Tax $$$: Fraud & Waste
Misused and Abused Tax Dollars: The Best (Worst?) Cases of "Your Tax Dollars (Not) at Work" in 2005
A COMPILATION BY THE
CAL-TAX STAFF OF NEWS MEDIA REPORTS AND AUDITS
state government
TAXPAYER-FINANCED PRESCHOOL ADS BOOST PROPOSED PRESCHOOL INITIATIVE, SAYS CRITIC. There's no doubt that millions of tax dollars are being spent on a public relations campaign to boost the image of preschool among California parents. And there's little doubt that a beneficiary, intended or otherwise, is a statewide initiative headed for the June ballot that would raise more than $2 billion a year in taxes on high-wage Californians to finance free voluntary preschool for all 4 year olds.
The $18 million media campaign has raised eyebrows among those who see something wrong about using tax dollars to promote a tax increase. Rob Reiner's Proposition 10 cigarette tax initiative, approved by voters in 1998, funds early childhood programs, including preschool for the poor. It also included language requiring that 6 percent of the new tax dollars be spent to promote preschool and educate parents of its availability.
Now Mr. Reiner's universal preschool initiative, expected to qualify for the June 2006 ballot, asks voters to approve additional income taxes on those making $400,000 a year ($800,000 for joint filers).
And Californians are being bombarded with ads saying how preschool fights crime and improves the economy and produces more college graduates, based on studies paid for by the 50-cents-a-pack Proposition 10 tax money.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, questions whether this passes the smell test. "It's a matter of common sense – this is an expenditure of taxpayer dollars promoting preschool. It's clearly connected to the pending initiative, and as a matter of ethics it crosses the line. Whether it crosses the legal line remains to be seen." It is illegal to spend tax dollars for or against a ballot proposition.
Kris Perry, executive director of the First 5 California Commission, which produced the ads to air through mid-January, said the media campaign is "absolutely not" designed to promote the next Reiner initiative. She said there have been four sets of ads promoting preschool benefits since 2002. The latest round of ads will stop as soon as the universal preschool initiative qualifies for the June ballot, even though she said there is no legal requirement to do so. "… we wouldn't want to present even the perception of a conflict." She added that the ad campaign just coincidentally overlapped with the universal preschool petition drive." (A strategic plan for 2003-04 through 2009-2010 calls for spending $140 million on a public education campaign, according to information on the First 5 California Web site.)
Mr. Coupal said the ads are setting up voters to favor preschool. Robert Stern, president of the nonpartisan Center for Governmental Studies in Los Angeles, said they could have that effect. He doesn't see anything illegal at this point. "They're not mentioning the initiative directly, but it's very equivalent to what the labor unions were doing against (Governor) Schwarzenegger earlier in the year by getting people in the mood to vote against him." (The Sacramento Bee, December 19, 2005.)
The Los Angeles Daily News (March 27, 2005) also reported on the huge public relations budget for preschool out of Proposition 10 money, quoting William Faith, associate professor emeritus at the USC Annenberg School for Communication: "It seem to me this is an incredible amount of money for P.R. and advertising. I know government agencies should get the word out to people, but to this extent? It boggles the mind." Cal-Tax's Larry McCarthy: "Proposition 10 locked in tremendous new public spending programs that will be difficult to ever unwind. The ugly side of the initiative process is that it can be manipulated and can create lucrative, taxpayer-financed spending that is virtually unchecked."
BAY BRIDGE DESIGN DEBATE COST TAXPAYERS $81 MILLION. The cost to build the new eastern span of the Bay Bridge ballooned by $81 million in 2005 when work on the foundation was suspended during a debate over design. Caltrans reported the additional costs as a committee overseeing construction of the $6.3 billion project agreed to pay the money.
In January, Caltrans stopped the foundation project while Governor Arnold Schwarzenegger sought to scrap a more expensive suspension design and instead use two concrete viaducts. The contract with Kiewit, FCI and Manson, a joint venture, was terminated. Two months later, the contractor moved its massive equipment to an Oakland salvage yard. Angry Bay Area legislators prompted Caltrans to retrieve the equipment.
But the battle over the bridge design continued until July, when the governor and Legislature agreed to the more picturesque single-tower suspension design, and to cover cost overruns with state funds and revenues from higher bridge tolls on Bay Area state-owned bridges. The project is expected to be completed in 2012, with bids for construction of the suspension bridge due to be opened February 1. (San Francisco Chronicle, December 8, 2005.) Cal-Tax Comment: This comes on the heels of the December 2004 report by the Bureau of State Audits that blamed Caltrans mismanagement for much of the $3.2 billion in cost overruns of the Toll Bridge Retrofit Program since April 2001. The whole bridge retrofit job was an urgent matter in 1989, after the Loma Prieta earthquake hammered the Bay Area, causing extensive Bay Bridge damage.
BENICIA BRIDGE COSTS CONTINUE TO GROW. Another budget fix is needed to keep up with the ever-rising costs of the Benicia-Martinez bridge. The costs have risen by about $10 million a month this year.
"The good news is we're running out of things to go wrong," said Steve Heminger, head of the Bay Area Toll Authority, which, with Caltrans, announced the latest price increase: $70 million since April. That brings the cost total to $1.263 billion, quadruple the 1995 estimate, and there are still two years of work to do.
The latest problem has been the need to cool the lightweight mixture of concrete that has been overheating when poured into place. Providing ice, cooling pipes and liquid nitrogen has been expensive. Earlier, engineers had problems with regulatory road blocks and the need to provide a special "bubble curtain" to avoid killing of fish when foundations were drilled, plus special rock sockets to secure the foundations. These elements added more than $1 billion to the cost. (Contra Costa Times, December 15, 2005.)
REPORT: LEGISLATORS TO LOOK AT STATE POSTS PAYING PLENTY FOR LITTLE WORK. Democrat and Republican legislators called for a review of the salaries of members of state boards and commissions. They responded to a newspaper's report on big-time pay for small-time work.
"A lot of them are way out of reason," Senate Republican Leader Dick Ackerman said. "My guess is they're all going to be looked at." Senate Budget Committee Chair Wes Chesbro, a Democrat, said, "Everything should be on the table. These (salaries) need to be considered on merit."
Thirty-three political appointees were among 80 current and recent board members, including seven former legislators, four spouses of politicians, and 11 high-ranking aides to former governors. Also, 36 of the 80 reported having second jobs, raising questions about the weight of their supposedly full-time board workloads. (Orange County Register, May 24, 2005.) Cal-Tax Comment: In all, reducing the salaries, some of them six figures, for what amounts to part-time work would not solve the state's budget problems. However, it would send a symbolic message to taxpayers that someone is minding the store.
FREE PARKING FOR STATE WORKERS IS UNCOVERED BY STATE AUDIT. The Bureau of State Audits has uncovered unauthorized free parking by more than 400 state workers.
The bureaucrats are supposed to pay for monthly parking permits through payroll deductions ranging between $40 and $85 a month, but Auditor Elaine Howle, in a July 7, 2005 report, found that more than 400 government employees weren't paying, costing taxpayers $24,500 a month. This contributed to a $2.1 million shortfall in parking lot operations of the Office of fleet Administration. The failures to pay were blamed on employees whose payroll deduction forms were lost or not submitted, or because deductions stopped when they changed state jobs, the audit said. (The Sacramento Bee, July 8, 2005).
WHERE HAVE ALL THE CARS GONE? Haphazard and inefficient management by Republican and Democratic administrations is blamed for the state's inability to provide the whereabouts of some 30,000 state-owned motor vehicles.
Last year there were 70,000 state-owned vehicles but the State and Consumer Services Agency, which launched a review when Governor Arnold Schwarzenegger took office, can pinpoint only about 40,000. Things were so bad, according to Fred Aguiar, the agency secretary, that one department didn't have any record of where it bought $4 million worth of automobiles. Mr. Aguiar said he was "amazed" by the lack of information. "The data coming from departments and agencies of state in regards to procurement was terrible."
Recently passed laws broadened the state's ability to gain information from departments on vehicles and their use. Now the agency is in the process of putting information into a computer program so it can track such details as purchase date, location and mileage. The Bureau of State Audits has concluded that the state may have too many vehicles and does not charge competitive prices when renting them to other agencies. (Los Angeles Daily News, August 8, 2005)
MEDI-CAL FRAUD: FLOURISHING. Crooked medical providers are buying Medi-Cal and Medicare patient identity numbers and using them to get reimbursed for millions of dollars in tests and other services that are never provided.
Los Angeles County Sheriff's Sergeant Steve Opferman, head of the Health Authority Law Enforcement task force: "These numbers are passed from medical clinic to medical clinic, lab to lab, until the medical beneficiary cards are maxed out. They suck it right out. That money's gone. It's huge. It's out of control. The health care system is just hemorrhaging."
Collin Wong-Martinusen, director of the state Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse: "The greed and depravity of the people who are committing these crimes is only exceeded by their ingenuity and creativity." The system is so vulnerable because there are thousands of providers and the bills are paid before questions are asked.
For example, the co-owners of a pharmacy and medical supply in the Los Angeles area were recently arrested on suspicion of billing Medi-Cal for $375,000 in prescription drugs that were not delivered to patients. The head of the Los Angeles County District Attorney's Fraud Interdiction Program, Albert MacKenzie: "This stuff is so out of control. We have to have a more effective way of investigating and prosecuting these cases because the traditional methods of investigation and prosecuting these cases take years. By that time, the money's gone and the crooks are gone." (Los Angeles Daily News, August 7, 2005.) Cal-Tax Comment: Government officials have estimated that 3 percent – and perhaps as much as 10 percent – of the $34 billion Medi-Cal budget is lost through fraud and waste. The U.S. General Accounting Office and many health insurance industry sources have used a rule-of-thumb fraud and waste estimate of 3 to10 percent. The California Department of Health Services released a study in January 2005 that said 3.57 percent of moneys spent on Medi-Cal fee-for-service and dental programs appear to be lost to billing or payment errors, including potential loss due to fraud and abuse.
YET ANOTHER MEDI-CAL SWINDLE. Two brothers who operated pharmacies in Redondo Beach (1995-1998) and West Los Angeles (1998-2001) were convicted August 9 on 21 counts of fraudulent billings of state and federal health programs for the poor. The federal criminal charges allege they billed Medi-Cal and Tricare for $250,000 for prescriptions that were never filled. Prosecutors said Mohammadali Abolahrar, 34, and Rexa Abolahrar, 36, could be facing three to four years in prison. (Information from Copley News Service, August 10, 2005.)
SUSPECTED MISSPENT PORK IN NOW-DEFUNCT STATE AGENCY PROMPTS CALL FOR PROBE. The Schwarzenegger Administration has asked the Department of Justice to investigate spending of as much as $425 million in law enforcement grants administered by the Governor's Office of Criminal Justice Planning. During the five years of the Gray Davis Administration, much of the federal grant money apparently was misspent, the Department of Finance said.
Sam Hull, chief auditor at DOF, said: "In my 30 years of experience, this is the worst thing I've ever seen." He led a team that spent 1,600 hours, at a cost of $1 million, trying to reconstruct what happened at the agency, which handed out money to local governments for crime prevention and to community organizations that helped victims of rape, domestic violence and child abuse. James Tilton, budget manager for DOF, said tens of millions of dollars in federal funds could be lost because of bad bookkeeping. (Sacramento Bee and Los Angeles Times, February 3, 2005.)
AUDIT SAYS GRANTS LACKED OVERSIGHT. Controller Steve Westly reported on his office's audit of 20 grant projects that were funded by state budgets between 2000 and 2002, concluding: "We found problems across-the-board in the way these grants have been administered. We have to make sure every taxpayer dollar is spent wisely – that means cleaning up the process." Auditors questioned $1.11 million in costs out of $14.26 million examined. The report said in some cases grant funds went to projects that have shown little tangible value or benefit, including funding for facilities that have not been built. To guard against future abuses, the controller said he was sponsoring legislation to address problems found in his report. (Westly report released March 9, 2005.)
STATE MILITARY DEPARTMENT "BIRD SANTUARY" IS SCRUTINIZED. The state's Military Department, which runs the California National Guard, has "an unusually large and at times unchecked military bureaucracy that provides lucrative benefits for high-ranking officers." The department, with about 400 soldiers, is known as a place to go after the end of federal military careers, where they can earn salaries and tax-free allowances well in excess of $100,000, and qualify for state pensions in addition to their federal pensions. "So many colonels, whose rank is signified by an eagle, have availed themselves of this opportunity that the Military Department headquarters in Sacramento is known among critics in the ranks as 'the bird sanctuary.'" (Sacramento Bee, November 27, 2005.)
COMATOSE CONVICTS ARE COSTLY TO TAXPAYERS. The state's prison system spent $1.27 million in just six months during 2004 on medical care for six comatose inmates. The figure does not count the $1,056-per-guard daily cost for security at hospitals. Senator Gloria Romero requested the cost accounting from the Department of Corrections in the wake of newspaper reports in the San Jose Mercury News of a system that requires round-the-clock guarding of prisoners, even when they are on life-support apparatus. (The Associated Press, March 28, 2005.)
$1,065-A-Day to Guard "Brain Dead" Prisoner. The State Department of Corrections is spending more than $1,000 a day for around-the-clock guarding of a "brain dead" prisoner in a Bakersfield hospital, according to the Sacramento Bee (February 3). Daniel Provencio, a Wasco prisoner, had been shot in the head with a foam bullet by a prison guard. The Bee said the Department is considering releasing the dead man on "early parole."
Senator Gloria Romero told the San Jose Mercury News (February 4) it is "incredulous that California taxpayers are paying $1,000 a day and assigning guards to guard a dead man." After the story broke, the Mercury News reported that prison officials are examining their policy on guarding comatose inmates. A Department of Corrections spokesperson was quoted as saying state prison officials would have to consult with the prison guards' union on any change.
UPDATE: BRAIN-DEAD INMATE RELEASED FROM CUSTODY. The Associated Press (February 14) reported that a state prison inmate who is brain-dead has been freed from custody and his parole ended. The unusual state prison board decision followed news reports of how the 28-year-old inmate had been shackled to a Bakersfield hospital bed with around-the-clock guard duty costing taxpayers more than $1,000 a day. Daniel Provencio had been shot in the head with a supposedly non-lethal foam projectile during an altercation at Wasco State Prison on January 16.
State Senator Gloria Romero, who chairs prison oversight committees, told AP: "The whole thing is a tragedy. It's just moronic that we were ever in the situation where we were having to guard what for all intents and purposes was a dead man." Mr. Provencio had been serving time for a drug offense when paroled in June 2004, but was returned to prison in August after he was caught driving under the influence. He was eligible for parole consideration next June, but the Board of Prison Terms released him from custody and discharged him from parole. Corrections spokeswoman Margot Bach said the convict is now his family's responsibility and costs of continued medical treatment will likely be paid by Medi-Cal.
update: COMATOSE INMATE DIES. The San Jose Mercury News (March 5) reported the death of a comatose state prison inmate whose around-the-clock security at a hospital for a month cost taxpayers more than $30,000. Daniel Provencio died March 4 in a Bakersfield hospital, according to his brother. He had been released to his family on February 14, about a month after he was admitted.
Mr. Provencio, 28, a construction worker from Oxnard, had been struck on the head by a rubber projectile fired by a prison guard during a disturbance in mid-January. He had been incarcerated for parole violation related to charges of drunken driving, associating with gang members and possessing a gun. He had been originally sentenced on drug charges. The Mercury News article of the "brain dead" man being shackled and under 24-hour guard by a state correctional officer, costing $1,056 a day for overtime, prompted Governor Arnold Schwarzenegger to describe the guarding policy as "ludicrous."
This case may wind up costing taxpayers even more than the $30,000 in guard overtime and $110,000 in medical expenses, reported the Mercury News. State Senator Gloria Romero said she expects to hold a hearing on issues raised by the case, and she expects Mr. Provencio's family to sue the state. "In the end," she said after learning of the man's death, "California taxpayers will pay the bill."
MEDICARE OVERBILLING CASE IS SETTLED. The Eisenhower Medical Center in Rancho Mirage agreed to pay $8 million to settle a whistle-blower lawsuit alleging the hospital over-billed Medicare during the 1990s. Assistant U.S. Attorney Wendy Weiss: "This was more or less an accounting scheme where costs were manipulated to gain a higher reimbursement" from the federal government.
Mark Razin, an employee of the hospital's consulting firm that prepared cost reports for insurers, Healthcare Financial Advisors, filed the complaint. The hospital, which did not admit guilt, released a statement saying "with the help of reimbursement experts advising both parties, Eisenhower Medical Center and the government were able to reach agreement on the amount of the overpayment, and Eisenhower is pleased that the matter was resolved appropriately."
The financial advisors who allegedly filed the fraudulent reports are no longer with the company and the hospital's chief financial officers are no longer there. Mr. Razin's case led to four hospitals paying more than $34 million in settlements, including $24.5 million from Lovelace Health Systems based in New Mexico. (Los Angeles Times, September 1, 2005.)
local government
JUDGE SAYS BUILDING FEES TOO HIGH. Orange County Superior Court Judge C. Robert Jameson has ruled that Orange County's Planning Department overcharged builders and could not justify how the money – $4.5 million from 1999 to 2002 – was spent. The judge ordered the county to reduce future planning and building fees by that amount. The suit was filed by Barratt American Inc., alleging that the county went on a spending spree to consume excess fee revenue. Judge Jameson also ruled that the county must pay the Barratt American attorney, Walter McNeill of Redding, $1.2 million for his successful challenge of the county's building inspection fees. (Los Angeles Times, January 6, 2005, and April 14, 2005.)
BIG OVERTIME BILL FOR RUSH JOB IN VAN NUYS. At least $700,000 in overtime was authorized to complete the restoration of the Van Nuys City Hall. Dozens of carpenters, plumbers, electricians and painters were getting $103 an hour as they were pushed to finish the job before the May 17 mayoral runoff election.
The project, once estimated to cost $18 million, now carries a $22 million pricetag. Most of the time sheets for workers describe the overtime as necessary to meet a deadline, and several City Hall sources, as well as construction workers speaking off the record, have made it clear that the rush job was to allow Mayor James Hahn to use the dedication in his re-election campaign. A spokesman for the mayor denied there was any pressure from the mayor's office to push the project and the mayor was unaware of overtime costs. Deputy Mayor Doane Liu said he has been told that the overtime was needed to close up the building against winter rains and to move rent-paying tenants to the new facility on schedule. (Los Angeles Daily News, April 22, 2005.)
L.A. "DOOFUS" CONTRACTING PROCEDURES ARE CRITICIZED. "We need to have a lean and mean system of doing business here instead of the doofus way we do things now," said Los Angeles Controller Laura Chick as she issued an audit critical of contracting procedures at the Information and Technology Agency. She said the agency failed to correct shortcomings identified two years ago. "We need to stay ahead of the curve, and proactive leadership from the mayor. We don't need directives that come out months after problems are discovered or spending hundreds of thousands of dollars on consultants." She said the department could not demonstrate "fair and open competition in millions of dollars worth of contracts" so it is "very unclear whether the public is receiving full value for their dollars." The agency, she said, has an "environment absolutely inviting fraud, misuse, abuse of public funds."
