An Audit Report

Off we go, into the Wild Blue Yonder…

At tomorrow’s Fullerton City Council meeting, agenda item #1 features a report by the firm of Grant Thornton Risk Advisory Services. They will present what the City is calling a “special fiscal audit.”

What does that mean, and what are the results? Unknown because there is no staff report – not even a little introductory prose. This is in keeping with former City communications regarding the recently revealed erroneous assignments of millions into General Fund reserves – money that was supposed to go elsewhere. The last post FFFF did on this subject in March pointed out the condescending gobbledygook press release that emanated from City Hall. I believe this “audit” was commissioned to address the big errors and allay fears that some sort of malfeasance took place.

I hope that Messrs. Shawn Stewart and Charles Mayes (CPA) of Grant Thornton will present something real simple. Like maybe a diagram, or a flow chart to explain how these bogus transactions took place. Where did the money come from, where did it go, and when was it fixed? One hopes there will be no verbal or logical gymnastics to dodge assignment of responsibility. Does one hope in vain? And of course please let us know:

What are the true balances in General Fund and Capital Improvement Reserves.

Item #12 on the agenda is a report on staff vacancies and retention recruitment efforts required, as usual, by a nosey and intrusive State legislature. I’m not sure what the purpose of the law is, but the information contained in the report is worth considering. According to staff there are currently 65 vacancies, two thirds of which are non sworn, general public employees. 65 vacancies is about 10% of the total labor force.

In past years the vacancy rate has done as high as 25% in Fiscal Year 21/22.

Here’s the issue. How many of these vacant positions are included in the current 25/26 budget deliberations? All of them? Some cities use a “vacancy factor” in their budgeting – an estimate of how many vacancies will be unfilled in the fiscal year. Does Fullerton do this? They should if they don’t.

I also note that the labor force in Fullerton is up 7% since 22/23 even as dire predictions of the structural deficit were publicized. Why did this happen? The architect of past city budgets, City Manager Eric Levitt quit and took a higher paying job in San Bernardino last year so no answer will be forthcoming from him.

As an example of a recruitment the staff report includes this graphic from last fall:

An Associate Planner goes for $84K to $108K per annum – not counting benefits and pension costs, of course. If those are generally calculated at a modest 25% we can assume this Associate Planner will cost the taxpayers around $120,000 a year, which I think is fairly reasonable.

If we assume the average total cost of those 65 vacant positions is, say, a conservative $100,000, then we are looking at an annual cost of $6,500,000. That closes a lot of budget deficit, right there.

Pro sales tax advocates will claim there is a vital quality-of-life issue at stake, as if the number of public employees in City Halls guarantees such a concept; these vacant jobs are key to life, liberty, and the pursuit of happiness in Fullerton. The same alliance of cops, “firefighters” and local City Hall camp followers who pushed Measure S in 2020 will claim it to be so. These are the same folks who get guaranteed defined benefit pensions, step pay increases, etc. They make no sacrifices and are rarely asked to do so. That task falls upon the citizenry.

Taking Out The Trash Thursday

On Tuesday the Fullerton City Council voted 3-2 to expand the finalists for the trash hauling contract from three to six. Staff had recommended solely negotiating with EDCO of Signal Hill and points south, even though the difference in scoring between the top three was de minimis, as they say. As a back-up recommendation staff requested the City work with the top three as finalists.

Councilmembers Jung, Valencia, and Dunlap voted to include three more for continued negotiations, including Valley Vista, and our current hauler, the giant Republic Services. For Mayor Jung the critical qualification was cost. Naturally, the obstructionists “Dr.” Zahra and the absent Shana Charles voted no.

Included in the “supplemental agenda” materials were an email to the Council and a written statement from Mr. Jeffrey Otter, Treasurer for the Craig Park East Homeowners Association, and a professional engineer, to boot. Mr. Otter gives his take that the process pursued by the City has inherent risk, legally, cost-wise, and in terms of negotiating weakness.

