Grand Jury Report Faults City Management


The Los Angeles County Grand Jury has accused the city of Pomona of sloppy management, poor staffing, neglect of affirmative action and failure to resolve financial issues that "threaten to overwhelm the city's resources."

In a report released this week, the panel says the City Council hired an inexperienced city attorney without any formal evaluation process, approved redevelopment deals with the county that could be financially ruinous and agreed to sell land at a bargain price to a private developer without consulting the city's finance director.

The basis for the report is a detailed analysis of city management by the accounting firm of Price Waterhouse. It found an understaffed and under-financed city government making decisions with too little information and relying on employees with inadequate technical expertise.

Mayor Donna Smith said many of the criticisms, which are based on a study that ended in June, are out of date. For example, she said, the city has solved its most pressing financial problems by halting planned reductions in the city utility tax.

City Administrator Julio Fuentes said many of the grand jury's criticisms are valid and that many of its recommendations are being carried out. In fact, he said, the city was working on reforms before the grand jury completed its analysis.

"The city is on the right track," Fuentes insisted. But, he added, "You don't turn an organization around in a year and nine months," referring to his own hiring in 1989 and to major personnel changes that followed.

Eight members of Fuentes' 12-member management team have worked for Pomona less than two years.

The grand jury report does credit the city with recent progress.

"City leaders appear ready to take a new direction, one that will lead (Pomona) away from the controversy, charges of favoritism and negative work environment that were so prevalent two years ago," the report says.

Suzanne Proctor, who headed the grand jury committee on government operations while the study was being done, said she hopes the city will do more with the report than it did with recommendations from the 1987-88 grand jury, which found numerous shortcomings in the city Redevelopment Agency. None of the recommendations from that report were carried out, Proctor said. "Not one."

The new report should fare better, because Pomona asked for the grand jury study and paid two-thirds of its $90,000 cost. The county paid the rest. The city had no control over the findings.

The recommendations were approved by the 1990-91 grand jury before it disbanded in June, but the report was not released until this week in order to give Pomona officials time to review and respond to it.

Fuentes on Monday released a 19-page response to the 160-page report. In general, he stressed the city's extensive efforts to put new policies and procedures in place and to put the city on solid financial footing.

The grand jury report said the city has not developed a long-range financial strategy, even though it "faces several substantial and immediate financial risks." Pomona's financial problems are more acute than other cities, the report said.

The grand jury compared Pomona with four other Southland cities of roughly the same size--Pasadena, Ontario, Riverside and Torrance. The panel found that Pomona has the lowest revenue per capita, but some of the toughest problems. It has more violent crime than any of the other cities, ranks just behind Ontario in population growth and has the second-highest unemployment rate.

To compound its financial problems, the grand jury noted, the city has been steadily reducing one of its major sources of revenue, the utility tax. In addition, the city faces a $4-million shortage in its fund to pay legal claims and a $10-million under-funding of pension obligations.

Fuentes said city officials are doing long-range financial planning, even if no written strategy is in place. Since the grand jury report was written, the City Council has increased the utility tax and other fees and has ordered a study that could lead to higher charges for numerous city services.

The grand jury found that one reason for under-financing is the diversion of property tax revenue to redevelopment projects. Then, the report said, the Redevelopment Agency made a bad decision to share its revenue with the county.

The panel said Pomona's agreements with the county, signed in 1982 and 1988, are "a source of significant financial loss and could be an even greater financial burden in the future."

The complicated agreements, negotiated by the city to obtain the county's help in developing a regional mall, will hurt Pomona financially unless construction begins by July, 1993.

But the mall site is contaminated with hazardous waste, which must be cleaned up. To complicate matters, there are malls proposed in nearby Chino and Chino Hills.

If Pomona's mall is not built, the city will have to repay loans to the county at 7% interest and will have lost other revenue without deriving any benefit.

The grand jury recommended that the city renegotiate the agreements. Fuentes said the city has tried to renegotiate but has no power to force the county to change the terms.

Other issues raised in the report:

* The city adopted an affirmative action policy in 1988 but has no program to carry it out and no system of monitoring compliance. As a result, the grand jury said, the city could face lawsuits over its failure to adhere to minority hiring agreements for the Police and Fire departments.

Fuentes acknowledged the city's tardiness on affirmative action but said a plan will be ready for adoption by December.

* The council hired City Atty. Arnold Glasman and his firm, Glasman, Colvin & Adams, on an interim basis in 1989 and permanently a few months later, although neither Glasman nor his partners had any municipal legal experience.

The grand jury said the council interviewed five firms for the job without setting criteria, then allowed Glasman to approve the form of his contract without outside legal review.

