November 2001

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The Accountability Files 

Editor’s Note: Over the years, Cal-Tax staff has accumulated examples of wasted and misspent tax dollars, periodically publishing them in the Cal-Tax Digest under a heading “The Accountability Files.” Nearly all of these cases are based on newspaper reporting during the past three years. As of November 5, 2001, these cases exceed $6 billion in tax money at state and local government levels, including schools. At this writing, the waste breaks down to state government, $2.67 billion; local government, $1.23 billion; transportation, $1.31 billion, and education, $824 million. This summary does not cover all reported instances of alleged waste, missed opportunity or impropriety in government. We believe this survey merely scratches the surface.

State Government

BOE AUTOMATION. Over 10 years, according to a State Board of Equalization staff report, the state would save $35 million if the board would adopt an automation project that was more than four years in the making. Staff said the board’s 15-year-old key data entry system was obsolete and delay or disapproval of the contract for the “Return Processing Automation Project” could prove costly. Board Member Dean Andal pushed for board approval, and was supported by Controller Kathleen Connell. However, public employee union officials lobbied Board Members Johan Klehs, John Chiang and Claude Parrish, complaining there would be 148 fewer employees. The board refused to approve the $28 million contract and instead ordered staff to restart the procurement process and consult with union leaders much earlier in the process, Caltaxletter reported. (2001)

HIGHER INTEREST. To help cover the energy crisis costs, the state borrowed $4.3 billion in the summer of 2001, paying about 4 percent prime rate interest. However, because the loan was not repaid by November 1, the interest rate jumped to 5.5 percent, plus additional fees to bankers. Four months of squabbling by legislators, the governor and the state treasurer prevented approval of a plan to pay off the debt. Thus, reported the Los Angeles Times, only the largess of the lenders has prevented California from defaulting on the obligation, which would have had disastrous implications for the state’s credit rating for all types of borrowing. With passage of the October 31 deadline, California is forced to make $390 million quarterly payments to lenders for the next three years, beginning in April. Since missing an October 10 deadline to have a payment method in place, the state has had to pay banks a 2 percent penalty fee that amounts to $235,000 a day, already costing taxpayers some $5 million. This penalty will be in play until the state approves a plan to sell $12.5 billion in energy revenue bonds. Meanwhile, the state’s budget hole grows deeper and deeper. (2001)

$88.5 MILLION TO LAWYERS. The buzz in and around the Capitol during much of 2000 isn’t the question of whether an $88.5 million award of public funds to a bunch of San Diego lawyers is outrageously scandalous. It is whether they will get away with what one political columnist called an “embarrassment of riches from the state.” In fact, this whole sad saga, wrote George Skelton of the Los Angeles Times, is giving the legal profession a collective black eye. It involves a 1991 law, ruled unconstitutional in 1999, that allowed the state to collect $300 anti-smog fees on out-of-state cars when their owners registered them in California. The refunds, ordered by the governor and Legislature, amount to more than $500 million. (2001)

SMOG-FEE CASE (Cont’d). Copley News Service reported on August 22 that private attorneys hired by Governor Gray Davis have amassed $400,000 in fees – $325 an hour for attorneys and $153 an hour for paralegals – to fight the $88.5 million award to law firms that won a smog-fee case against the state. However, CNS reported that even some of the governor’s critics are calling it a wise investment to challenge the fees. A Sacramento trial judge sided with the challengers, but the law firms that stand to make the big bucks are asking a state appellate court to reinstate the arbitration award. CNS quoted Dean Andal of the State Board of Equalization. The $400,000 is “an awful lot of money for one little lawsuit,” said Mr. Andal, who had filed a separate legal challenge to the arbitration award. He added that if the challenge of the $88.5 million succeeds, the $400,000 “will be money well spent.” Making about $70,000 a month to challenge the award is a private legal team named by the governor and led by Elwood Lui, a retired state appellate judge. (2001) 

CHILD-SUPPORT COSTS. The state can save at least $1 billion over the next four years if it will quit stalling and implement a federally mandated child-support computer system, says Melanie Snider, executive director in Sacramento for the Association for Children for Enforcement of Support. In a November 4 letter to the Sacramento Bee, Ms. Snider wrote that the state is paying penalties to the federal government for failure to develop and install a computer system that meets federal standards. The state has paid $208 million in fines for 1999 and 2000, she wrote, and fines this year will amount to $151 million. They will total $225 million in 2002, and so on. “We are throwing money away while we negotiate contracts for years,” she wrote, adding that there exists a computer system that works, is already certified in other states and can be easily adapted for California’s needs. (2001)

POWER TRADING LOSSES. Buying and selling electricity apparently is a tricky business. As the San Francisco Chronicle reported October 25, the state sold electricity for next to nothing – or nothing at all – as it piled up $25 million in power trading losses during April, May and June. Included was May 26, when the state sold 500 megawatts to the Los Angeles Department of Water and Power for 50 cents each. The state paid an average of $271 a megawatt hour during May. On May 28, the state gave away 786 MW hours to a British Columbia utility. Oscar Hidalgo, spokesperson for the Department of Water Resources, told the newspaper that California may not have had a buyer and electricity is not a storable product. (2001)

PEDDLING SCAMS. According to a September 18 report in the Los Angeles Times, those who run bogus non-profit groups and use youngsters to sell cookies and candy are raking in as much as $1 billion annually in untaxed sales revenues across America. Officials say about 50,000 minors, some as young as 8, peddle goods on any given day. The newspaper reported that California is one of 17 states that restrict peddling by youths, with employers required to register with the state if they employ minors engaged in door-to-door sales more than 10 miles from their homes. However, not one company holds such a permit from the state. (2001)

FLYING FAST. The California Department of Forestry and Fire Protection was raked through the coals in an August 31 Dan Walters column (Sacramento Bee). One element of Governor Gray Davis’ “‘fire action plan’ appears to be a boondoggle engineered by the second-ranking (department) official to obtain a very expensive, very fast, executive-style aircraft that he often flies personally and – according to those familiar with it – is unsuited to any serious firefighting role,” the columnist wrote. The supercharged aircraft, with a top speed of more than 300 miles per hour, is known as “Woody’s plane” because it is often flown by Chief Deputy Director Elwood “Woody” Allshouse, Mr. Walters continued. Mr. Allshouse came to the Davis administration from the CDF firefighters’ union, of which he was president. The union was an early supporter of the governor’s election campaign. Citing department sources, the column says the plane costs the state $600,000 a year in lease payments, plus maintenance and operational expenses. The 12-year lease alone could cost the state more than $7 million. Department Director Andrea Tuttle, a former environmental consultant, advocated the plane’s acquisition but, according to Mr. Walters, confessed ignorance about the technical details. She defended it as necessary for infrared imaging, although it was reported that this is available on other slower, more suitable aircraft and the technology itself is considered outdated. Checking the plane’s log, Mr. Walters noted that Mr. Allshouse was at the controls on eight of 12 flights since the state got the plane in mid-July, and only one of those flights, August 20 to the San Joaquin Valley, mentioned “fires” as the mission. (2001)

NO SUSHI OR ITALIAN TAKEOUT. Controller Kathleen Connell told reporters on July 24 that the state would not be paying for $3,600 in Department of Water Resources food purchases in January. The department employees, who at the time were putting in 20-hour days making electricity purchases, ate pizza and sushi charged on state credit cards. Dr. Connell said the state does not buy business-hour meals for staff while in town and it is improper to use a government-issued credit card. Department spokesperson Oscar Hidalgo said the department was operating under a state of emergency called by the governor and the food purchases were normal under such conditions, similar to a natural disaster such as a flood.  Buying power is not the same as firefighters being fed while fighting a forest fire, the controller responded. Steve Maviglio, the governor’s press secretary, said, “Unless she wants to go home and bake a few pans of lasagna for the guys on the front lines who are trying to keep the lights on, she should stick to the job of writing checks.” (2001)

POETRY. The Legislature’s Republican leaders, Senator Jim Brulte and Assembly Member Dave Cox, wrote a poem to Governor Gray Davis on June 14, questioning the wisdom of the Resources Agency spending $12,000 on a series of poetry readings. Agency Secretary Mary Nichols was quoted defending the event, because “poets give us the inspiration that we need to do our work.”  The Republicans concluded: “From the taxpayer you’ll never hear, ‘Isn’t that rosy, coffee, camaraderie, and state-paid poesy.’ Knowing this we ask (tongue-in-cheek, by golly!) that your administration never repeat this folly.” (2001)

STATE BUDGET. Here are a few state budget tidbits from the Legislative Analyst's Office: A typical University of California professor teaches 2.6 undergraduate classes per year; the Department of Conservation wants to buy seven new vehicles yet is seeking enough money for 32; ninety-one percent of local coastal programs are overdue for review by the Coastal Commission; Caltrans is spending $500,000 per home in the program to rehabilitate 39 historic homes that will be relocated to make way for a new freeway in South Pasadena; the state subsidy for each passenger ride on the state's intercity rail system is about $25 for 1999-2000, and federal government agencies got about 78 percent of the $10 million allocated during the current fiscal year for local assistance grants distributed by the state Off-Highway Recreation Commission. (2001)

ELECTRICITY GRID BUDGET. The California Independent System Operator, a non-profit agency that oversees the flow of electricity in the state, has a bloated budget, the San Jose Mercury News reported on May 5. The agency spends twice as much as other system operators, the newspaper reported, citing a $30 million-a-year telephone system that exceeds the agency’s needs, a chief executive salary and benefits of $550,000 a year, and $15 million spent on a computer system that must be replaced after only three years. The ISO is “really gold-plated,” said James Caldwell, an energy consultant. ISO Treasurer and Financial Director Philip Leiber acknowledged that the ISO, compared to other ISOs, is about “twice as costly” and explained that the high costs were a result of requirements to get up and running on a tight schedule. “… if you build something quick, you pay a premium,” he said. The California ISO, with a staff of 475, has a budget of $225 million. It serves 10 million customers.  (2001)

BUTTLEGGING. Since California more than doubled its tobacco tax in 1998, it is estimated that the underground, Internet and mail-order trade for cigarettes may exceed $500 million a year, according to a Copley News Service report (April 16). The biggest piece of this flourishing black-and-gray market is an outbreak of counterfeit tobacco tax stamps. CNS quotes Monte Williams, chief of investigations for the State Board of Equalization: “We have found counterfeit stamps on cigarettes throughout the state, and it seems to be a growing problem.” The state is losing about $200 million a year in projected tax revenue, much of it earmarked for public health and children’s programs. Dennis Maciel, chief of the BOE excise taxes division: “We have about nine active investigations on counterfeit stamps, and the proportions would probably boggle your minds.” (2001)

STATE BUDGET. From the Legislative Analyst’s Office (LAO) annual contest in which members of the news media are quizzed: The administration is requesting Global Positioning Systems for what purpose? (a) To help ambulance drivers locate addresses; (b) To assist in searches for escaped prison inmates; (c) To identify the location of neighborhood recycling centers, or (d) To monitor traffic flow on state highways. Answer: (c). The answer to another quiz question: 1,317 percent, or from $6 million to $85 million. The question? Since 1992, when a ballot measure (opposed by Cal-Tax) gave the California Public Employees Retirement System authority to spend funds to administer the retirement program without legislative appropriation, how much more has CalPERS spent on external investment advisors? The analyst also noted that the administrative costs for a proposed program to encourage prospective teachers to teach in low-performing schools amounts to 40 cents for every dollar in fellowships provided to teachers. Also, on average, it costs the Department of Corrections 31 percent more to use prison inmates for construction projects than it does to hire a private contractor. (2000) 

PRISON OVERTIME. Excessive overtime and extraordinary use of sick leave among California state prison correctional officers have been costing taxpayers millions of dollars, according to the Bureau of State Audits. The bureau’s January 26 report made headlines statewide. The Los Angeles Times reported: “In TV and newspaper ads, California prison guards have told the public for years that their jobs are among the toughest in the state. They also happen to be among the best-paying.” Using overtime, more than 5,000 correctional officers, normally making $50,000 a year, are making more than their superiors, and some sergeants and lieutenants are making $108,000 a year, or equal to the salary of the statewide director of prisons. One lieutenant made $140,000, or twice his regular salary. The report says the department has been mismanaged and efforts to curtail excessive overtime and sick leave have been ineffective. It says the Department of Corrections could save $29 million a year if the guards’ sick leave was reduced to a level comparable to that of the California Highway Patrol. Acting State Auditor Mary Noble said, “We consider annual sick leave of more than 48 hours to be significant, especially in light of the CHP’s considerably lower average and the department’s own experience at some of its institutions.” In a response to the audit, Corrections Department Director Cal Terhune said the department has already identified many of the problems cited by auditors and is correcting them. The department’s overtime expenses in the last fiscal year totaled $160 million. The department’s sick leave policy is a cause of the overtime problem. The audit report says that when a portion of the prison workforce takes excessive days off for illness, the department is required under its labor agreement to offer the most senior officers opportunity to fill in. Thus, the overtime is concentrated on the highest pay ranges. (2000)

STATE WORKERS GET ANOTHER HOLIDAY.  State employees, who now have 13 paid holidays, are getting another through the August 10 passage of SB 984 (Polanco).  Governor Gray Davis said he would sign the legislation, which designates March 31, Cesar Chavez’ birthday, as a state holiday.  The cost to taxpayers: $46.5 million a year.  Mr. Chavez founded and led the United Farm Workers of America.  Ironically, it will not be a holiday for farm workers. As a result, the Chavez family was reluctant to support the idea until an educational component was added. (2000)

STATE BUDGET. Here are the answers to some of the questions in the Legislative Analyst’s Office annual budget quiz: $2,900 per window (How much money does the Youth Authority propose to spend to modify 36-inch-square windows that it considers to be a security risk in one of its juvenile facilities?); 3  (How many people have participated in the program to help low-income persons with smog check repairs on their cars? The state budgeted $62 million for this program in 1998-99 and the same amount is proposed for 1999-00); $3.9 million  (How much extra money was added to the Department of Corrections budget just by accident?), and CSU does not know  (the number of additional full-time students enrolled in teaching preparation programs as a result of $13.8 million budgeted over the last two years to increase enrollment).  (1999) 

MEDI-CAL FRAUD. In a Los Angeles Times interview published December 10, Governor Gray Davis vowed to fight health care crime. He said he has been advised that fraud reaches 70 percent of the billings in the Medi-Cal section that deals with crutches, adult diapers, wheelchairs and other medical equipment. The FBI has estimated that Medi-Cal fraud in California will eventually total $1 billion. The governor says he is expanding investigative forces and seeking new laws to combat the crime that he says also has occurred in Medi-Cal dental services. “For too many years the state looked the other way. We’re not going to do that anymore,” the governor said. The current wave of Medi-Cal fraud was uncovered by State Controller Kathleen Connell’s auditors. The FBI has filed charges against 75 people and has 300 other cases under investigation. Governor Davis, while state controller in the late 1980s, uncovered similar fraud rings. Now he said he was surprised to find fraud was not only back, but rampant. “I was surprised that people had the chutzpah to just mail in a bill for a totally invented transaction. This is a rip-off that should not have reoccurred, and it’s not going to occur again on my watch,” he declared. (1999)

MEDI-CAL FRAUD (CONT’D). The state has lodged false-billing complaints against 64 medical supply businesses that may have bilked the Medi-Cal system out of $1 billion, according to a November 29 article in the Los Angeles Times. The FBI and state officials from a task force set up by Governor Gray Davis have cracked down on what The Times called a “giant rip-off” centered in the San Fernando Valley, the newspaper reported. By the time it is finally unraveled, the case may total more than $1 billion in fraud, said the newspaper. There have been a number of articles and reports –  including a “60 Minutes” television expose –  on such Medi-Cal fraud uncovered by state Controller Kathleen Connell’s auditors. However, a federal judge has said the state controller has no business auditing Medi-Cal. Dr. Connell said that ruling will be appealed and it applied to just one case. The jurisdictional dispute should not detract from the seriousness of the problem, she added. Of the 64 complaints filed, 34 have resulted in guilty pleas and the rest are pending, the newspaper said. Penalties have included prison terms ranging from 10 months to three years. Three-hundred other businesses are under investigation. (1999)

COMPUTER SNAFUS. An $18 million computer project to link four welfare networks has been abandoned by the state of California, according to a July 12 report in the Los Angeles Times. It is at least the fifth time in this decade, reported The Times, that California state government has “frittered away millions of dollars trying to construct a new system ... Nearly half a billion dollars has been wasted on mammoth systems that spun out of control and were abandoned.” Reporter Virginia Ellis continues: “For taxpayers, the failures have been more than monetary; they have meant lost opportunities to make government more effective and efficient.” Other projects that failed because they were poorly designed and poorly managed: The Department of Motor Vehicles ($51 million), child-support tracking ($201 million, including $90 million in federal penalties); prison information ($18 million, with costs later recovered from contractor), and lottery scratcher automation ($52 million). The welfare linkage project was abandoned early this year after consultants and state officials had “grave concerns” because it had inadequate controls and oversight. Efforts to kill the project began in the waning months last year of the Wilson administration. Ms. Ellis writes that the failures are not only costly to taxpayers, they are humiliating because California is the cradle of today’s technology. (1999)

Local Government

ANOTHER PENSION GIVEAWAY. Governor Gray Davis on October 13 signed legislation (AB 616) sponsored by unions representing local government employees that is likely to have significant impact on the budgets of cities and counties – and taxpayers. It enables unions to negotiate agreements with counties that could amount to 50 percent annual increases in pensions for employees who work to age 60. According to a report by Sacramento Bee columnist Dan Weintraub (November 1), the cost to taxpayers for the new benefit is expected to be another 3 percent to 4 percent of payroll. The current value of the higher pensions for all those workers already employed is estimated to be about $1 billion, Mr. Weintraub wrote. The governor noted that it is a local option. Local option also applied to the 1999 bill signed by Governor Davis that allows public safety workers to retire at up to 90 percent of their pay, even if they retire at age 50. Although the law had been in effect for only 22 months, some 90 local police and fire unions have gained the additional benefit for their members. (2001)

LATE CLAIM PENALTIES. Failure to process workers’ compensation claims on time has cost Los Angeles nearly $800,000 in penalties over the last 18 months, according to a city audit. The Los Angeles Times reported October 31 that City Controller Laura Chick, who released the audit findings, believes some delays occur for legitimate reasons. However, 25 percent of the 33 cases sampled involved late payments that could have been avoided. She blamed “inadequate oversight” by the city Personnel Department, which has a time-consuming, complicated process of examining claims. Tom Coultas, assistant general manager of the Personnel Department, responded: “We completely agree that paying penalties is not what the city should be doing.” However, he continued, “What needs to be added is this is a tenth of a percent of all the payments we make. While we completely agree, we need to put in context that we process over $100 million a year” in claims. (2001)

MAYOR’S TRAVEL HIT. Fairfield Mayor George Pettygrove has been criticized by his political foes for taking 31 trips paid for by the city in the last three years, reports the Fairfield Daily Republic (October 30). They also say he took his daughter to lunch 23 times on his expense account. The records, obtained by City Council Member Karin MacMillan, showed $34,238 in travel and entertainment expenses. Mr. Pettygrove said most of the trips were to Washington, D.C. to lobby against closure of Travis Air Force Base, or to get money to fix the Interstate 80/680 interchange. The city paid for lunches that he had with his daughter, the president of the local school board. The mayor said he and his daughter served on the same school district-city committees. (2001)

