Los Angeles County 2010-2011 - California Grand Jury Reports

📋February 17, 2012 — E-Subpoena System Implementation

228 pages 8 findings 19 recommendations

Findings & Recommendations 8 findings

F1: LADOT agrees with the finding. Note that the issue reviewed by the CGJ focused on whether or not signs should be posted in an existing temporary preferential parking district.

F2: Localized Joint Task Force Model The respondent agrees with the findings.

F2a: LADOT agrees with the finding, as it relates to the department received an incomplete petition in 2008.

F2b: LADOT agrees with the finding, as it relates to a request to post signs, not "installation ( of a PPD".

F2c: LADOT agrees with the finding, as it relates to sign posting, not "establishment of a PPD".

F3: LADOT has no position on the finding. LADOT has no record of the stated "attempts by residents to get the reasons for rescindment (of the request for sign posting]".

F13: Recommendation: Approve the responses to the 2010-11 findings and

Additional Recommendations 10

Not linked to specific findings.

R1: LADOT agrees with the conclusion, but the reason for the waiting period is explained below. The particular case reviewed by the CGJ involved a dormant file, originally submitted (albeit incomplete) in 2008. One of the two blocks was verified in 2009 after a complete application was received and LADOT delayed implementation of both blocks pending verification of the second block. When the second block could not be verified, sign installation for the first block was approved in 2010 and all affected residents were notified. A counter-petition was received and verified before signs were installed, therefore the installation was cancelled.

