While the City scrambles, TMC’s truth squad, oops, that’s the City’s tag line, has been blogging, reporting and speaking at Council Meetings as to why the Council should not have passed certain loans. In addition, how passing these loans will come back to hurt the tax paying constituents. The states silver bullet of termination appeared to be the only answer. Now 10% of those Enforceable Obligations submitted to the State Finance Department were rejected for not following state guidelines. Enforceable Obligations are legal contracts which declare that one person or agency owes another. The question being asked is were these filing discrepancies inadvertainly overlooked by our protector of citizens, City Attorney Gregory Priamos? And even their hired hand, Best, Best & Krieger? Could these discrepancies possibly be considered faulty legal advice? The City of Riverside shot back at the State Finance Department with the following letter. According to the latest Press Enterprise the City Manager Scott Barber is defending some of the debt.
In the response letter sent back to the State Finance Department by City Manager Scott Barber, he then agreed with the State on the following two items which could not be considered Enforceable Obligations. But shouldn’t the City’s legal council, Riverside City Attorney Gregory Priamos, have been able to clear this question of what is enforceable and what is not?
Page 1, Line Item 38: Grant agreement between City and Housing Authority $60,000,000.00 Page 2, Line Item 13: LM LS Targets of Opportunity-La Sierra/ Arlanza $1,085,749.17
A total of $61,085,749.17 which is due to hit our General Fund.
What is really disturbing in the letter is that Mr. Barber states there are three items of concern that can give way to a rate payer lawsuit. This in response if the State is unable to accept the debt, it will go to Riverside residents in the form of higher utility rates. But in doing so, these would in essence be a violation of proposition 218. These are Page 1, Line Item 29 ($4,329,897.60), Page 1, Line Item 30 ($328,039.22) and Page1, Line Item 32 ($4,793,600.00). Which amounts to $9,451,536.85.
Self Appointed Citizen Auditor, Vivian Moreno, emailed the following letter to Vicki Hightower of the Riverside County District Attorney’s Office indicating our frustration with the use of local resources. The letter was also read to the Council and Mayor at the April 25, 2012 public comment section in council chambers.
The rejections came from California State Department of Finance to the tune of nearly $159 million in projects and debts from Riverside’s former redevelopment agency, potentially leaving the city’s general fund responsible for the amount lost. Did City management commit fraud when submitting inaccurate information to the State of California for responsibility of payment? What role if any did the law firm Best, Best and Krieger have in this? Or is the responsible party ultimately the decision makers, the deciders, the Council and the Mayor?
Above is the letter sent to Vanessa Kirks, Fiscal Manager for the City of Riverside dated April 13, 2012 from Mark Hill, Program Budget Manager for the California State Finance Department detailing the states rejections. What was also found, was that the California Department of Finance sent 55 cities this letter out of over 400 cities with one or more items rejected.
CLICK THIS LINK TO VIEW THE CORRESPONDING DRAFT ROPS SUBMITTED TO THE CALIFORNIA STATE FINANCE DEPARTMENT BY THE CITY OF RIVERSIDE. POINTS HIGHLIGHTED IN YELLOW ARE THE REJECTIONS DETAILED BY THE STATES LETTER.
What people need to know about the relationship between the Redevelopment Agency and the City of Riverside, is that Redevelopment Agency is a state agency. The agency board is made up of your own city council, mayor and employees of the city’s development department. The City and Redevelopment are one in the same, they just change hats. Ultimately, they are responsible for all actions and decisions.
The state then mandated that local oversight boards or succesor agencies be created to organize and dissolve the assets, debts and other obligations of the former Redevelopment Agency. Loveridge stated, “The irony of this is that the state set up these local oversight boards but (the Department of Finance) is setting the rules of the game”. True mayor, but did some of your oversight board actually know some of these loans were wrong? While others may have not? Or were you steered inaccurate legal advice? Also Mayor, when you met with the initial oversight board didn’t you set some rules of the game? It appears that Mayor Ron Loveridge and County Supervisor John Tavaglione appointed each other for Chair and Vice Chair of the Board. Conflict of interest? Or just two peas in the pod? Not to mention, it appears that John Tavaglione is covering all bets by endorsing three mayoral candidates, which are running against each other. Former Councilman Ed Adkison, Councilman Mike Gardner and Councilman William “Rusty” Bailey. But would these endorsements have have anything to do with John Tavaglione running for Congress? Or further, even Richard Roth, Esq., oops General Richard Roth, Esq., who does quite a bit of legal work for the city, such as the current Sgt. Valmont Graham case regarding racial discrimmination issues and a proposed settlement offer in todays city council agenda. Even though they are both endorsed by Mayor Ron Loveridge, is this a conflict of interest? Or just bad, bad business? Even Nick Tavaglione endorses General Richard Roth. Possibly some relation to John Tavaglione? “Oh what a tangled web we weave, when first we practice to deceive” This is pretty bad legal situation for our city and someone needs to be disbarred, but the city which continues to exist in a clouded stupor and may not have the gumption to know the difference. For example, there are City loans made to the redevelopment agency, if not repaid, could be a future hit to the $214 million general fund. The problem is our general fund will not be able to sustain the additional debt load, we our are currently in a deficit as it is. Will this mean layoffs? Program cuts? Department cuts etc. etc.? More utility hikes?
If you were to read the California Department of Finance Question & Answer, which appears our city management did not, it states what is acceptable and what is not. The state even has Question & Answer on Enforceable Obligatons as follows:
The Oversight Board or Succesor Agency, with John Tavaglione and Mayor Ron Loveridge on the sidelines appeared to approve all the obligations for the former RDA and thought they could pull the rug over on the State Finance Department. The City and the Oversight Board sent the state a list of obligations they said were allowed and should be paid under the 2011 law that dissolved redevelopment agencies. The Oversight Board in itself was filled with conflicts of interest, and they obviously acted accordingly and expectably. The state then enforced its own pre-released guidelines, and rejected particular line items accordingly. State officials disagreed with a number of items on the list, including construction contracts for the new downtown fire station, Municipal Auditorium and Doty-Trust Park, as well as a disputed amount of loans from the city to the redevelopment agency and nearly $18 million from bonds issued in 2007 that the state says should not be spent. The City of Riverside took offense, and threatened litigation, well Gregory did, possibly by default.
In response to the State Finance Department rejection letter, City Manager Scott Barber will now send the state a response letter early this week, while Mayor Ron Loveridge will follow up with a trip in person to Sacramento. This will turn into a grand event by having his lobbying group, the League of Cities, behind him?
City Attorney Gregory Priamos stated, “We’re confident that by continuing to engage in a serious dialogue with the Department of Finance that we’re going to solve these issues without the need for litigation.”
But to even think that the city attorney would threaten the state with costly taxpayer litigation without considering the guidelines the state implemented, would be considered political suicide. Especially in a time when the city has less of a revenue stream, but not the city attorney’s office it seems. But of course, this is an office which operates without transperancy and without the duty to divulge expenses to the public, of which the public are entitled to. Many constituents in the City of Riverside are telling TMC that they are questioning Greg Priamos’s abilities and practices, which do not appear to be truly protective of our local constituents interest.
According to the letter sent to the City of Riverside by the State of California Finance Department the state says no to approximately 10% of the submissions, while the City of Riverside of course, as we are now aware, threatens litigation. What the State is saying is that Enforceable Obligations (EO), of which the State cites HSC section 34171 (d) , declares in part that Enforceable Obligations do not include any 1. Agreements, 2. Contracts or 3. Arrangements with City (that created the Redevelopment Agency), and especially the Redevelopment Agency itself. So it appears that the City and the Redevelopment Agency entered into multiple loan agreements. The law appears to be very clear, I’m not sure what part Gregory, our City Attorney and Best, Best & Krieger didn’t quite get? I know that they are both sharp cookies and it would appear to me that they wouldn’t allow the city to submit erroneous paperwork purposely. But what do I know, I’m only a common citizen..
But let’s go a little further down. The State considers the following not EO’s. You cannot make inter agency loans and that’s what the TMC truth team has been trying to tell the Mayor and the City Council. Did the city’s lobbying group The League of California Cities say this was legal.? Did the Greater Riverside Chamber say it was legal? Did our City Attorney Gregory Priamos say it was legal. Did Best Best & Krieger, the City’s hired law firm, say it was legal?