Otter goes into more detail in a written statement presented to the Council wherein he repeats his email conclusions and requests an independent “Cost of Service Analysis” to identify rate correction factors across various types of properties; in other words comparing oranges and oranges. His own analysis identifies the most overall cost-effective firms: Valley Vista, NASA and EDCO. He thoughtfully provides his own backup materials and data. Of course his diligent efforts will get him nowhere.

Otter also identifies an interesting fact. EDCO’s Marketing Director is a person named Duron. Apparently Fullerton’s Solid Waste and Recycling Specialist is a woman named Michelle Anna Duron. Is this just a curious coincidence or a possible familial conflict of interest? When asked who was on the evaluation committee the Stephen Bise, the City Engineer identified himself, Richard Armendariz, Assistant Director of Public Works Maintenance; Jerome Joaquin, Public Works Administrative Manager; Olivia Martinez, Environmental Services Coordinator; and Kim Chaudry, Senior Management Analyst. No Duron, although Michelle Anne Duron’s contribution to the overall process no doubt have provided influence.

I can’t find a Duron on ECDO’s dismal website, but Octavio Duran is identified in the EDCO proposal thus: Mr. Octavio Duran, Director of Market Development, has 15 years of EDCO industry experience and will oversee direct engagement with the City of Fullerton. His primary office is in Signal Hill. Mr. Duran will spend approximately 30% of his time on the transition and 25% on an ongoing basis.

So go figure.

In defeat, malice…

Anyhow the dance is far from over. Valley View has incurred the wrath of Fullerton Boohoo because they contributed to the Fullerton Taxpayers for Reform PAC who torpedoed the odious Cannabis Kitty Jaramillo in the 2024 election, an act that should bestow honor rather than opprobrium.

Marvelously, Zahra and Charles seem to think that Valley Vista’s political involvement should disqualify Jamie Valencia from participating in the process because the PAC caused her election, even though they didn’t give Valencia a nickel – a species of childing logic not worthy of an adult. I note in passing that Charles got $4000 from the cannabis workers union PAC in 2024 and wonder if that disqualifies her to vote on pot issues.

The Doctor is In

Some skeptical folks in Fullerton have long wondered aloud if 5th District Councilman Ahmad Zahra is really a doctor. His acolytes and camp followers in the Fullerton Observer call him “doctor” and he doesn’t correct them. Still there’s no evidence that he ever practiced medicine, so the skeptics had some reason to wonder, given Zahra’s ever shifting “origin narrative” and omission of salient features of his past – like the gay man’s stop over in Little Rock, Arkansas to marry…a woman.

But now the truth will out. The FFFF Research Department has done a deep dive into photographic evidence and discovered unequivocal proof of Zahra’s doctorhood.

Unless it was Halloween.

Take Out The Trash Tuesday

Tomorrow evening a special session of the Fullerton City Council will review responses to a Request for Proposals for a new trash hauling contract.

It seems sort of mundane, but the issue is big. Really big. The amounts of money at stake are enormous and the contracts typically run for years and years – as we have seen with our current provider Republic Services.

Won’t look you in the eye while you’re trashing him…

An ad hoc committee of Fred Jung and Jamie Valencia were involved in reviewing this process although their contributions aren’t really known. We do do now that the evaluation of the responses and subsequent interviews resulted in these rankings.

15 scoring categories, somewhat weighted to proposed rates, were the basis of the evaluation.

The winning score was earned by EDCO, based in Lemon Grove, down in San Diego County with an office in Signal Hill. CC&R, based in nearby Stanton placed a close second. Universal Waste, based in Santa Fe Springs was a close third. The lowest score was given to trash giant Republic, with whom the City has been having issues for years both in labor impacts and environmental compliance under SB1383 (organic waste recovery).

I have no idea how much lobbying of councilmembers has been going on, but I assume it’s been significant.

Smoke it down, Kitty…

Tomorrow night we should have an interesting show since Fullerton Boohoo is mad at Valley Vista Services for contributing to the PAC that torpedoed the candidacy of Cannabis Kitty Jaramillo. Ahmad Zahra’s followers and the Kennedy Sisters are sure to bring this up.