Deputy Mayor Doane Liu disagreed and said Mayor James Hahn issued a report in January showing most of the recommendations by the contracting task force had been implemented. Ms. Chick endorsed Antonio Villaraigosa for mayor but said the timing of this and two other audits expected to be released prior to the May 17 run-off election are not politically motivated. Audits of city Airport, Harbor and Water and Power departments have promoted investigations of a "pay-to-play" system at City Hall. (Los Angeles Daily News, April 27, 2005.)
BART PUSHES FARE HIKES FOR RETIREE BENEFITS. A labor pact 10 years ago giving lifetime medical benefits for retirees and their families – for $25 a month – has driven BART's latest push to increase fares and parking fees. Joel Keller, president of the BART Board of Directors: "It's the single biggest factor in the deficit."
The bill for the generous medical coverage is $9 million a year in premiums and a fund for future costs amounting to $24.6 million a year. That's $33.6 million. BART is running a $51 million deficit for the year starting this July, which could be reduced to about $30 million by eliminating 115 jobs and holding off on pay raises. (San Francisco Chronicle, May 4, 2005.)
SIX CHARGED IN SAN DIEGO PENSION SCAM. Six former or current members of the San Diego City Employee Retirement System were charged with felony conflict-of-interest – designing and voting for a contract tied to increases in their own pensions. Each was charged with three felony counts of state law, each charge carrying a maximum sentence of three years in prison.
Accused of violating state law were the head of the city firefighters union, two city officials who resigned on May 16, and another who has been placed on administrative leave for refusing to cooperate with federal investigators. District Attorney Bonnie Dumanis announced the criminal charges and called this case the "first step in restoring public trust in our government institutions."
The pension deals, including the pension board's signoff on a scheme that reduced the city's contributions to the system and contributed to a $1.4 billion deficit, are being investigated by local and federal authorities to determine whether fraud and public corruption laws were violated. For example, the district attorney said votes that enhance pensions were cast by Ronald Saathoff, veteran fire captain and president of San Diego Firefighters Local 145, who has represented firefighters on the pension board since 1985. His pension increased by $2,530 a month, taking it to $9,703, or $116,436 a year. (San Diego Union-Tribune, May 17, 2005.)
PERKING UP PENSIONS IN L.A. City and county employees augment their salaries with hundreds of bonuses that the courts have held can beef up pensions.
For example, a Fire Department arson investigator gets a "shooting bonus" of up to $32 a month, as approved by Los Angeles County supervisors in May. However, none can recall ever having to fire a weapon at someone. Another bonus: $120 a month for county janitors who wax floor, and if a custodian agrees to act as a watchman to guard against fire, weekly pay jumps 5.5 percent.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, called it "a nefarious yet successful means to disguise both pay and pension-spiking. It's clearly a way to hide from taxpayers the true cost of public employment." (Los Angeles Daily News, May 24, 2005.)
Grand Jury: Stockton Overcharging Home Builders. In a report issued by the San Joaquin County Grand Jury on June 13, 2005 the city of Stockton was accused of over-charging home builders since 1991 with excessive planning and permit fees. The jury said more than $40 million charged possibly violates state law that prohibits fees exceeding the cost of the service.
In response, the city called the report "true bias." However, city Community Development Director Jim Glaser said the city moved $24.8 million from the permit center to the general fund from 2002 to 2005. (Stockton Record, June 14, 2005.)
DEVELOPMENT BOARDS KEY TO HIGHER COUNCIL PAYCHECKS. Pomona is the latest of a growing list of city councils – such as Maywood, Baldwin Park, Huntington Park and National City – that have fattened council members' compensation by forming development boards. Pomona's council recently made headlines by quadrupling $10,000-a-year salaries by forming a community development commission and attending twice-monthly meetings for $2,500 a month, or $30,000 a year. (Los Angeles Times, June 29, 2005.)
COUNTY SPENDS $$$ FOR UNUSED COMPUTER PROGRAM. Stanislaus County has spent nearly $400,000 for a criminal justice computer system program that law enforcement has yet to use. Sheriff Les Weidman and one of his lieutenants, Adam Christianson, said the software program, called iManage, is not compatible to department needs and has not been utilized.
Intended to store images of documents, the program was purchased in 2003 as part of the Integrated Criminal Justice Information System computer system that allows law enforcement agencies to share criminal files. "We have never used iManage, never seen software for it or done any development for any possible interface for ICJIS," Lt. Christianson said. (The Modesto Bee, July 12, 2005.)
CITY HALL GAS TANKS ARE UNUSED. Three 8,800-gallon underground gasoline tanks that cost Los Angeles taxpayers $1 million have no permits and remain unusable four years after the $300 million renovation of City Hall. And officials want to spend at least $800,000 to have the tanks removed.
This had Councilman Dennis Zine seeking answers: "How on earth could we have spent so much money on City Hall and not taken care of a simple thing like making sure we were in compliance with all the regulations? Here we are, as a council, trying to scrape together money to hire police officers and firefighters, to keep parks open, and we are wasting almost $2 million to install tanks we could never use and now to remove them. This just doesn't make sense." (Los Angeles Daily News, July 27, 2005).
COUNTY CAN'T ACCOUNT FOR GRANTS. "Shoddy bookkeeping and lax oversight" are blamed for a lack of accountability in San Diego County when county supervisors handed out hundreds of taxpayer-funded grants. Records for 54 grants totaling nearly $1 million are missing, with receipts that have been collected showing money spent on such things as Cheetos and seared ahi crostini.
Further, the San Diego Union-Tribune's investigation showed that in July 2005 officials couldn't account for nearly $2 million in grants awarded since 1999, and quoted the county's chief financial officer, Don Steuer: "We dropped the ball. We're going to fix it. It's unacceptable what happened." Lisa Briggs of the San Diego County Taxpayers Association: "This isn't rocket science. This is basically common sense." (San Diego Union-Tribune, August 7, 2005)
Two Ballots in June Election ADD TO TAXPAYER COSTS. Long Beach will be paying $684,000 extra for the luxury of having two ballots for the June 2006 election – one for state races and issues and one for Long Beach races. The problem is bureaucratic: the county's deadline for printing ballots comes before Long Beach's April primary for city offices. If no candidate for mayor, five city council seats, auditor, city attorney and prosecutor get a majority of all votes cast, there is a runoff in June. Absentee voters will also have to send in two ballots. (Long Beach Press Telegram, August 9, 2005.)
MISSPELLED NAMES ARE CORRECTED. The infamous Livermore library artwork – which made national headlines because the artist misspelled 11 of the 175 names and words – was fixed this week at a taxpayer cost of $6,000. With curious onlookers fenced off, Maria Alquilar of Miami used power tools to remove the offending tiles and replace them with those that had been closely examined for spelling accuracy by library employees.
Ms. Alquilar originally agreed to fix the errors, including misspellings of Einstein, Michelangelo and Shakespeare, in the $40,000 mosaic that was unveiled in March 2004. However, when news of the episode spread across the country, she backed away, saying her reputation had been besmirched. Library patrons were pleased to see the corrective tiles in place, but not happy about having taxpayers pay for it. (Tri-Valley Herald, August 10, 2005.)
San Francisco Utility Commission Fiscal Management Criticized in Budget Analyst's Report. While administrative expenses of the San Francisco Public Utilities Commission have grown by an average of 11 percent per year since 2000, the increased staff is not managing money in a prudent manner. One-third of its contracts are over budget, some by as much as 74 percent. The entire contracting process is unnecessarily slow and cumbersome, according to a report from the Board of Supervisors Budget Analyst's Office. Further, 18 percent of the workers are collecting workers' compensation and $6.2 million has been paid on lawsuits since 2003. (San Francisco Examiner, August 16, 2005.)
Baseball Stadium Hits Fresno General Fund. Fresno's new baseball stadium, built for the Grizzlies of the Pacific Coast League, is costing Fresno's general fund about $1 million per year for repayment of bonds. The general fund backfill is caused by faulty estimates that were made when financing deals were struck five years ago.
City officials estimated parking fees for stadium events would produce $620,500 a year, but the fees fell 25 percent short this year. Further, the city estimated that city-sponsored events at the stadium would generate $250,000. To date, they have generated not a cent.
The team has managed so far to make its $1.5 million-per-year lease payments to the city. Otherwise the general fund hit would be even more. However, the team is $1 million in debt, after borrowing money to pay operating expenses. Grizzlies officials contend the lease "is terrible for the baseball team because it's way too expensive." (The Fresno Bee, August 21, 2005.)
MISSPENDING CITED AT THE L.A. COUNTY WELFARE OFFICE. The Los Angeles County Department of Public Social Services spent $20,504 on newspaper advertising announcing the election of two officials to the county's Commission for Public Social Services.
In a letter to county supervisors, Bryce Yokomizo, department director, said his staff acted improperly when its news releases, instead of being sent to news reporters, were sent with a request to seven newspapers to publish them as paid ads. Mr. Yokomizo wrote, "My department failed to determine, in advance, what the cost would be for these ads. Moreover, regardless of cost, a notice like this should never have been purchased at public expense." (Los Angeles Times, September 7, 2005.)
Sacramento County Financial Snafu Leaves Homeless Fund Short. The Sacramento County Department of Human Assistance repeatedly made accounting mistakes over a 10-year period, leaving a fund for the homeless and poor almost $2 million short, according to county budget documents.
The department asked for the $2 million in annual budget negotiations. Susan Priest, department finance chief, said the department will do a better job in following up on bills to make sure the errors don't happen again. County Supervisor Roger Dickinson said, "Frankly, it was sloppy. I can't remember another instance off-hand when we've gone through this length of time with money not being reconciled." (Sacramento Bee, September 10, 2005.)
PROPERTY MISMANAGEMENT IN SAN DIEGO? San Diego's Real Estate Assets Department's "slipshod" management is "extremely shocking." In an editorial, triggered by the paper's reporting that City Hall record-keeping is so bad it has no idea about the true value of city real estate holdings, the San Diego Union-Tribune called for the firing of the manager of the assets department. Further, the newspaper said neglect of some city-owned parcels is "on a par with the worst slumlord imaginable."
The paper published coverage of the assets manager's denial and repudiation of the Union-Tribune investigative report, and the paper's editor replied that the city's response was a futile cover-up effort, and the paper stood by its reporting. In another lengthy investigative report, the Union-Tribune lambasted the city's alleged mismanagement of Brown Field, an airport near the Mexican border. All this mismanagement and waste of tax dollars comes while the city is struggling to make ends meet. It is against the backdrop of the scandal stemming from the granting of extravagant retirement benefits to city employees and fudging on city fiscal health filings that withheld a true picture of the city's pension debt from potential sewage bond buyers. (San Diego Union-Tribune, September 21, 2005.)
S.F. Taxpayers Subsidizing Union Administrative Costs. Until this year, San Francisco taxpayers were picking up the $100,000 tab for union-related work performed by the head of the San Francisco Police Officers Association.
Since the 1970s, there has been an ordinance that prohibited an officer from being paid from city funds from police officer work. However, during the Willie Brown administration, an "understanding" was reached allowing the union president to stay on the city payroll while doing union work full-time. The police union endorsed Mr. Brown for mayor in 1995. However, last month, Police Commissioner Joe Veronese started making inquiries into how Gary Delagnes, the union president, was being paid. City officials asked Mr. Delagnes to go on unpaid leave. (San Francisco Chronicle, October 9, 2005.)
Fresno County Overpaying for Foster Care. Fresno County has overpaid $1.7 million for foster care of children over the last 12 years. On November 8, the county's Board of Supervisors decided to develop a policy that will prohibit foster care placements with businesses that owe the county for overpayments. Supervisors were also grumpy with county officials who intended to ask the supervisors to write off the overpayments. Supervisor Henry Perea said, "I don't see us holding foster care agencies' feet to the fire." (Fresno Bee, November 9, 2005.)
Fire District Directors Compensation Works Out to $849 Per Hour. Members of the Liberty Fire District (northeast of Lodi) board meet for an average or 35 minutes a month and get a $500-a-month stipend for health insurance premiums. This works out to $849.06 per hour. Director Bill Ward said board members "deserve" the benefit. One member, Ted Leventini, does not accept it. District resident Bill Brown of Acampo said, "I don't think anyone who runs for public office should get paid for these little things. If he doesn't want to do it out of the goodness of his heart, then step aside and let someone who does." (Stockton Record, January 17, 2005.)
Los Angeles MTA Pays Unauthorized Costs; Mail Clerks get $41 per Hour. According to its Inspector General, the Los Angeles Metropolitan Transportation Agency has paid more than $800,000 in unauthorized costs, over a two-year period, as part of a contract with a company handling workers' compensation claims. MTA managers informally approved increased pay for various purposes.
