Montebello Voters Reject Sales Tax Hike

November 9, 2017 by · Leave a Comment 

The unofficial results from Tuesday’s election solidified Montebello voters’ overwhelming opposition to Measure S, which proposed a 0.75 percent hike in the city’s sales tax to bring new revenue to the city.

Despite Montebello officials repeatedly declaring the sales tax increase was necessary, Measure S was soundly defeated with a large difference of 2,213 (62.13 percent) to 1,349 (37.87 percent) votes.

After declaring a financial emergency, the Montebello City Council in May voted to hold a special election on Nov. 7 to ask voters to raise the sales tax.

City officials originally wanted to hike the sales tax by 1-cent and projected a $9 million jump in revenue if the measure were to pass, but were later forced to lower the projection to $6.75 million to comply with a state law regulating the amount local municipalities can charge in sales tax.

Because Los Angeles County voters had approved a quarter-cent sales tax hike in March to pay for services for the homeless, which went into on Oct. 1, Montebello officials were forced to lower their ask to .75-cents to avoid violating the cap, causing the drop in projected revenue.

The city said the added revenue would help pay for things like street repairs and filling pot holes, park programs and maintenance, senior services and public safety programs, and to hire additional police and fire personnel.

Montebello residents, including a local watchdog group, didn’t buy it and urged voters to against the hike, saying the city council could not be trusted to spend the money as intended.

 

 

 

Montebello Voters Face Decision on Sales Tax Hike

October 19, 2017 by · 1 Comment 

Unregistered Montebello residents have until Oct. 23 to register for the city’s special election on Nov. 7, an election that could result in an increase in the city sales tax.

After first unanimously declaring a financial emergency, the Montebello City Council in May voted to hold the special election and ask voters to approve an increase the city’s sales tax rate as a way to bring new revenue to the cash-strapped city.

Under Proposition 218, passed by voters in 1996, city governments are prohibited from placing new tax measures on the ballot in General Election years unless councilmembers first unanimously declare a fiscal emergency — a statement that the issue can’t wait until the city’s next regularly scheduled election.WEb-Feature MTB sales tax

The city wanted to raise the sales tax by one percent but had to lower its ask to .75 percent to comply with the state’s 10.25 percent sales tax cap. County voters approved a quarter-cent sales tax hike in March to pay for services for the homeless that went into effect on Oct. 1, pushing Montebello’s proposed one percent hike over the state cap.

City officials had projected $9 million in annual new revenue if Measure S passes, but that forecast has now been lowered to $6.75 million, still a hefty sum for the financially flailing city, which despite instituting a hiring freeze, years of no pay raises for employees and other budget-tightening measures, still faces a $3.2 million deficit.

A 47-page staff report presented last November to the council puts the cost for Montebello’s long-term and immediate needs at $212 million, including $178 million in deferred maintenance costs.

Montebello’s projected revenues fall far short of the amount needed and the city has run out of one-time options such as selling off city-owned assets to shore up the impending financial crisis, according to the city council.

The selling-off of cell tower sites and other city land was used in the last two fiscal year budget cycles to balance city coffers, but not before raising public outrage. Other efforts to raise revenue have failed amid voter mistrust of how the council and city staff spend revenue and award city contracts.

While council members did show some reluctance to holding the special election and asking voters to raise the sales tax, they ultimately decided it was the best path to stave off a future financial crisis, which could worsen if the city waited until its next regularly scheduled election in November 2018 to ask voters to approve new revenue raising taxes.

The city says the added revenue will help pay for things like street repairs and filling pot holes, park programs and maintenance, senior services and public safety programs.

Montebello resident Sylvia Solis supports raising the sales tax as a way to increase the size of the city’s police department and improve response times, telling EGP it’s ridiculous how long residents have to wait for the police to provide assistance.

“I wait 40 minutes, sometimes an hour,” the 25-year resident of Montebello said. “I’ve called to report suspicious activity, what if it’s a real emergency,” she complained.

According to the staff report, more revenue is needed for the city’s police and fire departments. The police department needs $5.3 million to pay for 11 additional police officers and four part-time community service officers, and to make needed improvements to the police headquarters, while the fire department requires more than double that amount, according to the report.

The fire department is running $13.1 million short of what it needs to fully staff the department and adequately upgrade infrastructure, states the report, which cites the need to hire a deputy fire chief and deputy fire marshal, build a new fire station, and to purchase a new fire engine and aerial ladder truck.

The report also calls for more hiring and improvement of facilities in nearly every department in the city.

Lopez agrees there is a need for more revenue, but says she worries the added revenue will not be spent wisely.

Yvette Fimbres, a member of the watchdog group Montebello Activists To Clean House, or MATCH90640, also wants to see the city prosper, but opposes a sales tax increase as the way to get there. Like Lopez, she fears the council and city staff can’t be trusted to spend the revenue as intended.

The burden of fixing the council’s mismanagement of city revenue should not be placed on residents and visitors to Montebello, Fimbres told EGP.

She described the council’s spending as “fraudulent” and “questionable,” citing catered dinners at council meetings and travel to attend gatherings that do not benefit the city as unnecessary and wasteful.

Council members did not respond to EGP’s requests for comment, however, Councilman Jack Hadjinian defended the city’s effort to increase the sales tax to the Whittier Daily News, saying the staff report shows every department in the city is lacking in some area due to the city’s tight budget. He rejected another revenue raising option in the report, an increase in the utility user tax, as too much of a burden on residents and city businesses. On the other hand, the sales tax hike that would apply to residents as well as visitors to city, including at one of the city’s top sales tax generators, the Montebello Town Center.

Resident Linda Strong told EGP in an email that the council lacks integrity, pointing out the council’s vote to approve a settlement with developer Garfield Financial Corp. in January of this year.

Garfield Corp. had claimed that the city didn’t properly pay for street improvements for an affordable housing project contracted for through the city’s now defunct redevelopment agency.

Strong pointed out that city funds were used to defend Councilman Bill Molinari who was named along with the city in the developer’s claim, submitted multiple times over the years, but which the city said had no merit and the company never escalated to the level of a lawsuit.

“That vote was a gift of public funds,” contends Strong in her email. “It was a gift to a political supporter.”

Molinari, responding to this article, told EGP that just the opposite is true.

