June 2002

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The Accountability Files 

Editor’s Note: This roundup of reports, mostly from newspapers’ coverage or government audits, raises questions about the spending of more than $2.5 billion of taxpayer dollars. These are more recent examples since the fall of 2001 of misused and abused tax dollars by state and local governments, including schools. Where costs to taxpayers can be estimated, amounts attributed to state government total $456 million; local government, $593 million; transportation, $1.367 billion, and school districts, $134 million. In many examples there are no costs reported, but it can be assumed that as a result taxpayers are at risk for additional millions in the aggregate that would be added to the $2.5 billion. The Accountability Files published in the Cal-Tax Digest of November 2001 listed cases dating back three years that amounted to more than $6 billion in spending. Check them out at Cal-Tax Online (www.caltax.org).

State Government ($456 million)

“ORACLE AUDIT” RIPS STATE CONTRACTING PRACTICES. A scathing report released April 16 by the Bureau of State Audits said three state departments erred in the execution of an enterprise licensing agreement (ELA) with Oracle Corporation worth almost $95 million. The report, verifying many of the facts reported last year in the San Jose Mercury News, suggests that the attorney general may want to investigate.

The report concludes that the contract was executed despite evidence suggesting the need for the Oracle database license was limited, and that cost-saving projections presented by Logicon, Inc., a Virginia-based consulting firm that helped the state negotiate the deal, were not validated. Rather than saving $111 million, as Logicon purported, the state could spend from $6 million to $41 million more than if there was no contract. “Furthermore, it appears Logicon stands to make more than $28 million from the ELA, a fact the state may not have been apprised of,” the report said, raising a conflict-of-interest issue.

The report is critical of the departments of General Services (which used an inexperienced negotiating team and limited involvement of legal counsel), Information Technology (which was formed to prevent re-runs of scandalous computer upgrade programs), and Finance, which signed off on the deal. “… Many contract terms and conditions necessary to protect the state are vague or missing altogether,” the report said, also raising the possibility that the ELA could be unenforceable as a valid state contract because it should have been subject to competitive bidding requirements.

State Auditor Elaine Howle told the Mercury News that this audit was one of the three or four gravest reviews she has seen in her 18 years with the Bureau of State Audits. “The magnitude of the dollars and the mistakes make this extremely serious,” she said.

The San Francisco Chronicle reported that the audit, requested by the Legislature, questions why the state would want to purchase software and support services for 270,000 state employees when a survey showed little interest in the products and the state has only about 230,000 employees, and tens of thousands of them don’t even use computers.

State Senator Debra Bowen called on the attorney general to investigate and for the Department of Information Technology (DOIT) to be disbanded. DOIT was “set up to try to steer the state clear of contracting disasters,” she said, “but instead it’s got its hand on the stirring spoon of one of the biggest cauldrons of all.” Closing down DOIT is an idea seconded by Assembly Member Elaine Alquist (her husband, former Senator Alfred Alquist, carried legislation creating the department). She told The Chronicle: “The department is not doing a good job, is costing the taxpayers millions of dollars, does not have a useful function, and needs to be eliminated.”

According to newspaper reports, the state agencies involved declined comment beyond formal responses contained in the audit in which they said the state got a good deal from Oracle. Elias Cortez, the state’s chief information officer and leader of DOIT, said DOIT concurs with the audit’s findings and recommendations, which “will be very helpful in improving the management of current and future software volume purchases.”

Meanwhile, at a Joint Legislative Audit Committee hearing on April 18, leaders of the three agencies involved said they assumed the data had been verified by another’s agency. It also was reported that Senator Richard Polanco pitched the Oracle deal to administration officials, and that his son was employed by the software manufacturer. Also, a spokesperson for Attorney General Bill Lockyer said on April 18 that the Justice Department will try to determine whether there was any criminal wrongdoing in the contract negotiations.

As the Legislature continued hearings into the Oracle issue, the governor responded by accepting the resignation of Barry Keene, the director of the Department of General Services.  Mr. Cortez was suspended without pay. Another administration official, Arun Baheti, director of e-government, resigned after it was reported that he served as a conduit for a $25,000 Oracle contribution to the governor’s campaign.

Oracle officials say the contract is still a good deal for the state and have provided an analysis by a former state auditor, Kurt Sjoberg, that is at odds with the findings of his successor.

DOIT ISN’T DOING IT. The California Department of Information Technology (DOIT) appears to be doomed as the overseer of the state’s multibillion-dollar technology systems, reported the San Jose Mercury News (April 23). Assembly Member Manny Diaz of San Jose had been a defender of DOIT and even introduced a bill to keep it alive. However, Mr. Diaz decided to drop the bill and join others who have criticized DOIT for its role in a software contract worth more than $95 million to Oracle without verifying the need. The $11 million department has 69 state jobs, and they will disappear in two months unless the Legislature, by two-thirds vote, keeps it going. “Before the Oracle audit, I was willing to support a partial extension of DOIT,” Mr. Diaz said. “However, its blatant lack of oversight in the Oracle contract proved to me that DOIT cannot do its primary responsibility of protecting taxpayers’ money.”

HUGE STATE PAY DEAL ALARMS LAWMAKERS. As more details emerge, legislators are crying “foul” about the lucrative wage and benefits package that Governor Gray Davis gave prison guards. Senate Majority Leader Richard Polanco told the Los Angeles Times (May 16) that while the contract cannot be rescinded, the details should be studied and some changes might be possible as part of budget deliberations. According to The Times, details of the pact with the California Correctional Peace Officers Association, the union representing prison guards, were unavailable to legislators when they ratified the contract in January. For example, legislators were unaware that, in addition to a salary increase of about one-third by 2006, the guards will have the right to retire at age 50 and receive as much as 90 percent of their latest salary. Nearly 400 pages long, the contract’s retirement deal will cost $22.5 million a year in today’s dollars, according to state retirement officials. The newspaper, citing a confidential analysis by the union, reported that veteran correctional officers will be paid $73,428 a year, and possibly more, by 2006, a wage package that costs taxpayers roughly $700 million a year. Further, the contract gives the 27,000-member union more influence over working conditions and limits wardens’ ability to oversee use of sick leave and overtime, which The Times noted are two reasons for the Department of Corrections’ current $277 million budget overrun. Physical fitness is also an issue. Guards didn’t like having to take physical fitness tests to collect extra pay – they called it “jumping for bucks.” So the contract allows them to simply get a note from a doctor that they are fit, and they qualify for $65 a month in fitness pay, or twice that for veteran officers. In all, this is a perk that costs taxpayers $20 million a year. The Times quoted Marty Morgenstern, the governor’s director of the Department of Personnel Administration, as saying he stands by the contract he negotiated. “I will admit to trying to be empathetic, to trying to give them decent working conditions, in part because of the belief that felons will be treated more fairly.” The San Jose Mercury News also reported on the contract in its May 16 edition, quoting Senator Polanco as saying the contract does nothing to deal with the prison department’s own budget problems due to “ineffective budget practices.”  The Mercury News also noted that the governor, who has received $2.6 million from the CCPOA since 1998, including $251,000 last March, agreed to the union’s demand that he eliminate five of the state’s privately run, minimum-security prisons, staffed with non-union personnel, when their contracts expire in June.

GUARD BIVOUACS AT HOTELS. Despite a multibillion-dollar state budget deficit, the Davis administration apparently feels nothing is too good for the troops. The Contra Costa Times reported (March 30) that California National Guard members guarding Bay Area bridges were staying at local hotels, including the San Francisco Marriott, rather than local military barracks. The cost to taxpayers: $750,000. Governor Gray Davis activated the Guard after September 11 to provide added security. Major Kim Oliver, justifying the hotel lodgings, said, “There is absolutely no military housing in the area.” Sergeant Joseph Barker said, “Would you want to sleep on a cot for six months?” However, a spokesperson for the Presidio Trust told the Times that a 47-unit barracks there has been available since the troops were first deployed. Ron Sonneshine, a Presidio Trust spokesperson, said an offer had been made to lease the barracks for a nominal fee. “I’m sure it will be cheaper than the Marriott,” he said. Lawrence Korb, former assistant defense secretary, told the paper, “The National Guard should always try to go to a military facility it it’s anywhere reasonable.” A soldier, who asked not to be identified, said, “Being at the Marriott? Come on. I think we could find better ways to spend the money.”

KILL-A-WATT. California’s catchy TV spots urging people to conserve electricity by turning off light bulbs – or “Kill a Watt” – have been discontinued, reported Capitol Morning Report (March 1). Consumer Affairs Director Kathleen Hamilton said any message advocating killing probably is not a good idea. Also, the newsletter reported: “ … as we have learned, a gentleman surnamed Watt had been calling government offices to say he felt threatened because the commercial advocated his death. (There was no mention of how much it will cost taxpayers to ditch this spot and come up with a new one.)

FLYING HIGH WITH TAX DOLLARS. Following up on its “I-Team” report of a state employee commuting from San Diego to San Francisco at taxpayer expense, KOVR 13 in Sacramento had this report on March 2: Labor Commissioner Arthur Lujan has reimbursed the state more than $5,000. This, the station reported, was partly because he had failed to get prior permission for relocation expenses. He lives in Escondido, near San Diego, but his state office is in San Francisco. Another state employee, a whistle-blower complainer, told the station that the inappropriate expenses amounted to more than $16,000. However, Department of Industrial Relations spokesperson Dean Fryer said the expense claims were for legitimate state business travel. The Department of Personnel Administration also concluded that Mr. Lujan’s primary residence, by state rules, is 455 Golden Gate Avenue, in San Francisco. Does he really live there? Mr. Fryer: “He does not live in the building” but it is irrelevant because the state can use the San Francisco office address to validate travel claims. He said he could not explain DPA regulations and suggested that the reporter, Jon Baird, go to the DPA for answers. Does this mean that Mr. Lujan’s trips to his home in San Diego County are business trips and apparently OK since he “lives” in his office? This address issue is “bizarre,” said Bob Stern of the Center for Governmental Studies. It’s been a year since KOVR’s I-Team began checking Mr. Lujan’s expense records. Stay tuned.

LEGAL FEES MOUNT IN BATTLE OVER LEGAL FEES. It’s already costing the state (taxpayers) more than $500,000 for outside counsel hired by the governor to appeal an $88.5 million award to lawyers who helped get $300-plus-interest refunds of a tax that the courts ruled was illegal, Copley News Service reported June 3. The appeal is scheduled for a July 15 hearing. As CNS reported, the legal bills are piling up as the governor tries to extricate himself from an embarrassing quagmire of his own making. That’s because it was the governor who insisted on submitted the question of fees, which were going to be about $18 million at most, to an arbitration panel. The panel came up with the eye-popping $88.5 million, which was supposed to be kept confidential, for law firms that included the politically powerful Milberg Weiss Bershad Hynes & Lerach firm in San Diego. Bill Lerach has been a big-time supporter of Democrat politicians, including Mr. Davis. When the supposedly confidential arbitration award was leaked to the media, the governor joined in the criticism and took it to court. A trial court judge put the brakes on the $88.5 million. As of April 30, about one million motorists received refunds averaging $390 from the smog-impact fees they were charged for registering cars bought in other states, according to CNS.

BUDGET QUIZ.  The Legislative Analyst’s Office has issued the fifth annual Budget Analysis Quiz. The reporter who gets most of the questions right will get some Krispy Kreme donuts. Dan Carson, the author of the quiz, offers this guidance: “The more absurd the answer, the more likely it sometimes is to be correct.” For example: Which of the following items did the Department of General Services charge to other state departments for the management of their construction projects: (A) $20,000 per month for 18 months to travel to an office building in Marysville. (B) $6,200 to check a forest fire station, which does not have a school, for school seismic requirements. (C) $2,000 for environmental documents to replace lighting fixtures at a prison. (D) All of the above. (Of course, the answer is D – all of the above.)

POLITICAL CRONYISM. The San Francisco Chronicle on March 10 published a major investigative report of political cronyism in state government. The report focused on appointees to three somewhat obscure state commissions that provide generous salaries for what appears to be minimal work at the California Medical Assistance Commission, the Unemployment Insurance Appeals Board and the California Integrated Waste Management Board. The politically balanced article noted that appointments, mostly of ex-legislators, to these bodies were made by authorities from both major political parties (governors and legislative leaders). The article quoted critics as suggesting that one solution would be to reduce the level of pay, which ranges from $99,000 at the medical commission to $114,180, plus benefits, at the UI Appeals Board.

CONVICT’S $1 MILLION HEART TRANSPLANT. The state recently paid for a heart transplant for a two-time felon, the overall costs of which are estimated to reach $1 million. The operation was performed at the Stanford Medical Center. According to a January 25 article in the Sacramento Bee, Russ Heimerich, a spokesman for the Department of Corrections, said, “We don’t have a policy per se. We have a requirement to provide medically necessary care to inmates.” Critics charge that prisoners are given better medical care than the average Californian. Because of the scarcity of organs to transplant, thousands die each year while waiting for a new organ, the newspaper said. Million Dollar Convict Heart (Cont’d). Headline in the Los Angeles Times (January 28): “Doin’ Time With a New Ticker.” Columnist Steve Lopez noted the Sacramento Bee report that a two-time felon received a heart transplant. Mr. Lopez said he recalled advising his father, whose heart was ailing, to find good health insurance. Now, he wrote, he’d tell him to buy a Saturday night special and visit a couple convenience markets. Meanwhile, it was reported January 30 that the Davis Administration agreed to spend millions of dollars – $122 million a year when the program is fully phased in over seven years – to improve medical care in state prisons. The agreement settles a class-action lawsuit and, according to state officials, saves the state legal costs. The settlement was filed with a federal judge in San Francisco, whose approval is needed. According to The Times, Donald Specter of the Prison Law Office, the advocacy group that filed the lawsuit last April, said the heart transplant was an isolated example with no bearing on the lawsuit, which deals with day-to-day care for inmates. However, state officials have defended the heart transplant as necessary to avoid more litigation.  In yet another follow-up, Times columnist Lopez reported that the Stanford Medical Center’s first bill to the state came to $913,000. Mr. Lopez got the information from Steve Green, spokesperson for the Youth and Adult Correctional Agency, who expressed surprise that it was so high and indicated that the state will balk at paying the full amount while trying to negotiate with the medical center. The average cost of a heart transplant in the country is just over $200,000.

STATE PAYS TO MUZZLE FORMER EMPLOYEE. The California Earthquake Agency has agreed to pay its CEO David Knowles, who will resign January 16, $160,000 this year to keep his mouth shut. The Associated Press reported on December 24 that Mr. Knowles, a Republican former Assembly member, and State Treasurer Phil Angelides, a Democrat, fought over a report on whether the agency had funds to pay claims. The AP report, citing industry sources, said that Mr. Knowles was pressured to resign, but an agency statement issued after a December 17 board meeting depicted the resignation as voluntary. The details of the report were unavailable. All parties declined comment, as required by the $160,000 settlement. Mr. Knowles also waived potential legal claims.

STATE TRADE AGENCY MAY BE WASTEFUL. Lack of a strategic plan causes the state Bureau of Audits to conclude that the state’s Technology, Trade and Commerce Agency is disorganized. As a result, it could be missing opportunities and therefore wasting taxpayer dollars, State Auditor Elaine Howle reported December 10. She said the agency “lacks an effective way to demonstrate that it is wisely using the more than $200 million spent on its programs each year.” Agency Secretary Lon Hatamiya disagreed that such a plan is even needed, saying a one-size-fits-all planning approach wouldn’t work for an agency that must constantly adapt to changing circumstances. One problem, he said, has been unfilled positions in the agency. The Mexico office was understaffed and without a director for about a year, the report said. The audit notes that that agency abandoned efforts to develop a strategic plan after twice hiring consultants to do the work. The audit was requested by Assembly Member Sarah Reyes, chair of the Assembly Committee on Jobs, Economic Development and the Economy. She acted on complaints from business that the agency wasn’t working cooperatively.

AUDIT HITS VETERANS AFFAIRS DEPARTMENT. The Bureau of State Audits, in a report issued in December, found problems with the Department of Veterans Affairs cash management, to wit: Since the state Department of Health Services decertified the Barstow home in July 2000, this home lost $5.7 million in federal and state funds through June 2001. “The department lacks an understanding of the data in its system, in addition to adequate tools and resources, to allow it to effectively manage the fiscal operations of its veterans homes,” the report stated. The department responded that efforts were under way to regain certification of the Barstow home.

TAKING IT WITH HIM.  According to the Sacramento Bee (December 3) state workers everywhere are envious as word spread about the gold-plated retirement of Elwood “Woody” Allshouse. The deputy director of the California Department of Forestry and Fire Protection retired November 30 at the age of 52 and collected about $150,000, before taxes, for about 17 months worth of unused sick leave, personal holidays and vacation time. He says all this was built up over 33 years of service because he often worked 24 hours a day, seven days a week. Lynelle Jolley of the state Department of Personnel Administration said state employees with 30-some years of service usually earn 30 days annually of combined sick leave and vacation time. Governor Gray Davis appointed him deputy director in 1999. Mr. Allshouse was the subject of a Dan Walters column in the Sacramento Bee last September over the department’s lease of an expensive airplane that was unsuitable for fighting fires. Records showed that Mr. Allshouse was a frequent pilot of the aircraft.

STATE TARDY PAYING BILLS.  In the past year, according to a Sacramento Bee report November 12, state departments were penalized $1.6 million for making late payments to vendors. Caltrans had to pay $492,737 of the total, representing 0.01 percent of $4.6 billion paid. A department official said Caltrans employees in the field “get so wrapped up in the job they let the paperwork go,” and invoices don’t get to the central office within 30 days, as required by the state’s “prompt payment” law. Penalties in the past year represented a tiny fraction of the state’s budget, but the amount was 60 percent more than the year before.

BREAST-FEEDING MOM SUES STATE ASSEMBLY. According to an April 18 report by columnist Marjie Lundstrom in the Sacramento Bee, taxpayers could be on the hook for thousands, if not millions, of dollars because “some of our leaders just can’t seem to get it.” Pamela “P.J.” Harper, a 17-year employee who headed the Assembly’s travel office for 10 years, sued the Assembly and a state official over her demotion and eventual job loss. She said in her lawsuit that this happened because of her breast-feeding needs at work. Ms. Lundstrom wrote that the state isn’t talking, so all she knows is in court documents and what Ms. Harper’s attorney says. In its answer to the suit, the Assembly denied all allegations. The Assembly’s chief administrative officer, Jon Waldie, told the newspaper he could not comment due to litigation. After she was demoted, Ms. Harper quit her job. Wrote Ms. Lundstrom: “Maybe the state had its reasons for pushing Harper out, but appearing to hang it on breast-feeding is as dumb and insensitive as it gets – demonstrating complete, political tone-deafness to an issue of critical importance to women.” The column notes that state law permits employers to duck requirements to accommodate breast-feeding moms if it causes “serious disruption” in the workplace. The April 10, 2001 memo from Mr. Waldie noted that her time away from the job to breast feed and pump milk was “unfair to the members (of the Legislature), staff and your fellow employees.”

PRISONS OVERSPEND; DAVIS PLAN TO SHUT PRIVATE PRISONS HITS ROADBLOCK. Governor Gray Davis’ proposals to build a new prison and to close five privately operated prisons have been turned down by a Senate budget subcommittee. The panel’s April 24 action came as it took the Department of Corrections to task for overspending its budget by $277 million in the current fiscal year. As the Los Angeles Times reported, the plan to close privately run prisons housing 1,400 low-security inmates would end up costing the state $16 million annually, according to a study cited by the California Taxpayers’ Association. The department contends the state would save $2.8 million. However, Senator Joe Dunn, who joined fellow Democrat Richard Polanco in the action, indicated that he could change his mind about this issue, as well as the administration’s proposal for a new prison in Delano, which the subcommittee also trashed. Senator Dunn said he was alarmed by the size of the department’s deficit. “Certainly, we have not had some unexpected spike in inmate population. We have not had any unexpected spike in expenses … Why we now find ourselves in this deficit is shocking.” The Legislative Analyst’s Office said there are ongoing structural problems in the department that involve heavy use of overtime and sick leave. State audits have accused the department of mismanagement. The Times also reported that the department did not provide an analysis of the impact of a new labor agreement on personnel costs. Signed by the governor in January, legislative analysts say the agreement with the California Correctional Peace Officers Association will cost the state more than $500 million a year, possibly as much as $1 billion a year, by 2006, when in full effect. The Assembly’s budget subcommittee dealing with prison issues has already approved the governor’s plan. This is an early indication of an impending showdown when the Senate-Assembly budget conference committee settles differences between the two houses’ versions of the budget for the year starting July 1.

CALIFORNIA FOOD STAMP ADMINISTRATION IS THE WORST. California faces tens of millions of dollars in federal penalties due to incompetence in managing the food stamp program, according to a Los Angeles Times report (April 27). U.S. Department of Agricultural officials said this state is operating the most error-plagued program in the nation. According to federal data, in 17.4 percent of the cases last year, California allotted the wrong amount of food stamps – 124,520 households got more than entitled, while 68,486 got less than the correct amount. The federal government assessed a penalty of $115.8 million for its inept administrative performance. Eric Bost, the Agriculture Department’s undersecretary for nutrition programs, said that, after negotiation, the state will end up paying around 40 percent, or $46 million. According to The Times, the state passes on to counties their portions of the fines, consistent with their error rates. This means the bulk will be laid at Los Angeles County’s doorstep, where a computer snafu caused a large part of the problem. California issues food stamps, worth on the average nearly $1,000 a year, to more than 1.7 million residents.

PAINT PICKETS. While majority Democrats in the Legislature allowed them to disrupt legislative business, union pickets on May 7-8 protested the hiring of nonunion River City Painting Company painters to work on the Capitol building. As the Los Angeles Times reported, several hundred pickets were on hand May 7, and the project was shut down on May 8 when union employees of scaffolding and iron installers refused to cross the picket line. Legislative leaders joined the picket line, helping protest the $2.45 million painting contract to River City. However, The Times reported that the contractor submitted the lowest responsible bid of two received. The second bid was $3.7 million. The state spokesman also told The Times that River City employees were being paid the equivalent of union wages under the state’s prevailing wage law. Senator Tom McClintock, a Republican, was outraged that Senate Labor Committee Chair Richard Alarcon postponed a hearing when Democrat members and some 50 out-of-town witnesses refused to cross the picket line. “No private special interest should ever be permitted to disrupt the public’s business,” Senator McClintock said. Assembly Speaker Herb Wesson’s office announced that union officials agreed to stop picketing for a week while a settlement is pursued. Peter DeMarco, press secretary for Assembly Minority Leader Dave Cox, said: “Democrats are delaying the business of the Legislature and the people of California because their labor buddies don’t like the fact that the state is trying to save money. … Unionized workers didn’t get the job because their rigid work rules inflate the cost of a project even beyond the inflated costs of the prevailing wage requirements.” According to The Times, few people were deterred by the picket line from entering the building.

CHP FITNESS BONUS: TAXPAYER RIPOFF? California Highway Patrol officers receive $130-a-month fitness bonuses -- $1,560 per year – even though the department in 1995 discontinued annual physical fitness tests that used to qualify officers for the bonuses. The Sacramento Bee (February 11) reported that the bonuses are paid to active-duty officers as long as they have passed one such test anytime in their careers. The Bee quoted CHP spokesperson George Hartwell as saying the change resulted from too many workers’ compensation claims for injuries suffered by officers playing sports during off-duty hours, such as football, basketball and racquetball. They said the sports injuries were work-related because officers competed in athletics to stay in shape so they could pass annual fitness tests. When the CHP discontinued the tests, the officers’ union demanded that the monthly fitness bonuses be maintained.

LOTTERY DRAWING. As the Sacramento Bee reported on February 12, the California Lottery’s free $1 million drawing has fallen about half an inch short. The Lottery’s officials, trying to make up for past problems with Scratcher games, told the public to submit entries on 3-by-5-inch cards. However, those who sent them in, paying 24 cents postage, are getting them returned, stamped “undersized” in red ink. The Post Office says the cards are too small for automated equipment. They must be 3.5-by-5-inch cards. The purpose of the March 22 drawing is to “make things right” because tickets continued to be sold after all the top prizes had been awarded in 11 Scratcher games since 1996. People can put their 3x5 cards or pieces of paper in envelopes and mail them to the Lottery, but it would cost them 34 cents postage. People can send in as many entries as they want, as long as they don’t put more than one in the same envelope. Lottery spokesperson Vincent Montane said that perhaps some of the instructions “needed clarification.”

FEDS: CALIFORNIA MISMANAGING FOOD STAMP PROGRAM. Eric Bust, undersecretary of the U.S. Department of Agriculture for nutrition programs, told a Congressional committee last week that California officials are mismanaging the state’s food stamp program. He said 18 percent of the benefits paid were either too high or too low, which is twice the national average of 9 percent, according to a San Francisco Chronicle report (March 8). About $1.6 billion in benefits were paid in California for the fiscal year ending September 20, 2001. Glen Rosselli, undersecretary of California’s Health and Human Services Agency, said California will pay $10 million in fines over three years for its error rates last year. In 2000 this state had the nation’s highest food stamp error rates.

TAXPAYERS TO PAY STATE ENERGY CONSULTANTS’ ETHICS LAW FINES. The Davis administration has agreed to pay $69,500 in fines imposed for ethics law violations by failing to require energy consultants it hired to file statements of economic interests. The Sacramento Bee on March 8 reported that the Department of Water Resources admitted ethics laws were violated and agreed with the Fair Political Practices Commission to pay the fine. It could have been as high as $260,000. Legislative Republican Leaders Jim Brulte and Dave Cox threatened to block use of public funds to pay the fines. They said whoever was responsible for the violations – either the managers or consultants – should pay the fines, not the taxpayers. “To do otherwise holds no one accountable,” they said. The FPPC on March 14 approved the fine, an unprecedented action against a state agency. Secretary of State Bill Jones said it was “an outrage and an affront to the taxpayers.” The FPPC’s enforcement chief, Steven Russo, was quoted in The Bee as saying the fine was levied on the agency because it was “a violation caused by the agency itself and the procedures breaking down. It didn’t appear to be caused by any one person.”

PRISONS OVERTIME SPENDING. Excessive use of overtime pay and sick leave continues to cost taxpayers many millions of dollars, reports the Bureau of State Audits (November 2001). The report blames poor fiscal management and vacant correctional office positions for the additional expense. As a result, the department has sought between $20 million and $200 million a year in each of the last four years in additional funding from the state Legislature. Taxpayers would save $42 million a year in overtime costs if the department filled 1,500 vacant positions, the report said, and money also would be saved by curtailing sick leave. Corrections spokesperson Russ Heimerich told the Los Angeles Times (November 28) that it is hard to recruit correctional officers in areas of the state, such as Marin County, where living costs are high. “We don’t want to spend as much as we do on overtime,” he said, adding that gun towers must not be left unstaffed. Further, he said guarding convicts is stressful, which means more people get sick. The audit also noted that the department used a more expensive and less-effective program to help parolees find and keep jobs. It said it could have saved $716,360 last year and gotten jobs for another 534 parolees if it had stuck with its more effective program. The state audit bureau also hammered the department’s inefficiencies in an audit released in January 2000.

PHANTOM JOBS. A Bureau of State Audits report issued March 12 concludes that state payrolls continue to be inflated with salaries for non-existent employees. The audit of five large agencies in the 2000-01 fiscal year found 2,400 vacant jobs beyond normal attrition, with combined salaries of $116 million. Assembly Republican Leader Dave Cox issued a statement that the report “confirms what we’ve said all along: the shameful practice of continuing to fund phantom employee positions in state government is nothing more than an end run around the Legislature. As we face a budget deficit of more than $17 billion, we need to root out wasteful spending wherever it exists.” Senate GOP Leader Jim Brulte said the Davis administration was maintaining a “bureaucratic slush fund.” According to the audit, agencies move employees among positions to make them appear filled. When the Legislature cut the time a position could remain vacant before being abolished from nine months to six months, employee transfers increased 53 percent, the audit said. State Auditor Elaine Howle said the Department of Finance should explicitly prohibit agencies from shifting employees to preserve vacant slots. Auditors found the Department of Industrial Relations shifted one employee 10 times in 16 months to prevent the elimination of six empty positions. Finance Director Tim Gage issued a statement that 6,600 vacant positions have been eliminated and agencies’ salaries have been reduced by 5 percent to account for unfilled jobs. Most of the unspent salary money is used for overtime or temporary employees to do the work of unfilled positions.

NEW CHILD-CARE SUPPORT COLLECTION PROGRAM: A BUST SO FAR? The rate of collection of the state’s new child support collection program, created with great fanfare by the Legislature and Davis administration in 1999, is no greater than the system it replaced, according to a report in the San Francisco Chronicle (January 5). According to federal figures, the new program delivered $1.1 billion in child support in its first full year of operation, 40 percent of what was owed. That’s 1 percent less than collected under the old system in 1999, before the new state agency was created. Liberals in the Legislature were highly critical of the county collection program run by district attorneys and pushed through legislation creating a new state agency to take over collection responsibilities. Additional costs to taxpayers are not known.

TURNING POINT ACADEMY.  The Davis administration says it has to be geared up just in case judges start sending them students, but so far the governor’s Turning Point Academy in San Luis Obispo is something of a boondoggle, reports Sacramento Bee columnist Daniel Weintraub (November 25). The state has spent more than $10 million to create and run (with a staff of 34) the military academy for troubled youths. It opened in March 2001. As of November, it had eight students. That’s $500,000 per student, and, the columnist notes, even if the school had attracted the 80 youths that were envisioned this year, which is one-fourth of the original goal, the cost to taxpayers for each kid’s six-month stay would be $50,000. Mr. Weintraub: “The academy is just one of dozens of new initiatives scattered throughout the state budget, each spending perhaps $10 million or $20 million a year, which are hardly noticed in a general fund that totals nearly $80 billion. But taken together, these relatively small-ticket items add up to real money, and they are a large part of how state spending climbed by $20 billion in just three years.” The Turning Point Academy may be well intended, the columnist concludes, but “good intentions are not an excuse for wasting taxpayers’ dollars.”

CHAVEZ HOLIDAY EXPENSES. The Bakersfield Californian reported October 2 that the first paid holiday for state government employees honoring Cesar Chavez cost taxpayers at least $8 million more than was expected. In August 2000, when the legislation creating the holiday was approved, the pricetag was estimated at $34 million, or one day’s payroll for the state’s 215,000 employees. However, the state’s prison guards, highway patrol and state hospital employees were required to work on the holiday (March 31), which was a Saturday, and the agencies have asked the Legislature and governor for additional funds to cover overtime and extra holiday pay.

Local Government ($593 million)

SACRAMENTO’S CART BARN FIASCO. Sacramento Deputy City Manager Ken Nishimoto said on May 14 that the final cost of the city’s infamous golf cart barn at Haggin Oaks is $1.4 million. The barn was declared substandard last year because the city’s golf division, anxious to get it built in time for the grand opening of the refurbished course, had the warehouse-sized structure built without contracts or inspections, the Sacramento Bee reported (May 16). Actually, the cost to taxpayers may be even higher because of disputes between the city and two companies that did some of the work. The city has approved a $318,000 contract for additional work needed before golf carts can be parked and recharged in the structure.

USED SYRINGES IN PUBLIC RESTROOMS. Drug addicts and park clean-up crews are lauding a May 14 decision by the Santa Cruz City Council to put disposal boxes for used syringes in public restrooms, according to the Santa Cruz Sentinel (May 15). The cost to taxpayers: $900. Heather Edney of the Santa Cruz Needle Exchange (where addicts exchange 20,000 dirty needles a month for clean ones) said, “This means people understand it’s a public health issue… It’s not about morality.” John Robinson, speaking for the Seaside Company, owner of the Santa Cruz Boardwalk, said, “This sends a horrible message about Santa Cruz to visitors and tourists. Would it make you comfortable to send your kid to a public bathroom at the beach? This is about making the city comfortable for drug addicts, not about making a clean and healthy city.”

MORE DWP WOES. A whistle-blower lawsuit initiated by energy consultant Sam Barakat has been joined by four government agencies claiming the Los Angeles Department of Water and Power deliberately overcharged government agencies for electricity. The complaint alleges $200 million in inflated bills and seeks $600 million in damages, reported the Los Angeles Times (April 2). Mr. Barakat filed the suit in June 2000 under the California False Claims Act after seeing an internal DWP report while working as an energy consultant for a school district in the Los Angeles area, The Times said. The suit was made public on April 1 after the government agencies joined in the action. They are Los Angeles County, the Los Angeles Unified School District, the Metropolitan Transportation Authority and the Los Angeles County Community College District. These have not been the best of times for DWP, with news of the lawsuit coming on the heels of a critical audit of expenses. In response, DWP Chief Operating Officer Frank Salas said, “All our rates are fair and equitable … We are not overcharging anybody … It’s amazing how everyone seems to be picking on us.” State law prohibits publicly owned utilities from charging other governmental customers more than their share for capital costs, and Eric Havian, attorney representing some of the defendants, told The Times that the government agencies believe they have been charged up to 60 percent more than their legitimate share of capital costs. He said the way it works is if the school district uses 5 percent of a utility’s power, it cannot be charged more than 5 percent of the utility’s capital costs.

COSTLY ELECTION HANGOVER: UNUSED BALLOTS. The San Francisco Elections Department, which has had more than its share of negative news coverage lately, is involved in another saga of wasted tax dollars. The latest scandal, reported by Matier and Ross in the Chronicle (April 1) noted that the department spent $1.6 million for 3 million ballot cards for the March 5 primary election. There are 2.5 million leftover ballots. In all fairness, the newspaper reported that other counties had a similar problem because of the all-time low voter turnout, but not nearly as severe as San Francisco. Alameda County had 1.4 million leftovers. San Mateo County had 300,000 unused ballots. Who is to blame? The columnists say everyone from the state on down bears responsibility for the waste. State law requires enough ballots on hand for a 75 percent voter turnout, which is more than twice the March 5 turnout statewide. The Legislature also changed the law to allow voters to register up to 15 days before the election, while state law requires ballot orders be placed based on the voter rolls 88 days before Election Day.

S.F. CANS ANOTHER ELECTIONS CHIEF. For the fifth time in five years, San Francisco has axed its elections chief. According to the San Francisco Chronicle (April 23) Tammy Haygood was ousted on a 4-3 Elections Commission vote. Some commissioners blamed her for overspending the department’s budget by $5.6 million. She says her firing was politically motivated and that she has improved the department. Mayor Willie Brown charged that her firing was racially motivated. She is African-American and all commissioners are white.

JUDICIAL SLUSH FUND IS TERMINATED. According to the Los Angeles Daily News (April 1), Los Angeles County’s judges have used an obscure fund to spend thousands of dollars on golf tournaments, dinner cruises, horse races, baseball games and the theater. They have used funds from child custody training seminars and training programs for new attorneys to build an entertainment fund. A long-awaited audit of the fund, created in 1960 by the Los Angeles County Judges Association, reveals that some of the money could have been used for court operations, the newspaper reported. These apparent high-living days are over, because the association decided in December to freeze the $60,000 remaining in the fund, turn it over to the court and stop accepting contributions from lawyers and others. The 409 judges themselves will contribute $10 a month for group events. State Senator Sheila Kuehl, who had requested the audit, said the judges decided to stop what they were doing because they realized it was improper to take money someone was required to pay for training and put it in a “slush fund for yacht trips.” There probably was no breaking of the law, she said, because the judiciary is not subjected to the same financial disclosure requirements applied to most public officials. “With judges, it’s the appearance of impropriety that is important,” she said.

S.F. SEEKS FORGIVENESS. San Francisco Mayor Willie Brown has asked the federal government to forgive most of a $400,000 debt incurred because the mayor’s office awarded $51,000 in federal grant money to buy a mosque for Black Muslims. The 1999 grant went to a nonprofit organization led by convicted felon Charlie Walker, reported the San Francisco Chronicle (March 29), describing him as an avid supporter of the mayor. The U.S. Department of Housing and Urban Development ruled last year that the unusual deal violated rules against use of federal funds for religious purposes. It ordered the city to pay back the current market value of the Hunters Point property, which the city estimates to be as much as $400,000.

L.A. MAYOR AND COUNCIL MEMBERS GET RAISES. Members of the Los Angeles City Council will find their paychecks fattened by 5 percent to $139,784 by July 1, 2003, while pay for Mayor James Hahn will jump to $181,719, according to the Los Angeles Times. Voters in 1990 tied the pay of the council and mayor to local judges and it has more than doubled since then. Los Angeles already has the highest paid city council in the land. New York pays $90,000, Chicago $85,000 and Philadelphia $80,000. Jon Coupal, president of the Howard Jarvis Taxpayers Association, criticized the process, saying it is not based on performance and lacks accountability.

SAN DIEGO MAYOR AND COUNCIL INCREASE SALARIES. Faced with a potential budget gap of $15.6 million, the San Diego City Council nevertheless voted on April 9 to increase their salaries and that of Mayor Dick Murphy, the San Diego Union-Tribune reported. Mr. Murphy’s salary will increase from $86,982 to $100,464 in two steps by July 1, 2003. The salaries of the city council will grow from $65,269 to $75,386, also in two steps by July 1, 2003. The raises were recommended by a seven-member Salary Setting Commission. “You have to have a salary that is fair,” Council Member Ralph Inzunza, Jr. said.

SANTA CRUZ SIGN. The Santa Cruz Sentinel’s coverage continues on the controversy over the “Welcome To River Street” sign. When last reported, the city tried selling the much-maligned eyesore on e-Bay, but the bidding wasn’t exactly hot and heavy. No sale. On April 9, the City Council voted 5-2 to place an 18-month moratorium on council meeting discussion of the sign, which cost taxpayers $83,000 to erect. The sign’s largeness – 30 by 15 feet – and yellow-and-blue colors prompted complaints and votes to have it removed. However, some are now considering the sign an “underdog” that has suffered too much. Thomas Geerin considers the sign to be “a finely crafted artifact of postmodern minimalist design displaying a welcome message.” The council now considers talking about the sign a waste of time; others say it has been a topic of ridicule long enough. Mayor Christopher Krohn, who opposed the discussion moratorium, feels the sign violates the city’s billboard ordinance, but he’d rather talk about something else. “It was a nice distraction for awhile, but we’re moving on,” he said. At least until mid-2003.

HERMOSA BEACH PIER. Plagued by numerous design changes, Hermosa Beach’s municipal pier is still unfinished after $3.6 million and eight years, reports the Daily Breeze (April 14). City Council Member Michael Keegan said the city needs better management of large projects and more oversight by the Public Works Department.

OAKLAND PARKING METERS.  A report prepared for the Oakland City Council portrays a fiscal tale of woe as far as Oakland parking meters are concerned. According to the Oakland Tribune (November 26), the parking division projected revenues from the meters for this fiscal year of $7.29 million. The true amount is more likely to be $4.8 million. The budget for parking meter repair and enforcement was $6.1 million, meaning parking meter revenue will not cover expenses. Translation: If the city had no meters, taxpayers would save $4.8 million and the city would save $1.3 million.

GOVERNMENTAL “HOLIDAY INN.” The Los Angeles Daily News, in an April 25 editorial headlined “Holidays galore,” suggested “it’s time to rename L.A. City Hall the Holiday Inn.” The editorial criticized the addition of Cesar Chavez Day to the public employees’ list of paid holidays. Twelve of them now. It used to be 11.5, but the editorial noted that the unions gave up a half-day on Christmas Eve for a full day off at the end of March to honor the late farm labor leader. “Let’s get real. How many bureaucrats will actually be working after lunch on Christmas Eve?” the newspaper asked. “… realizing that there are only 365 days a year and that public employees should be required to work on at least some of them, it’s not necessary to commemorate every worthwhile historical figure with more paid time off,” the editorial said. It said America has honored Mr. Chavez in more appropriate ways by putting his name on 23 schools and 19 streets, including Cesar Chavez Boulevard in downtown L.A. Give the unions credit, the editorial concluded. The unions got a full day holiday in exchange for a half day, and the city got nothing in return. “They have clout and voice in City Hall. Too bad we can’t say the same for L.A. taxpayers.”

MONTEREY’S “MEATGATE.” Twenty-two pounds of beef used at a sheriff candidate’s fundraising luau came from meat that was stored at the Monterey County Jail, according to investigators quoted in an April 24 report in the Monterey County Herald. It has been dubbed “meatgate,” the newspaper said of the pilfered tri-tip that helped Lonnie Heffington raise campaign funds in January. Sheriff Gordon Sonn confirmed the finding and said that his investigator concluded that Mr. Heffington, a department commander, committed no wrongdoing because he did not know the meat’s history. However, the sheriff has asked the district attorney to look into actions by former jail kitchen manager John Garbin, a Heffington campaign volunteer. He resigned his county job in February after it was revealed that he had used the jail kitchen and a county cook to prepare food for the luau. The event cost the county about $200, including overtime for the jail cook and use of jail butter, broccoli, meat marinade, salt and pepper. The cook was following orders and will not be disciplined, Sheriff Sonn said. Mr. Heffington said he has no problem with his campaign reimbursing the county.

CROSS CASE COSTS TAXPAYERS. Meeting in closed session, San Diego County supervisors approved a $225,000 payment to the American Civil Liberties Union, settling the Mount Helix cross case. The San Diego Union-Tribune reported April 19 that ACLU attorneys had sought more, but decided to settle instead of taking a chance on a court ruling. The ACLU sued in 1990 on behalf of an East County man who contended that the cross on county-owned land violated the separation of church and state. The case was settled nine years later when the county gained federal court approval of a deal in which the land was deeded to a nonprofit foundation. The issue of attorney fees was left in dispute. The newspaper quoted ACLU spokesperson Dale Kelly Bankhead as saying the $225,000 is “reasonable compensation” for considerable resources devoted to the case over five years to secure ultimate compliance with the constitution.

NEW SOUTH GATE DEPUTY MANAGER. The city of South Gate (Los Angeles County) has hired a new $111,000-a-year deputy city manager. The Los Angles Times (May 8) reports the job went to the city’s treasurer, Albert Robles, who has been charged by authorities with making murderous threats against public officials and who has no municipal management experience. He has pleaded not guilty to the charges.

TOURISM BONUSES HIT. Los Angeles’ convention bureau paid $225,000 in bonuses to sales staff and executives for booking events to the city-owned convention center, although 20 of the events were later canceled, the Los Angeles Times reported (April 29). The story said local hotel owners were angrily questioning the bureau’s management practices. In the last three years, 42 conventions were canceled but bureau staff counted all but five of them toward their annual goals and bonuses.

KERN COUNTY JURY CRITICAL OF TOBACCO TAX USE. The Kern County Grand Jury reported that the county Children and Families Commission lacks financial oversight of the Proposition 10 tobacco tax monies it administers. The Bakersfield Californian (May 1) reported political favoritism in the continued reappointment of Supervisor Pete Parra as chair of the commission. Critics have “grumbled” that the commission is dominated by county employees and Mr. Parra, and the commission has too much money in the bank and requires too much paperwork. Assembly Member Dean Florez has called for a state audit of the group’s finances, but commission officials say the jury’s suggestions are based on misunderstandings and inaccurate information.

MENTALLY ILL DRUG COSTS ARE UP. Drug costs for the mentally ill in Alameda County will more than double this year, reports The Tri-Valley Herald (February 12). According to Doug Del Paggio, director of pharmacy services for the county Behavioral Health Care Services, newer drugs are more expensive and more of them are being prescribed. Sheriff Lieutenant Tom Moore said 11 percent of the county’s jail population is mentally ill. Carolyn Edmunds, chief of the criminal justice mental health program, told county supervisors, “Some jails refuse to give psychotropic drugs. Some counties are minimalists. The point is we spent a very large amount on psychotropics because it is the right and proper thing to do.”

TOILET PAPER CAPER. What do you do with 1.4 million rolls of toilet paper? If you’re San Diego County, you store it in a big room, and that’s expensive. County officials have decided that 14,800 cases of toilet paper can be better delivered from its vender as it is needed – or, rather, just before it’s needed, reported the North County Times (February 13).  “That’s a better deal for everyone,” said Weaver Simonsen, county purchasing manager. “We’ll be able to cut delivery time from as long as four weeks, when the county was storing paper products, to get there by the next day.” Mr. Simonsen said that while 1.4 million rolls of TP seems like a lot, it is only part of the county’s annual supply. Many of the county’s operations, such as branch offices and the County Administration Center, incorporate TP in janitorial services. The toilet paper is part of a $6.7 million annual contract that also provides paper, envelopes, notepads, calendars and paper towels. Mr. Simonsen didn’t know exactly how much the county pays for a roll of TP, the newspaper said, but he was certain it’s less than half what the general public pays, even with bulk purchases.

L.A. CITY HALL ELEVATORS UNRELIABLE. After spending $300 million three years ago on rehabilitation of the Los Angeles City Hall, council members are grumpy because six of eight building elevators are broken. According to the Torrance Daily Breeze, one council member was seen on February 19 climbing stairs to a meeting on the 10^th floor, while two other council members could not locate a working elevator in the parking garage. A city General Services Division official told the newspaper that $1.6 million in repairs will put the elevators back in working order.

ABSENT FIREFIGHTERS. San Francisco’s new fire chief, Mario Trevino, says he has a solution to the city’s expensive problem of firefighters who “play hooky,” resulting in serious overtime costs. Chief Trevino, who took over in August, says he will use attendance and lack of sick leave as a factor in promotions. The word will spread pretty fast, he told the San Francisco Examiner (February 18). The newspaper noted that “even heroes like to play hooky” as it cited a recent audit that found more than 20 percent of the 1,933 members of the department were absent from duty at times during the past year. It cost taxpayers an additional $24 million in workers’ compensation, disability and overtime payments. Overtime accounted for $10.9 million of that total, which was 48 percent above the amount that was budgeted. Since 1997, sick leave in the department increased 61 percent, with an average of 24 firefighters per day not coming to work. Chief Trevino said one problem is that duty schedules are posted a year in advance, leaving little flexibility, and, when a firefighter on a Monday-Friday schedule has to take a Wednesday off, the department doesn’t allow him to work Saturday to make up for the absence. Instead, other firefighters work overtime, and several of them accumulated $25,000 in overtime pay.

OAKLAND PARKING SCANDAL. It costs $30 a day to park at Oakland International Airport, unless you’re a VIP and get a parking permit. Seems just about everyone who is anyone has such a permit. The Oakland Tribune (February 18) reported that the airport hands out permits “like candy.” Although many won’t last for long as a result of this publicity, the newspaper said 649 permits for free parking in the VIP lot include a Clayton mayor last in office six years ago; a Los Angeles developer whose plan to build high-rises on Oakland port property fizzled; a Lucent Technologies employee no longer with the company; an Oakland city employee who moved to Arizona after winning a sexual harassment settlement based on allegations against Mayor Jerry Brown’s closest advisor. Oakland Port commissioners received lifetime parking privileges. The Tribune checked other airports to find that only 20 dignitaries have free parking at San Jose airport, and they must park in a lot used by airport employees. Even Norm Mineta doesn’t have a pass, and the airport is named after the area native who directs the nation’s transportation department. San Francisco’s airport has 158 dignitaries qualified for valet parking in 25 slots, the newspaper reported. By the way, if all 649 Oakland Airport VIP permit holders used them for just three days a year, that would amount to nearly $60,000 worth of freebies at taxpayer expense.

DEFECTIVE ABSENTEE BALLOTS. One-third of all Sonoma County absentee ballots have defective return envelopes, the Santa Rosa Press Democrat reported on February 20. A seam on the envelope tends to come unglued, jeopardizing those ballots, assistant Sonoma County Registrar Janice Atkinson said. She urged voters to tape the envelopes. Meanwhile, in San Francisco, a printing snafu said to be outside the city’s control caused a shortage of absentee ballots. Voters were marking their choices on photocopies and election workers were to transfer the results to real ballots when they’re available, reported the San Francisco Chronicle (February 8). This was OK with state election officials, who noted that two other counties (Mariposa and Mono) had the same problem.

RAIDERS V. OAKLAND. Oakland and Alameda County taxpayers are on the hook for additional thousands of dollars in connection with the Oakland Raiders lawsuit. Sacramento Superior Court Judge Joe Gray on February 21 decided not only to fine the public agencies for missing documents, but he increased the fine he was considering by $11,000 to $92,084. The fine was for failure of the city and county to turn over 42 boxes of documents, recently found in the basement of the Coliseum, to the Raiders. Total taxpayers’ cost of the fines in the case to date: $224,514. In addition to the fines, the judge also made a key ruling in favor of the team by holding the now-defunct Oakland-Alameda County Coliseum Board, for the purpose of the case, was a private entity. If he ruled it was a public entity, the statute of limitations would apply against the suit. The potential cost of the suit to taxpayers: $1.1 billion. Meanwhile, Oakland Mayor Jerry Brown and other city officials ordered an independent review of the missing documents. “We need to find out what it is that happened and how did it get to this point,” City Attorney John Russo told the Tri-Valley Herald (February 23). The report will not be made public as it will be subject to the “attorney-client” privilege.

SAN JOSE CITY HALL UNDER FIRE. With office space plentiful in the Silicon Valley, San Jose’s plan to spend $335 million on a new city hall at East Santa Clara and Fourth Streets (near San Jose State) is under renewed criticism. The San Jose Mercury News reported (February 28) that Mayor Ron Gonzales faces mounting criticism for pursuing the project with 12 percent of downtown offices sitting empty. City Council Member Chuck Reed said he will ask city staff to reexamine the project. Developer John Sobrato wants the city to buy an office tower his company is building that has no prospective tenant, instead of building more office space. This would save the city $100 million, Mr. Sobrato said.

MODESTO MAYOR CLEARED? Although he recommended revamped rules for expense claims, Modesto City Manager Jack Crist says the city’s mayor and council members do not blatantly abuse tax dollars when they claim travel and other expenses (Modesto Bee, February 27). He said revised travel policies will rely on “common sense,” such as use of the “most efficient” mode of travel. The Bee had reported that Mayor Carmen Sabatino had taken a limousine at taxpayer expense on city business in the Bay Area. Mr. Sabatino has demanded a retraction, noting that he had reimbursed the city for $4,165 in personal expenses and credit card calls since his election in December 1999. His lawyer also demanded a retraction for saying the mayor charged personal cell phone calls to taxpayers. On February 13, nearly a month after The Bee published the story on cell phone calls, the mayor presented a $1,632 check to the city and said he would no longer charge cell phone calls to the city. On February 26, Mr. Crist said staff audited the mayor’s phone bill for personal calls and reduced that reimbursement to $275, bringing the total reimbursement to $379 from more than $7,000 in cell phone bills to taxpayers. Mr. Crist said council members receive little or no training on expense policies when they are elected, and the violations that have occurred are “minor infractions.” He said revamped rules will force council members, before charging expenses to taxpayers, to ask themselves, “Would I mind seeing this claim on a freeway billboard tomorrow morning?” The city manager concluded: “I recommend we all consider this a learning experience, improve our existing policies and internal controls and move on.”

SEX BIAS SETTLEMENT. Under terms of the agreement, no one is talking, but 4.3 million taxpayer dollars are going to John Francois, who sued the city of Los Angeles claiming racial harassment and discrimination. He claimed in the suit that this occurred when he was the first African-American on the Police Department bomb squad. A jury in 2000 awarded him $5.34 million, but the city vowed to challenge the verdict. The settlement, approved in closed session, was reported March 7 by the Los Angeles Times.

FUNDS SPENT ON YORBA LINDA RETIREMENT PARTIES STIR OUTRAGE. Yorba Linda taxpayers are expressing outrage over lavish retirement parties for city officials at taxpayer expense. According to the Orange County Register, invitations to a retirement party for the city’s attorney and public works director were printed in black and gold on ivory linen paper with vellum overleaf, also printed in gold. The cost to taxpayers: $1,066.49. At the party, a guest list heavy with developers and contractors consumed quantities of food and drink. The cost to taxpayers: $4,128.10. Little going-away gifts for the two – a $495 sculpture and a $275 digitally enhanced photograph -- were also paid for by taxpayers. In June, the city paid $3,229.51 for a retirement party for its city clerk of 13 years. Resident Dawn Muranaka told the paper, “These are taxpayer dollars. They’re acting like it’s their own money, and it’s not. This is public money, and the public wasn’t even invited. City councilman John Gullixson said, “This is an embarrassment.”

CHICK SLAMS DWP SPENDING. City Controller Laura Chick of Los Angeles has refused to pay more than $600,000 in bills submitted to the city by the Department of Water and Power (DWP), declaring that she “cannot in good conscience approve multiple millions of dollars for party time and VIP receptions. It’s beginning to look like the DWP is the Department of Wasteful Practices.” According to the Los Angeles Times (March 14), the controller turned over 24 separate expense requests to the City Council for review, saying they lacked adequate documentation. Among DWP requests for taxpayer reimbursement: $100,000 for a black-tie dinner celebrating the refurbished City Hall and a $75,000 sponsorship that provides VIP tickets to basketball games, ice shows and the circus. DWP General Manager David Wiggs told The Times he is taking steps to better regulate spending on promotions. He said he thinks the expenses can be justified for business reasons and “we are working on a policy that would tighten this up a little bit.” The Times reported that the DWP is a semiautonomous city agency with its own governing board. It has been criticized in the past. In 1993, critics hammered the municipal utility for spending $800,000 to cater food for managers and others during a strike.

PENSIONS LURE MORE COPS. The city of Sacramento is facing an exodus of police officers lured into retirement by pensions that may be too good to refuse. How about 90 percent of their final-year salary for those with 30 years of service and past their 50^th birthday? While many of these “retirees” find other jobs, taxpayers will be paying twice for the same protection that they’ve had. They’ll pay for the replacement officer, plus the added expense of recruitment and training, and they’ll be footing additional pension costs. In Sacramento, officials say of 92 officers at retirement age, 36 have at least 30 years on the job to maximize pensions. The entire force is 702 officers, but those who will be leaving represent much of the department’s seasoned leadership. The city plans a $500,000 marketing campaign to increase the number of cadet applicants, reported the Sacramento Bee (March 20). All this is a result of legislation allowing enriched pensions (3 percent of salary for every year of service, with retirement allowed at age 50 instead of 55) that local law enforcement unions can negotiate with cities and counties.

SACRAMENTO CITY PULLS NEW VOICE-MAIL SYSTEM. After spending big bucks on a fancy new voice-mail system, the city of Sacramento discontinued use after two weeks and returned to the old system, the Sacramento Bee’s R.E. Graswich reported on March 18. According to a city employee, the new system has 99 greeting options and the old system has only two. According to The Bee, the public probably won’t see any difference between the two systems, unless they see the bill. City employees are complaining the switch has been an expensive headache for staffers.

SAMPLE BALLOT ERROR. The Orange County Registrar of Voters says new sample ballot packets had to be mailed to some 12,000 registered Democrats in Buena Park and La Palma because of a campaign statement that should not have appeared. The $6,000 cost of the mistake will be absorbed by taxpayers, according to the Orange County Register (January 31). The registrar, Rosalyn Lever, said it was up to the Secretary of State’s Office to notify the county that the candidate had agreed to campaign expenditure limitations, but a state official said proper notifications had been made.

NEVADA COUNTY RETREAT. The Grass Valley Union asks the question: “Is $30,000 too much to spend on a planning retreat for Nevada County department heads? Supervisor Sue Horne said it’s not the time to spend that much on a three-day retreat, with the state facing a huge budget deficit. In fact, she said $30,000 was too much to spend on a retreat, period. Ted Gaebler, the county’s executive officer disagreed, saying citizens “would be mad if we didn’t take time to get our act together …” The retreat was scheduled February 6-8 at the Forest House Hotel in Foresthill, Placer County. (Editor’s note: Officials of urban areas might be wondering why officials in such a sylvan paradise as Nevada County would be going somewhere else for a retreat.) County Treasurer-Tax Collector E. Christina Dabis agreed with Ms. Horne, asking why the department heads couldn’t just gather for two or three sessions at a local Elk’s Lodge and keep the money in the county. She added that “coordination happens naturally, if you let it.” On the side of Mr. Gaebler, who wrote “Reinventing Government,” was Supervisor Peter Van Zant, who said the county shouldn’t send a team into the game without training. “We told Ted to build a team and give them training … that’s what retreats are for – training, team building and strategic planning.” He said the team saved taxpayers $5.5 million last year, and if this were a private business, they’d all be getting bonuses.

POLICE SCHEDULE COULD BE COSTLY. Los Angeles Mayor James Hahn prefers a compressed work schedule for police officers by having them work 12-hour, three-day weeks, or 10-hour, four-day weeks. But consultants say implementing such a schedule could cost taxpayers an additional $4 million to $16 million a year. Four department stations have been using compressed week work schedules on a trial basis for the past few months. Julie Wong, a spokesperson for the mayor, said a 1995-97 pilot program in five LAPD divisions saved $24 million a year through reduced overtime and sick time. An estimate of savings for a department-wide program is unavailable, according to the February 5 report in the Los Angeles Daily News.

CANDOR IN S.F. POLITICS. Members of the San Francisco Film Commission voted to give $7,500 to the San Francisco International Film Festival, an event that commissioners dearly love to attend, especially a $300-a-head fund-raising ball on April 25. The door was left open to give the festival the full $10,000 it requested, with the obvious proviso that commissioners be invited to attend the fancy ball without having to pay. As reported by Phillip Matier and Andrew Ross in the San Francisco Chronicle (February 3), at least one commissioner wasn’t shy about wanting more than a VIP ticket to the festival. Giovanna Rovetti, who came to the meeting in a full-length mink coat, noted that the festival got $10,000 one year but tickets for the ball were not forthcoming, so the next year the grant was axed to $7,500. As staff and festival executives sat stunned, Ms. Rovetti continued: “That’s all we’ve ever wanted, a ticket to the gala event. We haven’t been given it ever in the five years I’ve been on this commission … I’m more than happy to sell a table, bring my friends, whatever, but I like to be felt special, and this is the way you can make us feel special.” Commission President Bob Morales, who suggested he didn’t have a problem with not getting tickets, urged festival organizers to get back to the commission on the ticket issue because commissioners “feel strong about their participation in the gala event.” Commissioner Jim McCullough said the grant and the tickets should not be tied, but his motion to that effect was met with “stony silence,” wrote Matier and Ross, who noted that approval of $7,500 was “for the time being – with the provision that the board might still be willing to consider $2,500 more down the line … depending.”

BOULDER CREEK DISTRICT SPENDING PROBE. The Boulder Creek Recreation and Park District (Santa Cruz County) is being sued by one of its board members, Denese Matthes, and her husband, for access to district phone bills. According to the Santa Cruz Sentinel, the couple has charged Barbara Day, general manager of the district, with destroying the district’s phone bills so they would not know how much is spent on long-distance calls. Phone company records show numerous and lengthy calls to a woman in Palo Alto who prepares the district’s budget and teaches an exercise class. However, bills for out-of-state calls have not been made available, six months after the request. Ms. Day refused to answer questions from the paper, on the basis that a lawsuit is pending. The district has a $150,000 budget, and the Matthes believe that with better management the district could spend more than $11,000 on activities. Saran Barbour, chair of the board, defended Ms. Day, but said she may need more training in record-keeping. Two recent grand jury reports have been critical of district practices.

CUT SPIN DOCTORS. Declaring that San Francisco doesn’t need “spin doctors,” Supervisor Jake McGoldrick wants a public hearing on the use of full-time publicists – he calls them “flacks” – fronting for city departments. The San Francisco Examiner reported January 29 that Mr. McGoldrick started wondering about this issue when he learned late last year that Elections Director Tammy Haygood paid a contractor $50,000 to respond to questions. “If 50 other departments decided to go out and hire someone to do this, that’s $2.5 million,” he said. Public relations, said Mr. McGoldrick, should be performed regularly by everyday city employees who understand the department’s work because that’s what they do.

SOLANO COUNTY PROPERTY MISSING. The Solano County Board of Supervisors was told that county departments since 1999 have failed to account for $830,000 worth of equipment, mainly computers. According to the Fairfield Daily Tribune (January 23), no one knows where the equipment is. It could be stolen or in another room. Supervisors said the figures were unacceptable and ordered department heads to find the missing property, if possible.

GIVING WELFARE RECIPIENTS USED CARS. Sacramento County initiated a new program giving selected employed welfare recipients surplus county vehicles. The county is spending up to $200,000 in taxpayer dollars (from the state) to buy the cars from the county motor pool and give them to welfare recipients. Monica Genera got the keys to a 1994 Ford Escort with 77,000 miles on it. A 1991 Dodge minivan with 88,000 miles was driven away by Sheila Darnell, a small business manager with five children, according to the Sacramento Bee (January 25).

WILLIAMSON ACT DISPUTE. The state of California can refile a complaint against Tehama County officials contending incompatible uses have been allowed on land enrolled in Williamson Act agricultural land preservation contracts. That was the ruling of Superior Court Judge Joseph B. Harvey of Susanville, who had dismissed the case without prejudice because a deputy attorney general failed to file an amended complaint in a timely manner, reported the Red Bluff Daily News in January.  The judge ruled that the state must pay the defendants’ costs, or attorney fees that could exceed $10,000, according to Supervisor Charles Willard. The suit says a 1999 planning department action allowed lot-line adjustments for creation of parcels “incompatible” with cattle grazing on 3,300 acres of agricultural preservation land southwest of Red Bluff.

WORKERS’ COMP COSTS HIT RECORD IN L.A. COUNTY. Los Angeles County’s workers’ compensation costs hit an all-time high of $242 million in 2001, a 65 percent increase in five years. The Los Angeles Daily News (January 10) reported that, until a part-time investigator was hired recently, not one case of fraud had been prosecuted in recent years. The last case of fraud prosecuted that anyone can remember was a 1987 case where a sheriff’s deputy, unable to work because of an alleged back injury, was caught on videotape dancing in a Chippendales all-male road show revue in Atlantic City. An average of 1,710 of 90,000 county employees were out on workers’ comp on any given day. Supervisor Zev Yaroslavsky said, “I think part of the problem is an obvious abuse of the system.”

QUESTIONING SPENDING FOR HEADHUNTER. Alameda County is spending $25,000 for a Los Angeles “headhunter” to find a public information officer for the county and supervisors want to know why. Supervisors Gail Steele and Keith Carson said the search could have been conducted by the county’s human resources staff, according to the Oakland Tribune (January 7). Board President Scott Haggerty said the county should consider freezing the job in light of forthcoming budget cuts. Denyce Holsey, the county’s public relations manager, said the outside recruiter was hired because “this is a very, very sensitive position.”

SPENDING TAX DOLLARS TO DETERMINE PERSONALITY COLORS. Alameda County supervisors spent $8,720 of taxpayer dollars to determine each supervisor’s personality “color.” In an editorial, the San Francisco Chronicle (December 29) said the supervisors exhibited “less-than-adult behavior” and observed it might seem like a parody of 1970’s Marin County culture. For the record: Supervisors Nate Miley and Keith Carson are “blue” (logical), Supervisor Scott Haggerty is “green” (planner) and Supervisors Alice Lai-Bitken and Gail Steele are “red” (emotional).

RIVERSIDE COUNTY OVERPAYS RETIREES. Riverside County has discovered that it overpaid retirees by $1 million, and is trying to get the money back. According to the Riverside Press-Enterprise (December 23), overpayments of a few dollars to $192,000 went to 597 former temporary or part-time employees. County spokesman Raymond Smith said letters will go out by January 10 asking the recipients of the largest amounts to pay the money back. Supervisor Bob Boston said, “I don’t have a lot of confidence that (the Human Resources) department knows what it is doing.”

WHIFF OF CULTURE. Seed money of $100,000 was appropriated by the Ventura City Council on December 10 to a controversial public arts project next to the Ventura Sewer Plant. When finished, the project is estimated to cost $750,000. Proponents argue that the project will attract visitors to a scenic wetlands area, according to the Ventura County Star (December 12). Critics say the proposal stinks and question spending hundreds of thousands of dollars on a project next to a sewer plant. Council Member Sandy Smith responded, “Who cares? We’re not taking it out of the general fund.” Council Member Neal Andrews, who voted against the project, said the city should explore to see if there is a better use of funds dedicated to arts and culture.

SPORTS LAWSUITS COST TAXPAYERS. Gone are the days when students voluntarily accept the risks when they go out for sports. Taxpayers are now footing schools’ legal costs of defending sports-related damage suits. Two recent examples: In Union City (Alameda County), the father of a Logan High School sophomore is seeking $1.5 million in punitive damages due to his son’s removal from the varsity basketball team. According to the Hayward Daily Review (December 11), Lynn Rubin (the father) said the family changed its schedule to be compatible with varsity practice. His suit also charged that the coach did not consult with the parents prior to cutting the boy. Mr. Rubin said he calculated the amount of damages based on potential lost wages from a professional basketball career. In Rialto (San Bernardino County), the mother of an Eisenhower High School freshman quarterback is suing the district on the basis that the district did nothing to discipline a student who broke her son’s jaw on the practice field. According to the Inland Valley Daily Bulletin (December 12), Janice Parker, mother of the player, is seeking damages for current medical expenses for the broken jaw from an alleged assault by another player. Despite the injury, the son played on the team but missed the first three games. Ms. Parker said the motive in filing the suit came in part from the fact she didn’t get an apology from the district.

DEPUTIES WANT MORE BENEFITS, WRITE FEWER TICKETS. Perhaps it can be called a ticket-writing strike, but sheriff’s deputies in Ventura County decided to hit their employer in the pocket book while they demand expanded retirement benefits. In the first five days of December, deputies wrote 22 tickets, compared to 407 in the first five days of November. It was unclear how many thousands of dollars local governments were losing in fines, reported the Ventura County Star (December 13). County officials, meanwhile, say they can’t afford the $100 million it would cost to apply a richer retirement plan retroactively for all safety employees. Deputies who now retire with 50 percent of their combined compensation want to be able to retire after 25 years on the job at age 50 with 75 percent of their combined pay and benefits. An analysis by the Los Angeles Times, reported November 19, found that a 55-year-old Ventura County deputy with 30 years on the job can retire under existing rules and take home $69,000 in annual retirement pay, or 106 percent of wages. The deputies’ union plan would give the same officer a $79,000 annual pension, or 122 percent of base pay, the newspaper reported.

$150,000 TO BUS FAMILIES TO JUVENILE HALL. Alameda County supervisors are considering providing bus service to the new juvenile hall in Dublin, so families can see their kids. The cost: $150,000 a year, plus $375,000 to buy a new bus. The new detention center is scheduled to be built in 2005, and the county wants to have a transportation plan in place before then (Oakland Tribune, December 14).

EXCESSIVE RECESSES. According to the Daily News (December 6), the Los Angeles City Council is being criticized for taking too much time for recesses and taxpayer-funded travel. The council was in recess the first week of December because three of its members attended a national convention, the newspaper reported. By the end of the year, council members will have taken off about six weeks in six months for recesses and travel. At $133,000 a year, Los Angles’ council members are the highest paid of any city in the nation.

S.F. ELECTION: $29 PER BALLOT. The price of Democracy is steep in San Francisco, where the December 11 run-off election for city attorney attracted 70,244 voters out of 453,961 who were eligible. It cost taxpayers $29 per vote to put on the $2 million election. The 15.47 percent turnout was the lowest in at least the last 30 years. The San Francisco Chronicle (December 13) reported that the newly elected Dennis Herrera was “swept” into the city attorney’s office with about 36,400 votes.

LAX PR PACT. The Los Angeles Times (December 18) reported that the commission that runs the Los Angeles International Airport has agreed to extend the $9 million contract of a public relations consultant with close ties to Mayor James K. Hahn. The newspaper reported that the commission of the mayor’s political appointees took the action despite the continuing financial crisis facing the airport as a result of the September 11 terrorist attacks. The contract extension, worth $1.5 million to Winner & Associates, requires City Council approval, and the council on December 18 postponed action until January 15, 2002. The Times noted that Chuck Winner hosted three fund-raisers for Mr. Hahn earlier this year and that he and some of his employees gave more than $20,000 of their own money to the campaign. Commission staff had axed the contract, but commissioners had it reinstated in the budget. Critics, reported The Times, questioned the need for the PR contract after the new mayor scrapped an airport master plan that had been developed by former Mayor Richard Riordan. The Winner contract also was lambasted by Times columnist Steve Lopez, who noted that “taxpayers might as well have stacked that $9 million on the tarmac and set it ablaze. The LAX expansion plan has been dumped since September 11, the airport is $127 million in the hole and hundreds of employees have been thrown out of work. They should have gone into PR.” Mr. Lopez wrote that one Winner subcontractor told Times reporters that so little work was involved that he felt “truly guilty” getting paid. He told the reporters that “it would be your dream contract.”

LA GRAFFITI AUDIT. Los Angeles taxpayers are being overcharged for the work to remove graffiti, according to city Controller Laura Chick (Los Angeles Times, March 12). She said city auditors found that New Directions for Youth Inc., one of 17 nonprofits that share contracts under the city’s Operation Clean Sweep, was overpaid by at least $54,525 in 1999. New Directions, which received $459,333, used $15,000 to buy two vans without written approval from Operation Clean Sweep, said Ms. Chick. However, Operation Clean Sweep Director Delphia Jones and Ed Viramontes, executive director of New Directions, said all billings were justified and verbal permission had been received to buy the vans. The city recently increased funding for the anti-graffiti efforts from $4.3 million to $7.8 million.

COUNTY SUPERVISORS RESPOND TO CRITICISM OF SHERIFF.  In response to an El Dorado County Grand Jury report earlier this year criticizing activities of Sheriff Hal Barker, county supervisors found no fault with the sheriff’s actions, according to an account in the Mountain Democrat (November 21). On the charge that the sheriff used a prison inmate to move furniture in his home, supervisors said the action was acceptable. On the finding he approved sick leave for an undersheriff who wasn’t sick, supervisors said the sheriff had no knowledge of his sidekick’s health and an investigation of the matter was under way. The board admitted two people were paid to be undersheriff from October 2000 to February 23, 2001.

INCREASED SPENDING ON EMPLOYEE BENEFITS CONTRIBUTES TO OAKLAND DEFICIT. Oakland’s projected $23 million budget deficit is due to increased spending on public employee benefits, the Montclarian reported on April 19. According to the paper, city revenues have declined by $290,000 from projections when the two-year budget was adopted in 2001. However, city appropriations are $22.99 million over projections. “The vast majority of that spending is related to non-departmental costs, such as salary and benefit increases to miscellaneous employees and an increase in what the city pays into a statewide pension plan for public safety officers,” the paper said. At a May 1 City Council meeting, Council Member Dick Spees said the city should investigate ways to increase revenue through entrepreneurial projects, such as selling access to the city’s geographic database. City Manager Robert Bobb presented an overview of options to balance the budget, such as reducing positions, increasing fees, reducing hours of operation of city facilities, selling city property no longer needed, and asking employees to work a four-day week or take a one-week furlough.