Los Angeles Mayor James Hahn questioned how individuals at MTA could alter a contract without board oversight and expressed outrage at the development. As examples, the report said claims assistants, who were suppose to be paid $24 an hour, were getting as much as $41 per hour. Mail clerks were also getting $41 an hour. (Los Angeles Daily News, January 21, 2005.)
SAN DIEGO BUDGET IS HURTING. To critics of San Diego government, the chickens are coming home to roost. "There is a price tag for financial mismanagement, and we're now seeing it emerge," Carl DeMaio, president of The Performance Institute, said. He reacted to news that the city's midyear budget operations report shows a $26.5 million gap, with $5.6 million of it linked to unexpected legal and auditing expenses tied to multiple federal investigations.
City Manager Lamont Ewell said he would balance the budget by June 30 by using higher-than-expected revenues, interdepartmental transfers and a 5 percent cut for all but the public safety departments. (San Diego Union-Tribune, February 25, 2005.)
FISCALLY CHALLENGED CITY IS OWED MORE THAN $90 MILLION, MUCH OF IT HARD TO COLLECT. While collecting $31 million in delinquent debt last year, the city of San Diego is owed more than $90 million, and odds of the city making headway on that amount appear slim. The San Diego treasurer looks with pride at a record of collecting 78 percent ($359 million) of delinquent debt over 15 years, but the city's attorney, Michael Aguirre, says he'd issue a grade of "C" for the job. He wants to help by posting the names of people and companies who owe the city money on his office's Web site until they pay up. City officials say there are more than 560,000 debtors, and the city is mailing notices to about 30,000 of them, those with debt of $250 or more, and giving them 30 days to pay before their identities are publicized.
"We are desperate," Mr. Aguirre said of the city's financial crunch (caused by mismanagement that includes the granting of generous pension benefits). "When you are desperate, this is what you do." He said his predecessor as city attorney should have done a better job going after these scofflaws.
He said cases that involve less than $5,000 can be taken to small claims court.
The Union-Tribune analyzed the lists of delinquent accounts, including many that are more than five years old and considered virtually uncollectible. They include $45.8 million from parking fines, fees and interest. There were 455,115 overdue parking tickets as of October 17. The city actually owes the city, as does the county and a number of other government agencies. Some of the biggest debtors are the county sheriff, the state prisons system, the FBI and the U.S. Postal Service. At least 150 city employees show up as owing money, including several water department employees among the 32,896 delinquent water and sewer accounts totaling $12.5 million.
The city owes itself $108,253 from rent, utility bills and parking tickets. The county's $2.5 million debt is mostly for a decade of crime lab services that the city provided. The county sent the payments to the state by accident, and the state refuses to give the money back. Now taxpayers are paying for a lawsuit in this case.
Corporations owe for taxes, bills and bounced checks, the newspaper reported, with $646,800, including interest, owed by a Temecula company that ran public auctions to sell surplus city stuff. The city sued the company, MGA Inc., but it went bankrupt in 2003. A Canadian circus company owes $19,886 for two checks that bounced, failing to cover a 2002 permit to perform in Balboa Park for about a month.
And what about those city employees who owe water and sewer charges? They'd seem easy to find. But Michael Vogl, manager of the city's Collection Division, said he isn't allowed to verify a city employee's address unless there is an emergency. "Just because they're city employees, it doesn't make it any easier to collect. Unless they're in the treasurer's department." (San Diego Union-Tribune, November 20, 2005.)
TAXPAYERS PAY MILLIONS FOR DEPUTIES' EXCESSIVE FORCE. Settlements of excessive-force claims against the Sacramento County Sheriff's Department totaled $3.9 million over six years ending in 2003. Of that amount, $1.2 million was needed to settle 23 claims against deputies in the county's main jail, according to data from the county's risk management office. (Sacramento Bee, November 3, 2005).
BEE ASKS: WHY PAY "HUSH MONEY" TO DEPARTING CITY MANAGER? The Sacramento Bee (November 29) editorialized against the Sacramento City Council-approved deal with its retiring city manager, paying $80,000 to get him to leave early – and silently. The early retirement agreement dissolves if either party, Bob Thomas or the City Council member, says anything negative of the other. If the agreement is violated, all the extra compensation is forfeited. In addition, top managers of the city, including Mr. Thomas, will get 10 percent retroactive raises.
"For Thomas, this parachute is a little too golden," The Bee said. "Paying $80,000 to go away quietly? One shudders at what council members this holiday season would have given to Thomas had they actually been trying to keep him." For Mr. Thomas, the raise "will be the gift that keeps on giving." Raising his salary to $208,900 will plug into the formula that calculates his retirement pay. That retroactive pay raise may boost his annual retirement pay to about $150,000. (Sacramento Bee, November 29, 2005.)
education
REPORT: UC PADS PAY OF TOP EXECS. University of California employees last year received $871 million in bonuses, administrative stipends, relocation packages and other forms of cash compensation – on top of salaries and overtime pay, the San Francisco Chronicle reported. Based on payroll records, the extra cash was more than enough to cover the 79 percent increase in student fees that UC has imposed over the past four years.
Roughly $599 million went to more than 8,500 employees who each got at least $20,000 over their regular salaries. And that doesn't include an impressive array of other perks for selected top administrators, ranging from free housing to concert tickets.
This additional compensation was not noted in a consultant's report released in September that said UC executives are paid 15 percent below their peers at other major universities.
UC President Robert Dynes, whose 2005 pay is $403,916, was quoted as saying UC relies on bonuses and other compensation in "fierce competitions for talent." He said "getting and keeping the best people for certain positions sometimes requires compensation packages that may look excessive on the outside, but that reflect true competitive realities. In many cases, these offers include one-time funding that should not be confused with ongoing compensation."
What about UC paying for executives to join airline "red carpet" clubs, or for expensive retirement parties, or a $106 bottle of champagne from then-President Richard Atkinson to Vice President Bruce Darling? These should not be considered perks, said a UC spokesman, who labeled them justified business expenses (wining and dining potential donors, for example). Not all UC funding comes from taxpayers, he said, citing research grants, private donations, medical fees and tuition.
Patrick Callan, president of the National Center for Public Policy and Higher Education, said private donations are not a "slush fund" and should be considered public money and be used for scholarships, not parties or gifts.
Overall payroll at UC has climbed from $8.55 billion (with base pay of $7.69 billion) in 2002-03 to $9.23 billion ($8.24 billion in base pay) in 2004-05, the Chronicle reported.