Don’t Worry, Be Happy!

The City of Fullerton has issued a press release to address the recent revelation that $10,000,000 was erroneously counted in general reserves when it really belonged in special restricted categories. Peruse this soporific and condescending verbiage and see if you can read a single reference to City employees having made a mistake, honest or otherwise.

Alternatively, take an Ambien and relax. Everything’s gonna be fine.

City of Fullerton Budget Update

At the March 17, 2026, City Council meeting, City staff presented an agenda item titled “Second Quarter Financial Report for Fiscal Year (FY) 2025–26 and Mid-Year Budget Adjustments.” The purpose of this item was to provide an overview of the City’s financial position through mid-year FY 2025–26, report on revenues and expenditures from July 1, 2025, through December 31, 2025, and present the updated financial position based on the finalized FY 2024–25 Annual Comprehensive Financial Report (ACFR). Following this presentation, the City would like to provide additional context and clarification to support a clear and shared understanding of the information discussed.

The City Council adopted the Fiscal Year 2024–25 budget on June 4, 2024, which included a planned structural deficit of approximately $9.4 million. As part of that budget, it was understood that the City would utilize a portion of its reserves—similar to drawing from savings—to balance the difference between revenues and expenditures. This approach was discussed publicly during the budget adoption process.

Throughout FY 2024–25, the City took steps to manage costs, including holding vacant positions and limiting expenditures where feasible. As a result of these efforts, the City reduced the actual year-end operating deficit to approximately $5.7 million, reflecting ongoing attention to fiscal responsibility.

At the close of Fiscal Year 2024–25, the City’s General Fund—the primary operating fund used to provide essential services such as police, fire, parks, and infrastructure—reported a total fund balance of $30.0 million. A fund balance can be thought of as the City’s overall savings. Of this amount, $19.8 million is held in the City’s contingency reserve, which serves as the City’s emergency fund to maintain services during economic uncertainty or unexpected events.

A portion of the City’s fund balance—approximately $10.2 million—is categorized as restricted, committed, or assigned for specific purposes. During the fiscal year, approximately $2.7 million was more clearly designated within these categories, increasing the allocated portion of the City’s savings from approximately $7.5 million to $10.2 million. These funds support important community priorities such as capital improvements, General Plan updates, Downtown parking, and street and infrastructure improvements, including road repairs. These funds remain part of the City’s overall financial resources but are set aside for their intended purposes.

Additionally, a $2.9 million prior-period adjustment identified through the City’s independent audit was related to the proper classification of assets between the General Fund and the Successor Agency. This adjustment ensures that funds are reflected in the appropriate account in accordance with accounting standards. The funds were not lost or misspent, but rather properly reallocated.

At the end of FY 2024–25, the City’s contingency reserve was approximately 14% of annual General Fund expenditures, which is above the City’s minimum policy requirement of 10%, though below the long-term goal of 17%. Based on current projections, the City is anticipated to end FY 2025–26 with approximately 12% in reserves, which remains within policy guidelines.

There has also been discussion regarding a potential 2% reserve level. It is important to clarify that this figure represents a baseline, starting position in the City’s long-term financial forecast, assuming no changes to current revenues or expenditures. It is neither the City’s current condition nor its expected outcome. As part of the upcoming budget process, the City Manager will present options during public budget study sessions to reduce the funding gap and improve reserve levels over time, ensuring the City remains on a path toward long-term financial stability.

The City’s financial outlook reflects broader trends impacting many communities, including rising costs for labor, materials, and services. At the same time, revenues remain stable, with property tax revenues increasing by 6.23% due to growth in assessed property values.

To help illustrate, the City’s finances can be compared to a household budget. Revenues function like a paycheck, expenses represent the cost of essential services, and the fund balance serves as savings. Over the past year, the City used a portion of its savings to support planned expenditures, while continuing to maintain an emergency reserve. Moving forward, the City is focused on aligning ongoing revenues and expenses to support long-term financial sustainability.

