❒ Council to mull CalPERS changes for new hires
By Donna Beth Weilenman
Staff Reporter
City Finance Director Rob Sousa says it’s time to seek a replacement company to do Benicia’s audits.
Benicia City Council will be asked Tuesday to accept an annual financial report by auditor Mayer Hoffman McCann for the fiscal year that ended June 30, 2010 — and then to terminate the city’s contract with the auditor.
MHM is the same company that served as auditor for the city of Bell, Calif., which has been mired for months in financial controversy.
The Comprehensive Annual Finance Report for Benicia that MHM prepared has been ready for months, but at its Jan. 6 meeting the city’s Finance, Audit and Budget Committee questioned the auditor’s business practices.
The committee asked the Council to delay accepting the CAFR until a peer review of MHM was finished, particularly since the auditors had been investigated by State Controller John Chiang as part of his quality control review of Bell and the Bell Community Redevelopment Agency, both MHM clients.
In 2010, the small Southern California community of Bell was rocked by a pay scandal that drained that city’s funds through city officials’ high salaries and questionable loans awarded to them — including $1.5 million in annual salary and benefits to Robert Rizzo, the city’s former administrator.
Other Bell council members earned annual salaries of $100,000. At least eight arrests have been made in connection with the scandal.
In contrast, Benicia Council members receive $413 as salary and an additional $75 a month for expenses, a rate that hasn’t changed in more than 15 years. Mayor Elizabeth Patterson receives the same expense account, and $551 monthly.
Chiang’s report accused MHM of failing to follow the majority of applicable, generally accepted fieldwork audit standards.
“MHM appears to have been a rubber stamp rather than a responsible auditor committed to providing the public with the transparency and accountability that could have prevented the mismanagement of the city’s finances by Bell officials,” Chiang wrote.
However, an independent peer review conducted by Carr Riggs and Ingram of Gainesville, Fla., concluded that MHM’s auditing of local governments conformed to professional auditing standards and the firm’s system of quality control.
Jennifer Farr, who works in MHM’s San Jose office, performed Benicia’s audit. The company’s Southern California employees worked with the city of Bell. The CAFR gave Benicia the highest marks available for its financial record-keeping, Sousa said in a report to the Council.
The CAFR is used by rating and lending agencies to determine Benicia’s credit-worthiness; it can affect lending rates and the city’s debt service capacity, Sousa wrote.
In other finance matters, the Council will consider amending its contract with the California Public Employees’ Retirement System, or CalPERS, for local safety employes to provide for a second tier of lower benefits for new employees.
The ordinance that would make those changes was introduced at the March 1 Council meeting, and in future could mean significant savings to the city.
The current retirement formula is 3 percent starting at age 50 and a one-year final compensation period. The amendment would provide for a second tier of retirement benefits of 3 percent at 55, and a three-year final compensation period, wrote Anne Cardwell, administrative services director, in a March 28 report.
Benicia Police Officers Association, Benicia Firefighters Association and unrepresented safety management employees have agreed to the changes.
Savings to the city would begin slowly, Cardwell wrote. But as current employees retire and their replacements are hired at the lower retirement tier, “the cost savings will increase dramatically in future years,” she wrote.
The Council also will be asked to award a $36,000 contract to Civitas Advisors of Sacramento, Oakland and Los Angeles, to study whether a Tourism Business Improvement District should be formed, and to aid in its possible creation.
Civitas would provide local business owners information on business improvement districts, which are a way businesses tax themselves to raise money for specific projects.
In Benicia’s case, this would be to further the city’s tourism program, Mario Giuliani, acting economic development manager, wrote in a March 22 report.
The contract is divided into two parts, with $20,000 earmarked for work associated with studying whether it’s practical to establish the TBID. The money for that portion of the contract has been set aside in a special account, Giuliani wrote.
The balance would be spent on a contingency basis only if local business owners agree to form the district, Giuliani wrote. That portion of the contract would be paid from initial proceeds from the district.
The Council may agree Tuesday to let City Manager Brad Kilger execute a quit-claim deed to Solano County for land under the Benicia Memorial Veterans Hall, 1150 First St.
Recently, representatives of both Benicia and Solano County discovered that part of the Veterans Hall property, a former alley, is owned by the city.
“The county is planning to do upgrades to the Veterans Hall, which require a building permit,” wrote City Attorney Heather McLaughlin in a March 28 report. “The building permit cannot be issued, since the building crosses parcels owned by different entities.”
The alley was vacated for right-of-way purposes in 1985, but the underlying land was not transferred to the county, she wrote. The deed would allow the improvements to be made, she wrote.
In exchange for the land, city staff suggested the county make several improvements, such as moving a transformer behind a dumping bin and enclosing both articles so they can’t be seen from the street; and building a fence to prevent people from parking at the hall and walking down a steep slope to Civic Center Park.
The county has agreed to those additions, McLaughlin wrote.
The Council also will examine the possibility of designing and leasing a 14-foot-by-48-foot electronic billboard to replace the Nationwide sign on city property near Interstate 680.
Last year, CBS Outdoor was chosen as the city’s preferred company for a reader board sign, and negotiations began, Giuliani wrote in a report March 14.
The next step in the process is an exclusive negotiating rights agreement for one year, during which Benicia and CBS Outdoor would try to agree on such terms as lease payments, length of contract and advertising restrictions, he wrote. No decision is required today, Giuliani said.
Staff is beginning to work with the contractor on design review, lease development and public outreach, Giuliani wrote, and among those talks have been the brightness of the digital sign.
“A new sign on this property will financially benefit the city,” he wrote, explaining that the city could receive interest tax, utility users’ tax and direct lease payments if a new sign could replace the inoperative Nationwide sign.
The new sign also could be an advertising opportunity for public messages, he wrote.
The Council also will be asked by the Community Sustainability Commission to spend $3,000 in Valero/Good Neighbor Steering Committee Settlement Agreement funds for the city’s 2011 Earth Day celebration April 21 at Veterans Memorial Hall.
The Council will meet at City Hall at 6 p.m. Tuesday for a closed session to discuss three existing lawsuits. The regular meeting starts at 7 p.m. Tuesday in Council Chambers of City Hall, 250 East L St.
The Council has another closed meeting at 6 p.m. Wednesday at City Hall to confer with labor negotiators.
Rick Ernst says
There are several topics in this article!
The first regarding Bell, CA and the auditor that ignored “a pay scandal that drained that city’s funds through city officials’ high salaries”, a situation similar to Benicia! The auditor ignored their scandal and continues to ignore our scandal! We need to rid ourselves of these auditors and find a company that will help Benicia get on better financial footing!
This article also talks about signs, fences, and labor negotiations, which, of course, the council wants to do behind closed doors! There’s no reason to keep these meetings secret — the city council is obligating the taxpayers of Benicia to pay millions to employees for many years to come — I think we should have a say in this! Apparently, the Council disagrees!
Bob Livesay says
I agree. The only time you will have a say is when they reach an agreement and will have it on the council agenda. At that time CONCERNED BENICIANS will have a chance to say they agree or disagree. If the are bring it to a meeting I would assume they already have decided. It would take a huge turnout to stop it. They would just vote it in. Or as the mayor says hire a consultant. Bob Livesay