CLEARLAKE – The Clearlake City Council took its city administrator's advice at its Thursday meeting, and agreed to invite the state to audit its use of a grant for funding repairs to the city's youth center.

The Hot Spot Youth Center, located on Golf Avenue and run for the city by the Lake County Community Action Agency, was supposed to have received numerous repairs over the past several years thanks to a state Department of Parks and Recreation grant.

But the city's inability to account for how some of the funds has been spent, and the state's dissatisfaction after inspecting the center, caused the council at its last meeting to conclude that it needed to repay just over $18,000 to the state, as Lake County News has reported.

However, City Administrator Dale Neiman suggested Thursday that, before paying back any money, it would be better to invite the state to audit the grant. Neiman suggested the state's findings might result in the city not having to pay back any of the money.

Councilmember Joyce Overton said that some of the repairs listed in the staff report – including new windows, and floor and ceiling tiles – that were supposed to have been made since the city received the grant in 2004 had not been completed.

Councilman Roy Simons said he hoped tighter control could be kept of the grant moving forward. Simons, who worked on construction, suggested drawing up plans for moving forward with repairs, carrying those repairs out in segments and conducting inspections as each segment is completed.

“You're exactly right,” Neiman said.

The youth center also needed a new lease, since its previous lease has expired. Overton told the council that the Lake County Community Action Agency is prepared to enter a lease agreement with the city to continue running the center until October 2014. The state's grant requires that the youth center must remain open for 10 years from the time of the grant's 2004 approval.

Councilmember Judy Thein had asked if it was possible to enter into a month-to-month lease until the audit came back from the state.

Neiman said the state was pushing now for the longterm lease extending until 2014, otherwise the state would require all of the funding expensed so far – just under $35,000 – back from the city.

“We don't want to give the money back if we don't have to,” said Neiman.

The council questioned how much the city may have to pay back to the state, and were concerned that the city's former recreation director's salary may also have been partially paid from the grant, which wasn't allowable.

Neiman said the city has so far been paid $34,878 from the grant for work on the center, according to city documents. “We found another book that had some records in it too since the last meeting.”

The city also submitted to the state two other reimbursement requests totaling about $10,000, which weren't paid because of the issues that surfaced in a state inspection, said Neiman.

Thein suggested they should have a financial analysis before moving forward with the longterm lease, saying she wanted everything in front of her before she made a decision.

However, Thein and Overton both pointed out that the state might take all of the money back if the lease wasn't created now, according to the state's demands.

“So we have no choice. That's basically what it comes down to,” said Thein.

Vice Mayor Chuck Leonard said it wasn't a no-win situation. “We just have to come up with the best agreement that we can.”

Mayor Curt Giambruno said the city already has invested in upgrading the building, but he was concerned that there is much more to do, including expensive bathroom upgrades.

He agreed with Thein that a financial analysis was a good idea, because he wanted to know who would pay for more work that might be needed over and above what the grant offered.

Neiman said the council could always decide simply not to make those repairs.

Giambruno said he was fine going forward with the lease if the city didn't have to put any more money into the building. Because the lease only costs the Lake County Community Action Agency $1 a year, he suggested that the agency should take charge of paying for the repairs.

Leonard moved to request the state conduct the audit, which passed unanimously. Also passing unanimously was a second motion by Leonard to authorize city staff to negotiate the new lease.

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