HERCULES -- After being put through the wringer by the state Controller's Office last year, the city could face more state scrutiny unless it submits more financial information soon.
Along with Stockton, Hercules is among nine cities that received letters last week from Controller John Chiang warning them they are delinquent in filing state-mandated financial reports. The other cities are Beaumont, Firebaugh, Imperial, La Habra, Lindsay, Taft and Westmorland.
The nine cities are among 126 local agencies in the state that Chiang warned were delinquent; the other 117 are special districts. Beaumont and Imperial have since been removed from the list of delinquents, along with 19 special districts.
The state requires local governments to file a report of financial transactions, covering revenues, expenditures and long-term debt, within 90 to 110 days of the end of the fiscal year, Chiang's office noted in an Oct. 16 news release. The 126 agencies' reports are more than a year overdue, according to the news release; during that time, they "ignored a penalty-free grace period, as well as written notification -- delivered via certified mail -- warning that assessment of monetary penalties is forthcoming."
"Transparency in financial reporting -- including public salaries -- is necessary to protect communities against the misuse of taxpayer dollars and other abuses of public trust," Chiang said, according to the news release, which also "urges" noncompliant agencies to file their delinquent reports by Dec. 31 or be subject to an audit.
Hercules Finance Director Nickie Mastay said in an email last week that whatever reports are delinquent will be filed with the state by the Dec. 31 deadline. In an email Tuesday, Mastay said Hercules has since received the Controller's letter and that the only item it seeks is the compensation report for calendar year 2011.
Among local special districts that received letters, the Los Medanos Community Healthcare District was late as a result of changing accountants and plans to submit the required forms by Oct. 28, according to Chief Executive Officer Bobbi Palmer. She said the district never received a delinquent notice.
The East Contra Costa Fire District was also on the original list but had been removed as of Wednesday; fire Chief Hugh Henderson said the required paperwork had been sent by certified mail on Oct. 26, 2012, slightly more than a week after the deadline. The Controller's Office confirmed Wednesday that it had received the fire agency's forms.
In 2012, Chiang's office released several audits of Hercules covering the period of July 2005 through June 2010, and slammed the city for a lack of internal and accounting controls, "serious mismanagement practices" and a former city manager's conflict of interest, as well as accusing city officials of foot-dragging during the state's investigation.
Several Hercules officials complained that Chiang's audits did not distinguish between the people who created Hercules' financial mess and those who were trying to clean it up.
The gravity of Hercules' still-lingering financial crisis entered the public consciousness in December 2010, when an interim city manager warned of insufficient Redevelopment Agency revenue to make bond payments and insufficient general fund revenues to maintain municipal services. The crisis' genesis predates Mastay, who started with Hercules in early 2012, and the current city manager, Steve Duran, who started in October 2011.
The Controller's updated list of delinquent agencies can be found http://sco.ca.gov/eo_list_of_delinquent_governments.html.