The above person is Penny Lilburn. She is both a council member and the Executive Director of the Highland Senior Center (HighlandSeniorCenter). What will be shown to be ironic is that Ms Lilburn was elected in 2004 as part of recall in which the recall proponents alleged that financial malfeasance was committed by those who were being recalled (RecallElection)
THE CORRUPTION
The city is paying $24,000 per year to the Highland Senior Center from a Community Development Block Grant (CDBG) it receives from the County of San Bernardino, which the county receives from Health and Urban Development (HUD).
These payments have the following problems:
1. They create a conflict of interest and the payments per Government Code 1090 are illegal.
2. The money is not being used as agreed to by the Highland Community Center. To be eligible to received this money the center agreed to provide transportation services to 400 seniors on average per month. Seniors are to be driven to the bank, doctor, store, etc. The center is not even close to providing these agreed to transportation services.
3. Some of the money in 2015 was used to pay Penny Lilburn a $10,000 bonus.
4. In the agreement with the county, the Highland Senior Center understated its income by 100%. This appears to have been done to claim the center has insufficient income. In fact, the center has over a $1M in the bank and the overhead costs exceed the cost of its programs.
This problem has been reported to the county and an investigation is underway. We were recently informed that Ms Lilburn is claiming she recused herself on a vote to approve the contract with the Highland Senior Center. This is true. She recused herself during the 5/26/2015 council meeting (LilburnRecuse). However, she voted to approve monthly payments to the center. Below is the email from Betty Hughes containing the minutes of a votes on the Warrant Registers containing the Senior Center Checks.
The document labeled "CC 08-11-2015.pdf: is here: LilburnVoteForCenterPayment. See on page 1 the consent calendar items were approved 5-0 and that item #4 is the Warrant Register that contains checks totaling $4,413,492.31. We don't have that Warrant Register but Betty Hughes indicated above it contained a Senior Center check. Whether Ms. Lilburn recused herself is a red herring because even if she completely recused herself on all votes related to the Highland Senior Center, the four issues noted above and that are expanded on below still exist.
THE CONTRACT WITH THE CENTER
Here is the agreement between the county and the center: HighlandSeniorCenterContract. Notice that this contract was not signed by Ms Lilburn by the John Rago, Board Chair. This in our opinion is not standard practice. Ms Lilburn probably signs nearly all contracts, but to APPEAR there is no conflict of interest, Mr. Rago signed the contract. Apparently he owns some business in Highland: RagoBusiness
THE CORRUPTION - EXPANDED
1. They create a conflict of interest and the payments per Government Code 1090 are illegal.
Here is the section of the contract the prohibits conflicts of interest:
1090. (a) Members of the Legislature, state, county, district,
judicial district, and city officers or employees shall not be
financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Nor shall state, county, district, judicial district, and city officers or employees be purchasers at any sale or vendors at any purchase made by them in their official capacity.
(b) An individual shall not aid or abet a Member of the
Legislature or a state, county, district, judicial district, or city officer or employee in violating subdivision (a).
(c) As used in this article, "district" means any agency of the state formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited
boundaries.
Given that Ms Lilburn is the Executive Director she has a financial interest in the contract. Therefore the contract violates this law. Ms Lilburn can be either a council member OR the Executive Director, but not both. She acknowledged this conflict when she recused herself on the 5/26/2016 vote.
2. The money is not being used as agreed to by the Highland Community Center. To be eligible to received this money the center agreed it must provide transportation services to 400 seniors on average per month. Seniors are to be driven to the bank, doctor, store, etc. The center is not even close to providing these agreed to transportation services.
See the last line of the "UNITS OF SERVICE" paragraph for support to the 400 seniors on average per month.
So the question then is was the required number seniors provided transportation services? The answer is an unequivocal NO! Every month the center submits documentation showing its costs. This is in effect a expense claim. We have included these July 2015 - December 2015. Included in this documentation is a transportation log. Here is the log for December 2015:
Notice that both the "Total Clients in Program" and "Total Clients Served this month" are blank. However, for November, these fields are not blank:
HighlandSeniorCenter-July2015Check
HighlandSeniorCenter-August2015Check
HighlandSeniorCenter-September2015Check
HighlandSeniorCenter-October2015Check
HighlandSeniorCenter-November2015Check
HighlandSeniorCenter-December2015Check
3. The money in 2015 was used to pay Penny Lilburn a $10,000 bonus.
4. In the agreement with the county, the Highland Senior Center understated its income by 100%. This appears to have been done to claim the center has insufficient income. In fact, the center has over a $1M in the bank and the overhead costs exceed the cost of its programs.
As part the contract, the center had to indicates its income. Here is what they claim is their income:
This is in the attached contract. The center is indicating that they are only making $194,000. The contract was signed on 5/3/2015. The funny thing is their official IRS financial disclosure (Form 990) indicates the income for twelve months ending 6/30/2015 was $419,796 (page 1 of attached). They were "only" off by +100%. Opps!! Don't you hate when things happen like that. If one of us made such a large mistake on a loan document we would accused of fraud. They probably had barely enough to pay Ms Lilburn's bonus.
In addition, they have $1,368,384 in the bank ( $324,747 + $1,043,637 - page 11). They are FLAT broke! Lets try to feel their pain.
