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State Controller Releases Findings from Audits on Montebello; Alleges Millions were Misspent

State Controller John Chiang has released the findings of two audits of the city of Montebello and concerns have been raised about $31 million in questionable spending, loans, and fund transfers. The audits concentrated on the city's gas tax fund and redevelopment agency (RDA) funds. Chiang commented that “At the expense of local job development, street repair, and schools, Montebello has made it a habit to tap legally-restricted funds to cover its budget and cash shortfalls. It appears that the City moved money wherever it wanted, whenever it wanted, regardless of the law or the intended purpose of those taxpayer dollars." For instance, according to the findings, RDA money was spent on questionable expenses like dinners in Las Vegas for the City Manager and embroidered polo shirts and golf tournament registration fees for city council members. Montebello was subject to such a financial review due to noncompliance with reporting requirements.

And when it comes to the city's Gas Tax Fund, it was revealed that more than $2 million was used to pay general operating costs instead of repairing streets and roads or repairing storm damage. In response to the audit’s findings, Montebello has released a scathing rebuttal, calling the reports full of “fundamental errors.” City Administrator Larry Kosmont wrote that “The audit misstates the law, makes recommendations and requests without any proper legal authority … and ignores common practices in other local agencies.” The LA Times reports on the city’s other objections:

“He also the said the findings, coming as Montebello is trying to get a short-term loan so it won’t run out of cash in its general fund, ‘exacerbates the financial conditions of the city, which has been making important strides in its financial recovery.’ Specifically, Kosmont took issue with Chiang’s contention that Montebello must repay its redevelopment agency $3.6 million for ‘ineligible expenditures,’ including $3.4 million in ‘administrative costs.’ Kosmont insisted that that the amounts Montebello’s general fund charged its redevelopment agency for administration were ‘on par with other redevelopment agencies statewide.’ He also disputed the controller’s findings that the city understated the amount of money owed to its housing fund.”

Chiang also alleges that Montebello City Council members, who also serve as the RDA board, have a history of authorizing forgivable loans to individuals who are political contributors.

You can read the full audit on the RDA funds here.

The audit on the gas tax funds can be seen here.

Media Circus over San Juan Cap Councilman’s Comment on His Dog; Bill O’Reilly Weighs In

The Council on American-Islamic Relations is demanding that San Juan Capistrano Councilman Derek Reeve issue an apology for boasting at a public meeting that he named his dog Mohammad after the Muslim prophet. The comment came up during a discussion about a new dog park, as the councilman stated he hoped to bring his two dogs named “America” and “Mohammad” to the park once it is open. (Dogs are considered unclean in the Muslim faith and therefore many view a dog named after Islam’s prophet to be in poor taste and/or offensive). Mayor Sam Allevato and Councilman Larry Kramer criticized Reeve and Kramer sent out a memo regarding the decorum of fellow council members. Kramer wrote, “Words spoken from the dais should be appropriate and if they are spoken as an individual rather than as the council as a whole, they should be represented as such.” And the mayor has commented that “It's a shame that now it's become a media circus. It's an embarrassment for the city.” Reeve has been unapologetic and supporters from the city turned up to the council to voice support for his freedom of speech. The Voice of OC reports:

“Reeve refused to apologize, instead unleashing a diatribe on what he considers radical Muslim societies in other nations. Reeve said he and his family together decided to give the name to the dog in remembrance of a teacher who was sentenced to prison in a Muslim nation for giving the same name to a teddy bear during a school project. ‘I can name six countries in the world where I can be sentenced to death. No recognition of natural rights, no recognition of civil liberties,’ Reeve said. At the end of his speech, Reeve's supporters cheered and hooted. Some in attendance jokingly shouted ‘stone him!’ when Reeve asked what action the council wanted to take."

Salam Al-Marayati, executive director of the Muslim Public Affairs Council, commented to one reporter that “It's difficult to dignify such childishness. It doesn't even deserve a condemnation. I'm sure the dog is more useful to the city than the city councilman [Reeve].” Aw, snap!

Here at CityNews we can’t help but feel sorry for the poor pup caught in the middle of this hate fest, as he’s none the wiser as to all the commotion over his name (which also makes us envious of his blissful ignorance). For the sake of compromise, maybe the dog should just be called Mo'.

Evidence of the media circus around the councilman’s comment can be found on none other than Bill “Papa Bear” O’Reilly’s talk show, as the Fox News host named Reeve a pinhead. Coverage here:

FBI Stats Show Belvedere is the Safest City in California; Oakland the Most Violent

To many people the word “Belvedere” may only bring to mind a brand of premium vodka, but according to the FBI, it’s actually the safest city in California. The small city in Marin County has a violent crime rate of zero, as it was the only city with a population of more than 2,000 people to report no violent crimes last year. In fact, a violent crime hasn’t been reported since 2007. The FBI's Uniform Crime Reporting (UCR) program collects monthly counts of crimes from thousands of law enforcement agencies and you can see the entire list of crime data for each city and the rankings here.

The FBI reports that the most violent cities in the Golden State are as follows:

1. Oakland (15.3 violent crimes per thousand population in 2010)
2. Oroville (14.8)
3. Desert Hot Springs (14.8)
4. Compton (14.1)
5. Stockton (13.8)

Notably, Oakland is the only city in the state has a violence rate above 15. More on Belvedere’s ranking here.

Local Officials Promised Constitutionally-Protected Funding for Realignment

As October 1st nears and realignment officially begins, local government officials have feared that one little (and most important) detail: funding. At the League of Cities Annual Conference, city officials voted on a resolution introduced by Glendora that demands full funding for realignment. The general assembly of the League approved it on a vote of 381 to 0.

CSAC President and Riverside County Supervisor John Tavaglione had announced recently the county organization was considering an initiative that would secure funds for realignment so that counties are not left in the lurch and without the resources they need to make the switch successful and safe. But Governor Brown has announced plans of his own for an initiative so that funding is guaranteed. At a speech at the Sacramento Convention Center in front of hundreds of law enforcement and local government officials, the governor promised to secure a constitutional guarantee. The governor wants to place the issue on the ballot in November of 2012. The governor stated at one point, “Don't worry about the money. We'll get it to you one way or the other.” But his promises may not be enough to allay the fears of local officials when one takes into account Republican opposition, which already stymied the governor’s efforts to lock down a package that involves tax increases. The Bee points out:

“Brown is expected to propose tax increases to voters next year, and the funding guarantee the governor is seeking could figure in that package. Brown, a Democrat, told reporters he has not yet settled on a plan. ‘There are a lot of groups working on it,’ he said. ‘It'll come together, but we've got a few months before we have to nail it down.’ Funding for realignment was a central part of Brown's failed bid this year to extend higher taxes, an effort blocked by Republicans in the Legislature.”

In response to the governor’s announcement about an initiative, Tavaglione released the following statement:

“We thank the Governor for his continued leadership and commitment to making realignment a success. Counties are extremely concerned about the significant new responsibilities the state has imposed on us without the constitutional protections that ensure ongoing, reliable funding. It is clear the Governor recognizes the need for this constitutional guarantee to protect vital local services. We stand ready to work side-by-side with the Governor to go to the voters to protect funding for these critical public safety services.”

Feedback from other officials can be seen here. After Brown made his speech, he talked with reporters and made the following statement about realignment’s pitfalls and potential safety issues if inmates are released:

“Ten thousand inmates are let out every month. Ten thousand. Do you know how many have murdered people? Several, OK? So how you will distinguish those who are let out on realignment from those who are coming out anyway is something I'll watch with interest. I think [realignment] will be better. Is it perfect? No, we don't get perfection in this life.”

Republicans have cautioned that they believe the public’s safety will be in jeopardy if offenders are released under realignment.

Oh, Dear: Carson Mayor Jim Dear Calls Opponents of Naming a Street after Him ‘Haters’

Will residents in the city of Carson one day drive down a street named “Jim Dear Boulevard” in honor of the city’s current mayor? While many cities don’t name streets or buildings after living people, Mayor Dear is actually the one pushing for a street to be named after himself. However, the issue has divided the city council, as they recently voted 2-2 on the matter. So now the mayor has moved the item to the October 4th council meeting so that a 5th councilmember will be in attendance to cast the deciding vote. The responses to the mayor’s street-name proposal have been a bit of a mixed bag, which probably isn’t a good sign. One vocal resident went so far as to say, “The only thing that should be named after you is a plaque at the cemetery.” Yikes. And the developers of an area where the boulevard will lie are arguing that they want to choose their own name for the street. In a letter to the city, the developers write they want “a name that will be embraced by the community and help to brand the development.” If “embraced” is the key word, then it would appear the mayor may not get his way.

In response to council members who opposed the street name, Mayor Dear commented, “I knew you would be against this because it's my name and you're going to do whatever you can to stop something like this, like you do on pretty much any good thing I'm trying to bring forward as a mayor." He also called opponents “haters.” The Daily Breeze reports that “The Public Works Commission, whose members - like all Carson commissioners - are appointed solely by Dear, ignored the developer's request to hold off on any decision, and voted 4-0 to approve the street name change on Sept. 12. The street is a public road and, as such, the city has control over its naming.” Dear told eyewitness news that it was residents that pitched the idea to him in the first place and that he doesn’t see what all the fuss is about. The ABC report is here:

Buddhist Center Sues Walnut for Religious Discrimination over Denied Permit

Back in September of 2010 we relayed that the U.S. Justice Department sued the city of Walnut for religious discrimination over claims that the city violated federal law by denying a permit to a group that wanted to expand a Buddhist center. Walnut had not denied any other religious group a conditional use permit since at least 1980. For background, the Buddhists practiced at a ranch-style house but trouble arose when the Chung Tai Zen Center, a branch of the Taiwan-based Chung Tai International Chan Buddhist Assn, decided to expand by completing a monastery that would be 11 times the size of the house where they worshipped. Walnut’s planning commission received complaints and the expansion never went forward after the city denied a permit, so the Buddhists took up residence in Pomona instead.

The Justice Department suit was already settled when the city agreed that it would not discriminate but the Buddhist group took the suit further by looking to recover funds that were spent on contractors and consultants. The Zen Center is suing Walnut for religious discrimination for a sum of $2.5 million. Despite the fact that Walnut is about 60% Asian, the Zen Center became a contentious issue and plans to change the 2.19-acre lot became bogged down by traffic studies and endless consultations with the city. The question is did the city commit religious discrimination in land use and zoning decisions or were officials simply heeding the opinions of locals who were not opposed to the center just its expansion. The LA Times reports:

“Ivy Kuan, 59, said a faction of Christians circulated petitions making dramatic claims about tour buses and incessant noise. But Mike Lu, a Buddhist who attends a temple in Baldwin Park, said it was never a matter of religious discrimination. ‘A temple in your backyard? How would you feel?’ said Lu, 36, who lives in the same neighborhood as the proposed Zen center. ‘I would reject anything that has to do with traffic coming in because we want to keep it as quiet as possible.’ Others in the neighborhood overwhelmingly opposed the temple, pointing out that the nearby churches, school and park already generate traffic that clogs Marcon Drive.”

The issue really heated up, however, when another house of worship was approved during the same year, as the Justice Department’s complaint alleges that “in August 2008, the city approved a conditional use permit for a Catholic church that, when completed, will be larger than the Zen Center's proposed facility.”

Adelanto’s Success Stories Featured in New Strong Cities, Strong State Profile

“Strong Cities | Strong State” has launched another fantastic city: Adelanto. In the western portion of the High Desert, this city is on the verge of tremendous growth and offers the perfect blend of small town charm and big city convenience. With a growing population of over 31,000 residents, and a city that encompasses approximately 52 square miles, Adelanto looks to capitalize in all areas of residential, commercial, and industrial development. Adelanto’s success stories include the following:

• Xeriscaping City Hall: Water is a hot commodity in the desert region, so to conserve, Adelanto has taken a proactive approach to landscaping and building retrofits.
• Community Clean Up: Every year the city hosts a clean-up event for residents to come together and pick up trash that takes away from the desert landscape.
• New Recreation Programs: Before September 2010, Adelanto did not have a single recreation program. Today, the city is host to a robust recreation program with opportunities for all residents.

Read more, see photos, and connect with Adelanto on the new profile here.

Poll Shows Mixed Support for Requiring Cities to Seek Mediation Before Bankruptcy

The governor has yet to sign the municipal bankruptcy bill, but if it is given final approval, then local governments would not be able to file for bankruptcy before they undergo mediation or hold a public hearing and declare a fiscal emergency. Originally local government groups were staunchly opposed to the legislation but after it was heavily amended, such opposition was withdrawn. Under the amended bill sent to the governor, local governments will have more flexibility and pre-bankruptcy facilitation by a mediator will not involve state or other political intrusion. The American Bankruptcy Institute (ABI) recently conducted a poll on pre-bankruptcy municipal mediation. The ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency, and its members include over 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals. Base on the poll’s results, there was mixed support for the statement “Local governments should be required to first go through mediation before filing for Chapter 9.”

