In a 3-2 decision, the Indian Trail Improvement District Board of Supervisors fired District Manager Jim Shallman and Finance Director Don Rinzel last week after finding that a state-required report had not been filed by its deadline for the third consecutive year.
ITID received a notification last week, dated April 12, addressed to registered agent Charlie Schoech, former ITID attorney, from the state’s Joint Legislative Auditing Committee stating that ITID had not provided audit financial statements for fiscal year 2014-15 in accordance with a bond resolution.
At the ITID meeting Wednesday, June 21, Shallman said he had not been aware of the letter until the Friday before the board meeting, and that nothing had been hidden intentionally from supervisors.
Shallman pointed out that he had sent an e-mail that morning to all of the supervisors and the attorney informing them of the situation.
Rinzel said requests by the district’s independent auditor had thrown staff behind reporting to the state committee on time.
Supervisor Betty Argue asked why board members had not received notification sooner, and Shallman said he had not learned about it until Friday, June 9.
Argue asked Shallman whether he was aware that the district had received three consecutive audit notifications that it was in trouble with the Joint Legislative Auditing Committee.
Supervisor Gary Dunkley told Shallman and Rinzel that they had nine months to report the audit findings to bond holders and had failed to do so.
Rinzel explained that they were late last year due to Shallman’s illness.
“I spoke on the phone with the lady who issued this letter to us,” he said. “This is a new law that was passed two years ago. It’s catching a lot of special districts by surprise.”
Rinzel stressed that the issue does not raise a concern that the state might liquidate the district.
“As long as we send them a response,” he said, “if they feel that it’s necessary for them to follow up, then they will follow up.”
The April letter stated that if a written explanation is not provided, or is not sufficient, the committee may require the chairman of the governing body of the special district to appear before the committee.
Rinzel said he had spoken with a representative of the state committee, who told him ITID would be OK as long as it sent an explanation.
Argue said her concern was that the letter from the Joint Legislative Auditing Committee stated that the district was not in compliance for three years in a row, failing to notify bond holders that the district had received a satisfactory audit.
“This happened three years in a row, so we’re not talking about one year,” she said. “We’re talking about three years in a row, and subsequently, this original letter was sent on April 12, so the question I have is, did you receive a copy of that letter?”
Shallman reiterated that he had not received a copy of the letter until June 9, the Friday before the board meeting, in an e-mail from ITID Attorney Mary Viator stating that a response had been due June 1. Schoech and Viator are both partners in the law firm Caldwell Pacetti Edwards Schoech & Viator.
Supervisor Carol Jacobs pointed out that if the state committee disciplines the district, it will be the board, rather than staff, that is held responsible.
“If something happens where they discipline us or try to dissolve the district, it’s not going to come down on you or Don; it’s going to come down on the board,” Jacobs told Shallman. “We are the ones who watch the funds out here in The Acreage for the residents. If you knew about it, why did it take until today to get this letter out to us? I heard from Mary on Monday, and I about flipped a lid.”
Shallman said he spoke with the district’s independent auditor, Raquel McIntosh, at the recent Florida Association of Special Districts meeting and she told him it wasn’t a big deal.
“We were in touch with bond holders throughout the last three years,” he said.
Jacobs said her point was that board members were not aware of it.
“We take our jobs seriously,” she said. “We all took an oath to protect the district and the money. You couldn’t have the courtesy to let us know that a letter came? This is a mark on us, three of them, and they don’t go away.”
She added that while Shallman was out ill, the board offered support for Rinzel, who was acting manager during that time, and he said it was not necessary.
“We’re the ones who are going to take the heat for this, not you two,” she said. “I motion to get rid of you and the finance director.”
Supervisor Gary Dunkley seconded the motion, but Supervisor Ralph Bair and ITID President Jennifer Hager said they would not support it.
“Right in the middle of budget time, it’s really going to screw things up,” Bair said.
Hager said this was the first time she was hearing about the failure of the district to provide a report to the state committee.
For clarification, human relations attorney Lara Donlon said there is a distinction between firing with cause or without cause, where firing without cause provides 12-week separation pay.
Although there appeared to be grounds for firing with cause, Donlon said firing without cause provides legal protection for the district.
“Even though the board has raised some questions tonight about certain conduct, it is something you should consider,” she said. “We would be required to make payment of 12 weeks of severance pay in exchange for a general release.”
Dunkley and Argue said that the board had established cause, and Viator said they could change the motion to “with cause” at any time.
Hager said she would like to hear the state’s response about the district’s explanation for its failure to report.
Jacobs said the district will still have three marks against it even if the state committee reports that the district’s response is satisfactory.
“Jim and Don have been here since 2013,” she said, pointing out that they had been at the job longer than former District Administrator Tanya Quickel, who was dismissed without cause at Jacobs’ behest. “They should be pros at this right now. This is a major deal. This is what we up here are responsible for.”
Argue expressed concern that the situation was being minimized by staff.
“To suggest that this isn’t an issue when it’s a state requirement that we have not met three years in a row, and has put us in a situation where we’re before the Joint Legislative Auditing Committee, where liquidation is potentially one of the things that could happen?” she said, insisting that the managers were out of line.
“Whether you think it’s going to happen or not, you don’t know what’s in that board’s mind and what they may or may not do, and one of the things that Mary said could potentially happen is that the district could be dissolved,” Argue continued. “That’s putting us at risk, and every single time that something happens that puts this board at risk where we entrust you, you are not fulfilling your job, and that’s a problem because that reflects on us as a district.”
Argue added that the state does not make a lot of legislative requirements.
“This [is a] very simple one that we did not meet,” she said. “There is no excuse… It doesn’t matter whether you think it’s important or not. It’s a legislative requirement. I don’t see how we can say this is not a big deal. We have put ourselves at a point where we are weak because of it, and that pisses me off.”
After more discussion, Jacobs made a motion to immediately remove Shallman and Rinzel without cause and to have the offices and computers locked down, which carried 3-2 with Bair and Hager opposed.
The board asked Viator to search for possible interim managers and set a special meeting on Tuesday, June 27 to reconvene. At that meeting, the board selected Special District Services Inc., whose CEO is Todd Wodraska, the son of retired South Florida Water Management District Director Woody Wodraska. The elder Wodraska will be the hands-on manager for the district with support from Special District Services staff.
