Ventura County Grand jury investigates, validates Oxnard's capital purchases

Better oversight and transparency is needed when disclosing spending habits, recommends committee

By Paul Sisolak 05/21/2009

When members of Ventura County’s Grand Jury followed up on a request to investigate how much oversight is placed upon Oxnard’s purchasing system, the big query, “Are they doing it right?” arose from allegations that local officials were less than forthright about how city funds are being spent for various public works projects.

The jury released its answer last week revealing that it found “no significant procurement problems” in how the city administers its funds for construction contracts.

Jury members concluded that the city should develop better policies on documenting its spending habits so Oxnard’s Contract Compliance Review Committee, and the public at large, isn’t left wondering if transactions dubious in nature are, in fact, perfectly legal.

Complaints that prompted the grand jury’s investigation involved the city’s spending of about $211,000 for construction of a restroom at Oxnard’s College Park.

Oxnard resident Martin Jones, long an outspoken critic of the city’s handling of finances, and a former candidate for Oxnard treasurer, has blasted the issue because it never came before the city council. And with no city council, he says, comes no opportunity for the public to weigh in.

“Oxnard is not like other cities in the county. It is unique,” Jones says. “There is no transparency if it doesn’t go before city council.”

The grand jury’s discovery in the little-seen city purchasing manual is that transactions of that sort only require city council approval if they exceed $250,000. Contracts between $100,000 and $250,000, the report notes, need only authorization from City Manager Ed Sotelo, who signed off on the deal.

Jones, other residents and even an ex-city councilmember have questioned, additionally, if the city’s procurement of millions in redevelopment dollars toward a major construction project off Highway 101 is legitimate.

In April of last year, some suspicions arose when the city council agreed to forward $12 million in “HERO” funding to Shea Properties, developer of retail center The Collection and its residential counterpart, RiverPark.

The money, they decided, would finance a parking structure on The Collection site, as well as various other infrastructure improvements — curbs, gutters and the like. Two weeks ago, the current city council revisited the issue and added a water main to the list of projects in the $12 million budget.

One concern that was raised centered on the city’s use of redevelopment funds from HERO — short for Historic Enhancement and Revitalization of Oxnard — on a parcel that was hardly developed to begin with, save for the scant building or neighboring strawberry field. Another question mark on the matter was placed by Oxnard resident Shirley Godwin.

She had wondered why Shea Properties, as part of the elusive deal, would be giving the city back $9 million after receiving $12 million in HERO money, and how to account for the remaining $3 million. According to Godwin, the city’s plan, to put its $9 million into the downtown to aid businesses there competing with Collection stores, was disingenuous.

“This was a way to move $9 million of HERO money to the downtown central city,” she said. “Right away, we said, ‘Hey, you can’t do that.’ ”

Tim Flynn agreed, calling the deal a “money swap.” It was one reason why Flynn, then a city councilman, cast the lone dissenting vote on the $12 million transaction. He also criticized the usage of funds, but moreover, how the city amended its airtight theater ordinance to do it.

“We’re undoing our ordinance to benefit them and in the process giving them more money back,” Flynn recalled. “My logic was, if you’re undoing the theater ordinance and giving the city $[9] million, but for us to give them $12 million, that’s a puzzling deal. The city was bamboozled by that.”

But while the grand jury never examined the HERO scenario, it might have found the redevelopment money issue to be another victim of bad transparency because another municipal spending procedure that was perfectly legal still managed to generate grave doubt.

According to Marc Charney, a redevelopment law attorney in Oxnard, one of the reasons why The Collection, for example, is eligible for redevelopment funds in spite of its construction on mostly vacant land is that it falls under the guidelines of old redevelopment law.

“Generally,” he said, “once a redevelopment project is formed, it gets all the benefits, even though the law may have been changed.”

Germination of The Collection project had been envisioned years ago as a “town center,” back when development laws were different, and was criticized heavily.

“Some people were concerned cities were using the redevelopment law to form redevelopment projects not justified by economic blight,” Charney said.

Godwin found this out later, through research of her own.

“Over the years, redevelopment law has changed and changed and changed,” she said.

The money exchange, it turns out, was also an acceptable move by city officials. It was arranged that Shea Properties would invest $9 million back into the downtown’s survival because the downtown theater stands to encumber negative impacts from a newer, bigger multiplex in The Collection’s Century 16.

“It will go towards the downtown and theater in some fashion,” said Curtis Cannon, the city’s community development director. “Basically, because we knew there would be a scheduled impact of the downtown theater, that was part of the discussion.”

The remaining $3 million, according to Cannon, funds the aforementioned infrastructure improvements to The Collection.

However valid, Jones of Oxnard still frowns upon the deal.

“The whole idea of revitalizing downtown might be a noble idea, but I don’t think financing a development on the north side of town is going to help,” he said.

According to Cannon, other projects in Oxnard funded by HERO include construction and improvements to sites that include the Wagon Wheel, Carriage Square, Pleasant Valley Shopping Center, College Park Shopping Center, Channel Islands Shopping Center and former sites of Home Depot, St. John’s Hospital and Oxnard High School.

More on HERO can be found online at communitydevelopment.cityofoxnard.org. For the Ventura County Grand Jury’s full report on Oxnard spending, visit grandjury.countyofventura.org.

paul@vcreporter.com


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