He said Garfield named him in their claim because he had repeatedly blocked their attempts to get money out of the city the developer was not owed. According to Molinari, Garfield Corp was hoping to force him to recuse himself from discussion of any potential settlement because he now had a conflict of interest.

“All the claims they made about me were unsubstantiated,” Molinari said, adding that credible, highly qualified legal experts investigated the developer’s allegations but found them without merit.

The company’s strategy did not work, he said, explaining he never recused himself.

Nonetheless, Fimbres says she does not believe the city is being transparent about the sales tax hike. She accused Montebello City Attorney Arnold Alvarez-Glasman of failing to provide an impartial analysis of the measure being pushed by the council and city staff. She also accused him of publishing misinformation on the projected tax increase and incoming revenues to the city.

“If this measure is passed, the city is in store for a lawsuit challenging the validity of this measure.” Fimbres said. “It’ll probably cost the city more money to defend themselves in court.”

“The city needs revenue, but we cannot trust the present council to do the right thing,” Fimbres said.

Alvarez-Glasman denies the ballot information is inaccurate, telling The Whittier Daily News that

“The law is crafted saying that (the increase) could be up to 1 percent.” Saying otherwise is “a fraud and incorrect,” he said.

Meanwhile, Montebello officials continue to defend the sales tax hike as necessary to meeting the city’s financial obligations and to providing public safety and other services in the city.

 

Updated 10/20/17 at 42 p.m.: Clarifies from earlier version that developer Garfield Corp. filed claims, not a lawsuit against Montebello and Councilman Bill Molinari.  Adds Molinari’s response to accusation that he had done something wrong and benefited from “a gift of public funds” to defend himself against those allegations;  adds response from city attorney to allegation that he is misleading the public about the sales tax hike.

 

Demanding Transparency, Activist Form ‘Watchdog’ Group

October 20, 2016 by · 2 Comments 

MONTEBELLO – There’s a new watchdog group in town and their demanding changes.

They sit in the front row at nearly every Montebello City Council meeting, keep a close eye on city business, read through agenda packets and regularly make public document requests, all in an attempt to hold their elected officials accountable.

Among their successes so far, getting the city to start live-streaming city council meetings. Now they’re trying to block efforts to allow marijuana-related businesses to open shop in their city, and keeping an eye on issues brewing in the Montebello Unified School District.

“We’re watching everything that is going on in our city,” says Kimberly Cobos, a spokesperson for Montebello Activists To Clean House, or MATCH9064

No strangers to city politics, the grassroots group’s members have spent years attending city council meetings and public hearings, often serving as Montebello’s most outspoken critics.

The activists haven’t always been on the same side of issues, but anger over the latest effort to allow marijuana related businesses to operate in the city led them to put aside their differences and work together. What they have in common is a strong interest in making the city more transparent and accountable to residents.

Montebello City Council meetings will now be streamed live online on the city’s website.

Montebello City Council meetings will now be streamed live online on the city’s website.

“We want our voice to be heard and we want to get residents involved,” Cobos told EGP about the collaboration, started in August.

Last week’s resignation of City Treasurer Charles Pell has added to their resolve. In their eyes, they’ve lost an ally who like them has been working to expose mismanagement and discrepancies in the city’s finances.

Pell, a federal prosecutor by trade, announced his resignation during the Oct. 12 council meeting. He cited an increase in his caseload as the reason for his departure. In the last year, Pell put the spotlight on a housing developer that owes the city $600,000, staff’s failure to collect rent on a city-owned property, and questionable practices in the city’s bidding process.

The city council will appoint Pell’s replacement. Cobos worries their choice may not be as willing to work hard on exposing the city’s financial failings.

Although the group is relatively new, MATCH90640 is already claiming a major victory in their fight to make the city more transparent. They claim the announcement last week that effective immediately all Montebello council meetings will be streamed live on the city’s website, is the direct result of pressure they put on City Clerk Irma Barajas to keep her campaign promise to ensure greater transparency in the city.

“Not many residents attend meetings, but now those who can’t make it can be kept up to speed with city issues” by viewing meetings online, MATCh90640 member Yvette Fimbres told EGP this week.

Members of MATCH90640 speak during the Oct. 12 Montebello Council Meeting.  (MATCH90640)

Members of MATCH90640 speak during the Oct. 12 Montebello Council Meeting. (MATCH90640)

The marijuana dispensary controversy that initially pulled the group together has not gone away, but is instead gaining steam. Residents packed city council chambers last week, where speaker after speaker demanded the council place a moratorium on all marijuana businesses within city limits.

“We’re not activists against personal use or medical use,” Linda Nicklas clarified. “What we don’t want are growers like the ones from Glendale opening businesses across the alley from Eastmont Intermediate,” she told council members, referring to an incident earlier this year when Montebello Police discovered nearly 1,400 marijuana plants in two commercial buildings located next door to the Montebello school.

According to Nicklas, all the residents she’s spoken to are opposed to allowing pot shops to open in the city.

Grant Pstikyan and the others circulating the petition to get an initiative on the ballot – which if passed would amend the City Code to allow and tax marijuana businesses in Montebello—are ready to set up shop in the city, Nicklas claims. The city’s zoning code currently prohibits medical marijuana dispensaries.

If you allow this measure to move forward, MATCH90640 will go door-to-door to inform residents of your decision, Nicklas promised council members.

“Come next election, everybody will get information about where you stood on this issue.”

The council has instructed staff to put discussion of a moratorium on marijuana businesses on its next meeting agenda. They say they plan to conduct a full review on the issue before deciding on a permanent amendment to the municipal code.

MATCH90640 told EGP their plans go beyond city hall, explaining they are also keeping a watchful eye on Montebello Unified; most of the city’s children attend District schools.

The group was at the Oct. 6 MUSD Board meeting to recruit members to their cause. While at the meeting, they learned about the conflict between the Montebello Teachers Association (MTA) and the District’s superintendent, Susanna Contreras Smith, who along with Chief Financial and Operations Officer Cleve Pell on Friday were placed on paid administrative leave Friday. The decision comes months following vote of no confidence by the teachers’ union, which asked the Board of Education to fire Smith.

Assistant Superintendent Anthony Martinez will serve as interim superintendent.

MATCH90640’s goal is to keep residents informed on issues in the city and they say they hope the community will come to them with their concerns. You don’t have to live in Montebello to join the group, membership is open to anyone with a child at a Montebello school, who does businesses in Montebello or plays sports at a Montebello park, according to Cobo.

