We relayed recently that the Tulare County Association of Governments accused the city of Lindsay of misusing taxpayer dollars and TCAG demanded that the city pay back $3.75 million in Measure R funds, which tipped residents over the edge and they initiated a recall of all five council members. However, if the city is forced to pay back that $3.75 million in addition to $1.25 million to the California Housing Finance Agency (CalHFA), then the city may be forced to file for bankruptcy, according to Thomas Young, who audited the city. Young, a member of Brown Armstrong Accountancy Corporation, said former administrators spent wastefully and ignored compliance standards in order to give city workers $1.1 million in fraudulent home loans. The audit report and financial statements show great mismanagement on the part of former City Manager Scot Townsend and former Finance Director/City Clerk Kenny Walker. Townsend resigned and Walker retired last November. The two former officials are shown to be at fault for almost every improper action that the auditors discovered. Unsurprisingly, the audit’s revelations have only angered local residents even more. The Sun Gazette reports:
“’The news is disappointing and we have a long road to hoe to restoring public trust,’ Current City Manager Rich Wilkinson said. ‘We are trying to fix what’s wrong with the city’s internal controls and the audit gives us the tool to do that.’ The draft audit was presented to the City Council at its Sept. 13 meeting. It was precluded by a torrent of outraged citizens wanting answers for the actions of Townsend and Walker and the lack of oversight by the City Council. Excluding Councilmember Ramona Padilla, Lorena Vazquez renounced the City Council for their rubber stamp approval of Townsend and Walker’s actions and said they should pay back all of the taxpayer money they squandered.”
Residents called for the resignation of council members and/or the continuation of the recall campaign. The Recorder reports that Mayor Ed Murray said he is “concerned that the potential (for filing for Chapter 9 bankruptcy) is there. […] Common sense tells me that making payments and letting us pay the money back would be better than having this city go bankrupt. We’ll see what route [the creditors] decide to go.”
While the city is in a bit of turmoil, Council woman Pam Kimball is still optimistic and in an interview with the Recorder, the official commented that “Things are being resolved and dealt with by people who are in the best positions to do so. I’m optimistic that we’re going to get through this, put it behind us and move forward. We’re implementing correct procedures and policies to make sure this sort of thing doesn’t happen again. [...] The motives of this council are as good as you can get. No one has a personal agenda here. We’ve done our best for this town, and we’re still committed to doing that.”
You can read an extensive summary of the audit’s findings here.