The Idiots Guide to Profits!

prof·it/ˈpräfit/ Noun: A financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something.

It seems that some attorneys recently have had a hard time understanding what the word profit means.  So much so that it's beginning to make us question what they are teaching kids in college nowadays.  We decided to concentrate on this word in today's blog post to give those that don't understand it, a little accounting lesson they must have missed out on while getting their law degree.

We wanted to give everyone a broad range of definitions for the word profit so the could see how it is used in the different worlds in Accounting and Finance.  In the Finance world, profit is the financial return or reward that entrepreneurs aim to achieve to reflect the risk that they take.  The accounting definition is simply the difference between revenue and costs.  Here is the mathematical representation of the equation.

REVENUE - COGS (Cost of Goods Sold) = PROFIT

Why do we feel we need to spend our valuable time explaining this?  Well, it's come to our attention that the Town of Southwest Ranches is pretty sore about not getting the detention center pick and now wish to create even more havoc in our lives by dragging the City of Pembroke Pines and the Town of Southwest Ranches into a lawsuit because they say they lost out on "profits".   At the time of the deal being killed the Town had not presented anyone with any type of contract that delineated any profits but we'll get back to the profits discussion later. 

Mediation has failed over the last several months between the two municipalities and now the Town is coming out GUNS BLAZING!  Who is pulling out the guns?  None other than Town Attorney Keith Poliakoff of Becker & Poliakoff along with CCA's attorneys (AKA "DEEP POCKETS") Sam Poole and Leonard Samuels of Berger Singerman, who will probably say they will fund the lawsuit just to stick it to Pines for not going along with their prison plans.

An interesting quote from Susannah Bryant's Sun Sentinel article,

Southwest Ranches officials accuse Pembroke Pines of breach of contract for reneging on an agreement not to 'interfere'

OK, If we remember correctly the Town cancelled the Roadways Agreement first and all the City of Pembroke Pines did was honor their wishes.  They wanted to cancel it and the City did just that.  Now they want to turn and sue because they honored their wishes?  This enabled the Town to expeditiously close roads in the west side of Southwest Ranches on 199th, 202nd and 205th Streets.  They were SO happy to be able to do this, they were quoted by Doug McKay to be "Happier than Pigs In Slop!", but they wouldn't have been able to do this with this agreement still intact.  In it, was a hidden non-interference clause forbidding the City from interfering with the Town's prison plans thus enabling them to continue to get increase after increase in the bed counts with Pines having it's hands tied behind it's backs unable to speak up for the residents nearby and the schools that were there prior and after this plat became a prison parcel.  SO that's the agreement about the roads and "non-interference." 

Now we turn to the Fire/EMS agreement...  This had the last minute addition that Pines would provide water/sewer to the prison while almost the entire Southwest Ranches is on a well system.  The addition that Mr. Dodge took approximately a WHOLE SIX MINUTES to consider before conceding the water addition in the Fire/EMS agreement to Southwest Ranches.  Also, Jeff Nelson has been quoted many a times as saying that the CCA could just dig a well on many occasions and why would Pembroke Pines not want to get the profits from selling water to CCA for the prison.  ??  Yes, Profits.  Revenue minus Costs.  This agreement was cancelled for convenience (9 months), a provision that the Town agreed to.  This final cancellation completely severs any ties that Pembroke Pines might have had with the prison property.  They were no longer enabling a project that would only have put the community at grave risk.

SO now we are present day where mediation seems to have failed and now the Town Attorney is pushing this along with CCA's attorneys as they were in attendance at the most recent mediation.

They [ICE] don't want controversy," Southwest Ranches Mayor Jeff Nelson said. "They don't want to read about this in the newspaper. -- Sun Sentinel, July 31, 2012

Maybe ICE realized they were dealing with a bunch of amateurs and decided it wasn't a right fit seeing as everything the Town does ends up in some sort of controversy one way or another.  Name an issue: Road Closures, Land Deals, Fire Contract conflicts with Weston, Davie and Pembroke Pines...  ICE must have realized to put a prison in this municipality would bring alot of scrutiny to the project and decided against it.  No one really knows... How would a Judge know what ICE was thinking when they decided to pull the site selection?  Only one person TRULY knows.

In addition to the Town being sore, there has been "posturing" in the press from both the Town Attorney Keith Poliakoff of Becker & Poliakoff and CCA's hired gun, Leonard Samuels of Berger Singerman.  They claim that the Town & CCA has lost out on this huge amount of PROFITS!   Profits that they seem to calculate in some "New Math" that they must have taught in them fancy law degree schools.

Had the detention center come to town, Southwest Ranches was to have been paid $1.6 million a year plus $350,000 in annual property taxes, Poliakoff said.  -- Sun Sentinel, July 31, 2012

In what contract was this stipulated?  That's RIGHT!  There wasn't ever a contract from ICE.  In addition, what was it going to cost the Town to have this prison for increased police, bonding, indemnity, hire new staff to oversee millions of dollars of transactions that were going to be going through the town coffers, etc that would then have to be taken from the prison "income" that would then equal the profits.  Again, this attorney doesn't seem to understand how to calculate profits... We hope he can balance his checkbook, let alone the mounting legal bills he's charging the Town of Southwest Ranches for!  We think the Town needs to take a longer look at who they are hiring to represent them and see if they have had problems in math during their educational background.   Did we mention he just talked the Town Council into voting to sue Pembroke Pines so they can discuss strategy in the shade... once he's gotten this ball rolling it's going to be a tough bell to un-ring in the courts.  Poor Freddy didn't even know what he was voting on as he had to get things clarified for him twice.  KA-CHING for Poliakoff...  Bad News for our Town Budget!!
   

REVENUE - COGS (Cost of Goods Sold)/COST = PROFIT
**Attorney's Cliff Notes on how to calculate PROFITS** 

Do you think Keith Poliakoff is giving the Town bad advice?  Chime in on the discussion HERE!

Letter to the Town Council on Suing Pembroke Pines

Poliakoff's Selective Truths!

Dear Mayor, Council and Administrator:

It is highly disappointing that the five of you recklessly voted to sue Pembroke Pines last night.  This was entirely based on the stated premise that you were doing so purely to recover financial damages allegedly suffered by Pines' alleged interference in your beloved prison.  This is a prison that required YOU to enter into a third party contract with ICE to OWN enforcement and removal so that CCA could exercise THEIR property rights, by the way.  There is NO established jurisprudence in the USA which supports an obligation of a municipality to enter into a third party contract (IGSA) so that a resident may exercise their property rights.  The property rights argument is specious and hollow in light of the NEED for an IGSA that Poliakoff HID from you for months.

You are acting against the more reasoned advice from me, Mr. Falletta and Mr. Hughdahl to strenuously consider Poliakoff's deficient mathematics where he's convinced you all that your damages are $2MM a year.  I cited CCA's own public statements while YOU allowed him to get away with citing a contract that every one of you knew was obsolete.  Even Sam Poole said this was an embarrassing "marketing contract" that would have to be rewritten.  CCA has repeatedly claimed you would receive $400K for beds and $300K for ad valorem per year.

Well, let's do the simple math based on the existing "John Canada Marketing Contract" anyway.  Poliakoff claims that the receipts will be $2MM for the bed fee as well as ad valorem.  However, he's selectively ignoring germane parts of that very contract which says that the town owes CCA a $100k/year "maintenance fee" back which straight away reduces Poliakoff's amount to $1.9MM.  Do you allow your attorney whom we pay dearly for to hoodwink you so easily?

Next, the contract EXPLICITLY states YOUR obligation to help CCA maintain their AG exemption on the property.  This clause effectively eliminates the $350K Poliakoff cited from ad valorem taxes.  This now brings the total revenue potential down to $1.55 MM based on the bogus "marketing contract" that we knew was being rewritten as he stated so multiple times.  It is outrageous that you all lack the critical thinking skills to challenge these lies by Poliakoff.

Next, Poliakoff's $2MM was based on the estimate of FULL occupancy 365 days per year.  This is an inexcusable assumption which is just as much a pipe dream as anything else surrounding this prison.  You have not asked for ANY evidence as to how CCA will maintain 100% occupancy every day of the year.  I would think an 80% occupancy is aggressive.  I'll give you that optimistic assumption though so the $1.55 MM scales down to $1.24MM in lost REVENUE.

Now, let's look at the other side of the lost revenue.  What are the COSTS associated with this revenue?  We were told my Mr. Holligsworth that you are all businessmen and trustworthy.  Thus, you know that NET PROFIT = REVENUE - EXPENSES.  Poliakoff lied to you by omitting even the stated expense in the contract itself.  So, it's clear that you have blindly ignored the expense side of those sparking dollar signs you see in your eyes and your irrational hatred of Pembroke Pines AND of your own residents who oppose this prison.  There's no judge in the world that is going to let you get away with this fuzzy math, even if that judge has worked for Becker Poliakoff one time in his or her life.

No, you do not have the fiscal discipline to keep Poliakoff's spending in check.  You do not have the critical thinking skills necessary to analyze claims nor do you have the ability to listen to your reasoned residents or think through the ramifications of your actions (kids being picked up on Griffin road all due to your actions closing roads as a Christmas gift).  In fact, last night you shut us out of the process going forward and WE RESIDENTS on polar opposite ends of the prison issue are bringing you issues to look at and QUITE FRANKLY A CRITICAL ANALYSIS OF POLIAKOFF'S HOODWINKING OF YOU ALL.  Steve, you shut us out in the NAME of openness.  That's an Orwellian perversion.

Steve, you often chide "bad government" and did so last night when you described your outrage at the school bus situation.   The fact is that YOU are government too.  The council's decision making has been based on woefully understudied facts or awareness of consequences.  You all don't even consider that there were expenses associated with Poliakoff's $2MM claim, for example.  You use your power in government to harass residents, break public records law,  and allow the Mayor and Attorney to personally call out residents and besmirch them with lies.  This is classic abuse of power and you are party to it.

Do the right thing.  Stop this enrichment of Becker Poliakoff now.  Our legal bills for our 2200 households are outrageous.

Here's one last challenge to YOUR repeated claim that the town's viability is and always has been dependent on the development of that CCA property.  If that's the case, why would you all hang your hat on a contract that explicitly deprives the School Board of ad valorem receipts through an abuse of an AG exemption?  But, funny, the Mayor announced that there would be an ad valorem roll back this year on the very eve of the defeat of the prison.  Your claims are specious and demonstrably so.  It doesn't make sense to reduce property taxes at the same time you just lost "$2MM a year" from the CCA deal.  Do you ever stop and think about the big picture of what you are saying?

Regards,
Bill Di Scipio

Do you think Keith Poliakoff is giving the Town bad advice?  Chime in on the discussion HERE!

School Buses and the Road Closures do not equal SAFETY

We weren't planning on blogging about this, but since we advocate for the community and this issue came up we felt compelled to let everyone know.  Since the road closures went up there has been alot of upset people on both sides, Southwest Ranches AND Pembroke Pines. The Town Council has said that they were closing the roads for "Public Safety" as they voted to close them at an emergency meeting without sufficient notice to the effected residents.  However, now the Broward County School Board has pushed the bus stops to be on a dangerously busy Griffin road.

Janine Stanwood from Local 10 did some coverage on it last night.
http://www.local10.com/news/Gates-keep-school-buses-out-of-Southwest-Ranches/-/1717324/16203062/-/uesd70z/-/index.html
And then John Turchin did another story today after hearing what the Town had to say.
http://www.local10.com/news/Southwest-Ranches-blames-Broward-for-bus-problems/-/1717324/16214212/-/13k8iqiz/-/index.html

What we can't understand is WHY wasn't the Town Council working with the School Board to make this transition painless PRIOR to school starting? They sent a letter... THAT'S GREAT!  But, what are they doing to be proactive for the children in the Community?? Are they THIS out of TOUCH?  This is just a continued "business as usual" of the Town not being IN FRONT of an issue and getting things done for the PEOPLE that live in the Town.  Is the Town just using the School Board bus woes in their favor??  For someone that is an assistant principal (Jeff Nelson), he sure has NO CONNECTION at the School Board for our Town.  Way to put children's safety first Jeff!  Is it going to take someone's kid getting hurt and then a huge lawsuit against the Town before people WAKE UP?!!

You can decide at the Ballot Box in November!  Make sure you are registered to vote!

Jeff Nelson breakin' the law...

Now that the primary is over, our elections are in FULL SWING! 

Setting a good example and abiding by the rules isn't something you would expect from Beavis and Butthead, however we should expect that from the Mayor of our Town, right?  Well, we aren't getting that from Mayor Nelson.  Not that we're trying to be picky, we feel obligated to point out how Mayor Nelson isn't abiding by the law of our Town.  According to the Town's sign ordinance (law) passed in 2010, campaign signs are NOT ALLOWED to be displayed until 60 day's prior to the election.   Don't take our word for it, download Ordinance 2011-01 for yourself HERE.  (Page 31, Section M-1-e)

It was passed unanimously by the Town Council on October 20, 2010.  Jeff Nelson voted on it, so you would think he had read it, right?  We understand how some people might not remember something they VOTED on, PASSED, and then SIGNED.   So, how could he have missed it in the Candidate Handbook that all candidates were given?  Surely he reviewed the requirements to refresh the old noggin'?