OAKLAND MARINA SNAFU. According to the Oakland Tribune (October 29), an apparent snafu that likely will cost taxpayers $1.5 million has angered some boaters and local business people. It’s the revelation of the need to remove about half of the new Jack London Square marina less than two years after the Port of Oakland invested $10 million in building the new facility. The work is needed to accommodate an earthquake retrofit project that is part of a $52 million Caltrans project to shore up underground tunnels connecting Oakland to Alameda. The Caltrans project had been planned for several years. “Why they didn’t figure this out is beyond me,” said Gary Jones, a boat sales company owner. Caltrans (taxpayers) will pay for removing and reinstalling the marina, costing up to $1.5 million, and will also reimburse the port for lost rent from boaters, which could amount to more than $200,000. The entire project could take two to three years, which will really hurt restaurants that just got over the effects of 18 months of construction for the new marina. (2001)

OAKLAND PAYOUTS.  Oakland is paying $240,000 to the 4-year-old daughter of a man fatally shot in the back by a police officer after a foot chase in 1998. Police have said 23-year-old Michael Moore was shot after ignoring officer Marcus Midyett’s commands to stop, and that he appeared to be reaching for his waistband. A pistol was found on the ground, according to police. A wrongful death and civil rights violation lawsuit was filed last year on behalf of the daughter. Oakland Assistant City Attorney Randolph Hall told the San Francisco Chronicle (October 27) that there was a chance the city would lose the case so a compromise agreement, without admitting any wrongdoing, was reached, bringing to $1.8 million the amount Oakland has paid this year to settle lawsuits alleging wrongdoing by police. (2001)

NO-BID CONTRACT COSTS TAXPAYERS. According to the Los Angeles Daily News (October 28), the Los Angeles City Council has approved a $615,000, six-month contract, plus up to $62,000 in travel reimbursements, for an East Coast security firm to handle lie detector testing of police recruits. The no-bid contract went to U.S. Investigation Services of Vienna, Virginia, at a rate of about $395 per polygraph. The local rate is about $200, the newspaper reported, and the firm, found through a brochure, has no polygraph examiners of its own, so is hiring local experts. This is a “sweetheart deal,” said Edward Gelb, past president of the American Polygraph Association and head of a local company that does testing for six local police agencies. The newspaper reported that as the contract with the Virginia company was signed, the city was receiving a tentative proposal from the Los Angeles County Sheriff’s Department to test about 100 LAPD recruits a month for about $206 each, including quality control work, which was described as a break-even deal. (2001)

THE SHERIFF’S NEW PLANE. The Los Angeles County Sheriff’s Department’s purchase of a new airplane (for $2.4 million) has been criticized by county supervisors, who say they learned of the deal after the fact, the Los Angeles Times reported (September 30). Supervisor Zev Yaroslavsky said Sheriff Lee Baca should prioritize his budget because the purchase comes at a time when the department claims it lacked funds to provide adequate medical care for jail inmates. The 10-seat turboprop plane replaces an old Cessna used by investigators to travel to remote state prisons and bring witnesses and suspects to Los Angeles. Costing $383 an hour to operate, the plane also is used by the sheriff and other department officials to travel to the state capital. The sheriff says the plane saves the department time and money. “I think the taxpayers should consider this a good decision …” he said. County supervisors, however, noted that the department was already $25 million over budget and the sheriff had recently asked them for an additional $5.5 million to provide better jail health care. (2001)

PARK CONSTRUCTION CRUNCH. In the five years since Los Angeles voters approved a park bond, the city’s Department of Recreation and Parks has bungled dozens of major construction projects, reports the Los Angeles Daily News (September 30). The problems are in projects worth more than $50 million and they range from inadequate staffing to thick red tape, causing projects to run an average of nearly a year behind schedule, the newspaper reported.  The department has been overwhelmed with projects since voters passed Proposition K in 1996, providing $25 million a year for 30 years. Plus voters approved Proposition 12 last year, a statewide bond expected to bring Los Angeles projects totaling $44 million beginning next July. Over the next four years, the department expects some 555 construction and landscaping park projects, compared to 136 from 1995 to 2000. “There’s no doubt that we’re in a crunch here,” said Maureen Tamuri, the department’s sixth general manager in the last five years of the Planning and Construction Division. (2001)

GOLF RETREAT. Led by City Manager Bob Thomas, some 35 leaders of various Sacramento agencies spent three days at Greenhorn Creek Resort for a $15,000 retreat, reported the Sacramento Bee’s R.E. Graswich (September 28). The resort features a golf course and an idyllic place near Angels Camp where the city management folk can relax, and Mayor Heather Fargo said she would have some questions to ask of the group that usually meets monthly in Sacramento. “I will question the cost and the need for three days,” she said.  (2001)

HISTORIC BUILDING. Sacramento taxpayers have been taken to the cleaners, according to Sacramento Bee columnist Diana Griego Erwin (September 30). She says the investment of tax dollars to restore a Victorian mansion could be worth every penny ($5.7 million), but the problem is it could have been done for a fourth of that amount. Most of the money didn’t go toward saving the structure. The city needs the building’s site for a new civic administration building, so the 300-ton structure will be moved one block. Developers bought it for $1.2 million, and sold it to the city for $2.2 million. It is to be used as a youth hostel. The developers, Ms. Erwin, wrote, may have paid some taxes and taken some write-offs, but now they are $2.2 million richer. She questioned why the city didn’t buy the building in the first place. Thus “preservationists are happy, the youth hostel has its home and developers are rid of their empty money pit,” wrote the columnist. “The only one skunked is the city (taxpayers).” (2001)

911 “FREQUENT FLIER.” Since 1996, Gregory Goins has dialed 911 more than 1,200 times, complaining of chest pains. Indeed, officials at Highland Hospital in Oakland see this overweight and until recently homeless man of 47 with a history of drug abuse as a high-risk cardiac case. However, according to the Los Angeles Times report on September 23, he will often throw away medicine. He’ll wait until he finishes a bummed cigarette before calling 911, because they won’t let him smoke in the ambulance. Estimated cost to taxpayers for all these emergency room visits, ambulance rides and hospital care: $900,000. About three years ago, according to the newspaper, a committee of health professionals and social workers met to see if they could figure out how to reduce Mr. Goins’ use of the emergency room. They even got a restraining order banning him from the hospital unless he was receiving medical care. The Times reported that Goins, who has been jailed for a few days for belligerency in the emergency room and for defecating on the floor of a café, lives in a group home for the developmentally disabled. Home director Vincent Bush has nagged him to take his blood-pressure pills, brush his teeth and put on his shoes. He also has lectured him about the problems he is causing at Highland Hospital, but Mr. Goins replies, “If you don’t like it, fix my heart.” He told The Times reporter that he didn’t see his Highland Hospital visits as bad. “Last year, they told me my bill was a quarter-million dollars. I said, ‘So what? I’m sick. Take care of me.’” Dr. Barry Simon, director of Highland’s emergency department, said no system has been created that can manage a case like this. “I think he is faking, manipulating quite a bit,” Dr. Simon said. “But the reason he’s so difficult is that we all feel we’re playing Russian roulette with him. He has malignant, accelerated, uncontrolled, near-death hypertension. Given that, in the face of chest pains, nobody in their right mind would ever send him home.” The Times reported that no national survey statistics exist, but San Francisco General Hospital found that 6 percent of ER patients at that hospital accounted for 25 percent of all ER visits. (2001)

THROUGH THE ROOF. Los Angeles Deputy Mayor Matt Middlebrook says luckily it doesn’t rain much in sunny Southern California, or there’d be even more embarrassment at City Hall. The Los Angeles Daily News reported (September 10) that the $300 million spent to renovate City Hall did not include fixing a leaky roof. The monstrous renovation project was to retrofit the 70-year-old building to make it safer if there is an earthquake, and to remodel the interior. Discovering that the roof was not fixed, city officials merely pulled $800,000 out of the maintenance budget to hire a contractor and get the work done. However, some City Council members are upset that they were not informed. “Anytime we spend money, I think we should learn about it,” said Dennis Zine, who sits on the council committee that oversees building maintenance. “If we spent $300 million to retrofit and renovate this City Hall, I would think the roof would be a part of it. This is the first I’ve heard of it.” (2001)

POSH EXPENSES CHARGED TO TAXPAYERS? Riverside County officials may be able to dine well and stay in posh hotels at taxpayer expense under a proposed travel policy, according to the Riverside Press Enterprise. The new rates for meals would allow a $15 breakfast, $20 lunch and $30 dinner, a 67 percent to 88 percent increase over current limits of $8, $12 and $18, respectively. As for lodging, the cap would be increased to $159 and $239 for high-cost environs. This should allow plenty of upscale living. According to the Press-Enterprise, citizens eating at a local restaurant were not impressed. “Why don’t we just put them on a cruise ship and bump them up to first class?” asked Judy Todero of Riverside. (2001)

ENDANGERED RATS. To save an endangered kangaroo rat whose habitat is in San Bernardino and Riverside counties will cost between $14 million and $74 million, according to the U.S. Fish and Wildlife Service. Taxpayers will share the costs with developers. According to The Associated Press, environmental groups have been working to protect the rat and sued the federal government. Costs include studies, land purchases and other associated expenses. (2001)

EXPENSE ABUSES. The San Bernardino Sun, based on 750 pages of sworn statements by a former top county administrator, reported rampant abuse of travel and expense reports by county officials from 1986 to 1998. The newspaper on September 4 reported the alleged misconduct from James Hlawek, who said he had agreed to serve as his former boss’s alibi dinner guest if anyone questioned false claims on Harry Mays’ expense reports. Mr. Hlawek himself over-billed the county, submitting three receipts twice, the newspaper reported, but he said he wasn’t certain he had filed any false expense claims before June 1995. That’s when he agreed to participate in bribery schemes that brought him about $200,000. He told a lawyer he couldn’t be certain “because travel vouchers, among the group of Harry’s executive staff, were a joke. Everybody kind of traded in travel vouchers.” Mr. Hlawek said the Arrowhead Credit Union board was “Mays’ personal travel agency. Harry was instrumental in deciding who got onto the board. The board would … give you an account, 10, 12 thousand, that you would spend on travel every year, and can take your spouse wherever you go.” The county retirement board was a travel bonanza, according to Mr. Hlawek, who said former county Treasurer-Tax Collector Thomas O’Donnell traveled three times a month when he (Hlawek) was county CAO. The retirement board tightened up its travel policies last February, requiring all requests to be approved by the full board of trustees. Mr. Hlawek also claimed that Mr. O’Donnell had a Fontana travel agent who would draw up inflated invoices.  (2001)

