Get your popcorn ready!

On Wednesday, January 23, 2019 the North Miami Personnel Board will convene for the Appeal Hearing of former Assistant Budget Director Terry Henley, who was fired for … you guessed it … blowing the whistle on corruption.

As we previously reported in BREAKING: Larry Spring and Duke Sorey under fire for fraudulent budget!, Mr. Henley exposed serious problems with the city’s proposed budget for the fiscal year beginning October 1, 2018.  According to a September 21, 2018 letter sent from his attorney, William R. Amlong, to City Attorney Jeff Cazeau, Mr. Henley was offered “hush-money” to “go quietly away as City Manager Larry Spring and [Deputy Manager Arthur] Sorey push through what looks like a $70 million balanced budget, but one that really conceals $7 million to $20 million in deficits.”

When Henley wouldn’t take their bribe, he was promptly fired and escorted out of City Hall by a gang of North Miami’s “finest.”

In typical North Miami fashion, city officials began their usual and customary smear campaign against an employee whose personnel record was exemplary … until he refused to comply with their orders to cook the books.

Mr. Henley’s first Appeal Hearing before the Personnel Board on November 29, 2018 was aborted because the city had refused to fulfill Mr. Amlong’s October 1, 2018 public records request for twenty items in order “to demonstrate to the members of the board that Mr. Henley was telling the truth when he repeatedly pointed out to City Manager Larry Spring and Deputy City Manager Arthur Sorey III that the City’s 2018-2019 budget had a multi-million-dollar deficit.”

The city also initially failed to supply eight additional documents that Mr. Amlong requested on October 4, 2018 and October 30, 2018, including the police report filed when Mr. Henley was removed from his City Hall office by multiple Command Staff members of the Police Department on September 20, 2018.

Two months after his initial public records request, Mr. Amlong had still not received all the documents he requested for his client’s November 29, 2018 Appeal Hearing, so it had to be rescheduled.

On Friday, January 18, 2019, William R. Amlong, Esq. filed his Appellant’s Exhibit List, and attached Exhibits 1 through 28, with city officials in preparation for Wednesday’s Appeal Hearing.

Get your popcorn ready because North Miami’s house of cards is about to collapse.

Spectacularly.

Despite the denials by Spring and Sorey, the city’s own website advertises the deficit for Fiscal Year 18 on a page entitled Understanding North Miami’s Finances.

You don’t need a calculator to clearly see that the city actually spent way more than it received … to the tune of $4,774,496.11 MORE!

Which is exactly what Terry Henley had been warning Spring and Sorey all along.

And because no good deed goes unpunished in North Miami, Spring and Sorey retaliated by firing him.

Let us explain.

Terry Henley’s troubles started on August 27, 2017 when he sent an email to Deputy Duke Sorey (Exhibit 6) with his Plan to Balance the FY 18 Budget, which initially showed a deficit of $3.7 million.  Unfortunately, for Mr. Henley, his plan included cutting a slew of temporary contract employees (TEC), most of which were hired under Deputy Duke’s Friends & Family Plan.  The bulk of the proposed cuts were in the Parks & Rec Department, the Director of which is Sorey’s close friend, Derrick Corker.

It got worse from there.

The most explosive documents among the exhibits are documents entitled Memorandum for Record, which were contemporaneous memos written by Terry Henley, dated, notarized and emailed to his official North Miami email address in order to memorialize the events as they happened.

A memo dated November 14, 2017 (Exhibit 7) detailed “the budget development process” for the fiscal year 2017-18, as follows:

• On June 6, 2017, Mr. Henley expressed concern that “reoccuring revenues would not be sufficient to support the pace of the growing operating expenditures.”  He noted that “expenditures exceeded revenues by approximately $4 million in the General Fund.”
• On, August 27, 2017, Mr. Henley sent to Deputy Duke a “Plan to Balance” the FY 18 Budget, which included “a number of strategies to cut expenses and review alternative revenue sources.  The City Manager made it known to me not to email him sensitive information.  Management ignored the communication.”
• On August 31, 2017, Deputy Duke directed him to “add $4,900,000 in one-time revenue from the sale of city owned land (SoleMia/Biscayne Landing) to support ongoing operations for FY18.”  Furthermore, he wrote, “I admonished the Deputy City Manager that this was a poor management decision and this deficit will be here in the following year.”

