How to Cook the Books: Eight Ways Larry Tibbs Allegedly Screwed Up Lauderdale Lakes Budget Projections

​It should be noted up-front that Larry Tibbs hasn't had a chance to respond to the charges lined up in a Broward Inspector General report leaked yesterday -- he has 30 days to submit a rebuttal, which he said yesterday he fully planned to do.

But the allegations of wild mismanagement in Lauderdale Lakes are not new, and the report pretty specifically points to Tibbs as the guy doing the ol' shake-and-bake with financial spreadsheets, faking projections and at one point cutting a $1.2 million check to the sheriff's office that he knew wouldn't clear.

To be fair, Tibbs couldn't have done this alone. Many people -- including current City Manager Jonathan Allen -- had to either ignore the messed-up numbers or be clueless enough to not notice. In any case, here are eight ways the OIG report says Tibbs played that funky budget.

1. He included other people's money in the totals of the city's general fund.
About $800,000 in collected property taxes has to be reserved every year as "Tax Increment Financing" revenues, which the city doesn't get to keep -- it's turned over to the Community Redevelopment Agency. But in estimates of how much property-tax revenue the city would keep, that money was counted in both 2008 and 2009. That money wasn't included in the general fund numbers for 2010, but that, of course, leads us to:

2. He kept other people's money and used it for city operating expenses.
The 2010 TIF revenues were finally removed from the budget of the general fund, which was a step in the right direction -- except then the city kept the money. It failed to turn over $855,031 in money owed to the CRA, according to the report, in order to pay for city operating expenses because the city's accounts in September 2010 were actually overdrafted. And that's not the only way the CRA got shafted:

3. He took other people's money and used it for city operating expenses.
In addition to failing to turn over that $855,000, the city also went into bank accounts of reserved CRA funds and simply took the money -- $1.7 million of it in just three months in 2010 -- "despite the fact that Florida law does not permit the use of CRA funds for payment of city general operating expenditures."

In addition, Tibbs attempted to actually include CRA money in the 2011 budget, listing an $800,000 CRA reimbursement, about nine times higher than the previous two years. The report makes this situation sound particularly convoluted -- a CRA director changed his story about how the reimbursement was justified -- but ultimately says that "in the absence of any other explanation, the OIG is compelled to conclude that the 2011 allocation represents another mechanism to inflate revenues and fictitiously balance a deficit budget."

4. He said money was coming in from imaginary sources.
The 2010 budget projections included $250,000 in revenue from the "recreation trust fund" -- which doesn't exist and seems to have never existed. Though there was obviously no funding realized from the fund in 2010, Tibbs included the fund again in the 2011 budget he helped wrote before leaving his position -- and this time, he said there was going to be $305,000 coming in.

When asked by investigators about the nonexistent fund, Tibbs said the revenue was actually supposed to be coming from the "impact fee fund," which does exist but had more than a quarter-million-dollar deficit.

5. He used inflated income estimates that had no demonstrable basis in reality.
"Comparing the historical information for various revenue estimates revealed that one common tactic used throughout the budget in various years was the use of unexplainable overestimations, contrary to historical trends," the report says. It also includes seemingly illogical estimates of city income associated with fees garnered from utility companies: While the city got a little less than $1.6 million from electric franchise fees in 2008, the number steadily declined to about $1.4 million in 2011.

The whole time, however, Tibbs was increasing revenue estimates. While the projection was close in 2009, the 2010 estimate was off by more than $228,000, and the 2011 estimate, rather than dropping to reflect the lower revenue, stayed exactly the same and was off by almost exactly the same amount.

6. He included income projections for funds that were waaaay in the red.
Tibbs predicted $125,000 coming in from the city's transportation gas tax fund, which actually had a deficit of more than $76,000. He also predicted $75,000 in income from the fire rescue fund, which was more than half a million dollars in the negative.

"He stated his belief, at the time, that the funds would perform better in 2010 than they had in 2009," the report says. "However, he could not articulate any basis for that assumption."

7. He said tax payments that weren't coming in were totally coming in.
Expected property tax revenue was one number the Lauderdale Lakes people couldn't tinker with -- county appraisers provide assessments to the cities. It's common for the cities to then budget less than 100 percent of that assessment, partially because not everybody just pays their taxes like they're supposed to but also because those paying early are eligible for up to a 4 percent discount:

"Theoretically speaking, should all taxpayers pay their taxes when the bill was received, the City would only collect approximately 96% of the maximum possible ad valorem revenues," according to the report.

But not all taxpayers paid their taxes with the bill was received, and the actual numbers were way off: In 2008, the city budgeted more than $7.1 million in tax revenue; it got only 88.4 percent of that. It brought in only 86.6 percent of budgeted revenue in 2009, but that didn't stop Tibbs from expecting 100 percent of the budgeted tax revenue in 2010. The city didn't get it, and between 2008 and 2010 came up almost $2 million short of projections.

8. He said the city was earning crazy interest payments on accounts that were essentially empty.
In 2008, Lauderdale Lakes had more than $3.6 million in cash and investments that were earning interest. It actually brought in almost $200,000 in interest. In 2009, when things were already rolling forcefully downhill, the city's interest-earning cash and investments were reduced by two-thirds, to $1.2 million. But Tibbs predicted interest earning would actually go up, to $150,000. In reality, it earned about $15 grand.

He was never more off than in 2010, when the investment funds were essentially empty. Tibbs actually predicted that the city would bring in $100,000 in interest on $43,000 in investments. It wasn't me who bolded those numbers -- things that are that stupid just show up thicker in your browser automatically.

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Rich Abdill