Stanislaus County Grand Jury • 2011-2012

City of Riverbank System Development Funds (Account 145-Overpass) Case 12-16c

7 pages
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Findings and Recommendations 10 findings

F1
City staff has responded to the public with many documents in an attempt to roll forward 25 years of activity in Acct.145-Overpass, without the benefit of a full and complete financial history. The public is left with the impression that funds have been mis-appropriated or misused. The City’s CPA could have provided a more complete and accurate roll-forward for far less money and time spent.
Related Recommendations (1)
R1
The 2011-12 SCCGJ suggests that the City of Riverbank review its need for a City Treasurer. The 2011-12 SCCGJ finds the creation and assignments of the city’s volunteer Finance/Budget Committee is a positive action to involve more members of the public in financial decisions, especially in these tough financial times. However, there are powers, responsibilities and duties granted to a Treasurer that may provide a higher level of over-sight and compliance.
F2
The 2011-12 SCCGJ finds that prior to 1999, the lack of proper and basic accounting policies and procedures, the lack of staff understanding of the fundamentals of accounting processes and an 4 inept accounting software conversion all contributed to the Acct.145-Overpass beginning balance cleanup of $296,497 executed in the 1996-97 financial statements.
Related Recommendations (1)
R2
Obtain the requested written opinion from the City Attorney per the City Council request of January 9, 2012. Provide a copy of the opinion to the SCCGJ.
F3
The City of Riverbank continues to achieve an Unqualified (highest status) audit ranking. No internal control findings or recommendations are being reported by the auditors, an indication that appropriate GASB financial policy and procedural standards are being followed.
Related Recommendations (1)
R3
Complete the System Development Report. Insure that the report is in full compliance with AB1600 (Government Codes 66000 – 66025), including a brief description of the city’s intention of use and feasibility of each fund project. Treat the SDF Report as a living document. This document can serve as a current and historical record of the status for each fund / project, creating accountability for city staff, the foundation for the adherence to GASB 54, full disclosure to the public along with being a historical document for current and future staff and elected city officials.
F4
The additional revenue posted to Acct.145-Overpass in the years of 1998-99, 2001-02 and 2002-03 was proper.
Related Recommendations (1)
R4
Provide a copy of this first “catch-up” SDF Report to the SCCGJ
F5
The total fees collected per Res. 87-68, $397,355 and resulting interest earned over the last 25 years has never provided sufficient funds for the City to complete the Overpass Project. Past and current city officials and staff have allowed Acct. 145-Overpass to remain in existence for 25 years without constructing a capital improvement.
Related Recommendations (1)
R5
The current City Council is now charged with the responsibility of understanding and correcting the action or lack of performance by prior city officials. A first step is an understanding of AB1600 (Government Codes 66000 – 66025). This educational process should be completed by the Mayor, all City Council members, finance staff, City Manager, Development Services Director, Planning Commission and any other participants in city government responsible for compliance with AB1600 California Government Codes (66000-66025).
F6
The 2011-12 SCCGJ concludes that the revenues in Acct. 145-Overpass have not been transferred or spent for general fund purposes or to fund some other undisclosed project. However, in 2008-09 the City of Riverbank began utilizing Account 145-Overpass for the Santa Fe Underpass Project. The core purpose (to mitigate the railroad and traffic issue and to connect the East and West sectors of the City) may be the same, however the actual projects are different. This multi-use of Funds is not in compliance with AB1600. AB1600 Government Codes 66000-66025 AB1600 Government Codes 66000-66025 provides clear direction for the handling and public disclosure for SDF funds, public funds collected for the public and held ‘in trust’ by a local agency. The SCCGJ reviewed the City of Riverbank’s compliance with regards to these codes. The City of Riverbank consultants and staff are currently preparing a System Development Fee Report that will define and summarize the project status of the General and Specific Plans and each SDF fund. The City Council minutes of January 9, 2012 stated, “… the annual (SDF) report will be presented to Council every December 15th and the first catch-up report will be presented as soon as possible.”
Related Recommendations (1)
R6