The Wall Street Journal reports: “Nearly half of participants, 49%, either “strongly agreed” or “somewhat agreed” with the statement: ‘Local governments should be required to first go through mediation before filing for Chapter 9,’ the form of bankruptcy reserved for municipalities. Conversely, 44% of respondents expressed some level of disagreement. The remaining respondents ‘did not know or had no opinion,’ the survey found. The poll suggests tepid support for a bill passed by the California legislature that is awaiting approval from Gov. Jerry Brown.

The last city to file for bankruptcy in California was Vallejo, which occurred three years ago.

Cloudy Budget Forecasts in San Jose and Santa Ana: Closures, Outsourcing, Cuts in the Future?

The cities of San Jose and Santa Ana are two examples of local governments in California facing painful budget realities. Take the Bay Area city: city administrators this week informed the San Jose council that without additional revenue from tax hikes or cuts in employee pensions, by next summer all of the city’s libraries could be closed. Furthermore, community centers would have to shutter their doors and fewer police officers may be on patrol. City officials have been getting a head start in examining the next fiscal year, and it’s not a pretty picture. But Mayor Chuck Reed reportedly hopes that if the council gets serious now about pension reform proposals, the city will have a better chance of avoiding insolvency. Mercury reports that City Manager Debra Figone warned the council that “This is no way to run a city of a million people. The solutions are not popular. This is a pivotal year." San Jose has had ten straight years of deficits. Next year’s deficit is expected to reach as high as $115 million. Mercury reports:

“The mayor hopes to get a pension reform measure before city voters in the spring. City officials will continue talking with union leaders about ballot language through October. Reed wants the council to approve a fiscal state-of-emergency declaration after that to build a legal case for the reform measures.”

And in Santa Ana, the city’s finances are grim as well. In a presentation to the council, outsourcing the fire department and a dozen other city services were offered as solutions. And Paul Walters, interim city manager, noted that the city down the line could not completely rule out bankruptcy as an option. Potential services that could be outsourced are as follows: “the city jail, Santa Ana Zoo, street sweeping, police training, police animal-control services and the Santa Ana Public Library,” according to the OC Register. An outside consultant prepared a budget stabilization report for the city, which you can read in full here. Key excerpt:

“This annual deficit will grow to $24 million or more in FY 2012/13 if no changes are made in ongoing costs during the current fiscal year. The City does not have reserves to fill these gaps as the unrestricted fund balance has been spent over the last few years. Additionally, other risks and uncertainties, along with cash flow requirements, mean that remaining balances in the internal service funds are not sufficient to maintain existing levels of expenditures. Simply put, the City must now take substantial action to reduce its spending.”

The interim city manager’s response to the report’s findings can be seen here.

Burbank Residents Urge City Council to Block Wal-Mart’s Arrival; Hold Protest

Back in June, Wal-Mart purchased a 12-acre site where a former Great Indoors store used to be located in the city of Burbank. When it became public that the retail giant had purchased the 120,000-square-foot building, the news didn’t sit too well with many local residents who certainly haven’t hid their distaste for the store moving into the neighborhood. Before this week’s city council meeting, around 30 protestors gathered outside City Hall as a way to pressure council members to block the store’s eventual arrival. The Burbank Leader reports that Kate Nixa, one of the organizers of the demonstration, commented that “Hopefully, as one big voice, the city will hear us. I know they say there's nothing that can be done, but we're trying every angle to see if that's true. We would love to work with the city, not against it.”

However, the land was rightfully purchased and the site is zoned for commercial-retail use, so it is likely there is little the city can do to stop the store’s plans. And it may be hard for the council to turn down the opportunity for raking in large amounts of revenue. Burbank Deputy City Manager Joy Forbes commented during the council’s meeting that “You can't disregard the positive benefits of sales tax revenue [and] jobs creation.”

Nevertheless, opponents are concerned about the impact on small businesses, Wal-Mart’s reputation for poorly paying workers, and the influx of traffic. To allay the fears and concerns of local residents, a Wal-Mart spokesman has announced the store will host public meetings so that members of the community can say their two cents about what they want to see from the store. ABC filed the following report: