BRADENTON, Fla. - The former city manager of insolvent Opa-locka, Fla. has pleaded guilty to pocketing pay-offs while he was in office.
David Chiverton, who resigned effective Aug. 1 after improperly paying himself city benefits, entered a plea deal on felony counts of extortion and accepting bribes in Miami United States District Court Monday.
Chiverton, according to prosecutors, participated with other city officials to solicit pay-offs in exchange for using their official positions to help residents and businesses obtain city services and deal with billing issues.
Former public works supervisor Gregory Harris pleaded guilty to bribery last month.
Both men agreed to cooperate with investigators against other Opa-locka officials in return for lighter sentence recommendations, though there is no guarantee that the judge will agree to the terms.
The corruption probe in the Miami-Dade County suburb of 16,000 residents is unfolding as a state financial oversight board tries to prevent Opa-locka from payment default on its bonds and, ultimately, filing for bankruptcy.
Before his arrest in August, Chiverton had been on a leave of absence since May after "bypassing" the city's finance systems to pay himself thousands of dollars in benefits, the nine-member panel appointed by Gov. Rick Scott later discovered.
The oversight board, chaired by Florida Chief Inspector General Melinda Miguel, then ordered city officials to develop procedures to segregate financial duties and prevent the kind of improper access Chiverton obtained.
Chiverton also faces an ethics complaint filed with Miami-Dade County for the benefit payouts, according to Miguel.
Chiverton and Harris were accused of taking bribes in return for using their influence to obtain city licenses and preventing water from being shut off for delinquent payments, according to court filings.
After existing water and sewer accounts were examined, the oversight panel found Opa-locka's collection rates are as low as 27% and that many properties are not even being billed.
City officials have since asked Miami-Dade County to take over water and sewer billing, and have asked the county for a bridge loan because the general fund balance is so low it will run out of funds soon to pay for basic services and make payroll.
The oversight panel is already combing through monthly invoices, agreeing to pay the most essential bills while disapproving payment on others.
In addition to the ongoing criminal investigation, the Securities and Exchange Commission is also examining whether Opa-locka properly disclosed its financial condition when bonds were issued to fund a new city hall last year.
Opa-locka's debt includes $8.6 million in privately placed notes with its largest creditor, City National Bank of Florida.
While current on bond payments, the city's failure to submit required periodic financial statements and the 2015 audit triggered a 30-day notice from the bank that the notes will be accelerated and due in full.
Bank spokesman Eddie Dominguez has said that City National Bank "remains open and willing to work with the city and the State Oversight Board to resolve this matter."
The financial oversight board appointed by Scott in June was tasked with taking over Opa-locka's finances after finding the city in its second fiscal emergency since 2002.
The board offers Opa-locka the expertise of many financial and local professionals, but no state funding.
Opa-locka officials first approached the state for a bridge loan seeking advancement of payments such as revenue-sharing funds, but Miguel said she would not recommend it in light of the corruption and state of the city's finances.
The oversight board's next meeting is Sept. 23.