Will 2012 Be a Year of Judgment for Riverside?

Let's Get Ready to Rumble...on June 28?

THE SELECTION OF THE NEXT MAYOR PRO TEM NOT AGENDIZED
By Either Mayor Ron Loveridge or Mayor Pro Tem Chris MacArthur

More to come...

Big Shock!!! City clears itself on the contracting for a sewer plant project during its own "independent" investigation! A lot of people are denying it but it appears that the District Attorney's office is doing its own investigation.



A Battle Might be Heating Up on the dais...but does the mayor really control how the council members vote for his understudy?

Is Redevelopment coming to a head in Sacramento? What about all those city loans? Could it be over $100 million erased along with the RDA? Not one city official has answered the question about what would happen to the four buildings serving as collateral for a developer's loan to build a hotel.

[Where the city council/Redevelopment agency puts up four city-owned buildings as collateral to help a developer make bond payments for his new Hyatt Hotel. Click to make it larger.]

Some readers asked for more information on the deal that put two fire stations and two libraries under the Redevelopment Agency so that the city could pay rent and that money would be provided to the developer in the form of a loan for the Hyatt Hotel. Some folks couldn't believe the city would do such a thing and that it just sounded so implausible, so far fetched but it isn't, it actually did happen as the photo of the document language shows. The link for the March 2, 2010 Report #2 is down in the posting. The pertinent language is on page 4.

[The Development Committee meets on the Marcy Library parcel in front of over 50 people]

The committee votes 2-1 to sell Marcy Branch Library to the Lucky Greek restaurant with Councilman Mike Gardner dissenting saying the city has a "fiduciary responsibility" to insure the publicly owned facility draws the top tax dollar. Councilman Steve Adams said nothing he heard at the meeting changed his mind despite the submission of at least two other proposals.

It's very nice to hear council members suddenly so concerned about the survival of one business when they have witnessed at least 16 businesses in the downtown area leave or get forced out by the #1 driving force behind the declining revenues of businesses which is the recession. It's great to hear Councilman Steve Adams say how horrible eminent domain is when he was on the city council when it voted to threaten downtown businesses with eminent domain several years ago, so it could buy those properties with sewer fund money before essentially handing off to developers.

But the city council including this committee needed to follow the process that stresses accountability and transparency to everyone. Not to mention that it needed a much better plan that it has implemented thus far to address the financial hardships of ALL the businesses in the Merrill Street area, not just the ones with powerful friends tied to individuals at City Hall including elected officials.

Maybe small business owners shouldn't even start businesses here unless they build up the power base of influential people to help them first. Because the other businesses damaged by what's going on in the city including the recession and the grade separations have been eminent domained out or forced to fend for themselves.

Watching some known Republicans advocate for corporate welfare was ironic given that some of these same individuals would tell other businesses in dire straits to pick themselves up by their bootstraps and fend for themselves unless it's someone they know. Some top Democrat leaders claimed they were just showing up because this one business was being treated so shabbily. Well guess they haven't been downtown lately and seen what's happened to many businesses there that have been damaged by the recession, all the construction and the hideous parking situation that's chased people out of downtown. Not to mention some of them on the mall being seen as undesirable by those in powerful positions at City Hall.

And what about the couple who own the scuba shop next to the trench, are these same folks going to advocate for them?

They often do the same thing, because the two parties are more alike than different, in that for both of them what's personal becomes political when a situation regardless is closer to home.



CPRC to Hold Meetings in Secret to Avoid Community

[CPRC Commissioner Ken Rotker (r.) pushed for a subcommittee to meet in secret, because he views the community as a "burden" and didn't want to be outnumbered by community members at meetings.]

UPDATE: CPRC votes to hold policy and procedure committee in secret and bar the public from even knowing when and where the meetings take place. Several commissioners allegedly made derogatory comments about the community members being a "burden". These meetings don't have to be conducted in secrecy; the commission minus one member simply doesn't want the community to attend. This apparently has the blessing of CPRC Manager Frank Hauptmann who should have learned from his time addressing issues at Maywood and Bell that increasing the number of secretly conducted meetings isn't the way to go.

