Eureka’s Finance Director responds – Questions remain

city of eureka

Paul Rodrigues, Finance Director, City   of Eureka Responds to Examiner’s Post

The Finance Director commented on yesterday’s POT OF GOLD post. We thank him for taking the time to add a little more information to what has been a void. It was sold to the voters as a very transparent and open process. Read his comment (below) and you well see that he tried to refute our assertions.

Our rebuttal to Mr. Rodrigues is as follows:

The Finance Advisory Committee was never envisioned by the previous City Council as a substitute to the committee described in Measure O -“citizen’s oversight committee shall be established to conduct annual audits”.  It would have said that in the ballot measure or arguments for the measure. For the public’s protection this was supposed to be a completely independent committee. Not the very political, mayor appointed, Finance Advisory Committee.

Audits are very different and are a line by line review of what is taken in and spent.  That is a very different process than the current “oversight” of Measure O.

The Finance Director; “Measure O spending has been budgeted to the tune of about 79 percent to Public Safety.”  Budgeting versus expending is not just a fine point, but something very different.  You can add a budget item for a thousand firemen, but if you don’t actually spend the money, it can easily be recycled into the general fund and spent on whatever pet projects the council wants.

The Committee is not just supposed to be “good with how the money was spent”, it was supposed to detail the expenditures and sign off on those details.

The Finance Director; “Any monies budgeted but not spent are transferred to reserves and designated as having come from Measure O.” After three and a half years of not spending all of the money there must be one hell of a reserve. Please give us the breakdown.  Is there a specific “reserve” for public safety, or is it just put back into the general fund?

The Finance Director; “a quick glance at the site shows that it’s not there. I am having the expenditure report uploaded to the website in the next week or so.” Well good, but it’s been 3 ½ years.

The Finance Director; Measure O contains this “A YES vote means that you support the services and programs provided by our Fire and Police Departments. A YES vote means you value Sequioa Park zoo, safe parks, recreation, and programs to protect the environment.” You are correct sir, it does. Our point is the public campaign was about how Measure O is for Public Safety. Remember the big yellow signs? The Police Dept is woefully understaffed and crimes are up. EPD just took an across the board pay cut.  New officers will be paid less then if they hired last year. We weren’t competitive pay wise to begin with.  Will the Measure O money that is budgeted for public safety, that hasn’t been spent, ever actually be spent on public safety?

The Examiner, upon further study, still believes the City deserves a failing grade.  Has the money actually been spent on public safety?  Or, has all the unspent money gone toward new exhibits at the zoo?  Even worse, has it been spent on other pet projects for the political cronies of current council members?  Why did the police take a pay cut, when Mr. Rodrigues states there are reserves of saved money from Measure O?  These questions can’t be answered unless the public is given the factual information from a citizens committee that does a complete audit of Measure O.

The Finance Director Paul Rodrigues full Comment:

Hello,

My name is Paul Rodrigues and I am the Finance Director for the City of Eureka.

I would be more than happy to have a discussion with anyone who has any questions regarding Meaure O spending or any other questions they may have regarding City of Eureka finances.

It would be nice to have a constructive conversation regarding your assertions, so this is my attempt to address them. Please do not hesitate to either email me at prodrigues@ci.eureka.ca.gov or call me at 441-4114.

The Examiner has taken a look at how measure O promises and pledges have been kept.

Let see how the City of Eureka has done:

“A citizen’s oversight committee shall be established …FAIL”

I respectfully disagree. The Finance Advisory Committee was tasked with taking of the role of overight of Measure O. That does not seem to be a “FAIL” to me.

“Review the City’s expenditure of these revenues generated by the tax…..FAIL”

Again, respectfully disagree. The FAC reviewed the expenditures of the revenuees generated by the tax. Dave Parris, the FAC Chair gave a report, one that you apparently did care for, but that does not change the fact that the commitee reviewed the expenditures and they were good with the way the funds were expended.

“Annual audits of all expenditures generated by the tax……FAIL”

Pass. Again, The FAC was given a detailed list of the expenitures. Further, there are many kinds of audits, ranging in nature and scope from forensic audits which examine every transaction, to annual audits which provide reasonable assurance that the finacial statements are free from material misstatement, to payroll tax audits or bed tax audits, where expenditures are tied from room reports or payroll records to the general ledger, and then to the tax return.

The FAC’s role in oversight of Measure O spending performed an examination which is line with the latter definition, although the City’s financial records ARE audited every year by an independent CPA firm, and Measure O funds are part of that. Again, PASS.

“City post to their website, a detailed spending plan and an annual report from the City of revenues collected and how the funds have been spent……FAIL”

I would not say that this is an A+, perhaps a C- at this point, because a spending plan has been prepared, and it should be on the City’s website, but a quick glance at the site shows that it’s not there. I am having the expenditure report uploaded to the website in the next week or so.

Measure O spending is listed on the website already, though as part of the City’s annual budget, posted on the site the 2013-14 proposed document is the document that was approved by Council last June.

“The bottom line is clear, Measure O was intended to support public safety. One look at the Police Dept staffing (about 15% down) and you can see Measure O money is not being spent on the Police Dept.”

This is simply not the case. Measure O spending has been budgeted to the tune of about 79 percent to Public Safety. Any monies budgeted but not spent are transferred to reserves and designated as having come from Measure O. This is in the interest of being completely transparent and open. When staffing is down, not all of Measure O is spent, but then it is shown as HAVING COME FROM MEASURE O.

When there are sufficient reserves built up, the City Council can look at other Public Safety Expenditures that are more long term in nature, such as the building of a new Fire Department.

The same wording that you’ve used to bring up the oversight commitee and other items also contains this – in fact this wording is at the beginning of the City of Eureka’s Measure O ballot measure:

A YES vote means that you support the services and programs provided by our Fire and Police Departments. A YES vote means you value Sequioa Park zoo, safe parks, recreation, and programs to protect the environment. A YES vote on this measure means a minimal increase in local sales tax in order to raise nearly $3 million annually for 5 years to help fund critical city services. A YES vote means you are taking an active role in protecting our quality of life in Eureka during these difficult economic times.

Thank you very much for your time. Again, I am more than happy to talk in person, over the phone, or via email about this very important issue, and again thanks for the opportunity to perhaps provide some clarification.

Paul Rodrigues, Finance Director,  City of Eureka

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11 thoughts on “Eureka’s Finance Director responds – Questions remain

  1. I don’t understand where the zoo and parks got into the mix of recipients for measure “O” money. This was originally presented as for public safety only. That is police and fire in my book. How did Arkley’s pet zoo project get in line for funds on this second four year extension of the sales tax increase. I wonder?

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  2. If it were anything but the Zoo…. fuzzy little animals huddling together in the perpetual fog. I like the Zoo….

    Yes, there have been two points made that in my view show how corrupt the situation is.

    One: How did the Zoo get mixed into this? At the time of the campaign I do not recall one single mention of the Zoo and parks being in the mix.

    B: With all that money sitting around not doin’ nuthin’… then how does the City of Eureka justify making police officers take a pay cut? I didn’t hear about that either. I imagine the money for the six vacant positions was re-purposed to other departments or projects. But hey… the whole point was to make the police department more attractive to potential new hires so those positions get filled.

    Last I heard, the EPD pays their officers about the least in the area (and far less than the state average). And you do get what you pay for. There is no excuse I can see for making the EPD officers take a pay cut. Perhaps wiser minds than mine can explain it to me (use real short words though as I’m not as sharp as I used to be).

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  3. Just for clarity’s sake I should mention I do not live in Eureka. I live in Fortuna. But occasionally I do go to the big city to get supplies.

    Since Measure O is a sales tax that means I’ve been paying into it along with everyone else in the county.

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  4. I really got to hand the kudos to this blog when you can actually get someone from Eureka city government to respond. Looks like whoever you are you’ve got someone’s attention. Says something about the credibility and viability of anonymous blogs and bloggers. Good work!

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  5. Hello,

    Paul Rodrigues again, and once again thank you for this opportunity to have a meaningful conversation.

    I once again would like to reiterate that I am happy and willing to meet with any member of the public via phone, email or visiting me at my office; in fact I am always up for a cup of coffee, on me (not the city) 🙂

    Again, I am just trying to clarify some apparent misconceptions that I have noticed. I am not trying to to be rude or snarky any way shape or form.

    TuluEX says:

    “The Finance Advisory Committee was never envisioned by the previous City Council as a substitute to the committee described in Measure O -“citizen’s oversight committee shall be established to conduct annual audits”. It would have said that in the ballot measure or arguments for the measure. For the public’s protection this was supposed to be a completely independent committee. Not the very political, mayor appointed, Finance Advisory Committee.”

    Finance Dir Response:

    That is simply not true. The ordinance, as written specifically names the Finance Advisory Committee as a viable Oversight Committee, as opposed to creating another committee.

    TuluEX says:

    “Audits are very different and are a line by line review of what is taken in and spent. That is a very different process than the current “oversight” of Measure O.”

    Finance Dir Response:

    I do not mean any offense, but I would like to know exactly what your qualifications are in determining what constitutes what a proper audit of Measure O. I have been a CPA since 1989, as I have explained in my first post, there are many definitions of what constitutes an audit, and that what the FAC has done falls within those definitions.

    I also explained the City has an annual audit performed by an independent CPA firm each and every year, and that Measure O funds are part of that audit.

    Further, my staff and I can take the Measure O spending and tie it to the general ledger – most went to public safety – AGAIN, I want to reiterate, if any one has any questions call me at 441-4114, email me at prodrigues@ci.eureka.ca.gov, or come see me at City Hall, I’m on the first floor – though right now I am in the Bay Area with one of my kids.

    TuluEX says:

    “The Finance Dwirector; “Measure O spending has been budgeted to the tune of about 79 percent to Public Safety.” Budgeting versus expending is not just a fine point, but something very different. You can add a budget item for a thousand firemen, but if you don’t actually spend the money, it can easily be recycled into the general fund and spent on whatever pet projects the council wants.”