FEDS SAY S.F. HOUSING AGENCY MISSPENDS. According to the San Francisco Chronicle, a federal audit has found that the San Francisco Housing Authority has misspent public funds. The audit found that the authority spent $121,000 maintaining an invalid waiting list and $800,000 on questionable or prohibited expenses. Mike Roetzer, spokesman for the authority, said the agency disagrees with some of the criticisms, and is in the process of contacting the U.S. Department of Housing and Urban Development, which conducted the audit, for clarification. (2001)

TREASURE ISLAND. “What a boondoggle.” That was reaction from a city bean counter in the July 26 Matier and Ross column of the San Francisco Chronicle on the demise of Police Academy II, the plan to move the academy to the old Navy base on Treasure Island. The plan was to sell the current academy site to developers (prime Diamond Heights land), and use the profit to build a new police station in Chinatown. Then relocate the academy to the old Navy station, spending about $1 million on renovations, and then paying only $1 a year thereafter for use of the island. However, the rent zoomed from $1 to $1.4 million a year because the federal government requires market value in rent of the old base. However, as Matier and Ross reported, police went ahead and owe the Treasure Island Authority $1.2 million in back rent for a facility used for only 40 days last year. There also is $247,000 owed for work on the Treasure Island academy that has since been halted. (2001)

CITY PAYS HARASSMENT CLAIM. The city of Oakland will pay $50,000 to settle the sexual harassment claim against Jacques Barzaghi, who is Mayor Jerry Brown’s closest adviser and long-time confidant dating back to his years as governor of California, The Associated Press reported June 22. Michael Meadows, lawyer for Nereyda Lopez de Bowden, said his client agreed to the settlement because she does not want to go through a difficult trial. As part of the settlement, she will resign her city job and plans to move to Arizona. The City Council is expected to approve the settlement, probably at its July 10 meeting, The AP reported. The mayor suspended Mr. Barzaghi from his job for three weeks.  (2001)

CLOVERDALE TAX SNAFU. Another bureaucrat is out of a job as a result of  Cloverdale’s tax problems.  The Press-Democrat of Santa Rosa reported June 12 that Assistant City Manager Carol Giovanatto, a 26-year city employee, resigned May 2 and will receive a year’s pay of $72,000, but gives up the right to sue the city for any actions taken against her. She had been on administrative leave after the Internal Revenue Service slapped the city with $114,000 in penalties for missing payroll tax deadlines and failing to file returns on time since 1995. Following the disclosure of the fines, City Manager Bob Perrault resigned last November. Ms. Giovanatto, who had said in the past that she was unfairly disciplined, issued a statement: “I am extremely proud of my career with the city of Cloverdale and leave this position with the full knowledge that I contributed 110 percent dedication and hard work for the organization.” She said she helped erase a $1.2 million budget deficit. The city said the disciplinary action was appropriate. Meanwhile, an additional $79,000 fine against the city was dropped by the IRS last March after the city provided evidence it had submitted employee tax forms. (2001)

BOW-WOW! The San Diego City Council in February approved $124,000 for an “off-leash dog park” consultant, reports the San Diego County Taxpayers Association. The consultant is to gather public input on a dog park project, a park in Pacific Beach designed with significant canine components, Scott Barnett, association executive director, wrote in his June 8 E-newsletter. The entire park is to cost $1.7 million, including $385,000 for city administrative costs. “What a bowser!” declared Mr. Barnett, who added that having separately fenced areas for dogs – furry quadrupeds that don’t pay taxes, chase cars, jump, defecate and attack old ladies and “my kids” – is a good idea. He thinks dog owners should foot the bill through fees and licenses. “I for one am dog tired trying to track this issue, which should come to the City Council by the dog days of summer …” (2001)

S.F. MISSING BALLOTS. San Francisco’s acting elections chief, Phillip Paris, says about 3,600 ballots from last November’s election are “unaccounted for,” according to a San Francisco Chronicle report May 18. Mr. Paris further alleges that the elections director, Patty Fado, who is away on maternity leave, and her top deputy, Christiane Hayashi, were aware of the problem and failed to take appropriate action. Mr. Paris also alleges that the two officials signed time sheets for employees who did not do the work, costing the city more than $1 million. It was unclear whether the ballots in question could change any of the supervisorial races, the newspaper reported. City Administrator Bill Lee: “These are very serious allegations that could affect the highest levels of government.” (2001)

BIG BUCKS FOR HOME SOUNDPROOFING. The city of San Jose is planning to soundproof 800 low-income homes near the San Jose airport at a cost of $50 million. This works out to about $62,000 per home. Will the county assessor reassess the homes and add the value of this new construction? (2001)

ATHERTON. The tiny town of Atherton, near Palo Alto on the San Francisco Peninsula, is the third richest in the nation, according to Worth magazine. The average home sells for $2.3 million. Since Proposition 13 cut property taxes in 1978, residents have approved parcel taxes to provide services. There is no business in the town. However, voters in March refused to renew a $750-a-home tax that provides 25 percent of the city’s annual $6.2 million budget. The Los Angeles Times quoted Sandy Crittenden III, a “typical conservative Republican” and commercial real estate investor. He said he voted against continuing the tax because he hates seeing waste in government. For example, the police chief recently resigned after being charged with voter fraud, according to The Times, and the city manager departed amid complaints that he paid too much attention to his tennis game. There also was what the newspaper called a “botched” sale of a police dog that resulted in a $22,000 settlement. In addition, city credit cards and cellular phones were provided to even the “lowliest municipal workers.” Interim City Manager Ralph Freedman has outlined a plan to cut city operations and to raise revenue by increasing building fees and creating new taxes or fees. For example, the city may charge a fee for homes with security systems wired into the police department. “We’re going to have to nickel-and-dime people to survive,” said Mayor Nan Chapman.  (2000)

OLD RECORDS. Marin County government, despite the computer age, is keeping 95 percent of its records on paper. In 1996, the county spent $286,000 for an off-site storage facility in Lucas Valley. The 10,080-square-foot building is full, packed to the rafters, the Marin Independent Journal reported in June. County departments are renting commercial storage space, costing taxpayers $45,000 a year. Further, almost a third of the staff at the Civic Center has to drive to an off-site storage facility daily to access documents. The newspaper reports a committee was organized several years ago to begin solving the problem. It has put together a list of documents and how long the county is required by law to retain them. It is trying to dispose of non-permanent records. (2000)

RETIRED JUDGES. The Orange County Register reported on May 7 that more than 100 retired judges are returning to courtrooms and earning full pay on top of their pensions, with no accountability to voters. Judges receive pensions of up to $85,000 a year, plus full daily salaries and pay for the cost of driving cars to court. Supreme Court Chief Justice Ronald George approves the 60-day assignments for the retired judges. Several of them earn more than Justice George, and one jurist, Russell Schooling in Los Angeles, was paid more than $216,000 last year, including his pension. That’s more than U.S. Chief Justice William Rehnquist’s $181,400 annual pay. Senate Judiciary Committee Chair Adam Schiff told the newspaper that the Legislature has neglected the need to create new judgeships for several years.” The chief justice has responded to that in the only way he can, bringing people out of retirement until the Legislature acts,” the senator said. The retired judges do not have to stand for election, as sitting judges must every six years. (2000)

POOR ACCOUNTING REVIEWS. The Sacramento County Grand Jury in June criticized the county’s Environmental Management Department. The jury’s report says the county had to refund or credit local businesses and utilities at least $240,000 in fees for environmental reviews because there is no evidence the work was done. According to the Sacramento Bee, Department Director Mel Knight said, and “If I don’t have any records showing whether the work was done, I have to give these people their money back.” He said he was embarrassed and has since assigned to employees to the job of keeping records. (2000)

$1 MILLION TO FIRED MANAGER. The Redondo Beach City Council approved a $1 million settlement to former City Manager Bill Kirchhoff, who was fired in 1997 for allegedly spying on a police union’s private meeting. As reported in the March 31 Los Angeles Times, city officials say the case was settled at the insistence of the city’s insurance company, which covers half of the settlement. The rest comes from taxpayers. Council Member Gerard Bisignano said the lawsuit lacked merit but the settlement was a business decision. Mr. Kirchhoff, in his lawsuits against the city, said the council fired him in exchange for valuable election endorsements from the police union. He said union leaders wanted him out of the way so he couldn’t expose irregularities in police overtime. Mr. Kirchhoff denied that he directed employees to secretly monitor a police union meeting to get information on unwarranted overtime. Mr. Kirchhoff was hired as city manager in 1991 and was credited with improving city finances, but council members said he became difficult to work with. (2000)

COST-CUTTERS CAUSE HIGHER COSTS? Los Angeles’ Chief Legislative Analyst Ron Deaton says a committee appointed by Mayor Richard Riordan to cut costs has caused some of the delay – and higher costs – for renovation of City Hall. Mr. Deaton made the statement at a March 29 City Council meeting, the Los Angeles Times reported. However, Jessica Copen, a mayoral spokesperson, said the council, not the mayor, is responsible for the $26 million increase in the project, now expected to cost $299 million. Mr. Deaton said $12 million of the $26 million increase resulted from higher-than-expected bids on a construction contract. The higher bids were a result of a yearlong delay – and construction inflation – while the mayor’s cost-cutting task force looked for ways to reduce costs. (2000)