“We want to help our community,” said Fimbres. “We’re bringing the voice of residents directly to the city council.”

 

Residents Decry Handling of Water Utility Issue

September 22, 2016 by · Leave a Comment 

MONTEBELLO – A behind closed doors discussion about the Montebello-owned water system was tabled when residents accused the city of violating the Brown Act and of secretly conspiring to sell off the city’s water utility.

Residents last week took issue with a scheduled closed session meeting between the city and various water companies where they planned to discuss the price and terms related to the potential sale of three city-owned water reservoirs, a well and related appurtenances, fixtures and equipment, despite voters’ rejection in June of a ballot measure approving the sale of the Montebello Water System to the San Gabriel Water Company for $14.4 million.

At the time, some opponents to the measure argued the city had no business selling off an important and valuable asset, while others argued the city was letting the utility go to cheap.

The Montebello Water System has been operating at a deficit for years and city officials claim there is no money to make much needed and very costly system upgrades.

Residents have been keeping a close eye out for signs that a sale could be in the works since last year when Assemblyman Ed Chau introduced a bill that would have allowed Montebello to sell its water system without voter approval. The bill was ultimately shelved, but residents believed the issue was far from over.

Following their defeat in June, council members considered bringing the issue to voters again in November, but scrapped the plan when they realized it would take a year to get a new sales proposal together to present to voters.

Council members and city staff are allowed to discuss issues that are considered legally sensitive, such as contract negotiations, lawsuits and personnel issues, out of the public eye in closed session, provided the item is on the closed session meeting agenda.

The discovery that Montebello officials planned to meet with potential suitors in closed session, set off a new round of alarms with residents who charge that the city is not being transparent in it’s handling of the water utility issue.

Longtime Montebello resident Larry Salazar accused the city council and staff of failing to drop talk of a sale even though there efforts run contrary to residents’ wishes.

“The people voted not to sell this water company and now you’re going to try to do it in pieces,” he complained during the Sept. 14 city council meeting.

The city is not trying to circumvent state law, which requires the matter go before the electorate for final approval, said City Attorney Arnold Glassman.

“The council, however, has to have the opportunity to review and evaluate matters related to the possible sale of city property” during closed session, he postured.

Resident Yvonne Watson informed the council that she has filed a complaint with the Los Angeles Country District Attorney’s Integrity Unit for what she said is the city’s failure to identify negotiating parties who would be at the closed-door meeting.

Salazar prodded the council to table the item on grounds that it would violate the government code included with the item, which requires the city to identify the negotiators during public session.

“I would ask you, as a resident, as a voter, not to discuss this item because you are not following those very clear and simple rules,” he said.

The closed session agenda item is “illegal,” echoed Linda Strong.

“This is a deliberate attempt, by saying various water agencies, to play backroom games one more time,” she told the council.

The Public Utility Code specifically lists the process by which all or parts of a water company are sold, including a request for proposal, which the city did earlier this year before taking the proposed sale to the San Gabriel Water Company to voters .

At that time, the vice president of California Water Service accused Montebello’s city manager of unfairly helping its competitor San Gabriel Valley Water prop up its bid. As a result, the bidding process was reopened with the San Gabriel Valley Water again winning the bid.

Strong told the council that the city is again interfering in the bidding process.

“This is an attempt to avoid a request for public bid and a public hearing,” Strong claimed. “This is an attempt to maneuver backroom favoritism.”

Montebello City Treasure Charles Pell asked that the city consider a proper appraisal to evaluate the true value of the water system.

“I don’t see how negotiations can take place if you don’t know what you’re asset is worth,” he said.

According to Glassman, he had planned to identify the all parties taking part in the discussion following public comment. He mentioned the San Gabriel Valley Water Company but no other entities. Glassman argued that the Brown Act allows the city council to hear these discussions away from the public, but asked the city council to put off the item in light of residents’ concerns.

“The last thing we want to do here, as a city council, is to give the perception that we’re trying to railroad something,” said Mayor Art Barajas, who asked his colleagues to table the matter.

Councilman Bill Molinari said he was confused as to why the discussions were scheduled to take place in closed session rather than in public as past conversations had been.

“Why all of a sudden is this a closed session item,” he questioned.

Glassman explained that City Manager Francesca Tucker-Schuyler had asked the item to be discussed in closed session. “It is her obligation to decide the appropriate listing,” he added.

The council voted 4-1 to table the item. Councilman Jack Hadjinian was the lone dissenting vote.

Hadjinian said he was surprised to learn a complaint of a Brown Act violation had been already been made since they had yet to discuss the item.

“I want to thank the members of the public wanting to keep us so honest,” he said sarcastically. “Thank you for that.”

Lawsuit Against Ex-Officials Found ‘Without Merit’

August 11, 2016 by · Leave a Comment 

MONTEBELLO – Ruling that the votes of public officials are protected under state free speech laws, the California Supreme Court on Monday found a lawsuit brought by the city of Montebello against three former council members and a former city administrator is without merit.

The case involved the controversial awarding in 2008 of an exclusive trash-hauling contract to Athens Disposal Services (AEI), upending a years long practice of allowing multiple independent trash-haulers to provide service in the city.

Montebello’s suit, filed in 2012, charged that ex-council members Kathy Salazar, Rosie Vasquez, Robert Urteaga and former City Administrator Richard Torres violated conflict-of-interest laws in the city’s awarding of the contract. The lawsuit claimed the three officials had steered the contract to Athens, avoiding the bidding process, in return for campaign contributions. The suit sought a court order requiring those “found to have been financially interested in the AEI contract to disgorge to the City all amounts they received from AEI.”

The 15-year, $150-million contract gave Athens the exclusive right to haul away garbage from area businesses, a service it already had exclusive rights to for residential trash.

At the time, Athens already had contracts with a number of Montebello businesses, but the new contract would require all businesses by 2016 to contract with the company.

The controversy sparked a recall election and referendum attempt to void the contact.

Monday’s ruling reverses a 2nd Court of Appeals 5-2 decision that found that “the defendants’ votes on the contract were not protected activity under 425.16.” the anti-SLAPP (Strategic Lawsuit Against Public Participation) law to protect public officials from unmeritorious claims.

