By Stacey Singer
The 13 municipalities still suing to avoid paying fees for Palm Beach County’s Office of Inspector General made their case at the 4th District Court of Appeal on Oct. 4, saying they don’t object to oversight by the independent inspector general but protest the concept that the county can send them a bill and demand payment.
Since the county began billing them, many towns and cities have refused to pay fees for the oversight, collectively amassing bills totaling nearly $5 million. As a result, the underfunded office for many years had difficulty filling positions and carrying out its auditing, contract oversight and tip investigation duties until county commissioners agreed to step in and temporarily pay the fees.
The municipalities suing include Gulf Stream, Delray Beach, Manalapan, Highland Beach, Ocean Ridge and Boca Raton. The village of Wellington withdrew from the litigation.
“The county sent the cities invoices without first entering interlocal agreements, violating sovereign immunity,” argued Jane Kreusler-Walsh, appellate lawyer for the municipalities. “If this program is allowed to continue, there is nothing to stop the county from implementing other countywide programs. … It will wreak havoc in municipalities all across the state.”
In 2015, Circuit Judge Catherine Brunson sided with the county on every argument. The municipalities were being billed for a “valid user fee and not an unlawful tax,” she wrote.
“In this case, the approval by the voters of the referendum authorized the governing bodies to establish a line item in the budget to contribute to the funding of the OIG. This eliminated any discretion that the municipalities may have had as to funding,” Brunson wrote.
The creation of the Inspector General’s Office came after a series of public corruption scandals. On Nov. 2, 2010, county voters overwhelmingly approved a ballot item asking if a county ethics commission and office of inspector general should be created. It’s significant that voters in every municipality said “yes.”
The referendum language explicitly stated that the inspector general would be funded “by the County Commission and all other governmental entities subject to the authority of the inspector general.”
Given that language, why would the cities question their obligation to pay, since the voters’ will trumps all, asked Judge Alan Orantes Forst, one of three judges on the appellate panel.
Case law and precedent, answered Kreusler-Walsh. “There cannot be referendums on budget items,” she argued.
A grand jury convened in 2009 to address a series of public corruption scandals in Palm Beach County and West Palm Beach had recommended paying for the OIG in the same way that Miami-Dade County paid for its OIG, through a 0.25 percent fee on vendor contracts.
However, the county, in implementing the ballot language, took a slightly different approach, billing the cities directly. The county left it to the cities and towns whether to charge the fee to their vendors or make it a budget line-item, said Palm Beach County’s attorney, Helene Hvizd.
Kreusler-Walsh argued it would be illegal for municipalities to charge vendors for services they themselves didn’t provide, so it was a de facto budget mandate.
On the contrary, Hvizd said, the municipalities’ refusal to pay was a plain attempt to thwart the will of the people and cripple the power of the inspector general, which can investigate anonymous tips and refer findings to the state attorney for potential criminal charges.
“The people, by passing a referendum, created law. You cannot suggest that the people intended to create a law that would have no effect, and that is what would happen here,” Hvizd argued.
Kreusler-Walsh disagreed: “It will continue the way it is being funded now. It will be paid through ad valorem [property] taxes paid to the county. So citizens in the municipalities, who are paying ad valorem taxes to the county already, are already paying for the OIG.”
It’s unclear precisely when the three-judge panel will issue its opinion on the issue. Opinions come out on Wednesdays each week. Inspector General John Carey said he’s hopeful that the opinion will put the matter to rest.
“Judge Brunson stated that the citizens are the cities, not the small group of elected officials. I hope they would accept the will of the people,” Carey said. “We will continue to do our job regardless.”
By Stacey Singer