Tuesday, June 21, 2011

OCEA Auditor - "No Financial Crisis"

This afternoon I was one of the participants in a telep
honic press conference held by Jennifer Muir, spokesperson for the Orange County Employee's Association at which the auditor they hired, Steve Foti of the auditing firm of Harvey M. Rose Associates, LLC, answered questions about the recently-completed audit he performed of the City of Costa Mesa's financial condition.

He provided the OCEA with an 8 page Executive Summary and a 27 page audit report. I'm not going to try to cover every number provided and every comment he made during the press conference. However, during his audit he found more than $26 million that COULD be used to help balance the municipal budget and preclude the draconian measures currently being proposed by the majority on the City Council. The chart below is extracted from the cover letter to the final audit report, issued today.

According to Muir, she has met with City CEO Tom Hatch this morning and provided a copy of the audit and, apparently, will be given 10 minutes to present a summary of this information to the City Council at their meeting tonight.


Based on the comments made in the press conference, Foti opined that Costa Mesa is doing a good job of managing it's finances. When pressed by reporters he would not state that city officials have "hidden" money in the bowels of the municipal finances and would not address anything about "ulterior motives". When pressed by one
reporter to give an opinion about how Costa Mesa is doing when compared to other cities, he said our city is doing "better than average".

One reporter wondered wh
y Mayor Pro Tem Jim Righeimer was talking about having "only $1million in reserves" when this report states $26 million available. Foti couldn't understand where Righeimer got that number, but didn't attribute an ulterior motive to it.

As if the council meeting tonight wasn't going to be enough f
un, adding this report into the mix makes me think there may be no chance for a budget to be approved this evening. I hope I'm wrong, but I don't want to see them approve a draconian budget without giving this new information a chance to percolate and be considered carefully. We'll see.

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Anonymous Barry said...

They want to issue bonds to cover our unfunded pension obligation? Is OCEA really serious? This is laughable.

Hire union goons like Berardino and they will spin the numbers any way you want!

6/21/2011 03:31:00 PM  
Anonymous vulanse said...

Hire your own Auditor and just imagine what the results might be.

6/21/2011 03:38:00 PM  
Blogger Colin said...

Well if we didn't layoff all the workers, the unfunded pension wouldn't be a problem, and according to the audit, our budget would be fine. So Cancel the Layoffs and have everything go back to normal.

6/21/2011 03:38:00 PM  
Anonymous Original Max said...

Again, why not put Righeimer on a lie detector and ask him if his original intent was to file for bankruptcy? That would explain his original dire predictions. Our budget is bad, but not Righeimer bad. Everyone else I know was happy to find out that revenues were up. Righeimer seemed upset that he won't be able to force the city into bankruptcy.

6/21/2011 04:09:00 PM  
Blogger Joe said...

Anyone else tired of hearing about union "thugs" or "goons?"

All the thugs and goons in Costa Mesa I've encountered in the last 21 years seem to be anti-union.

6/21/2011 04:18:00 PM  
Anonymous Chief Staveley's #1 Fan said...

Please do not add any more last minute items for the Hatchster tonight. I want to go on my two week vacation knowing that the Budget is finally balanced without anymore deeper cuts to accommodate your personal politically motivated spending sprees. And don't forget to catalog the "Three Costamazing Days of July" deep into the Costa Mesa Historical Society's vaults, as a "once-in-a-lifetime" event, that should never be repeated again! And could you make sure that at least one of the HB choppers flies over my house.... at least once while we're gone? And don't forget to tell all those stealth ninja clean-up volunteers that I'm expecting a clean street when I get home.

6/21/2011 04:41:00 PM  
Anonymous Costa Bell said...

BEll Costa really needs to take a step back. Reality is setting in and everyone is finding out what the real story is. Auditor's figures don't lie. Sorry Barry.. but your pigs are starting to stink...

6/21/2011 04:41:00 PM  
Blogger kwahlf said...

Barry, what if Foti is right and Righeimer wrong. Then what?

6/21/2011 04:45:00 PM  
Blogger kwahlf said...

Barry, what if Foti is right and Righeimer wrong. Then what?
Colin- you got that right!