The City of Riverbank should review, correct and amend its Code of Ordinances related to Building Regulations for System Development Fee Projects for accuracy and compliance with AB1600 Government Codes 66000-66025.
F7
The City of Riverbank, California Code of Ordinances for Building Regulations related to System Development fees and projects, established initially in 1967, do not reference and are not in compliance with AB1600 California Code 66000-66025.
Related Recommendations (1)
R7
AB1600 Government Code 66001 requires that the City Council pass by resolution, the SDF Report. The resulting approval or re-approval, of each SDF fund should be included as part of the resolution. The city’s Financial Records (G/L) should reflect each action. For example, for Acct.145-Overpass, if the City Council decision is to replace the Kentucky/Talbot Overpass Project with the Santa Fe Underpass Project, the financial statements should reflect that decision/ resolution. Acct. 145-Overpass should be closed out and all funds transferred to a new G/L Fund Account (preserving the detail of the Santa Fe Underpass expenditures). This general ledger action will serve as a clear delineation between the projects and will provide compliance with AB1600.
F8
Clearly, there is a need for the City of Riverbank to provide safe access between the East and West ends of town and to overcome the railroad dissection of the City of Riverbank.
Related Recommendations (1)
R8
If the City Council passes a resolution to abandon the East/West Access RR crossing project, obviously, R7 no longer applies and the process of refund should be executed per AB1600.
F9
During the January 9, 2012 council meeting, the City Council asked for an opinion from the City Attorney regarding the proper procedures to address the use or disposition of the balance in Acct. 145-Overpass. As of June 2012, the Mayor has not received a written opinion.
Related Recommendations (1)
R9
Utilize the Finance/Budget Committee to review AB1600 Government Codes 66000-66025 for the benefit of understanding the fiscal and reporting responsibilities for the SDF funds. In addition, the committee can help prepare the city for compliance with GASB 54. Compliance with AB1600 (Government Codes 66000-66025) could reduce audit costs associated with GASB 54. The City’s Certified Public Accounting Firm can provide the specifics of the GASB 54 requirements as it relates to the City of Riverbank’s financial reporting responsibilities.
F10
Though General and Specific Plans have been approved by the current City Council in open and public meetings a review of the March 20, 2012 Downtown Specific Plan does not tie the Plan together with the Funds established and collected for the city’s SDF projects. Consequently, several sections of AB1600 Government Code 66000-66025 appear to be disregarded and/or not fully utilized for; 1) full and clear disclosure to the citizens of the city 2) powers granted to the City Council, and 3) responsibilities and actions that need to be taken by the City Council. 5
Related Recommendations (1)
R10
It is suggested that city staff and the City Council rely heavily on the advice of the City’s CPA and City Attorney to guide the city through the approval of each SDF Fund and the amendments to the SDF Fund City Ordinances for compliance with AB1600 and GASB 54. This report of case #12-16C is issued by the 2011-2012 Stanislaus County Civil Grand Jury and no members of the grand jury volunteered to recuse themselves due to a perceived conflict of interest. Reports issued by the Civil Grand Jury do not identify individuals interviewed. Penal Code § 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 Civil Grand Jury. The California State Legislature has stated that it intends the provisions of Penal Code § 929 prohibiting disclosure of witness identities to encourage full candor in testimony in Civil Grand Jury investigations by protecting the privacy and confidentiality of those who participate in any Civil Grand Jury investigation. The primary function of the SCCGJ is to provide unbiased oversight and to investigate complaints from citizens about the operations of county and city government, school districts and special districts, as required by law. The grand jury is one means to inform citizens that government is operating efficiently and in an ethical, honest manner. The grand jury investigates policies and procedures and makes recommendations to improve local governmental operations. It has no power to enforce its recommendations. It only informs citizens about some of the legislative and administrative work of their local governments. All grand jury investigations and reports are approved by at least a 60% supermajority vote of the entire grand jury panel. Response Requested: City of Riverbank City Council 7

Agency Responses 2

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.