Only Commissioner John Brandriff argued against the secretly held meetings and another newer commissioner, called it a campaign speech. But these policy and procedure committee meetings have been held in the public in the past for years before the disbandment. There's no legal rationale behind the secret meetings. It's because two commissioners in particular, Art Santore and Rotker, don't want the public there and the other six apparently don't have the backbone to go up against them or at least provide good reasons why they have to meet privately.


More to come....





UPDATE: Costa Mesa Police Chief Steve Staveley resigns due to the unilateral actions of the city's council involving the police department. Some parts of his resignation notice sound just like another city.

(excerpt)



There are basically two reasons that I leave right now. The first is the 5/8 the council wishes to impose and the second is the layoffs of officers. Just before leaving on a very short trip to the river on the 16th of June, I was informed that all professional employees would be moving to 5/8s. When I first got to Costa Mesa this time, and met with two councilpersons they told me that they wanted everyone on 5/8s (cops too by the way). I told them it was not their responsibility rather that scheduling should match customer need (a scientific method of deployment) and not serve some off the wall bias that they had. More importantly, scheduling is the responsibility of the department head not the council. For council persons to demand such changes is meddling Later our CM told me that he was ordered to put everyone in the professional ranks (non sworn) on 5/8s. I told him I would not support that and for me it was a line in the sand. We had a rather heated discussion on the subject and frankly – I was not very polite – which I do regret. If you let council people meddle is such small matters, is it long before they tell us who we can cite, or arrest, or require us to release or whose burg gets investigated – I think not. It is simply a step to corruption and I won’t play in that arena. Never mind the lack of following the MOU or meeting and conferring on any such changes.



Here is the second reason and I wanted to be sure that you understood why I am resigning now right when I could well be of most value to you and the community. Here is why. It’s very clear to me that there is no fiscal crisis in the City of Costa Mesa. The majority of the council has created budget gaps in order to affect or create the appearance of a fiscal crisis. They have pushed finance and the budget process around to get the kind of numbers that benefit their position. They have in essence lied as they create the appearance of crisis in order to appear as the white knight to a narrow band of political followers. They have done this, I believe, because they have a political need to layoff police officers. This is completely unethical and immoral behavior and I will have no part in it. If I stay, and refuse to sign layoff and demotion notices (which I am fully prepared to do) then Tom Hatch will suffer yet more and be forced to fire me. If I resign prior, at least I save him some pain and he is a good guy, and not deserving of this situation. In fact, I think in the right circumstance (and this is not) he has the potential to be a great CM. In any case I will not help the council majority hurt you, undermine this department and halt the improvement of this community – I simply cannot do that – it would be wrong and frankly hurt my reputation as a professional. I do not expect at my age to have another chiefs job, but I do expect to continue to teach, mentor and be of value and so my reputation is important to me. Even more importantly I expect of myself to do the right thing – and this is the right thing and very painful for me personally. I wish I could stay and try to help you, but I cannot – so I bid you farewell....


I have never, however, seen a council such as this one. They lack skill, training, education, knowledge, they fail to study (or at least learn). The majority either lies or are so lacking in the necessary skills that they actually believe the junk they say. They act as if they are owners of the business that is the municipal government of the City of Costa Mesa, but they are not, they are merely trustees of these public assets both human and physical and they fail in that role completely. They are in my opinion incompetent, unskilled and unethical....


The council majority plays fast and lose with the law and ethics and I am certain as individuals they will step over the line and it won’t be long before the DA or more likely the AGs office comes knocking on the door....

Collateral now, but Collateral Damage Later?

Casa Blanca's library was given to the Redevelopment Agency to be leased by the city to provide funds through the RDA to loan to the developer of the Hyatt Hotel.

Arlington Library the property of the Redevelopment Agency, leased by the city to fund a loan to the developer of the Hyatt Hotel




This agenda report from the March 2, 2010 meeting details the terms of the Hyatt hotel.




[Text of agenda item where it puts up the fire stations and libraries as collateral. Click the photo to make it larger if necessary]

UPDATE: Asst. City Manager of Finance/Chief Financial Officer/City Treasurer says independent audit by Moss Adams of six years of Brad Hudson too expensive and in his opinion, not necessary.

And no bid splitting took place, according to him. But if it ever did or does, he should be notified so he could investigate it.


UPDATE: Robert Slawsby resigns from Community Police Review Commission leaving a Ward Four vacancy to be filled by the city council.

City council to pick an interim city manager during closed session today. Will it be one of the following?

Paul Sundeen

Belinda Graham

Deanna Lorson

David Wright

Tom Evans

or someone else?

UPDATE: Time to Pay the Piper as the city council prepares to raise user fees to deal with the costs of Renaissance. But given that the Park and Recreation Department allegedly had been ordered to use its monies to subsidize the City Hall cafeteria, is it a guarantee that the higher fees will actually be used towards the parks?

UPDATE: the Sacramento Bee' Editorial Board's Letter to Brad Hudson


Former Asst. City Manager Tom DeSantis did not provide answers questions during the interview process by the local press for the town manager position in Gilbert, Arizona.

[Rumors have Michael Beck returning to Riverside as a candidate for city manager but is that true?]

Here it was posted that former Asst. City Manager Michael Beck is the strongest applicant for Riverside's next city manager and that's something that's been floating around since even before Brad Hudson made his exit. After all, he's closely tied to Mayor Ron Loveridge and had been since before his hiring by the city in the specially created job title of deputy city manager. Beck of course had gotten out when the getting was good, moving on to become city manager of Pasadena and some wonder why he would ever want to come back. Especially considering all that's about to unfold about Riverside's actual financial health which will provide an interesting if very sobering contrast to all this mythology that's been spun up and passed out like pixie dust to the city's residents.





And apparently most of the governing body as well.



It had been rumored that Hudson had been working on the next stage of his own Renaissance since the departure of his former assistant city manager, Tom DeSantis last year. And if he were to leave, someone would have to replace him because even though there were three assistant managers, it didn't appear that they might have been experienced or qualified to take the top position even in an interim basis. After all the city council has yet to name an interim manager opting to wait until next week's city council closed session to wait for the atmosphere to cool down. Strange words, considering that they were so effusive in their praise of Hudson at the evening session when Mayor Ron Loveridge announced Hudson's departure. What needs to be cooled down exactly?

Well anyway, it has yet to dawn on the city council certainly the majority of it of exactly what shape the city has been left in after having its budget "balanced" through borrowing money and taking out more bonds. So they praise Hudson in public while they had just gone through a contentious closed session where some of them got a reality check on issues ranging from the rampant discretionary spending and "bid splitting" to the situation involving the over $600,000 given to former part-time employee Connie Leach (formally married to the ex-police chief) much of it in contracts. At least $35,0000 of that money arose from the police department's asset forfeiture fund, where the department donated that money to the Multicultural Youth Festival but dumped it instead in the general fund first. In a sense co-mingling highly restricted funds with funds that aren't restricted. How did that happen, and why wasn't a single elected official on the dais looking into that? Why didn't either the city's internal auditors or its external auditing firm, Meyer Hoffman McCann doing that?

Especially given that this firm audited the asset forfeiture fund up to three times annually during that period or at least it took funds from that fund that many times. But it's mystifying that all these expert auditors both inside and outside the city missed all this because it's like missing a red flag against a white background. With the talk about "pension reform", why not as much discussion about how a part-time employee wound up making much more money in a shorter period of time than many full-time employees with longer tenures with the city? Seriously, questions need to be asked and who's going to ask them?

The city government, don't bank on it because it's more concerned with looking like it's on a sink that's not sinking in public than being honest about what's going on underneath the waves. Last Tuesday's love fest on the dais proved that.

But the issue of the bonds and whether or not the city can actually pay them off beginning next year also caused some discussion.

