Follow up to City Auditor’s November 2018 Report

FOLLOW UP THE CITY AUDITOR’S REPORT OF 2018

 

audit lookBackground

Last year the Finance Director of El Cerrito, Mark Rasiah, hired a new auditor to ensure that the city had a thorough review of the finances. In November of 2018 the City Council received a report from this auditor that raised concern among council members as well as residents in attendance. The ECP initial blog post on that presentation can be found here.

The auditor’s findings raised quite a few questions for us, and we submitted questions in a letter sent to the Finance Director soon after the meeting.  We met with the Finance Director and the new City Manager, Karen Pinkos, on January 24, 2019. Both the City Manager and Finance Director were eager to clarify what they felt were misrepresentations by the auditor when he spoke at the city council meeting. We also had a follow up phone call with the Finance Director on February 6, 2019.

What We Learned

The City Manager and Finance Director explained that the “transfer” of funds is actually a common practice for continuous operating costs.For example, the Integrated Waste Management (IWM) (Recycling Center) continuously generates revenue into the general fund and continues to expend those funds on a revolving basis.What is not  part of a continuously operating budget is the debt that began to accumulate in 2012 due to the statewide shutdowns of redevelopment agencies. According to Mr. Rasiah, the city completed several projects that were never repaid as anticipated, when our Redevelopment Agency ceased to exist. According to the City Manager, the city is involved in litigating the taking of redevelopment money to pay down state debts.  We link to several articles on that below. The Finance Director explained all of this to the city council on January 15, 2018. The presentation can be found here and his slides can be found on page 174 here.

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Currently, the city plans to comply with the audit findings by selling several properties previously purchased by Redevelopment. The Finance Director aims to eliminate the loan from the Recycling Center in the 18/19 Fiscal Year through a mid-year budget modification. If he cannot pay it all off then the balance will carryover into FY 19/20 for repayment. The balance of the loan as of June 30, 2018 is $317,966.

Timing and the Audit – Who Knew What and When

The entire audit was done much later than usual due to the availability of the new auditor. The Finance Director received the initial report in August, and the document required a thorough review by him before release. The former City Manager, Scott Hanin in his report to Council on September 6, 2018, stated that the audit had been released but only made an very vague reference to the issues raised by the auditor. He stated “This was the first year that the new auditors audited the City’s financial records and as a result they made several prior period adjustments in accordance with auditing standards that had not been applied before by the previous auditors, Maze and Associates. The link to that report is here. He also stated that the council would be getting their copies of the CAFR that week which is earlier than the Finance Director told us they received it. There is a question as to why none of the city council members asked staff about the issues after reading the CAFR (which is admittedly a difficult document to read and understand.)

The Finance Director reported that City Council received a hard copy of the Comprehensive Financial Report (CAFR) in October and it went online as public information in early to mid October.

audit findingsIn mid-October, with the report finalized,  the Finance Director made the decision to bring the auditor  to the city council to provide further explanation. The Finance Director said it is atypical that the auditor report the findings to council and this is the first time for a city council presentation in recent memory.  The presentation occurred on November 20, 2018.

Although some community members speculated that the timing of the report was intentionally delayed given the Measure V election, the City Manager and Finance Director both stated that the presentation after the election was a coincidence and that the CAFR was online prior to the election. In regards to the Financial Advisory Board (FAB) The Finance Director stated that FAB did not see any issues with the auditors report that required further review.

Future Plans

The issue of fund transfers alarmed the auditor as well as the staff and city council.  The presentation, which the City Manager thought to be more alarming than necessary, did shed light on the need for the Finance Department to be more transparent and create a paper trail. The Finance Director commented on the lack of documents or even notes to explain some of the earlier practices of the fund transfers conducted by the Finance Department. The Finance Director stated that the city will continue to budget  continuous operating funds like IWM, but these would be handled differently than what the auditor called loans. When asked if there would be a written policy, the Finance Director stated that the Financial Advisory Board (FAB) reviews the policies of the city annually. The FAB is just finishing up this years review. This item will be addressed during the 2019 review which occurs at the end of the calendar year. FAB also reviews the CAFR annually. The review happened as part of a budget review this year (because the CAFR was not completed until August). This past year the review happened in June 2018 and the minutes are linked to here.

The City Manager did agree that the city could do a better job of getting information to the public in a more accessible way. She did point out that the city budget is now easily accessible online via a contract with Open Government. That can be accessed here.

