Costa Mesa’s 60th “Kick-Off” Celebration, and the 7-month Hangover.

Most of us have done something like this:  We’ve taken a large group of friends or colleagues out for a nice celebratory meal. We’ve hosted grandly over the table as the food was served and the wine flowed. Only to suddenly realize that we’ve just blown through all the money we set aside for the mortgage. The waiter delivers the bill in a black leather folder and it silently, stubbornly sits at our elbow… but we’re too afraid to even glance at it.  Worst of all, what will we tell our spouse?

Well, the City of Costa Mesa had a 60th Celebration “Kick Off” Event, over seven months ago, and we still haven’t seen the final bill.

Originally the City Council , led by Mayor Jim Righeimer, voted to outlay a preliminary amount of $125,000 for the celebration of the city’s 60th anniversary. The fiscal impact analysis stated that the budget would need a total of $315,000, but only $125,000 would be needed from the City’s General Fund. Most of the remaining money would be raised through other revenue sources and sponsorships. The initial preliminary budget provided to the public painted a “pie in the sky” portrayal of large donations and fundraising opportunities that would fully fund the event with a tidy sum of $13,575 left over.

The Main “Kick Off “ event took place at the end of June, a little before the OC Fair was to begin.

The three-day event closed down Fair Drive and took up a good portion of the OC Fairgrounds Parking lot, right across from City Hall.  $154,750.00 was budgeted for tents, stages, entertainment, rides, security, lights, power, booths, fireworks, the list goes on…and on.

Now, the City of Costa Mesa USED to have a fully functioning print shop with an accomplished graphics department, but that was dismantled under the Righeimer regime as too “costly and unnecessary”, so a special Graphics artist was “outsourced” for this project ($6,000.)  The “Commemorative” magazine another $20,000. Banners, flyers, and stickers,and bill inserts for another $32,000. Souvenirs-$20,000, with a caveat that they would be revenue-generating. Initially, an additional $94,025.00 was budgeted to cover these additional costs. After all, any great event needs proper PR and Marketing.

Costa Mesa City Staff recommended that they channel any funds related to the 60th-anniversary celebration through the Costa Mesa Foundation. The Costa Mesa Community Foundation is made up of a group of appointed, respected, active residents.

A 60th Celebration Committee was appointed using a broad diverse section of appointed residents willing to serve in a non-partisan “shoulder to shoulder” effort to pull this event off and make it a great success that the City could be proud of. Everything seemed to be in place with public oversight and input established to monitor and run the event.

What could possibly go wrong?

Some residents, early on, had been hearing rumors being swirled that everything was not going exactly as planned or promised, but it wasn’t until mid-July, a few weeks after the event, that the first story broke publicly. On July 11th, reporter Bradley Zint from the Daily Pilot wrote:

Concerns raised about Costa Mesa’s birthday party: 

“City’s 60th anniversary bash had its ups and downs; financial reports aren’t due in for a week or two, officials say.”

Now, many of the complaints at this time were pretty benign. Volunteers being mistreated, running out of cake plates, falsely advertising the Foo Fighters as a headliner, and a lack of financial reports. At the July 11th 60th Committee meeting, City CEO Tom Hatch praised the event and assured the residents that the numbers would be released and finalized in another week or two as invoices were still coming in. He went on further to forewarn that the event might incur the Costa Mesa Conference and Visitor Bureau to incur “some shortfall in revenue”.

Concerned citizens, following up on rumors swirling about the cost over runs, submitted Public Records requests as early as July 23rd. Those requests included:

• Copies of RFP’s and bids for contracts issued and considered but not issued
• Executed copies of contracts with all amendments including food concessions and entertainment
• Invoices and payments for all contractors
• Staff time spent on the project including overtime
• Public safety staff time spent on project including overtime
• Records about ticket sales for concert and VIP areas including free/comp tickets
• Budget information and records for the event

On July 25th, city CEO Tom Hatch informally communicated to the citizen who’d requested the documents that “the city will need more time because not all of the invoices are in yet.”

A “Wrap Up” meeting, some called it an “autopsy”, was scheduled to review the event and discuss it’s downfalls and successes with all the volunteers present in the City Hall chambers.

That meeting was scheduled for August 8th,…..but this autopsy never came to be.

On Aug 6th, the two city employees principally responsible for organizing the event were placed on paid administrative leave.

The Potstirrer, Costa Mesa’s ever diligent observer, broke that news here: More Trouble Brewing At City Hall?

On that same day, August 6th, acting City Clerk Brenda Green asks for an additional 14 more days to assemble the records because “the extension of time is reasonably necessary for the proper processing of the request, requiring multiple levels of review and examination of potentially voluminous amounts of separate and distinct records.”

Unbeknownst to anyone at this time is that six days earlier, on July 31st, Costa Mesa’s CEO Tom Hatch ordered an independent forensic audit of the 60th anniversary event finances claiming, “This was the day that he learned about concerns that some city policies and procedures may not have been followed”. This is 8 days after the formal public records request, which were requested by the public for the very same reasons Tom Hatch claims he initiated an audit.

Now on Friday August 9th employees are seen transferring boxes from City Hall to the Costa Mesa Police Dept. Calls start going out throughout the city to the residents who had been following this. It was again reported by The Potstirrer:  What Was Removed From City Hall Friday?

