Local

 ALACHUA – The Alachua City Commission voted at the Monday, July 23 meeting to pay $300,000 to the Lion’s Den Adult Boutique to settle the company’s lawsuit against the City and to keep the would-be sex shop from opening in the city.

In October 2010, the Lion’s Den first submitted paperwork to open a sexually oriented business in the former Scultura building near Waffle House.  The same building had been home to The Western Teepee, a western clothing store, for many years before it closed in 2005.

The settlement, which passed by a vote of 4-0, will be paid for with a combination of insurance funds and the City’s general fund.  The insurance will pay $145,125, and the remaining $154,875 will come from the City’s general fund, which is primarily supplied by tax dollars.

The settlement provides conclusion to the months-long dispute between the Lion’s Den and the City of Alachua, which began shortly after the City passed a “Gateway Ordinance” prohibiting certain businesses, including sex shops, from operating within a 2,000-foot radius of the U.S. Highway 441 and Interstate 75 interchange.

On Sept. 9, 2011, the Lion’s Den filed complaints with the U.S. District Court seeking a declaratory judgment, injunctive relieve and monetary compensation because of the perceived unfairness of Alachua’s “Gateway Ordinance,” filing an additional complaint on March 28.

After the court denied the Lion’s Den’s motion for injunction on April 17, the Lion’s Den and the City of Alachua entered into mediation to resolve the issue.

Adam Boukari, Assistant City Manager for the City of Alachua, said the city agreed to the $300,000 payment in order to avoid future legal costs.

“The city commission agreed to the terms of the settlement because it was at the recommendation of legal counsel that it would be fiscally prudent to agree to the terms,” Boukari said.  “Further, the city commission found the settlement to be in the best interest of the city and its citizens.”

According to Boukari, the City will have spent $47,978 in legal fees regarding the Lion’s Den case once all attorneys’ fees are paid.

The settlement stipulates that the City will pay a lump sum of $200,000 to the Lion’s Den within 15 days of Tuesday’s approval of the settlement.  The final $100,000 will be paid on or before Jan. 15, 2013.

The Lion’s Den is not the first adult novelty story that has attempted to set up shop in the City of Alachua.  In 2003, Adult World leased space formerly known as The Huddle House, also near I-75.  That company battled it out with the City for several months before the City agreed to settle the matter for $25,000.

Adult World owners opened the doors for business, landing them in jail after City of Alachua officials said they violated the law by not having a properly issued business license in the city.  Unlike Adult World, the Lion’s Den never opened its doors, or even finalized permitting for the store.

At the meeting, Commissioner Gary Hardacre expressed pleasure at the solution of the dispute.

“Though it cost us a little bit of money to guarantee that this isn’t going to happen, now we have a gateway ordinance that will stop that,” Hardacre said.  “We will not have to look at the Lion’s Den when we drive into our community off of I-75.”

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Commissioner Scott Jamison voted against the audit by Kessler International, which is estimated to cost between $5,000 and $10,000. A recognized leader in international corporate investigation, Kessler advertises its forensic accounting company as the place “where lies go to die.”

CRA Chair Bob Barnas hopes to uncover whether money transferred has been accounted for, and that the money spent on school renovations conformed to state statute. For the school projects, the City lists the amount budgeted from the 2011-2012 fiscal year as $128,915. At the time, there were not enough funds to complete the project, and the CRA voted to obtain a line of credit from the bank to cover the difference, budgeted at $85,800, Finance Services Director Helen McIver said.

The auditors will also look into management fee transfers from the CRA to the general fund. Management Fee transfers over the past four years include $70,000 in 2009, $70,000 in 2010, $95,000 in 2011 and $95,000 in 2012, McIver said.

While Barnas is concerned that funds within the CRA, a special district, might be an illegal use on City building renovations, he is uncertain about the Florida statue detailing CRA limitations and guidelines.  He hopes the Kessler audit will clarify how CRA funds are allowed to be distributed.

“I think to not do this would be a disservice to the taxpayers in the City of High Springs, and the business owners who can benefit from improving funds and doing it the proper way,” Barnas said.

An audience member stated she felt the $10,000 price tag was steep for an audit that could be completed in a week. She questioned whether the board had received bids from any other companies.

Barnas said he had researched other companies, but felt Kessler was the best choice.

“From what I glean from the discussion so far, as Mrs. Weller stated, would not an attorney be able to answer some of these questions without a complete forensic audit,” Resident Barbara Miller asked. “It’s been done. You have the wherewithal to do differently in 2013. I don’t know why you need a $10,000 audit.”