Further Resources/Information

El Cerrito Settles Redevelopment Case.

El Cerrito Surrenders Redevelopment Money to the state

 

We Demand Smart Community-Informed Border Solutions

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Please contact your Congressional representatives!

In the debate about border walls, the (false) alternative to wall has been “increased border security” including more drones, surveillance and an increased Border Patrol presence.

This is not a smart solution. More policing and militarization of the border will lead to increased racial profiling and anxiety in border communities. We don’t need more militarization at the border any more than we need more militarized police forces in our hometowns.

What we DO need is community-informed solutions developed by those most heavily impacted.

The BEST POLICY RECOMMENDATIONS we have found are from The U.S.-Mexico Border Policy Report of 2008. It includes 13 pages of excellent recommendations from their task forced that included the faith community, law enforcement, academics, civic leaders, attorneys and community organizations along the U.S.-Mexico border.

Please consider emailing the letter below to your representatives in Congress through their websites (takes 6 minutes). Note: you will need to reformat the paragraph breaks once you copy and paste the letter.

If you have an extra 30 minutes, please email the senators on the conference committee listed below who are tasked with negotiating an end to the logjam with President Trump vis-à-vis the border wall.

Please reject border security that puts communities at risk – Propose Smart Solutions

Dear ______ ,

I call on you for a border approach that involves affected border communities who understand their situation and their needs.

An armed Border Patrol presence around existing and planned border walls has proven to be lethal too many times according to Southern Border Communities Coalition* that tracks deaths at the hands of the Border Patrol.

The blanket “increased border security” alternative to more walls is NOT a smart solution. More drones and Border Patrol agents too often go hand-in-hand with racial profiling and detention of people who are citizens or those with legal immigration status. This increases anxiety in the community.

According to Ann Williams Cass, Executive Director of Proyecto Azteca and a health care researcher, a recent study of Hidalgo County’s colonias (near McAllen, Texas) found a shocking 80% FOOD INSECURITY RATE among residents because they are too afraid to leave their neighborhood to shop, for fear of being arrested. For comparison, according to the USDA in 2017**  only 11.8% of US households were food insecure. Most of those families in McAllen have money, transportation and access to food stores – but they and their children are going hungry out of fear of arrest. This is just one of many serious and invisible implications of racial profiling and high security along the border.

The Border Patrol needs better vetting as part of their hiring process as well as better training. According to Politico reporting in The Green Monster: How the Border Patrol Became America’s Most Out of Control Law Enforcement Agency the Border Patrol has had serious problems including hiring members of the MS-13 gang and averaging one arrest per day of its own agents in a seven year period.

The US-MEXICO BORDER POLICY REPORT (2008) proposes the BEST COMMUNITY-INFORMED POLICY RECOMMENDATIONS I have seen. PLEASE incorporate their excellent suggestions (pages 21-34).

https://law.utexas.edu/humanrights/borderwall/communities/municipalities-US-Mexico-Border-Policy-Report.pdf

Thank you very much.

Sincerely,

 

*https://www.southernborder.org/deaths_by_border_patrol

**https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-us/key-statistics-graphics.aspx#children

Continue reading “We Demand Smart Community-Informed Border Solutions”

City Council takes “heat” from organized landlord groups

rentersstand updon't pack up (2)When tenants gathered in double digits on December 18th to speak up about protections, they were met by support from three of the City Council members (Mayor Pardue-Okimoto, Council member Lyman, and Council member Fadelli). By the end of a long evening of moving testimony from tenants and discussion amongst themselves, the Council directed staff to draft a Just Cause for Eviction Ordinance and an enforceable mechanism to obtain data from landlords.  Furthermore, they strengthened a Relocation Allowance Ordinance to include additional compensation for vulnerable populations. For details on the Ordinance see the Agenda Packet for the Tuesday, January 15th  meeting. Ordinances for Discussion

Tenants, do not rest! The Statewide California Apartment Association and the Contra Costa Association of Realtors is working diligently and with much funding to stop cities from implementing protections for tenants.  As a result of the Council’s action at the last meeting, According to the staff report, “Both the Contra Costa Association of Realtors (“CCAR”) and California Apartment Association Contra Costa (“CAA”) submitted separate letters alleging that the City Council violated the Brown Act at the December 18, 2018, meeting. CCAR alleged that the amendment to the Tenant Relocation Assistance Ordinance had to be agendized as a separate item of business prior to Council consideration because it constitutes a form of rent control. It also alleged that the direction to staff to prepare Just Cause Eviction and Rent Registry ordinances also had to be agendized. CAA alleged that the Council adopted the amendment to the Tenant Relocation Assistance Ordinance without discussion of the amendment.”  According to the City, none of the claims are supported in the Brown Act itself or applicable case law.