R2: LADOT agrees with the recommendation, but will not implement in the foreseeable future due to budgetary and staff constraints. ### September 27,2011 2 Re loj4jJl ,-lei Los BOARD OF FIRE CITY OF ANGELES FIRE DEPARTMENT COMMISSIONERS CALIFORNIA BRIAN L. CUMMINGS GENETHIA HUDLEY·HAYES FIRE CHIEF PRESIDENT CASIMIRO U. TOLENTINO 200 NORTH MAIN STREET VICE PRESIDENT LOS ANGELES. CA 90012 DIANA M. BONTA (213) 97&3800 ANDREW FRIEDMAN FAX: (213) 97&3815 JILL FURILLO HITP://WWW.LAFD.ORG LETICIA GOMEZ ANTONIO R. VILLARAIGOSA EXECUTIVE ASSISTANT I MAYOR September 27,2011 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 Subject: RESPONSE TO THE FINAL 2010-2011 CIVIL GRAND JURY REPORT RECOMMENDATIONS (e-Subpoena) The Final Report of the 2010-2011 Civil Grand Jury Report puts forth a number of recommendations related to the implementation of a computerized automated system (e-Subpoena) to manage the issuance and tracking of subpoenas issued by the Los Angeles County District Attorney's office to law enforcement agencies throughout the county of Los Angeles. The Final Report of the 2010-2011 Civil Grand Jury Report identifies the Los Angeles Fire Department (LAFD) as one of the agencies required to provide a written response to Recommendation number one (1) of the 2010-2011 Civil Grand Jury Report. Recommendation number one (1) reads as follows: "Implement e-Subpoena as a cost saving and operational efficiency measure for local law enforcement agencies receiving at least one hundred fifty (150) DA subpoenas quarterly." The finding of an internal LAFD assessment of the implementation of the e-Subpoena program suggest that the implementation of the e-Subpoena program is not feasible at this time due to limited financial resources and additional staffing requirements. AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER Los Angeles County Superior Court September 27,2011 of2 The LAFD estimated the following financial expenditures in order to implement e-Subpoena: 1. Roughly $75,000 to $100,000 is required to procure new hardware, software and network equipment to operate an in-house e-Subpoena application. 2. Approximately $80,000 to $90,000 would also be required to procure the additional Microsoft Active Directory (AD) licenses to provide e-mail licenses to LAFD members who do n'ot have a department issued e-mail account. 3. Two to three additional positions would be needed to meet the minimum staffing needs required to manage and support the e-Subpoena program. Although the LAFD cannot implement the e-Subpoena program at this time due to the current fiscal constraints, it recognizes the value and efficiencies derived from the use of a program such as e-Subpoena and will look into the implementation and deployment of e-Subpoena in the near future. ( Sincerely, -...,,:::~- l754-281)6 Anthony Wong www.d.monterey-pork.C8.US October 7, 2011 CITY CLERK David Barron The Honorable Lee Smalley Edmon . CITY TREASURER Presiding Judge Joseph leon Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012 RE: GRAND JURY REPORT COVER LETTER DATED JUNE 23, 2011 Dear Judge Edmon: The City received a copy of the undated Grand Jury Report entitled "Whoa! The State of Public Pensions in Los Angeles County" at the end ofJune 2011 (the "Report"). The Report n3,quested that the City re¢pond~otw() recolTlmendati0rls: . 1'1. [ThClt]Monterey Park's City CbuncilCldoptpolicieslofully'fund the ARC for bpth the MMRP and OPEB retirementbenefif plans for empl()yees in' order. to ensure future funding of benefits and earn hwestment income .. which would discount the annual required contributions. 2. [That] Monterey Park's City Council direct its City management to explore alternatives for reducing retirement benefit costs, including possible additional revisions to the amount of the employee contribution pick up paid by the City and alternative employee cost sharing arrangements for retiree health benefits." This letter responds to these recommendations in accordance with Penal Code § 933(c)(d). Please note that the City identified many factual errors in the Report pertaining to" Monterey Park. While the City respectfully declines to identify each of these, it does acknowledge that (like most cities in California) the City must continue acting to address the ever,e~panding retirememfobligCltionsincurred by the City. As you are aware, these obligations were generally negotiated between tlie