Bell leaders take issue with state report which criticizes city for not fixing financial mess

Ali Saleh (far left) with the newly elected Bell city council during a swearing-in ceremony on April 7, 2011. The other council members from left to right are: Nestor Enrique Valencia, Danny Harber, Violeta Alvarez and Ana Maria Quintana.
Ali Saleh (far left) with the newly elected Bell city council during a swearing-in ceremony on April 7, 2011. The other council members from left to right are: Nestor Enrique Valencia, Danny Harber, Violeta Alvarez and Ana Maria Quintana.
AP Photo/Jae C. Hong

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It’s been nearly three years since a public corruption scandal rocked the city of Bell. And now, a review of a state audit says the small working class community is in a financial mess. Read the full document below.

The state controller’s report says the city will continue to suffer financially if leaders don’t turn things around.  

One issue in particular: taxes.  

Auditors say Bell has a negative cash balance and is too broke to issue refunds to residents who paid more than $3 million in taxes that the city illegally levied against them. 

“That is something that we are looking at to figure out how we can pay that back, " says Bell City Councilman Ali Saleh, who defends the administration. "It’s going to take some time...we are in a structural deficit.”

Saleh served as Bell’s mayor after voters kicked out former mayor Oscar Hernandez and several other city council members in a 2011 recall election. A jury recently convicted most of those former officials of using taxpayer money to pay themselves huge salaries.

Saleh takes issue with the state controller’s review for not including progress he maintains new city leaders have made over the past few years. Read the city's full response below.

For example, he cites the outstanding $35 million bond left on a property that the previous administration defaulted on.

“The city turned around and did a short sale on that," said Saleh. "And we’re in the plans of selling that property and not being liable for (the) $15 million deficiency.”

The state controller’s review follows a series of audits from two years ago. Auditors report that since then, the city has not followed up on more than 20 recommendations the controller's office made, such as collecting $700,000 in outstanding employee loans.  

Bell city leaders say they're working to bring economic development back to the city. They plan to address budget issues at a public meeting next month. 

California State Controller’s Office follow-up review of the City of Bell’s finances. by scprweb

The City of Bell's response to the review:

Today the City of Bell will receive the final “Follow Up Review” audit report conducted by the California State Controller’s Office (SCO) of the City of Bell and its current condition. 

The detailed report outlines a series of recommendations intended to further strengthen the City’s ongoing effort to rebuild and reform its administrative processes as well as mitigations to address the still lingering impacts of the corrupt former administration. The findings also provide the SCO’s view of the current fiscal challenges before the City of Bell. 

“We appreciate the work and recommendations provided by the State Controller’s Office”, stated Bell City Mayor Violeta Alvarez. “The SCO’s work is a snap shot –an important perspective which we will include in our analysis and legislative decisions. These findings, coupled with the numerous audits conducted by other reputable public agencies, as well as the City’s own auditors, have functioned as a blue print – a guide in our journey toward reform. We believe the City of Bell has a pathway out of its current financial condition; it involves continued hard work at all levels of our local government, and a commitment to transparency and good government”.

As background, the initial SCO audit was conducted at the request of the City in the fall of 2010. It was intended to shed light on the City’s true fiscal condition following the ouster of its former city administrator Robert Rizzo. The City purposefully sought out the assistance of the SCO, a trusted source, at a time when it had little credible information about its condition and the organization was in a state of confusion and disarray. The SCO’s finding became a blue print of its condition, and more importantly, functioned as a guide on the City’s path towards transparency and reform. 

Within the near three year span since the first audit was published, the City of Bell has made great strides in its rebuild campaign which has been shaped, in part, by the recommendations of the SCO. During this time, other public agencies have also conducted numerous audits on the City’s condition at a County, State, and Federal level. In its continued pursuit of reform and transparency, the City has also acted on and incorporated many of these recommendations. 

The recommendations provided by these trusted and distinct agencies, have helped shape the new City of Bell. Today, the City of Bell administration is under the leadership of a new City Council and new leadership. Its new and permanent city manager and department directors are committed implementing the Council’s legislative reforms and policies. 

As outlined in the SCO report, there is still much work to be done in the City of Bell. While the organization survived the Rizzo Scandal of 2010, its impact has left a lasting impression. Similar to a natural disaster, rebuilding is a direct function of the strategic marshalling of resources targeted for its recovery. 

The SCO has also outlined challenges before the City, including a looming “fiscal crisis”. The City is well aware of the financial hurdles in its path. However, there is a strategy in place which addresses a number of the SCO’s concerns. The strategy involves pending mitigations which are unaccountable at the time of the audit’s publication. City officials are working tirelessly through the courts system to receive financial settlements and restitution, and in the process of selling property, and working around the clock to put the City back in good financial standing.