A grand jury report alleging financial mismanagement and other issues has sparked some in Sanger to seek the recall of three City Council members.
The notice of intent to recall Michael Montelongo, Rosa Pena and Martin Castellano was issued this past week and comes after the city was subject to a scathing Fresno County grand jury report in May.
The city is in the process of responding to the grand jury's concerns, which include spending money from a lawsuit settlement that should have been used for water projects and the performance of a former city manager's dealings with a developer.
Recall supporters were required got 20 signatures for each petition. They now have 90 days to get an additional 2,000 signatures of registered voters to trigger a recall election.
Sanger Mayor Jose Villareal, who was one of two council members not targeted for recall, said a recall could be disruptive to the city. He said recruitment of a new city manager could be more challenging for council members with a recall looming.
"I always felt recalls are not good for communities, but we may have to go through it and see what happens," he said. "I understand the reasons for the recall, and everyone has a right to take action on things they feel they should."
The grand jury report detailed a series of incidents and said city officials acted improperly and, in some cases, illegally.
One of the grand jury report's most striking accusations is that former city manager Jim Drinkhouse bought a house from a developer for tens of thousands of dollars below market value.
The grand jury said Drinkhouse gave the developer special treatment by allowing him to build homes before they were approved and by letting him "cut corners" on building permits.
In May, Drinkhouse denied giving preferential treatment. He said his wife, who worked for the developer, bought the house and that she was able to get a good deal on the house because she bought it before real estate values had risen, he said.
The report also criticized the City Council for not fully vetting Drinkhouse before hiring him seven years ago.
It said that after he was hired, Drinkhouse told the City Council in closed session that he had been convicted of forgery. The council decided to let him keep his job.
In late February this year, Drinkhouse resigned without explanation and the council agreed to let Drinkhouse collect his salary and benefits for the remainder of his contract through January 2010 -- $233,000.
Both Montelongo and City Attorney David Weiland said Friday that they gave information about Drinkhouse to the U.S. Attorney's Office more than two years ago seeking an investigation. The council placed Drinkhouse on administrative leave for 16 days in July 2007, but could not do much more, they said.
"City attorneys don't have the subpoena power or investigative power the district attorney or U.S. Attorney would have," Weiland said. "We reached a point where we couldn't take it any further."
Neither the district attorney nor U.S. Attorney's offices have cases open involving Drinkhouse, officials said Friday.
The grand jury also made it clear that the city would not be facing the possibility of such drastic budget cuts in the next fiscal year that begins July 1 if it had managed its finances better.
The city is laying off employees and facing a budget deficit of $1.6 million.
Montelongo said Friday that most cities are facing deficits, and making layoffs and seeking employee concessions in salaries and benefits.
"We are in the same category as every other city," he said. "There was no mismanagement of money."
He said the council may have waited too long to make cuts in the hope that revenues would improve.
"I didn't want to lay anyone off," he said.
The city is laying off eight people and cutting a total of 17 positions, Montelongo said.
Bryant Jolley, a certified public accountant who has audited the city's budget, said the city spent more money than it should have in previous years.
But he also said their financial situation is similar to other cities.
"They probably should have seen it coming a little quicker," Jolley said Friday. "Maybe they should have been a little more prudent."
The grand jury report said the city also made loans or spent almost all of the $15 million it received from a legal settlement with chemical and oil companies in the early 1990s.
The money was intended for use on water-related projects, but much of it was lent out for unrelated projects, the grand jury report said.
Weiland and Montelongo said some of the recall supporters were former council members. Weiland said criticism on the use of the water settlement money is "misplaced."
"Some of the people who have stood up at council were previously on councils," he said, "and voted the exact same way."
The reporter can be reached at mbenjamin@fresnobee.com or (559) 441-6166.
http://www.fresnobee.com/local/story/1485605.html
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