CAA  and the organized realtors are a powerful body.  Their mission is to support landlords.  But we all know not all landlords are equal.  El Cerrito is a relatively small community with a number of local responsible owners who care about their tenants, who do not rent gouge, and who are not making fortunes from their investments.  On the other hand, tenants can speak of landlords who repeatedly raise the rent, refuse to make repairs, and who have the upper hand – evicting renters at will.  At the December Council meeting, both tenants and landlords agree that no one wants to support greedy landlords or negligent  landlords.  The City Council and the community are asking the question, what policies can target those landlords who are putting profit first and community last? How can we develop policies that protect tenants and not punish those landlords who are responsible and providing housing as a service to the residents. What are  your thoughts?

Auditor Findings to El Cerrito City Council Raises Red Flags

At the November 20, 2018 El Cerrito Council meeting the new independent City Auditor Ahmed Badawi presented on the findings.

cityhallFirst a bit of history. The City of El Cerrito’s last 6 audits were conducted by the same auditor. For the 2016-2017 audit,  the El Cerrito Financial Advisory Board (FAB) recommended that the city put out a bid for a new auditor. The bid was late and as a result, the 2016-17 audit only recently came before the City Council in November. Although the auditor completed the final Comprehensive Annual Financial Report (CAFR) in August of 2018, it is not known why the presentation to the Council did not occur until this November meeting.

The findings of the auditor are sobering, according to City Council Member Quinto. To see the video please click here and then go to the Baldawi presentation. Findings included the following:

  • For the last three years the City has been borrowing money from the General Fund to various agencies such as Integrated Waste Management. Those loans totaled about 2 million dollars. For the most part very little if any of that borrowed money has been repaid. The auditor stated that typically loans such as these are used as bridge funds.

For example, city projects that are grant funded are often reimbursable grants.  The City can temporarily use general funds to front projects costs and the City is then reimbursed. This is generally done on a quarterly basis and considered short-term. However, in this case, funds have been outstanding, without reimbursement for almost three years.  As a result, the “so called” balance budget reported by the City staff, and passed by the Council, is by no means balanced. When funds were transferred out of the general fund it was done without action by the Council and without a plan for repayment. The auditor also reported most of those agencies did not have any identifiable ways to pay back the money. He also stated in most cities something like this would normally be approved by council and there would either be a write off of these funds or a repayment plan.

  •  As a result of the above borrowing for the the last three years, the city budget has been showing these loans as assets even though they were not. That money should have been marked as unusable. Essentially the city was spending money they did not actually have.City staff convinced the auditor to postpone the adjustment of  the city budget for this approximately 2 million dollar deficit for FY 16/17 until the completion of the 2018 audit.  There is the suggestion that revenues not previously reported may be forthcoming and reimbursed into the General Fund based on the timing of the review.  The auditor reported that thus far in FY 2018 approximately $300, 000 has been repaid. He anticipates a budget deficit of over 2 million dollars.
  • According to the auditor, the deficit needs to be addressed before any other spending priority. The city cannot operate with a negative balance sheet.
  • During the presentation Councilperson Abelson suggested using transfer tax monies (the result of the passing of Prop V). City staff also said none of that money should be spent until this was figured out.
  • Other council members asked questions that seemed to indicate that they did not understand the severity of this issue. They were talking about building a reserve. The auditor clearly stated you cannot have a reserve if you have a deficit.
  • There was no discussion on how this happened or what was going to change to make this not happen again. The auditor suggested a policy that such loans be approved by city council and the council asked if other councils did this. He answered” yes.
  • The auditor also found a few additional deficiencies. A prior financial report had to be amended due to be incorrect.
  • The closing of the fiscal year was reported to be not done in a timely manner.

Again the auditor is currently working on the FY2018 audit and more information will be known when that report is completed.

Witness at the Texas-Mexico Border

Submitted by Tomi Nagai-Rothe

bollard wall

In June I saw images of tent city prisons built for children separated from their families and all I could think about was the concentration camp where my mother’s family lived for several years during World War II.

