff at Board Meetings.
• Open the District’s Whistleblower Process up to public scrutiny and participation, with dubious potential consequences.
• Modify the proposed contract for a replacement GM to prohibit participation in any business venture or non-profit conducting business in the established boundaries of the District, even if these activities do not interfere with the performance of the GM’s duties. This provision in turn sends the message to all District employees that they are to be discouraged from integrating into the community through participation in community non-profit activities.
• Place a District administrator on paid leave of absence for months without providing any explanation, while searching unsuccessfully for a reason, any reason, to justify dismissing this employee.
• Initiate a totally unnecessary Forensic Audit fishing expedition at the cost of hundreds of thousands of dollars to find evidence of fraud by District staff and management based on accounting and control issues that ‘might facilitate fraud’ despite the total lack of evidence to support such allegations in prior audits. As a result of this Forensic Audit, delay the completion of a state-required audit submission, undermine confidence in District financing by creditors and the State Taxation Department, and create the impression by staff of a ‘witch hunt in progress’ that further deteriorates staff morale.
• Seek community input through a survey process that fails to solicit input from all the District residents, asks questions without fully informing respondents first, and uses response options designed to get the answers they prefer to hear.
• Waste hundreds of thousands of District funds on consulting services to augment understaffed departments; pay to push out an unwanted GM, management, and staff; and risk coercing employees to sue the District for unlawful employment practices.
• Delay the execution of planned and proposed capital projects, halt progress on important projects to stop and go back out for further consultant services, and delay yearly budget deliberations to focus on unnecessary audits and disputes over contract terms.
• Deplete the surplus in the District’s General Fund to the point where it violates District Policy and comes very close to violating state financing statutes, and use this as an excuse to implement ‘zero based budgeting’ for the District to try to recoup revenues lost through elimination of the Recreation Fees, and unnecessary expenditures for consulting, etc. This in turn should force staff to cut services to reduce expenses, undermining public satisfaction with District amenities and facilities.
When enough members of the community realize the damage these Trustees and their supporters are doing to the District that they decide to initiate Recall Petitions for two of the Trustees, they can:
• Fail to discourage supporters of these two Trustees from verbally and even physically intimidating members of the community from signing these recall petitions at public signing tables and on social media.
• Use District resources, Board meetings, and District sponsored community meetings to contradict and distort the reasons for the Recall and disparage the Recall process.
• File multiple complaints about the conduct of the Recall effort and Petitions with the Secretary of State in an effort to avoid having to face the voters in a Recall Election.
This is how three Trustees and a few disgruntled residents can dismantle a perfectly good General Improvement District that most residents are very happy with. Though they would never acknowledge this as their goal, their actions would speak louder than their words. With a prolonged campaign by a few to undermine the District and set the stage; a determined majority of the Board of Trustees can turn this District into a mere shell of its former self in less than a year.