Our best guess is that Jeff Nelson didn't read the candidate rules either since the sign below has been up for the past several weeks.  It makes you wonder what other "rules" he skirts around for his convenience?  Also, if he didn't READ the Ordinance he passed, what other laws or documents has he NOT READ yet voted for?  Moreover, whose counsel is he depending on for the ordinance's contents?  This is worse than using "cliff notes" in high school.  This shows a complete disconnect for an assistant principal and the Mayor of our town to be taking the "easy route" and not doing what he was elected to do.

Maybe you should ask Mayor Nelson why he's "breakin' the law" next time you see him or you can feel free to email him... 

JNELSON@southwestranches.org 

 

(Picture taken on 8/15/2012) - See Green and White sign to the right of Korn's sign

The Nelson Vendetta

Do you know any of Jeff Nelson's history with Pembroke Pines?

Let us help you better acquaint you with the Mayor's past dealings with Pembroke Pines.  Jeff Nelson started working for the Pembroke Pines Golf course managing the pro-shop for $15,000/year in September of 1983 shortly after the City purchased the golf course and Nelson was later elevated to managing the entire golf course.   Since 1982, when the City purchased the golf course, it had lost about 2 million dollars during 8 of those years Nelson was in charge.  So, the City decided to privatize the golf course in 1993 giving up municipal management.

Incidentally, his father Charles Nelson was a Pembroke Pines commissioner at the time and voted against the privatization.  Is this vote a surprise... but hey, of course he wouldn't possibly want his son to be out of a job.  If his son Jeff were out of a job, then he might have to move back home !! So, the City offered Jeff a job at another facility.  Jeff turned that down and decided to file a lawsuit against Pembroke Pines, instead.  He won the lawsuit and the Judge awarded him $282,000 for his nine years of service for letting a facility run at a loss creating a 2 million dollar hole.  WOW!  If we all could be so lucky!  But, in all seriousness, any business looking at any sort of loss is going to look at replacing the management.  The fact that he walked away with this hefty sum seems idiotic, but that was the judgement.

We don't know about you, but we think that this shows a pattern.  We believe Jeff Nelson clearly has it out for Pembroke Pines now given he has a history of suing Pines.  In addition to his demonstrated litigiousness he also seems to have established a pattern of not being able to manage money.  Why did the golf course lose so much money and what fault lies with Nelson for this?  Consider the financial decisions he's made FOR Southwest Ranches. These range from the purchasing of parks in the Town which at one point saddled Southwest Ranches with over $30 million in completely unfunded obligations, to possible vicarious land deals with Ira Cor, to Richard Rubin's grant writing with wife Diana Wasserman Rubin, or the Prison plans that were not made so public. Also, he was willing to recklessly increase the prison bed count to get increased profits while it isn't in the best interest of the surrounding schools nor residents who have kids going to those schools.  This really shows poor leadership, poor financial responsibility, and poor judgement.

He even lists his specialty as "School & Education" on his bio on the Town Website.  We don't see where he was using these skills when he said "the school board should have looked at what was zoned for that area"..  when asked about the prison plats close proximity to the newly built West Broward High school.  Perhaps Mr. Nelson should have warned Broward County School Board that they were going to build a state of the art $140 million high school 1.1 miles from an immigration prison.  Is this the man you want to be Mayor of OUR TOWN? Do you want someone that is supported by Lawyers, Lobbyists and Private Prison companies just so they can remain in power of the Town and get more $$?

Feel free to review the following references:
Pines Ordered to pay Ex-Worker Sun Sentinel May 3, 1996
City to appeal decision  - Sun Sentinel May 9, 1996
Jeff Nelson recklessly agrees to increase of bed space from 1500 to 2200!! -
Email between Keith Poliakoff, Sam Poole (CCA Atttorney) and Mayor Jeff Nelson
Cash Cow - Broward-Palm Beach New Times, Bob Norman
Ira Cor FBI Sting - Broward-Palm Beach New Times, Bob Norman
Jeff Nelson's Campaign Contributions