It will be interesting to see what happens if the city utilizes a similar strategy next year but it will be much more difficult. This is why I find it so difficult to be a mouth for City Hall, to praise elected officials simply because they're in those positions and they are nice to me to get what they want, public relations wise. I don't hang with politicians, don't go to their parties or their social clubs, because they work for me and the rest of the 350,000 residents in this city. And right now, the city government as an entity would be getting a failing grade for dereliction of duty. After reading the documentation that led to the assignment of this failing grade, it wouldn't be professional for me to stand up there and say, hey these are all nice people. I'm sure they are but they're also elected officials who through apathy, ignorance or worse have led our city down a dark path. And they have to answer for what they have done by essentially delegating all of their responsibilities including fiduciary accountability to "staff".

It's beyond time for at least one of them to stand up even if that means going against the grain or the "group think" that they have going on the dais and the candidates who have declared or are even thinking of declaring to join the mayoral free for all next year should seriously consider it a requisite of doing so to stand up and ask the State Comptroller John Chiang to audit the city's financial state. It's time to do what's best for the city and not their own political ambitions.

It might be time to pay the piper soon because remember how many times Sundeen and others on the dais kept saying not to worry because the bonds and loans wouldn't need to start being paid off until 2012? Well guess what, 2012 starts in January, and 2012 might be a year of reckoning in more ways than one when it becomes clear to City Hall that it's facing debts that it can't pay back. That might include millions of dollars in bonds and loans, including many that were to have financed the Riverside Renaissance. This could begin a very painful period for Riverside when those in power realize that the city might not be as solvent as they believed or had been led to believe. But it's not like the city hadn't ever been cautioned about this taking place as even on the evening, when the city launched the Riverside Renaissance to great fanfare at the Riverside Municipal Auditorium, the powers that be just didn't take those cautionary notices seriously.

Caution about spending money on new housing given that this market was about to collapse, causing great devastation to the Inland Empire. Caution about borrowing, borrowing and more borrowing and leaving the future generations the legacy of sky high utility rates, sewer fees and other costs that will be what's needed to generate income to begin to pay off the interest on much of this accumulated debt. These critics or naysayers or gadflies as they are called certainly weren't welcome to this garden party in the guise of a city council meeting but they including the late Yolanda Garland were right to urge the exercise of caution in the five year $2.1 billion Renaissance which might have broken the city's back.

Maybe if the city council members had actually been reading agenda reports and backup documents, bond documents and other written material rather than relying solely on the guidance of staff, much of the upcoming crisis could have been avoided or minimized. But what do you see at meetings? City Council members looking down at their reports just before they're going to be discussed and who knows, that might be the first time they've even seen them let alone read them thoroughly.

They might have raised questions when the city's sewer fund turned into an ATM machine and how discretionary spending was allowed to get so out of control to where Hudson was allowed to spend up to $29 million in one year. The city residents will see just how much when one example of what happened during Hudson's watch is played out publicly. They might have spoken up when loans between the city and a state agency, Redevelopment got conflated into "interfund loans", which if you've been paying attention have been flying fast and furious on city council agendas the past six months. There are reasons for that and financial solvency isn't likely to be one of them. In fact, in some cases it looks like the city's been scrounging including when they took $3.5 million out of a housing program in the Eastside to complete a SERAF payment to the state, on behalf of the city's redevelopment agency which didn't have the funds itself to do that.

Not that the council's paying much attention to it because most of this stuff is on the consent calendar now, millions of dollars in expenditures and transfers among the city's different financial accounts and the separate accounting process of the Redevelopment Agency which belongs to the state. The city council has turned over two fire stations including the new one on Canyon Crest and both the Arlington and Casa Blanca libraries to the RDA and if the city can't pay rent on any or all of them in the future, then what happens? If the RDA dissolves, then what happens to its non-monetary assets? Any loans that are in the RDA are gone forever which means that over $100 million of city funds might be gone forever if that happens. The sad thing, will be if that happens because as it turns out, the city's really going to need that cash soon.

