There was a report this morning in the Daily Breeze about the city of Hawthorne missing $1.3 million from a HUD housing account. Earlier this year, a new City Council majority was elected in Hawthorne, and their first actions were to fire the City Manager and the Police Chief. Before their firing, both had maintained they had done nothing wrong. They charged that the new City Council was on a witch hunt. Both persons had the complete backing of the city manager association and the police chief association.
Significantly, they did not have the backing of their new bosses, and so they were let go.
There is a strong probability that no one person walked away from the city of Hawthorne with large bag of cash. Nor is anyone likely to be prosecuted for this crime.
But the money is gone.
Or someone hid the money, and it will be gone soon.
The money likely left in large pay and benefit packages to management approved over the past few years. You may ask yourself, how can HUD money be used for that? The answer is: very easily.
Here is how it works.
Now You See It, and…
The City Council approves $1.3 million for HUD housing. At the same time, or possibly a year later, the City Council approves big management pay increases. They are advised the revenue is there to fund these pay raises. The fact is, the revenue money is not there. But city management receives their raises anyway, and the HUD housing money never is spent. Therefore, the $1.3 million in HUD money should still be the in the city account.
Except, it is missing. Not missing, really. It is gone.
What About Culver City?
In Culver City, I have no idea how much money is hidden in the Redevelopment Fund or in Culver City’s HUD accounts that is moved around each year.
I do know that the major Culver City General Fund accounts funds that are manipulated each year are the Liability Reserve Funds, Worker Comp Fund, PERS Retirement Fund, and the Employee Salary Accounts. These funds are presented to the City Council each year with doom and gloom scenarios that will support their inflated cost.
The money in the Culver City Employee Salary accounts is inflated. (For example: They tell the City Council that even with this big pay raise, it only takes $13 million a year to pay for 100 police personnel when it actually is costing $15 million to fund these positions. Management adds money to the salary account. The City Council does not know what the salary cost is for 100 police officers. And so if I tell you the cost is $13 million to fund these positions, the Council does not know what the real cost is.
At the end of the year, the $13 million in the salary account is gone by April or May, and money is moved from the various inflated city funds to balance the Year-End Budget.
Anyone who has been around Culver City for the past 30 years has heard city management stand before the City Council in a time of budget shortfalls and make that famous statement:
“We have found one-time money in a city account, and it will take care of the $500,000 to $3 million shortfall that we are facing.”
Everyone on the city staff is praised by the City Council and rewarded with big pay raises.
Sorry, but when I am told someone found $3 million, that implies that the money had been missing. I want to know who lost it or who hid the money from me.
The City Council in Culver City takes the word of the city management staff. In Hawthorne, they did the same thing for years.
Until a new City Council came in and said, “We want to see for ourselves what you have been doing.” People were fired. Audits were completed. And the money is missing.
You can call the actions of the Hawthorne City Council a witch hunt, and you may say ,y essay is the act of a disgruntled ex-employee with an ax to grind.
However, the facts are what they are. I can’t tell you that the Hawthorne City Council is not on a witch hunt. For me, the Bell city management staff said the same things about their current and former employees that exposed their wrongdoing.
Mr. Smith, a retired Culver City police officer, may be contacted at scsinternationalinvestigations.com
