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Lawndale Aims to Oust Critics From City Panels

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Times Staff Writer

Lawndale City Council members, angered by two residents who have formally challenged the city’s handling of an $8-million federal grant, plan to remove them tonight from their posts on city advisory panels.

Recreation Commissioner Nancy Marthens and Virginia Rhodes, chairwoman of the city’s Beautification Committee, submitted a voluminous bound document to the U.S. Department of Housing and Urban Development in December. They asked the agency to investigate whether the city properly administered the grant, which it lent to the developer of the $70-million Galleria at South Bay in 1984.

In a very brief response, HUD asked the city to respond to the questions raised but did not comment on the substance of the allegations, which include:

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Failure to meet hiring objectives for the employment of Lawndale residents at the mall.

Failure to seek HUD’s approval for a recent refinancing of the mall approved by the council last year.

Failure of the city and the developer, South Bay Associates, to comply with a 10-year restriction on a buyout of the city’s interest in the mall by the developer. The city has been negotiating for at least five months on a proposal by the developer to pay back the loan and buy out the city’s interest in the mall, which could bring a windfall to Lawndale.

Officials declined to state the amount the city would receive, but City Atty. David J. Aleshire said last fall that the buyout would be “certainly worth more than the $8 million” the city originally invested.

Aleshire said in an interview Tuesday that the city has followed proper procedures in administering the federal grant. He said he will draft a formal response to HUD.

Allegations Disputed

He and other city officials disputed the allegations of Marthens and Rhodes.

Members of the council vigorously defended the city’s hiring program, which they said has resulted in several hundred jobs for Lawndale residents.

Aleshire said the city does not need HUD approval for the refinancing because no additional debt would be incurred. HUD has signed off on the agreement, Aleshire said, and the city and the developer need not hold to the 10-year buyout restriction.

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Acting City Manager Jim Arnold said Tuesday that HUD would not have closed out its role in the project had federal officials detected problems with the city’s administration of the funds.

Council Upset

All five members of the City Council said they are upset that Marthens and Rhodes made a formal inquiry that will cost the city thousands of dollars in legal and staff time. Four of the five council members said they will support the removal of Marthens and Rhodes from their city posts. The fifth, Harold E. Hofmann, said he is troubled by their action but has not decided how he would vote on their removal.

Marthens and Rhodes, who both were candidates in the 1988 City Council election, said they have acted in the city’s best interest. They said they are appalled that the council would take away their appointments because they have criticized the city.

Councilman Larry Rudolph, who appointed Marthens to the city’s Parks, Recreation and Social Services Commission last year, delivered a letter to her home Monday asking for her immediate resignation.

In the letter, he said he has “no problem” with her performance on the commission and that she has done “an adequate job.”

HUD Letter Cited

But, he added, “due to your recent letter to HUD, which could cost the city of Lawndale anywhere from $3,000 to $5,000, it is my feeling you cannot work to better the city of Lawndale and try to harm the city of Lawndale at the same time.”

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If necessary, Rudolph said, he will ask the council to remove Marthens.

Councilman Dan McKenzie had placed on tonight’s council agenda an item declaring his intent to remove “a Beautification Committee member.” He confirmed in an interview that he has targeted Rhodes because of her participation with Marthens in calling for the HUD inquiry.

“All they want to do is tear up the city,” McKenzie said.

‘Badgered the City’

Mayor Sarann Kruse and Councilwoman Carol Norman, who are often at odds with McKenzie and Rudolph, also want to remove the two from their city posts. Kruse said that rather than helping Lawndale, Marthens and Rhodes have “constantly badgered the city” with lawsuits and complaints. As city appointees, they have a responsibility to protect the city’s interests, she said, adding: “They can’t play two roles at the same time.”

Rhodes said Tuesday that she sees the council’s plan to remove her from her post as a violation of her right to comment on the actions of elected and public officials. “I didn’t give up my civil rights by being on this committee,” she said.

Marthens said that while city officials are upset at the cost of the HUD investigation, they don’t appear as concerned about whatever staff time may have been spent in inquiries made by Gary McDonald, chairman of the city Planning Commission and a political ally of Rudolph, McKenzie and Hofmann.

Rudolph responded: “The bottom line is that Gary doesn’t go out and cost the city money to defend itself.” The issues McDonald has raised have generated “positive changes,” he said.

‘Benefit to the City’

McDonald said his investigations may have taken staff time but “have turned out to be a benefit to the city, reducing city expenditures.”

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For example, he said, his 1988 discovery of embezzlement in the maintenance department and a subsequent restructuring of the department produced a projected savings of $370,000. His said his discovery of irregularities in the Planning Department has led to projects that are harmonious with the city’s environmental and planning concerns while providing developer fees for traffic improvement.

Marthens said the points she and Rhodes raised with HUD should come as no surprise to the council. “Every issue was raised in open council meetings, but they never bothered to follow through,” Marthens said. “I am a federal taxpayer, and those are federal tax dollars. It bothers me that the federal government would hand over $8 million . . . and not follow up to see the city is complying with the requirements in their agreement.”

Roy Priest, a senior development director for HUD in Washington, said the federal agency does review the administration of such grant funds. Once a city has met its requirements, HUD closes out the agreement and gives the city a certificate of completion, he said. Lawndale has received this certificate, he said, and that normally ends HUD’s involvement unless there is some evidence of malfeasance that requires investigation.

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