Six days later on August 15th, the City, facing enormous scrutiny and questions by local reporters, finally, and formally announces that the employees were actually placed on leave.

Now others begin to also ask requests for the public documents and contracts regarding the 60th Celebration.

Nick Gerda of the Voice of OC specifically requests contracts and invoices pertaining to the Food and Beverage component of the event. All Food and Beverage for the Celebration was given to the company KB Events.

This was dictated to the 60th Celebration Citizens Committee, by Events Coordinator Dan Joyce. Many on the Committee at this time were somewhat disconcerted that the decision was made “for” them. At this same time it was also made clear that all entertainment would be handled by an unknown entity, Sun Group LLC.

KB events is the company partnered by the wife of GOP Chairman Scott Baugh, a close friend of Costa Mesa Mayor Jim Righeimer, with whom he shares office space.  Further investigation of KB Events led this writer to discover that the partners also included an entity solely named as CAA Event Industry- Food and Beverage Events.

Local insiders reviewing this information have been led to suspect that the CAA entity is actually the California Apartments Association. A known Lobbying Political PAC supporter of Baugh and Righeimer, with large political donations made towards candidates and the failed Costa Mesa “Righeimer” Charter in the last election.

Ed Reno with Speaker Boehner, Chairman Shuster, Scott Baugh and artist Gary Kutscher in Speaker’s private office with Speaker’s “living biography” painting in background.

KB Events partner and spokesperson Gary Kutscher confirmed that preliminary profit and loss numbers from the event were emailed to City on Aug. 6th, just hours before the two city employees were placed on leave.

On Aug 29th, the Register‘s irrepressible insider columnist Barbara Venezia wrote about the swirling controversy:  Politics or missed communications for 60th party costs

It wasn’t until five days later, on Sept 3rd,that CEO Tom Hatch finally made a statement and the City “lawyered up,” refusing to release all the Public Documents pertaining to KB Events and citing ongoing personnel and police investigations. VOC’s Nick Gerda recapped that here:  Costa Mesa Won’t Release Records on GOP Chairman’s Firm

This statement was made 42 days after the first public records requests were submitted by the residents back on July 23rd.

At this same Council Meeting, CEO Hatch, for the first time, declares he “ordered an independent forensic audit of the 60th anniversary event finances on July 31, the day that I learned about concerns that some city policies and procedures may not have been followed.” This was the first public announcement of this, even though he ordered the audit 34 days previously.

He went on further to declare that he had initiated new precautionary measures, such as:

• A refresher training course for all employees involved in purchasing
• Establishing a Purchasing Quality Control Committee, headed by the city’s finance director, Purchasing Department personnel and other city departments representatives.
• Reviewing the city’s current purchasing policies
• Reviewing the processes for engaging the Costa Mesa Foundation, used for the administration of the 60th anniversary event’s finances.
• Meeting monthly to review the city’s purchasing records and provide another layer of quality control to ensure implementation of municipal policies and procedures.

CEO Hatch ended his statement requesting the public’s “patience” through this process.

……..and so we waited.

Barbara Venezia, her interest now piqued, starts doing some more digging around the Entertainment portion of the event and Sun Groups lucrative contract. (A little known fact is that Barbara’s tattoos are from a storied past working with a top back East show promoter… back in the day). Barbara knows a little about the entertainment business, and she asks some very good questions, such as:  “How did Barrera secure this gig for his company?”

“Nothing I read here would’ve convinced me this was the guy or company that should have even been in the running for an event like the 60^th Anniversary…”

“Which begs the question — how did he get Barrera get his foot in the door?”

Roland Barrera Spins It

Each and every few weeks another City Council meeting, and more and more warrants and bills were being paid by public tax dollars with no public records of contracts or invoices provided to the public.

On Oct 14th Roland Barrera, the SUN Group LLC sole “no bid contractor”, chosen by the City to provide all the entertainment , buys a local bar and turns it into an exclusive “speakeasy.”  Casa Trades Avalon Bar’s Punk Past For An Upscale Speakeasy

Barrera is quoted in the article, “You can’t cater to the masses and maintain quality.”

September, more bills being paid… we waited.

November. Wait… Wait.

Then in December this happened……

“A local businessman, Roland Barrera, who was paid tens of thousands of dollars by Costa Mesa to act as a consultant during the city’s 60th anniversary celebration is suspected of participating in a Ponzi scheme that cheated a Newport Beach man out of millions, according to a lawsuit filed by the Securities and Exchange Commission.” – Daily Pilot

By Dec 23rd,  the Daily Pilot gets impatient and starts counting up the amount of money paid out through the City using the warrants posted in the public records. The amount is nearing $400,000, on a party that originally had a working budget of $154,000.

In this article DP Reporter Jeremiah Dobruck states, “Over a period of more than six months, the city paid Barrera’s company almost $127,000 — more than the entirety of Costa Mesa’s authorized allocation.”

Still we wait some more.

This month (January) … Costa Mesa City Spokesman William Lobdell: “”The results of the city’s audit of the 60th anniversary celebration finances should be available by Jan. 15.“

So we waited some more.

January 27th – Our beloved Potstirrer asks, Where Are The 60th Anniversary Documents?

At the writing of this blog posting, this Costa Mesa resident has been waiting for the release of the public documents for 190 days.

…..but I am beginning to lose my patience.

More to come….