The public was never informed that it would be responsible for financing the hotel, by paying off the bonds through the leasing of four public facilities. We were told the developers would pay them off by our own city government. Even when people went to the podium and asked the government specifically about this, the city council and mayor (and staff) said no cost to the residents. Did any single one of them said, hey we're giving our public facilities to the RDA and hence the state to pay for someone else's hotel, the same one that no reputable financial lending institution would touch with a ten foot pole? The city's pushing "pension reform" yet is financing entertainment venues like the Fox Theater (which if closed will cost at least $2 million annually just to maintain) and hotels?

But this is one of those buildings essentially in hock, the Canyon Crest fire station, a beautiful building which houses fire fighters on duty when they're not on calls. It's now owned by a state agency not the city. So much for public safety because it was one of their buildings that headed the list of expendable real estate.

[Remember when the city council and mayor told you that the city's residents wouldn't put a dime into the cost of the Hyatt Hotel? Wrong! Among other costs, four public buildings now are owned by the state through the RDA so the city can rent them]

But the fire station even though it's essentially in hock as collateral to the state so a developer doesn't have to pay off on the bonds used to build his fancy hotel, at least not right away is much better off than the city's favorite ATM machine, the sewer fund.

"I only look like an ATM machine at City Hall but actually I'm the Sewer Fund."

The Sewer Fund has its own story to tell and it should be allowed to do it. The only question is whether it should be a play in three acts or in iambic pentameter. But even as elected officials lament that it's been drained or depleted and thus unable to do what it's supposed to do which is fund sewer repairs and maintenance, what's being done to stop it from being used as a credit card for everything else?

[Siobhan Foster's background is finance, not public works and certainly not in sewers. What did she do to stop the Sewer Fund from being the city's ATM machine?]

The only problem with allowing the Sewer Fund to tell its story is that there are other city funds out there that will be highly jealous of it. So maybe several plays in three acts will be required.

But perhaps the person to ask about the city's financial status and those of its public buildings now belonging to a state agency is Asst. City Manager of Finance/Chief Financial Officer/City Treasurer (all in two days a week while retired) Paul Sundeen, who pretty much dictated when the city council's own finance committee would meet and what it would discuss according to its current chair, Nancy Hart.

[Asst. City Manager of Finance Paul Sundeen at a Finance Committee meeting reporting on some of the city's finances]

But now that Hudson's left the building, how long will Sundeen hang around? The Finance Committee began meeting in late 2009 after a year's hiatus due to pressure applied in the right place, the city council. Several members in turn started asking for items to be placed on the agenda of those meetings. But this committee needs more action, it needs to look critically at the issues that got our city in these dire financial straits in the first place. Because that's where the city's heading, based on its finances and it's evident at city council meetings which have seen more interfund transfers from Peter's fund to pay Paul's fund in the past six months. Apparently on Tuesday's closed session, the city council and mayor are now cognizant of the truth, well maybe most of it about what Riverside's financial future holds.

It's amazing how many of them actually drank the Koolaid about how Riverside's budget is balanced while other big cities aren't balanced, considering Riverside was at the epicenter of the recession because of its reliance on the new housing construction industry for jobs and revenue. But Riverside had two things to simply delay the inevitable and the first was that it owns its own utilities, and that's been used as a huge source of revenue to pay its other bills. Los Angeles also owns its own utility but it gutted its own years ago doing the same thing. The other factor is that Riverside apparently balanced its budget on borrowing money and buying bonds. Riverside probably doesn't have the income stream (except through increasing fees, taxes and utility rates) to pay off the bonds and loans when they come due beginning next year. That's why the Finance Committee met just this week to discuss users fees (which it usually did in the autumn) including increasing some of the costs again.

But one area where Riverside might be seeing changes soon is increasing vacancies in the employment ranks if people depart from their positions because Hudson's left.

It's not clear how many employees brought in under Hudson including those who had worked in Riverside County will stick around now. It's rumored that Sundeen might retire for real this time and that if he does depart, he might not be the only one.

This rumor's hardly surprising given that the pool of candidates that the city government will wish to select from will be very limited and that the city's apparently still scrambling for a replacement now that City Manager Brad Hudson has left the building. And if they can't keep Hudson, then why not one of his former assistant city managers? And remember DeSantis is busy getting interviewed by three panels for the town manager position in Gilbert, Arizona. Even as the editorial board of the Arizona Republic said the red flags he and other candidates raised took away from the process.

