City Auditor's Office Seeks Council Approval To Destroy Years Of Files & Documents; Some May Involve Still-Controversial Issues

Agendized for the November 23 Council meeting just days before the Thanksgiving holiday, the City Auditor's office proposes to destroy its listed records in much the same way as other City Hall departments seek approval to purge files no longer deemed relevant. In a multi-page attachment to the Council agenda item signed by Assistant City Auditor J.C. Squires, the documents proposed for destruction include City Auditor records related to:

• City Hall's "Capital Improvement Program" from 91/92 through 95/96.. During this period, City Hall said it planned to deliver a number of major traffic improvement projects, including grade separations (running one street under another) at the Traffic Circle, Iron Triangle (PCH/7th/Bellflower) and Lakewood/Spring that would reduce congestion and lessen the risk of intersection traffic accidents. The three grade separations were never delivered as represented, despite being publicly listed in City Hall's Transportation Element to the city's General Plan, a legal document.

  In 1991, the City Council imposed a 16% increase in business licenses and new fees on new development to pay for these and other traffic projects as part of a "Traffic Mitigation Program." The "Traffic Mitigation Program" resulted from a process that included City Hall-approved committees which claimed future traffic needs justified the business license fee increase.

  As LBReport.com detailed in a Sept. 2000 article, the business license fee increase was publicly portrayed as a way to fund the traffic improvements, but the ordinance itself designated the money as General Fund revenue...inviting the Council to spend it as it pleased on other projects, which it did.

  In the late 1990s, the Council deleted the Lakewood/Spring project, diverting funding to a pedestrian walkway near a planned downtown hotel...and approving new Airport adjacent developments at Lakewood/Spring likely to increase traffic. In December 1996, the Council allowed a new UPS facility at the southwest Lakewood/Spring corner and in April 1999 it approved Marriott Hotel expansion on the southeast corner.

  In July 1999, city staff publicly admitted that none of the 16% business license tax collected in FY 97-98 had been transferred to the Traffic Mitigation Program and the money had apparently been spent on other capital projects. City management justified deleting the Lakewood/Spring project on grounds traffic hadn't grown as much "as planned" and the Lakewood/Spring project wasn't a stand-alone project separate from airport area projects.

  The Council diverted the Lakewood/Spring project funding to a downtown pedestrian walkway and two other projects (710 freeway signage and a longer 605 freeway offramp onto Spring Street). City staff justified shifting the traffic money to the pedestrian walkway on grounds it would "support transit use through linkages to the Transit Mall" and encourage development and business location "within walking distance of the most heavily served by transit [sic] area of the City."

  City Hall is now in the process of inviting public participation in a new round of public meetings preceding adoption of a legally required "update" to its General Plan.

• Documents involving "Tidelands Parcels/Convention Center" from 1981 to 1993. As LBReport.com reported in January 2001, Deputy City Auditor Earl Hobbs prepared an audit report in late 2000 indicating that since its 1978 opening, LB Convention & Entertainment Center's operations had caused City financial operating losses of "several million a year" and "cumulative cash operating losses are in excess of $60 million."

  The report was transmitted to the Council by City Auditor Gary Burroughs as a "consent calendar" item (not routinely discussed unless requested by a Councilmember or the public) with the recommended action "receive and file" (effectively take no further action). No Councilmember pulled the item for discussion and the report was received and filed.

  In addition to indicating years of Convention Center operating losses, the report said City Hall had instructed the Convention Center facility operator several years earlier to increase its parking charge by $1 as part of a bailout of the (now ceased) Civic Light Opera and had continued to divert the increase into its Special Advertising and Promotions Fund.

  "This practice appears contrary to the statutory [Tidelands] trust, general trust law, the City Charter and generally accepted accounting principles," the report said. It recommended that the appropriateness of diverting Convention Center parking revenue to other city funds "be referred to the City Attorney for additional review."

  The report also said that for nearly twenty years, City Hall has failed to follow a 1981 City Manager-authorized Administrative Regulation requiring that the City's General fund reimburse the Tidelands for all losses from non-trust [non-Tidelands related] events (and events are conclusively presumed non-trust unless the City Attorney makes a written determination it is a trust event.)

  A 1982 report by the City Auditor's office found the Administrative Regulation was not being followed, and the Auditor's office latest report said this "continues to be the case today." It recommended that the applicability of the Administrative Regulation be reviewed by City Management and the City Attorney. "If still applicable, it should be followed. If not, it should be revised or rescinded," the report said.

  City Auditor Burroughs eventually fired Deputy City Auditor Hobbs for reasons it says were unrelated to his audit. Mr. Hobbs is now suing LB City Hall, alleging wrongful termination; City Hall denies Mr. Hobbs' allegations.

  In January 2004, LBReport.com reported that LB City Hall had not yet provided information and documents requested by the CA State Lands Commission (SLC) in mid-2003 relating to the Convention and Entertainment Center and the Queen Mary lease. The State Lands Commission sought in Sept. 2001, and reiterated its request in mid-2003 for, documentation on how LB City Hall proposed to address what SLC staff called diversion of tidelands trust revenue from the Convention and Entertainment Center parking lot funds to other City Hall funds and purposes.

  Staff of the State Lands Commission -- the agency charged with monitoring use of state tidelands trust property -- requested the information and materials in letters dated July 9, 2003 and September 6, 2001.

  In mid-November 2004, State Lands Commission Executive Director Paul Thayer told LBReport.com that to his knowledge, his agency's staff had not yet received the documents requested from LB City Hall.