Audit Released As Long-Time Vernon Official Leaves City

By Elizabeth Hsing-Huei Chou, EGP Staff Writer

A highly-paid financial advisor and former Vernon city administrator officially ended his relationship with the city on Tuesday, just as the results of an investigation into the city’s benefits compensation practices were released.

Some at the city council meeting on Tuesday applauded when it was announced that Eric Fresch would no longer be serving as a consultant to the city as of May 1, nearly two years after his salary, which topped $1 million a year, and the salaries of other city officials, were thrust into the media spotlight.

Fresch was on contract, working on a bond deal for the light and power department, and was paid over $600,000 last year. He submitted his resignation letter last November.

While some in the city are glad to see Fresch gone, the city’s independent ethic’s advisor, John Van de Kamp, said his interactions with the former city administrator have been positive. “I have to say in full disclosure [Fresch] has been cooperative and helpful with me and with the council in this reform process. There are other issues that relate to him that I’m not going to touch on, but that simply needs to be said,” Van de Kamp said during his report at Tuesday’s meeting.

On the same day, CalPERS, the administrators of the state’s public pension fund, released its findings following a yearlong audit of how the city provided benefits to its employees between 2002 and 2010. Among the problems cited by CalPERS was the improper classification of certain employees, including Fresch, as safety personnel, a designation typically applied only to police and fire employees that resulted in Fresch receiving increased benefits.

The city also failed to report that former mayor Leonis Malburg had been convicted of perjury, which “could result in the forfeiture of years of service,” according to CalPERS investigators.

Another former official whose benefits could be affected is former city administrator Bruce Malkenhorst, who is receiving $500,000 a year in retirement benefits. He pleaded guilty to embezzling city money last year.

CalPERS also raised a host of other issues related to the city’s failure to show documentation on employee benefits and compensation, and to prove that benefits paid to employees were based on accurate information.

The findings by the CalPERS auditors could impact over 20 current and former employees, some of whom may have been over compensated, according to the CalPERS’ findings.

However at Tuesday’s council meeting, Van de Kamp said the problems cited in the audit report are “ancient history,” adding that “some of these proposals and findings that have been made by PERS are ones that have been picked up [by the city] and it’s very clear that we’re gong to have to have a very good reporting program for PERS on an ongoing basis….”

Meanwhile, City Administrator Mark Whitworth noted that many of the mistakes found in the audit dated back to 2004 and 2005, and said that the audit’s findings could actually result in money coming back to the city.

Whitworth added that representatives of the state Legislature are back in the city this week to continue their audit of city finances and a report from that audit should be released in the “next couple of months.”

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May 3, 2012  Copyright © 2012 Eastern Group Publications, Inc.

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