The battle over Costa Mesa’s refusal to disclose vendor contracts and records for its 60th anniversary event spilled into Tuesday night’s City Council meeting, with residents demanding to see the contracts and city management standing by their decision.
City CEO Tom Hatch also revealed that he commissioned a forensic audit of the event, which involves examining financial records for fraud or misconduct. He is also putting in place a series of measures designed to ensure the city follows its purchasing policies.
It all comes amid a city investigation into the handling of the event’s finances and two city employees who helped organize the event being placed on administrative leave.
Many of the questions by City Hall observers center on a company, KB Event Management, that ran the food section of the event and is co-owned by Orange County Republican Party Chairman Scott Baugh.
“My document request was from July 23, and it’s way overdue,” said activist Reggie Mundekis at Tuesday’s meeting. She said she has yet to receive the food, beverage or entertainment vendor contracts.
The city has also refused a Voice of OC request for the KB contract under the California Public Records Act.
Activists said the city has spent more than $250,000 on the event late June and is refusing to disclose the contracts on which many of the payments are based.
“We have seen payment after payment after payment on these contracts,” said Greg Ridge, another activist, referring to agreements such as the entertainment contract with SUN Group.
“Both sides have signed them,” Ridge said. “You’re paying on them. You’re using our money. You can’t just hide them because maybe they’re not going to be flattering to you.”
City Attorney Tom Duarte of the law firm Jones & Mayer said the city may legally withhold the contracts, because disclosure would endanger an investigation.
The city’s position has been challenged by Terry Francke, general counsel of Californians Aware and open-government consultant for Voice of OC. Francke said the KB contract is a public record, even if Baugh’s firm is the target of a criminal investigation.
“That would be no legal justification for keeping these documents from the public,” Francke said last week.
“Just as independently existing documents not created for use in litigation are not exempt under the ‘pertaining to pending litigation’ exemption, independently existing documents not created in the course of investigation are not exempt under the law enforcement exemption,” he added Wednesday.
Hatch read a statement saying he ordered the forensic audit July 31, the same day he “learned about concerns that some city policies and procedures may not have been followed.”
“I’ve asked that the audit be thorough and done in a timely manner,” he read. “As soon as the audit is completed, it will be made public to the extent allowed by applicable state laws regarding individual employee privacy rights. In addition to a financial accounting, the audit will also detail if any city procedures and policies were violated.”
Hatch also said he’s “instituting several measures as precautions to make sure city purchasing policies and procedures are strictly adhered to.”
Those include a “refresher training course” for employees on the purchasing process and creating a purchasing quality control committee.
The committee is supposed to meet monthly and recommend improvements to the city’s purchasing policies and review the city’s involvement with the Costa Mesa Foundation, the city’s nonprofit group that administered the anniversary event’s finances.
The committee will also review the city’s purchasing records monthly to ensure that policies are followed.
Mayor Jim Righeimer emphasized that city leaders want to get to the bottom of what happened.
“Everybody up at this dais wants to know what happened, what needs to be fixed” and what needs to be solved, said Righeimer, adding that council members “are blind to what happened, or is happening” with the city’s personnel investigation.
To news reporters, Righeimer said, “Do not call us up and ask us what we know,” because the council members are kept in the dark.
Meanwhile, councilwomen Sandy Genis and Wendy Leece supported the efforts by activists to obtain the contract records.
“If we’re looking at documents that would have been available the day before” the investigation started, Genis said, “it just seems kind of bizarre that we would somehow make them secret.”
Leece said she, too, asked for a copy of contract records but hasn’t received them.
“It’s just kind of strange,” she said.
Sue Lester, a former City Council candidate who serves on the city’s 60th Anniversary Planning Committee, said she’s dismayed at the city’s refusal to disclose the records.
“Not only as a taxpayer but as a member of that committee, I’m mortified that this is happening,” said Lester.
Lester said she read through the city’s municipal code and that “it looks like we deliberately violated the rules for payment in order to avoid getting the approvals.”
The city has declined to specify which aspects of the event it is investigating or whether there is a criminal investigation under way.
The California Public Records Act requires cities to make documents “promptly available” upon request, with a general maximum limit of 10 days to decide whether the records are disclosable.