Mr. Henley closed this memo by stating, “In the days leading up to the first budget hearing, I was told not to discuss … the one-time revenue and instead focus on the other revenue sources that increased.  The presentation to and discussion with Council never disclosed this information.”

In an email exchange beginning July 25, 2017 through May 3, 2018 between Terry Henley and Finance Director Miguel Augustin (Exhibit 8), Mr. Henley was instructed to treat $13,222,369 in proceeds from long-term lease of city land (originally $20,000,000, but already tapped into) as unearned income in order to magically turn a $347,319 deficit from FY 17 into a $12,875,050 “surplus” going forward (Exhibit 9a).

The problem is that those proceeds, which were supposed to be amortized over the length of the 99-year lease, had already been spent.  In order to “balance” the budget for FY 18, Mr. Henley was instructed to use a slightly revised unearned revenue figure of $12,059,462 to plug the deficit hole of $4,842,075 for FY 18 and magically make it look like a $7,217,567 “surplus” (Exhibit 9b).

In plain English, Mr. Henley was instructed to present a fraudulent budget to disguise deficits as surpluses by using imaginary money and the infamous Larry Spring Sleight of Hand Magical Balancing Trick.

On May 4, 2018, Mr. Henley prepared and submitted a “General Fund 2018-19 Forecast” (Exhibit 11b), in which he made recommendations to balance the budget.  His recommendations can be summed up as installing some budgetary controls where absolutely none had ever existed.

Another memo dated June 19, 2018 (Exhibit 12) concerns “Mr. Henley’s submission to Mr. Sorey of a General Fund Reconciliation Draft June 13, 2018 that projected a $14.95 million bare-bones deficit in the 2018-2019 budget, Mr. Henley’s pointing out areas of overspending and unbudgeted expenses and Mr. Sorey’s prediction that Mr. Henley would be fired.”

Mr. Henley wrote, “This was not the first time the Deputy City Manager threatened to fire me or tell me I do not belong in North Miami. When I was hired, I was told I had five years, according to Arthur Sorey. ‘This is a black city. A Haitian city.’ This racial remark was made on a number of occasions in regards to my realistic impediments to any ascension in the organization, even when I was promoted in 2015 to Assistant Director (Acting Director). He told me that I didn’t have much time left and if I got lucky enough to get through the next few years, then maybe I would have a chance at management if North Miami would ever become a ‘white city’ after development.”

A memo dated August 1, 2018 (Exhibit 13) details “July 30 and 31 interactions amongst Deputy City Manager Sorey, Mr. Henley and Roy Brown, a budget analyst, which interactions involved, among other things, Mr. Henley’s telling the deputy city manager that it was illegal to use surplus Building Department revenue for non-Building Department purposes, see Item 15, and Mr. Sorey’s sending both of them home for the rest of day and issuing Mr. Henley a written reprimand the following day.”

Exhibit 15 is a “printout of § 553.80, FLA. STAT., which forbids the use of building-department revenues for anything other than building-code enforcement enforcement.”

Specifically, the statute states that, “each local government and each legally constituted enforcement district with statutory authority shall regulate building construction,” and the “governing bodies of local governments may provide a schedule of fees … for the enforcement of the provisions of this part. Such fees shall be used solely for carrying out the local government’s responsibilities in enforcing the Florida Building Code.”

This August 1, 2018 memo is particularly disturbing, as Mr. Henley described, that Deputy Duke “went on a verbal rampage cursing me out and screaming in front of the entire staff.  He said “Fuck” a dozen times as he said it was my fault he was going to have to terminate people and I am to blame…”

Nice!

Not only did Deputy Duke not terminate anyone but according to Exhibit 27, in FY 18 he had bloated the payroll with $914,127 worth of new employees even though those positions had not been budgeted.

Because Friends & Family Plan…

Mr. Henley aptly wrote, “My thoughts are that we do not have a budget or planning problem; the city has a deficit spending issue.”

