Two new audits by California Controller John Chiang have questioned how the city of Montebello spent its redevelopment agency funds and its gas tax funds.
The audits raise questions about $31 million in spending, loans and fund transfers. Money that was supposed to go to local job development, street repair and schools was reportedly used to cover its budget and cash shortfalls.
"It appears that the city moved money wherever it wanted, whenever it wanted, regardless of the law or the intended purpose of those taxpayer dollars," said Chiang.
The audits were the first in a series of reviews of Montebello ordered by the controller after the city failed to comply with the state's financial reporting requirements.
The review found that Montebello used its redevelopment funds to pay for such unusual expenses as dinners in Las Vegas for the city manager, promotional items such as notebooks, pens, water bottles and flash drives and embroidered polo shirts and golf tournament registrations for city council members.
The RDA audit also claimed the funds were used to purchase a house outside the redevelopment project area.
Montebello also failed to make $2 million in payments to local agencies, which increased the funding the state had to provide those educational agencies.
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The review also found that Montebello City Council members who also serve as the Redevelopment Agency Board have a history of authorizing forgivable loans to individuals who are political contributors.
The second audit, into the spending of the city's Gas Tax Fund, found that more than $2 million was used to pay general operating costs --not repair streets and roads or repair storm damage.
The controller ordered the city to establish a separate cash account for gas tax funds so the money is not put in the general fund.
In his original report, the controller also accused the city of spending $1,300 in redevelopment funds for Dodger tickets. This was withdrawn after the city was able to prove these tickets were paid out of the city's general funds.
Still, Chiang questioned the use of city general funds to buy Dodger tickets, saying it does not appear to be a proper use of public funds.
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