CitY and its· pUblic· employees over the COl)rse of.many years. While these obligations continue to increase in cost, the econ,omic downturn - .and re~ulting decrease ih public revenue - threatens the ability of every public agency in California to pay for such obligations. ' Grand Jury Report Cover Letter Dated June 23, 2011 Long before the Grand Jury issued the Report, the City Council recognized that the City must decrease its expenses as to public benefits. Consequently, it directed the City Manager to take a number of austerity measures to help balance the competing demands of public employee benefits with taxpayer interests of improving the community. Toward that goal, the City Council negotiated several issues with its employees. Listed below are several matters the City has negotiated with three of the five bargaining units st that took effect on October 1 (the Police and Fire units do not come due until June 30, 2012). Steps taken: 1) Created a second tier of retirement. Lowering the 2.7% @ 55 to 2.5% @ 55 for new non-safety employees. 2) Requiring all non-safety employees to pick up 100% of the employee's portion of the PERS contribution. (Currently 8%) 3) Eliminating OPEB benefits for all new hires, and investigative studies of a VEBA or 115 Trust account for both current employees and new hires. 4) Lowering of caps of sick time, vacation time and administrative leave time on all employees. Also agreeing to forgo any cash outs during the next 12 months of the new MOUs. 5) Adding an additional $500,000 annually towards the OPES ARC. While these actions do not completely cure the problem, they are certainly a step in the right direction. In a difficult economy, all sides mutually worked together to find solutions to the City's long term structural obligations. Should you have any further questions or follow up, please do not hesitate to contact me. POLICE DEPARTMENT Cllty ofM~tatll Beach 420 t5~Sired MANHATIAN BEACH. CALIFORNIA 90266 f;HO) S02-5103 FAX (310) 802-5101 EVE R. IRVINE CmEFOFPOLK:E August 4, 2011 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, Ca. 90012 Dear Presiding Judge: We recently received the 2010-2011 Los Angeles County Civil Grand Jury RepOlt. The report makes the recommendation that the City of Manhattan Beach Police Department implement e-Subpoena as a cost saving and operational efficiency measure. In addition, the report recommends the City Attorney / City Prosecutor utilize the e-Subpoena system in locations wherein the police department is using the system. I have reviewed the report and agree that the e-Subpoena system could benefit our Department in the area of cost savings and improved efficiency. As a result of the Grand Jury recommendation, I have instructed my staff to begin an analysis of the e Subpoena program to determine whether we should implement the program here at the Manhattan Beach Police Department. I have asked that the review be completed within six months of the date of the Grand Jury report. This analysis and implementation review is to be completed by December 30, 2011. I want to thank you for bringing this new e-Subpoena program to my attention and I will be anxiously awaiting the results of our analysis of this program. CHIEF OF POLICE POLICE DEPARTMENT City of Manhattan Beach 420 15th Street MANHATIAN BEACH, CALIFORNIA 90266 (310) 802-5103 FAX (310) 802-5101 EVE R. IRVINE CHIEFOF POLICE January 31, 2012 Los Angeles County Civil Grand Jury Alf Schonbach, Foreperson Clara Shortridge-Foltz Criminal Justice Center 210 West Temple Street, Room 11-506 Los Angeles, California 90012 Dear Los Angeles County Civil Grand Jury: We received your request for a copy of our response to the recommendations of the 2010-2011 Civil Grand Jury Report. We reviewed our file and determined that we had sent the response to the Presiding Judge of the Los Angeles County Superior Court on August 4,2011, as instructed in the original request from the Civil Grand Jury. Apparently the response never made it to you. I am including a copy of the original response that was mailed last August 2011. If you need anything further please don't hesitate to ask. Thank you, EVE R. IRVINE CHIEF OF POLICE "Policing through Partnerships" City ofManhattan Beach Web Site: www.citymb.info Monrovia Police Department Grand Jury Response High Tech Forensics and Cyber Security Crime Fighting in the Digital Age By Captain Alan Sanvictores