S.F. Overtime.  The San Francisco Chronicle reports that new data from the city controller’s office shows that 523 police officers, firefighters, bus drivers, sheriff’s deputies and water department workers will make more than $100,000 a year at the current rate of overtime pay. This, reported Phillip Matier and Andrew Ross on August 25, is occurring despite a civil grand jury report and years of hand-wringing by department heads. An example: a Muni street supervisor assigned to keep trains running at PacBell Park and write up accident reports is projected to earn $162,930, including $93,000 in overtime. Why is this happening? Matier and Ross blame “poor management, understaffing, and an unwritten understanding that for years has allowed workers heading for the door to beef up their final paychecks in order to fatten their retirement packages.” (2000)

What price democracy? That was the lead to the October 18 San Francisco Chronicle article on how the postcards to request absentee ballots are one-eighth of an inch too tall to qualify for the 33-cent postage rate. Thus the city has asked the postal service to go ahead and deliver the absentee ballot requests, with the city promising to pay the additional 11 cents.  That isn’t all. The newspaper reported that the ballots are on three pieces of oversized heavy paper, requiring 99 cents postage, not 33 cents. Since many voters may not realize the problem, the city has included a notice with all ballots it sends out. However, some at City Hall are concerned that some absentee votes will be missing in action. “This is really stupid. It’s ridiculous,” said Supervisor Michael Yaki. “Absentee voting should be convenient for people. Why is it every time we turn around we throw new obstacles in people’s way?” San Francisco’s new Eagle voting system requires a heavier paper for ballots. Elections officials anticipated problems last summer and reached an agreement with postal officials to deliver all marked ballots, even if they do not have 99 cents of postage on them. Still, it is recommended that voters affix the proper amount of postage. Is this all? There’s more. The newspaper reported that sample ballots, ranging up to 306 pages, have taken longer to deliver and there were some complaints from voters who had yet to receive their copies with the election less than three weeks away. (2000)

SAN JOSE HOTEL. Taxpayers’ cost to move and spruce up the historic Montgomery Hotel in San Jose has ballooned by $6.1 million. The San Jose Mercury News reported on October 17 that Redevelopment Agency Executive Director Susan Shick received preliminary City Council approval for the additional money. That’s in addition to the $12.7 million already spent or set aside for last January’s move of the building 186 feet down South First Street, and its seismic upgrading.  Ms. Shick informed the council last June 15 that no additional tax dollars would be needed for the project. Ms. Shick said the additional money was requested by developer Divco West Properties and partners to make it “financially feasible.” The plan is to convert the building into an 83-room luxury hotel with a ground-floor restaurant. (2000)

S.F. ASSESSOR SNAFU. The San Francisco Assessor’s Office has sent out about 1,000 duplicate tax bills, according to a report in the San Francisco Chronicle (Matier & Ross, October 9). The muckraking columnists say the latest snafu came on the heels of their report that thousands of deeds were still waiting to be processed, and “from the looks of things, it’s going to be quite a while before the job gets done.” To correct the mistake of sending duplicate tax bills, notices were sent to 1,300 homeowners telling them to disregard the bills they had just received. But that’s 300 more than should have been sent, so another “disregard” letter had to be sent to those who shouldn’t have gotten an initial “disregard” notice. Tax Collector Susan Leal has the chore of responding to irate calls caused by the mess created by Assessor Doris Ward’s office across the hall. There’s more, write Matier & Ross. Some tax bills went to previous owners, causing another round of irate calls. A frustrated Ms. Leal said, “It’s to the point where we’re going to have to call a press conference … just to try and explain it all.” (2000)

FOOTBALL Ticket GUARANTEEs. Taxpayers have been sacked for millions of dollars in losses in San Diego where a 1996 agreement between the National Football League Chargers and the city requires the city to buy enough tickets to assure a sold-out stadium for each home game. For the 2000 season, the city spent $7.97 million on unsold tickets, which was $1.72 million more than the Chargers paid in rent to use Qualcomm Stadium, the San Diego Union-Tribune reported. City leaders have tried to renegotiate this deal, even approaching the NFL commissioner with their plight, but to no avail. Meanwhile, the Oakland Raiders and officials of the city of Oakland and Alameda County have been at odds over an alleged sell-out agreement. The Raiders claim they were misled with promises of sellouts, enticing them to move back from Los Angeles in 1995 (but they didn’t get a ticket guarantee deal in writing). The Raiders sought more than $1 billion in damages in a suit tried in Sacramento County Superior Court, where Judge Joe Gray ruled that the team must honor the rest of a 16-year lease. According to coverage in the San Francisco Chronicle and Sacramento Bee, Oakland offered to settle the lawsuit if the team would agree to play in Oakland through 2025. The team rejected the offer as a publicity stunt.  The first three years of the court battle had already cost Oakland-Alameda County taxpayers $6 million in legal fees, the Chronicle reported. (2000)

Judges’ Perks. According to a Los Angeles Times report August 20, Los Angeles County judges are receiving duplicate benefits and perks from state and local taxes, getting nearly $30,000 a year above their $118,000 base salaries. Some call it “double dipping.” For example, judges on the superior court get $22,400 in cash from the county for health and insurance benefits that are already fully provided by the state. They also get $5,520 a year in “professional development” funds for legal journals, educational books and conferences. The Times also reports that judges also get two retirement programs, one from the state and one from the county. The compensation of an L.A. judge is so high that they would be taking a pay cut if they accept promotions to the next level. Chief Justice Ronald George said the disparity between the more than 400 judges in Los Angeles County and those in the rest of the state doesn’t make sense. He called it “double dipping for benefits,” but stopped short of urging the state Legislature to intervene.  Presiding Judge Victor Chavez defended the current level of pay and benefits, and said it ought to be even more to attract the best lawyers to become judges. “Even with the benefits, we’re not at the level needed,” Judge Chavez said. Assuming all 400 judges collected the $22,400 in cash for benefits they already had, taxpayers were victimized to the tune of  $8.96 million. (2000)

RIVERSIDE COUNTY LACKING COST CONTROLS.  A just-released study by Riverside County found that the county did not have adequate oversight on design of a new justice center.  Costs ballooned from $50 million to $97.4 million, the Riverside Press-Enterprise reported last week. (2000)

L.A. PARK DEPARTMENT COVER UP?  According to the Los Angeles Daily News, Los Angeles County Park Department officials overspent allocated funds by $3 million and “intentionally manipulated” records to hide the mistake.  Auditors uncovered a pattern of “mismanagement, including wasteful purchases, overpayments, missing or stolen inventory, and contracting and bidding violations,” the paper reported in August. (2000)

PETALUMA GIVES EMPLOYEES RETIREMENT BONANZA. The Petaluma City Council has approved a retirement package for city police and fire department employees that could cost taxpayers millions over the next decade, the Santa Rosa Press-Democrat has reported. The package includes a change in the computation of benefits, allowing employees who retire at 50 to get 3 percent of their annual salary for each year worked, rather than 2 percent. Few other cities in the state offer this benefit, officials said. (2000)

DEAD GET PENSIONS. Dead city pensioners in the city of Los Angeles were paid approximately $900,000 cumulative in 1998 and 1999, an audit by City Controller Rick Tuttle has reported. Because of direct deposit, payments to the deceased have become more of a problem Mr. Tuttle said. Before direct deposit, survivors were less likely to sign and cash a check because of the paper trail left. (2000)

LAPD. Los Angeles city and county will spend at least $17.6 million in the next fiscal year investigating police corruption and improving the department, according to an April 27 Associated Press report. It says the figure could rise, and it does not include the $30 million that Mayor Richard Riordan wants to set aside for potential liability from civil suits or the $2.7 million already spent this year on the investigation, The AP reported. The county is planning to spend $6.5 million in district attorney and public defender costs, which is about 12 percent of the $48 million the county expects in additional revenue in the fiscal year. “We have all kinds of programs that could use the money,” County CAO David Janssen told AP. “It’s a draw on the money that we obviously would prefer we didn’t have.” As of this writing, 67 convictions have been overturned and about 30 officers have been fired or suspended for falsifying reports, lying under oath or planting evidence.(2000)

L.A. NEEDS BETTER MANAGEMENT. Los Angeles City Controller Rick Tuttle says the city is mishandling taxpayer dollars to the tune of more than $100 million a year. As reported by the Los Angeles Daily News, Mr. Tuttle on June 1 said the city has allowed permit and license fee payment checks to sit uncashed for months. He said the city neglected to collect hundreds of thousands in tax credits from the county and state. He said his office’s recommendations for improvements have been ignored over the years. “The buck passing has got to stop,” he said while urging the city to create a finance director position to oversee revenue collections. Mr. Tuttle said the city collected $2.26 billion in 1990 from various taxes and fees, but in 2001 collected only $2.79 billion, which amounts to $2.18 billion in 1990 dollars. Counting inflation, that’s a decline over 10 years, “despite a booming, vibrant economy and many more city fees at higher rates. Something is wrong here.” He was critical of the city’s enforcement of its business tax collections, noting that some 60,000 businesses do not pay the tax. If they did, the city would be about $60 million richer. (2000)

PARK POOP. Mayor Willie Brown wants the city to hire two park patrol officers to enforce San Francisco's ordinances against dog owners who allow their pets to run without a leash and poop in parks. The mayor calls for spending $12,000 for two dozen doggie bag dispensers and as many dog warning signs. While one dog-walker told the San Francisco Chronicle that poop-free parks could help The City be more civilized, others questioned the need. "Some big-shot friend of the mayor must have stepped in dog poop," said Andrew Dickinson. "That's the only way you can explain it. What do we need dog poop police for?" (2000)

THERAPIST FOR POLICE.  A winner of one of the San Diego County Taxpayers Association (SDCTA) Golden Fleece awards is the city of Oceanside for paying $3,600 to a therapist to help police officers deal with the stress of moving from an old building to a new one. Overtime also was paid to many officers and staff who were required to attend, the total cost of which has not been released, according to the SDCTA. The association, which awarded annual Golden Fleeces on May 18, also noted that library staff had to move into the same building but did not require stress counseling. (2000)