The Japanese-American community has made a point of standing in solidarity with those targeted by the US government, including the Muslim community after 9/11. Because almost no one — except for the American Friends Service Committee — stood for them when they were forced out of their homes simply because of their ethnicity. I feel a part of this solidarity movement so that no one and no group targeted because of their identity will feel so alone.

I felt led to do more than organize locally in El Cerrito − to go in person to witness what is happening at the Texas-Mexico border. Going in person felt like one way to embody my commitment.

In October I spent 2 ½ weeks volunteering with the Texas Civil Rights Project (TCRP) in Alamo, Texas just outside McAllen which was ground zero for the family separation crisis over the summer. TCRP interviewed 382 families and organized 90 attorneys as part of the #FamiliesBelongTogether effort over the summer (there are only three attorneys in their Alamo office, and six others in the other TCRP offices).

Humanitarian Respite Center

By October the family crisis had abated somewhat, so I worked on a border wall project. I studied the history of the border wall, including the economic, cultural and environmental impacts and created this illustration of the executive summary of the article, Death, Damage and Failure: Past, Present and Future Impacts of Walls on the US-Mexico Border.

To support the work of the TCRP attorneys I created an interactive map of the landowners affected by the October 10 waiver of 28 federal laws that clears the way for additional border wall construction. TCRP is working with individuals who need help negotiating with the government and cannot afford to hire an attorney.

FINAL Impact of Wall on the Border

On my last day in Texas I volunteered at the Humanitarian Respite Center in McAllen where newly arrived families and individuals gather before taking busses to reunite with family members in other parts of the state or country. I was struck by how young they were — in their 20s and 30s — and how composed they seemed, having experienced unspeakable challenges. Soon after I arrived I started crying inexplicably. I can only guess that it was the feeling of so many people’s trauma in one small room.

When I returned to the office I edited stories of people killed by the Border Patrol for a Dia de Los Muertos Offrenda (altar). It felt important to write a respectful obituary for those who died a violent death. It was an emotional end to an eye-opening visit.

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To learn more about why the Bay Area is a border region, why the Texas-Mexico border has the fewest miles of wall and more, come to Tomi’s talk about her sojourn in South Texas.

Saturday, January 5 3 to 4:30pm at Berkeley Zion Presbyterian Church, 545 Ashbury at Lincoln, El Cerrito

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOP THE TEARS AT THE BORDER!

teargasNationally, Families Belong Together are calling for a National weekend of protest on December 1 and December 2nd.  Locally, West County residents can join the chorus to STOP THE TEARS by Showing UP at the El Cerrito Plaza at Noon on December 1st. Event Sign Up  This visibility action is for ONE HOUR and meant to be a reminder – just 10 hours from our borders, we are placing innocent people in harms way, ignoring international law, and making it virtually impossible for asylum seekers to carry through with their quest for asylum.

When tear gas traveled through the throngs of migrants on the border areas of our State, most citizens stood by horrified by the images of women and children frantically running for safety,   Trumps latest manifestation of a hostile policy toward migrants  follows on the heals of the failing family separation policy,  long term detention of immigrant families, not to mention the newly restricted rules for asylum application.  It is clear that the architects of the current administrative changes at the border are determined to halt any immigration of the refugees who are fleeing from countries that have been torn apart by violence, political corruption and economic deprivation.

Locally, other efforts are underway to support the migrants at the border.

The city of Berkeley will donate money for the migrant caravan to the Interfaith Movement for Human Integrity, not to exceed $250 per council member. Funds will help provide food, shelter and basic needs to caravan members detained at U.S. ports of entry or traveling to immigration hearings, according the Daily Cal (November 28, 2018)

safe_imageTo learn more about the solidarity work that can be done on the border, please join the Interfatih Movement 4 Human Integrity

Saturday, Dec. 8th, 7 pm – 9 pm
People’s Assembly for Migrant Caravan Solidarity
@ 1st Pres. Church Oakland, 2619 Broadway Ave. Oakland
Join IM4HI & the Migrant Welcome Committee of the Bay Area for an evening of sharing and action as we better understand the recent caravans and take action in solidarity with their participants.
  • Find out the root causes of the mass migration of Hondurans and other Central Americans in this historic moment.
  • Hear testimony from participants of the migrant caravans about the realities, stories and power of their journey and collective action.
  • Find out the many ways individuals and organizations right here in the Bay Area can support the material and political goals of the migrants who are seeking asylum in the US.
Financial Donations to support organizations in Tijuana supporting migrants
and migrant legal defense will be collected at this event.