According to the opinion written by Justice Carol A. Corrigan’s reversing the lower court’s decision, however, absent the evidence of illegal activity, individual public officials cannot be sued over votes made.

Montebello’s lawsuit contended that “illegal conflict of interest” had “infected the councilmember defendant’s votes,” depriving them of protection under the anti-SLAPP statute.

However, according to the ruling, while the court does not “minimize the seriousness of the City’s conflict of interest allegations … “campaign contributions are constitutionally protected and ‘do not automatically create an appearance of unfairness.’”

The decision further states that “The city concedes that its claim depends on inferences to be drawn from circumstantial evidence of the councilmember defendants’ advocacy and votes in favor of the Athens contract, followed by their receipt of campaign contributions.”

“There’s definitely a conflict of interest,” said longtime resident Ciraco Jauregui in Spanish, responding to news of the court’s ruling.

An Athens Trash bin sits outside a Montebello home on collection day Tuesday. (EGP photo by Nancy Martinez)

An Athens Trash bin sits outside a Montebello home on collection day Tuesday. (EGP photo by Nancy Martinez)

He argued that the lawsuit has merit because the contract felt like a quid pro quo. The campaign funds from Athens, though legal, could look illegal to outsiders who see a pattern between a decision and the exchange of money.

“If they had a personal interest when they made the decision that takes away from our rights as residents, they should be sued.”

Rosa Sanchez, a 40-year resident of the city, however, told EGP she hasn’t had a problem with the services provided by Athens over the years and therefore has no problem with the contract in question, even if council members later received campaign contributions from the company.

“People always want to find something wrong to complain about, why can’t we just support our council,” she said.

Likewise, Julio Estrada told EGP he supports the council because they represent the people who voters elected and their decisions should reflect what their constituents want.

“If that’s what the majority wanted I have no problem,” he said.

“I don’t have a complaint when the majority thinks a decision is best for our city.”

To that point, the ruling goes on to note, “It is not necessary to sue government officers in their personal capacities to challenge the propriety of a government action.”

In her opinion, Corrigan points out “the Athens contract was successfully challenged in a citizen’s suit brought against the city.”

In 2012, just days before Montebello filed its lawsuit against Salazar, Vasquez, Urteaga and Torres, a judge quietly voided the controversial trash contract.

Judge James C. Chalfant ruled that the city’s contract with Athens Services, also known as Arakelian Enterprises, violated Proposition 218, which restricts the imposition of taxes, assessments, fees or charges by a city on individuals based on their ownership of residential property ownership. As EGP previously reported, he rejected claims that the contract violated competitive bidding and non-exclusivity requirements as grounds for voiding the contract, claims that nevertheless served as popular criticisms of the contract when the city council approved it.

Noting the timing of the city’s lawsuit and the fact that the Athens contract had been voided, the defendants claimed “the City’s action was little more than a politically driven attempt to punish them for exercising their constitutional right to free speech in connection with issues of public interest related to their official duties.”

At the Montebello Senior Center Tuesday, Robert Val Verde, half jokingly said all politicians are paid and there’s nothing anyone can do about it.

He has lived in Montebello since 1972 and says there has always been a cloud over politics in the city. “There’s something wrong with the system,” he said. “They should be held accountable for their decisions,” he said referring to the court’s decision on the city’s lawsuit.

He feels strongly that the ‘coincidence” of elected officials getting contributions from company’s they approved contracts for should not be pushed aside like some minor incident, but acknowledges that it isn’t only past councils that have made troubling decisions.

“There are so many things going on, it’s not just one person,” he said. “There has been a history of bad decisions in the city, including after the fact.”

And when the city has a council member with different opinion or view than the majority, they just get voted out and can’t do anything to change it, he pointed out.

“People don’t trust the city council, it’s been like that for a long time.

The Supreme Court’s ruling returns the lawsuit to the Court of Appeal to determine whether the city of Montebello has enough evidence to continue the case on grounds that the actions of the defendants were illegal, therefore not protected free speech.

 

EGP Staff Writer Nancy Martinez contributed to this report.

City Running Out of Options to Balance Budget

August 4, 2016 by · Leave a Comment 

MONTEBELLO –News that city officials were considering holding a special election to raise the local sales tax or the tax on utilities has prompted a new round of calls for more belt-tightening and transparency in Montebello.

Both proposals could be dead, however, now that the city council has tabled discussion on a 1-cent sales tax increase and/or a 6.5 percent hike in the utility tax, which if passed by voters during a November special election could have raised as much as $14 million in new revenue for the cash-strapped city.

The 4-1 decision to cut off discussion came during the July 27 council meeting, when several speakers questioned the hastiness of the proposals, demanding the council instead tighten spending, starting with cutting their own salaries and benefits.

Councilwoman Vanessa Delgado, the lone vote against tabling discussion on the potential tax ballot measures, said she is looking for a long-term solution to balancing the budget, now over $1 million in the red.

Fire and Police make up the majority of the city’s $51.9 million budget this fiscal year. (City of Montebello)

Fire and Police make up the majority of the city’s $51.9 million budget this fiscal year. (City of Montebello)

“Selling assets is a temporary solution: We will be faced with the same problem next year,” said Delgado who was disappointed her colleagues did not at least allow discussion of the issues to move forward.

Montebello is again facing a budget shortfall and must find a way to avoid the financial woes of the not to distant past when the city was forced to make drastic cuts in services and shed employees to cover its budget deficits, which at one point reached $12 million.

Mired in political uncertainty and accusations of misuse of funds, and one of the worst financial downturns in history, it took three interim city managers and changes of several department heads to finally get a recovery plan in place to stay afloat.

The situation today is not as critical, but Montebello’s current $1.1 million deficit – the first since the 2010-2011 fiscal year – comes at a time when most cities are experiencing more financial stability and even growth due to improved economic conditions.

Larry Kosmont served as Montebello’s interim city administrator and financial consultant in 2011 and 2012 and was instrumental in helping the city develop its economic turnaround plan, which included putting the breaks on hiring and deep cuts in some city services. The result was several years of balanced budgets.

“[Montebello] had money in the bank, the economy has been strong, [the city] should be in better shape,” Kosmont told EGP.

