By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
By 2003, arguably the most critical year in Fort Lauderdale's budget crisis, the city's health program was $8.7 million in debt and climbing. Instead of using a health provider such as Travelers or United Healthcare, the city runs and finances its own program.
Fort Lauderdale needed desperately to increase revenues to match expenses. For three years, staff had explained to the commission that the city was digging a deeper and deeper hole. Inexplicably, though, Johnson and Sharp never lobbied the commission for tax increases.
The commission didn't have the guts to do it either. By 2003, a tax hike became politically impossible. In September 2002, Commissioner Tim Smith had challenged Naugle for mayor. And though the commission approved a minuscule tax increase on rental and commercial properties, it was only window dressing. "For political reasons, neither of the candidates wanted to be seen as having raised taxes," recalls Vice Mayor Dean J. Trantalis, who that same year won Smith's old commission seat.
In July 2003, then-Finance Director Terry Sharp told the commission that Fort Lauderdale had a $5.4 million deficit in the general fund in addition to a debt-ridden health program. Fort Lauderdale faced about a $14 million total deficit. One month later, an independent audit by Ernst & Young found the city's financial condition "deteriorating." Moody's Investors Service notified officials in August that it had put Fort Lauderdale on a watch list for a potential downgrade of its credit rating, which would make it more expensive for the city to borrow money.
On September 16, 2003, the City Commission voted 3-2 to request Johnson's resignation. A $308,875 severance package that included one year's salary plus vacation time and benefits was an ironic bonus for a man who had done so poorly.
Now executive director of the Riviera Beach Community Redevelopment Agency, Johnson refuses to discuss his tenure in Broward's largest city. "I'm still a resident of Fort Lauderdale," he says, "and as such, I wish the very best for the city as it moves forward."
Smith, now out of office, says he wouldn't have agreed to fire Johnson. "The commission made him a scapegoat," Smith says.
Adds Leola McCoy, a civic activist and City Hall watchdog: "The City Commission knew the books were a mess for a long time. But they didn't want to do anything about it, so they pretended not to know."
Alan Silva wears thick eyeglasses that he constantly adjusts. When he looks straight ahead, he props them up on the bridge of his nose and looks out over a thick mustache. When he reads, he angles the glasses down toward his nostrils, creating a small window through which he can read blurry letters and words on a page. And when he talks, he makes no effort to disguise the elongated A that comes from growing up in Massachusetts.
Silva sits at a booth at TGI Friday's in North Fort Lauderdale on a March afternoon. To his right rest a legal pad, the city's most recent budget, and an audit report. "When I arrived at City Hall," Silva recalls, "I told everyone, 'Guys, I'm a liberal Democrat from Massachusetts. I'm also a fiscally conservative Democrat. You will have no better friend in City Hall than me. '"
If the city escapes the present financial dilemma -- and that's still a big if -- much of the credit should go to Silva, who was the first person to discuss Fort Lauderdale's budget problems in language everyone could understand. A 54-year-old, openly gay intellectual with a master's degree from Harvard and a former city administrator in Fall River, Massachusetts, Silva was for five years a director of the U.S. Agency for International Development, an organization that provides economic and humanitarian assistance worldwide. Until 1996, Silva, who speaks six languages fluently, oversaw all humanitarian relief and social programs in the former Soviet bloc.
In 1997, after retiring from federal employment, he and his partner, fellow federal government retiree Ed Barranco, moved to Fort Lauderdale and purchased a $171,000 house in Imperial Point that has since tripled in value.
"We were looking for a gay-friendly place with warm temperatures," Silva recalls. "It was either Fort Lauderdale or California, and I hate earthquakes."
In March 2003, at the request of newly elected Commissioner Christine Teel, Silva analyzed the city's books. That's when he realized how disastrous the finances were. The budget that year was $2.6 million short, he remembers. Johnson's staff made the books balance by including an asterisk that noted the city would negotiate furloughs and pay reductions with the unions to make up the difference. But the city had already negotiated its union contracts. The savings implied by the asterisk were highly unlikely. Johnson had cooked the books.
"I harkened back to the days of David Stockman," Silva says, referring to President Ronald Reagan's former budget director who used similarly deceptive accounting practices as the nation's deficit ballooned.
In the months preceding Johnson's termination, Silva began to submit memos to Teel describing the city's finances as "fiscally irresponsible." Teel then passed on the memos to the rest of the commission.
"I was the only one saying, 'The emperor has no clothes,'" Silva recalls. "At the time, Fort Lauderdale was at the height of fiscal mismanagement."