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Maywood strives to bring order to financial chaos
An audit of the small city finds records missing, failure to adequately account for some loans and other problems. The city manager hired after the scandal in next-door Bell is hopeful but says finances are still ‘extremely fragile.’
|Angela Spaccia became a central figure in the Bell scandal because she was the top deputy under Robert Rizzo. (Lawrence K. Ho, Los Angeles Times / August 2, 2010)|
The small town of Maywood drew national attention last year when it disbanded the Police Department, laid off virtually all its workers and outsourced City Hall operations to neighboring Bell.
But nearly a year later, an experiment hailed by some as an act of municipal genius is considered by many residents to be a huge blunder.
Just weeks after Bell took over government operations, the city was embroiled in a salary scandal. Corruption charges were filed against Angela Spaccia, the Bell assistant city administrator brought in to run Maywood, along with several other officials. Maywood has lumbered for nine months without a formal budget, and residents have complained about a decline in some basic city services.
An audit released this week found that some city records were missing, meeting minutes had not been adopted for nearly a year and the city had not adequately accounted for some loans and city properties. In some instances, auditors said, the city also went against its own policies and gave contracts without competitive bidding.
The city is also at the center of a broad FBI probe into allegations that an engineering firm paid bribes to city officials to get business in Maywood. The FBI was also investigating hundreds of thousands of dollars the city paid from redevelopment funds to a community activist group for a lead abatement program. The group, Union de Vecinos, is closely aligned with Councilman Felipe Aguirre.
The task of bringing order to Maywood has fallen to City Manager Lilian Myers, who was hired last summer by the City Council in the wake of the Bell scandal.
Myers arrived to a City Hall in shambles. Basic financial records were missing, making it difficult to determine whether Maywood was even solvent. She was forced to pay bills with incoming tax revenues because she had no operating budget to guide her.
The Bell officials hired to run the city departed in mid-October, leaving Myers with no one to handle day-to-day operations.
To keep City Hall open, she turned to temp agencies. She then began the task of figuring out whether the city was operating in the red and determining whether its contracts with various vendors were valid. “It created some problems,” Myers said in an interview. “There was a lot of chaos.”
Myers also got an earful from residents. Some said police response had suffered since the Police Department was replaced by the county Sheriff’s Department.
Others said the grass at one park had grown knee-high, making it impossible for kids to play sports. There were also complaints that the city was slow to fix broken sidewalks. Until recently, Maywood had no code enforcement officers or city engineer to oversee projects. At least two projects were put on hold, including the expansion of the library.
“We’ve had too many changes of hands, and that’s why things are disorganized,” said Sandra Orozco, a longtime Maywood resident and activist. “Anybody who comes to [a city] that’s so dysfunctional is going to find it a challenge and will be in for a surprise.”
Myers said the audit was the first of two she had commissioned. The second will focus more closely on finances. Despite the problems, she said she’s optimistic the city can weather the turmoil and put itself on a better financial footing.
But “Maywood’s financial position is still extremely fragile,” she said.
The city continues to operate using a budget that expired last June, the last one available. But Myers hopes to have a new budget in the next few months.
Turning over all municipal operations to another city, a course Maywood chose last June, had apparently never been done before in California. Maywood officials said they had no choice. At the time, the city faced a deficit, and officials said Maywood was unable to obtain insurance because of a history of lawsuits, many involving its Police Department.
There has been much debate about how the Maywood-Bell union came about. Some, including former City Manager Paul Philips, said Maywood officials seemed determined to build close ties with Bell even before the city lost its insurance. He said the hiring of Spaccia seemed a foregone conclusion. Before leaving his post, Philips said, he told the council that Spaccia should get a background check like other employees hired. “They waived the requirement for her,” he said. “They waived it because they said Bell had already done that.”
Even weeks after the Bell scandal erupted, Maywood officials defended Spaccia, crediting her with helping their city.
“She’s gotten us out of so many jams. She’s such a technical wizard,” Councilman Aguirre said at the time. “We were in such a bad way that she saved our skin.”
Spaccia, however, became a central figure in the Bell scandal because she was the top deputy under Robert Rizzo, the former city administrator whose nearly $800,000 annual salary unleashed the scandal.
Earlier this year, The Times asked Maywood for public records, including those related to Spaccia’s hiring. The city said it could not find the documents. Prosecutors in the Los Angeles County district attorney’s public integrity unit said they received complaints about Spaccia’s hiring but deferred to the FBI’s ongoing investigation.
Myers said she did not know why many of the records, including those related to Spaccia’s hiring, could not be found. Aguirre said he thought the city’s record keeping had been poor for a while.
Still, some angry Maywood residents won’t let the city forget about the partnership with Bell. At a protest this week, several unfurled a banner with photos of Spaccia in a jail jumpsuit and Rizzo being arrested.
Even if Maywood can get its budget worked out, it faces some potentially costly lawsuits. Former Maywood police officers have filed suit against the city, claiming breach of contract when the department was closed. And Maywood is locked in an ongoing legal dispute with the L.A. Unified School District over a high school construction project in the city.
This week, Myers said the lessons of the Bell scandal wouldn’t be lost on Maywood. The auditing firm accused of “rubber stamping” Bell’s audits has also done Maywood’s. But this time, she said, the review has found legitimate problems.
It’s “the most extensive audit I have ever seen,” she said. “It’s a good starting point for Maywood.”