For the past year, the citizens of Culver City have patiently listened to now-retired City Manager Jerry Fulwood and his staff talk about Culver City’s dire financial state.
(“But we are not as bad off as other cities,” we were told.)
Then after each of these worsening reports was delivered by staff, citizens had to listen as numerous accolades were bestowed upon staff by the City Council for the fine job they had done.
Thank you, city staff for what?
Wasting the city’s money to a point that, now, for the first time in our history, we have to use $ 8 million from the Reserve Fund to balance the budget?
City Council, how about thank you, citizens of Culver City, for paying some of the highest taxes in the state/country, for allowing us to have a 41 percent Reserve Fund.
Now it is the turn of new City Manager Mark Scott, and it started recently when Mr. Scott started to talk about the budget.
He mentioned change, transparency, and sacred cows.
Then the accolades started to flow.
Little Early for Praise?
Mr. Scott was praised for the direction he was taking with the city’s budget process.
Some Council members thanked Mr. Scott, telling him, “This is why we hired you.”
Some Council members, who normally lead the choir of praise for the city staff, were relatively silent. Their perplexed facial expressions and their simple thank yous, and whatever the others said goes for me, too, were unusual responses.
I wondered what Mark Scott said to elicit this kind of response from these Council members.
I think it was the word “transparency,” which caused the worried facial expressions some of the Council members wore. It’s not the fact that what is in the budget is hidden from them, but the fact that it’s hidden from the community they have taken an oath to serve.
Transparency; let’s start with the Reserve Fund.
Who authorized city staff to withhold public funds to increase the Reserve Fund to 41 percent from the Council-authorized 30 percent?
Only the City Council can do that. I guess the community missed that meeting.
This Is Transparency?
But the community was there last year before the big deficit became transparent, when they wanted Culver Boulevard paved, and they wanted an Animal Control Officer.
The community was told, You can’t have those things because we do not have the money.”
Transparency means telling the community the truth. The truth is the city needs the money to pay for large management salaries/benefits packages, unnecessary management positions and unnecessary outside legal counsel/consultants.
Should the community believe city staff when they say we have a Reserve Fund with 41 percent in it.
The answer is “No.”
Little More Applause, Please
If you look at it that additional 11 percent in the Reserve Fund, it is the amount of the deficit that they are tapping into. This is what they will tell you. Because city staff has been so thrifty in saving for a rainy day we can tap into the Reserve Fund for the first time in our history, balance the budget, and still maintain our 30 percent balance.
The City Council can say, “Let’s all stand and give city staff a round of applause. Aren’t they great?”
Where does the extra Reserve Fund money come from?
It’s the money hidden in the \inflated General Fund accounts, retirement, liability reserve, workers comp, city attorney self insurance funds, risk management fund, and the other contractural services fund.
These are the funds city staff uses each year to balance the budget.
How long has the City Council known about this?
In 2005, Mr. Fulwood informed the Council that the General Fund Liability reserves were completely depleted.
He reported that in 2000, the General Fund Liability Account had a $20 million surplus, and it was funded at a rate of $3.5 million each year.
From 2000 to 2005, the city spent $37.5 million over their General Fund budget.
Mr. Fulwood had all of the answers; let him fund the General Fund Liability accounts at $7.5 million a year, and I will build up this reserve for the future.
What happened next is documented history.
Over the last five years, the City Council, Mr. Fulwood and his staff spent the entire $37.5 million in General Reserve Liability Funds, plus an additional $6 million to $8 million shortfall for a total in the neighborhood of $45 million.
Mr. Fulwood and his staff then had the nerve to stand before the City Council and the community to present a financial report blaming this $45 million deficit on the $3.5 million Culver Crest landslide.
What did the City Council say that night when presented with this financial report?
It went something like this:
“We want to thank Mr. Fulwood and his staff for the excellent job they do in preparing these reports and what a pleasure it is working with you.”
Mr. Smith, a retired Culver City police officer, may be contacted at www.scsinternationalinvestigations.com
