The stated purpose for PILOT is to reimburse the city for police, fire and public works services.
As reported in the DBMGC financial statements for FY’s 2005 and 2006 this charge was $57,450 and
$50,000 respectively.
Based upon 6% of the reported revenue for these fiscal years the PILOT charge should have been $123,192 and $124,065 respectively, resulting in a undercharge of $65,742 in 2005 and $74,065 in 2006, which should have been paid back to the city’s General Fund. A 2007 public records request made by a Daytona Beach resident inquired on what or who’s authority city management based their decision to not follow municipal code 46-37 and reimburse the full 6% of PILOT fees to Daytona’s General Fund. No reply was received.
In 2007, at the direction of City Management the City Commission voted to change Municipal Code 46-37. Now the Finance Director and City Manager determine if and how much each Enterprise Fund will be charged for services. Changing the city municipal code does not absolve management of their malfeasance regarding previous violations of Florida statutes, Daytona Beach Municipal Codes and generally accepted accounting practices.
Daytona Beach Municipal Golf Course Financial Violations
Daytona Beach City Management and City Commission:
Conspired to defraud taxpayers in the amount of $139,807, by not paying 6% of gross revenues (PILOT) from the Daytona Beach Municipal Golf Course Enterprise Fund back to the City of Daytona Beach in 2005 and 2006, as required by City Municipal Ordinance 46-37.
2. Violated City Municipal Code 46-37, ‘Full cost of services by the Enterprise fund must be recovered through fees and charges.’ by illegally subsidizing the DBMGC Enterprise Fund with $1,175,000 in 2005-2007. These fund transfers were nothing more than subsides to offset shortfalls and artificially improve financial results.
3. Conspired in a fraud, falsifying financial records, (the city budget) by stating the municipal golf course earned a profit of $43,874 in 2005 and experienced a loss of ($191,833) in 2006 after illegal subsidies.
These profit and loss figures were calculated using transferred monies to illegally subsidize the DBMGC Enterprise Fund in violation of city municipal code. If these transfer subsidies were not included, true reported losses would have been ($98,868) in 2005 and ($365,898) in 2006.
4. Conspired in a fraud to violate Municipal Code 46-35, ‘It is the policy with respect to (Enterprise Fund) user fees...to perform a user fee rate study of the respective service when the costs for a service are determined to be in excess of the revenues collected. In addition... ‘to prepare a business plan to provide thorough review of the respective funds operating costs, to ensure personnel and operating costs have been justified, and to provide a plan which would reduce or eliminate the ongoing operating loss.’
Illegal subsidies transferred to the DBMGC artificially improved financial results and covered up actual reoccurring losses. This allowed city management to subvert their responsibilities in performing a rate study and develop a business plan to reduce or eliminate the ongoing operating losses as required by city municipal codes.
Daytona Beach city management transferred over $40 million annually between various departments in recent budget years. These fund transfers defraud taxpayers by subverting the public budgeting process. They’re used to offset shortfalls, artificially improve financial results such as the Daytona Beach Municipal Golf Course budget and support the creation of a false and fraudulent city budget with a built in 25% error factor, for the upcoming year.
This ‘erroneous’ budget makes it necessary to collect taxpayer derived ‘profits’ from inflated public utility charges, property taxes and city fees. These ‘profits’ are then transferred to support the ‘need’ to ‘balance’ the erroneous budget city management previously created. It’s a ‘shell game’ using a false budget derived from artificially improved financials, transferring millions in taxpayer derived ‘profits’ to cover shortfalls, while allocating millions more as ‘Other’ or ‘Emergency’ funds with no stated purpose, eventually spent by City management with no City Commission oversight or public discussion.
It’s malfeasance, a breach of the public trust and violation of the fiduciary responsibility city management and elected officials have to taxpayers.