Torrance City Council – A Town Hall Style Conversation About Local Politics

The City Council crushed the hopes of Susan Startup who appeared at the Council meeting last Tuesday to request that the City allow the sale of a commercial property, that she owns with her husband, to a developer who intended to build a car wash on the site.

In an emotional appearance, she pled with the council by stating, “This is our retirement. If you take that away from us, we don’t have nothing.” Near tears, she later said, “We really need this, more than you realize.”

Susan also submitted a letter to the Council prior to the meeting as she was concerned she might not be able to attend due to the failing health of her husband Frank. In the letter, she wrote:

“It is my intention to attend the City Council meeting. However, due to the fact that my husband, who is 90 years old, is in the hospital, yesterday just having his condition upgraded from serious to stable, I am writing this letter in case, God forbid, his condition regresses. Given the magnitude of this matter in our lives, he has insisted that I leave his side and be driven from Temecula to Torrance to address this matter in person with you.”

In the letter, Susan described her and Frank as simple working class people that had earned a living by working very, very hard for 44 years to sustain a locksmith and a bicycle business that they built on the property.

Susan closed her letter by writing:

“I appeal to your sense of empathy and general understanding to realize that my husband, children and I need to complete this deal so that we can live out our remaining time knowing that the business we built and the property we made so many sacrifices to buy will, in the end, provide for Frank and I to not live in fear of running out of money”

The property at 2355 Sepulveda Blvd is located in an M-2 Zone which, per the buyer’s’ attorney who also appeared at the meeting, allows car wash uses “by right.” To support his claim, the attorney cited Torrance Municipal Code section 95.3.20 which states as follows:

“Automatic car washing, clean and polishing, conditionally permitted in C-3, C-4, and C-5 zones. No such permit required in M-1 and M-2 zones.”

The staff report acknowledged that a car wash was a permitted use under existing zoning guidelines, but expressed concern that the, “further introduction of car wash uses, where located near or adjacent to residential uses, have the potential to create annoying and excess noise emitting from car wash equipment and general operations.”

In order to further study the issue, City staff recommended that the Council adopt an urgency ordinance that established a temporary moratorium on the issuance of business licenses and permits which pertain to car wash uses. In order to do so, the Council needed to make a legislative finding that the introduction of carwash uses resulted in an immediate threat to public health, safety, or welfare.

The buyer’s attorney and several other representatives argued that no such threat existed with this particular car wash and offered voluminous evidence to that effect. Nobody from the public spoke against the project at the meeting and no complaints about the proposed car wash were included in the staff report.

Despite the lack of opposition to the car wash, the Council was not persuaded by Susan’s plea or any of the arguments offered by the buyer and ended up adopting the proposed moratorium by unanimous vote. The moratorium effectively kills the sale of the property unless the parties can return to Council at a later date and convince City officials that their project merits a waiver to the moratorium.

A e-mail submitted to the City Council after its meeting last week revealed startling rumors about the Finance Department and the City’s hiring practices. The e-mail was sent to the entire Council last Wednesday night. The e-mail was not included in the 300 page City staff report proposing a reduction in the City Treasurer’s compensation even though it’s common practice for the City to include correspondence received from the public on agenda items in advance of the meeting.

Another e-mail, sent by Sheila Abalayan, was sent last Thursday afternoon. That e-mail, in which Abalayan was strongly critical of current City Treasurer Dana Cortez, was included in the staff report even though it was received a day after the e-mail that was omitted. The omitted e-mail reads as follows in its entirety [with the exception of formatting errors]:

Dear honorable Mayor, Council Members, City Treasurer and City Clerk,

I attended yesterday’s Council meeting and I have a big concern about what is going on in our City now, especially in the Finance Department. I am a long time Citizen here and I support to have a separate Treasurer Office rather than moving it under Finance Department.