Montebello’s sales tax make up an estimated 25 percent of the city’s revenue generating around $13 million. (City of Montebello)

Montebello’s sales tax make up an estimated 25 percent of the city’s revenue generating around $13 million. (City of Montebello)

Like many others, Kosmont believes “belt tightening” is the key to turning Montebello’s finances around, but points out that the council and staff must to be willing to make the tough decisions.

When Kosmont arrived in Montebello, the city was facing a $2.7 million deficit and lacked the cash flow needed to pay employee salaries and day-to-day expenses.

By requiring employees to pay a share of their retirement, implementing furloughs, revising city fees and pushing departments to control spending, the city was able to balance its budget and to secure a loan to pay its employees, EGP reported back in 2011.

The city’s increasing operating costs were something Montebello, a city once nicknamed the “Beverly Hills of the Eastside,” could no longer afford, Kosmont told EGP.

As in most cities, the biggest chunk of Montebello’s budget goes to public safety. This year, 65 percent of the revenue in the city’s $51.9 million budget will go to covering the cost of the police and fire departments.

Contracting out some of those services could be a start to reducing expenses, but Kosmont acknowledges it would be tough sell with residents who have rebuked past efforts to contract with the County while pushing back against paying more taxes.

Larry Salazar, one of the founders of the “No New Taxes” political action committee (PAC), said his group is ready to fight any measure to impose new taxes, just like it did back in 2004.

Salazar said he doesn’t believe the council can be trusted to “know what to do with our money.”

Some claim that a lack of faith in the current council and city staff is why voters in the June Election failed to approve the $14 million sale of the city’s water system, despite “not a dime” being spent in opposition.

“It’s quite evident that there is truly mismanagement of our city budget,” Yvette Fimbres said at last week’s council meeting. “This is precisely why Measure W was voted against…we demand transparency and we have yet to see it,” she said, referring to how the council goes about making it’s spending decisions.

Some of Montebello’s neighboring cities have imposed special taxes to take some of the burden off their budgets, Delgado pointed out to EGP.

But if Montebello can’t raise any taxes or sell off its aging water system, the city will have to look at what are likely to be equally unpopular options,

“People need to understand that if we don’t increase revenue we have to make cuts and layoff,” Delgado said.

Councilman William “Bill” Molinari told EGP he voted to table discussion on whether to take the tax raising measure to the voters because he felt there was not enough time to do proper outreach, and he’s against the city issuing the emergency declaration required to hold a special election on raising taxes in conjunction with the November General Election.

“Declaring a financial emergency could bring risks to our credit rating and bonds,” explained Molinari. A lower rating could increase what the city has to pay in interest on its financial obligations and future borrowing.

According to Kosmont, his 30 years of experience working with cities leads him to believe that cuts to cover a $1 million shortfall could be avoided if time is taken to review every invoice, department and position. For example, he said, many cities get into the pattern of ordering supplies they already have, tying up cash. Looking at what and how the city orders and pays for supplies might have helped Montebello avoid its current deficit, Kosmont said.

For years, current and past councilmembers have bemoaned the city’s inability to attract new, sales tax generating businesses, despite such gains being made by its more working-class neighbors.

But Montebello has struggled to develop a real, long-range economic vision or strategy for the city that is consistent with its current reality, rather than the image of what it was in the past, according to Kosmont.

“It’s not selling property and increasing taxes that the city needs, rather an increase in revenue,” says Kosmont, who points to the city’s failure to develop the Whittier Boulevard commercial corridor as an example of missed opportunity for economic development.

At the time of the city’s past budget woes the country was in the midst of a deep recession, but has since recovered, noted Kosmont.

“Now is the time to act,” he said. The city needs discipline but “it can be done again.

 

Treasurer Questions City’s Debt Collection Record

July 21, 2016 by · Leave a Comment 

During an already tense city council meeting, Montebello’s treasurer accused the city manager of not cooperating with him when he questioned her about a city-owned property.

What “I’m doing here is trying to uncover when people aren’t paying what they should to the city,” explained Treasurer Charles Pell.

“I haven’t received a lot of cooperation from the city administrator,” he said during the city council meeting on July 13.

Dozens of residents were at the meeting to speak on the Alameda Corridor-East Construction Authority’s (ACE) proposed revisions to a grade separation project in the city, an ongoing hot button issue for residents and businesses — changes the council ultimately approved — as well as city measures aimed at addressing a $1.1 million budget shortfall.

However, by the time Pell spoke during the public comment portion of the meeting, nearly four hours had passed and only a little over a dozen residents were still at the meeting.

“We heard a lot about finances today. I heard a lot of ‘do your homework’ and somebody else said ‘we have to take a hard look into the city’s finances,’” he told the council, explaining that’s exactly what he is trying to do.

Montebello is among a small number of cities that have an elected treasurer, who in theory would be responsible for the job done in other cities by professionals hired to oversee the city’s finances.

The role played by Montebello’ treasurer, however, often comes down to who is in office. Some past treasurers have chosen to do little more than sign off on finance department reports and sign checks, while others have taken a more active role, from reviewing interest rates paid on bonds to analyzing the return on city investments.

A federal prosecutor by trade, Pell said numbers don’t scare him, telling the council he has worked on fraud cases bigger than the city’s entire budget.

At issue is the amount of rent being paid for a city-owned residential property located on 132 S. 6th St, which according to Pell the city has owned since 2010. Public records show the property went into foreclosure in 2012.

Pell claims that when he asked City Manager Francesca Tucker-Schuyler if any rent has been collected on the property, she did not give him a direct response, citing ongoing litigation.

“I had to file a public record request to get that information,” the elected official said in frustration.

The market value of the nearly 1,500 square-foot, 4-bedroom, 2-bath single residence is estimated at $465,000, according to the Zillow Real Estate website.

Pell estimated the market rate for rent on a home of that size to be about $2,000-$2,300 a month, however, according to city staff, the city has not collected any rent on the property for 6 years.

Pell called the failure to collect rent another example of outstanding debts he has identified that Montebello has failed to collect on over the years, but could be part of the solution for fixing the city’s financial woes.

“This is not something I did, this is not something the city council did, this is the administration,” the city treasurer said.

As an elected official, who oversees the safekeeping of city funds, the former federal prosecutor asked why it is that he’s not getting cooperation from city staff.

“When I uncover stuff like this I have to question why,” he said, prompting applause from the audience.

Tucker-Schuyler quickly defended herself and accused Pell of turning things personal.