Fuentes said Glasman was versed in municipal law from representing private interests in business transactions with cities and redevelopment agencies.

Councilman Tomas Ursua said the city hired Glasman because he was low bidder. Ursua said Glasman was not his first choice but "we're saving money and the guy works pretty hard."

* The City Council agreed to sell land to a private developer for $620,000 below its appraised value without consulting the finance director or following formal policies or procedures.

The deal involved five acres that the council agreed to sell to San Dimas Mayor Terry Dipple and his partner, Brian Barbuto, last year for $805,000.

The deal was in escrow for more than a year before the council canceled the sale over the objections of Dipple and Barbuto. Fuentes said the sale was a policy decision the council was entitled to make.

* The Redevelopment Agency paid $244,500 to a contractor to work on cleanup of the regional mall site without a written contract. It also failed to monitor costs on other projects.

One law firm that was supposed to get agency approval for any rate increases nearly doubled its hourly rates over six years without any notice to the city.

Fuentes said the agency has established policies and procedures that will require written contracts and monitoring of costs.

* The city has failed to set goals for department heads and to evaluate their performance.

The grand jury said that one department head had not been evaluated in nine years and that the goals established for some departments were so vague (the Police Department is instructed to deliver services in a "realistic, sensitive and positive manner") that it is impossible to measure performance.

Fuentes said previous administrations neglected performance evaluations and admitted that he did not pay much attention to them when many jobs were vacant. Since most of the jobs have been filled, he said, evaluation systems have been put in place.

* The Redevelopment Agency and the community development department are understaffed and the Redevelopment Agency lacks technical expertise.

The grand jury said the city should hire a deputy city administrator, whose responsibilities would include overseeing these agencies, and should fill other vacant positions.

Fuentes said the council has authorized a new deputy city administrator position and the community development and redevelopment staffs are being beefed up.

* The city's coffer for paying insurance claims is under-funded by $4 million. The grand jury says the city's risk management program, which handles worker's compensation and other legal claims, "lacks cohesion and direction."

Fuentes said the program is more comprehensive and better organized than the grand jury suggested. He said he will recommend that the city use new revenue to solve the funding problem.

In addition to the criticisms, the grand jury issued several commendations.

The panel said the Police and Fire departments respond to emergencies just as quickly as departments in comparable cities, although other cities have larger departments.

Fuentes said the grand jury recommendations are helpful and that the study was worth the cost, even though the findings were not surprising.

"It's always good to bring a fresh perspective in from the outside," he said.

Ursua said the report confirms his belief that city government has not been well run and that the city has made poor deals in redevelopment, though he said it is an open question whether "it was because of corruption or stupidity."

The councilman said the city is making progress but still suffers from "sloppiness, waste and inefficiency."

Proctor said the Pomona study was one of the highlights of her term on the grand jury because it offers a means of improving the workings of government.

In this instance, she said, the grand jury was not looking for wrongdoing but for a way of helping a city deal with problems that grew out of years of conflict and turmoil. She said Pomona officials took a very positive attitude toward the study and hopefully "they can use this as a tool of change."

Grand Jury Findings

In its report on Pomona, the Los Angeles County Grand Jury compared the municipality with four other Southern California cities of roughly the same size: Pasadena, Ontario, Riverside and Torrance. The panel found that Pomona has the lowest revenue per capita but some of the toughest problems. It has more violent crime than any of the other cities, ranks just behind Ontario in population growth and has the second-highest unemployment rate.

Population (1990 Census) Pomona: 131,723 Ontario: 129,300 Pasadena: 131,591 Riverside: 218,500 Torrance: 133,107

Total revenues (1989 fiscal year) Pomona: $69,355,844 Ontario: $80,249,025 Pasadena: $251,318,344 Riverside: $306,165,634 Torrance: $120,521,140

Revenue per capita (1989) Pomona: $527 Ontario: $621 Pasadena: $1,910 Riverside: $1,401 Torrance: $905

Full-time city employees Pomona: 844 Ontario: 892 Pasadena: 1,600 Riverside: 1,973 Torrance: 1,366

Population growth from 1980 to 1990 Pomona: 42% Ontario: 46% Pasadena: 11% Riverside: 28% Torrance: 3%.

Average unemployment rate 1990 Pomona: 7.2% Ontario: 5.0% Pasadena: 4.6% Riverside: 7.5% Torrance: 3.3%

Violent crimes as a percentage of all crimes in 1989 Pomona: 21% Ontario: 20% Pasadena: 18% Riverside: 15% Torrance: 11% Note: Pasadena and Riverside own and operate their own electric utilities; the other cities do not. Figures include electric utility revenue of $93.8 million for Pasadena and $131 million for Riverside.

Source: Los Angeles County Grand Jury

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