City of Lake Elsinore

The City Attorney’s contract is renewed annually without the open bid process. The City of Lake Elsinore has continually contracted with one legal firm for the last seven (7) years, without competitive bid. For the year 2004 the legal firm required a $7,000 per month retainer in addition to $155 per hourly fee for other non-specific legal services. The amount of legal services for 2004 exceeded $500,000.

The Grand Jury referred to the California State Attorney General‘s opinion 02-711, dated October 23, 2002, to clarify purchases of third party meals by a City Administrator. The attorney representing the City of Lake Elsinore disagreed with the Attorney General’s opinion and stated that this law applied only to the City Council members.

As of January 1, 2005, Lake Elsinore City Council did not have formal adopted and updated policies and procedures that pertain to the following: - HWBP (Program terminated January 2005) - Credit Card use - Cell Phone use - Travel Reimbursement - City Vehicle Benefits - Car Allowance - Petty Cash Reimbursement - Per Diem Reimbursement - Meal Reimbursement The City’s financial division accepted and approved significant discrepancies in the above programs. 2

As of October of 2004: (a) The City Council has not had Town Hall Meetings on subjects important to the citizens. (b) Some Lake Elsinore citizens have expressed concern regarding the current indebtedness of the City, concluding that they will ultimately be responsible for repayment of the debts from the general funds, which include: - Cost to operate the Diamond Stadium - Cost to subsidize the McVicker Skate Board Park - Bond and Tax Debt (in excess of $170 million) - Attorney and Consultant fees - Salaries for executives, staff and managers. (c) The first of three (3) Redevelopment Agency (RDA) Bonds was issued October 1, 1994, to finance the Diamond Stadium. The bonds were issued to finance cost overruns of the general fund account, which includes the cost to operate the Diamond Stadium. The City Council passed an ordinance to refinance the bonds by allowing the City to issue “Certificate of Participation Bonds” with the RDA. As indicated above in Finding #4b, general funds are being used for the repayment of the bonds. The stadium, since its inception has been operating at a loss. In fiscal year 2003-2004 the stadium expenses exceeded income in excess of $700,000. This situation contributed to the financial problems of the City, causing funds to be diverted from RDA’s low and moderate-income housing development program. (d) The City of Lake Elsinore’s RDA, as stated in Health and Safety Code Section 33334.2 thru 33334.6, requires redevelopment agencies to set aside twenty percent (20%) of the property tax increment receipts to a low and moderate income housing fund. This has been validated by Superior Court Case #CIV271683, dated November 14, 1995. This lawsuit petitions the courts for relief of all city indebtedness by allocating RDA’s twenty percent (20%) set aside designated monies to reduce that indebtedness.

The City of Lake Elsinore does not have a salary plan that includes job definition and stated criteria for advancement. 3

In 1997 land was donated for a potential site of the Diamond Stadium. During the 2004-05 Grand Jury investigation of the donated land, a supplemental agreement document was discovered. This agreement disclosed that fair market compensation would not be realized by the donor if the land was sold to a non-governmental agency within fifty (50) years of the date of donation and the original intent of the donation was not kept.

Based on investigations, one person performs both the duties of City Clerk and Human Resources Director. Some annual personnel evaluations have not been done since 1998. One employee has not received an evaluation for seventeen (17) years.

The City Council has renewed some local contracts annually rather than using the open bid process. Some contracts are incomplete and amendments are unsigned.

The McVicker Skateboard Park is located several miles from downtown Lake Elsinore in McVicker Canyon. The park is operated under contract to a private company. At the present time it is operating at a loss. The location of the park and lack of public transportation for park users has contributed to this loss and has required the City to subsidize the operation of the park to keep it open.

The preliminary procedure for an Employee Development Program (educational training) does not have appropriate requirements and approvals.

In reviewing the Lake Elsinore General Plan it was discovered: (a) The City General Plan, in total, has not been updated since June 1995, but does have a goal to update the land use element/development codes. California State Law, Government Code Section 65300, requires every City and County to adopt a comprehensive, long-term general plan for physical development of the community. 4 (b) The Housing Element was updated in July 2002. The Circulation Element of the General Plan has not been amended since March 1995. The Traffic Study Report, which is a part of the Circulation Element, has not been updated since March 1994. (c) California State Law, Government Code Section 65400 (b), requires local governments to provide an annual report to the legislative body on the status and implementation of the original General Plan, which was adopted on November 27, 1990 and reprinted in March 1995. California Government Code Section 65302 requires planning of the following areas: • Land Use • Circulation / with Congestion Management Plan • Housing • Conservation • Open Space • Noise • Safety (d) In April 2005, the Grand Jury requested the City’s Status Report for the year of 2004 and/or prior years. The Report for 2004 was not submitted to the Grand Jury as requested. It was stated by the Planning Department, “They did not have the required Status Reports, because the department was inadequately staffed.”

The Grand Jury requested information on safety rules and regulations for the use of the lake. The brochures, written only in English, contain important information regarding, boating, fishing, and swimming.

As of January 2005, the City Clerk stated that the City of Lake Elsinore had no Mission Statement. 5