    Finance Director Response:

    That’s why the unspent budgeted expenditures are transferred to reserves and designated as having come from Measure O – that means they are unspent at that point, and are not just spent on some pet projects – labeling them as having come from Measure O provides transparency, and the City Council has been very clear that they want to use these reserves for future public safety costs.

    TuluEX says:

    “The Finance Director; “Any monies budgeted but not spent are transferred to reserves and designated as having come from Measure O.” After three and a half years of not spending all1 of the money there must be one hell of a reserve. Please give us the breakdown. Is there a specific “reserve” for public safety, or is it just put back into the general fund?”

    Finance Dir Response:

    Again, the reserves are set aside and designated as having come from Measure O. For fye 6-30-13,the amount transferred and was almost one million dollars.

    And again, this will allow the Council in the coming years to build up some Measure O reserves and accomplish some long term projects, and as I mentioned before, they would be most likely, public safety projects like a new fire station in another part of the city – that is one example – nothing specific that I can name, as I am not a policy maker.

    TuluEx posts the following:

    “The Finance Director; Measure O contains this “A YES vote means that you support the services and programs provided by our Fire and Police Departments. A YES vote means you value Sequioa Park zoo, safe parks, recreation, and programs to protect the environment.”

    Finance Dir Response:

    This Yes vote verbage comes from the voting guide, not my words, to refute that everything is one hundred percent public safety – but again, public safety is the recipient of 79 percent of budgeted Measure O expenditures, and $$ unspent gets designated as having come from Measure O and is not spent on somebody’s “pet project”

    TuluEx says:

    You are correct sir, it does. Our point is the public campaign was about how Measure O is for Public Safety. Remember the big yellow signs? The Police Dept is woefully understaffed and crimes are up. EPD just took an across the board pay cut. New officers will be paid less then if they hired last year. We weren’t competitive pay wise to begin with. Will the Measure O money that is budgeted for public safety, that hasn’t been spent, ever actually be spent on public safety?

    Finance Dir Response:

    I think I have answered that question – yes, given that Measure O money left unspent in a fiscal year is transferred to reserves and designated as having come from Measure O, it is pretty darn likely that given the history of Measure O spending – primarily on public safety, that those funds will be spent on public safety.

    Also, I encourage any and all to attend our budget workshops and hearings. This is where the City Council receives input from staff and the public, and Measure O is a large part of that process.

    “The Examiner, upon further study, still believes the City deserves a failing grade. Has the money actually been spent on public safety?”

    Yes, to the tune of 79 percent of budgeted expenditures, with unspent going to the reserves, and NOT HIDDEN BUT IDENTIFIED as having come from Measure O.

    “Or, has all the unspent money gone toward new exhibits at the zoo?” NO, NONE OF IT HAS

    ” Even worse, has it been spent on other pet projects for the political cronies of current council members? ” NO, no it as not.

    “Why did the police take a pay cut, when Mr. Rodrigues states there are reserves of saved money from Measure O? These questions can’t be answered unless the public is given the factual information from a citizens committee that does a complete audit of Measure O.”

    Police did not take a “pay cut”.

    Thank you again for this opportunity. I’d love for you to come by and go over this in person – any and all, including TuluwatExaminer.

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  6. Okay TE (alias TuluEx): Were there police wage cuts? And was Measure “O” money spent on the Zoo?

    And Mr. Rodrigues: When you say 79% Measure “O” funds spent on public safety; does that mean 21% wasn’t? Or does it mean it’s sitting in a virtual-world coffee can waiting for it’s moment? In any case, making police salaries competitive sounds like a better use.

    There is a question of credibility here.

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  7. Mola 42, The measure “O” tax increase is only collected in Eureka, not the whole county. So your Fortuna dollars spent, and the “O” portion of the tax paid in Eureka go to the city only. Hope that’s clear.

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  8. Apparently, Measure “O” ballot language using “Citizens’ Oversight Committee” misrepresented the language of the actual ordinance that, instead, listed the city’s Finance Committee. Which came first?

    Before there’s a demand for a separate and independent audit of Measure “O” funds, and in lieu of a Public Records Act Request, the city should provide a detailed report of all Measure “O” funds including supporting schedules.

    Mr. Rodrigues was careful to avoid stating how much is in reserves.

    Following my career in accounting, I have no illusions about the ineffectiveness of statistical analysis of complex transactions. (Banks are among the most regulated, audited, and corrupt institutions in the U.S.).

    Unless there’s a knowledgeable whistle-blower pointing where to look, audits rarely uncover anything.

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  9. hopefully you will post a prominent retraction when you get the facts, not keep it buried in the comments

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  10. Watchman: I thought I was clear. I said I was a Fortuna resident and like nearly all residents of this county (and beyond) I pay into this tax when I buy goods in Eureka.

    I was attempting to make the point this is a tax that concerns everyone including out-of-towner’s like myself since most folks here in Humboldt do at least some shopping in Eureka even if they don’t live there.

    Forgive me if I did fail to make that clear.

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