Last week’s attempt by Mr. Herman Hilkey to convince the readers that he had miraculously found the $4.6 million was another attempt to confuse and deceive the public about the truth. It appears that Mr. Schwab has given up trying to confuse you so now Mr. Hilkey volunteered to carry Mr. Schwab’s water on this issue.
Yes, I have voted to approve the Cost Allocation from the Redevelopment Agency to the City’s general fund. This transfer is legally authorized under redevelopment law. It is intended to reimburse the City’s general fund for work performed by city employees on Redevelopment Agency tasks, some of which Mr. Hilkey mentioned in his article. Unfortunately this is not the missing $4.6 million.
The June 30, 2009 annual report of the Community Redevelopment Agency of the City of Grand Terrace prepared by our auditors lists on page 11 under statement of Net Assets “Due from City of Grand Terrace” . . . $4,606,950. It is again listed on page 13 of the Governmental Funds Balance Sheet, “Due from City of Grand Terrace” . . . $4,606,950.
On page 25 of this same report under the heading of “Agency Debt Service Fund” it references “Advances made to City” Balance at June 30, 2009 . . . $4,306,745, with a Total Balance at June 30, 2009 . . . $4,606,950.
Now let’s move to the auditor’s report for the City of Grand Terrace. On page 11 of this report under the heading of “Budget vs Financial Statement Differences” the report states that due to the financial reporting requirement under GASB 34 relating to “advances from the Redevelopment Agency to the City” . . . “These long term advances are now required to be shown as reduction in fund balances rather than a component of long-term debt as done in prior years. Therefore, there is a difference of approximately $4,606,950 between the reporting General Fund and Community Redevelopment Agency Fund Balance Reserve in the budget versus the financial statement.” The auditors have been reporting this discrepancy for many years, but Mr. Schwab managed to keep it from the City Council and the residents.
The final reference to this DEBT is on page 38 of the Audit Report, Notes to Financial Statements under “advances from/to other funds” . . . CRA Low Income Housing Fund $300,000 and CRA Debt Service Fund $4,306,745. Total . . . $4,606,745.
City Staff has been reviewing General Fund expenditures going as far back as twenty (20) years trying to identify any Redevelopment eligible projects or programs. They have been unable to identify a single legitimate entry. The City Manager and Director of Finance wish some or all of this debt could be written off against legitimate RDA funded projects/programs, but nothing has surfaced yet.
I know that this is extremely technical and there are a lot of numbers mentioned. That’s how financial statements and audit reports are prepared. Members of the City Council are not expected to be “experts” on RDA law and financial accounting. That is what Mr. Schwab was hired for. His expertise became so good that it appears he was able to move this money to balance the General Fund Budget without the knowledge of past City Councils. It appears that he was not capable of delivering a balanced budget without “robbing” from the RDA. The auditors caught it and now we have to repay it.
I hope this finally puts this argument to rest. The $4.6 million is gone and now the City and its residents must repay it. Thank you Mr. Schwab.
Gramps Appreciates the Clarification of the spending Walt Stanckiewitz approved. To say the money went to specific projects is wrong if it did it wouldn't have to be paid back. Clearly, people at the top of City Management have been getting paid more than we can afford to pay them. Take Mr. Schwab's 200,000 plus annual cost to the city. If that were cut by 100,000 per year it would account for 3 of the 4.6 million that was drained out of the RDA using Mr. Schwab's accounting and staff recommendations to past city councils.
Mr. Hilkey's grand threat that if we didn't have an RDA and 4.6 million debt to repay, we'd have no Grand Terrace. Well Mr. Hilkey if the County of San Bernardino had been approving the plans for the Senior Center, there will be a Commercial Kitchen in it right now. The competency of running our own Planning Department, Planning Commission has not proven to be all that rewarding for the typical citizen or Business in Grand Terrace.
Mr. Petta and Mr. Hilkey are clear supporters of keeping things the same, and that includes giving Mr. Schwab a seat on the City Council. This would be the worst thing possible as he has a vested interest in maintaining improper management systems in place or not corrected.
The future governance of Grand Terrace will have to be done on a lean financial budget as a result of the economy and past management errors of the Schwab/Berry Administration. Having Mr. Schwab on the City Council will not expedite the process of financial recovery in GT.