I’m also questioning the City’s hiring policies and procedures, and the integrity of the City’s management because I heard a lot of rumors recently. Here is what I heard, which should be very shocking to every concerned citizen, if they are true:

1. Two years ago, A new position of Finance Revenue Manager was created specifically for Finance Accounting Manager Ms. Royes’ daughter because she was out of work for a year already and urgently need a job. Unlike the other applicants, she did not go through the formal interview process but was hired through a “lunch interview”. I heard there are many more qualified applicants who are much more experienced than her.
2. Around the same time, Ms. Royes’ son was hired as the Senior Manager (a new position specifically created for him) in the Department of Public Works due to his Mom’s close relationship with PW’s Director. Also, there are a lot of applicants are much more qualified than him.
3. The Finance Assistant Director is retiring so they planned to have Ms. Royes to take over his position to boost up her pension payments since she plans to retire in two years. After she retires, her daughter will be the next Assistant Finance Director. But later they changed the plan and decided to let her daughter be the Assistant Director right away so her Son can move over as the Revenue Manager. Since the daughter has not enough experience the Current Assistant Director decided to stay to train her and there will be TWO Assistant Directors at the same time for SIX months.

If we have a daughter as Assistant Finance Director, a Mom as Accounting Manager and a son as Revenue Manager that all work in the same Finance Department, I cannot imagine how we are going to check and balance the City’s funds if the Treasurer’s Office is moved to Finance Department.

I respectfully request City to set up an independent panel to investigate whether there are any violations of the City’s policies and procedures for hiring the Accounting Manger’s daughter and son, and whether it is against the City’s policy to have the family members to work in the same department as the management.

Sincerely,

A concerned Torrance Citizen

Another document in the staff report listed 560 (or roughly 112 per year) errors due to transactions that were not posted or that were posted incorrectly by the City Treasurer’s Department over a near five year period (July 2013 – April 2018). A separate report obtained through the City Treasurer puts those errors in context. That report provides evidence that the Treasurer’s office processes an estimated 155,400 transactions a year. The report listing the total number of transactions was also not included in the staff report.

When City Treasurer Dana Cortez talks about transparency its not just a campaign slogan, she means it. Cortez could have signed a Confidentiality Agreement presented to her by the City Attorney, but she refused. The Agreement likely would have prevented any evidence prepared by the City pertaining to her job performance from being disclosed to the public. By not signing, Cortez took a significant personal risk knowing that her reputation was on the line, but in deference to the voters that elected her Cortez wanted everything out in the open.

Cortez forced the City’s hand and she now has her wish in the form of a 300 page staff report prepared by the City to justify why her compensation should be slashed by over 50%. Perhaps most telling in this whole drama is that despite being on the job for eight years, Cortez says that with the release of this 300 page report it is the first time that she is hearing about these concerns as nobody within City Hall has approached her to raise these specific issues before now.

As an elected official Cortez does not receive a formal employee performance evaluation but her activities are reviewed by an oversight committee comprised of the City Manager, the City Attorney, the Finance Director, herself and the Deputy City Treasurer.  Presumably, these concerns could have been brought forward by the oversight committee, but according to Cortez they were not.

The staff report is mostly fluff containing nearly 150 pages of job descriptions, internal procedures, and org charts, but it does some provide some eye opening information. In it, the City alleges that the Treasurer’s Office suffered from an an overall lack of reliability due to errors, omissions, and high staff turnover.

With regard to high staff turnover, the report revealed that since June 2011 fifteen employees had ended employment in the 7 person department with 8 resignations, 3 retirements, 2 discharges, and 2 transfers to other departments. Two of those 15 people had very negative feedback about the department based on documentation provided by the City.

One employee who resigned in March 2017 wrote that:

“The City Treasurer has been disrepectful on too many occasions, provided little to no support, provided mis-information, engaged in hostile and demeaning conversations, made false accusations, and kept me in the dark on critical issues; all of which has made it unbearable for me to be here any longer … to be harassed, bullied, and disrespected while in the performance of my duties is more than anyone should have to deal with.”