PENSIONS. The Los Angeles County retirement board has granted work-connected disability pensions to 53 percent of 1,034 retiring public safety employees in the past three years, the Los Angeles Daily News reported on May 9. That contrasts with 20 percent of retiring Los Angeles city police and firefighters receiving disability pensions. A disability pension provides a higher percentage of salary, with half of it tax-free. Surviving spouses also get 100 percent of a disability pension, not 60 percent under routine pensions. Supervisor Zev Yaroslavsky called the statistics “startling. For half of the retired sheriff’s deputies and firefighters in this county to be on physical disability pensions just doesn’t meet the smell test. It defies common sense.” The newspaper said county officials did not know how much the disability pensions cost taxpayers. The report was ordered by county supervisors last year in the wake of the $232,908-a-year disability pension – the highest in the nation – that is being paid to the widow of Sheriff Sherman Block, who died in 1998. (2000)

L.A. POLICE. The corruption scandal in the Los Angeles Police Department may cost taxpayers as much as $125 million to settle lawsuits, according to a report in The Los Angeles Times. The newspaper reported February 3 that City Council members, hearing the news in closed session from Chief Bernard C. Parks and city lawyers, reacted with gasps and sighs. The report was attributed to sources who requested anonymity. Meanwhile, the Daily News reported last week that $125 million is a conservative estimate, with at least 15 people arrested, detained or allegedly abused by Ramparts Division officers already filing civil suits against the city that seek millions of dollars in damages. The number of victims is widely expected to reach 200, possibly even 300, the Daily News reported, escalating the cost of the scandal and threatening many city services for years to come. (2000)

Y2K PARTY DEFICIT. Instead of making a profit, the city of San Rafael (Marin County) lost $1.2 million when only 6,100 people showed up for a high-profile New Year’s Eve bash. To break even, the $2.6 million event, featuring Bonnie Raitt, Huey Lewis and Jerry Lee Lewis, plus a $22,000 balloon drop, needed to sell 11,000 tickets. The loss represents 2.5 percent of the city’s 1999-2000 budget, and, officials said the loss would be covered by redevelopment funds and a general fund surplus. The legality of using downtown redevelopment funds to cover any part of the loss was questioned by Marin County Auditor-Controller Richard Arrow. “The Y2K party, although a city-sponsored endeavor, is not a redevelopment project,” Mr. Arrow said in Marin Independent Journal coverage of the story. The paper quoted a San Rafael resident, Roy Gordon, as saying that it was “very stupid” to charge between $225 and $300 for tickets. (2000)

DISABILITY PENSION ABUSE. An editorial in the San Jose Mercury News skewered the disability pension system that it said provides “easy supplementary income for anybody with the slightest problem who wants to try a new career. Add gambling to the list of excuses.” The newspaper cited the decision of the San Jose Police and Fire Retirement Board to grant disability retirement to ex-cop Johnny Venzon Jr., who, at the time of the November 9 editorial, was awaiting trial on charges that he stole from people while on duty as a cop. His non-service-related disability: a gambling addiction. He was offered help for this problem by the department, but refused. He is accused of trying to make up for his off-duty gambling losses by rifling dead bodies for jewelry. (1999)

LATE PHONE FEES. Los Angeles city officials are fuming in the wake of auditors’ discovery that the city had to pay $517,000 in late fees on telephone bills last year, more than double the usual amount in recent years. City Controller Rick Tuttle says the Information Technology Agency also has failed to develop a system to prevent improper use of city telephones. An example of misuse: A phone was left behind while City Hall was renovated two years ago. It was used for $900 in collect phone calls from England and other faraway places.  An audit found dozens of “mystery” phones that were never authorized. Furthermore, the city has been paying $7,000 a month for directory assistance. According to newspaper reports, Mayor Richard Riordan said the late fees were “appalling.” Council Member Michael Feuer said, “Incurring any late fees at all is a scandalous waste of taxpayer money.”  (1999)

BOND ELECTION IN JEOPARDY? Supporters of the $744 million bond measure on tomorrow’s ballot in Los Angeles are concerned that mistakes in the city clerk’s office will hurt their chances of winning. City Clerk Michael Carey has accepted blame for the errors that left the list of proposed police and fire protection projects out of voter pamphlets mailed to 1.3 million registered voters last month. According to a report in the Daily News, Mayor Richard Riordan was furious. Backers of the measure feel the list is important if the bonds are to gain the necessary two-thirds voter approval. The list was being reprinted and was to be in a special, $340,000 mailing. (1999)

L.A.’S CONSULTANTS. A report by the Daily News says Los Angeles has spent more than $73 million on outside consultants over the past four years. The newspaper, based in the San Fernando Valley, says the spending is significant because City Hall has resisted paying for a legally mandated study of San Fernando Valley cityhood, claiming money is unavailable without taking away from city programs. The report says the city, without oversight or a way to gauge effectiveness, spends $20 million a year on average on an array of studies that include whether to build a bigger airport and how to tax hot dog vendors. The city has spent about $4.5 million in general fund dollars for about 24 studies, in addition to a recently completed $4.2 million review of City Charter reform. Most of the 80-plus studies in various stages at the end of 1998 will be paid by taxpayers via taxes, fees, utility charges and other assessments, the newspaper reported. (1999)

OLD PARKING VEHICLES.  About 65 percent of the San Francisco Department of Parking and Traffic Cushman vehicles are “over the hill,” yet the department keeps spending to fix them, according to what the San Francisco Chronicle’s Matier and Ross call a blistering audit from Harvey Rose, the city’s budget analyst. This policy has led to unbelievable costs such as sinking $6,898 into a Cushman with a book value of only $124. Further, the audit says about $9.7 million is spent covering missed shifts because 25 percent of meter officers are not available for their shifts on any given day. Also, on any given day, at least 34 employees are out on disability. Still further, there is evidence of the filing of multiple claims, or filing claims at the same time every year for the same injury. This, say Matier and Ross, leads auditors to suspect fraud. (1999)

PAID NOT TO WORK. Assistant Santa Clara County Sheriff Ruben Dias has been paid his regular $2,013-a-week salary for the past three months – even though he has not done a day’s work, according to a report in the San Jose Mercury News. Sheriff Laurie Smith, who defeated Mr. Dias in a bitterly contested election, doesn’t want him around. She put her former opponent on administrative leave, with pay, and would like to eliminate assistant sheriff positions. Mr. Dias, meanwhile, claimed he was too ill to work for Santa Clara County, and would like to retire early with a heart condition, the newspaper reported. Meanwhile, he has applied for the police chief job in Salinas. The Salinas job was given to someone else, but Santa Clara County officials, after learning Mr. Dias had applied for the job, rejected his disability claim. The newspaper reported that some county officials believe the $2,013-a-week pay is a small price to pay to keep the peace in the sheriff’s department. (1999)

LEGAL FEES. “This is unbelievable,” says Los Angeles City Council President John Ferraro, referring to the council’s decision to pay $180,000 in legal fees to attorneys who represented Anthony Robert Mee. The city had lost a $1,200 lawsuit to Mr. Mee over a false arrest after he was stopped for reckless driving in 1990 and a knife was found in a fanny pack.  “Twelve-hundred dollars to the client and $180,000 to the attorneys. It makes you wonder,” said Mr. Ferraro, according to a report in the Daily News. (1999)

COSTLY LIBRARY ELECTION. The San Diego County Taxpayers Association’s annual “Golden Fleece” award – symbolic of the biggest waste of taxpayer money last year in the San Diego region – went to the failed proposition to raise taxes for library construction. Association Director Scott Barnett said library backers cost taxpayers $1.7 million by putting Proposition L on a special ballot this year instead of a regular election ballot in 1998. With that money, Mr. Barnett said, a new library probably could have been built. The taxpayer group supported L, but, according to Mr. Barnett, questioned the timing of the election. City Council Member Judy McCarty, a champion of L, said library backers decided to go for a special election instead of competing with other measures, such as a ballpark proposal and funds for school repairs, on last year’s June and November ballots. “We’ve got to take our lumps,” she said at the April 15 Golden Fleece Award Dinner. “We lost the election and that’s the price you pay.”  (1999)

WALL OF INEFFICIENCY.  The Los Angeles City Council’s Governmental Efficiency Committee, working to improve city contracting procedures, has been stalled 18 months by what the L.A. Daily News called a “wall of bureaucratic inefficiency.” The newspaper, in a June 3 article, quoted Council Member Laura Chick: “I sometimes think it’s an oxymoron that we have a government efficiency committee in the city. If you heard me discussing the time lines – how long it’s taken for me to get a report that’s not even completed into that committee – that’s not government efficiency. That’s beyond frustration.”  Council Member Joel Wachs, chair of the committee, said the city needs penalties to ensure compliance with contracts. “We have an elevator that doesn’t work. You have parking meters, 10 percent of which don’t work. People get away with things because there’s no accountability.” (1999)

S.F. FAT WAGES.  Banner headlines last week in San Francisco’s two major newspapers portrayed “The City” as one of unbridled budget largesse and runaway “fat-cat” wages for city employees. The Examiner, in part of a three-part series (June 20-22) entitled “Fat City,” reported how the city’s spending has increased by 43 percent since fiscal 1994-95 ($2.6 billion), and, with proposed spending next year, that increase would be 57 percent to total almost $4.2 billion. Further, Mayor Willie Brown wants to hire 1,400 more people in the year ahead after adding 2,700 positions since 1994-95.  The Examiner followed up by reporting on the number of “special assistants” – patronage appointees – on the city payroll. There were 119 before Willie Brown became mayor. Now there are about 400 who are paid up to $141,000 a year. They include two former Assembly members who were Republicans at the time (1995) they helped Mr. Brown, a Democrat, hang onto the speakership of the Assembly after Republicans had won a majority of seats. Meanwhile, the Chronicle reported on June 22 that 585 San Francisco employees took home $100,000 or more last year because of high salaries and a “nonstop flow of overtime” pay. For example, 20 plumbing supervisors with the Water Department received from $101,605 to $114,483; 81 police officers under the rank of captain were in the “$100k club,” and five Muni drivers hit six-figure incomes. A $59,961-a-year transit supervisor for the Muni Metro made $173,068. That’s $27,213 more than the mayor made in 1998 and $16,318 more than Governor Gray Davis will earn this year, reported the Chronicle. (1999)

