City of Lindsay disappointed in TCAG repayment deal

Lindsay City Council takes issue with reasonable concessions made by TCAG over the City’s grossly misspent Measure R funds

By Paul Myers

@PaulM_SGN

LINDSAY – Some would say reducing the full breadth of a punishment for a million dollar blunder is overly generous. But the City of Lindsay would consider it a “poke in the eye.”

During Lindsay’s City Council meeting last Tuesday, Jan. 9 mayor Pam Kimball informed her fellow council members, minus Laura Soria-Cortes who was absent with notice, the Tulare County Association of Governments’ (TCAG) ad hoc committee considering Lindsay’s $1 million repayment plan had come to a consensus on a couple of optionsThe TCAG board could vote on whether to give Lindsay a yearlong reprieve from their $18,100 quarterly payments or allow them to continue payments without interest moving forward, allowing all payments to be put towards principal which started at $1,048,433 on Oct. 1, 2012.

Kimball said the committee was seeking input from the City on the two options before they encourage it be considered for vote by the TCAG board.

“While I’ve felt that we could have gotten better than this, and I know there is some sympathy on the Board, I also realize there is no way other than this that we can get a consensus from the Board,” Kimball said. “So I think we should graciously accept the concessions that are being offered.”

However, not all council members were willing to take the ad hoc committee’s concessions as graciously.

“I think if they are asking us if we’re happy with this then no we’re not…but right now we are in a position where we’ll take whatever we can take,” said councilmember Steve Velasquez. “They also need to know that it’s not our first choice.”

The consensus comes from the ad hoc committee created to consider options to relieve Lindsay’s debt to TCAG for misappropriating over $1 million of Measure R funds for their Downtown Improvement Project devised by then city manager Scot Townsend and former finance director Kenny Walker. The project successfully repaved, remade and recast what is historically considered downtown and the outlying streets from Frazier to the north, Apia to the south, Sweet Brier to the west and Gale Hill to the east. Tax payers were originally told the project would cost $2.5 million in November 2008. The cost grew to $3.7 million in June 2009. And in addition to being funded by Measure R, the County’s half cent sales tax for road, transportation and air quality projects passed by voters in 2006, it was also funded by, gas tax and federal transportation money.

It was not until 2011 when it was revealed that Lindsay was erroneously using Measure R dollars for the project. TCAG went on to file a claim at Lindsay City Hall for the full amount of the project.

By April of 2011, Brown Armstrong Accounting Corporation conducted an audit of the project’s expenditures and found that $568,000 were ineligible Measure R expenses, $365,000 were questionable expenses for a total of $933,000. The remaining $2.9 million were eligible expenses. After a line-by-line forensic audit was insisted by TCAG the eventual settlement agreement came down to the just over $1 million with the Tulare County Transit Authority (TCTA) which falls under the purview of TCAG..

It was not until fall of last year when Kimball and current city manager Bill Zigler met with Tulare County District One Board member Kuyler Crocker who represents Lindsay and sits on the TCAG board. During their meeting the three discussed options to alleviate the burden of the payments.

When the TCAG board convened as the TCTA to consider the item on Nov. 13 board members had more questions than staff had answers and as a result created the ad hoc committee to consider several options:

• Reduce the remaining loan balance and or reduce the interest rate;

• Forgive the remaining loan balance;

• Reduce one of the Measure R Air Quality line items that is of the City of Lindsay to pay off the remaining loan balance;

• Change the time frame for repayment;

• A combination of those items;

• Or leave the settlement agreement in place with no changes.

The committee was comprised of Crocker, Tulare County Board of Supervisor chairman Pete Vander Poel, Visalia representative to TCAG Bob Link, Lindsay representative to TCAG Pam Kimball and Porterville representative to TCAG Martha Flores.

Despite the options the committee was able to come to consensus on were generous, considering they could have done nothing and left the terms of the settlement as is. However, if the TCAG board were to pass either option the argument could be made other cities might vie for the same treatment. Albeit, Crocker believes that scenario is unlikely.

“The question is, was the damage done…and they’ve already paid a quarter of a million dollars back, so there has been [punishment],” Crocker said in an interview with the Sun-Gazette last November.

He went on to say each item is decided upon by its own individual circumstances, and the feeling of the board on matters changes as board members change.

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