6/21/2011 04:46:00 PM  
Anonymous sellyourstuffandpayus said...

reduce designated funds and eliminate the self insurance fund? To pay outrageous retirement costs? Really? I mean really? While we are at it we could sell City Hall and lease it back. Save the ten minutes and address the designated fund reduction and he will be laughed off. Leece may even be against this.

6/21/2011 04:55:00 PM  
Anonymous Barry said...

Is anyone on this blog seriously supporting the idea of issuing bonds to cover our unfunded obligation. Really? Can't be. No one is that dumb. We may disagree on a lot of stuff, but that idea is just outrageous. Please, say you are all smarter than that. PLEASE FOR THE SAKE OF OUR CITY

6/21/2011 04:57:00 PM  
Blogger Kim Marie said...

So much for transparency.

6/21/2011 05:30:00 PM  
Anonymous Daisy Mae said...

The haters will say that since it was paid for by OCEA it is not accurate. Numbers mean nothing if they do not convey what you want. I have always believed that Costa Mesa was not in the dire straights that was presented by Righeimber, Messinger and Monahan. What happened to Monahan anyway. For all his years on the Council he should of known the truth when he sees it. Why the change of heart Gary since you also get the sacred health benefits and pension you wish to deny to other City employees. You are a part-time employee, you should not be getting any benefits.

6/21/2011 05:34:00 PM  
Anonymous Pentagon Hexagram said...

There are two distinct problems in Costa Mesa. One is a cash flow problem, where the city needs to have adequate working capital. The auditor's report demolishes the claim that Costa Mesa is "broke" and will "run out of money". There is plenty of money in reserves to cover any foreseeable cash management problem. One Big Lie demolished with facts.

The other problem is the question of balancing income against expenses for the year and ending the year with a surplus. That's a bigger problem, but one where the auditor makes very good sense in looking at present and future trends in revenue and expense, and looks at different ways of budgeting for unfilled positions.

6/21/2011 06:08:00 PM  
Anonymous Original Max said...

By the way, it is corruption if a council members tells us citizens that the city is bankrupt (when it's not) and we must outsource without any proof we will save money. Righeimer hasn't been honest with his true intentions since day one.

6/21/2011 09:43:00 PM  
Anonymous Doug said...

That OCEA audit turned out to be completely bogus. Because the audit firm failed to support OCEA's position, it caused them to look exceedingly desperate.

The audit uncovered exactly nothing; no hidden funds, no unnecessary stashes, no slush funds, etc.

Gibberish, sleight of hand, smoke and mirrors, imaginary money and rhetoric was all the OCEA had to offer. Their audit report made our Costa Mesa city councilmen look like blooming geniuses.

My guess is they won't be hiring that audit firm again.

6/22/2011 01:50:00 AM  
Anonymous Costa Bell Speaks said...

The employees (including police officers) all took a pay cut over the last two years in the form of mandatory unpaid time off work. The council has rewarded this by not doing anything to increase revenues, threatening layoffs, and micromanaging beyond the scope of the council's authority. In spite of being provided a balanced budget by the city manager, Councilman Righeimer demanded additional cuts to account for $2.9 mil in expenditures which are prima facie unnecessary. The budget is not the problem if someone can materialize that kind of deficit out of thin air.

6/22/2011 05:09:00 AM  
Anonymous Mike said...

How did the audit make the councilmen look like geniuses again? That's an interesting interpretation.

6/22/2011 07:25:00 AM  
Anonymous Barry said...

Did anyone watch that train-wreck of an audit presentation at around 12:15 last night. Couldn't tell from the tv, but looked like only a few were left in the chambers. No hidden money, no pot of gold, no "waste watchers" just draining our cash and reserves and floating more bonds to pay down our pension obligation. The woman presenting couldn't even defend it. It was really sad to watch--glad I was not there.

6/22/2011 09:10:00 AM  
Anonymous CM Mesa North said...

OCEA's audit last night was absolutely embarrassing. The speaker was distancing herself from the "findings." They did not do their homework or there simply isn't any money left besides issuing bonds or raiding the insurance reserves. That would be fiscally irresponsible.