R3: LASD and LAPD evaluate electronically transmitting other documents such as police reports andprobable cause determinations among law enforcement agencies, . prosecutors and the Court. LAPD's Response: Th.e Department agrees with the finding. The recommendation has not yet been implemented. The recommendation requires changes in the long standing procedures at the courts, Los Angeles County Sheriff's Department and LAPD. The Department is presently investigating the possibility ofproviding more services in six to twelve months to the public and other law enforcement agencies electronically. These include electronic filing and requesting of police reports, electronic case filing with the Offices of the District Attorney and City Attorney and systems to notify detectives of results from fingerprint and other forensic investigations. These projects are in the early stages of development and in many cases will require cooperation or joint development with various agencies and municipalities, Docunlellts such as Probable Cause Determinations calIDot be electronically distributed sim:e the Courts require the original report.. . , ·-i AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER www.LAPOOnfine.org www.joinLAPO.com The Honorable Lee Smalley Edmon 1.14 Hi-Tech Forensics

R4: City of Bell Police Department 19. City of Manhattan Beach Police Department

R5: City of Bell Gardens Police Department 20. City of Monrovia Police Department

R6: City of Beverly Hills Police 21. City of Monterey Park Police Department Department

R7: City of Burbank Police Department 22. City of Pasadena Police Department

R8: Establish a "High Tech Forensics Bureau." This will facilitate: i. Promotions and career opportunities for those who are trained and skilled in this area without having to leave the discipline ii. Succession planning and transfer ofhigh tech expertise, preserving the investment made in creating the expertise The Culver City Police Department is a participating agency in the West Side Regional High Tech Task Force. This task force is hosted by the Beverly Hills Police Department 4040 DUQUESNE AVENUE • CULYERCITY • CALIFORNIA 90232-2882 From:Guler City Pol ice Dept - Det. 3102536115 01/31/2012 16:00 #189 P.003/003 POLICE DEPARTMENT IN\'ESTIGATIONS BUREAU CITY OF CULVER CITY (31O) 253-6300 FAX (310) 253-6115 DONALD PEDERSEN Chief of Police and is made up ofinvestigators from the Beverly Hills, Santa Monica, and Culver City Police Departments; as well as the Los Angeles County Sherriff's Department and the United States Secret Service. We provide one Culver City investigator to the task force who works in such capacity on a part-time basis. Working in conjunction with the task force, our investigator is able to facilitate all ofour high tech investigative needs. Because ofthis, and in light ofour current fiscal situation, the establishment of a High Tech Forensics Bureau would be neither reasonable nor responsible. b. Update regular law enforcement recruit and detective training to include orientation, procedures, protocol, and other training with respect to digital evidence c. Include training in digital evidence collection, analysis and use in "roll call" training Our High Tech investigator is currently creating in-house training materials that, when completed, will address all ofthe above recommendations. Roll call training and other High Tech issues are provided and addressed by our investigator. We also have access to High Tech training through the West Side Regional High Tech Task Force as needed. As a department, we regularly send officers and investigators to formal High Tech training courses provided by POST and other training sources. d. Take steps to acquire POST certification for High Tech training courses for forensic examiners and cyber investigators to allow for reimbursement ofthe costs Being as we have accesses to the aforementioned training opportunities, the Culver City Police Department does not provide formal High Tech training. Feel free to contact the undersigned ifyou have any questions. Sincerely, {1~1 ['I' rol2- Scott/i.;b:; Assistant ChieforPolice SB/JW/js 4040 DUQUESNE AVENUE • CULVER CITY • CALIFORNIA • 90232-2882 From:Culer City Pol ice Dept - Det. 3102536115 01/31/2012 15:59 #189 P.001/003 CITY OF CULVER CITY CULVER CITY POLICE DEPARTMENT FAX TRANSMISSION COVER SHEET Date: 01/31/12 To: Name ............................................ . Natalie Organization ................................ .. Civil Grand JUry Location ....................................... .. (213) 229...2595 Fax # .............................................. From: Name ............................................ . Sgt. J. Sims #836 Organization ................................ .. Culver City Police Department Locatiou ........................................ . Culver California 90232 (310) 253·6115 Detectives Fax # ............................................. . Return Phone # ............................. . (310) 253-6306 Number ofpages:t.~;.,.:~~.~.;{yincluding cover sheet) .,-\";"" Special Instructions Culver City Police Department 4040 Duquesne Avenue Culver City, CA 90232 Telephone (310) 837-1221 Fax (310) 253-6115 - Detectives Fax (310) 253-6117 - Records FUTURE UNLIMITED ----~ Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 Your Honor, In June, 2011, The Downey Police Department received a copy of the County of Los Angeles Civil Grand Jury report detailing their investigation into the "High Tech Forensics and Cyber Security Crime Fighting in the Digital Age" within Los Angeles County. Per California Penal Code section 933, The City of Downey and The Downey Police Department are responding to the report. Upon reviewing the grand jury's investigation, we conclude the following sections applied directly to The Downey Police Department; 2a, 2b, 2c, and section 2d. We concur with the findings of the Grand Jury in these specific sections. fi Sincerely, ! \ I ~7~ Marque{~ Rick Esteves, Chief of Police Luis H. Downey Police Department City of Downey 562-904-2301 562-904-7274 ------------POLICE DEPARTMENT 11111 BROOKSHIRE AVENUE ---P-O-ST- O-F-FI-CE- B-O-X- 7-01-6 -----n(-'\\-hlM-l-::V- C-ALIFORNIA 90241-7016 -------------~----------- ..--- GARDENA POLICE DEPARTMENT 1718 W. 162nd Street • Gardena, CA 90247 Phone (310) 217-9600 • Fax (310) 217-9638 August 31,2011 REF: 11-176 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 W. Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012 Dear Presiding Judge: The Gardena Police Department has reviewed the e-Subpoena material provided to the Department by the Los Angeles County Civil Grand Jury. As the respondent, we agree with the Grand Jury Reports and will establish a timeline for e-Subpoena implementation. A study of our current procedures showed execution of the system would be both feasible and beneficial to the Department. Currently, the District Attorney's Office and the Public Defender use paper printed subpoenas. The subpoenas are picked up at the Torrance Court and brought back to the Department for logging, and distribution to our personnel and witnesses. There are some instances where we receive subpoenas via FAX or U.S. mail. These subpoenas are also logged in by our subpoena control police assistant, and then physically distributed to our personnel and civil witnesses. The use of the e-Subpoena system would greatly enhance our ability to get our personnel served in a timelier manner. The system also provides a greater amount of accountability in the proof of service, by complete logging of delivery and receipt. Once in use, the e-Subpoena system would eliminate the need for our subpoena control police assistant to track and deliver court summons to our officers. The subpoena control police assistant would still be needed for the tracking and the delivery of printed subpoenas to civilian witnesses and victims. The system does require some interfacing with current IT systems. We spoke with representatives of the Inglewood Police Department and the Culver City Police Department; both agencies are currently using the system. In both instances they spoke very highly of the system and the ease of implementation through an outside vendor, WEBIPLEX in Newport Beach, CA. Service with Pride and Professionalism. II If Should you require further information, please contact Sergeant Russ Temple, Gardena Police Department Detective Bureau, at (310) 217-9636. Sincerely, Edward Medrano Chief of Police f , CITY OF GLENDORA POLICE DEPARTMENT 150 SOUTH GLENDORA AVE., (626) 914-8250 GLENDORA, CALIFORNIA 91741-3498 FAX # (626) 963-2154 ROBERT M. CASTRO, CHIEF OF POLICE June 27,2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 To Whom It May Concern: This letter serves as the Glendora Police Department's response to the 2010-2011 Civil Grand Jury report for "eSubpoena". As to recommendation #1, "Implement e-Subpoena as a cost-saving and operational efficiency measure for local law enforcement agencies receiving at least one hundred fifty (150) DA subpoenas quarterly," We agree with the fmding. The recommendation has not yet been implemented, but will be implemented in the future. Since the Glendora Police Department is a small department without dedicated subpoena control officers on staff, we will coordinate with the LA DA office to develop an e-subpoena application in-house, rather than incurring the additional software purchase and maintenance costs associated with a third-party solution which may offset the benefit of the recommendation. Our timeframe for implementation is within 1 year from the date ofthis mailing. Please contact me at 626-914-8262 with any questions. Sincerely, ~~ Robert M. Castro Chief of Police o P RID E F THE FOOTHILLS CITY OF GLENDORA POLICE DEPARTMENT 150 SOUTH GLENDORA AVE., (626) 914·8250 GLENDORA, CALIFORNIA 91741·3498 FAX # (626) 963-2154 ROBERT M. CASTRO, CHIEF OF POLICE June 27,2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 To Whom It May Concern: This letter serves as the Glendora Police Department's response to the 2010-2011 Civil Grand Jury report for "eSubpoena". As to recommendation #1, "Implement e-Subpoena as a cost-saving and operational efficiency measure for local law enforcement agencies receiving at least one hundred fifty (150) DA subpoenas quarterly." We agree with the fmding. The recommendation has not yet been implemented, but will be implemented in the future. Since the Glendora Police Department is a small department without dedicated subpoena control officers on staff, we will coordinate with the LA DA office to develop an e-subpoena application in-house, rather than incurring the additional software purchase and maintenance costs associated with a third-party solution which may offset the benefit ofthe recommendation. OUf timeframe for implementation is within 1 year from the date ofthis mailing. Please contact me at 626-914-8262 with any questions. Sincerely, 1fUrf~ Robert M. Castro Chief of Police P RID E o F THE FOOTHILLS CITY OF GLENDALE, CALIFORNIA 131 North Isabel Street Police Department Glendale, California 912064382 Office of the Chief of Police (818) 548-3140 www.ci.glendale.ca.us November 23,2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11:"506 Los Angeles, CA 90012 RE: 2010-2011 Civil Grand Jury Recommendations Dear Presiding Judge, On June 23, 2011, the 2010-2011 Civil Grand Jury made the following recommendations to the Glendale Police Department: 1) Implement e-Subpoena as a cost saving and operational efficiency measure, and 2) Establish a High Tech Forensics Bureau. I have. considered these recommendations. I understand the need in law enforcement to provide prosecutorial and defense agencies with an automated means to serve law enforcement officers and I also recognize the value to crime fighting oftraining our personnel in high tech forensics. Presently, our ability to implement e-Subpoena and create a High Tech Forensics Bureau is hampered by dramatic cuts over the last three years in the City of Glendale Police Department's budget, along with a significant reduction in our staffing of sworn positions. As a result, we are fiscally unable to consider implementing these recommendations at this time absent a funding source. Ronald L. DePompa Chief ofPolice RLD: rsb C: Mr. Bob Cremer, Chairperson, Continuity Committee 2011-2012 Los Angeles County Civil Grand Jury o WE RECYCLE CITY OF INGLEWOOD One W. Manchester Boulevard, Suite 860, Inglewood, CA 90301#1750 Office ofthe City .Jlttorney Tel: (310) 412~8672 Cal P. Saunders Fax: (310) 412~8865 www.cityofinglewood.org City Attorney November 29, 2011 Presiding Judge Los Angeles County Superior Comt Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 Re: E-Subpoena Dear Presiding Judge:

R9: City of Culver City Police Department 24. City of San Fernando Police Department

R13: City of I-!untington Park Police Department 27. City of Torrance Police Department

📋February 17, 2012 — High Tech Forensics and Cyber Security Crime Fighting in the Digital Age

228 pages 8 findings 32 recommendations

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Findings & Recommendations 8 findings

F1: LADOT agrees with the finding. Note that the issue reviewed by the CGJ focused on whether or not signs should be posted in an existing temporary preferential parking district.

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F2: Localized Joint Task Force Model The respondent agrees with the findings.

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F2a: LADOT agrees with the finding, as it relates to the department received an incomplete petition in 2008.

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F2b: LADOT agrees with the finding, as it relates to a request to post signs, not "installation { of a PPD".

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F2c: LADOT agrees with the finding, as it relates to sign posting, not "establishment of a PPD".

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F3: LADOT has no position on the finding. LADOT has no record of the stated "attempts by residents to get the reasons for rescindment [of the request f9r sign posting]".

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F4: LADOT agrees with the finding, as it relates to canceling the July 29, 2010 approval of sign posting. LADOT notified all the affected residents in writing that the sign posting was imminent, but did not notify the affected residents when a counter-petition opposing sign posting was verified and the sign posting canceled. LADOT agrees that residents should have been informed. September 27, 2011 1 County of Los Angeles CIVIL GRAND JURY CLARA SHORTRIDGE FOLTZ CRIMiNAl JUSTICE CENTER 210 WEST TEMPLE STREET· ELEVENTH FloOR • ROOM 11-505 • LOS ANGELES, CALIFORNIA 90012 TELEPHONE (213) 893-1047 • FAX (213) 229-2595 http://www.grandjury.co.la.ca.usI June 23. 2011 SheriffLee Baca Los Angeles Sheriffs Department 4700 Ramona Blvd. Monterey Park. California 91754 Re: PRE RELEASE DELIVERY OF A PORTION OF THE 2010-2011 LOS ANGELES COUNTY eM GR..ANri JiJRy REPORT. NOTE: DO NOT DISCLOSE ANY REPORT CONTENTS PRIOR TO JUNE 30, 2011 Dear SheriffBaoa: Pursuant to California Penal Code §933.05(f): A grandjwy shall provide to the iifjected agency a copy oflheportion ofthe grandjury report relating to that person or entity two working days prior to its public release andafter the approval ofthe presidingjudge. No officer, agency, department, or governing body ofa public agency shall disclose 07QI contents ofthe report prior 10 the public release ofthe final report. The Final Report by the 201 0-2011 Los Angeles County Civil Grand Jw:y will be released to the public on June 30, 2011. ! I '<, In accordance with this requirement. please acknowledge receipt ofthe portion ofthe 2010-2011 Los Angeles County Civil Grand Jury Report that affects this agency, department, or governing body by signing this letter. Thejurors delivering this report will retain the copy ofthis letter signed by the recipient or recipient's agent. A response to all Recommendations in a Civil Grand Jmy Report is required by California Penal Code §933(c) and §933.0S within ninety (90) days following the release ofthe Report to the public. Attached are instructions on how to respond. Sincerely. Joe Safier, Foreperson 2010-20] 1 Los Angeles County Civil Grand Jury RECEIVED BY DATE / l ~y J). 6~ Printed Name Attachments (2) At'ITONIO R. VILLARAIGOSA Commission RONALD O. NICHOLS Mayor Gener.i11 Manager mOMAS S. SAYLES, President ERIC HOLOMAN, Vice President RICHARD F. MOSS CHRISTINAE. NOONAN iONATIIAN PARFREY BARBARA E. MOSCHOS, Secretary September 27, 2011. The Honorable Lee Smalley Edmon Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 Dear Presiding Judge Edmqn: Subject: Additional tim~J~ClIJ~~ted bytheBdar~ ~:l.Water and Power Commissioners of the City of Los Angeles to respond to: Final Report -130) Whoa! The State of Public Pensions in Los Angeles County Assessment of the State of Pension Plans in Los Angeles County Phase II: Section 2 City of Los Angeles Department of Water and Power Employee Retirement Plan (pp. 254-265) Water and Power Conservation . .. a way of life 111 North Hope Street, Los Angeles, California 90012-2607 Mailing address: Box 51111, Los Angeles 90051-5700 Telephone: (213) 367-4211 table addres.s: DEWAPOLA .,.i • ~andmadoftom~_ '...: , I The Honorable Lee Smalley Edmon September 27,2011 On June 30, 2011 the, Los Angeles County Civil Grand Jury issued its final report. Two of the 13 investigative reports contained within the finat report concern the Los Angeles Department of Water and Power (lithe Department") and call upon the Board of Water and Power Commissioners (lithe Board") of the City otlos Angeles to respond to these reports. Under California Penal Code § 933{c), the "governing body of the public agency must comment to the presiding judge of the superior court on the findings and recommendations pertaining to matters under control of the governing body" within 90 days of the date the grand jury submitted its final report. Both reports inform the Board that its response is due on September 30, 2011. See Final Report at pp.128, 265. The'Board respectfully requests that it be allowed an additional 30 days within which to file its responses to the findings and recommendations set forth in the two investigative reports referenced above. Should this request be granted, the new deadline for response would become Monday, October 31,2011, inasmuch as the 30th will be a Sunday. The requested additional time is needed for two reasons: 1. Additional time is needed to complete the analYSis of the grand jury's findings and recommendations and prepare responding comments for the Board's consideration. The Board's response must be built upon a thorough analysis of the findings and

