LAUDERDALE LAKES --

TALLAHASSEE – State lawmakers took the city of Hollywood to task Monday over an audit that showed gross mismanagement of the city’s finances and called into question whether it actually needed to declare a “financial urgency” status in 2011, which led to layoffs and pay cuts for employees and higher taxes for residents.

City officials, for their part, have acknowledged that their finances were a mess and have pledged to improve them.

“We concede,” said city attorney Jeff Sheffel. “Absolutely. They city was in terrible financial straits. Certainly, parts of that were due to mismanagement.”

But they do disagree with the state on whether the city had to declare a state of “financial urgency” in 2011. At the time, Hollywood was facing a $38 million budget hole. The declaration enabled the city to renegotiate collective bargaining agreements with the city’s workers.

Ultimately, 13 police officers and 18 other city employees were laid off. The mayor, commissioners and police took a 10 percent pay cut; firefighters took a 12.5 percent cut. Most other employees had their salaries cut by 7.5 percent.

State auditors have argued that money was available in the city’s utility funds and that city officials could have approved a transfer that money to the general fund. More recently, city officials approved a loan from that same account to pay for more police cruisers.

The finding irritated lawmakers, who repeatedly questioned why that money wasn’t moved around in the budget.

“To me, you don’t call ‘Fire’ unless you really, really mean fire,” said state Sen. Eleanor Sobel, D-Hollywood, who requested the state perform the audit.

But Sheffel and city finance director Matt Lalla said their hands were tied by the law. The city could have borrowed the money, they conceded, but a loan must be repaid. And they had no money to do that.

“It does not improve the bottom line of that fund,” he said.

Sheffel and Lalla appeared before a joint House and Senate panel that was reviewing the state’s audit. No further action will be taken by the state, but auditors expect the city to make a number of changes.

Sheffel said that the city had made a number of personnel changes in the wake of the financial problems. Since 2011, Hollywood has hired Lalla as finance director, plus a new city manager and community redevelopment director.

The city’s finances have stabilized, and it has been able to give raises to some workers.

In addition to the dispute over whether it could have loaned itself money, the audit accused the city of continuously overestimating city revenues, delivering incomplete budgets for the Community Redevelopment Authority that didn’t show the money carried over from the past fiscal year and having no plans to create reserves for some of its funds.

It also noted that the pension system was unsustainable and urged the city to adopt a policy to adequately fund it.