There were loans between RDA and the City totaling $41.3 million. There was a cooperative and an agreement between RDA and the City totaling $61.2 million. There was a loan between RDA and the City Housing Authority totaling $1 million. So far $103.4 million total
Then there was an unused revolving line of credit for $19.9 million. Again it remained unused, but the City still tried to push this through for payment regardless. The State said no, it’s not EO’s. New total is $123.3 million.
There are contracts with the city with other entities, not RDA, that the City tried to pass to the state as a Redevelopment issue for $19.9 million. It said no, these are not EO’s. New total, $143.2 million.
There was various expenditures with no expenditure contracts, similar to how the City handles business with BB&K, with no contracts. The state said no, this amounted to $15.4 million. New total, $158.6 million.
So for now, the City of Riverside claims victim status, blaming the state for themselves over extending the city’s finances. We all know that the City is in denial, they will never admit fault, and will not take a bit of responsibility for their past voting record as they should. Continuing to blame the State Finance Department for themselves incurring our $2 billion in Redevelopment debt, and of course, the constituents of this city will ultimately be responsible for the debt. We must also not forget those who were in charge at the time of these occurrences, such as Former Chief Financial Officer/ Assistant City Manager/ Treasurer Paul Sundeen.
The truth of the matter is that the city can only ‘cry wolf’ a limited amount of times, before the residents of this community realize what they have done. But in all fareness we must allow the city’s newly formed “truth squad” to respond to this conundrum, and we will wait to hear from them.
It is now time time to ask the Public Works Director the question the constituents have been waiting to ask, with regards to bids, contracts, change orders and accountability of which he has taken part of .
UPDATE: 06/01/2012: STATE FINANCE DEPARTMENT SEND LETTER OF APPROVAL TO CITY OF RIVERSIDE ALLOWING COVERAGE OF $26 MILLION OF THE ORIGINAL $156 MILLION ORIGINALLY REJECTED. CURRENTLY, APPROXIMATELY $133 MILLION IS UNACCEPTABLE TO THE STATE OF CALIFORNIA AND REMAINS A DEBT OF THE CITY.
WHAT WOULD JOE ISUZU HAVE TO SAY ABOUT ALL THIS?
UPDATE:04/23/2012: CITY HALL SCUFFLE? Info has been brought to TMC that Councilman Chris Mac Arthur’s aid Chuck Condor was allegedly involved in a scuffle with another individual at City Hall. Condor has been called on the carpet of City Hall for making derogatory remarks such as calling woman commenters “bitches” and “idiots.” This was done in plain sight of others at city meetings. Is Condor out of control? Or is this an accepted part of City Hall culture? TMC has been told Chuck Condor is now on administrative leave, ‘paid leave’? That we do not know. Is Chuck Condor going to lawyer up?
TMC, RATED RIVERSIDE’S MOST “SLANDEROUS” AND
MEZZSPELLED, “MISSPELLED” AND “OPINIONATED” BLOG SITE! TEMPORARILY BLOCKED BY THE CITY OF RIVERSIDE AT PUBLIC ACCESS SITES WITHIN THE CITY, THEN UNBLOCKED. I GUESS YOU CANNOT DO THAT ACCORDING TO ACLU. RATED ONE TWO STAR OUT OF FIVE IN TERMS OF COMMUNITY APPROVAL RATINGS.. TMC IS NOW EXCLUSIVELY ON FILE WITH THE COUNTY OF RIVERSIDE’S DISTRICT ATTORNEY’S OFFICE, AND PROSSIBLY POSSIBLY ON FILE WITH THE CITY OF RIVERSIDE’S POTENTIAL SLAPP SUIT LIST… WE WILL HAVE TO ASK GREGORY ABOUT THAT ONE ( OUR PEOPLE WILL HAVE TO CONTACT HIS PEOPLE)… AGAIN, THANK-YOU COMMUNITY OF RIVERSIDE AND THE CITY OF RIVERSIDE EMPLOYEE’S FOR YOUR SUPPORT! COMMENTS ALWAYS WELCOMED, ESPECIALLY SPELL CHECKERS! EMAIL ANONYMOUSLY WITH YOUR DIRT OR FOR CONTACT! THIRTYMILESCORRUPTION@HOTMAIL.COM