Cape Coral, Florida, is a city of over 150,000 people in Lee County. Along with its nearby neighbor, Ft. Myers, it is part of a multi-city region numbering over half a million. Tourist pamphlets ballyhoo Cape Coral’s network of canals, and I’ve got to admit, it looks like quite a place to visit.
But really, the only substantial reason I am interested in traveling there is to meet Sal Grosso.
I’ve spoken to him on the phone. And I’ve read a few of his columns for the local paper. But everything I learn about the man makes me want to meet him in the flesh. (Too bad Florida is not on my near-term itinerary.)
What makes Sal Grosso the man to meet? He’s a crusader. For justice. For government transparency. For accountability, and balanced budgets, and low taxes.
And, in the city of Cape Coral, he has met an imposing enemy, the city’s political establishment.
But Sal is not one to be bullied or pushed around. He had a successful career in the telephony business, being responsible for “call completion” in a very large network encompassing all of New York State. If something went wrong regarding the phone system, he was the man to fix it. When he moved to Florida to retire, he didn’t take up snorkeling or golf. He took up something more along the lines he was used to: problematic systems.
So he got involved investigating local governance and its accounting methods. He started in with the municipal water system. He discovered that it couldn’t keep track of millions of gallons of water per day. Sal plunged in (so to speak).
After some of his initial reports hit the local paper, the head of the water district hired him for one dollar per year to investigate further. Sal gladly accepted, and continued his research . . . and the publishing of his findings. When the facts came to light, the mayor of Cape Coral was incensed. According to Sal, it wasn’t long before the man at the water bureau who had hired him was pressured to fire him . . . giving him his dollar for services rendered.
Unfortunately, he was only halfway into the investigation. He had uncovered quite a mess. He had discovered that some prominent, large-usage businesses were being billed for only the basic water charge, not for actual usage. This meant that these businesses were getting a huge freebie, paid for by fully paying water customers.
Understandably, Sal suspected that this was the way someone in government wanted it to be.
Even after making some reforms, the water department continued to be unable to keep track of what it distributed. The amount of water unaccounted for in the city’s billings remained over 10 percent.
Some might say, “Close enough for government work,” but if that’s the case, it shouldn’t be government work, should it?
Sal wasn’t merely up to his knees in water problems. He also stepped into the city’s books in general. He quickly discovered a peculiar accounting anomaly. The city had reserves, a fact that city officials seemed not to want the public to know. And it kept changing budgets, and asking for ever-new taxes and fees, without mentioning (once again, strategically) the money it actually had in the bank. In 2007, that reserve (fund balance) came to $210 million . . . which was more than the annual budget of just a few years prior.
Cape Coral was a rich town, always pretending to be poor.
And it spent money like the Prodigal Son.
Sal took his concerns to city officials. They were uninterested in looking at his findings, to say the least. He then took his information to the state attorney’s office. There he was told they simply didn’t have the manpower to look into Cape Coral government finances.
But Sal didn’t give up. Next stop was the office of the Auditor General, which is tasked to audit every agency of the state government. Sal was pleased to learn that this office does what he calls “a three-legged audit,” covering financials, worker performance, and legal compliance. Though the office is not set up to audit all the local governments, it does audit a select group of subsidiary governments each year.
So Sal made his pitch to the State Legislative committee in charge of the office, giving each member a red binder detailing his findings. Please, he asked, audit Cape Coral.
Understandably, there were repercussions. Local state House and Senate reps got involved, and they were all very concerned that someone was questioning the ethics and legality of government. Pressure was brought to bear. Sal’s name was dragged through the mud (“he’s a nut”), and Sal got his answer: “No.”
That was in 1997. Still Sal did not give up, even after so many setbacks. For soon he would add an ace to his hand . . .
In 1999, a young lawyer named Jeff Kottkamp decided to run for office, and asked for Sal’s support. Kottkamp was a loyal reader of Sal’s columns, and claimed to be for honest and limited government. That was enough for Sal; the two became friends. Kottkamp won in 2000, and was twice re-elected; now, years later, he serves as Florida’s Lieutenant Governor.
But before Kottkamp ascended to serve under Governor Charlie Crist, he exerted his influence to get the auditor’s office to focus in on Cape Coral.
Now, the preparing of the report was no small undertaking. At Sal’s request, the audit went beyond water and sewer, incorporating a local charter school and storm-water drainage systems as well.
The auditors in Tallahassee knew a resource when one plopped in its lap. They sent down a team to run through Sal’s evidence. After careful review, they then went off on their own.
In May 2006, Florida’s Auditor General published its report, an operational audit. It’s quite a document. It doesn’t take long even by merely skimming to see that Sal was basically right.
The summary of findings runs two pages. Finding No. 1 gives you a good indication of the general tenor: “The City had not maintained its accounting records on a current basis, or periodically reviewed them for completeness and accuracy.” If you are an accountant, you know what this means. If, like me, you are not an accountant, you still get the idea. Sheila Weinberg, Founder and CEO of the Institute for Truth in Accounting, draws a clear moral: “Like Sal, all Americans need to review their own governmental units’ books. Most likely,” she writes, we “will find ‘political math’ being used to report only what the politicians you want to know.”
The trouble in Cape Coral — short of actual conspiracy to defraud the public — can be summed up easily: The government has been no more transparent than the sewerage it runs. But, in part because they have listened to Sal Grosso, citizens are learning fast to see through the . . . usual politics.
A follow-up report by the Auditor General’s office — required by law to be published within 18 months of the initial audit — is late. Sal speculates that the Auditor General’s office has uncovered more chicanery, and is consulting with prosecutors.
This suspicion is far from groundless. In one of the more interesting developments in the story, the city government hired an independent auditor — the prestigious Kessler International — in hopes of getting a better result. Kessler came out with its report (also in 2006), focusing on a utility expansion project. It was even more damning. Based on that audit, the federal Department of Justice began its own, still ongoing, investigation.
While the citizens of Cape Coral wait, their city manager has been kept on. On the bright side, $157 million of reserve funds are now included in the official budget. Alas, there are plans to spend $85 million of that . . . in a city budget that has nearly doubled in the last three years.
As Sal says, “There’s a lot of work left to do.” Thank goodness there are people like Sal Grosso (in Cape Coral and elsewhere) who keep on plugging.
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