The Annual Comprehensive Financial Report (ACFR) referenced above is the City’s official year-end financial report and is independently audited. In simple terms, it is similar to a household’s year-end financial statement—it shows how much money came in, how much was spent, and how much remains in savings, along with how those funds are designated.

Looking ahead, the City will continue to evaluate cost containment strategies, operational efficiencies, and potential revenue opportunities, which will be discussed during upcoming public budget study sessions along with updates to the City’s multi-year financial forecast.

In summary, the City of Fullerton’s financial position reflects a planned and publicly approved use of savings to address a budget gap, along with standard accounting updates to ensure funds are properly tracked. No money was lost, missing, or improperly spent. Approximately $2.7 million was reclassified to reflect funds set aside for specific purposes—such as road repairs and capital projects—and a $2.9 million adjustment was made to the appropriate account for those funds. The City ended FY 2024–25 with 14% in reserves and is projected to have about 12% this year, both above the City’s minimum requirement. The 2% figure referenced in recent discussions reflects the City’s baseline financial outlook if no changes are made to current spending or revenue levels, underscoring the importance of taking action. The City is actively working to reduce the budget gap and strengthen its financial position moving forward.

The City of Fullerton remains committed to transparency and keeping the community informed. Residents are encouraged to review financial documents available on the City’s website and participate in the budget process.

$10,000,000 Misdirected; Budget Crisis Suddenly Gets Worse

Off we go, into the Wild Blue Yonder…

At Tuesday’s Fullerton City Council meeting our honorable elected representatives found out that our fiscal reserve funds were overpopulated with bucks that belonged someplace else. I haven’t been able to view the video – the City Clerk’s link doesn’t work so I’m relying on a Voice of OC article.

It seems monies that should have gone to Fullerton’s Redevelopment Successor Agency and other sequestered funds were being counted in the general fund reserve pool – $10,000,000 worth. How and why this occurred wasn’t spelled out in the article except as some sort of accounting error:

“These funds remain part of the city’s overall fund balance, but are now set aside in a way that better reflects their intended purpose,” said Steven Avalos, the city’s finance director, at Tuesday night’s meeting.  

Mr. Steven Avalos, Fullerton’s New City Treasurer

Wow, that’s an application of bureaucratic soft soap, massaging what amounts to an egregious accounting error, or worse.

What it means is that all previous budget discussions led by Mr. Avalos and his predecessor have been nonsense for the past 5 years. And decisions in just the past year obliviously come into sharper focus for their foolishness – like going in-house with ambulance drivers and hiring a bunch of new, permanent “firefighters” based on a one-time FEMA grant. Parenthetically, I note that Mr. Avalos was appointed City Treasurer earlier in the Tuesday meeting. That’s a bit funny, really.

The Voice reports heated and loud interlocutions between Ahmad Zahra, the perpetual grandstander, liar, and victim, in exchanges with Mayor Fred Jung and Nick Dunlap. The exchanges as reported generated a lot more heat than light, but so it is when Zahra begins his sanctimonious routine. Ironically Zahra says a new sales tax increase won’t help.

The Man from Manfro

We are informed by the article that City Manager Eddie Manfro is going to meet with the ad hoc Budget Sustainability Committee on March 30th which seems like just a stall of 12 days.

Won’t look you in the eye while you’re trashing him…

One interesting statement was uttered by Jung in a Voice interview:

“I think we were set up to fail.”

We don’t know what this means because apparently the reporter didn’t follow up. Does the Mayor believe this misallocation of funds was deliberate to create a budget crisis at some point? Who knows?

Things are grim in City Hall, and a cactus garden in front isn’t going to cheer anybody up.

Small Stuff Adds Up

The Fullerton City Council agenda for tomorrow’s meeting is pretty light. Except for a budget discussion everything is “Consent Calendar.” One of those items caught my attention. Item #10 is an emergency, non-bid request to work on some drainage channel wedged between the Uptown Apartments on Yorba Linda and the 57 CalTRANS right-of-way.