“It seems to me there is a personal attack on me this evening by the city treasurer and I’m sorry I find it unconscionable,” she said fuming.

The city manager clarified she did not directly answer inquiries over the rent because of ongoing litigation and instead chose to defer Pell’s questions to the city attorney.

“Why? Because as city manager it is my duty to protect the interests of the city as a whole,” she said.

“Every single day I see claims and litigation matters that come to my attention, therefore I am very careful in what I say and what information I provide,” she explained.

When asked what type of litigation the property in question is involved in, Kristina Zendzhiryan, assistant to the city manager, told EGP the city had “No Comment.”

Tucker-Schuyler pointed out there’s been no rent paid on the city-owned property since before she joined the city.

“I do not appreciate Mr. City Treasurer maligning me in public, accusing me of not working with you and I’m very tired of these accusations,” she told Pell.

“Enough is enough…I’ve done nothing wrong,” she complained.

Mayor Art Barajas asked the clearly upset Tucker Schuyler, his fellow council members and Pell to calm down, at the same time denying Pell the opportunity to rebut to the city manager’s assertions.

Pell later told EGP this is not the only discrepancy he has questioned. He previously questioned why the city has not taken action to collect outstanding debts or why Montebello is not investing surplus cash at the highest possible interest rates.

“There is a constant push back,” he told EGP.

Councilman Bill Molinari has in the past asked why Pell, an elected official serving a 4-year term just like the members of the council, has not been afforded the courtesy of providing a formal treasurer’s report during council meetings, but has instead been relegated to testifying during public comment?

According to City Attorney Arnold Glassman, the city council has the discretion to include or exclude the city treasurer from its meeting agenda.

Sale of Water System Bid Process Challenged

March 10, 2016 by · Leave a Comment 

Montebello voters may soon decide if they want to sell the city’s water system, but getting the question on the ballot was complicated this week when a prospective buyer for the system claimed Montebello’s bid process was tainted.

At a public hearing Monday on whether Montebello voters should be asked to approve the sale of the city’s water system, and to allow the council to select a buyer from companies that have already submitted bids for the system, California Water Service Vice President Stan Ferraro told the council that city staff had unfairly helped another company prop up its bid.

In doing so, “You left money on the table,” Ferraro said.

The controversy led the council to reopen the bidding process for about 24 hours and to postpone a decision on the ballot measure until a special meeting scheduled for Wednesday night, after EGP went to press.

San Gabriel Valley Water Company President Robert Nicholson told the council he was open to extending the process another day to allow both companies to submit one final proposal.

“I would not want the citizens to think that it wasn’t done right,” he said, prompting applause from the audience.

According to the city, California Water and San Gabriel Valley Water submitted the bids with the two highest purchase price offers by the Feb. 29 deadline.

Ferraro claims San Gabriel Valley Water original bid was $3 million less than California Water’s, but the utility company increased its offer to come out on top after learning from City Administrator Francesca Tucker-Schuyler the amount of California Water’s bid.

“I have a problem with the process,” Ferraro complained.

According to a city consultant, Montebello’s water system was appraised at around $8 million. Tucker-Schuyler said the city expected at least $10 million. San Gabriel Valley Water’s proposal to purchase all water system facilities for $12,021,960 was ranked higher than California Water Service’s bid of $11,740,000 , but only after it amended its initial offer.

Tucker-Schuyler defended her actions saying she checked with legal council and was told she could disclose the purchase offers when she asked the two highest bidders for their best and final offers.

But Ferraro said he believes San Gabriel Valley was given an unfair advantage when Tucker-Schuyler told them how much his company had bid, after only telling him his company was the highest bidder.

Had he known the city had disclosed their bid amount to its competitor, California Water would have had an incentive to increase its bid, Ferraro told the council.

City Attorney Arnold Alvarez-Glasman, however, quickly defended the city’s actions by explaining that the RFP includes a disclaimer that the information provided is considered “non-confidential,” “non-proprietary” and “subject to public disclosure after the solicitation is completed.”

“The process has been fair and open,” Alvarez-Glasman maintained.

Montebello City Attorney Arnold Alvarez-Glasman, left, defends the city against accusations of favoritism during a special meeting Monday. (EGP photo by Nancy Martinez)

Montebello City Attorney Arnold Alvarez-Glasman, left, defends the city against accusations of favoritism during a special meeting Monday. (EGP photo by Nancy Martinez)

The city contends California Water could have asked the amounts of the other bids received, but did not.
Montebello’s handling of the bid disclosure is not typical in the bidding process, Terry Francke of California Aware, The Center of Public Forum Rights out of Sacramento told EGP.

“It’s the exact opposite,” he said. “The objective is to keep the bid information confidential until a decision is reached.”

The selective disclosure of a bid of one participant over the other undercuts the public’s spirit of the process, he said.

“The rules should be the same for all competitors,” Francke said. “The same benefits and information should apply without cherry-picking,” he added.

Mayor Art Barajas said he was torn. “Are we getting the best offer,” he questioned. “We’re not in a position to leave money on the table.”

Tucker-Schuyler pointed out that the water system needs $50 million in deferred capital improvements, funds the city does not have. The city has already put in $1 million to subsidize the system.

In 2013, the Montebello Land and Water Company raised its rates for the first time in nearly two decades. Customers saw their bills increase 50% that year and an additional 25% in 2014, but the utility is still losing about $100,000 a year.

State mandated water usage cuts during the drought have also decreased revenue while expenses continue to rise, explained Tucker-Schuyler. “It was not enough for us to cover the costs,” she said.

City staff proposed selling off the city’s water rights to cut Montebello’s losses. They hoped to get the issue on the June 7 Primary Election ballot, a process that has to be completed before Friday to avoid paying for a special election.

To get there, they had to approve a potential buyer by Wednesday.

Longtime resident Linda Nicklas acknowledged the city’s need to sell the system but argued the important decision was a one-time transaction that should not be rushed.

“If we’re going to sell, lets get the most out of it,” she said.

Councilman Bill Molinari said his work as a general contractor required him to submit hundreds of bids over the years. He called the city’s handling of the water rights bid “unethical” and “unprofessional.”

“This was more of an auction,” Molinari said, angering the city attorney,

“To challenge the integrity…as you can see I’m pretty heated,” Alvarez-Glasman told the mayor.

Barajas said he believed staff had worked hard on the process and had done nothing wrong.

He said the city would not be in its current situation if past councils had raised water rates and not deferred maintenance, pointing out that Molinari has been on the council for decades.

Molinari said he is disappointed the city is again moving to sell of an asset to offset a deficit, referring to a council decision last year to sell cell towers and a large lot to generate one-time monies to balance the budget.

“The money is gone and the assets are gone,” he complained.

Councilman Jack Hadjinian criticized Molinari for getting in the way of real change, and urged the council to just make a decision and not waste time on a rebidding process, but was outvoted.

“I don’t want [the public] to have the perception that something was done intentionally to give favoritism,” said Councilwoman Vanessa Delgado who proposed extending the bid process. “We should do this out of precaution.”

Last year, when the city council considered selling Montebello’s water rights, they asked Assemblyman Ed Chau to author legislation that would allow the city to do so without the vote of the people, angering city residents who demanded Chau withdraw the bill.

Linda Strong believes the city is again acting hastily. “Why not wait for the November ballot,” said Strong.

If approved by voters, proceeds from the sale of the water rights would not be available to the city for months after the election, according to Tucker-Schuyler.

So, “‘If it’s going to take six to eight months why not wait and get this done right,” demanded Strong.

Candidates See Montebello as Diamond in the Rough

October 29, 2015 by · 1 Comment 

When Rose Gascon first moved to Montebello the city was often referred to as the “Beverly Hills of East Los Angeles,” a nickname adopted to differentiate the city’s thriving businesses and clean, paved streets from its neighbor to the east, where many of the city’s residents once lived.

“We used to be the diamond on the hill,” Gascon recalls wistfully.

Lea este artículo en Español: Candidatos Ven a Montebello Como un Diamante Sin Pulir

Nearly 40 years have passed and now all Gascon sees are remnants of the past, potholes on her street and vacant storefronts on the boulevards.

“The luster is gone,” Gascon told EGP. “I look at all the new stores and restaurants opening up in neighboring cities and I just think, ‘what about Montebello?”

On Tuesday, Nov. 3, Montebello voters will have an opportunity to – as one candidate puts it – not just vote for two councilmembers but for the future of the city.

Campaign posters for candidates running in Montebello’s upcoming Nov. 3 election are found throughout the city. (EGP photo by Nancy Martinez)

Campaign posters for candidates running in Montebello’s upcoming Nov. 3 election are found throughout the city. (EGP photo by Nancy Martinez)

“We need someone who is going to create a positive impact in our city so businesses want to be located here,” says Angelica Jauregui, executive director of St. Paul Lutheran Church and member of the Montebello Chamber of Commerce.

Six challengers – Fernando Chacon, Kimberly Ann Cobos, Vanessa Delgado, William Paolisso, Michael W. Samarin-Popoff and Randy Smith – are trying to unseat Mayor Jack Hadjinian and Councilwoman Christina Cortez, who have each served one term.

When first elected, Hadjinian and Cortez were faced with a city in the mist of a tumultuous identity crisis, its reputation tarnished by a series of bad financial decisions and political discord on the City Council.

The city’s budget has since improved and several projects that had languished on the books for years have been approved, progress Hadjinian and Cortez hope voters will see as their doing.

But challengers in the race say much more should have been accomplished during the last four years and they hope voters will give them a chance to get it done.

EGP reached out to voters and the incumbents and challengers to get their views on the city’s most pressing issues. Only Fernando Chacon did not respond.

A vacant store front on Whittier Boulevard in Montebello displays signs indicating the businesses is available for lease. (EGP photo by Nancy Martinez)

A vacant store front on Whittier Boulevard in Montebello displays signs indicating the businesses is available for lease. (EGP photo by Nancy Martinez)

Economic Development: More Businesses Wanted

All the candidates, including the incumbents, agree Montebello must do a better job of attracting new business to the city. They all say duplicating successes in neighboring cities like Alhambra, Pico Rivera and Downey, would greatly improve the city’s ability to provide services to residents and fix deteriorating infrastructure.

Cobo wants to see one of the main boulevards transformed into a restaurant row and believes streamlining the city’s inspection and permitting process from three weeks to 72 hours would help.

Hadjinian says his real estate background has given him insight into what developers wants and blames city’s demographics for retailers and restaurant chains previously not wanting to open in Montebello. He said they look at demographics, current retail, traffic and the city’s reputation before deciding to invest. He also blamed council politics for at times making the city appear not to be business friendly, but added the current council has been working to make Montebello more attractive to investors by creating more housing stock for families with higher disposable incomes.

Gascon says she’s tired of hearing elected officials spout the demographic argument.

“Just because we’re considered a blue-collar community doesn’t mean we won’t shop or frequent nice restaurants,” she said while visiting the Montebello Senior Center. “Pico Rivera had lower demographics and look at them now,” she said in frustration.

Gascon thinks less talk from the council and more walking of developers through the city is what’s needed. “Bring them to Olive Garden, BJ’s [Brewery] or Applebee’s,” they are always full, she said.

St. Paul’s Jauregui agrees with Gascon and has brought the issue up to the mayor. “I don’t understand why businesses think they would not be patronized by Montebello residents,” she told EGP. “We always have to go outside to spend our money,” Jauregui complained.

Challenger Delgado works with the developer responsible for building the new Azalea Shopping Center in South Gate. She told EGP if elected she would foster a climate that supports economic development, starting with updating the city plan.

“In order to attract investment in the city, the general plan and supporting zoning documents must be redone to make sure they are flexible and encourage creative development projects,” she said.

Incumbent Cortez, however, seems to think the city is getting a bad rap when it comes to business. She argues the city already has a diverse business community. “We have retail that includes a fantastic mall, a Costco and several independent family businesses,” she said. “My guess is that as long as our economy continues to improve businesses will seek out opportunities here.”

Gascon doesn’t buy it. She thinks it’s going to take more than an improving economy to attract restaurants and retailers to underdeveloped Whittier Boulevard. “We need someone who will fight for us and won’t be afraid to push back against developers who say” we can’t support more businesses, she said.

Beautification and Aesthetics

Residents complain that the city has allowed its streets and facilities to fall into severe disrepair. Some, like Jauregui, say it’s the biggest beef they have with the current city council. “They don’t take pride in beautifying the city,” she said, noting how much better cities just across the border look.

