Oxnard City Hall: Driving Blindfolded

Producing monthly financial statements is the most basic function of a Finance Department in any professional organization.  It’s really not asking for anything extraordinary…

California state law requires every general law city to produce monthly financial statements and file them with the city clerk and the city council.  These statements should inform both the public and the city council, as to the city’s current financial position and the results of its various operations. It’s an important management tool for making better decisions and keeping people accountable.

Unfortunately, the city of Oxnard does not produce monthly financial statements, and they haven’t done so for many years. 

Merely asking the city to start doing it has been ineffective, so Moving Oxnard Forward has now filed a petition for a judge to issue a writ of mandate, which would compel the city to comply with this state law.

California Government Code section 41004 requires that:

“Regularly, at least once each month, the city treasurer shall submit to the city clerk a written report and accounting of all receipts, disbursements, and fund balances.  The city treasurer shall file a copy with the legislative body.”

California Government Code section 34004 allows cities to transfer the city treasurer’s duties under section 41004 to any other city officer. The City of Oxnard (Municipal Code § 2-176(d)) has transferred these duties to its Chief Financial Officer (CFO).

The city has a revolving door when it comes to CFOs – several in the past years alone – and none of them produced monthly financial statements.

Members of the public have complained for years that the city does not comply with this law.  Oxnard City Treasurer Phil Molina has been noting in his quarterly reports to the council that this requirement is not being met by the CFO.

In the spring of 2017, a few months after Oxnard’s most recent CFO (Jim Throop) took the helm, our organization’s president (Aaron Starr) discussed with Mr. Throop the lack of monthly financial statements.  In spring of 2018, Mr. Throop started producing some summary reports that do not even come close to compliance with the state requirements.

After seeing no real effort to correct the problem, at the May 22, 2018 city council meeting, Mr. Starr presented the city council with a written demand for the city to start producing monthly financial statements.  He asked that if the city could not do so within 30 days, that they at least meet with him to establish a time frame for compliance.  The city did not respond to the letter.  No options were left but to have a judge compel the city to comply with state law.

Oxnard Mayor Tim Flynn’s response to the press about the lawsuit was to claim ignorance that there even was such a requirement.  Is he just not listening at city council meetings?  Does he not read the City Treasurer’s reports?  Did he not read the letter that Mr. Starr gave each council member in May, citing the legal requirement?

Mr. Flynn campaigns with promises of “transparency”, yet his staff refuses to provide the public even this most basic, legally-required information.

Operating a $425 million organization without monthly financial statements is like trying to drive a car while wearing a blindfold.

Budget numbers are hopeful projections made once per year.  They’re guesses about the future.

The only other regular report produced by the CFO is the Comprehensive Annual Financial Report, which is produced once per year with the help of an outside CPA firm, and is usually not issued until at least 6 months after the end of the fiscal year.  That information is already outdated by the time it is produced, and it’s wholly inadequate to inform day-to-day decisions.

Monthly financial reports show actual revenues and expenses in a timely manner.  How else is the council to know whether they can afford to approve a particular expenditure request, whether certain categories are deviating from the budget plan, whether or not the utilities are meeting bond coverage requirements, etc?

For too long Oxnard’s leadership has accepted substandard performance from the largest city in Ventura County.  It is unfortunate that it requires legal action to overcome such management failures.

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