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Audit Subcommittee Meant to Ease Public Distrust of Santa Monica City Hall Faces New Challenge  

Convention and Visitors Bureau Santa Monica

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Niki Cervantes
Staff Writer

March 29, 2017 -- When it was created almost two years ago, a special panel to act as a watchdog of public spending at Santa Monica City Hall inspired some high hopes.

Council Member Sue Himmelrich said the new Audit Subcommittee could help restore public faith on how City Hall was spending a biennial budget that tops $1 billion -- one of the highest per capita in California ("Santa Monica Municipal Budget Among Highest Per Capita in California," November 16, 2016).

Easier said than done, it turns out.

Critics now want a seat at the table to delve into City employee pay, benefits and pensions -- all of which are also among the state’s highest ("Santa Monica Ranks Third in County for City Employee Compensation Costs, Survey Finds," June 23, 2016).

And the reaction from Himmerich, an ally of some of those critics, is not exactly embracing.

After all, “no one from the public attended a single meeting until the January 2017 meeting,” when speakers showed up asking that the five-member panel be expanded, she said.

The subcommittee is composed of Himmelrich, council members Tony Vazquez and Pam O’Connor; Nimish Patel, an accountant and former school board member who lives in Santa Monica; and Frances Ellington, also a CPA and Santa Monica resident.

All are appointed by the council and serve staggered terms, with Himmelrich and O’Connnor serving four years and Vazquez serving two years. The terms for Vazquez and Ellington expire this June.

And activists are zeroing in now on the panel, which has barely registered with the public despite its lofty ambitions.

“A movement is now afoot,” said Tricia Crane of Northeast Neighbors, one of many neighborhood organizations that have been going head-to-head with the City over issues ranging from development to the cost of employee compensation and -- in particular now -- soaring costs for pensions.

Crane said “many residents (insist) that the City must account for the high salaries we pay City staff compared with other cities in our state.

“They want to see more residents on the City Council Audit Committee. We have a right, they say, to understand and decide how to deal with the looming City pension crisis,” she said.

Residents, Crane added, "want to see greater transparency and accountability for City salaries and pensions."

Himmelrich told the Lookout Tuesday that, since panel members are all residents, “it is not true that community members are not represented.”

“Of course, I too am a community member, as are the other councilmembers,” she said. “Our meetings have been publicly noticed as we are a Brown Act body and no one from the public attended a single meeting until the January 2017 meeting.

“I think we may have had five or six members of the public in attendance in January,” Himmelrich said. “I have never received a single letter from a member of the public about the work of the audit subcommittee.”

Himmelrich and City Manager Rick Cole have met with several community groups to discuss the compensation issue, which both readily agree needs to be ("'Serious Community Discussion' Needed on Santa Monica Employee Compensation, City Manager Says," January 6, 2017).

Cole is agreeing to work specifically on the issue.

“Recognizing the citizen interest in the staff compensation review commissioned by the audit subcommittee, I have had preliminary discussions about the potential for an ad hoc opportunity for citizens to participate,” he said.

“The chair of the audit committee (Patel) is open to this possibility as am I,” Cole said Tuesday.

But “whether and how to move forward with such an approach will be up to the audit subcommittee and the City Council discussing it at one of their regularly scheduled meetings,” he said.

Approved by the council in July of 2015, the audit subcommittee was one of several recommendations from a Los Angeles County Civil Grand Jury ("Santa Monica City Council Approves Audit Subcommittee for Budget," July 30, 2015).

In a countywide investigation, the jurors found some of the worst government management at Santa Monica City Hall, although officials there strongly denied the findings outlined in a 2013 grand jury report.

Himmelrich and others hoped the subcommittee would both provide an independent look at spending and increase transparency at a time of public distrust of government at City Hall and in general.

But priorities are shifting now among Santa Monica’s outspoken critics, who are based in its neighborhood groups and also include the slow-growth group Residocracy and two community-based watchdog organizations -- the Coalition for a Livable City(SMCLC) and Transparent Santa Monica.

City employee costs, like other spending practices, have been a long-term concern of most of these critics. But the fight over development in Santa Monica pushed that issue to the back burner until the November defeat of Measure LV, which could have reined in development dramatically if passed.

When LV lost, complaints about employee costs -- now more bitter than ever -- began moving to the forefront.

Another difference today: Himmelrich, who was elected to her first term in 2014 with the support of some of those critics, took a hit in her popularity with them because of the defeat of LV.

She did not campaign against the measure, as did other council members and most of the city’s political establishment.

But she expressed reservations about LV. Her absence in the fight won her no praise among some original fans.

Himmelrich, whose term expires in 2018, says she is open to input from the public on employee compensation.

“I am always interested in more public participation, especially in the budget process,” Himmelrich said. “I have begged community members to look carefully at areas of the budget that cause them concern or interest them, with little response until the salaries and pensions issues arose.

“I agree that that we have many high-paid employees and the pension issue is causing angst in cities throughout the state.”

Himmelrich said she welcomes community involvement.

“I encourage everyone who is interested in this issue to help us craft feasible solutions to these issues within the constraints of the law, CALPERS (the public pension system), and our union bargaining groups. I am intensely researching and discussing these issues myself.”

The subcommittee has asked outside auditors, Moss Adams LLP, to prepare an “internal Audit Assessment of City’s Compensation and Use of Overtime by Sworn Personnel,” she said.

The subcommittee’s meeting on April 18 has been canceled. The next meeting is scheduled for August 15. It is at 7 p.m. at the Ken Edwards Center, 1527 4th Street, Room 104.

Editor's note: Employee salaries and compensation have been a longstanding issue in Santa Monica. The Lookout explored the issue in the 2003 series "A Bang for the Buck?"

A BANG FOR THE BUCK?
"Great Expectations or Spending Spree?" June 16, 2003
"A Tale of Two Cities: How Santa Monica and Pasadena Spend Their Money," June 16, 2003
LETTERS -- City Officials Respond: Apples and Oranges & Bad Math," June 17, 2003


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