Stating that the cost of the audit was high, Miller asked Barnas what he hoped to find that could be corrected. In response, Barnas said he wanted to understand how the City should properly handle CRA funds, and the board could “apparently not” get these answers anywhere else.

Board members Ann Carter and Sylvia Newcomb agreed with Barnas that the audit needed to be conducted.

“If there’s anyone here today that feels that they are qualified and will vouch for its correctness as to how the CRA should be managed, please step forward and save the City $10,000,” Carter said. “However, with that said, I personally, sincerely, do not feel like that will happen. So, in order for us not to throw good money to bad, we need to do this.”

Recently, the first-draft of the MAXIMUS cost allocation plan suggested the CRA transferred approximately $45,000 to $50,000 more than the City required. During the meeting, Commissioner Sue Weller made a motion that requires High Springs to pay the CRA back for any funds over the amount deemed necessary by the final draft of the study. It passed unanimously.

Kessler proposed a three-phase audit followed by an evaluation of the findings. In Phase One, Kessler establishes a working relationship with the City of High Springs, introducing its staff members to City employees. Kessler will also identify and gain access to any documentation required for the audit.

The company’s Phase Two involves a detailed review of records, such as general ledger accounts, check registers and additional records provided relative to the financial assets of the CRA.

In Phase Three, Kessler intends to identify specific areas of concern and to complete further in-depth investigation techniques, including interviews and database research.

The CRA board also voted to move the $10,000 into the professional services budget item to provide payment to Kessler International. In addition, CRA Board Member Sue Weller made a motion to create a checking account separate from the City’s finances, and the motion passed four to three.

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CRA orders $10,000 audit on past projects

By AMANDA WILLIAMSON

Today Reporter

HIGH SPRINGS – Despite protests from a small group attending the High Springs Community Redevelopment Agency (CRA) meeting on Tuesday, the CRA voted 6-1 in favor of moving forward with an audit involving money transferred from CRA funds to the City of High Springs, and funds spent on renovating the town’s old school.

Commissioner Scott Jamison voted against the audit by Kessler International, which is estimated to cost between $5,000 and $10,000. A recognized leader in international corporate investigation, Kessler advertises its forensic accounting company as the place “where lies go to die.”

CRA Chair Bob Barnas hopes to uncover whether money transferred has been accounted for, and that the money spent on school renovations conformed to state statute. For the school projects, the City lists the amount budgeted from the 2011-2012 fiscal year as $128,915. At the time, there were not enough funds to complete the project, and the CRA voted to obtain a line of credit from the bank to cover the difference, budgeted at $85,800, Finance Services Director Helen McIver said.

The auditors will also look into management fee transfers from the CRA to the general fund. Management Fee transfers over the past four years include $70,000 in 2009, $70,000 in 2010, $95,000 in 2011 and $95,000 in 2012, McIver said.

While Barnas is concerned that funds within the CRA, a special district, might be an illegal use on City building renovations, he is uncertain about the Florida statue detailing CRA limitations and guidelines.  He hopes the Kessler audit will clarify how CRA funds are allowed to be distributed.

“I think to not do this would be a disservice to the taxpayers in the City of High Springs, and the business owners who can benefit from improving funds and doing it the proper way,” Barnas said.

An audience member stated she felt the $10,000 price tag was steep for an audit that could be completed in a week. She questioned whether the board had received bids from any other companies.

Barnas said he had researched other companies, but felt Kessler was the best choice.

“From what I glean from the discussion so far, as Mrs. Weller stated, would not an attorney be able to answer some of these questions without a complete forensic audit,” Resident Barbara Miller asked. “It’s been done. You have the wherewithal to do differently in 2013. I don’t know why you need a $10,000 audit.”

Stating that the cost of the audit was high, Miller asked Barnas what he hoped to find that could be corrected. In response, Barnas said he wanted to understand how the City should properly handle CRA funds, and the board could “apparently not” get these answers anywhere else.

Board members Ann Carter and Sylvia Newcomb agreed with Barnas that the audit needed to be conducted.

“If there’s anyone here today that feels that they are qualified and will vouch for its correctness as to how the CRA should be managed, please step forward and save the City $10,000,” Carter said. “However, with that said, I personally, sincerely, do not feel like that will happen. So, in order for us not to throw good money to bad, we need to do this.”

Recently, the first-draft of the MAXIMUS cost allocation plan suggested the CRA transferred approximately $45,000 to $50,000 more than the City required. During the meeting, Commissioner Sue Weller made a motion that requires High Springs to pay the CRA back for any funds over the amount deemed necessary by the final draft of the study. It passed unanimously.

Kessler proposed a three-phase audit followed by an evaluation of the findings. In Phase One, Kessler establishes a working relationship with the City of High Springs, introducing its staff members to City employees. Kessler will also identify and gain access to any documentation required for the audit.

The company’s Phase Two involves a detailed review of records, such as general ledger accounts, check registers and additional records provided relative to the financial assets of the CRA.

In Phase Three, Kessler intends to identify specific areas of concern and to complete further in-depth investigation techniques, including interviews and database research.

The CRA board also voted to move the $10,000 into the professional services budget item to provide payment to Kessler International. In addition, CRA Board Member Sue Weller made a motion to create a checking account separate from the City’s finances, and the motion passed four to three.

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“Each and every vote that this commission makes has a consequence,” Langman said. “I hope that the commission and the citizens realize we need sound budgetary practices without the puffery.”

When preparing for the budget process, commissioners advised Langman and Finance Services Director Helen McIver to be conservative, to not count unconfirmed revenue and to keep all department expenditures in line with the current year’s budget.

Although the city’s centralized sewer system is anticipated to add 75 new users in the near future, revenue from these users will not be calculated into the budget because the project has not yet gone out to bid. As a completion date is not in sight, Langman opted to leave out the potential revenues to avoid facing a shortfall because of incorrect projections. Since January, High Springs commissioners have expressed aggravation over decisions made by previous commissions to include unconfirmed revenues in the budget.

Facing a 5.9 percent decrease in ad valorem taxes, Langman said the City will have to raise millage rates by 6.9 percent to keep the general fund balanced. She also suggested increasing sewer rates by $16 per user, per month, in an effort to balance the sewer fund and eliminate the need to supplement sewer operations from the general fund.

Two of the City’s enterprise funds have been trending downward for the past nine months, Langman said. While the water fund and the solid waste fund operate at a profit, the sewer continues to lose money. In an effort to balance the sewer account, funds were transferred from water and solid waste revenues.

After the City balanced its enterprise funds, the general fund continued to show a deficit, she said. In response, the City decreased department head salaries to $50,000 annually, eliminated two full-time employees and decreased fire department volunteer staff and equipment. In addition, employees on City health insurance will be required to pay $20 more per pay period, totaling $780 per year.

“It’s time for us to rethink the City and hit the reset button,” Vice-Mayor Bob Barnas said.

With several lawsuits and complaints against High Springs still ongoing, the City faces possible additional costs. Langman warned the commission Tuesday of a potential $50,000 increase in expenditures if the Florida Supreme Court rules that municipalities, including High Springs, have to pay back employees for retirement accounts.

Commissioners decided not to vote on the proposed budget during the Tuesday meeting, instead they agreed to push back the decision until the July 31 meeting.

After the city manager explained the budget, Commissioner Sue Weller made a motion to table the agenda item discussing ad valorem rates until the Aug. 2 meeting. The motion passed unanimously.

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Hunter Marine bought out after filing bankruptcy

Hunter Marine will have all six of its production lines running for the first time since 2009.  The Alachua production facility will produce Hunter sailboats, Mainship trawlers and Gemini catamarans

ALACHUA – After a crisis, the workers of Hunter Marine are being offered the freedom of starting over.

Like most American businesses, the Alachua-based sailboat manufacturer suffered during the economic downturn in the fall of 2008.  On April 30, Morgan Industries, the parent company of Hunter Marine and other boat manufacturers, filed for Chapter 11 bankruptcy.

On July 11, the U.S. Bankruptcy Court in the District of New Jersey approved the sale of Hunter Marine to Marlow Acquisitions, an affiliate of worldwide boat manufacturer Marlow Marine.

For John Peterson, Hunter Marine president and chief restructuring officer, the financial struggles of the past three years have provided opportunities for strategic development which he hopes to expand further under new ownership.

“We learned a lesson during the recession,” Peterson said.  “We learned a lesson on how to survive.”

Being bought out may not sound like surviving, but Peterson said the situation befell Hunter largely due to their contractual obligation to financially aid other companies in the Morgan Industries family.

According to Peterson, dealers of Hunter sailboats and other Morgan Industries products used their retail inventory as collateral for loans from General Electric and a few smaller lenders, loans to be repaid once the inventory was purchased.

This common retail practice was disrupted when the recession decreased the American demand for high-end sailboats.  Decreased sales revenue meant less money to repay the loans, and when a Morgan-owned powerboat manufacturer folded, Hunter was required to pay the General Electric bills for them.

Peterson said without this hindrance, Hunter could have made it through the recession without being bought out, citing the company’s timely repaying of its loans to Bank of America during its eight weeks of bankruptcy, as support.

