At the last Santa Clarita City Council Meeting, two members of the Open Space District, Financial Accountability and Audit Panel (FAAP), spoke during public participation questioning a $2 million transfer out of the Open Space account.
The action in question, was accomplished at the December 12, 2017 City Council meeting, Agenda Item 15, titled 2017-18 Mid-Year Budget Adjustment. Buried in the staff report for this item was the following information: “The recommended expenditure adjustment in the Open Space Preservation District Fund includes a $2 million funding swap for the Canyon Country Center land acquisition.” “The expenditure reduction of $2,375,263 in Other Revenue funds includes a $2 million funding swap from the Facilities Fund for the Canyon Country Community Center land acquisition, and $17,000 in Public Education and Government Fund for area enclosure and storage of public television equipment.“
Well, if you have read the above paragraph and understood what is going on, you have far greater psychic powers than I possess, so I decided to do some digging. One of the FAAP members who spoke made the comment, Open Space funding is to be used to purchase undeveloped land, and when the City Manager had an opportunity to respond, he issued the same sentiment. As it turns out, the land which will accommodate the soon to be constructed Canyon Country Community Center was not all purchased at one time.
The first section to be obtained was authorized on September 23, 2014, when agenda item 10, looked for approval to purchase approx. 6.5 acres of vacant land, for $4.7 million. Revenue, according to the recommended action, came from the General Fund (Capital Projects Reserve) to expenditure account 19000-5201.004. At least my psychic powers were working this time, as account 5201-004 is defined within this year’s budget, page 294, as “Capital Outlay: Land: Provides for the acquisition of land for city use or for Open Space Preservation.” The Signal reported the deal the next day, in an article penned by Lila Littlejohn. Purchase of the corner property at Sierra Highway and Soledad Canyon, along with the restaurant and shops on Sierra Highway came later, and these land purchases were not undeveloped land.
So, what is the problem? When our City Manager responded, he indicated in part; both the City Attorney and the City Manager will be setting up a meeting with the members of the FAAP to explain the City’s position on how they feel the action was legal, appropriate and consistent with the district approved by the voters. But, last time this issue was addressed, Councilmember Smyth indicated the meeting was going to be held by August 26, which is before the Council Members returned from hiatus. Fortunately, as all FAAP members will be in attendance, the meeting must be noticed per the Brown Act, and interested members of the public will be able to attend. Mr. Striplin further indicated the FAAP does not have the authority to dispute the parcels purchased. In some instances, I agree with him. The FAAP cannot challenge the parcels cost, use, or location within the city. But the FAAP can, and should, challenge the acquisition, if the amount of land purchased for active parkland exceeds 10% of the total land purchased, the parcel is outside the three mile district border, or the land is not being purchased for use by the district as open space or active parkland.
Lastly, the FAAP should maintain oversight of Open Space District expenditures, to assure the resources are being spent properly, in support of the district goals and objectives. Such questioning of actions taken, and oversight of funds appropriated is support of the district, are precisely what was intended when the FAAP was formed. As a member of the panel for the first five years of its existence, I was made aware the yearly financial audit, which is funded by the city, only verifies accounting practices. It is not a forensic audit to determine funds are properly spent. Yet even if it had additional scope, passing an audit does not indicate everything is OK. It simply means the auditors did not report any findings.
Also remaining in question is Mr. Striplin’s comment stating, The Canyon Country Community Center is “Active Parkland.” I pondered the validity of his statement, and if true, the Newhall Community Center should be classified as a park also. This time to find out, I went to the City of Santa Clarita’s website for an answer. Under Parks Division, the website indicates, “The City of Santa Clarita offers 34 beautiful and well-maintained parks. Picnic tables, baseball diamonds and basketball courts are just a few of the numerous facilities park patrons can take advantage of.” On the Parks and Facilities Pages, I selected “Parks” and “All Amenities,” which brought up a picture and details on all 34 Parks. Community centers and libraries were not in the listing, because they are identified as “Park and Recreation Facilities,” not “Parks.”
Therefore, I will be waiting to hear the City Manager and City Attorney explain their position, which approves the use of “Open Space District,” (Proposition 218), funds to be used for the purchase of property not designated as Open Space or active parkland by the City. In that same vein, I’m sure they will agree, it would be illegal to transfer revenue from a discretionary fund, (like the Open Space fund) to a non-discretionary fund, (such as the general or facilities fund), unless it was identified as paying back an amount used to benefit the discretionary fund.
Since this action is transferring revenue to the General Fund account for a purchase which was approved by the City Council over three years ago, does it mean staff can use Open Space funding to reimburse the General Fund for any purchase of parkland back through city incorporation in 1997? While it may not be illegal to do so, it certainly displays an abuse of the trust our community had with City Government, when we voted to establish the “Open Space and Parkland Preservation District.” Lastly, I would ask; why in a year where Capital Project funding is projected at $0, does it take $755,556 to administer the fund? (See Open Space Engineer’s Report, page 5). Plus, who specifically is administering the fund?
No matter which way this issue turns out, it has shown the value of having an oversight committee like the FAAP. Our elected officials appear to be asleep at the switch, as our Mayor was quoted in a previous Gazette article as saying; “I’m assuming that all this was looked at before the decision was made to go ahead and use the money to build active parks at the Community Center.” She went on to indicate, “When we receive information that an action is OK to take, we go by what our staff puts forth. As far as I know, this was all done the way it was supposed to be done, and until something different comes up, that’s what we go by.” Thankfully we have FAAP members who ask questions, and make the issue known when they feel a problem may exist.
From my perspective, I am still optimistic staff and council will look inward and use this opportunity to implement changes which will end “business as usual” and strengthen the City’s business practices. Plus, they need to embrace the hard-working volunteers, serving on the FAAP, when they raise an issue.
The Canyon Country Community Center is a great project, which will provide our residents with resources we desperately need. Let’s do the right thing and get past this issue. Then, we can all look forward to the project’s bright future, and I can write a very happy story for the grand opening.