Indio's credit card tab tops $805,000

While Southard wouldn't talk, his bosses did.

“We got blindsided on this,” Mayor Gene Gilbert told The Desert Sun, saying he conducted an independent examination of records the newspaper requested.

“If I knew this before, (I) would have obviously said ‘What the heck is going on?' I had no idea we had that many credit cards going (around),” he said. “As far as eating out, I think that was abused. I hate to use that word, but it was. That was the first thing that came to my attention was the amount of food.

“We have a problem and we can't go on like this. Our credit card policy is inadequate. It seems to me like overall, some people are living on the credit cards.”

The council is expected to call a special meeting Wednesday to discuss the city's proposed early retirements, and the session is likely to include a discussion of the city's spending policy. No specific agenda has been released, because special meetings only require 24-hours notice.

Gilbert and Councilman Glenn Miller have each suggested that most of the cards should be revoked.

Miller also is calling for the creation of a “blue ribbon panel on finances,” comprised of residents, to independently audit the city's spending habits.

This is not the first time council has heard concerns about the city's credit card policy.

Auditors warned Indio officials as early as 2006 that the city's credit card policy needed to be improved as employees did not consistently provide receipts for every charge, which made it difficult to prove that the charges were valid official business.

Having multiple cards creates the “potential for abuse,” financial experts have warned.

Unlike other spending that is presented line by line in Indio's annual budgets and reviewed by elected leaders, these charges are buried on statements approved by department heads. Council members told The Desert Sun they don't regularly review the charges before approving the payments to the bank.

Travel, meals, clothing

An evaluation of statements from Jan. 1, 2008, through Oct. 26, 2009, found:

• Travel: Credit card records from February 2009 include travel charges for 13 employees.

Just into this fiscal year, amid dire budget projections, taxpayers also paid more than $3,200 in August so four employees could fly from Ontario to Phoenix, rent a vehicle and stay at a AAA Four Diamond hotel that promotes itself as “luxurious, oversized (and) newly renovated” while checking out its water park as research for Indio's proposed aquatic center.

• Southard's wife: City taxpayers in April paid for a $533.10 plane ticket so Southard's wife, Gale, could join him on a September trip to Quebec in conjunction with the International City/County Management Association's annual meeting. The event — where Southard was honored according to one city official — focused heavily on “redefining services in challenging times,” according to the group's event summary.

The flight was charged on a city credit card issued to Glenn Southard.

Later that September, taxpayers covered a $15 baggage fee for his wife for a trip to Sacramento.

The city's travel policy specifically states “expenses for spouse or family members who accompany an employee on a trip are the employee's responsibility.”

Council members have previously warned that the practice must stop.

Southard declined to answer The Desert Sun's question on whether he reimbursed the city for the expenses.

• Meals: City employees regularly used the cards to pay for meals at local restaurants, including Burgers & Beer, Naked Noodle, In-N-Out Burger and China Bistro.

In February 2009 — after initial budget projections indicated a $14million deficit loomed — employees charged more than $2,300 in meals.

On July 11, 2008, Ison charged two bills at the La Quinta Cliffhouse, totaling $2,019.86. In May, Southard's card covered a $3,947.63 bill at Jackalope Ranch.

• Sports tickets: During the 22-month period reviewed, almost $9,200 was charged on assistant to the city manager Mark Wasserman's card for two trips to see the Los Angeles Angels of Anaheim play baseball and one trip to see the Minnesota Vikings play football.

Councilman Miller said he thought the trips were pre-approved youth group trips, but city administration did not provide specifics.

• Clothing and home goods: An employee charged almost $135 in October at Forever 21, a popular women's clothing store; another employee spent $1,072.36 at Bed Bath & Beyond in May; and yet another employee charged $2,371.80 at Best Buy in July 2008.

No details released

Southard refused to explain why the credit card purchases were made.

“The $805,000 is less than 1 percent of our expenditures on an annual basis and they are a record of every expenditure that we make,” Wasserman said on Southard's behalf, without answering other questions.

“I've been instructed by the city manager not to answer questions on any of the charges in question at this time, until we have ample opportunity to research all of the charges.”

Others are already expressing concerns about the city's credit card spending.

“All these lavish expenses at a time with a multimillion (dollar) deficit is totally, totally irresponsible,” said Tom Ramirez, Indio's former city manager, who has more than 30 years experience in public service.

Ramirez reviewed the credit card statements obtained by The Desert Sun.

“It's totally out of control. I've never seen anything like it in my career,” he said. “What this tells me is nobody is managing the money. Nobody.”

Budget cuts loom

Revelations about how Indio employees use taxpayer-funded credit cards come at a time when the spending habits of the valley's largest city are under scrutiny — particularly a proposed, but then dropped, bump in benefits for Southard, who earns at least $300,000 as the highest-paid city manager in the Coachella Valley.

In December, Southard warned the council that the city must make another $5 million in cuts to balance its current fiscal year budget.

About $2 million would be saved, he said, by leaving positions open, decreasing advertising, eliminating outside consultants and reducing operating expenses such as travel.

“When I created this year's budget, I anticipated we would begin to see signs of a recovery. Unfortunately, the economy is not improving as quickly as I hoped,” Southard said in a Dec. 17 memo to city employees and council members.

“The downturn in the economy continues to challenge many cities throughout the state and Indio is no exception. It is critical that we continue to operate in a fiscally prudent manner and maintain current service levels that our citizens have come to expect.”

Council members, in reviewing the city's monthly bills, approve every payment made to the bank that issues Indio's credit cards.

Nevertheless, two council members — Melanie Fesmire and Mayor Pro Tem Ben Godfrey — told The Desert Sun last week that they weren't fully informed about the spending habits.

Another council member, Lupe Ramos Watson, said she was traveling but would review the documents when she returned to Indio.

The Desert Sun's public records request was submitted in October. Copies of the credit cards statements were made available in November.

“Travel and all these other expenses should have been cut a long time ago,” Miller said. “It is excessive. That isn't the only spending we need to rein in.”

Miller, who said he has looked at the statements in the past, plans to call for an independent committee of residents to take a closer look at the city's spending habits.

Each council member would appoint a resident to the panel who could then evaluate everything from credit card usage by city employees to whether some city programs might be more cost efficient if combined with other existing services.

“There are some red flags that are being addressed,” Miller told The Desert Sun.

“That will stop, very shortly. I have a distinct feeling that all the credit cards will be pulled in. I'm not going to defend all the spending. But everyone else in the state, the nation, is being asked to tighten its belt.”