This is Only
in the area..
Welcome to the OXNARD JOURNAL...
due a spanking ====oh boy!
As Submitted to the Grand Jury Yesterday.
September 20, 2002
Ventura County Grand Jury
800 S. Victoria Ave, L#2680
Ventura, Ca. 93009
Dear Foreman of the Ventura Grand Jury:
I am Martin Jones, a citizen of the City of Oxnard. I am filing this COMPLAINT against the City officials of the City of Oxnard. I understand that the Grand Jury for Ventura County has civil watchdog and criminal indictment responsibilities, and the power of accusation against public officials. While the Grand Jury can perform the function of either criminal or civil matters the Grand Jury of Ventura performs both functions.
The major function of present day grand jurors is devoted to civil government oversight responsibilities. The grand jury may examine all aspects of county and city government and special districts to ensure that the best interests of Ventura County citizens are being served. The grand jury reviews and evaluates procedures, methods and systems utilized by government to determine whether more efficient and economical programs may be employed. The grand jury is also authorized to:
a. Inspect and audit books, records, and financial expenditures to ensure that public funds are properly accounted for and legally spent
b. Inspect financial records of districts in Ventura County
c. Inquire into the conditions of jails and detention centers
d. Inquire into any charges of willful misconduct in office by public officials or employees.
My complaint alleges misappropriation of public funds as a result of improper dealing between City of Oxnard officials and High Tide & Green Grass Inc., which operates the River Ridge golf course. I also believe that after reviewing the information below you will find sufficient evidence to warrant a Grand Jury investigation involving intentional fraud and white collar crimes by members of the City of Oxnard staff and some of the City Council members. The absolute evidence you need in order to establish a case for fraud has intentionally been withheld from me when I have requested it under requests for public information.
The City of Oxnard officials signed an operating contract with High Tide & Green Grass, a California corporation, to manage the operations of the Citys golf course name River Ridge. This agreement states that all costs of the golf course shall be included within the accounting of the contract. The same agreement also states that because the money generated from the City owned golf course is governmental funds, there shall be a joint checking account established for City and operator, as outlined in section 23&ldots;. This clause appears on page 5, clause 10 a. On page 8 clause 23 reads Operator shall establish in the name of the City and Operator, jointy, such bank accounts as required for the operations, maintenance and management of the Golf Course and reconcile such bank accounts on a monthly basis to Operators financial statements.
Furthermore, the agreement states that all money generated by the golf course operations shall be deposited into that joint checking account and that disbursements of money for the costs of the golf course shall be paid from that checking account.
Also within the written contract the operators are required to provide the City Manager of the City of Oxnard with a complete audit within 60 days of the end of each fiscal year. According to the Standards of Auditing used by California licensed certified public accountants an audit by definition requires the review and opinion on the entire fiscal operations including revenue, expenditures, debt, assets, and equity.
The City Manager has not received nor has he demanded compliance with the audit-reporting requirement of the agreement. The City of Oxnard has never received an audit of the golf course operations. Instead the golf course operating agreement has been superceded by the business plan, which is attached to the contract, but has not been approved by the City Council. The business plan purports to limit the council-approved written contract by limiting the scope of the audit of High Tide & Green Grass, Inc., to just a review of the revenue of the operations. This limitation in scope does not provide the City with what the agreement demands and opens the door to every kind of abuse possible in how the money generated by users of the City owned golf course is being used or abused.
My request for copies of the High Tide & Green Grass, Inc., complete audit has not been successful.
The City has not established a joint checking account with the operators as required in the agreement (Section 10a). The City Treasurer is required by California Government Code (GC 41001, 41002, 41003) to be the sole city official responsible for the safekeeping and handling of the money received by the City. By not complying with the agreement the City Treasurer has also violated the California Government Code, which requires that all public funds must be secured by an institution having securities with a market value of 110% of the value of public funds deposited (GC 53652) or in mortgage backed securities having 150% of the value of public funds.
The result is that the Citys money received by High Tide & Green Grass, Inc., from the golf course operations, which exceeds $3,000,000 annually, is not secured as required by the California Government Code.
Apart from the golf course contract, the City Finance Director does not issue Citywide monthly financial reports as required by the California Government Codes (GC 41004) and the Citys Municipal Code (section 24-7).