[Facing interviews with three different panels for town manager in Gilbert Arizona, hopefully DeSantis has left his badge at home.]

What's interesting if Beck gets hired, is that he's got a connection to the police department's current assistant chief, Chris Vicino who retired last year from Pasadena's police department after over 20 years of service. He also had been appointed to be interim chief twice while working there and that included one stint while Beck served as city manager. But when it came to picking the city's permanent chief, Vicino hadn't been chosen.

Still when the two met up at a city council meeting not long ago, they seemed to be on fairly good terms.

[Riverside's assistant chief, Chris Vicino retired from Pasadena Police Department after serving as interim chief twice, including once under Beck]

Speaking of Vincino, he's also an instructor at Pasadena City College and has his own Rate My Prof page. But it'll be interesting if Beck were hired, how that would affect the dynamic between Beck as this city's manager, and his former interim chief, Vicino with Chief Sergio Diaz in the middle of them.

Still Beck was tied up with the whole cold plates and flat badges scandals that broke loose last year. In fact, Hudson passed the buck to Beck on the badges saying he and DeSantis (and the city council) received their badges only because the Community Development Department which was under Beck had suggested it. But then Hudson spent most of last year putting both Beck and DeSantis under the bus.

Riverside needs to have an open recruitment and hiring process for the city manager position including input from the public through forums and other means and interview panels which include community members. The community members should be allowed to pick their own questions to ask. If they're gravitating to Beck so quickly and tipping off their friendlies, then that doesn't exactly lend to the belief that the hiring process will be any different than the last time when the city government conducted a faux hiring process for the position while three now ex-councilmen courted Hudson in the wings beginning back a year before Hudson's hiring. If that's true as one of those former officials let slip, then they sought him out while City Manager George Carvalho was still employed. One of those council members, Dom Betro, praised him effusively in the swan song article.


Hudson who was interviewed here by Instant Riverside, a media outlet now bunkering down at the Citrus Grill's old haunt in the Riverside Plaza mall, has moved on to greener pastures supposedly leaving the city government stunned and unaware that he had been working on an exit plan. And leaving a whole lot of hurt in its wake that the city government might finally be waking up to after rubbing the pixie dust out of its collective eyes.

[See ya! Hudson's off to Sacramento, perhaps to run a "Renaissance" up there]

There are media outlets who will praise Hudson and defend him and elected officials but this isn't one of them and there are people who show up to praise the city government and Hudson. This isn't Bell, they keep assuring everyone. But without having read a single public document or doing anything but complaining about the Press Enterprise being too negative in its coverage of City Hall. If these people want to know the truth, they need to start requesting the public documents under the CPRA that they already own and they need to do some serious reading. Then they need to start asking questions because after all, the public is paying for what goes on in the city government.

If that makes me a "critic" to say all this, then that's the truth but the others need to start doing some research on exactly what's the truth behind Hudson's real legacy to this city rather than just ask the foxes guarding the hen house and go, okay that's true because my friends wouldn't lie to me. But what happens when they do, because again, the city government insisted that the city's residents wouldn't be paying for the hotel in any way whatsoever. That it would be on the developer. But then why are four city buildings now belonging to an RDA, and paying rent to solely finance a loan the city through a state agency gave to a developer? And why was the Canyon Crest fire station tossed in there given that it's not even located in a Redevelopment project area?

But what's needed now is to hold the feet to the fire of every elected official on that dais because if Riverside's ever going to get out of the hole it's dug itself into during the past five years, then that's what people need to do. And when the whole truth comes to light as it surely will, there will be many more people doing that.

Just in time for the mayor's race.

Public Meetings

Tuesday, June 21 at 2pm and 6:30pm, the Riverside City Council will meet to discuss this agenda. Money to be spent on three and five year contracts with various vendors. The first phase of a sewer project will be approved for millions and the source is an account from public works. But it doesn't mention where that funding came from.