“There’s a lot more graffiti, the streets are shot and the alleys are filled with junk” here, laments ninety-year-old Juanita Alavrenge. “I know the city doesn’t have money, but they have to try,” she said.

Nitta Francis, on the other hand, is willing to give the council credit for trying to make improvements. “They’re doing okay,” she said in defense of their work. “The important thing is they are trying.”

Trying isn’t good enough, according to Cecilia LaRogue. She wants the council to raise more revenue by attracting more businesses to the city.

Candidate Smith says the city needs to redevelop its business corridors on Whittier Boulevard and off the 60 Freeway, which he says are long overdue for upgrades. He suggests temporarily raising taxes to pay for the upgrades.

Cobos doesn’t support raising taxes on property owners but will consider a 1 percent increase in the city sales tax. Pico Rivera added millions of dollars to their general fund this way, she said.

Delgado and Cobos propose using grants and tax credits for such projects.

Cortez, Samarin-Popoff and Hadjinian told EGP they are opposed to increasing taxes that would burden residents.

Senior citizen Robert Valverde says he’s tired of the incumbents’ campaigns touting all the positive changes they’ve brought to the city. As far as he’s concerned, when he looks around all he sees is facilities where maintenance has fallen behind.

“I don’t fault them for spending on our police department, but when they buy the entire force new cars and the senior center is deteriorating on the inside it seems unfair,” he said.

Belt Tightening

While city finances have improved, Montebello is a long way from having the revenue to pay for all the city’s many budget needs.

Samarin-Popoff acknowledges that the city’s popular police and fire departments take up a big chunk of the city’s budget, but thinks any cost cutting measures will have to come from some other sector.

“This year, to balance the budget we had to sell a city property,” recalled Cobos who says she doesn’t want to go down that road again. She doesn’t support cuts to the recreation department or programs that benefit residents directly, but agrees with fellow challenger Paolisso that any belt-tightening should begin with the elected officials who are enjoying luxuries like medical benefits not provided to some city employees.

Cortez says she’s not sure there’s room for more cuts in the budget. “Throughout the recession we cut services and expenses to the bone and we are now a very lean, but still full-service city,” she told EGP.

Meanwhile, according to Robert Valverde the city should be paying more attention to its seniors. “It doesn’t make sense the city doesn’t do more to keep seniors happy when they’re the ones who vote,” he said half-jokingly.

—-

Twitter @nancyreporting
nmartinez@egpnews.com

Montebello City Council at Odds Over Budget

May 21, 2015 by · Leave a Comment 

The use of $3.4 million in one-time funds to balance the city’s 2015-16 budget caused a rift on the Montebello City Council last week, splitting the council 3-2 for the approval.

Councilman Bill Molinari, the council’s longest sitting member, and Councilwoman Christina Cortez opposed the majority decision that will allow revenue generated from the sale and lease of city land to be used to pay for costs tied in part to the hiring of five new full-time employees, including a new fire marshal, director of parks and recreation and police lieutenant

“I don’t get how you take the one-time selling of assets and call it revenue,” Molinari said.

He reminded the council and people in the audience that it was just 4 or 5 years ago that the city was struggling with a $12 million budget deficit.

“What happens next year when that $3.4 million is not there,” he asked. “How do we then plug that hole when there’s no anticipation of revenue?”

The budget approved by the council includes $51.7 for expenditures, a $4.4 million increase over last year, and $3.9 million more than the $47.9 million in anticipated revenue.

The increase in expenses can be partially attributed to the five new employees, but also includes an increase in retiree pension costs, a rise in the state’s minimum wage to $10 an hour in 2016 and the 5% percent pay raise for police the council approved earlier this year.

According to a June 2014 audit, the city has $5.6 million in its reserve fund.

The new one-time money will come from a $2 million sale of city land and a $1.4 million deal to lease three city-owned properties to a company that plans to build six cell towers on the sites.

“Do you want to cut spending to the tune of about $3 million or would you like to take the one-time revenue, balance your budget and move forward,” asked City Administrator Francesca Tucker-Schuyler in response to Molinari’s questioning of the wisdom of using one-time revenue for items that come with costs beyond the next fiscal year.

“We want to attack, we want to criticize, but we don’t want to come up with any solutions,” Councilwoman Vivian Romero said in defense of the council majority’s position. “It’s about time the city wakes up.”

Growing frustrated, Mayor Jack Hadjinian interrupted Molinari when he attempted to ask staff for clarification on another issue, reminding Molinari that he had the budget binder at his home for over week.

“Did you bother to pick up the phone and call your city manager or your department heads to talk about this matter, or did you wait to come to a council meeting and make it sound like there’s all these uncertainties in the budget?” Hadjinian asked.

Molinari defended himself, saying in the past city staff has not always responded in a timely manner to his requests for more information.

“If the council wants to set a policy where I can call a department head and get an answer, I would be more than happy to do that, it would save a lot of time,” retorted Molinari, He was referring to the fact that most requests for information get forwarded to the city administrator.

Molinari said he does not favor budget questions being asked behind closed doors, out of public view.

“This is their money we’re spending,” he said in frustration. “We’re talking about $50 million.” “We keep talking about transparency, I’d like to see a little more of it.”

Not one to let a critical comment slide, Hadjinian quickly responded with a criticism of his own.

“Those ‘closed-door’ meetings you’re talking about, that is a council briefing,” he said. “You refused to meet with staff and you want to call it non-transparent practice, I would disagree and say that’s shameful for you to say on the dais.”

“What you’re trying to do is create uncertainty in the public’s mind.”

But Molinari said he shouln’t have to call staff to find out if there are changes in the budget; they should list them as budget agenda items.

In a condescending tone directed at Molinari, the mayor then instructed the city administrator to next year draw arrows, circles and notes in the budget to “make it easier for councilmembers who’d rather not ask questions and act like it was shoved down their throat to approve.”

“The bottom line hasn’t changed,” clarified Tucker-Schuyler. “The composition may have shifted because they combined two different sections into one.”

Molinari suggested the city conduct more public study sessions on the budget the way it has in the past.

“Again, these are all estimates, we don’t have a crystal ball to really know what kind of revenues will be received by the city,” said Tucker-Schuyler.

Update 4:27p.m.: Corrected city manager to city administrator; editing errors.

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