Staff is claiming the project (whose scope isn’t described, other than “a damaged wall”) is necessary due to “recent rain events,” always a useful pretext for doing stuff. The channel isn’t one of those big ones with perpendicular walls, but from a satellite view it looks like a simple concrete “V” ditch that enters and exits a concrete drain structure.

It must look something like this, right? A concrete “V” in cross section with woven wire mesh or thin rebar. Has a part of the been washed out or undermined? Who knows? We just know there’s some sort of damage, and I’d bet the “recent rain events” are an excuse for a long-developing issue.

Here’s a google earth view of a portion of the the existing “V” ditch that is either buried or washed out.

This is the funny part. The City Engineer has estimated a construction cost of $105,000, but with an overhead of almost 20%. That’s ridiculous. At $100 an hour for staff time we’d be looking at 200 manhours, or one person working on nothing else for five weeks. The design is negligible since you can just sketch a plan and pull a cross section and specs out of the Green Book or other standard sources, like I did, above. Administration? Processing? You’ve got to be kidding. And then there’s the amount budgeted for “contingencies.” $75,000, or 75% of the construction amount. So they really don’t know what the scope is and are expecting surprises.

If I were on the City Council I would be asking staff about these figures. They don’t make sense, at least not on the surface. Something is going on.

When the 57 freeway was built this drainage flow was created by a giant berm, but I have to wonder how and why the City created a drainage right-of-way on what appears to be the CalTRANS right-of-way, or on private land since the property looks like a jagged remnant of the State’s freeway land acquisitions.

Someone might also reasonably inquire into how come this thing is an emergency at all. That seems awfully strange. The rainy season is virtually over and the amounts of water collected here seem pretty insignificant.

But back to the finances. The problem with all municipal public works budgets are the amount used to cover staff expenses and overhead, and this, normally around 10% or more, is already padded. If you think about it, money from infrastructure funds are being used and abused to support to bureaucracy instead of pouring concrete.

The amounts in this instance are small, but they are indicative of an ongoing philosophy of abusing Capital Improvement budgets. Some might argue that unused funds will simply be returned to the fund from which they came. Could be. But how would anybody know?

More Trouble Down On The County Farm Vis-a-Vis the Do-Si-Do

Do with American flag, busy digging an escape tunnel…

The Voice of OC is reporting more suspicious activity on the part of crooked former County Supervisor Andrew Do. Do is already in the lockup after admitting to scamming OC out of millions in criminal scams with pals to steal COVID relief funds. His daughter, a co-conspirator got a slap on the wrist while his wife, Judge Cherie Pham still revels in the title of “Your Honor.”

“Now, auditors from the Weaver-Tidwell firm say they’ve reviewed over $486 million of contracts and found a series of questionable expenditures where Do ordered county staff to approve a vendor without the proper paperwork or covered up where grant money was actually going.” 

You are ready to depart, young grasshopper…

Do is gone, but his self-proclaimed protégé and great friend, our County Supervisor Doug “Bud” Chaffee, isn’t. He has been stonewalling the Do affair from his dais and even now is quoted as saying:

 “I don’t want to keep spending money if we can’t recover it in some way. The report is disturbing but it’s not what I’d call evidentiary quality.” 

Right. Why pay to find out what happened and where the money went, and who benefitted? Nothing to see here, folks. So sayeth Chaffee, the staunch defender of public resources. Quality evidence is so darn expensive.

Paulette Chaffee discussing complicated education issues with a bunch of helium-filled balloons in front of her garage…

The rancid rodent Chafee has ten months left in his sketchy Supervisorial career. Perhaps he doesn’t want it tarnished by more scandal. Or maybe he’s got his own skeletons locked up some place he doesn’t want auditors poking around. Don’t forget the Little Lady – Pilferin’ Paulette is once again running for public office with her fake “4th District Ambassador” label, a non-job her hubby created to get her photo ops.

