A Grand Jury is recommending that Banning start the process of collecting money owed to it by the Banning Chamber of Commerce for utility bills and from a judgment against the chamber’s executive director.
In a report issued recently, the county panel also suggested city officials make sure the chamber complies with all the terms of its lease or be evicted. It also recommended that chamber directors request Jim Smith’s resignation unless he settles up.
“The current situation poses a conflict of interest and is in direct conflict with the chamber mission statement of ‘cooperative interaction among business, government and community,’” the report reads.
The city has to respond to the report within 90 days, but does not have to act on the findings.
“It’s going to be interesting to see how this plays out,” said Councilman Don Peterson.
Peterson, who took office in 2012, is the one who contacted the Grand Jury after he said his colleagues weren’t doing enough to collect what the city is owed.
“We’re entrusted with the people’s money,” he said. “I’m not going to go out there and waste their money.
Banning Mayor Art Welch said he did not want to comment on the issue before it’s discussed at the Tuesday, May 10, City Council meeting. Efforts to reach Smith and City Manager Michael Rock were unsuccessful.
According to the Grand Jury report, the chamber was given a 50-year lease in January 2006 by the city’s Community Redevelopment Agency for the property located at 60 E. Ramsey St. Rent was set at $1 per year.
The lease – which is still in effect – required the chamber to name Banning as an additional insured and as the payee on an insurance policy for the building. An amendment required a minimum $10,000 maintenance fund be established.
But neither action has taken place, according to the report.
The report also noted that the chamber did not pay utility bills incurred between 2006 and 2013 and stated the jury learned the bills were waived based upon a handshake agreement between the city and chamber.
According to the report, the chamber offered to pay back $15,800 at the rate of $32.10 per month over the remaining 41 years of the lease – an offer the city rejected. A year later, the two sides still have not reached a settlement.
Finally, Smith has a judgment against him for nearly $75,000 over a dispute with former Councilwoman Barbara Hanna. The judgment was issued in March 2011 after Smith sued the city, claiming Hanna acted inappropriately in denying him an opportunity to present a business proposal to the city. Smith lost the case and was ordered to pay attorney’s fees.
This is not the first time a Grand Jury has issued a report concerning the city. The Banning Council rejected a 2010 report that sought the return of $162,000 it awarded to the Banning Cultural Alliance.
The panel asserted that the alliance did not fulfill its contractual obligations and that the governing board of the city’s Redevelopment Agency – which was the Banning City Council – seemed willing to provide the nonprofit alliance financing without a measure of accountability.
The agency responded by defending the alliance, calling it an effective partner in redevelopment efforts and saying it has adequately fulfilled its contract.
How council members will respond is unclear. Welch, Debbie Franklin and George Moyer tend to be on one side of issues with Peterson and Edward Miller on the other.
“Having a split council, it will be interesting to see what they do with this report,” Peterson said.
May 6, 2016
The Press Enterprise
By Craig Shultz
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