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    The Hobbs Report...and the Real State of the City

    (January 14, 2003) -- If you want to know the real State of the City of LB, look no further than tonight's anniversary of a publicly voted Council cover-up that took place at the 3d district Council meeting held at CSULB in January 2001.

    It's been nearly two years -- two years -- since the Council voted to "receive and file" (take no further action on) a devastating financial report compiled by then-Deputy City Auditor Earl Hobbs.

    As reported in detail at the time, the written report by Deputy City Auditor Hobbs found LB Convention & Entertainment Center operations cost LB taxpayers $2.5 million in FY 2000 (ended Sept. 30, 2000) after posting a $3 million loss in FY 1999 (ended Sept. 30, 1999). The Hobbs' report said that since opening in 1978, the LB Convention & Entertainment Center's operations had caused City financial operating losses of "several million a year" and "cumulative cash operating losses in excess of $60 million."

    Deputy City Auditor Hobbs' report also said that City Hall [several years ago] instructed the Convention Center facility operator to increase its parking charge (now $7) by $1 as part of a bail out of the (now ceased) Civic Light Opera and has continue 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 Hobbs 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 noted 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. put Deputy City Auditor Hobbs' report on line in our Reference section, where is can be viewed by clicking on Hobbs report on Convention Center.

    The Hobbs report was sent to the Council by City Auditor Gary Burroughs, whose recommended action was: "Receive and File" (take no further current action). And to ensure the Hobbs report got a fast burial, someone agendized it as a "consent calendar" item, so it wouldn't be separately discussed unless someone from the public or a Councilmember requested it.

    None did.

    And today, nearly two years later, LB's six figure City Auditor has yet to level with LB taxpayers about what was done in response to the Hobbs report. What City Auditor Burroughs did do in 2002 was fire Deputy City Auditor Hobbs. Mr. Hobbs has since filed a "whistle blower" lawsuit alleging he was illegally fired in retaliation for a number of revelatory actions. City Hall is expected to oppose the allegations in Mr. Hobbs' lawsuit.

    The proper place to adjudicate Mr. Hobbs' lawsuit is in a court of law...and the proper place to respond to the substantive issues raised in Mr. Hobbs' report -- two years ago -- is at a public City Council meeting.

    The public has a right to know what was done in response to what Mr. Hobbs found and reported. has kept the Hobbs report posted on our front page ( for nearly two years...and it continues to draw readers.

    In fairness, the City Auditor's office has also kept the Hobbs report posted on its City Hall web site...and has done so for some time. Good. We're reliably informed that Mr. Burroughs was present at the January 23, 2001 Council meeting, apparently prepared to discuss the Hobbs report had any Councilmember asked him. Good.

    It's time for the Council to ask Mr. Burroughs now...and time for him to answer.

    Yes, it's only money. But it's not theirs. It's ours.

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