Previously published Friday, October 30, 2020

LIVE OAK, CA (MPG) – A report filed by the Sutter County Grand Jury, June 30, 2020 holds the findings of an investigation into the City of Live Oak and its finances, management, staff and City Council.

In the opening summary of the report, the SCGJ states its authority to examine its local city governments and while doing so for “Sutter County and its two cities”, found issues with the City of Live Oak.

The report breaks the findings down, addressing each issue in depth in the discussion section; these sections are entitled: “Conflicting Finances and Conflicts of Interest”, “City Council Meetings Run Amok”, “Contracts and Getting your Money’s Worth” and “City Water Finances in Hot Water”. The following are the findings of the Grand Jury:

F1: The City Council created a conflict of interest by appointing the Finance Director (consultant) to be the interim City Manager, between April 2018 and April 2019

F2: The City of Live Oak is overspending on profession service contracts without City Council approval.

F3: Ethics training for City Council has not been completed in the legally mandated periods and content.

F4: City Council members have not disclosed potential conflicts of interest or maintained a current Form 700 as required by law.

F5: For several City Council meetings, no minute or video recording are available online. Other video recordings are incomplete or inaudible.

F6: The City Council meetings are not consistent with Brown Act regulations and City Municipal Codes concerning transparency and how meetings are conducted.

F7: Live Oak is not requesting competitive bids for service contracts per standard best practices.

F8: City Council has repeatedly neglected to require term limitations, caps on fees, and a detailed scope of work in profession service (consultant) contracts.

F9: The water Enterprise Fund is underfunded.

F10: The Water Enterprise Fund does not comply with State regulations regarding the water loan covenant.

Those findings were followed by recommendations and a request a response from the governing body within 90 days, pursuant to Penal Code sections 933 and 933.05.

On October 14^th, a 15-page response filed by Live Oak City Manager, Aaron Palmer, on behalf of the City Council, was posted on the city’s website with a detailed rebuttal made for each of the findings and main issues of concern of the SCGJ.

In a brief answer to each finding, Live Oak responded:

F1: Disagree. This finding is not substantiated. The Grand Jury Report is entirely out of context.

F2: Disagree. The assertion of “overspending” was never addressed in any fashion by the Grand Jury. In fact, the City is getting its money’s worth with its professional contracts.

F3: Disagree. All members of the City Council have their ethics training certificates on file with the City Clerk.

F4: The City is not in a position to respond to this finding. Each individual Council Member would presumably have personal knowledge as to their financial positions. This is not an issue the City can control. All five of the City’s Council Members have on file current Form 700s.

F5: Disagree. This “finding” has no basis in the law. There is no legal requirement to create any video recordings. IF created they may be destroyed after 30 days. There is no requirement to post video recordings online. Because there is no requirement to create a video recording in the first instance it is impossible for them to be “incomplete” (if there is only a partial recording of a Council meeting this is of no moment because there is no obligation to record any portion of a Council meeting).

F6: Disagree. This finding cannot be sustained. The Grand Jury Report is full of non-sequiturs.

F7: Disagree. The Grand Jury Report makes no reference to service contracts. The assertion of “best practices” is misplaced. The Grand Jury did not analyze the fact that the City’s professional contracts are proper and reasonable. Furthermore, as to Consultant Agreements not involving City Officials, the City uses a contractual template which contain the clauses in question.

F8: Disagree. This “finding” is no thing more than an argument and an attempt to embellish “finding” 7 above. Some professional relationships do not lend themselves to “term limitations” and the services to be provided are well defined by statute in addition to what might be set forth in an agreement. Again, the City utilizes a form of contract for its consultants (who are not City Officials) which contain the suggested clauses.

F9: Agree

F10: Agree.

To read the entire response to the Grand Jury Report please visit https://www.liveoakcity.org/services/news-list. To read the original Sutter County Grand Jury report, please visit https://tinyurl.com/yxucp7ak.