City’s Fiscal Confusion Spurs Calls for Audit : Budget Woes: A $1.4-million refund of money paid into a retirement fund hasn’t affected calls for an outside audit of Oxnard’s city management.
Oxnard officials Wednesday announced a surprise find of $1.4 million to bolster sagging budget reserves, but that didn’t squelch the demand for an investigation to determine whether poor management practices caused the city’s financial crisis.
In fact, the discovery served to illustrate the confusion surrounding Oxnard’s budget.
City managers say they learned of the windfall Tuesday, when the state notified Oxnard that it would receive a refund of some money the city paid into the California Public Employees’ Retirement System (PERS).
“We were shocked,†said Rudy Muravez, Oxnard’s Finance and Management Services director. “We’re not psychics.â€
However, state officials said they notified the city in February that it might get the refund, which stemmed from unexpected investment returns and a reassessment of Oxnard’s pension needs.
The timing issue is important because in October, the city, beset by financial difficulties, cut its expenses by more than $1 million through layoffs and service reductions. Muravez said a search through city files Tuesday had turned up a letter the state sent in February but no accompanying description of a possible surplus.
“The supporting data may be buried under someone’s desk file,†he said. “We don’t know.â€
Last year, for the first time in more than 20 years, Oxnard received a $1.5-million refund, $1.2 million of which was put into the general fund, City Manager David Mora said.
Mora emphasized that the city had no knowledge of the refund money during the last several months of anguished budget discussions and cutbacks.
“PERS is not in any fashion controlled by the city,†Mora said. “It is totally state-administered.â€
The refund probably will go into the reserve fund, Mora said.
Mora said he did not anticipate any restoration of the more than $1 million in reductions from this year’s budget.
Councilwoman Dorothy Maron, however, already is advocating putting some of the funds into a street-sweeping program and a police unit that patrols for truants.
Maron and council members Geraldine Furr and Manuel Lopez said they were pleasantly surprised by the find.
“I’m overjoyed,†Lopez said. “We’ve had so many negative things happen recently, it’s kind of a welcome change.â€
But city leaders are still pushing for a management audit.
“I’m committed to the audit,†Furr said.
At a special meeting Friday, the City Council will discuss hiring a consultant to research how $9 million was sucked from reserve funds during a four-year period, precipitating the need for more than $1 million in cutbacks this year.
“Changes are in process,†Maron said Tuesday at the regularly scheduled meeting. “A management review and audit is being studied. Members of the council are aware of the problems.â€
The management audit should be conducted by a firm that does not presently do business with Oxnard and will not enter into any other contracts with the city for three years, Maron said.
Maron said she wants the audit to include a special review of development projects such as the senior apartment project at South Oxnard Center, which was approved by the council last February. The council discovered last week that a miscalculation had resulted in the loss of about $372,000 in development fees from the complex.
Council member Lopez said he would go along with the audit. Mayor Nao Takasugi and Councilwoman Ann Johs were absent, both attending a National League of Cities conference in Atlanta.
The Oxnard Chamber of Commerce and the Ad Hoc Citizen Financial Advisory Committee pushed for the management investigation.
“This committee is almost blind without an audit to make any decision about what should be done,†committee member Tony Wilson said at a meeting Monday.
The committee, which for 12 weeks has reviewed city finances, is to make recommendations on how to clear up the budget crisis in January.
A management audit would be aimed at clarifying information to be disclosed by the city’s annual financial audit. That report is due in December, as is a city staff study detailing causes for the city’s dramatically flawed misreadings of its own finances.
But even before those disclosures are made, some officials and Oxnard residents have firm ideas on how to begin cleaning up the city’s fiscal mess.
Some city officials--like Mora--are pushing for a “revenue enhancement†measure that would be decided by voters in a June election. Others, like former Councilman Michael Plisky, contend that such a tax is not needed, claiming sufficient funds could be found by eliminating waste in city management.
But proving either contention may force the city to cross a crucial deadline. A management audit could take as long as five months, but the council has only until late February to decide whether to place a tax on the June ballot.
Some fear that an audit also will cost too much money.
A management audit could cost $50,000 to $500,000 depending on the scope of the study, Mora said.
The simplest type of study would examine the structure of city management, determining such things as whether too many or too few employees are reporting to one administrator.
However, a complex study also could be performed, one that would go throughout the city monitoring workers on the job, Mora said.
For instance, consultants would spend one day with a street maintenance crew reviewing how employees are scheduled and how they perform their jobs.
Another day could be spent with the city manager, keeping track of how he spends his time, Mora said.
“If that’s what it takes to convince people that the organizations and services we provide require additional funding, then we ought to do it,†said Mora, who contends that there is little fat left in the city.
The council last week finalized decisions to reduce department budgets and eliminate 15.5 city positions, reducing this year’s budget by $1 million and saving about $1.5 million annually.
The reductions were made on the heels of discoveries that estimates of revenues for the 1988-89 fiscal year were about $2 million too high and that the city had spent $850,000 more than its budget allowed.
The decreases followed $1.9 million in cutbacks that the council instituted in June--resulting in fewer police patrols and occasionally forcing the closing of fire stations on a rotating basis.
Since then, the council has shifted $167,000 to the Police and Fire departments to ease their manpower problems.
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