Strait On: Hemet City Manager responds to audit criticism

Photo courtesy of Rusty Strait
Rusty Strait.

■ By Rusty Strait / Senior reporter

Alex Meyerhoff more resembles a sophisticated French diplomat than city manager of a small town like Hemet – but that is exactly who and what he is. Beyond the charm there is a hard as nails comptroller type who knows exactly what he’s being queried about and how to respond.
We sat down at a conference table at city hall merely steps away from the receptionist and before I began our interview, he said, “Wait a minute. I want every business in Hemet to succeed, every business to grow and hire people. The unemployment rate is just under 8 percent. Normal is about 4 percent.”
I mentioned that some would state that Hemet’s unemployment is at a higher rate. He went on. “I want to see a vast improvement of employment opportunities within the city of Hemet.”
His enthusiasm bursts out like a bud that sprouts a full-grown bloom after a spring shower. Thus we launched into the business I came to talk about: the state audit and the recriminations that followed.
He was anxious to, and did, go into the details of the auditor’s findings and requests as well as the city’s responses.
“The city,” he began, “was notified of the audit in 2015. In 2016 we worked closely with the auditors. We reviewed a draft of the state audit on July 5, 2016 and provided an answer to them at that time. The city reviewed the final state audit on Aug. 4, 2016 and provided a response letter with a corrective action plan at that time. It is important that the taxpayers know that the auditors found no evidence of financial impropriety, mismanagement, malfeasance, fraud or abuse.”
Meyerhoff stated that the audit essentially found two key issues:
(1) Expenditures outpace revenue, impeding the city’s ability to meet its financial obligations and;
(2) Ineffective organizational management negatively affects its provision of public services.
The auditors recommended that the city identify risk areas and reduce costs by establishing and collecting fees for services it currently provides without charge or other options identified in the report. The corrective action plan had two elements.
“First, the City Council, at that time, had placed a general purpose revenue bond on the ballot, estimated to generate $10 million annually and, the city continually was updating its five-year management plan annually through analysis and projections for action and feasibility.”
Another request by the auditors was that the city develop adequate plans for changes in pension costs.
Meyerhoff said, “The city will work with CalPers to identify options to reduce payments for unfunded liability and will evaluate the cost effectiveness of pre-payments of unfunded liability. Further, we will take advantage of Pers’ amortization schedule, changing the amortization schedule from a 30-year period to 20 years to determine if additional savings are achievable.”
He further stated that the city did a prepayment last year to CalPers, “and we saved the taxpayers a lot of money.”
“We declined the auditor’s suggestion about charging out-of-district library users a fee because if we had followed their wishes, the library would have lost $7 million dollars in grants and other services. The council made a wise decision in that case.”
As to retiree medical costs and unfunded liability, “The city discontinued lifetime medical for employees in the late ‘90s but there are still employees and former employees contracted prior to the change. The council directed these changes prior to the audit in 2015.”
Auditors suggested that the council seek direction to establish other post employee benefit trusts and draft a funding policy. Meyerhoff added, “Such a plan was studied and passed by the council in October 2016.”
The auditors further recommended that Hemet generate additional revenue, “such as charging fees for emergency medical services currently provided by the fire department at no extra cost. If we do that, we must conduct a comprehensive fee analysis to determine the fully burdened hourly rates for providing such emergency medical services and first responder fees cannot exceed the costs of the provided services.”
Part of the corrective action plan includes authorizing the fire department to fill all open budgeted vacancies. “This includes firefighters, paramedics, engineers and fire captains.”
The council’s corrective action or response is that they would conduct a work study with the current vendor, Fire Cost Recovery Services, to identify impact and potential revenue generated through the EMS First Responder Fee. The council did that on Sept. 27, 2016.
“Also on Sept. 27, 2016, the city had completed its comprehensive fee analysis to determine fully burdened hourly rates for providing emergency medical services for specific emergency medical calls.”
The audit requested the city develop and present comprehensive staffing implementation plans to address concerns identified in the consultant reviews of the fire department with immediate priority given to filling the rank of Battalion Chief. In the third quarter of 2016, the City Council supported reclassifying the captain position (duty officer) to battalion chief predicated on the passage of Measure U.
“That has been done and the recruitment is complete,” Meyerhoff assured me. “The battalion chiefs began orientation May 22 and will assume operational duties the first week of June. We will have three new battalion chiefs and we’re very excited about that.”
One of the primary faults found by the auditors was the city has poor communication with the community.
The city manager was particularly concerned with reaching out to the community on a regular basis and keeping an open door policy with the taxpayers.
“We will complete a plan for better community engagement, including strategies to educate and engage the community in the city’s needed reforms to establish financial stability.”
To begin, the city is in process of developing a city-wide newsletter, which will be included in the 2017-18 budget.
“Remember, we didn’t get the audit until after the 2016-17 budget had been approved, so we weren’t able to make that happen,” said Meyerhoff. “We are very active already in both the police and fire department with their quarterly newsletters. Our intern from the Western Riverside County Council of Governments has wrapped up the city’s social media program, including Instagram, Facebook and Twitter as well.”
Meyerhoff was open to the suggestion of regular town halls and maybe special town halls for small businesses to air their complaints, especially as to Code Enforcement, which is often considered by small business people to be particularly harsh on them.
As to another risk area, the audit found inefficient structure of city government and recommended to strengthen oversight and better align similar functions and to provide opportunities to leverage staff – specifically to conduct a comprehensive organizational analysis, including work assignments, workloads and relationships.
The city offered three responses, one of which was to “authorize a comprehensive analysis, including work assignments, workloads, reporting relationships, and coordination points, and pursue options to improve efficiency and effectiveness, most of which have already been done,” said Meyerhoff.
Certain requests will be fulfilled in fiscal year 2017-18. As to the turnover of key positions and lack of consistent leadership, “the city has experienced frequent turnovers in its city manager as well as fire and police chief positions, and is likely to have some departments heavily affected by upcoming retirements.”
He pointed out that, “In some departments, more than 50 percent of the staff will be eligible for retirement within five years, so this requires comprehensive succession planning. We are proposing that the city council authorize an assistant city manager, whose duties would include overseeing some of these endeavors, in the 2017-18 budget.”
Lastly, regarding inconsistency in outsourcing maintenance service levels, Meyerhoff stated, “This requirement by the auditors was completed on September 27, 2016. An informal plan was submitted from an agency to do our park maintenance. It was considered but ruled out by the council at that same meeting. We found that it was cheaper to do it ourselves.”
Out of nine suggestions by the auditors, six have been completed, according to the city manager. The remaining three “are being worked on and expected to be completed in the near future.”
It annoys him that some folks keep clamoring for a final report which is yet to be presented to the auditors.
“We will be submitting a follow-up report at the end of May and another report in August of this year. If the auditors accept it, our reporting requirements will be finished. I believe the city has shown good faith,” said Meyerhoff. “Many of the suggestions by the auditors were taken care of before the audit was ever prepared. We are continuing to improve service delivery, customer service for our clients, internal communications and service to the community. I will do all in my power to face the community with openness, transparency and accountability as long as I am Hemet’s City Manager. The public has a right to know.”
Mr. Meyerhoff stayed pretty much on the audit. I had other questions. He has promised to meet with me again and answer them. Hope so.

Just sayin’.

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