HEALTHCARE DISTRICT USE OF PROPERTY TAX IS UNDER FIRE. The San Mateo County Grand Jury excoriated the Sequoia Health Care District in a recent report for donations of property tax revenue to various groups, the San Francisco Chronicle reported May 8. The district – which was formed in 1946 to build and run Sequoia Hospital in Redwood City – transferred the hospital to Catholic Health Care West in 1996 but continues to be allocated property tax revenue under state law. As a result, the district has been giving various non-profit groups, including some advocacy groups, property tax dollars. Grand Jury Foreman Bruce Hasenkamp said the district’s mandate was to maintain a hospital and the contributions should stop. The hospital district’s vice-president, Malcolm MacNaughton, said the report was “arbitrary and rude.” The grand jury said the district has surpluses from $1.5 million to $6 million a year, and $41 million in the bank.

USE OF TAX DOLLARS TO INCREASE TAXES. Lathrop (San Joaquin County) city officials are asking the City Council to approve a $95,150 contract with a private company to help persuade voters to approve a $110 parcel tax, according to the Stockton Record of November 18. The contract is for developing a marketing strategy to reach voters and to complete the mail-in ballot process. Officials favor a bid by Harris & Associates of $86,500 plus a 10 percent contingency fee. The low bid is $26,000.

Transportation ($1.367 billion)

ENDANGERED (DEAD) SNAKE DELAYS PROJECT. Last September, a dead garter snake was found on the site of the Bay Area Rapid Transit line to San Francisco International Airport. Work was halted for 18 days, costing $1.07 million. Construction of the $1.5 billion project apparently is endangered again, reported USA Today (May 13), because state wildlife officials ordered work to stop as they investigate the discovery of another dead garter snake. The snake with red and black stripes is on the state’s list of endangered animals.

BART’S TROUBLED ESCALATORS. Unlike the escalators, the costs keep going up and up for BART. According to a March 31 Matier and Ross column in the San Francisco Chronicle, there are 20 trouble calls a day on average, despite nearly six years and $27 million invested in the escalators, including 19 state-of-the-art units installed at the busiest stations. Maintenance costs are expected to reach $2.1 million this year, compared to $1.8 million last year, most of it going to nearly three dozen repair people. Besides the wear and tear of skateboarders and handcarts hauling stacks of newspapers, the newspaper reported that one problem is built-in motion detectors that automatically shut down the escalators when there is a sharp or sudden movement. BART spokesperson Ron Rodriguez said a 300-pound BART patron would jump on the bottom step every morning “just because he thought it was fun to shut it down.”

SCHOOL BUS SAFETY COSTS. The Legislature was told that annual costs for a school bus safety program would amount to $1 million annually when it passed new safety rules between 1994 and 1997. The rules were prompted by the death of a student while crossing the street after being dropped off. The Bureau of State Audits reports that the annual cost of the program is $67 million, with schools claiming $290 million in costs. The Legislature last year halted reimbursements to local districts pending completion of the audit, which was released March 28 and reported upon by The Associated Press. State Auditor Elaine Howle blamed the Commission on State Mandates for lack of clear reimbursement guidelines, leading to inconsistent claims and documentation. The commission – made up of the controller, treasurer and five appointees -- also took 14 months, until 1997, to decide whether compliance costs were reimbursable. Elk Grove, near Sacramento, claimed $1.8 million, or $198 per bus rider because its consultant – Mandated Cost Systems – took a more aggressive approach and sought all associated transportation costs, Ms. Howle said. Claims from this consultant’s clients averaged nearly $98 per rider. Claims from most of the other consultants’ clients averaged $14.72 per rider, The AP reported.

NEWSPAPER HITS “RECORD” PAY AT MTA. According to a March 4 report in the Los Angeles Daily News, top officials of the Metropolitan Transportation Authority (MTA) have set records for local government salaries. And they also get lucrative perks. MTA CEO Roger Snoble makes $295,000 a year and his chief deputy, John Catoe, $220,001. Twenty-four of the MTA’s 10,000 employees make $125,000 or more a year, compared to 10 in 1997. The newspaper reported that Mr. Snoble’s total compensation package includes $30,000 for his pension, a $12,000 housing allowance and $10,000 for vehicle expenses in addition to access to an MTA vehicle 24 hours a day. That’s a total of $347,000. The paper noted that the general manager of San Francisco Municipal Railway makes $203,585 a year and New York City’s transportation commissioner, $162,800. The MTA leaders’ salaries were defended by County Supervisor Mike Antonovich, who said they had operated efficient transit systems elsewhere and “are worth their salaries because they have developed a plan that will eliminate fat and result in substantial savings in administrative costs at the agency.” The newspaper also reported that high-ranking MTA officials received low-interest home loans. Jon Coupal, president of the Howard Jarvis Taxpayers Association, said, “Nothing shocks me anymore, but this comes pretty close.”

BAY BRIDGE. Blame political wrangling, bickering, turf wars, or whatever, but taxpayers have been soaked to the tune of $1.3 billion by delays in construction of the new eastern span of the Bay Bridge. It was damaged in the Loma Prieta earthquake 12 years ago. On January 29, state and local officials gathered to signal the start of construction of the $2.6 billion project. The cost doubled since 1996 as politicians and transportation officials argued “over everything,” reported the San Francisco Chronicle (January 30), including design and location, a bicycle path and pedestrian walkway. Governor Gray Davis said, however, “It was a collegial effort, and we all played our role.” As the newspaper said, “bygones became bygones.” Politicians involved (the governor, S.F. Mayor Willie Brown and Oakland Mayor Jerry Brown) have been fortunate so far that another catastrophic earthquake hasn’t hit the region since Loma Prieta, and they’d better hope that the good fortune lasts at least another five years. That’s how long it will take to complete the project and open it to traffic. The governor said the bridge project will create 67,000 jobs and generate $8 billion for the economy – and result in “the strongest bridge in America, bar none, and arguably the strongest bridge in the world.”

MORE BAY BRIDGE FALLOUT. The Contra Costa Times (February 5) published an article probing the political infighting and turf war that contributed to the lengthy and costly delays before construction recently began on the new eastern span of the Bay Bridge. So much has gone wrong, the newspaper reported, noting that it took the country less time to answer President Kennedy’s challenge to put a man on the moon – eight years, one month, 26 days – than it took for Caltrans to sink a single test piling for the new bridge after the Loma Prieta earthquake – 10 years, 11 months, 29 days. And, the paper notes, the projected cost of $2.6 billion makes it the largest project in Caltrans history. And a study last year said the final cost might exceed $3 billion. “Will there be enough money?” it asked. The newspaper observes that all the politicians involved continue to walk a tightrope and could fall off if there is a catastrophic earthquake before the strengthened span is completed in five or six years. If construction had begun in mid-1999, a year after the Metropolitan Transportation Commission approved the bridge’s design and alignment, it would be more than half done today, the paper said.

MTA WORKERS’ COMP FRAUD. Metropolitan Transportation Authority officials in Los Angeles say they have started trying to look into the question of fraudulent workers’ compensation claims, reported the Los Angeles Daily News (November 4). During the past five years, MTA’s workers’ comp insurance costs have climbed 51 percent, now totaling $53.4 million in 2000, and possibly as high as $59 million in the current fiscal year. Meanwhile, of 1,400 cases identified as suspicious over the past three years, only two employees were convicted for filing fraudulent claims. Only 16 cases since 1998 have been referred to the district attorney. Two were prosecuted, 12 are pending and two were rejected. Both convictions involved bus drivers. One said he suffered a back injury while adjusting a mirror on his bus, and that he had no prior history of back injuries, which proved false. He had to pay $200 in restitution and serve 200 hours of community service. A woman driver complained of stress from an armed robbery, but on-board cameras didn’t record a robbery. She pleaded guilty to multiple counts, was ordered to pay $6,684 in restitution, serve 250 hours of community service, spend five years on probation and four days in jail.

MTA WORKERS’ COMP COSTS HIGH. Workers’ compensation costs for the Los Angeles Metropolitan Transit Authority average $6,500 per employee – the highest in the nation, the Los Angeles Daily News reported on May 5. Tom Higgins, head of the Los Angeles County district attorney’s workers’ compensation fund unit, said he is assigning two additional prosecutors to oversee MTA fraud investigators. The MTA’s workers’ compensation costs are 15 times higher than Washington, D.C., and seven times higher than New York. “The statistics suggest there is some pretty significant fraud going on,” Mr. Higgins said. Rosanne Wong, principal deputy county counsel, said, “California is the most liberal state as far as workers’ compensation laws go.” MTA employees have filed 12,000 workers’ compensation claims since 1998.

BART’S “VERTICAL TOILET.” The Bay Area Rapid Transit District’s $510,000 sculpture-elevator sits broken with boarded-up doors next to the Powell Street station, hardly a statement of modern art and convenience. As the San Francisco Chronicle reported (October 1), the elevator is a statement of modern urbanity – for all the wrong reasons. Built in 1997, after a disability rights activist complained, the elevator was covered with an expensive steel sculpture, doubling its cost. In August, it was closed after a homeless drunk was stuck inside when the doors automatically locked at 8 p.m. closing time. Firefighters were called to rescue the drunk, ripping apart the shiny doors with the “jaws of life.” As a result, there was one freed drunk and $18,000 in damage to the doors. Now repair costs are estimated at $80,000, but it’ll take three months for parts to arrive. That’s because of the corrosion of the elevator’s working parts caused by human waste. Mohammed Nuru of the Department of Public Works said they’ve tried all the chemicals they have without succeeding in deodorizing the elevator. By the way, there is a pay toilet just a couple of feet away that is free to the homeless.

Education ($134 million)

CELL-PHONE EXPENSES. School board members’ cell-phone expenses are paid by taxpayers in three school districts, the Torrance Daily Breeze reported on March 29. On a 3-2 vote on March 27, the Hawthorne school board added $40 to their stipends to cover the cell-phone expenses. “This really gets my goat,” Board Member Nilo Michelin said when voting “no.” Shirley Duff blasted other board members for the actions, particularly when budget cuts are being considered. Other districts paying for cell-phone expenses include those long criticized for waste and mismanagement: Los Angeles Unified and Centinela Valley Union High.

SCHOOL SUPERINTENDENTS’ PERKS. In addition to salaries that sometimes exceed the governor’s, some school superintendents have special taxpayer-funded perks, the Contra Costa Times reported on April 8. For example, Berkeley Unified Superintendent Michele Lawrence has the interest on her home loan paid by taxpayers. Antioch Superintendent Dennis Goettsch gets $8,100 a year to pay for a new Cadillac. West Contra Costa Unified Superintendent Gloria Johnston has taxpayers paying for a $12,000-per-year tax-deferred annuity. The perks are “issues that rub a lot of teachers the wrong way,” said Beth Furstenthal, president of the Acalanes Education Association.

LAUSD OUT $10 MILLION? The Los Angeles Unified School District could be out $10 million in construction funds because the federal government decided to build on Wilshire Boulevard land coveted by the district for an elementary school site. The Los Angeles Daily News (April 16) reported that the district has until June 30 to submit a building proposal for the school or lose $10 million in matching state school construction bond money. More than $1 million has already been spent by the Social Security Administration for plans and furnishings for a center on the property. The school district hopes the SSA will agree to an alternative site. LAUSD officials are upset, accusing the SSA of leasing the property while the district was complying with lengthy state-required environmental review of the proposed school site. However, federal officials say the school district didn’t even bid on the site until three months after it was leased. Meanwhile, children are being bused up to an hour away due to overcrowded conditions in existing area schools. School Board President Caprice Young said, “Oh, my God, I thought I was a bully, but I’m just getting creamed by these guys. This is absolutely insane.”

LAUSD: RENTED BUILDING WASTE. The Los Angeles Unified School District has run into problems with a building rented to house the new school police headquarters. As the Los Angeles Daily News (April 15) reported, the building is still unoccupied after 20 months and $1.2 million in rent. The district has been in a dispute with the landlord over a leaky roof and other problems, the newspaper reported. The lease did not specify who would pay for repairs. The time needed to remodel the structure was underestimated but the project remains on budget and “the whole thing is going to be finished this month,” according to Nadir Farnoush, senior facilities manager with the district. He said police would be moving in on May 4.

SIGNING BONUSES AND NEW CARS FOR PRINCIPALS. Signing bonuses and use of a new car have been thought to be the province of professional sports. Not anymore. The poor Baldwin Park Unified School District (in Los Angeles County) recently paid signing bonuses of $15,000 and use of free leased cars to secure the services of two high school principals. According to the San Gabriel Valley Tribune (April 23), District Superintendent Mark Skvarna said, “Without the incentives, we would get six candidates. When we offered the incentives, we got 36 candidates. It seems to have worked.” Wayne Johnson, president of the California Teachers Association, said signing bonuses are a misuse of public funds. “I have never heard of this before and I find it a gift of public funds,” he told the paper.

BURBANK’S BELEAGUERED BOARD. The Burbank Unified School District is facing a $3 million budget deficit, and that’s just part of the problem, reported the Los Angeles Times (May 1). Reporter David Pierson wrote that someone forgot to budget $1.3 million for special education, a superintendent dismissed for unknown reasons may sue the district, and some parents are attempting to recall school board members. This district’s woes would seem small compared to Los Angeles Unified’s, particularly since all of Burbank’s eligible campuses have been honored by the state for high academic achievement and community support. The Burbank Teachers Association also has voted no confidence in the board and wants to know why David Aponik, who was popular as superintendent for eight years, was sacked earlier this year. Said PTA member Britta Hamrick, who has signed a petition to begin a recall effort: “Those California Distinguished Schools didn’t come about because of our school board. It’s because we had a great leader in Dr. Aponik. The board (members) are almost farcical figureheads.” District officials say the budget headache is a result of rising workers compensation and medical insurance costs, plus mismanagement by a since-disbanded fiscal management team.

BELMONT LEARNING COMPLEX UPDATE. Los Angeles Unified School District officials are optimistic that, for an additional $88 million, they can complete the troubled Belmont Learning Complex, which was already the most expensive high school in the nation and probably anywhere. According to the Los Angeles Times (February 13) there are two competing proposals for the job to seal off hazardous vapors from the former oil field at the 34-acre site near downtown, plus install vents, air scrubbers and detectors. There would be a tarp-like membrane over the entire site. Thus, they say, the gas that does escape would be harmless. Just in case, the district would buy a 30-year insurance policy for $7 million. The high school is already more than 60 percent complete, costing the district $154 million. The school board halted construction in 1999 because of environmental problems. Superintendent Roy Romer believes the complex can be finished within three years. Then, when Los Angeles has its next earthquake, he said “everybody should run and get in the middle of this site. It will be the safest place in Los Angeles to protect yourself from gases in the ground.”

DISTRICT PAYS MORE FOR PROPERTY. The governing board of the Las Virgenes Unified School District (Los Angeles County) on February 8 agreed to pay $2 million over the district’s $1.25 million appraisal for a school site. The property was acquired for $3.25 million through eminent domain, for use as a middle school site, after the landowner put the value at $5.75 million. According to the Ventura County Star (February 9), board President Pat Schulz said, “We feel we made the best business decision for the district.”

SANCTIONS SUGGESTED. U.S. Magistrate Elizabeth D. Laporte recommended on February 12 that sanctions be imposed on the Ravenswood School District (near Palo Alto) and its officials for submitting fraudulent petitions to the court. She suggested to U.S. District Court Judge Thelton Henderson a $10,000 fine for the district and a requirement that the school board and superintendent attend ethics training. According to the San Jose Mercury News (February 13), the petitions which were submitted to persuade the court not to order a state takeover of the district, were filled with false signatures and other irregularities. Judge Laporte concluded that school Principal Martheilia Hargrove was partly responsible for pasting signatures from an old petition under a new heading.

UC OFFICIALS SUSPEND SEX CLASS. Embarrassed officials at the University of California at Berkeley suspended a class on male sexuality after it was learned, among other things, that one of the student instructors had sex on stage during a visit by students to a strip club as their final class project, The Associated Press reported on February 18. The two-unit class is part of the “democratic education” curriculum and it is sponsored, but not funded, by the university. Several students told the Daily Californian that classmates were involved in an extracurricular “orgy.” “These sorts of activities are not part of the approved course curriculum,” UC spokesperson Marie Felde told The AP. Other “democratic education” classes sponsored by the university include “Blackjack,” where students are taught how to count cards, and “Copwatch,” a class where students are taught how to “safely and effectively assert their rights when interacting with police.” The Sacramento Bee reported that these classes must have department chair approval and faculty sponsorship. UC Berkeley Academic Senate Chair David Dowall told The Bee (February 16) that Women’s Studies Department Chair Caren Kaplan had reviewed the male sexuality course description but was not provided details. Update: University spokesperson Janet Gilmore said there “won’t be any outside activities” for a reinstituted male sexuality class at the Berkeley campus (San Francisco Chronicle, March 1).

S.F. SCHOOLS “FLUNKING PAYROLL.” That was the February 18 headline in the San Francisco Examiner in a story about Proposition F on the March 5 ballot, a measure to create an oversight committee for spending San Francisco school construction bond money. Angie Marshall, in the summer of 2000, applied for a speech pathologist job with the district, then turned it down to take a better offer in San Bruno. Then, in September 2000, she got a paycheck from the S.F. district. Another came in October. November’s check included a raise. The three checks together exceeded $13,500. She sent them back, informing the district that she had never worked for it. Then, in September 2001, she got another check, with a bonus, despite her repeated phone calls. Ms. Marshall also wondered why the checks were sent to an old address in Spokane, Washington. She said, “I know that what happened to me is most likely indicative of a much larger problem. I have no clue what’s going on. I’m just glad I didn’t accept a job, because if I did, maybe I wouldn’t be getting a paycheck.” The Examiner said district officials refer to Ms. Marshall as an isolated incident and insist that no one else was paid accidentally.  The district’s finances have been the subject of more than one newspaper report of questionable – if not illegal – spending practices. For example, it has been reported that the district didn’t know how many teachers were on its payroll. Also, an independent audit found the district misspent $140 million in bond money meant for school construction with most of the money going into paychecks for district staff. For reaction to the Marshall case, the newspaper quoted Kent Mitchell, teachers’ union president: “It’s disturbing, but not shocking. The number of payroll problems is much less than it used to be, but that doesn’t excuse even one. Doing payroll is not exactly rocket science.”

SCHOOL DISTRICT LEGAL FEES ARE $5,000 PER STUDENT. According to Governor Gray Davis’ 2002-03 budget, the average per-pupil spending is projected to exceed $7,000. It is astonishing to learn that the Belridge School District in Kern County spent $300,000 on legal services by six law firms between July 1999 and September 2001, an amount equal to about $5,000 for each pupil in the district.  According to the Bakersfield Californian (February 16), the spending came to light in a report prepared for the state’s Fiscal Crisis and Management Assistance Team by the auditing firm of MGT of America. Kern County Superintendent Larry Reider was quoted by the paper as saying the report shows the district “was out of control.” He added former Belridge Superintendent Steve Wentland demonstrated a “management arrogance and abuse of power” that was tolerated by school board members. The district was also charged $14,000 for a bond counsel, despite the fact that the contract said the counsel would not be paid if the school bond failed (which it did). The report also found a violation of district nepotism regulations by the hiring of Wentland’s mother as librarian at the district’s single school.

BLOATED LAUSD. The Los Angeles Unified School District’s administrative staff has grown by 500 people, despite Superintendent Roy Romer’s promises to decentralize and reduce the bureaucracy, according to the Los Angeles Daily News (February 24). The district’s downtown bureaucracy of 3,900 staffers is creating an office space crunch, the newspaper reported, that could cost the district millions of dollars in years ahead. The district has too many employees to be accommodated by the new $157.9 million headquarters building and will have to lease more space or engage in costly renovations to existing facilities, the Daily News said. District Chief Financial Officer Joseph Zeronian said the downtown growth is partly a result of the district’s efforts to build new schools and to improve literacy and math instruction. The overall growth of administration staff reflects growth in student enrollment and construction of schools in recent years, according to district Chief-of-Staff Gordon Wohlers. Still, school board Member Julie Korenstein told the paper, “It’s crazy, You can’t say we’re going to consolidate, save money and put everyone under one roof – and then say we don’t have enough space now and have to pay for other buildings.”

SKI WEEK IS COSTLY. The fiscally troubled Saddleback Valley Unified School District, concerned that many students would be absent for “ski week” from February 15 through February 22, tried warning letters, posters and cash giveaways, reported the Orange County Register (February 24). By bunching three holidays – Admission Day on Monday with Tuesday and Wednesday holidays – only Thursday and Friday were school days. This entices families to take 10-day vacations. Most districts spread the holidays over three weeks. The Saddleback district was aware that it would be losing $36.40 per day in state funding for each student who went skiing or chose some other endeavor besides education during the two school days in question. The newspaper said the absences at Mission Viejo High School cost the district $15,000 in state funding, and that similar absences occurred at three other high schools. The paper said 430 Mission Viejo students were absent on February 15, compared to 300 on an average day. At El Toro High School, students placed posters in classrooms urging students to “show up.” El Toro also has “Five Dollar Friday” in which a name is drawn randomly. If the student has been in school all week, he or she gets $5. If not, the money rolls over. Meanwhile, the district is trying to cope with a budget crisis that has led to the elimination of 73 staff positions and cuts in some music and science programs. (Editor’s Note: School officials realize Admission Day was September 9. It was too soon in the school year to observe it then, so the decision was made to put it in February along with the two presidents’ holidays.)

UPDATE: TEACHERS OUTDO STUDENTS IN CUTTING SKI WEEK CLASSES. The Saddleback Valley Unified School District reports that the problem of students skipping two days of classes during “Ski Week” was anticipated. But they didn’t think district teachers would outdo students in cutting classes during that February 21-22 period. The Orange County Register (March 5) reported that 12.2 percent of teachers were absent those two days, using sick days or personal days. Meanwhile, 6.8 percent of students stayed away from school, twice the normal rate of absences.  The district had sent notices to parents urging them not to take their kids out of school on February 21-22. But 4,699 of them missed classes on those two days – 2,211 more than usual. The additional absences cost the district $56,623 in state money at a time when budget problems have caused cutbacks in science and music programs and a reduction of 73 staffers. When a teacher is absent, the district has to pay a substitute $90 a day. The 397 teacher absences cost the district $21,240 for substitutes on February 21-22. Even district administrators were more likely to be absent. Seven of the 65 administrators stayed away during that two-day period, compared to the normal number of three for a typical Thursday-Friday. So, you’d think that the district would make a slam-dunk decision not to repeat this “Ski Week” fiasco in 2003. The Register also reported that Saddleback is the only Orange County district to offer three consecutive holidays, which it has done for the past 10 years. The future of Saddleback’s Ski Week, the paper said, “is the focus of intense negotiations” between the teachers union and district management. It said Janet Henry, the union representative, was upset that the district released absence figures while the issue is being negotiated. She also said teachers “have every right to use personal days to maximize their winter break.”

BERKELEY SCHOOLS IN RED INK. Berkeley’s new schools chief, Michelle Lawrence, learned first-hand that the district’s finances were messed up. Her first paycheck last fall was twice what it should have been, and those looking into this and other payroll problems blame the district’s outdated computer system. Ms. Lawrence said she found “inadequate checks and balances, and we were bleeding green throughout the organization.” According to the San Francisco Chronicle (February 25), Ms. Lawrence said there was no payroll department oversight. A fraud investigator was brought in to look at overpayments to existing and former employees. A new computer system is expected to come on line in July, but, meanwhile, most of those who know how to operate the old system have retired, said Joel Montero, a member of the district’s Fiscal Crisis and Management Assistance Team. He also said there are indications that construction bond money was used to pay salaries, which is illegal. Meanwhile, about 50 teachers are going to lose their jobs, the newspaper reported, because $7 million must be cut from the district’s $90 million budget. Are chickens coming home to roost? The district granted a 9.5 percent teacher pay raise two years ago. District enrollment declined by 150