Friday, October 15, 2010

FW: First District Press Release & Motion

FOR IMMEDIATE RELEASE                                                                                                       

CONTACT:  Roxane Marquez at 213) 974-4111 (office)

or (213) 598-5463 (cellular)











Supervisor Gloria Molina introduced a motion today calling for a comprehensive review of Bell’s financial condition, conducted and paid for by the County of Los Angeles.


“It is imperative that the residents of Bell learn the true facts and figures about their city’s finances.  They want to know if they will still have police, fire and other essential services. They want to know to what degree the city can continue to fund city services.    We must pierce through the growing cloud of uncertainty that has been building” Molina explained.   “This is a basic right and expectation of all Bell residents”.


Under the terms of Molina’s proposal to be voted upon at the October 19, 2010 Board of Supervisors meeting, L.A. County auditors and staff will immediately begin scouring  Bell’s finances, and issue a report on the city’s financial condition within 30 days.  After a meeting this week between Molina and Bell City Manager Pedro Carrillo and City Attorney Jamie Casso, Bell officials welcomed the review and promised full cooperation.


“No matter who runs the city in the future, whether there will be a receiver, or a new City Council is appointed—they will need accurate information about the City’s finances. This just can’t wait” Molina added.


Funding for the audit was pledged from a discretionary First District Supervisorial account.




                                                                                                                                           AGN. NO.           

MOTION BY SUPERVISOR GLORIA MOLINA                                            October 19, 2010

            On September 22, 2010 the California State Controller issued an Audit Report detailing “serious and pervasive” deficiencies in the City of Bell’s administrative and internal accounting controls.   The State Controller’s findings indicate a systemic lack of oversight and serious mismanagement of City finances, particularly in critical areas, such as the City’s levying of taxes and the fiduciary and financial obligations related to the issuance of bonds as well as compensating employees, and accounting for and disbursing public funds. 

These issues appear to be pervasive and longstanding.  As the County is the Treasurer and Tax Collector for all cities in the County, including the City of Bell, the County is responsible for issuing tax bills, collecting taxes and issuing refunds of taxes. Bell’s finances raise issues of serious concern for the protection of the County’s interest, as well as the public’s interest in having a clear understanding of the City’s current financial condition, and to obtain independent verification of the City’s actual income, expenses and liabilities. 

The County and the public must know if the City is fiscally sound, and receive assurances that the City is now being governed with budgetary integrity and transparency.  It is also crucial to know whether the City is solvent, and has the financial resources to continue providing basic services, how much those services cost, and how they will be funded.  Given the deficiencies identified in the State Controller’s report, we cannot rely upon financial records prepared by the City of Bell to answer these questions.  The interest of the County and the public must be protected. 

The City of Bell has expressed their interest in cooperating with the County and will allow the County to conduct an independent review of the City’s finances.

I, THEREFORE, MOVE that the Board of Supervisors direct the Auditor-Controller, with assistance from the Chief Executive Officer:

1)  To conduct a comprehensive review of the financial condition of the City of Bell immediately, addressing the following key areas;

·   The City’s current cash position, including tax collections, investments and other cash-equivalents;

·   Current/Outstanding debts, including authorized and issued bonds, and ongoing debt service costs;

·   Current City contracts, commitments and other obligations;

·   Income and revenue received by the City, and the sources of such income;

·   Core services provided by the City, and the cost of such services.

·   Other City operating expenses.

·   Whether the City has the financial resources to continue as an ongoing concern.

2) Report back to the Board in 30 days with a preliminary review of whether the City of Bell has the resources necessary to continue providing core public services, and a timeline for completion of the full review.  Review should include an assessment of expenditures for each operating budget unit, compared to similar municipalities.

3) Direct the Chief Executive Office and Auditor-Controller to transfer $100,000 from the First District’s Provisional Financing Uses allocation to the Auditor-Controller’s Operating Budget.




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