"Annually prepare and present a proposed budget for the Council to the Steering Committee of the City Manager's Technical Advisory Committee ("Steering Committee") and, after the approval of the Steering Committee, to the Governing Board and, after approval of a budget by the Governing Board, to maintain the expenditures of the Council within the approved budget, as may be amended from time to time by the Council."
This is the situation with the COG and Conway on the budgets issue. The Bylaws require the Executive Director (Conway) to prepare and present an annual budget to the City Managers Steering Committee for their approval. Once they approve that budget it is then presented to the Governing Board for its approval. The notion being that this will provide for a kind of financial oversight since the selected City Managers are experts at this sort of thing. If they approve the budget, then the Governing Board has some assurance that it has been properly done.
This year, Executive Director Nick Conway presented the SGVCOG's budget to the City Managers Steering Committee and got their approval. However, he then supplied a different budget to the Executive Committee for their approval. Presenting a budget to this particular committee, while not legally required, works to Nick's purposes since they are mostly his bobbleheads and will agree to rubber-stamp whatever he wants. It makes for a legitimate looking paper trail and enhances the process.
Finally, Nick Conway presented another budget to the Governing Board, something that was neither the budget approved by the City Managers or the one reviewed by the Executive Committee. Three different budgets, and a full two more than there ought to have been.
To be precise, Conway provided each of these three separate entities three quite different budgets. Something that sabotages the concept of sound financial oversight, and is hardly the kind of behavior expected of an organization that receives and spends public moneys. The result being that each committee believed that they had been shown the same budget, yet ended up approving something rather different from what their two counterparts had been supplied.
Listed here are some examples of the differences between these budgets. They should put you into the spirit of it all.
The budget presented to the Executive Committee is different from the one submitted to the City Managers Steering Committee in a couple of areas. First, it includes an entirely new income source which is called ACE (Alameda Corridor East Project) GANS (Govt Anticipation Notes) ROI (Return On Investment) for $50,000. This is an item that reflects Conway's attempt this year to direct interest received by ACE back to the COG. The justification being that ACE was created by the COG, and therefore deserves it. This became a problem for the director of ACE, who later pointed out that since the moneys given to his organization are for funding specifically designated construction projects, they're shouldn't be used to pay for SGVCOG nonsense.
Also, in this budget under expenses, Conway eliminated a $7,500 cost for "LARWQCB Technical Support." This is money the SGVCOG spent on a staffer for Monrovia Mayor MaryAnn Lutz, who also sits on the Los Angeles Regional Water Quality Control Board. Among other things.
Added into expenses is $10,000 for a "grants and policy committee internship program." No one I spoke with for this article is aware of the Board even authorizing such a program, but apparently it is part of a pet project run by Gino Sund, a reliable Conway ally.
In the budget provided to the Governing Board, the $50,000 in income from ACE is removed. This budget also reduces the income from the Southern California Edison Local Government Partnership from $150,000 to $75,000. The budget also shows a reduction in the costs of legal services from $65,000 to $40,000, though it is anticipated that the true cost could actually be in the $150,000 range.
It also shows an increased amount in expenses related to media public relations, from $10,000 to $15,000. Oddly enough, in the previous year's one and only budget the total spend was $715. Apparently someone felt the need for a comfortably funded charm offensive this year.
The big difference here is in the expense for Conway's Management Services Contract # 1. (Conway has, for whatever reasons, three service contracts.) What this one shows is a reduction from $105,000 to $52,500 in money paid to Conway's privately owned company Arroyo Associates. Which is the same company that figured so prominently in the famous Caltrans audit that was the beginning of Conway's current woes.
If you read the agenda packet small print, this is not really a reduced cost. Instead Conway simply decided to only include 6 months worth of payments in this budget. The reason being it results in what appears to be a balanced budget. Had the full year amount been included the resulting budget would have been upside down.
This is also a problem since the contract is specifically for work done on three major programs, EnergyWise, CalRecycle and something called Watershed. CalRecycle and Watershed being programs that had already ended.
Last is a reduction in the cost of the Southern California Edison Local Government Partnership. This is downgraded from $20,000 to $10,000.
What we've detailed here shows that a "Let's Make A Deal" mentality was at work in the creation of COG's public agency budgets. Behind each door is something different. Unfortunately that is not how officially established systems of financial oversight are supposed to get done. The Governing Board relies on the technical expertise of the City Managers Steering Committee to ensure that the budget is properly laid out and budgeted. None of this is worth the paper these budgets are printed on if the numbers are not completely consistent.
The documents used to create this article were obtained at meetings held by the San Gabriel Valley of Governments. They are as follows:
City Managers Steering Committee: Agenda packet for May 2nd, 2012. This meeting took place at El Monte City Hall in El Monte.
Executive Committee: Meeting agenda revised for May 9, 2012. This meeting took place at Alhambra City Hall in Alhambra.
SGVCOG Governing Board: Agenda and Notice. This meeting took place on May 31, 2012 at Southern California Edison CTAC in Irwindale.