News and Notes from Tustin Councilwoman Deborah Gavello
August 2009
• Tustin City Council Meeting August 4, 2009
Council Member Gavello through hard work and digging and researching discovered that the City Treasurer violated the city's investment policy. He then when questioned by Council Member Gavello about this investment, admitted to doing it on purpose, and stating on the record he would violate the policy again. NONE of the other council members helped to have him removed from his consulting position which pays $4,000 a month. In addition, they all defended his actions and protected him.
Watch the video to see what transpired:
• WATER RATES AND CONSERVATION
On August 4 the city council voted to oppose the proposed increases in water rates to the residents in our water district by a vote of 3 to 2. Mayor Davert and Council Member Nielson voted for the increases. I opposed the increases, as I believe this is the wrong time to hit our residents with huge increases.
The number of foreclosed homes in 92780 has increased tremendously. Some of these homes, one in particular on Main Street in Old Town, had dried-out grass on the front lawn. Obviously, if people can’t afford their mortgage, they aren’t able to afford to water their lawns.
I also don’t see that we have the methodology or technology currently to review how much our residents have already cut back their water over the past couple of years. Overall Tustin has cut back its water demand from last year. However, if we impose new restrictions, how do we give credit to those residents who have already cut back? How can they be expected to cut back an additional 20 percent?
One resident spoke at our recent council meeting about how she has cut back 30 percent by using many great water-saving techniques. I agree with her.
Approximately half of our city is receiving water from the Irvine Ranch Water District (IRWD). This includes all of Tustin Ranch and Pepper Tree and a little more area of 92780. The pricing model that is used by IRWD is a different pricing model. It is based on a set allocation per household, and reflects lot size, and percent landscaped areas. I understand that IRWD has more money and resources than Tustin Water does, but we need to find a more streamlined pricing model and conservation methodology that is fair for the residents.
If you have ideas or input, please contact me on either conservation or water rates.
• AROUND TOWN
I encourage everyone to go to Broadway in the Park in Pepper Tree Park.
Concerts in the Park have been a huge success. I have gone to three of the evenings, and I enjoy seeing the community coming together for free entertainment.
Movies in the Park have already started, with two movies so far. I went to the first event at Heritage Park and was pleased to see some of the friendly faces I met last year at these events. The movies will continue at different parks for several weeks. Bring a blanket, a chair, and some food, and enjoy the movie.
For many residents free movies and free concerts are their standard entertainment for the summer. We’re proud that Tustin can provide this community service.
I enjoyed the ribbon cutting at Jim’s Music, which relocated from Irvine. It’s always great to welcome new businesses to our city.
I toured the Prado Dam, which was recently elevated by the Army Corps of Engineers. The project will continue with the raising of the Spill Way.
I also had a full tour of the former navy base, and inside the county’s blimp hangar, the largest wood structure in the world. Although the city’s hangar is supposed to be torn down, this one is going to be preserved and run by the county.
I went to the 20th Anniversary of the Senior Center and loved talking with the many volunteers. Marilyn, who runs the center, does a fabulous job.
• KEEPING TABS ON OUR CITY’S FINANCES IN A TOUGH ECONOMY
I am watching the city’s investments with a close eye. I believe I have a fiduciary responsibility to review and question all of our investments. That is the job of a Tustin City Council Member. Our treasurer is a contractor who reports to all five council members. He works part time for a monthly set dollar amount. A former Tustin City Council member recently told me that in his eight years on the council, no one had questioned our city treasurer in public.
At the July 7 Tustin City Council meeting, I changed that for the second time this year. When asked by me from the dais why he made an investment decision to pull all of our money out of the Orange County Investment Pool, our city treasurer said, “so as to not have it become an issue during the city council election campaign.” Only one person at that time was running for re-election -- our current Mayor Pro-Tem. This discussion can be seen on video.
In addition, in July he purchased two notes that were not AA rated, as mandated by the city’s investment policy. On careful examination of the quarterly investment reports, I noticed a Bank of America note and a Wells Fargo note. The Bank of America note concerned me, as I knew B of A was under a secret Memorandum of Understanding with the U.S. Regulators, and was struggling. I did contact the treasurer directly to ask about these notes, and he explained that they were Merrill Lynch and Wachovia notes that were taken over by the other banks. I physically went to the finance director to verify and look at the two notes and their ratings. Neither of these notes follows the city’s current investment policy. I had wished it was an oversight by the treasurer, and that he had disclosed his error in our Council packets. I found no explanation of what he had done. Furthermore, from the dais on August 4, when I asked about both of these investments, our treasurer admitted purchasing these notes knowing they didn’t follow our policy. He also admitted knowing that his signature on the report was false in terms of his verifying that all investments followed policy.
Why no one else is in shock is beyond me. We can’t have people pick and choose which policies to follow, and then state on record that they would do it again, and that they have no intention of changing when asked. The treasurer told us for the record that he told two audit committee members, the city manager, and the mayor. No one did anything to correct the mistake or let all council members know about what occurred.
I am trying to make changes to our investment policy to keep it in line and more conservative, but I can’t do it alone. I have been looking at it very carefully.
I will continue to ask questions on behalf of the citizens of Tustin.
Thank you for the opportunity to serve,
Deborah Gavello