PHONE SEX CALLS.  Los Angeles taxpayers have been paying thousands of dollars for telephone calls made by city employees to phone-sex numbers and to foreign countries, according to the Los Angeles Daily News.  In a report released on July 29, City Controller Rick Tuttle said a review of city long-distance telephone bills for October 1998 and January 1999 “identified numerous calls costing thousands of dollars that were placed from city telephones to both telephone ‘sex lines’ and to what appear to be private residences in other countries.” (1999)

GOVERNMENT LOBBYING GOVERNMENT. Local government agencies, including cities and counties, spent $44 million lobbying state government during the last legislative session. That two-year total more than doubles the $18 million spent seven years ago when the Secretary of State’s Office started compiling the information. Local governments outspent the health industry by $11 million to reign as the top-spending lobbying category. The Orange County Register quoted Greg Turner of Cal-Tax: “It’s government competing with itself for money. If government is fighting with itself all the time, it’s just going to get bigger. It’s feeding on itself.” Jon Coupal, president of the Howard Jarvis Taxpayers Association, said, “It’s taxpayers’ dollars being used against taxpayers.” Publicly funded lobbying doesn’t bother Jim Knox of California Common Cause, who told The Register: “I wish there were more lobbyists there representing the public’s interest, and fewer representing the wealthy private sector interest.” Dwight Stenbakken, chief lobbyist for the League of California Cities, said he constantly lobbies for the good of taxpayers, citing the league’s opposition to deep cuts in the car tax. (1999)

EXPENSIVE FLY. Government leaders from San Bernardino County and five area cities are reported by the San Bernardino County Sun to be “flabbergasted” at the potential price of protecting the Delhi Sands flower loving fly: $220 million! The insect was listed in 1993 as a federally endangered species. “It’s a ridiculous overburdening of our taxpayers,” said Fontana Mayor David Eshleman after an August 24 meeting with officials of the U.S. Fish and Wildlife Service. The service’s plan is to set aside up to 2,200 acres for habitat conservation. Cities of Rialto, Fontana, Colton, Ontario, Rancho Cucamonga and the county of San Bernardino have proposed a 280-acre site in Colton for recovery of the fly. (1999)

LOCALS RIDE REVENUE WAVE. What are counties doing with all the extra tax dollars flowing into their treasuries? In Los Angeles County, the Board of Supervisors last Tuesday (September 14) approved a $51,878 raise for the district attorney. Gil Garcetti will make $185,378. The Los Angeles Times reported that the raise is the biggest increase ever for an elected official in the county. “What an iceberg did to the Titanic this is going to do to the salary structure in the county,” said Supervisor Mike Antonovich, who suggested that $160,000 would be more appropriate.  Elsewhere, the San Bernardino County Sun reported county supervisors found an extra $9.4 million in the county budget. They decided to give it to libraries and to fix up government buildings. In Calaveras County, supervisors added more than $650,000 in spending from unanticipated revenues since adopting a preliminary budget earlier this summer. The Sacramento Bee described supervisors as “almost gleeful” because they were able to restore deep cuts made in areas such as parks, probation and primary health care for the poor.  “It sure is easier when you have money,” said Sacramento County Supervisor Muriel Johnson.  (1999)

DOLLARS FOR NOISE. The Daily News reports that Los Angeles and a city employees union are negotiating an agreement that would force the city to pay as much as $2 million in back wages to hundreds of workers because of workplace noise. Citing labor sources, the newspaper reported September 27 that the bonuses are due since 1992 for about 300 street-repair workers. The deal, it was reported, could prompt other employees in other city departments, ranging from the airport to tree trimmers, to file claims for noise bonuses. (1999)

WASTED WASTE WATER.  Ninety percent of the waste water going into San Diego’s $201 million North City Water Reclamation Plant has been going through an expensive treatment process only to be discharged into the sea. The San Diego Union-Tribune reported October 10, after examining plant records for its first two years of operation, that only 3 percent of the water has been reclaimed and sold. An additional 7 percent of the water is used at the plant itself for landscaping, cleaning filters and testing machinery. Critics say the 16 billion gallons discharged into the ocean since the plant opened two years ago represent money poured down a drain. Sierra Club attorney Bob Simmons said, “I can’t think of anything to rival it in terms of the magnitude of water waste and waste of ratepayer money. It’s scandalous, frankly.” However, Peter MacLaggan, executive director of the WaterReuse Association, said demand for the reclaimed water, which cannot be used for drinking, will grow.  “San Diego is in the early stages of developing what is going to be a long-term investment,” Mr. MacLaggan said. “The use will grow as the needs of the city grow.” So far the city has sold $1 billion worth of reclaimed water. Sixty-five customers are on line and another 88 are in the hook-up process, which takes months. Water Department Director Larry Gardner says the plant will exceed its goal of reusing 25 percent of the water by 2003. The City Council has killed the idea of purifying the waste water to the standard that would allow using it for drinking. The Sierra Club’s Simmons wants the city to enforce an existing ordinance that requires irrigation with reclaimed water when it is available. The biggest customer is the city itself, using reclaimed water for golf courses and some parks. A city water salesperson, Hossein Juybari, says the problem of making reclaimed water easier to sell has one sure-fire solution: Drought.  (1999)

L.A. PAYROLL SYSTEM.  Can Los Angeles’ new automated payroll system be salvaged or must it be scrapped, after an investment of $17 million so far? The City Council on September 14 decided to hire an outside management consultant to help make the decision. City Controller Rick Tuttle has told the council the system to pay the city’s 32,000 workers is millions of dollars over budget, a year behind schedule and probably won’t be good enough when it is finished. Council Member Laura Chick, chair of the Governmental Efficiency Committee, says the system must be evaluated to learn whether money is being wasted or if the system needs only minor changes. (1999)

LIBRARY TROUBLES.  San Francisco’s $137.5-million library, only three years old, already has problems that could cost millions of dollars to fix, according to a draft of a $240,000 study commissioned by the city. The San Francisco Chronicle reported on August 27 that the building has run out of shelf space for more books. Also, the open-space design confuses many visitors who have difficulty understanding that to go upstairs they first have to go downstairs. The report by a team of architects, engineers and librarians says that while the library has proved a popular site, with 5,700 visitors a day, many “are baffled as to how to proceed once they enter the building.”  The report concludes: “Our findings are that the library, while designed to be a grand public space, does not function as effectively as it should or as effectively as peer institutions do in several major aspects.” It says “critical library functions are poorly arranged and do not function well.” Library Commission President Ernest Llorente said the report is not shocking but is saddening, and solutions will cost millions of dollars. (1999)

OVER-ANALYZED? Since 1987, the city of Berkeley has spent $300,000 analyzing 24 sites for a new courthouse. All were ultimately rejected. It was to be a $52 million structure, but over time the pricetag increased to $85 million, and, on May 25, the Alameda County commission considering the facility decided it was too expensive to build. The San Francisco Chronicle reported on June 10, quoting Ronald Overholt, county superior court executive officer: “Ten or 12 years ago, when we first started looking at this, it was probably entirely doable. But at today’s dollars ... it priced itself out of the market.” (1999)

HARASSMENT AWARD.  A federal jury has awarded $410,000 to an Imperial County health worker who claimed she was religiously harassed by her superior in the county’s Mental Health Department. The San Diego Union-Tribune reported March 31 that Silvia Herrera received religious letters at work from Elifonso Nava, who was the county’s assistant mental health director. She said in the suit that he also said her office was inhabited by the devil. The suit sought $600,000. The jury awarded her $235,000 from the county and $175,000 from Mr. Nava. The suit said the county was aware of the harassment and did nothing to prevent it. (1999)

MISSED WORKDAYS.  Missed workdays by county employees are costing Santa Barbara County taxpayers $10 million a year, according to the Santa Barbara News Press.  Collectively, county bureaucrats are absent 444,000 hours a year.  While most of the hours are attributable to sick leave and approved leaves of absence, the county absentee rate is greater than average absentee rates for government employees.  In Santa Barbara County, the average employee uses 11.4 of 12 allotted sick leave days.  According to County Administrator Michael Brown, “There is nothing wrong with getting sick.  What hurts the county is a person who uses sick days as vacation days.” (Editor’s note: Wonder what this problem would amount to in statewide waste of taxpayer dollars. Or is this a situation unique to Santa Barbara County?) (1999)

WELFARE FRAUD. The Los Angeles County Grand Jury reports that welfare fraud may be costing taxpayers as much as $500 million a year. According to a July 1 report in the Los Angeles Times, the jury’s 58-page audit concluded that “the potential for fraud ... in the Los Angeles County Department of Public Social Services is enormous.”  Sixteen deficiencies were found, including overpaying recipients and a department failure to control fraud that shows “the inertia of a bureaucratic monolith.” It takes more than a year to assign an investigator to a high-priority fraud case. Only 5 percent of cases are investigated in Los Angeles County, compared to 14 percent in Orange County. The state average is 7.9 percent. The report noted that the county’s internal investigative staff of one supervisor and four investigators for 10,000 employees was fewer than smaller counties such as San Diego. The jury recommended that the county hire a manager to oversee its recommendations and that the manager must not be from within the county workforce. This manager should report directly to the Board of Supervisors, the jury suggested. (1999)