The Finance Director is required to submit each month financial reports to the City Council and thereby to the public, which show the citizens the amount of the Citys monthly receipts, disbursements, and changes to the equity (fund balance) in each of the funds. Because this is not being done the citizens of Oxnard have no way of knowing how the Citys financial operations are being handled. The Citywide monthly financial reports were prepared prior to November 1999 as required by Government Code. Without this report, the public cannot be expected to identify that money is being transferred from the Citys general fund into the Golf Course Enterprise. The lack of this required reporting conceals the fact that taxpayers money is being used to subsidize the golf course.
Additionally the golf course contract requires that a financial statement for the fiscal year then ended be submitted by High Tide & Green Grass, Inc., to the City Manager sixty days after the close of each City fiscal year. That golf course financial report must include reasonably accurate detail of the financial activities of High Tide & Green Grass, Inc. No such financial statements have ever been proffered by the City upon request, and the monthly statements provided by the City do not provide a reasonably accurate detail of the financial activities of High Tide & Green Grass, Inc.
The fourth part has to do with the compensation to the three partners in ownership of the full shares in High Tide & Green Grass, Inc. Through the agreement the partners are generating over $800,000 annually in guaranteed income for themselves from the City. This is clearly an abuse of taxpayer money. Mr. Otto Kanny, one of the three partners of High Tide & Green Grass, Inc., testified under oath that the City hired a consultant, Mr. William Sherman, Sherman Golf Associates, Inc., who reported to the City Manager that there are better contracts for defining a business arrangement between a city and a golf course operator. The City also hired Mr. Mike Harrison, CPA, Conrad & Associates LLP, Certified Public Accountants, to consult on the contract. Mr. Harrison reported to the City Manager and the Finance Director that he had never seen such a sweetheart deal that totally benefits High Tide & Green Grass, Inc., while laying all the risk on the City of Oxnard. This is not a standard contract. Yet it was approved by the City and provided a guaranteed base income to the High Tide & Green Grass, Inc., which exceeds its costs by over $500,000. Additionally the contract provides that gross receipts generated by the City owned golf course which exceed the guaranteed base be shared with the three partners, who own 100% of High Tide & Green Grass, Inc. When taken into account the total income provided to the three partners exceeds $800,000 annually. It is important to note that over the most recent ten-year period the City has transferred money generated by taxes from the Citys general fund into the golf course fund. Furthermore, the average amount of tax money transferred to the golf course annually has been $834,000. Thus the income provided to the three partners has been provided from the transfers of taxes which should have been used to improve the Citys safety programs, streets, and parks.
During a period of financial turmoil, demonstrating financial support for the only municipal golf course may not be reprehensible. However, guaranteeing the three partners, who operate the golf course, an annual income of $800,000 makes the review of the current partnership between High Tide & Green Grass, Inc. and the City of Oxnard a matter of public policy. Neither Oxnard nor High Tide & Green Grass, Inc., has been held accountable for fulfilling the financial provisions of the agreement to manage River Ridge.
The City officials have continuously misled the citizens to believe that the golf course is operating in the black&ldots;that it is generating a net income stream to the City. In fact, the Comprehensive Annual Financial Report of the City shows that the golf course has been operating at a loss.
QUESTIONS FOR THE GRAND JURY:
There are two questions the Grand Jury needs to ask and have answered:
Attached to my complaint are copies of the High Tide & Green Grass contract (exhibit #1) for your review and copies of the California Government Codes identified above (exhibit #2).
River Ridge continues expanding despite the major obstacle that 86 acres of the expansion property are located on landfill property that cannot be used. And yet, without public discussion or proper notice, the citizens of Oxnard have been given the liability of maintaining 110 acres for years to come at an unknown cost. The developers who are building the houses [near the new 18-hole golf course] have told the City [of Oxnard] they need a golf course to sell the homes&ldots;so they are pushing the City to move the project along [despite this major obstacle]. The residents of Oxnard are unaware of the extremely cordial partnership between High Tide & Green Grass, Inc., and the City of Oxnard. With the unfulfilled and somewhat unusual financial provisions in the Agreement for the operations of River Ridge, as well as an obvious imbalance in the net gains enjoyed
Mr. Martin D. Jones
Oxnard, Ca. 93033
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