On September 23, 2009 the Fillmore Gazette reported that at the September 22, 2009 City Council meeting Interim City Manager Larry Pennell could not answer Councilman Conaway’s question about why the agreed procedure for finding a new auditing company for the city was not followed. It might be more accurate to state that Pennell would not answer Councilman Conaway’s question and it was not the first time that Conaway had raised questions to Pennell about the selection process for a new auditor and been ignored. Why would the City Council majority allow the City Manager to treat an elected city council person with such disrespect? Pennell had requested City Council support for requesting proposals for auditing services at the August 25, 2009 City Council meeting. At that meeting Conaway asked Pennell if he had selected a firm or would the City’s existing firm be allowed to submit a proposal for the auditing services. Pennell answered in the affirmative and stated regional and local firms would be invited to compete for the services. However, as reported in the Fillmore Gazette, Pennell brought-in a new firm without giving any other firms a chance to bid the job. This is just one example of Pennell telling the City Council one thing and then doing what ever he wants to do to suit his and Mayor Walker’s agenda. One of Pennell and Mayor Walker’s disingenuous arguments for not allowing other auditing firms to compete for the services was that they needed to hire a firm right away in order to meet certain State reporting deadlines with Walker opining that the penalties issued by the state are excessive when the reports are late. Question is, if this firm was able to prepare a complete proposal in the short period of time, why would other firms not be able to do the same? Answer is, Pennell and Walker did not want any other firm to propose and did not give them the opportunity to do so.

There will be no savings for the city with this new audit agreement. In fact, while $34,000 was budgeted for the audit, under the new auditing firm the cost to the city will be almost $41,000. $7,000 could have been saved by keeping the previous firm which had done a commendable job for many years. When Washburn asked, “Is there any flexibility in pricing?” the representative of the chosen auditing firm replied that it would be the same as “last year.” I am not quite sure how the $41,000 price from the new firm can be considered the same as the $34,000 cost to the city for last years audit. Brooks said it was a competitive bid even though the City only received one bid! Brooks needs to explain his logic on that one. Conaway was the only one to vote against spending the $41,000.

When Washburn pointed out that the City had only budgeted $34,000 for auditing services, Pennell quickly stated that he thinks the budget has more money for the audit as the Redevelopment Agency also contributes to the cost of the audit. And guess what? They bought Pennell’s explanation! Problem is there is no extra money budgeted for the audit, $34,000 is all there is. Page H-15 of the budget shows $34,000 budgeted for the annual City Audit. This page also shows all of the transfers to help pay for the audited including a $10,000 transfer from RDA Central Project and a $5,000 transfer from RDA Housing. So Pennell is wrong and/or he intentionally misled the Council when he stated the budget has more money budgeted for the audit. The Redevelopment Agency contribution is already accounted for in the $34,000. This is another example of Pennell incorrectly informing the Council of something in order to persuade them to do what he wants.

So in one quick action the City Council spent $7,000 of monies that they do not have budgeted. This is not surprising though because when they approved the $156,000 salary for the new City Manager, they spent $24,000 more than the $132,000 that they budgeted for the city manager position. Walker and Pennell knew they were going to spend more than $132,000 for the salary of the new city manager, but it suited their purpose at the time to only show $132,000 in the budget in order to get the City Council to adopt the budget. The new expensive “transparent” budget that Pennell and Walker convinced the City Council they needed is not as transparent as they would like you to believe. They either don’t know what they have budgeted, or they don’t believe anyone will care or be able to figure out that they are spending more than they have budgeted as long as they get to do things their way.

Past administrations required all city staff reports that involved spending city funds to include a fiscal impact report stating how much a council decision would cost, where the money was coming from and requesting an additional appropriation of funds if necessary. For some reason, Pennell does not feel it necessary to include fiscal impact statements in his staff reports and is gambling on the fact that the City Council will not challenge him on his actions. His gambling has served him well. Remember it was Pennell who stated to the City Council on July 23, 2009 that the City at its current rate of spending was going to run out of money in 18 months and on July 28, 2009 Pennell stated he would reduce the General Fund budget by $1.9 million. Well, on July 28 the General Fund budget was $12.9 million and on August 25 the City Council adopted a $13.3 million General Fund budget; an increase of $400,000. Pennell never produced the $1.9 million in cuts that he said were needed to balance the budget. In fact, the budget that Pennell convinced the City Council to adopt is $2.6 million greater than last year’s General Fund budget and that does not include the extra $7,000 for the new audit or the extra $24,000 for the new city manager. This administration and City Council sure knows how to covertly spend the taxpayer’s hard-earned monies.