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Hollywood Bond Deal Raised in Lauderdale Airport Expansion Debate
Hollywood Bond Deal Raised in Lauderdale Airport Expansion Debate
South Florida Sun-Sentinel, FL
Posted December 9 2003
The city of Hollywood enlisted Broward County Commissioner John Rodstrom to
sell $115 million in bonds last month as city officials stepped up pressure on
Rodstrom and other commissioners to reconsider the long-planned expansion of
Fort Lauderdale-Hollywood International Airport.
The underwriting team headed by Rodstrom earned $486,000 on the deal to
refinance Hollywood water and sewer bonds, according to city financial records.
County commissioners are set to decide today where to build a second major
runway, and Rodstrom recently shifted his views to favor a northern runway --
the same plan sought by Hollywood.
The Hollywood bond deal renews questions about Rodstrom's private work as a
broker for Citigroup Global Markets. At the same time he began urging his
colleagues to rethink the airport expansion last year, he was helping
Miami-Dade County finance the expansion of its airport."Having been brought on
the carpet before, shouldn't he be extra sensitive and more alert for possible
conflicts and disclose them?" said Fort Lauderdale resident Judy Sadlier, who
filed an ethics complaint against Rodstrom in June over his Miami work. "It's
the same old game."
Rodstrom declined to comment about the Hollywood bond deal, referring questions
to Citigroup's New York office. But he defended his stand on the airport as the
best way to handle increasing air travel with the least damage to the nearby
"Until someone shows me otherwise, the north runway would seem to harm the
fewest people," he said.
A spokeswoman for Citigroup said the company had long worked with Hollywood on
water and sewer bond matters and that Rodstrom's political views had no
connection to the deal.
County officials were not aware of Rodstrom's ties to Hollywood, but County
Attorney Ed Dion said Monday he saw no ethical problem. He said Rodstrom would
only have a conflict of interest under state law if he voted on a matter in
which he directly benefited personally. He said the same thing about the Miami
The airport has sought for a decade to extend the south runway from 5,276 feet
to 8,920 feet so it can handle aircraft simultaneously with the current main
runway. Alternatives under consideration are to lengthen that runway only to
7,985 feet or to build a new 8,750-foot runway north of the main runway.
About 5,000 more people would have to deal with intense noise from air traffic
if the south runway were built instead of the north runway. A north runway
would take 10 more years to build and would have longer delays in bad weather
than the south runway.
Hollywood decided to undertake the bond issue in early November to help resolve
a dispute over utility rates with nearby cities.
Hollywood agreed to pay $9 million to Pembroke Pines, Dania Beach, Hallandale
Beach, Miramar and Pembroke Park because a faulty metering system overcharged
them for water and sewer service. Lower interest rates allowed Hollywood to
refinance a 1993 bond issue, settle the rate dispute and gain about $10 million
for other projects.
Hollywood's finance director, Carlos Garcia, said the city chose Citigroup
three years ago to be the lead underwriter on a bond deal that was eventually
dropped because Pembroke Pines sued over the utility rates. He said the city
rated Citigroup as the best of about a dozen firms that bid and kept them on
board when officials decided to refinance the debt last month.
Garcia said Citigroup sold about 60 percent of the bonds, with four other
underwriting firms splitting the rest of the deal. Rodstrom has previously said
he does not earn commissions on the deals he handles but receives a salary and
performance-based bonuses as an employee of Citigroup.
Hollywood Mayor Mara Giulianti said there was no effort to influence Rodstrom.
She said she never talked to him when the city was discussing the refinancing.
"That would be quite a stretch," Giulianti said. "A vote on something as
important as siting the location of an expanded airport has absolutely nothing
to do with the city selling bonds."
But others charged that Rodstrom's ties to Hollywood cast a cloud over his
decisions as a commissioner.
"The timing certainly appears to create a conflict that is very disturbing,"
said airport expansion advocate Randy Dunlap, who is running against Rodstrom
in next year's commission elections. "His actions raise serious questions that
the voters will ultimately need to answer for themselves."
State ethics investigators are expected to rule as soon as next month on the
propriety of Rodstrom's runway votes in relation to his Miami bond deal.
In that case, Rodstrom brokered a $299 million bond issue last year for Miami
International Airport. The deal hinged on Miami's continued dominance in the
South Florida market, and records showed that the Miami airport was concerned
that more competition from Fort Lauderdale could harm its ability to pay for
massive construction plans.
Rodstrom had long favored major expansion at the airport, but began advocating
a shorter southern runway than the airport wanted. He said he was not
influenced by the Miami deal but began to question the expansion plans after
hundreds of residents protested at a public hearing in April 2002.
He switched stands again late last month to favor a northern runway.
He said he discovered that the north runway was more viable than he thought
after reading a report that aviation consultants gave the commissioners on Nov.
19. In addition to Hollywood, city leaders in Dania Beach, County Commissioner
Suzanne Gunzburger and key environmental activists favor the north runway.
Commissioner Ben Graber said Rodstrom will have to explain his vote to his
"His dealings with the cities puts him in an awkward position where he might
not be doing anything illegal but creates questions in some people's minds,"
Graber said. "When you operate in the gray zone, you will have political risk."
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