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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Score: +1
(1/0/0)
Monterey County Grand Jury
• 2017-2018
Monterey County Civil
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 14 findings
F2
Committing City funds without having done an investigation of the developer, without adequate deposits and without a firm contract for reimbursement, exposed the City to a potential liability of several hundred thousand dollars.
F3
A lack of transparency contributed to the public criticisms and allegations of financial malfeasance. 16
F4
The lack of clearly defined systems and procedures that were consistently followed contributed to public criticism of the City administration.
F5
The allegation that $50,000 of City funds had been misappropriated resulted from the City’s failure to correctly record a check for that amount that was paid for Project Bella by David Armanasco. This allegation was shown to be incorrect.
F6
The City lacked adequate procedures to account for employee time by project.
F7
The City lacked adequate procedures to track documents.
F8
A lack of appropriate controls on the part of the City administration contributed to unreimbursed costs of more than $101,402.47 to the City.
F9
In the Jury’s opinion, it appears that Mr. Harvey had an advantage in competing for the position of City Manager.
F10
In the Jury’s opinion, the City Manager, Mr. Harvey, displayed a lack of sensitivity to the appearance of a conflict of interest created by joining Jared Ficker’s group membership in Surf Air.
F11
Mr. Harvey’s relationship with members of the Domaine organization resulted in an allegation that he was receiving gifts from Domaine.
F12
Mr. Harvey did not receive the membership in Surf Air from Domaine, as was alleged in a citizen complaint.
F13
Mr. Harvey did not pay for Surf Air for two separate three-month periods.
F14
The cost of Mr. Harvey’s flights to Southern California on Surf Air was substantially greater than the average cost would have been for commercial flights.
F15
The April 19, 2016 re-zoning allows for hotel use at the American Tin Cannery site in the future.
Recommendations 13
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R2The City Council should review and revise Mr. Harvey’s employment contract to clearly spell out the limits of his travel allowance. 17
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R3There should be a sunset date for the reimbursement for Mr. Harvey’s personal travel to Southern California.
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R4Travel of City of Pacific Grove employees should be reimbursed at the lowest practical cost.
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R5The City of Pacific Grove should develop procedures that would enable document tracking.
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R6The City of Pacific Grove should develop procedures that would track employee time by project.
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R7The City of Pacific Grove should develop a comprehensive policies and procedures manual that clearly describes the duties of all employees.
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R8The City of Pacific Grove should develop a policy to improve the transparency of its communication with its citizens.
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R9The County should consider the advantages and disadvantages of a feral cat spay/neuter program, and begin returning neutered feral cats to the field when appropriate.
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R10The County should review and streamline access to the Animal Services website.
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R11When County cat cages require replacement, the County should purchase reconfigurable cages.
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R12A copy of this report should be provided to the Animal Services Administrator.
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R13The Jury requests that copies of both the 5 and 8-month written reports be provided to the Monterey County Civil Grand Jury impaneled as of the date of the release of the reports.
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R14The Jury requests the County and City invite other incorporated cities to join with them in developing a Joint Powers Agreement or Joint Powers Authority so that a separate legal entity could be established to provide animal control services to all jurisdictions within the County.
Conclusions 2
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CL1Inspired by the prospect of significant revenue for the City, the project was pursued without due diligence.
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CL2The Jury does not doubt that the City entered into Project Bella with the best of motivations. However, inspired by the prospect of significant revenue for the City, the project was pursued without due diligence. Ultimately, the only positive result of this project was a zoning change at the ATC site which significantly increased the value of the location. This was at a cost to the city of a minimum of $101,402.47. A new project for a luxury hotel at the ATC site in the future is still a possibility. If the City is able to identify and incorporate the lessons learned from Project Bella, such a project has every possibility of succeeding. Proposed Site of Project Bella 35 “ ICMA Code of Ethics with Guidelines “The ICMA Code of Ethics was adopted by the ICMA membership in 1924, and most recently amended by the membership in June 2017. 14 FACTS (1) November 9, 2015: Notice of an incomplete application to develop the American Tin Cannery site at 125 Ocean View Blvd, Pacific Grove was provided by the Community Economic Development Department to Domaine Pacific Grove LLC. (2) Domaine had 180 days from November 9, 2015 to submit revised plans or the project would be considered withdrawn. (3) Domaine never submitted a complete application which was required for construction of Project Bella. (4) The application fee of $11,044.20 due from Domaine was never received by the City of Pacific Grove. (5) At the commencement of the project, the City failed to follow standard procedure by not requiring a substantial deposit from the developer to cover the City’s project expenses. (6) After the City Manager announced his resignation, Mr. Ficker recommended Mr. Harvey to fill the position of City Manager. (7) January 4, 2016: Ben Harvey began work as an independent contractor. (8) January 20, 2016: Ben Harvey began work as Interim City Manager. (9) January 20, 2016: The City Council approved an agreement for Domaine to reimburse the City for the cost of the special election for a zoning change necessary for Project Bella. (10) January 27, 2016: Mr. Harvey joined a membership group in Surf Air’s private air travel organization. (11) The group membership was owned by Jared Ficker, a friend of Mr. Harvey. (12) Mr. Ficker was also an associate of Ronald Meer who was the president and CEO of Domaine and a member of the Surf Air group. (13) February 17, 2016: The City Council authorized the interim City Manager to enter into a master reimbursement agreement with Domaine which included reimbursing for City staff time. (14) February 17, 2016: In the same City Council meeting the Economic Development Director reported that an estimated $35,000 of City staff time had been devoted to Project Bella. (15) The Jury found no evidence in the City’s documents of a tracking system for staff time. 15 (16) The jury found no evidence that the City had billed Domaine for staff time devoted to Project Bella. (17) April 19, 2016: City of Pacific Grove Special Election approved rezoning the ATC parcel for hotel use. (18) April 20, 2016: Ben Harvey hired as permanent City Manager. (19) June 4, 2016: The City and Domaine signed a second reimbursement agreement that was not presented to the City Council for approval. (20) August 11, 2016: A letter from Jason Letterer, attorney for Domaine, contained Domaine’s offer to reimburse the City for a portion of its Local Coastal Plan costs. (21) Early August, 2016: A $50,000 check from David Armanasco was not properly recorded as a payment for Domaine for more than a month. (22) February 1, 2017: meeting the City Council voted unanimously to no longer seek additional Reimbursement from Domaine for Local Coastal Plan costs. (23) The Jackson Lewis law firm was hired by the City in response to public allegations and criticisms of its decisions and performance. (24) In a City Council meeting, the Jackson Lewis investigator gave a PowerPoint presentation with the conclusion that no evidence of malfeasance had been found. (25) The City of Pacific Grove now has the zoning change that will be necessary for the development of a hotel at the ATC site. (26) The unreimbursed cost of Project Bella to the City has been $101,402.47.
Agency Responses 1
Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.