PENSION BONANZA IN S.F.  Most cities don’t allow overtime pay to be a factor in figuring base pay for pension purposes, but San Francisco, for those hired before 1976, still does. And is it ever a bonanza, reported the San Francisco Chronicle on June 23. A Muni transit dispatcher recently retired with a $92,400-a-year pension, which was based on the $196,038 he received in the final year on the job before retiring in March. More than $100,000 of that sum was overtime. Without it, he would have a pension of $28,121 a year. In addition, the newspaper reported, the former dispatcher will receive annual 3 percent cost-of-living increases over the next couple of years. Even with restrictions that prevent employees hired since 1976 from spiking their pension bases with overtime pay, there were 2,782 city employees still eligible, and it will be another decade before the last of them retires. Meanwhile, reported Phillip Matier and Andrew Ross, overtime for older workers at Muni just keeps rolling on and on and on. How can a Muni driver actually drive enough hours to make over $100,000 a year?  They drive seven days a week, or they are “yard starters” for three hours before their regular shifts. (1999)

WHOOPS.  Due to a multimillion-dollar mistake, San Bernardino County officials must spend between $140,000 and $290,000 to revise the public property pledged to secure a bond loan, according to the San Bernardino Sun.  In 1996, the county pledged the Chino Airport as collateral for a $115 million bond issue for a landfill consolidation plan.  The Federal Aviation Administration has advised the county that federal regulations forbid using airports as collateral.  As a result, the county may substitute parks, land around the county jail, etc.  The added costs to the county result from the necessity to get appraisals of the new properties to be used as collateral. (1999)

OVERBILLING. Ventura County has agreed to pay the federal government $15.3 million for nine years of Medicare payments that were billed for unnecessary and unsubstantiated medical treatments, according to The Ventura News Star.  The amount is one of the largest in the country levied against a mental-health provider.  In order to make the payments, which represent one of the largest financial setbacks for the county, county officials said cuts in programs are inevitable. (1999)

HIGHER TRAVEL COSTS.  Travel costs for Orange County employees increased 83 percent in two years (from $715,000 in 1997 to $1.3 million this year), according to the Los Angeles Times.  Overtime pay for employees nearly doubled during the same time period, from $17.3 million in 1995 to $31.5 million this year.  County officials said sometimes it is cheaper to pay overtime than hire new workers, which doesn’t explain the difference in the two years.  Regarding travel, officials said additional trips to Sacramento were wise investments.  If wise in 1999, why not wise in 1997? (1999)

Education

LAUSD OVERSIGHT. The state’s Little Hoover Commission has criticized the Los Angeles Unified School District for consistently withholding information from a citizens oversight committee (Los Angeles Daily News, October 27). The committee, established to monitor the district’s use of $2.4 billion in Proposition BB bonds approved by voters who were promised strong oversight and accountability, had to submit a Public Records Act demand in 2000 for information on a district agreement with bond investors. The information was provided in October 2001. “The oversight committee should never be required to submit a Public Records Act request to receive information and district officials should be ashamed if that ever occurs,” the commission said in a letter to the district. (2001)

WRONG REWARDS. State education officials said about $750,000 in test improvement rewards were sent to the wrong schools as a result of the publisher’s scoring error on the Stanford 9 achievement test, the Los Angeles Times reported (September 28).  The money went to six public schools, their teachers, principals and others who are ineligible based on tests administered in 2000. California Teachers Association President Wayne Johnson, whose union continues to oppose the governor’s program to reward individual schools and teachers, said, “The whole thing is a nightmare as far as we’re concerned.” Paul Warren, the state’s deputy superintendent for accountability, told The Times that the situation has been “a heartache for all of us. We know that teachers have cashed these checks; we know schools are using this money. It would be difficult to ask for it back. We’re trying to find a solution that creates as little upset as possible.” (2001)

WRONG REWARDS, PART 2. State law requires districts to negotiate the amounts of big bonuses for teachers whose classes show major improvement in test scores. However, United Teachers-Los Angeles, which dislikes the bonus program, refused to negotiate the amounts. As a result, reported the Los Angeles Times (October 30), the formula defaulted to that which essentially doles out the money based on seniority. This means a new teacher – whose class performed well enough for a $5,000 reward – gets $3,300 instead. Principal Ronald Jones of Mountain View Elementary in Tujunga said he called an emergency meeting of his teachers to break the news to teachers who were expecting $10,000 checks from the state. “There are going to be some unhappy people on my campus. I’m going to encourage people not to be upset with their colleagues because they are receiving more money.” The union has a policy against bargaining on any pay related to test scores, saying it leads to dissension. It appears this policy also leads to dissension.  “… you don’t deserve it at the expense of somebody else’s sweat,” said Scott Haddad, a Mid-City elementary school teacher who is getting $3,300 instead of $5,000. (2001)

GRAND JURY PROBES COLLEGE TRAVEL. The Alameda County Grand Jury has launched an investigation into travel expenses of top officials of Peralta Community College in Oakland, reports the Oakland Tribune. Chancellor Ronald Temple and district trustees have been criticized for flying business class and staying in five-star hotels in trips to China, South Africa and other countries since Mr. Temple was hired. The district has spent more than $167,000 on international travel since 1999. (2001)

L.A. UNIFIED LEASES ADMIN BUILDING. The Los Angeles Unified School District has leased a 29-story downtown office building for five years for the district’s administrative headquarters, even though the building has earned the lemon award twice from a downtown business group. According to the Los Angeles Daily News, the school board has postponed until Monday (October 1) a vote on a $180 million financing plan to purchase the building. With reports of sagging floors and poor ventilation, the building has been controversial for years. Superintendent Roy Romer defended the structural integrity and the safety of the structure. However, David Tokofsky, a board member opposed to the purchase, said it is a ramshackle building that the board should avoid purchasing. On a tour, he said, “Oh, look. You get to see the Belmont Learning Center from here.”  The cost to repair the structure is expected to exceed the purchase price. Mr. Tokofsky said, “No taxpayer would buy a house or building where the repairs are 120 percent of the cost of buying it.” The building is at 333 S. Beaudry Avenue. (2001)

EMERY SCHOOLS GET BAILOUT. The Emery School Board on August 6 agreed to accept a $2.3 million handout from the state (appropriated in AB 96, Aroner, that was signed by the governor in late July). According to the Oakland Tribune, Emery is only the fourth district in California history to be taken over by the state, which provides an administrator to run the district. Incidentally, the bill included a provision designed to prevent a superintendent who mismanages one district from doing the same to another. In Emery’s case, J.L. Handy pleaded innocent to two counts of theft of public funds and one count of violating state conflict-of-interest laws. Mr. Handy has been involved in two of the four California districts involved in state takeover and bailouts. He was superintendent of the Compton district until he was fired in 1992. And, while the state was bailing out Compton with $20 million, Mr. Handy was hired by the tiny Emery district in Emeryville (Alameda County). Assembly Member Dion Aroner noted that Walter Marks, the superintendent forced out of Richmond Unified in late 1990 after the district went $30 million into debt, was then hired by Kansas City schools, only to be fired in 1995 for disability fraud. By revoking the offending superintendent’s credential, the bill would make it extremely difficult for the individual to gain another superintendent position. Richmond Unified is now West Contra Costa. The fourth California district to fit into this category was Coachella Valley Unified. The Tribune reported that three of Emery’s five school board members face a recall election August 28 and the other two resigned “rather than face a public flogging.”   (2001)

FRAUDULENT CLAIMS. John Sterns, executive director of Humboldt State University’s advancement activities from July 1998 to March 2001, has been charged by a California State University audit with claiming $60,000 to $70,000 in fraudulent travel, entertainment and business expenses. The Eureka Times-Standard reported that the auditor found claims for meals with people Sterns had never met and charges from non-local retailers when Sterns had not been traveling. He also claimed to have raised $15 million in funds that are non-existent, according to the report. The university has not had recent contact with Mr. Sterns, who is believed to have left the area. (2001)

DISTRICT TRUSTEES WANT MORE BONDS. Trustees of the Orchard School District in San Jose, which has only 780 students, want to put a $20 million bond on the ballot in September, less than a year after gaining voter approval of a $16 million bond extension. The San Jose Mercury News reported June 21 that the issue came up without agenda notice, but the trustees acted anyway because of a tight time frame to get a measure on the September ballot. The district, at its June 19 meeting, also voted to change the district’s credit card program to one offered by the state that has certain restrictions. The Mercury News reported that the school board has been criticized for buying a $79,856 BMW for the district superintendent and allowing travel to conferences in England and Cuba. Trustees also promoted the superintendent’s special assistant who had been dinged for using a district credit card to buy a $468 Cartier fountain pen for the superintendent. The board has suggested that a nice pen be acquired for the signing of official documents. (2001)

RESTRICTING AUDITS. The Contra Costa Times reported (June 26) that the Legislature’s budget conference committee restored $3 million to investigate suspected padding of attendance figures by school districts. The action occurred after Governor Gray Davis pushed for the audits. Sandy Harrison of the Department of Finance said the audits are needed “to make sure that the money going to the schools is going to the schools fairly.” However, budget language sought by school districts limits auditors to records for the past three years, with prior approval from the Legislature’s budget committee, and bans the state controller from collecting back payments unless it can prove a district purposely falsified records or intended to defraud the state. The newspaper reported that West Contra Costa is one of three Northern California districts audited in 1999 after a sudden increase in daily student attendance. The state suspects some districts have exaggerated attendance figures to claim more state money. West Contra Costa could be forced to repay $8.5 million if an audit of the1996-97 school year survives the district’s appeal. The budget control language could strengthen the district’s appeal. West Contra Costa trustee Glen Price told the newspaper that the new burden of proof in the budget language should help the district in its appeal. “… I don’t think anyone ever made allegations there was intent to purposefully defraud the state,” he said. It remained to be seen whether the governor would veto the control language, but the newspaper quoted Mr. Harrison as saying the restrictions might “hinder the effectiveness of the audits” with “procedures too restrictive to get good reliable information out of the audits.” (2001)

HANDY FACES CRIMINAL