Sacramento city officials illegally diverted more than $21 million from water, sewer and utility funds to cover government expenses, according to findings from an investigation by the Sacramento Grand Jury.
The investigation found that the city's actions violated Proposition 218, the 1996 voter-approved ballot measure that prohibits local governments from diverting government costs to utility rate-payers. The grand jury's 44-page report analyzed potential costs resulting from non-compliance with Proposition 218.
City expenditures needing further legal review include: $2 million to subsidize water rates for city departments, $2 million spent to purchase the Natomas Auto Mall, and $1 million to help developers on downtown projects.
Mayor Kevin Johnson said he will be "following up with staff to see how we can not only resolve these issues, but prevent them." Other city officials said several of the practices highlighted in the report have since ceased.
The Howard Jarvis Taxpayers Association filed a suit against the city on January 7, seeking to recover the funds. (Source: The Sacramento Bee, January 7.)
Cal-TaxReports, January 11, 2010
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