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Hiller blocked on third try to void contract she says was illegally steered to Sen. Richter’s bank

City Desk Naples-Marco Island, Florida
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Gina Edwards
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Hiller blocked on third try to void county contract she says was illegally steered to Florida Sen. Richter’s bank

By Gina Edwards

Naples City Desk

 

Collier Commissioner Tim Nance, in his role as vice chairman, blocked a third attempt by Collier Commissioner Georgia Hiller on Tuesday to void the county’s lucrative banking services contract that Hiller asserts was awarded to the bank founded by Sen. Garrett Richter in a sham procurement process.

Hiller asserted again Tuesday that the 3 to 2 vote by commissioners to waive bidding irregularities and the county’s purchasing ordinance and sanction the bank selection by Clerk of Courts Dwight Brock was illegal because no emergency circumstances existed at the time of the Sept. 23 vote.

Nance took the gavel after Commission Chairman Tom Henning stepped down from the dais to offer a rebuttal to Hiller’s presentation.

Nance invoked the board’s rules and said the commission could only void the contract vote if a member who voted in the majority moved to reconsider. Commissioners Nance, Henning, and Donna Fiala voted on Sept. 23 to waive the bidding irregularities and approve the banking contract while Commissioners Hiller and Fred Coyle voted against it.

“The commissioner is always saying this is illegal, illegal, illegal,” Henning said, adding later: “Go over to the Sheriff’s Office and file a complaint…Throw everybody under the jail.”

richterHiller contends that Richter’s First Florida Integrity Bank was allowed to lower its bid after the fact by Brock: First Florida Integrity Bank removed a $25 million balance requirement that it had put in its bid response after all the bids were open. Hiller also contends that First Florida Integrity Bank failed to submit a responsive bid because it didn’t offer a trust company to serve as custodian as the county’s $600 million securities portfolio, didn’t offer a custody agreement, and instead offered up a broker dealer as custodian.

A blank account opening document with broker-dealer Infinex Financial Group was submitted to commissioners as the “custodial agreement” as part of the Sept. 23 vote by commissioners.

“No third party custodial agreement was provided to the Clerk, nor to the Board,” Hiller wrote on her summary agenda item. “No financial information about the broker-dealer was provided. The contract with First Florida Integrity Bank makes no mention of the broker-dealer custodial arrangement. The County Attorney negligently overlooked these deficiencies in his legal review of the transaction, and instead overzealously and incorrectly sought to find any means to try to legally validate the vote of three Commissioners.”

County Attorney Jeff Klatzkow opined at Tuesday’s meeting that the Sept. 23 vote was legal.

Naples City Desk requested a copy of the signed and executed custody agreement for the county’s securities of Klatzkow on Oct. 15 and he referred the records request to county manager employees. County Manager employees said they didn’t have a copy of the custody agreement and they referred questions to Brock’s Office. Klatzkow told Naples City Desk in an email he only reviewed what was posted in the county’s online agenda system. The online system contained the blank account opening document with Infinex Financial Group.

Klatzkow on Tuesday referred a request for the custody agreement to Brock’s Finance Director Crystal Kinzel.  

Brock’s spokesman Robert St. Cyr, responded late Tuesday to an Oct. 22 public records request by Naples City Desk and said “We do not currently have a 'signed and executed' custodian agreement with Infinex Financial Group as requested.”

The county’s existing contract in which Fifth Third has custody of the county’s $600 million portfolio ends on Oct. 31. What agreement will be in place when the county hands over its $600 million portfolio is unclear.  

In an email about the legality of the Sept. 23 vote to commissioners, Klatzkow pointed to the county’s revised 2013 Purchasing Ordinance that gave commissioners broad power to waive “any and all irregularities” and “Purchasing Ordinance provisions” within lawful guidelines.

Fifth Third filed a bid protest after Brock’s selection of First Florida Integrity Bank.

Hiller said Brock acted as “judge, jury and executioner” in denying Fifth Third’s bid protest and she questioned Brock’s authority to select the county’s banking contract. She also said the process included sunshine violations and that she had received only 11 of 16 bid tabulation sheets from Brock’s office in response to her public records request.

Hiller also said Fifth Third had the lowest net costs, considering fees, projected interest earned on deposits by the county via LIBOR, and that Fifth Third didn’t have the $25 million minimum account balance requirement. 

Brock did not attend the commission meeting.

Henning said no sunshine violation occurred because no action was taken at the selection committee meeting in question. He also said there was no requirement that the county keep a $25 million balance in its bank accounts as requested by First Florida Integrity Bank.

“This is a request for a proposal. It’s not a sealed bid. … A proposal is just that, it’s a negotiated item,” Henning said.

He also said First Florida Integrity Bank had a custodial agreement with Infinex that was emailed to all commissioners and that First Florida Integrity Bank provided a mechanism with Infinex for safe keeping of the county’s securities with a third party.

Hiller had pushed for extension of the county’s existing banking contract with Fifth Third to allow time for a new, untainted bid process.

However, Henning said that wasn’t possible without cooperation from the Clerk because the Clerk, not the County Commission, has the existing contract with Fifth Third because he has selected the county’s banking contractor for two decades.

“How can anybody extend a contract that’s not theirs,” Henning said, Henning said referring to the Board of County Commissioners.

Richter, taking the podium during public comment and introducing himself as president of First Florida Integrity Bank and your Florida state senator, told commissioners that removing the $25 million account balance from his bid came in response to a “request for clarification.”

He said First Florida Integrity Bank is providing the lowest cost to the taxpayers and he said as a locally headquartered bank, First Florida Integrity Bank provides benefits to the local economy in the form of high-paying jobs.

“We are a proud corporate citizen of Collier County,” Richter said. “We were aggressive in our pricing because we are proud of Collier County.”

Richter said First Florida Integrity Bank submitted a proposal with significantly less costs on a monthly basis and agreed to waive all costs to the county for the first year.

“There’s a significant cost difference between ourselves and any of the other bidders,” Richter said.

In terms of cost, First Florida Integrity Bank bid fees for the county at $360,000 over the life of the contract versus more than $1 million bid by Fifth Third.

However, Fifth Third said in its protest that doesn’t capture the full picture:

Fifth Third estimated that based on historical performance it would provide the county with $850,000 more in interest income on its deposits than First Florida Integrity Bank. Fifth Third based this estimate on its use of the LIBOR versus the federal funds rate proposed by First Florida Integrity Bank.

Commissioner Fred Coyle, who had sided with Hiller, said Tuesday that they didn’t have the votes to change course. He called Brock’s selection of First Florida Integrity Bank “too casual” and “too dictatorial.”

“I think the board made a mistake in not taking the opportunity to resolve this,” Coyle said, referring to putting the contract back out to bid in a new process. He added: “I feel very uncomfortable with one constitutional officer making these procurement decisions on his own.”

Reporting by: Gina Edwards

Dateline: Naples, Fla., Oct. 29, 2014

 

Contact Gina Edwards at 239-514-1336 or by email at ginavossedwards@gmail.com 


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