On November 16, the UC Board of Regents, meeting at UC Berkeley, voted 17-2 to raise student fees by 8 percent for undergraduates and 10 percent for graduate students. Fees for undergraduates, $3,859 four years ago, will be $7,294 next year. The increases are expected to generate $147.9 million.
Assembly Speaker Fabian Nunez, an ex-officio regent, said he wants the Legislative Analyst's Office to examine UC finances. "There is a dark cloud over the university that we really have to reckon with, and it speaks to the question of transparency and honesty. We have to ask the university system to take a closer look at what it does." Some UC faculty members have circulated a petition asking regents to appoint an independent investigator.
The board on November 18 approved annual merit salary increases averaging about 3 percent for top administrators. The regents are expected to consider additional raises in January. Raises for unionized employees of the 10-campus system are being negotiated.
Legislative hearings were planned for early 2006 to probe the UC pay and fringe benefits issues raised by the investigative reporting.
(San Francisco Chronicle, November 13-19, 2005.)
EX-UC DAVIS VICE CHANCELLOR IS PAID WELL FOR NOTHING. A secret legal settlement, unveiled by the San Francisco Chronicle (December 19), involves a former UC Davis vice chancellor who resigned last summer and got a new title, a $20,000-a-year raise, and no requirement to do any work. The newspaper said the legal settlement or agreement, reached June 1, was negotiated to avoid a potentially embarrassing lawsuit alleging race and gender discrimination.
Celeste Rose, 55, is allowed to stay on the payroll for two years at $205,000 annually as "senior advisor to the chancellor" with no specified duties. She no longer has an office on campus, where she had been vice chancellor of university relations for the past seven years. She cannot be fired no matter how little she does. She gets all benefits of a senior manager, including health care, severance pay and a growing pension, the paper wrote. Even if she quits, she is entitled to what's left of her two-year salary, plus the university agreed to give her a $50,000 transition payment to help her find a new job, a letter of recommendation and a promise to tell reporters that she voluntarily resigned her old position.
Ms. Rose's attorney, Melinda Guzman, said the settlement was achieved under threat of a lawsuit, which was not filed. Ms. Guzman said the UC Davis chancellor, Larry Vanderhoef, had told Ms. Rose, who is African American, in a private meeting that she needed to resign by the end of June and didn't offer a reason. Ms. Guzman said UC has had a record of repeated failure to recruit or retain minority executive managers at the UC Davis campus.
UC Davis quickly settled and officials denied they discriminated against Ms. Rose or anyone else. Citing privacy rights in personnel issues, they said they could not comment on the claim that she was fired without a reason. The "separation agreement" – not a settlement – was not reported to UC regents for their approval. Meanwhile, Ms. Guzman said her client is ready to work but is still waiting for her first assignment as an adviser to the chancellor. The legal agreement says Ms. Rose and the UC Davis chancellor have to mutually agree on any duties.
UC Davis spokeswoman Lisa Lapin told The Sacramento Bee (December 20, 2005) that so far Ms. Rose had declined suggested assignments. Mr. Vanderhoef, who had personally hired the woman in 1998, released a statement saying she has considerable experience in fundraising and government relations. He said he expects her to continue to help refine initiatives for a major campus fundraising campaign.
UC Regents Chairman Gerald Parsky announced an outside auditor would review compensation and severance packages for top administrators throughout the 10-campus system. In an effort to provide "greater oversight and understanding about UC compensation policies and practices," Mr. Parsky issued an order creating a regents' Compensation Committee. A task force also was named to review UC compensation practices and their public disclosure.
CHARTER SCHOOL EXECS ACCUSED OF WASTE AND MISUSE OF PUBLIC FUNDS. State Schools Chief Jack O'Connell released audit findings of a charter school operation that was taking millions of public school dollars to enrich the owner and members of his family.
The audit found executives of the California Charter Academy, which closed last year, misused $25.6 million in public education money, including $2.6 million for such personal expenses such as travel, health spa visits, Disney-related merchandise and more. The audit said two employees paid their income taxes with $42,000 in school funds.
"The magnitude of waste of precious education funds outlined in this audit is appalling," Mr. O'Connell said. He added that he sent the 107-page audit to the state attorney general and to district attorneys of San Bernardino and Orange counties, where the school had been headquartered from 1999 until it went out of business in 2004.
The California Charter Academy was founded by C. Steven Cox, its chief executive, as a for-profit management company to run a network of satellite campuses. The audit found that Mr. Cox personally received more than $1.1 million in public education funds and spent $1.2 million more to hire members of his family.
Mr. Cox allegedly used public funds as venture capital to form other companies, such as Everything For Schools, a supplier of textbooks and supplies. It marked up textbooks and supplies by as much as 57 percent and charged the schools $920,000, the audit said.
According to the San Francisco Chronicle, Gary Larson, speaking for the California Charter School Association, said, "Clearly we need a higher level of accountability on the school districts that authorize charter schools."
The Associated Press reported that Mr. Cox did not return a message left at his Educational Administrative Services Corporation offices in Arizona. (Audit findings, April 14, 2005.)
MANY SCHOOL DISTRICTS SPEND MORE THAN THEY HAVE. State Controller Steve Westly says his office's analysis of audits of school districts found more than half of them spent more than they had in 2003-04. Of 982 school districts, 552 combined for $682 million in red ink. Furthermore, 79 districts reported problems so severe that they might be unable to meet obligations over the next three years. The endangered list was 22 percent longer than the previous year, the newspaper reported.
The report said about a third of the districts had to spend reserves to cover multiple years of shortfalls, and auditors suspect that many schools are hiding the truth about impending financial problems. State Superintendent of Public Instruction Jack O'Connell: "It's staggering and really enlightening. These audit findings really do underscore what the education community has been saying, that we do need additional resources." (Contra Costa Times, July 12, 2005.)
Pomona Schools Misspend Computer Dollars. The Pomona Unified School District has misspent at least $2.4 million from a taxpayer-funded program to connect schools in low-income areas to the Internet.
Despite federal guidelines prohibiting spending e-rate funds for personal lap top computers for teachers, the district purchased 460 such computers. The district purchased 48 servers for Marshall Middle School. Curtis Lee, director of technology for the Walnut Valley Unified School District said, "There's no reason for a middle school to have 48 servers. In a typical school, you may need one to five servers." In addition, invoices showed that Pomona Unified paid hundreds of dollars more than the retail price for the computers. (Inland Valley Daily Bulletin, July 22, 2005.)
