Friday, Jul. 08, 2011
Merced grand jury addresses Los Banos issues
By COREY PRIDE
cpride@losbanosenterprise.com

A handful of complaints about Los Banos were investigated by the Merced County civil grand jury, but the city has already instituted many of the recommendations.

This year's version of the annual grand jury report addresses the Redevelopment Agency not having enough money in reserve, embezzlements of city funds, possible favoritism involving the Neighborhood Stabilization Program and the police department's need to update equipment.

The grand jury report was released to the public July 1.

The report states that the Los Banos Redevelopment Agency, as of 2009, failed to maintain required minimum reserve funds for the $17 million bond taken out to build the Los Banos Community Center and other projects. The minimum reserve amount is $972,595, but the grand jury found that in June of 2009 the fund was $9,802 short.

RDA Director Elaine Post said the nearly $10,000 discrepancy was because the money needed to be used in place of declining property taxes.

Councilwoman Elizabeth Stone said Los Banos' RDA is not much different than others in the state.

"We knew before this grand jury report that our RDA was not doing as well as it used to," Stone said. "We're not the only ones dipping into our reserves."

Consultant and acting Chief Financial Officer Brent Kuhn disputes the RDA's status. He said the RDA was below the minimum reserve amount because of a formula error by the bond's trustee, U.S. Bank. He said the reserve fund now meets the requirements. However, Post said the reserve is still below the minimum amount because of declining property tax revenue.

Also in the 2010-11 report, a complaint questioned the city's hiring practices because of two embezzlements discovered in the past four years. Allegations against former employees Rachel Solano and Mary Ann Jones were investigated by law enforcement in 2007 and 2009, respectively. In 2007, Solano was arrested on suspicion of embezzling $50,000 during her 20-year career, but she died before her case went to trial. In 2009, Jones pleaded no contest to stealing nearly $2 million from the city between 2005 and 2009. The complaint, which was filed during the previous grand jury's term, also alleged that the police department failed to handle the second embezzlement case properly.

"The Human Resources Department has a formal hiring procedure and such procedure was followed when hiring the second embezzler, who passed the Live Scan Fingerprinting," the grand jury stated.

The report also vindicates the police department, stating that its report was approved by the Merced County District Attorney's Office.

The grand jury recommended that changes suggested in a 2009 audit be implemented. Sonya Williams, Los Banos' accounting and budget supervisor, said the changes were made a while ago. The switch in procedures includes staggering billing cycles, limiting access to cash registers, fixing data entry errors and reconciling sub-ledgers more frequently.

The federal Neighborhood Stabilization Program, which is designed to provide new homeowners with funding to purchase foreclosed residences, came under scrutiny after a complaint alleging local Realtors were not given a fair opportunity to participate by the city.

The grand jury found that the committee which City Manager Steve Rath had set up to choose a real estate agent to represent Los Banos picked a person whose supervisor was part of the panel. The grand jury recommended not allowing members of the committee to benefit financially from the person that's hired.

"Next time I will definitely ask, 'Who do you work for,' " Post said.

The grand jury said the Los Banos jail passed all required inspections, including those from the health department, fire department and juvenile justice agencies.

The grand jury recommended the department purchase larger monitors for its 911 system, replace a fuel generator and establish a maintenance training program.

Read more: http://www.mercedsunstar.com/2011/07/08/1961565/merced-grand-jury-addresses-los.html#ixzz1ReHJNnoE


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