However, Peterson also said that the added burden taught the Hunter team how to manage in sparse conditions, skills he said will come in handy with the added boost from Marlow Marine.

“Once we get some capital infusion from Marlow and we start putting out some new Hunter models, we’ll begin to see some growth again,” Peterson said.

Growth would not be a new phenomenon for Hunter Marine, which has steadily come back following the bankruptcy filing.  Hunter, which in its pre-recession years once employed 435 people, had a total payroll of 31 employees on May 1.  That number has increased to 77, and Peterson is confident that the comeback will continue.

“Everyone we furloughed has been brought back on,” Peterson said.  “We’re hoping that in the next few months, most of the people we had to let go will have jobs again.”

Peterson, who became president of Hunter Marine three years ago when the previous president resigned after the recession hit, said the company will streamline its production and integrate it with products from Marlow and Mainship, a former Morgan Industries company that Marlow partially acquired in its purchase.

The company will have all six of its production lines running for the first time since the downturn, three of them having been dormant since 2009.  The lines will produce Hunter sailboats, Mainship trawlers and Gemini catamarans, which are not sold by Hunter or any Marlow company, but which will bring increased production revenue for Hunter.

Hunter has whittled its product line down to 14 models from the previous 17.  Three Mainship trawlers will now round out the new inventory.

Peterson understands the importance of personal relationships in business and hopes to strengthen Hunter Marine’s bond with its home city in the future.

“The company has been always seemed a bit standoffish from Alachua,” Peterson said.  “That’s not my style, I’m more community oriented.”

Just as many Alachua residents have relied on Hunter Marine in past years, Peterson hopes to have the support of his employees and his community in the rebuilding months.

“We’re attempting to do the best we can for our employees,” Peterson said.  “I think they understand the predicament we’re in.  They’re good people, and they’ve just been caught in the wrong spot at the wrong time.”

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The first business would involve selling electric motorbikes in a small building on NW 250^th Street. While the business would only create one job, it is a positive business to bring to the area, Newberry City Planner Lowell Garret said.

The four commissioners in attendance voted to approve the economic development incentive sponsorship for the business, waiving a $6,500 fee required to amend land development regulations.

The second business discussed was an RV park, which would be built just east of Cedar Estates. The commission voted by a 3-1vote to table discussion on the economic development incentive sponsorship for the RV park until the next commission meeting.

Commissioner Alena Lawson voted against tabling discussion on the basis that the commission had just passed an economic development incentive sponsorship for a business that will only provide one job, and to table discussion would be unfair to the RV park business owner.

“I don’t think we’re being fair to the applicant,” Lawson said.

By sponsoring the RV park, the commission would be waiving a total of $15,500 in application fees. City Manager Keith Ashby said the amount of time needed to process each of the three applications required to build the RV park was unavailable, but he would have it ready for the next meeting.

Each application would have to be approved separately, but the sponsorship would merely waive the fees required to undergo the process.

The economic development sponsorship program will be up for discussion in December. At that time the commission can decide to continue, discontinue or modify the program.

“To date, I think it’s been wonderful,” Commissioner Jordan Marlowe said at the meeting. He also noted that possible changes to the applicant vetting process may be included in the December discussion concerning the program.

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In an email to commissioners, Ivey seemed to point to the city’s scheduling of frequent meetings as a chief reason for stepping down.

“Because I am concerned about my ability to attend all of the additional meetings that are necessary to accomplish City business, as well as the volume of work (which exceeds what I anticipated) as a result of the meetings, I must regretfully resign as City Attorney,” Ivey wrote in the email.

Although the commission’s regular commission meetings are scheduled just twice monthly, the second and fourth Thursday of each month, the commission has been meeting considerably more frequently than that.  Between commission meetings, special commission meetings, emergency commission meetings, joint commission meetings, workshops and Community Redevelopment Agency (CRA) meetings, the commission has met as many as a dozen times in one month.  Many of those meetings have lasted as long as five hours or more.

Ivey is just one in a long line of officials to part ways with the City over the last several months.

Former High Springs City Attorney Thomas DePeter resigned Jan. 13 when it became apparent that the majority of the commission intended to replace him in the ensuing weeks.

When pitching his firm to the commission in January, Ivey proposed a rate of $50 per hour up to 80 hours per month with no retainer or minimum required and additional time available at a negotiated rate.  Also topping the list for attorney’s being considered earlier this year was Brent E. Baris, P.A. of High Springs.  Baris proposed a rate of $100 per hour with an effective retainer or minimum of $3,000 monthly for 30 hours of services.

Ivey said he would continue to serve until commissioners hire a new city attorney.  When that will be is not yet clear.

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