Resident Uncovers $100K Cupertino Accounting Error

After discovering over $100,000 in funds designated for affordable housing instead went to pay off a YIMBY lawsuit, San José Spotlight reports that Cupertino is “scrambling fix what city officials are calling an ‘accounting error.'” As the City continues to struggle with its budget deficit and residents endure budget cuts, the latest error drew more questions about its fiscal management.

YIMBY Law, one of the two litigants in the lawsuit questioned Cupertino’s motives in its misallocation of funds. “They’re saying it’s an error, so I think we have to pretend that we believe that,” stated YIMBY Law’s Sonja Trauss. “There’s another reality where it wasn’t an error at all and Cupertino looks even worse.”1

Resident Discovers Alleged Error
The issue first came to light at the February 21 City Council meeting, when resident Rhoda Fry spotted errors in the Accounts Payable Report which had been approved by three levels of City staff. Fry said, “developers are paying these mitigation fees in good faith that these will go toward below market rate housing, not to pay for frivolous lawsuits.” It was thanks to Councilmember Kitty Moore that Fry found the error; in 2021 Moore requested that the specific paying fund be listed in the Accounts Payable Report.2

Councilmember Liang Chao pulled the Accounts Payable item from the Consent Calendar. City Attorney Jensen tried to shut down discussion by claiming that it was an administrative issue while City Manager Wu added that it was a waste of time to discuss it. Their comments angered residents who hadn’t originally intended to speak on this item, resident Lisa Warren chided “you should be very happy you have people that care.”

Although City staff admitted that affordable-housing money was misallocated, Councilmember Hung Wei persisted in assuming that the City has “checks and balances in place.” Councilmember Kitty Moore requested that any adjustments to the BMR Fund make their way into the City’s annual Development Mitigation Fee Report under State Law AB 1600.

More Concerns about the Affordable Housing Fund
Since the article was published, other questionable withdrawals from the fund have been discovered such as subscriptions to the San Jose Mercury News, memberships to organizations, airfare, and hotel stays. Furthermore, the use of the fund has been surprisingly inefficient. Nearly half of the fund’s 2023 expenses of $769K went to pay for “Staff and Administration.”

The San Jose Spotlight Article closed with a quote from Councilmember Moore, who previously served on the City’s Audit Committee, “We are the stewards of the city’s public funds and must demonstrate we are prudent, responsible and accountable.”

Sources

1 – Freimarck, A. (2024, March 29). Cupertino spent affordable housing funds on lawsuit. San José Spotlight. https://sanjosespotlight.com/cupertino-spent-affordable-housing-funds-on-lawsuit/ 

2 – Cupertino Development Fee Impact Reports: https://www.cupertino.org/our-city/departments/finance/budget-reports

One thought on “Resident Uncovers $100K Cupertino Accounting Error

  1. Wow! Only in 2023 $769K went for “Staff and Administration”. I really would like to know how many exactly hardworking staff and administratinon members got nearly a 1 million dollars in 2023.

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