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F13: Recommendation: Approve the responses to the 2010-11 findings and

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Additional Recommendations 32

Not linked to specific findings.

R1: lInpl~mente-Subpoena as n cost saving and operational efficiency measure for local law enf6rcement agencies receiving a.t least one hundred fifty (:1.50) DA subpoenas quarterly. . . , . .' . . - ' . . . . ResponseJ: The recommendation has not yetheenirrtplemertted, hut the Torrance Police Department has resear:ched implementation of an E':Subp()ena systeJ;lland plans to begin beta testing ofthistechnology illFall2011. Staffhas examined avair~bleE-Subpoena software packages successfully deployed by law enforcement agencies in Los Angeles County and plans to deploy a sihlilat system for a sixmonthtrial period ..Through E-Subpoenairnplementation, the departmenthopestohetterits cost and process efficienc'ie's through such features as:. email .notification oi'subpoenareceipt and seivice,stre~lilledaudittrails, email notification ofofficer appearance instni~tions, and centralized perforrn.ance repoftingand service tracking. Additionally, the City ofTorrance prosecutor's Office has expressed interest in participating in the police department'sE-Subpoena testtrial,and discussions for coordination are ongoing. Sincerely, ~e~~----~~ Chief of Police OF TORRANCE POLlCE DEPARTMENT JOHN J.NEU Ci-IIEFOF POUCE September 16,2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justite Center 2l0W. Temple St., 11th Floor, Rm. 11-506 Los Angeles, CA90012 Dear Presiding Judge of the L.A. Sllperior Court: Incompliance with Califorma Penal Code requirements, the Torrance Police Department has reviewed the recommendations detailed in the 2010-2011 L.A. County Grand Jury Report "High TechForeflsics andCyber. Security Crime Fighting in the Digital Age" and provides the following responses:

