Riverside County Grand Jury • 2025-2026

2025-2026 Riverside County Civil Grand Jury Report: Banning - a City Alarmingly Mismanaged

Published: June 08, 2026 18 pages

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Findings 8 findings

The Banning Electric Utility (BEU) went from a $31 million surplus in 2018, to a $9 million deficit in 2022.

Multiple sources have stated that the City of Banning may have transferred revenue from the BEU to the General Fund. These transfers would be in violation of Propositions 26 and 218 after Measure P was rejected by the voters in November 2018.

The Cost Allocation Plan utilized from 2018 to present contains serious errors and lack internal controls.

Per Standard & Poor’s Global Rating Report, the electric system revenue bond rating has been downgraded from A- in 2007 to B (junk status) in 2026.

The City of Banning is currently experiencing a monumental billing crisis due to an antiquated billing system and failed software rollout.

The City of Banning has experienced a substantial turnover of essential personnel.

Human resources policies and procedures are outdated and not enforced, leaving the City vulnerable to litigation.

The City of Banning is currently operating without a strategic plan. RECOMMENDATIONS

Recommendations 10

R1

Conduct a transparent audit of all BEU finances and ledger activity to determine if any fund transfers violated the terms of Propositions 26 and 218 after Measure P was defeated. Based on Findings: F-1, F-2, F-4 Implementation: January 1, 2027 Financial Impact: Low/Moderate
R2

Distinctly separate the BEU financial data from other City departments by reviewing best practices of other cities that operate their own municipal electric utilities. Based on Findings: F-1, F-2, F-4 Implementation: December 31, 2026 Financial Impact: Low/Moderate
R3

Manage Cost Allocation Plans to ensure current, accurate, and transparent documentation. Based on Finding: F-3 Implementation: January 1, 2027 Financial Impact: Low/Moderate
R4

Improve the financial management practices beginning with immediately balancing the budget and bolstering internal control processes. Complete all annual financial reports on time. Based on Finding: F-1, F-3, F-4, F-5, F-8 Implementation: July 1, 2027 Financial Impact: Moderate
R5

Review, compare, and implement a newer software application including Cloud solutions to update the current billing system. Based on Finding: F-5 Implementation: Immediately Financial Impact: Moderate/High
R6

Initiate a comprehensive onboarding and offboarding program to include appropriate training, transfer of knowledge, and clarity for job responsibilities. Take all necessary steps to improve the culture through transparency, training and collaboration. Based on Finding: F-6 Implementation: Immediately Financial Impact: Low 15
R7

Create a central policy location on SharePoint or similar program, organized by department, that is accessible and easy to locate. Update all policies and procedures to reflect current city, state, and federal guidelines and review and revise annually as needed. Enforce policies through staff training and accountability mechanisms. Based on Finding: F-6 and F-7 Implementation: January 1, 2027 Financial Impact: Low/Moderate
R8

Promptly establish an impartial, thorough, and efficient investigation process for all harassment complaints utilizing qualified and trained personnel to ensure due process for every employee including elected officials. Based on Finding: F-6 and F-7 Implementation: Immediately Financial Impact: Low/Moderate
R9

Draft and implement a strategic plan to address all issues related to financial and personnel matters existing within the City of Banning. Based on Finding: F-4 and F-8 Implementation: Immediately Financial Impact: Low/Moderate. REQUIRED RESPONSES Governing bodies have ninety days to respond to Grand Jury report findings and recommendations. Elected officials have sixty days to respond to Grand Jury reports. Both governing bodies and elected officials must submit their written responses to the Grand Jury report findings and recommendations to their county’s Presiding Judge. California Penal Code §933(c) and §933.05 outlines the parameters within which governing bodies are permitted to respond and how responses are structured. Required Respondents: 60-90 day Respondents Findings Recommendations Mayor Richard Royce F1 – F8 R1 – R9 Council Member Cindy Barrington Council Member Sheri Flynn Council Member Leroy Miller Council Member Colleen Wallace City Treasurer Sue Savage F1-F4 R1–R4 Invited Respondents: 60-90 day Respondents Findings Recommendations City Manager, City of Banning F1 – F8 R1 – R9 99 East Ramsey Banning, CA 92220 Riverside County Board of Supervisors F1 – F8 R1 – R9 Member, District 5 Courtesy copy: Courtesy Findings Recommendations Respondent California Attorney General F1 – F8 R1 – R9 17 Reports issued by the Grand Jury do not identify individuals interviewed. Penal Code section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Grand Jury. Report Issued Date: 6-17-2026 Report Public Date: 6-24-2026 Report Due Date: 9-24-2026 18
R60-90

day Respondents Findings Recommendations Mayor Richard Royce F1 – F8 R1 – R9 Council Member Cindy Barrington Council Member Sheri Flynn Council Member Leroy Miller Council Member Colleen Wallace City Treasurer Sue Savage F1-F4 R1–R4 Invited Respondents: