Auditor: Calif. unfairly targeted Valley cities by withholding coronavirus cash

A key finding by the California State Auditor was that the squeaky wheel of California’s municipalities received the financial crackdown.

As the State of California unleashed a torrent of financial relief to respond to the raging coronavirus pandemic last year, a new analysis of spending says that state financial officials short-changed residents of smaller counties.

It also found that state officials, furious at two Valley cities – Atwater and Coalinga – for defying Gov. Gavin Newsom’s coronavirus regulations in the early aughts of the pandemic, failed to equally scrutinize other California cities for their compliance with coronavirus rules.


Or, in short, the squeaky wheel of California’s municipalities received the financial crackdown.

A report released Tuesday by California’s State Auditor finds that residents of large counties – the 16 counties with a population of 500,000 people or more – received more than double the coronavirus relief funding per person than 42 of California’s smaller counties.

The report found that large California counties received between $190 and $197 per person, between Federal and state coronavirus relief appropriations.

Smaller counties, however, received $102 per person.

Breaking down per-capita relief funds in large counties, the report finds that the bulk of the funding – $174 of the $190 total – came via Federal government’s CARES Act.

The State of California provided additional funds to large counties in the amount of $16 or $23 per person, depending on the county.

A key section of the report centers on the California Department of Finance’s actions to reprimand two San Joaquin Valley cities: Atwater and Coalinga.

The two cities approved resolutions either partially or fully declaring themselves sanctuary cities for small businesses to operate, a move conflicting with Gov. Gavin Newsom’s then-operative shutdown order.

The Auditor’s report found that the finance officials – working in cooperation with California’s Office of Emergency Services – failed to consistently evaluate California cities’ compliance with Newsom’s rules.

“Emergency Services could not demonstrate that it had evaluated all cities,” the report read. “Emergency Services used an informal process to evaluate Coalinga’s and Atwater’s adherence with State public health orders, stating that it reviewed the resolutions, the subsequent city council meeting minutes, and the meeting webcasts to make its determination, but it did not develop written evidence of its assessments.”

The audit report contrasts the process undertaken by the Office of Emergency Services in reviewing Atwater and Coalinga with the compliance check process undertaken by the California Department of Public Health – and ultimately reported to the Department of Finance – which included “a robust analysis” detailing coronavirus testing and contact tracing efforts in California’s 58 counties.

“Instead, Emergency Services only provided information to Finance about Coalinga and Atwater,” the report continues. “Because Emergency Services was unable to demonstrate that it reviewed all 476 cities, we question whether other cities may have passed similar resolutions and may not have been eligible for CRF funds.”

The State Auditor found at least one additional, unscrutinized instance where a local jurisdiction – the City of Imperial – approved a resolution allowing businesses to reopen in violation of Newsom’s orders.

“However, Imperial continued to receive [coronavirus relief fund] funding of $246,000,” the report said.

Unlike Atwater and Coalinga, state emergency officials informed the auditor they knew of the resolution but “believed that it was a symbolic gesture and had concluded that the resolution itself did not conflict with the State orders.”

The state’s auditor, however, vehemently disagreed.

“Based on the discussion during that city council meeting, we believe the city council passed its resolution with the clear intent of not complying with the State’s required timelines for reopening businesses, which should have also made Imperial ineligible to receive CRF funds.”

This story will be updated.

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