6/22/2011 09:37:00 AM  
Anonymous Original Max said...

Regardless of the results of the audit, Righeimer is still responsible for manufacturing a bankruptcy scenario. The audit does seem to show some savings although maybe not $26M. One thing I don't like is how the union assumes that money should automatically go to salaries (although I am for more police officers than Righeimer is). It's too bad Righeimer doesn't live near Shalimar.

6/22/2011 11:07:00 AM  
Anonymous Wheelchair Improver said...

Does anyone know why a certain CC member who claims to love CM chooses to send his kids to public school in Huntington Beach?

6/22/2011 11:27:00 AM  
Anonymous Mike said...

Regarding all the folks, including the CC member, in Mesa Verde that send their kids to school in HB, they don't seem to understand that maybe test scores, etc. might go up at OUR schools if their kids were attending them. Kills me that all the people I know that grew up here and went to the schools here don't send their kids to those same schools. They worked pretty well for us. Heaven forbid their kids should have to mingle with 'the illegal immmigrant scourge.'

6/22/2011 12:43:00 PM  
Anonymous Barry said...

Mike, what Councilmember sends their kids to HB Schools. I thought Mensinger's oldest kid went to Estancia and younger kid is at St. John's with Righeimer's kids?

What about Wendy Leece who lives in Irvine, aka, the gated HOA community of SeaBreeze. She doesn't live here, she has no idea what Costa Mesa is about.

6/22/2011 01:43:00 PM  
Anonymous Harold said...

Original Max: If you don't like living near Shalimar ------ move!

You couldn't pay me enough to live in that neighborhood. It needs to be razed so that we can rid this city of criminals.

6/22/2011 01:43:00 PM  
Anonymous Max said...

Wheelchair, you are referring to Righeimer? I think he spends most of his time in Newport. From my observations he seems ashamed that he has to live here. He'd probably live in Newport if it wasn't a requirement to live in the city you represent. Not surprised at all to hear his children go to Huntington Beach.

6/22/2011 01:44:00 PM  
Anonymous Mike said...

I was responding to the other comment from Wheelchair - I can't confirm that. I do know a lot of people who send their kids outside the district, and it ticks me off as my oldest will be starting kindergarten at California School, proudly, this fall.

I know Mensinger's kids are in district, and it's one of the few things I will actually give him props for.

6/22/2011 02:28:00 PM  
Anonymous Costa Bell said...

Love it= You know when you get ole' Barry away from his beer and t.v. we (OCEA, CMCEA, EMPLOYEES) must of ruffled his feathers. The Audit proved without a doubt what the "normal" people have been telling the citizens of Costa Mesa all along about the deceit and lies Riggy has been spreading. As for Chief Staveley "Newport Beach police Chief Jay Johnson told The Orange County Register, "I've only known Chief Staveley for a short time and have found him to be well-respected within the law-enforcement community. He has a tremendous amount of experience and is a wealth of knowledge and wisdom, from which I have personally benefited." Sounds like AGAIN, the Bell Costa Four and Tom the Puppet have finally been found out and put in the public spotlight. Barry.. go back to your little corner and cry cause' we "The PEOPLE", the citizens of Costa Mesa are not back down from this fight.

6/22/2011 02:41:00 PM  
Anonymous Frank Gomez said...

Wow! stunning results from a report commissioned by the OCEA!

6/22/2011 03:57:00 PM  
Anonymous Face Reality said...

Costa Bell, you are either drunk or on drugs!

Of one thing I am certain though. You are unable to face reality.

Perhaps you should be taking some anti-psychotic meds instead of so much cocaine. You need something to clear your head.

6/22/2011 03:59:00 PM  
Anonymous Original Max said...

Harold, who said I live near Shalimar? Or is that just some whacked out careless ignorant statement?

I do think it would be a good idea to have Councilman Jim Righeimer live on the West Side (even better, on Shalimar) to get an idea of why we need more than 125 cops. Newport doesn't have the demographics we have. How many graffiti taggers are in Newport and how many in Costa Mesa?

When the city maintenance department goes to contract work, we will have more illegal immigrants working in Costa Mesa. How is having fewer officers going to help that situation?