On September 3, 2018, Terry Henley wrote another Memorandum for Record (Exhibit 18) in which he documented the “pressure and threats [he] received from the Deputy City Manager to misrepresent revenue to cover growing expenses.”

After Duke Sorey directed Mr. Henley to add a total of $3 million to revenue and surplus from non-existent sources and cut $3 million from the appropriates for operating-expense reserves, as Larry Spring had ordered, Henley then consulted with his attorney (who was not Mr. Amlong at the time) as well as a Professor of Ethics and Finance in Public Administration at the Askew School of Public Administration in Tallahassee.  Henley’s lawyer advised him “if it is not illegal” then he should follow the orders of his supervisor.  The Professor also advised that the “budgeting practices are not illegal, but simply ‘bad business’ practices.

The inquiries to his then-lawyer and former professor, however, did not include any questions about using Building Department revenue to pay the day-to-day expenses of other units of city government, which as we’ve already noted, is illegal.

Mr. Henley implemented the changes in light of the threats that Sorey already made to fire him and because of “the City’s history of terminating finance professionals who speak out against management initiatives.”  He recalled the former Finance Director, Vernon Paul, who was fired when he blew the whistle that the city’s Early Retirement Incentive Program (ERIP) was a financial blunder, which eventually proved to be true.

Henley was also concerned that he was being targeted and noted the “City Manager’s SEC investigation that exonerated him but found his former Budget Director at the City of Miami guilty of fraud.”  Since Sorey had already warned him that if any problems arose, he would be “the fall guy on this one,” Mr. Henley had reason to be concerned.

In this same September 3, 2018 memo, Mr. Henley added that Deputy Duke instructed him to “add $5M in SoleMia Developer revenue in order to balance,” even though only “$2M of this $5M was collected when $2M from Costco at SoleMia was received.”

Worse, Mr. Henley noted that even though the Council had instructed the City Manager to return the $2 million to Costco, Spring said “he will not send the check back” and that the Mayor and Council “can go fuck themselves.”

Nice!

On September 15, 2018, Mr. Henley wrote yet another memo (Exhibit 18b) in which he described the push back he was getting from the department heads about cutting their individual budgets.  He specifically mentioned Parks & Rec Director Derrick Corker and Code Manager Krystal Cordo, both members in good standing of Deputy Duke’s Friends & Family Plan.

He wrote, “Considering the City Manager was telling Departments not to cut and the Deputy City Manager was telling me to make cuts, it was a losing situation.”

When he explained this to Deputy Duke, and asked why management was not supporting his efforts to make the cuts, Duke hung up on him.

Terry Henley closed his final Memorandum of Record with this paragraph:

The General Fund budget is 2% less in FY19 than it was in FY18 but City expenses increased significantly with 25 new police officers and 16 additional positions throughout the general fund.  Pension and contractual obligations also increased but the proposed Budget is balanced and less than last year.  In brief, the City Manager’s FY 18-19 Budget is balanced on the surface but in reality, the budget being proposed is a lie or unrealistic, exaggerated financial plan that is hiding a true deficit ranging from $5 to 20M.  I have been threatened, harassed, and discriminated against as I aggressively seek additional legal and ethical opinions on how best to proceed.

And five days later, he was fired.

Oh, and remember the independent third party audit the Mayor and Council promised residents?

Yeah, neither do they.

The October 9, 2018 meeting included a “Budget Audit Presentation,” even though no audit was ever conducted.

City Manager Larry Spring and Deputy City Manager Arthur “Duke” Sorey have been given free reign to spend residents’ tax dollars like monopoly money and move employees around like pawns on a chessboard.

After being apprised of the budget shortfall and the attempt to cover it up, not one member of the City Council was concerned enough to do anything about it.

And they all voted to pass the fraudulent budget.

It’s become painfully obvious that North Miami is Larry Spring’s and Duke Sorey’s world.  Residents and employees only live in it.

The only recourse North Miami residents have is to vote out the incumbents in May and elect individuals who will actually serve the community instead of themselves.

Just saying.

In the meantime, please support Terry Henley by attending his Appeal Hearing on Wednesday night.

And don’t forget the popcorn.

Stephanie