City ‘respectfully’ says grand jury report on redevelopment finances was flawed
By Allison Sampite-Montecalvo, U-T San Diego -
IMPERIAL BEACH — City Council members approved a response Aug. 24 to a San Diego County civil grand jury report, saying they disagree with the panel’s conclusions earlier this year that questionable spending and other deficiencies occurred in the city related to redevelopment.
In July 2012, Imperial Beach resident Libi Uremovic filed a complaint that made allegations of fraud, a lack of transparency within city records and failure of the city to act in the best interest of citizens.
The alleged financial misbehavior led to the grand jury’s 2013 investigation, and its report was released May 28.
“The very first summary paragraph of this says, the results of this investigation did not uncover any fraud,” Mayor Jim Janney said. “We did not do anything wrong.”
The investigation included a formal audit of city financial records by the San Diego County Office of Audits and Advisory Services, which examined outsourced attorney charges and employee time allocations from 2010 to 2013.
“We believe that a lot of the findings were reflective mostly of the city trying to navigate a process that was changing midstream,” Assistant City Manager Greg Wade said, “We’ve gone through this very detailed and … we had already implemented many of those recommendations at the time of the audit and made that clear to the auditors.”
Wade said the grand jury report includes significant inaccuracies and misleading statements “that should be and are clarified and corrected in the city’s response.”
The grand jury report provided nine findings and recommendations to the council and city staff. It concluded that labor and legal expenses related to the city’s redevelopment activities should have been better recorded and allocated. It made no allegations of fraud.
“The 2012/2013 (civil) grand jury issued 15 reports this year to various local agencies,” City Attorney Jennifer Lyon said. “These are all policy recommendations ... We’re required to respond. But there’s nothing about the law that requires the city adopt their policy recommendations.”
The state dissolved all California redevelopment agencies beginning Feb. 1, 2012, to help reduce the state budget deficit. The Imperial Beach City Council, like councils in most cities, became the redevelopment successor agency, responsible for paying, performing and enforcing existing obligations.
The agency is required to prepare recognized obligation payment schedules every six months of the fiscal year and disclose the amount and funding source.
Wade said the way the legislation was written complicated the process.
“So poorly written was that legislation that during this dissolution process they rewrote the legislation and adopted a new bill in June of 2012, trying to make clear some of the provisions,” Wade said.
Wade said in May he felt the city had been singled out.
“Generally speaking, the audit period covered a time during which if an auditor were asked to audit any agency in this state, I would venture to guess they would have found much the same thing if not worse,” Wade said.
He said the fact that the city has had all of its recognized obligation payments schedules approved and in on time speaks for its success in navigating the process.
“We’ve met every obligation of the dissolution act,” Wade said. “We have navigated this process better than most agencies in the state of California. Transitioning into dissolution and moving forward, we have weaned ourselves off reliance of those dollars.”
Councilman Ed Spriggs said the allegations have impugned the city and all of its elected officials.
“It isn’t often that a grand jury goes to this length with so many allegations about the conduct of city business,” he said.
Despite the harm, Spriggs asked Lyon to include “respectfully” before each time the response states the word disagrees.
Wade said that, given the challenges of the dissolution process, he acknowledged the city can always do better.
“At the very least, this grand jury audit forced us to do that,” he said.
Mayor Pro Tem Lorie Bragg thanked Wade for the report.
“The last two years of unwinding the RDA were strenuous, rigorous and gut-wrenching, and we survived it,” Bragg said. “It was unchartered waters and those waters changed on a daily basis. I’m proud of the outcome of this. I think that as a small city … we have nothing to be ashamed of.”
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