City of Lynwood Councilwoman Responds to CA State Audit

For Immediate Release
December 13, 2018

MAYOR PRO-TEM STATEMENT ON CALIFORNIA STATE DRAFT AUDITORS REPORT FOR THE CITY OF LYNWOOD 

LYNWOOD, Calif.-      Mayor Pro Tem Aide Castro made the following statement today regarding the release of the draft California State Auditors Report – Poor Management Has Contributed to Its Financial Instability and Led to Its Failure to Comply With State Law

“I would like to thank the state auditors that took the time to come and review our books so that they could give us constructive criticism on how the city of Lynnwood can move forward in a positive direction. Some of the concerns pointed out by the auditors are alarming but at the same time I feel confident that my colleagues and I will take the necessary steps to cure and correct the actions identified in the auditor’s report.

By the time I joined the council, in December 2007, we were running a nearly $1.5 million dollar deficit every year.

For approximately six years we cut our budget by eliminating positions that diminished the services we provided to Lynwood residents. 

Under the City Council’s direction, new tax measures have been approved by the voters that will alleviate the structural problems.

Council made the decision to declare a fiscal emergency and asked for a one penny sales tax to create new revenue for the city. We would eventually approve the cultivation and manufacturing of cannabis products and approved an economic development project that would generate thousands of dollars in sales tax in the future. 

Fiscal year 2016-17 ended with a positive fund balance of $2.5 million and current unaudited projections for 2017-18 indicate another increase of approximately $1.9 million.

Unfortunately we have been presented with a state audit that shares some valid concerns.

The first step Council took was to make key administration changes by bringing in new leadership.

The State Auditor questioned why a consultant conducted salary surveys and that was due to the city not having a permanent Human Resources (HR) Director on staff.  Lynwood now employs a full-time HR director whose first duty was to address positions being paid from restricted funds.

The State Auditor asserted that the City inappropriately used water and sewer revenue to fund two staff members. To avoid any potential Proposition 218 violations, the City has transferred the cost of the two identified positions from the water and sewer funds to the General Fund for FY 2017-18 and reallocated their cost for FY 2018-19 as well.

Finally, the State Auditor addressed issues with the increase of staff the city of Lynwood employs. Due to many years of eliminating positions, city services began to decline, specifically in the Parks and Community Services and Public Works departments.

In order to provide services to the public, the City must recruit and retain qualified staff. After the City provided employees with a moderate 1% Cost of Living Adjustment in 2017, the salary surveys conducted showed nearly every City position benchmarked was below market rate. Studies show that the cost of employee turnover ranges from 20% to 40% of their annual salary.

With that said I disagree that working for a smaller city means an employee should take a smaller salary. I think it’s disrespectful to the employee who’s performing in the same capacity as an employee who works in a larger city. I believe and support Lynwood employees salary being based on the scope of work the employee performs without regard to the size of the city.  

The council looks forward to continuing to work with the State Auditors and our staff to ensure we remain transparent about the financial condition of the city of Lynwood.”

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Contact:          Melissa Hebert

Chrysalis Strategies Group

[email protected]