An e-mail from former Deputy City Treasurer, Shiela Abalayan, who wrote to the Council after the meeting last Tuesday was also included in the report. No information from Abalayan during her tenure with Torrance was included in the staff report (nor was her exit interview), but in her e-mail Abalayan claimed that:

“Watching her speak in the City Council meeting last Tuesday, brought back all the negative feelings and bad memories and experiences I had with Ms. Cortez. I was not her first victim, the lady before me … was fired on her 50th birthday. Who in her right senses does that to an employee? What does that tell you about the kind of person she is … employees would rather leave than to work in a very hostile and stressful department caused by the department head, Ms. Dana Cortez”

In speaking with Cortez about these allegations she acknowledged that high turnover had been a challenge for the department as people just don’t stay at one job for 25 years like they used to. In reference to the specific feedback, she said she had no idea it was the 50th birthday of her former employee on the day that person was fired and that the termination was the result of a long process that so happened to conclude on that day.

With regard to the other employee who resigned in March 2017, she cited her own challenges she had with the employee recalling on one occasion, when she was out of the office recovering from a skiing accident, that the employee had put up a sign in the office window during a regular working day saying that the Treasurer’s office was closed.

With regard to errors and omissions the City, among other things, produced the following:

• A report from July 2013 – April 2018 of financial transactions that come from the Treasurer’s system and feed into the general ledger listed 560 errors due to transactions that were not posted or that were posted incorrectly;
• Monthly investment report for June 2017 submitted to Council contained an error. The submitted report stated “as of May 31, 2017.” It was corrected and resubmitted to correctly state “as of June 30,2017”.
• A duplicate monthly payment was made to CalPERS in December 2017 of $1,279,736.56. CalPERS ended up applying the over payment to the January 2018 invoice.

In reference to these errors, Cortez responded by saying “I’m not perfect, but I will always be honest and act with integrity.” She acknowledged the errors and took responsibility for them as they occurred within her department. She said the Investment Report contained the right numbers, but had a “scrivener’s error” that was quickly corrected. The over payment to CalPERS was due to a new employee that just made a mistake. According to her, the list of financial transactions is something that had been an ongoing challenge for the department due in part to the high turnover and was something they were continually working to correct.

Cortez’s initial inkling that something was afoot came last year when the City Manager proposed realigning several of the duties that had previously fallen under her department. With regard to that realignment she penned a memo to the City Manager dated November 21, 2017. In it she states,

“I am completely supportive of progress and any changes that promote efficiencies, productivity, and growth. It is equally my duty to share concerns that I believe to be material to this beloved organization. As an elected official I strongly believe that it is my duty to be the voice of the people. The position of City Treasurer per the Charter is to be the acting steward of the the people’s tax dollars. Since I take this responsibility seriously I feel it is my duty to mention concerns I feel are noteworthy.”

She then expressed concern that the “City of Torrance is diluting its ability of taking full advantage of the separation of duties and checks and balances that have existed in the City for years.” She also expressed a concern about the appearance of impropriety because “currently in the Finance Department there are two key division managers with huge authority over many of the key functions that are between a mother and her daughter … the relationship of these two key staff members could be viewed as a concern.”

In response to Cortez’s memo, Finance Director Eric Tsao sent a memo to the City Manager dated December 17th, 2017. In that memo, Tsao wrote:

“It is all too apparent from the onset that the City Treasurer has been and remains in disagreement with the City Manager’s decision to return the above functions from her office to the Finance Department … The transition of the above duties can be best described as a “Very Hostile Takeover.”

Cortez begs to differ with that characterization. She claims her office was very cooperative during the transition and went above and beyond to provide whatever support the Finance Department needed. She did, however, describe an office environment that had become challenging and territorial. She remarked it felt as if members of the Finance Department were almost purposely looking for mishaps that might occur in her department in order to curry favor with city management.

With regard to her future, no matter the outcome of Tueday’s meeting she plans to stay on as Treasurer. She said Assistant City Manager, Aram Chaparyan, had recently directly asked her if she intended to resign as a result of these allegations and that she told him she did not as she plans to honor the will of the voters.