Maybe you should visit Shalimar yourself to get an idea of why fewer cops doesn't make sense. Plus, it's not just about Shalimar, plenty of crime happens throughout the city. Crime is down and let's keep it that way! Let's not welcome car thieves, burglars, rapists and other violent offenders.

6/22/2011 04:18:00 PM  
Blogger Rich said...

Yeah Barry!!! Wendy lives in Irvine, and Obama was born in Hawaii!
She lives in CM, bleeds CM, gives more of herself than you ever have or will...
Stop drinking the Fool Aid, Riggy moved to CM to get elected to CC so obviously you have to live in the city

6/22/2011 04:25:00 PM  
Anonymous Original Max said...

Costa Bell, you should speak for yourself. Not all of us are union fans. However, it just so happens I agree that Righeimer was deceitful and impossible to work with. I hope he gets recalled and salaries and pensions get trimmed to appropriate levels.

6/22/2011 04:26:00 PM  
Anonymous Barry said...

I've been thinking. We are all getting really riled about the cost of pensions for city employees. In reality, they pay part of it themselves, so it is theirs. If we stopped paying for it all together (I know we can"t) how much would our taxes go down? The answer is that they wouldn't go down at all. The city would just have more money in the general fund to spend on other things. We are starting to sound like socialists. "If we can't have it, no one can. We should all be equal". How absurd. When we chose a career, we should have planned better.

6/22/2011 04:45:00 PM  
Blogger Kim Marie said...

What the auditor said when asked how
CM is doing compared to other cities, he said 'better than average'.
To me that means it's obvious that it's not about the budget...it's purely political.

6/22/2011 05:35:00 PM  
Blogger Bruce Krochman said...


Have you ever considered just deleting the posts that are predominately personal attacks?

Has anyone given any real thought to the possibility that the OCEA Audit, which I have only seen the exec summary of is accurate yet not of any real value?

So they "found" some money. Nice. I am sure Hatch and company knew it was there. Did they find any recurring revenue streams? That is what you pay ongoing expenses from, like salaries and pension contributions.

I don't like all of this council's priorities on spending, but they were elected to do this job and guess what? That is what they are doing. We will know by the next election cycle how it is working and certainly by the time Righeimer is up for reelection.

In the mean time, keep those cards and letters and public comments going.

I hear there is the threat of a recall campaign. Costly and not at all guaranteed to be successful.

6/22/2011 07:09:00 PM  
Blogger The Pot Stirrer said...

Bruce Krochman,
Yes, but in most cases when they are not too egregious and provide substance for the discussion I let them go. Won't tolerate foul language and I'm not posting "Anonymous" anymore - again. It's not hard to select a pen name - obviously, some of the folks here are having fun with that.
Thanks for your participation - and concern. You know how to reach me if you think we've gone too far..

6/22/2011 08:19:00 PM  
Blogger Bruce Krochman said...


it is just posts like this that seem gratuitous:

"Face Reality said...
Costa Bell, you are either drunk or on drugs!

Of one thing I am certain though. You are unable to face reality.

Perhaps you should be taking some anti-psychotic meds instead of so much cocaine. You need something to clear your head."

Harmless, I guess, just more disappointing than anything. They certainly support Lisa Reedy's comments last night.

6/22/2011 09:02:00 PM  
Anonymous Original Max said...

Rich, I agree. You can't get more Costa Mesa than Wendy. If Costa Mesa was its own country and invaded, Wendy would be the first to defend it. Riggy would be the first to say he's not really a Costa Mesan.

6/22/2011 10:30:00 PM  
Blogger Rich said...

Forgive me for my negative rants lately, I am just tired of MY city being ground zero. I have had personal experience with Righeimer, and yet to forgive and move on... Put that on my to do list! I have a lot of friends who have been effected by this CC, and to see them stressed and wondering how they are going to feed their kids in this recession, it really irritates me. The king does not care about the peasents.
But, I just have to go with this last one, (@ Original Max)Riggy is Wendy's Peter, he will deny, deny, deny...
Geoff sorry, I will try to refrain!

6/23/2011 09:12:00 AM  

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