March 9, 2016

FOR IMMEDIATE RELEASE                         
March 9, 2016                                                                                                                                                                                                   Contact: Janet Chin (626)430-2499
(Sacramento, CA)---Today, Senator Ed Hernandez (SD-22) announced he is requesting the California State Auditor examine the finances and governance structure of the city of Irwindale.  The request must be voted on by the Joint Legislative Audit Committee, which will hear the request Wednesday, March 16, 2016.  The State Auditor, Elaine Howle, is tasked with examining the fiscal health and performance of local government entities to ensure California taxpayers are receiving the essential services they pay for, in the most efficient and effective way.

“Allegations of misuse of public funds by Irwindale officials have been in the news for years, and it is time that a comprehensive review by an unbiased state agency gets to the bottom of this,” Hernandez stated.  “The alleged misconduct contained in these complaints erodes the public’s trust and belief in the institution of government itself.”

The audit request submitted by Senator Hernandez asks for a comprehensive, independent review of the city’s finances, expenditures, and governance structure, and follows his ongoing efforts to root out corruption in the City of Industry.


(Content of the audit request letter sent by Senator Ed Hernandez (SD-22) on February 24, 2016 to the Chair of the Joint Legislative Audit Committee)

I am respectfully requesting the Joint Legislative Audit Committee to immediately approve an audit of the City of Irwindale’s finances and governance structure.  Given the enormous attention the Cities of Vernon, Bell, and Industry have received over the past several years, we believe this is an appropriate action for BSA to conduct. Irwindale officials have had various public corruption charges brought against them in recent years, and although some of the charges were dismissed, they were dismissed due to statute of limitation concerns, and not on their merits.
Additionally, media reports on how Irwindale has conducted city businesses within its borders have raised concerns over conflict of interest and “bullying” of businesses in the City.  
In light of recent accusations and reports, we believe an audit is necessary.  To the extent possible, we request the State Auditor review and evaluate the following:

Regarding the City of Irwindale’s Finances and Governance –

1.    Review of the current charter and any proposed changes to determine if it complies with applicable laws as well as promotes sound operational business practices, and how the charter compares to other similar cities’ charters.

2.    Describe the current governance structure in the City of Irwindale.  This should include identifying the roles, responsibilities, and authority of the various officials including elected officials, city manager, and others with key roles in governing the cities’ operations. 

3.    Describe the operational structure of the city and determine if it provides the appropriate level of checks and balances over significant financial and administrative functions, especially with respect to how contracts are awarded and managed by the city. Special attention should be given to the city’s Planning Commission and how it expends its funds and manages its decisions.

4.    For a five year period, identify the revenue sources and expenditures and determine reasons for any unusual fluctuations or trends that exist.

5.    For a five year period, review a sample of revenues and expenditures for appropriateness.  

6.    Examine the salaries, benefits, and pension packages of high level staff and elected officials.  How was the compensation determined and approved?  How does the compensation compare to other cities of comparable size? Are city officials’ children getting taxpayer funded college educations?
7.    Examine the contracting practices over the last five years.  This should include a review of the contract bidding and approval process, the process for mitigating and identifying potential conflicts-of-interest, and the process to ensure adequate performance under the contract.
8.    Review all bond issues over the past seven years, with a specific focus on how these bonds are managed, the purpose of each bond issue, whether it was well-defined, properly approved, and used appropriately; the status of the debt service, and the impact that Irwindale’s bonded indebtedness has on its long-term fiscal health.  

9.    Examine city’s ownership of residential property within the city limits, including a review of leasing practices, rental practices, and property sale practices.  

Because the Legislature has oversight responsibility, applicable even to charter cities, I feel this audit is a necessary and meaningful use of state resources. 
Thank you for your consideration of this request.


State Senator
District 22