But if Chaffee hopes for peace and quiet he hopes in vain. Yet another galactic fuck up in which Andrew Do’s name is attached is addressed in a new Voice of OC post. Apparently the County claims a vendor in the public mental health game, Mind OC, owes them $65,000,000 for payments made without supporting evidence of accomplishment. And guess what? Mind OC has ties with…Andrew Do. Get this:

“Lawyers noted that Do helped increase Mind OC’s role in managing medical operations at the site, despite them being unlicensed, and pointed to a $275,000 contract the nonprofit created with the wife of Do’s then chief of staff Chris Wangsporn.” 

Wangsaporn is not in jail, and neither is his wife. I don’t know whether Mr. or Mrs. Wangsaporn are or have ever been subjects of FBI investigations, but the Mr. W currently peddles his services as a government lobbyist. As usual, our DA Todd Spitzer has been singularly uninterested in the activities of Do and his Chief of Staff.

Off we go, into the Wild Blue Yonder…

And now back to Chaffee. How much did he know about his best bud’s side gigs on the Board of Supervisors? What did he know and when did he know it? Chaffee has a million dollar+ office budget to help him “supervise” and there seems to have been nobody looking into a damn thing; if they did, Chaffee said nothing about the ocean of cash that was disappearing through the OC Health Care Agency funnel, abetted by the politcal puppets that ran it. And what did Pilferin’ Paulette know about the chicanery down on the County farm?

Traut endorsers. Look at names #1 and #2!

Have any of the current 4th District candidates addressed this ongoing scandal at the County? I am unaware of any statement promising a clean sweep and a reckoning for those who aided Do in his malfeasance. I would think this is something Fred Jung, Connor Traut, and Tim Shaw would be all over. But opposing corruption is scary because you never know who might prevail. And some of the miscreants may have endorsed you!

Surpise!

On Tuesday night the Fullerton City Council did something very rare for a government agency. Nothing.

The issue at hand was a response to a State mandate to get rid of non-functional turf by denying it potable irrigation water. Therefore it was believed that some sort of xeriscape would be needed to replace the lawn in front of City Hall. I have has posted a couple times about this nonsense.

Oh Dear. Surveys were conducted, the charade of public input was exercised, copious staff time was spent culling and collating in preparation for the inevitable routine: hiring consultants and “designers,” organizing charettes, redrafts; months of fruitful effort developing bid quantities, taking bids, awarding and managing contracts, etc., etc., ad nauseam.

And then the remarkable occurred: leave the damn thing alone. In fact, while you’re leaving the grass alone, re-open the fountain that has been shut down as a virtue-signaling gesture years ago. Staff didn’t see that coming. Neither did I.

Some folks rightly pointed out that the lawn was functional – as a gathering place for meetings, protests and even municipal-sponsored events! First Amendment and civic pride. That sealed the deal.

But the road of lawn laissez-faire was not without a couple of speed bumps. “Dr.” Ahmad Zahra wanted a grand public arts gesture somewhere on the lawn; maybe All the Arts for Kids could help! Seeing the opportunity for a grand social gesture slipping away Shana Charles asked that “options” be presented to the Council, completely contradictory to the motion that had been made to leave the damn thing alone. She used to make this strategy of last minute obfuscation work, but it won’t work this time, despite her insistence on MORE TREES, maybe even an enormous fig that would serve as shade for generations to come.

Completely absent was the Fullerton Heritage Group who should have been there to protect the integrity of the original building elevation’s relationship to its surrounding. Nick Dunlap got it. The formal exterior of the building was part and parcel with the site design – created 65 years ago. It’s a landmark. The Heritage Group wasn’t interested, apparently.

I wonder if anybody has notices several empty tree wells in the sidewalk along Commonwealth in front of City Hall. There used to be shady ficus trees there (see picture, above), but not any more. If anybody had given this any thought they didn’t say so.

Anyhow, well-done Jung and Dunlap and Valencia for doing the smart and the right thing.