ANAHEIM SCHOOL BUILDING PLAGUED BY SHORTFALL. Three years ago, voters in the 37,000-student Anaheim Union School District approved a $132 million bond measure, but the district is experiencing a $49 million shortfall of its construction plans.
An audit ordered by the district's trustees also found problems with project oversight and a failure to gain tens of millions of dollars in matching state funds. Overspending has put at risk projects at three high schools and five junior high schools. Applications for nearly $40 million in state funding have been awaiting a district signature since February, when the facilities manager departed. The audit by Construction Controls Group said bond program management "has been inadequate. In fact, many of the key operational areas that were reviewed have significant weaknesses." (Los Angeles Times, September 7, 2005.)
END IN SIGHT FOR "PUBLIC WORKS DISASTER OF BIBLICAL PROPORTIONS?" In 1992, the Los Angeles City Schools paid $60 million for a former oil and gas field as the site of what was to be a model of innovation. Near downtown, it was to be the public-private Belmont Learning Center and it was to be built for the "guaranteed price" of $86 million.
Now the end may be in sight, for something approaching $300 million, as the district has three bids to complete the existing buildings plus two more for an estimated $111 million. Bids are to be opened later this month with construction expected to start by early December. Officials see the project, renamed Vista Hermosa, being completed in two years – or a decade after the initial ground-breaking on a site plagued by noxious gas seeping to the surface and an earthquake fault.
Twice officially abandoned by the school board, as the price tag doubled, fingers were pointed, a superintendent was canned and investigations were launched. Arriving in 2000, Superintendent Roy Romer succeeded in getting it back on the drawing boards. However, it is vastly different from what was initially envisioned.
Yet it may always carry the baggage of a "white elephant," the nation's most expensive high school project; a colossal waste of tax dollars.
In 2001, the site was declared a "crime scene" by District Attorney Steve Cooley. He later concluded that there was nothing he could prosecute, and he labeled it a "public works disaster of biblical proportions."
Mr. Romer: "Obviously there were great mistakes made here. When I came, the issue was, 'Do you abandon it, or do you finish it' … and I chose to finish it." He said he became determined that this "white whale for me" would not be a lasting "mark of failure for this district." He said he "wanted to prove we could finally cure this series of errors … I feel a sense of satisfaction that we overcame the difficulty and we're going to make it happen."
Don Mullinax, former district inspector general and now a partner at Deloitte, said such a celebration may be premature. He said the school is likely to be "a can of worms all over again. Who knows what they'll find under the surface of the ground once they start digging and disturb it; the stuff is still moving around." (Los Angeles Daily News, September 14, 2005.)
Update: School officials said they were shocked when bids were opened to finish the school and the lowest bid ($128.9 million) came in $40 million over district estimates. (Los Angeles Daily News, September 29, 2005.)
SCHOOL DISTRICT FRAUD PROBERS NEED HELP. The new inspector general of the Los Angeles Unified School District says his efforts to find and stop fraud in the mammoth district is hampered by understaffing. Jerry Thornton said his 52 auditors and investigators can examine only 3 percent of the district's awarded contracts.
Unless there are tips, fraudulent activities are likely to go unnoticed and cost taxpayers millions of dollars. "My concern there, having a background in the FBI," Mr. Thornton said, "is you've got billions of dollars in the construction program and (if) you're not finding any significant fraud, you're probably missing something." (Los Angeles Daily News, September 16, 2005.)
Los Angeles Unified Alleges Former Official got $931,000 from Unauthorized Purchase of his Book. Matthias Vheru, a former Los Angeles Unified School District curriculum director, has been accused by the district of unauthorized spending of $3.4 million to buy a math book that he wrote. From the order, the district alleges he profited by more than $931,000 in royalties.
About 48,000 copies of an Algebra I book he authored were purchased, and about half are still sitting in a district warehouse. A civil suit filed by the district against Mr. Vheru came to light September 15 in the annual report of the Inspector General of the sprawling district.
Los Angeles Schools Chief Roy Romer said there weren't sufficient checks in place to detect the purchase.
David Baum, representing Mr. Vheru, denied the charges and said he did not know how the books got on the list of approved materials. He said Mr. Vheru had been told by others to buy the books. (Information from the 2005 Annual Report of the Office of the Inspector General, Los Angeles Unified School District and from the Los Angeles Times of September 16, 2005.)
Los Angeles School Spending on "Professional Experts" Needs Evaluation. The Los Angeles Unified School District spent $23.9 million in fiscal 2004 to employ 6,007 individuals in the class codes of "professional expert and or temporary certificated assignment." A review by the district's Office of Inspector General found: "(i) many individuals were hired for the positions on a recurring basis in breach of stated policy, (ii) Board authorizations sometime were not requested as required, (iii) some professional experts did not meet the appropriate qualifications or were used to perform duties normally performed by classified employees, and (iv) there was no formal monitoring or performance evaluation system in place. As a result, there was little assurance that the individuals serving in these positions were appropriate, qualified, and effectively used. (Information from 2005 "Annual Report to the Board of Education," Office of the Inspector General, Los Angeles Unified School District.)
Payroll Fraud in Los Angeles Unified. A career advisor/teacher improperly claimed 40 hours of illness leave while on vacation with her husband, who was a senior district official. During the vacation, the teacher called in ill to her job location with her husband's knowledge. (Information from 2005 "Annual Report to the Board of Education," Officer of Inspector General of the Los Angeles Unified School District.)
Trustee Hits Community College JUNKETING. "This lavish travel and wasteful spending in our community college must stop!" That was Peralta Community College Trustee Marcie Hodge's statement in a mailer sent to 13,000 east Oakland residents. She was referring to spending in the district's $500,000-a-year program to recruit foreign students.
She is asking about Jacob Ng's stays at luxury hotels on dozens of overseas trips. She has also filed a Public Records Act request to see how many foreign students there are since the district's general counsel couldn't come up with an answer.
Chancellor Elihu Harris, former Oakland mayor and ex-assemblyman, insists that the program has provided a valuable service to thousands of foreign students.
On November 16, board members voted to censure Ms. Hodge for her comments that "publicly castigated the character and performance" of district employees, including Chancellor Harris. Board Member Linda Handy: "Marcie is so out of hand that she is jeopardizing the image of Peralta that we have worked so hard to bring up." (Oakland Tribune, November 17, 2005.)
Cal-Tax Digest. January 2006
©2006 California Taxpayers' Association