CITY OF LAKE ELSINORE'S RESPONSE TO GRAND JURY FINDINGS AND RECOMMENDATIONS #4

ELSINORE MAGAZINE2 Grand Jury Findings #4 4. As of October of 2004: (a) The City Council has not had Twon Hall Meetings on subjects Important to citizens. (a) Some Lake Elsinore citizenshave expressed concern regarding the current indebtedness of the city, concluding that they will ultimately be responsible for repayment of the debts from the general funds, which include: - Cost to operate the Biamond Stadium - Cost to subdize the McVicker Skate Board Park - Bond and Tax Debt ( in excess of $170 million) - Attorney and Counsultant fees - Salaries for executive, staff and managers. (c) The first of three (3) Redevelopment Agency (RDA) Bonds was issued October 1, 1994, to finance the Diamond Stadium. The bonds were issued to finance costr overuns of the general fund account, whicdh includes the cost to operate the Diamond Stadium. The City Council passed an ordinance to refinance the bonds by allowing the City to issue "Certificate of Participation Bonds" with the RDA. As indicated above in Finding #4b, General funds are being used for the repayment of the bonds. The stadium, since its inception has been operating at a loss. In fiscal year 2003-2004 the stadium expenses exceeded income in excess of $ 700,000. This situation contributed to the financialproblems of the City, causing funds to be diverted from RDA's low moderate-income housing development program. (d) T he City of Lake Elsinore's RDA, as stated in Health and Safety Code Section 33334.2 thru 33334.6, requires redevelopment agencies to set asidew twenty percent (20%) of the property tax increment receipts to a low and moderate income housing fund. This has been validated by SUPERIOR cOURT cASE # civ271683, dated November 14, 1995. This lawsuit petitions the courts for relief of all city indebetedness by allocating RDA'S twenty percent(20%) set aside designated monies to reduce that indebtedness. City's RESPONSE to Grand Jury's response: The City Council appreciate the input from the Grand Jury regarding the holding of Towm Hall Meetings. Please refer to Response to Recommendation No.3. Recommendation No. 3 (3) Grand Jury: " The City Council establish a Policy and Procedure Committee within the next sixty days to review and revise current policies for formal adoption. Policies and procedures must be reviewed and published on an on going basis and/or when there is a change of proceduresin staff duties."

City's RESPONSE to Recommendation No.3 : The city concurs with the recommendation to review and revise current policies and procedures. In light of the City's rapid grwoth and changing demands, the City Council directed a Benefits Audit to be conducted ( see Exhibit "E") and established a City Council subcommittee. to review and revise Council Policies. Those recommendations were submitted to the City Attorney and City staff with direction to prepare and present a final proposed updated City Council Policiy Manual. As indicated in response to Finding No. 3, above a study session has been set for September 29, 2005 for the City Council to review and consider revised policies and procedures. In light of the Progress currently underway, the City Council does not believe that the formation of a Policy and Procedure Committee is necessary at this time.

EM2 response to City's recommendationNo.3 Paragraph 1: First of all No. 3, does not seem to answer the Town Hall Meeting question. Secondly as EM2 noted in last article, Finding and Recommendation, Response No. 3. that the City and City Council have yet to continue their review, revise and publish current Policies and Procedures since from September 29,2005. We are about to enter a New Year and the study session have not been scheduled for Public Review.

EM2, suspect that the City and City Council, is in no hurry to pursue and adopt strong measurer on Policies and Procedurers. It will take away their poor, excuses and their corrupt abilities to allow Public Funds/ Monies to be ripped off and stolen. It is obvious some or all of them is on the take. Why else they are so comfortable and satisfied at CORRUPTION? An HONEST person would not be able to stand or live with themselves.

City's RESPONSE to Paragraph 2: The City Council also concurs with the recommendation that the policies and procedures be continually reviewed and updated as necessary and that City be expressly informed of both the existing policies and any future changes.

City's RESPONSE continues on #4 : The Grand Jury correctly points out the financial diffulties occassioned by the construction of Diamond Stadium 12 years ago. The current administration inherited the perplexing problems brought about by the construction of the Stadium and is taking positive steps to address these issues. The City has actively sought to: (i) reduce its level of annual debt service and(ii) to pursue "partnering" arrangements with private entities to reduce Stadium operations costs.. Additionally, the Agency has commenced a "Request for Proposal" process and received three serious bids from private entities seeking to take over operational responsibilities at the Stadium. (see Stadium RFP attached as Exhibit "G") " review "G" at City hall." See also, Response to Recommendation No. 5.