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City Hall: The year in scandals

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Scandals shook Sacramento City Hall throughout 2010. A review of the past year in local politics shows city leaders in turmoil over debacles at the Community Development and Utilities departments.

The troubles in the development department prompted City Councilwoman Sandy Sheedy to declare in January that council members should find out what has “gone wrong” at City Hall. Before we ring in a new year, let’s take a look at the scandals that shaped city politics over the past 12 months.

Troubles with the feds
A scandal that began in 2009 involving the city’s development department and a Natomas flood zone continued full-throttle until the end of 2010. City employee Dan Waters, son of recently-retired Councilman Robbie Waters, gave permits to K. Hovnanian Homes to develop an area of Natomas that the federal government had defined as a flood zone, according to city officials.

City officials said Waters broke Federal Emergency Management Agency rules by giving the permits to the builder in 2009.

The crisis made waves all through 2010 as FEMA and the city wrestled with how to resolve the breach of federal rules. The City Council approved an expensive solution to the problem just weeks ago, at a Nov. 16 meeting. It will cost $350,000 in general fund dollars to correct the blunder and take several actions to follow FEMA rules.

Following the scandal, Waters was not fired, but was moved to a code enforcement job from a community development department position. Community development and code enforcement were separate departments at the time Waters was transferred in 2009. The departments have since consolidated.

A Dec. 1 Sacramento Bee story quoted anonymous sources to report that the city’s management was preparing to fire Waters. City spokeswoman Amy Williams would not confirm the Bee’s report, saying that the city does not comment on personnel matters.

What happened to $2 million?
The development department faced a second scandal this year that involved more than $2 million in fees. City Attorney Eileen Teichert and independent firm Renne Sloan Holtzman Sakai encountered a number of issues relating to fees at the department when they investigated the problems with FEMA and the building permits for the flood zone.

Teichert received the information about the fees, but did not investigate the claims. Instead, Teichert handed over the information on fees to a third-party auditor, Sjoberg Evashenk Consulting, Inc., which conducted an audit of the department. The audit, released in October, said the department did not collect more than $2.3 million in fees from developers. The amount is a significant sum in light of the city’s ongoing budget woes.

The issue is likely to rage on at City Hall in 2011. Councilman Rob Fong has been pushing for the City Council to do a separate investigation of the problems at the department. He also has said he wants to find out if the City Council can get the money back.

Grand Jury rips Utilities Department

The Sacramento County Grand Jury claimed in a January report that the Utilities Department may have broken state law Proposition 218. The law says that utilities fees from ratepayers must correspond to the costs of delivering the utilities services.

Partly in response to the Prop. 218 issue, a citizens’ group placed a measure on the November ballot to roll back city utilities rates. But Measure B failed at the polls.

Mayor Kevin Johnson and Councilman Kevin McCarty both said on Oct. 13 that the Utilities Department should be audited. McCarty and Councilman Steve Cohn actively campaigned against Measure B.

Look for the next installment of our year-end review in the coming days. We’ll refresh you on the resignations and promotions of city officials in 2010.

Photos of Natomas homes by Kathleen Haley. Photos of council members by Brandon Darnell. Photo of Measure B sign by Suzanne Hurt.
Kathleen Haley is a staff reporter for The Sacramento Press.

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