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R2: Additional time is needed in order to allow the Board of Water and Power Commissioners sufficient time to consider the matter. The reports call upon the Board to serve as the responding "agency" for all recommendations, but three of them also require responses from the City Council and the Los Angeles City Employees' Retirement System ("LACERSII) Board of Administration. Under the Los Angeles City Charter, the Board serves as "head" bf the Department, Charter § 600(b), and thus serves functionally as the "governing body" referenced in California Penal Code § 933(c) over matters within the Board's Charter authority. The Board is one of the citizen boards heading major City operating departments (others include Airports, Harbor, Fire, Police, Library, Public Works, and Recreation and Parks). Charter §§ 500(a), 600(a). The Board conducts regular meetings twice a month (1st & 3rd Tuesdays). Rules of the Board of Water and Power Commissioners, Rule 1 (Res. 011-223, March 1, 2011), although it can and sometimes does call special meetings. If the Board is the responding lIagency," it must approve the response. Board approval is given by majority vote of its members, Charter § 503(c), at a noticed meeting as required by the applicable open meetings law, the Ralph M. Brown Act. California Government Code §§ 54950 ef seq. The additional time requested will afford the Board sufficient opportunity to review analysis by Department staff in various functional areas and receive other input so that it can determine the responses to be made. The Board should be able to complete this work by the October 31 deadline being requested. Thomas S. Sayles President Board of Water and Power Commissioners c: Ronald O. Nichols General Manager 244674v2 3 OFFICE OF THE CITY ATTORNEY CARMEN A. TRUTANICH RICHARD M. BRCWN DEPARTMENT OF WATER ANtl PCWER CITYATTORNEY GENERAL COUNSEL LEGAL tllVISICJN FDR WATER AND POWER P.O. EltlX 61111 - SUITE 340 LtlS ANGELES, CALIFORNIA 90061-0100 HAND DELIVERED TELEPHONE (213) 367-4600 FAX (213) 3S7-461313 November 17, 2011 The Honorable Lee Smalley Edmon Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 Alf Schonbach, Foreperson Civil Grand Jury County of Los Angeles Clara Shortridge Foltz Criminal Justice Center 210 W. Temple Street Room 11-506 Re: Status report on the progress of the Board of Water and Power Commissioners of the City of Los Angeles in responding to: Final Report -130) Whoa! The State of Public Pensions in Los Angeles County Assessment of the State of Pension Plans in Los Angeles County Phase II: Section 2 City of Los Angeles Department of Water and Power Employee Retirement Plan (pp. 254-265) Dear Presiding Judge Edmon and Foreperson Schon bach: AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER The Honorable Lee Smalley Edmon Alf Schonbach, Foreperson November 17, 2011 In a letter of November 1,2011, this Office indicated that it would keep the Court and the Grand Jury advised of the progress of this matter until the response of the Board of Water and Power Commissioners was filed. We can report that the Board considered a preliminary draft prepared by staff at its regular meeting on November 15, 2011. While it had been anticipated that all Board members would be present, only three (but still a quorum) were present. The draft response was discussed by the members present, but no action was taken at that time to approve a response. The Board will require additional time to consider its response and have the matter before the Board when more members are present. In consideration of the Holidays, the Board meets only once in December. The Board deferred consideration until a meeting in January. This Office will continue to keep the Court and the Grand Jury advised of the progress of this matter until the Board's response is filed. eneral Counsel Department of Water and Power cc: Thomas S. Sayles President Board of Water and Power Commissioners Ronald O. Nichols General Manager Department of Water and Power 246981v1 ( m~<-t;s~~ redondo B E A C H Police Department W. Joseph Leonardi Chief of Police 401 Diamond Street, P.O. Box 639 Redondo Beach, California 90277-0639 www.redondo.org tel fax 310379-2477 310372-0167 August 8, 2011 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012 Subj: 2010-2011 CGJ Report Recommendations Madam:

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R2a: E~tablish a "High Tech Forensics Bureau." Response 2a: The Torrance Police Department has already implemented this recommendation. A High Ttch Crimes detail, housed in the Detectives DIvision, was established in January 2010. A full-time detective is assigned to the detailasthe Computer Forensics Lab investigator. The Department completed renovations to establish a state of the art computer forensics lab in August 2010 which houses the equipment and systems needed for digital evidence processing. Detective duties intiude:conductinginvestigations a.rid digitcilevidence recoveryort computers, cell phones and various electromc devices; performing surveillance video recovery and enha.p.cement investigations; providing expert witn.ess testimony in court; l:lnd assisting ta~k force members with cases and warmhtsat various locations around Los Angeles County. The detective is assigned to the Los Angeles Police Department's Internet Crimes AgaihstChildren (ICAC) Task Force and the United States Secret Service's Los Angeles Electromcs Crimes Task Force (LAECTF). He is a graduate of the National Computer F orensicInstitute "Basic Computer Evidence Recovery Traimng";has attained "ACE" certificationin Access Data's Forensic Tool Kit; and is trained in mobile phone and computer forensics, as well a.s advanced internet examinations; As ofMarch 2011,the detallhas coinpleted 41 forensic investigations with evidence retrieved from computers, cell phones, electronic video and audio, dIgital video recorders (DVR) and global positioning systems (OPS\ These investigations included criminal cases involving homicide, identity theft, narcotjcs, theft and sex crimes. Another detective has been assigned to the High Tech Crimes detail and is being trained accordingly, as the original Computer Forensics Lab investigator isonmedicl:llieave .. 3300 Civic Center Drive. Torrance, California 90503-5056 • Telephone 310/328-3456. Facsimile 310/618-5532 · ;. { I'

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R2b: Updateregular law enforcement recruit and detectivetraining to include orientation, procedures, protocols and oth~r trai.ningwith respect to digital' eviden'ce. . ' . . Response 2b: The Torrance Police Departmenthas;:tlready i111pletnented this recommendation. Personnel fromtheHigh Tech Crimes detail and Detectives Division periodically inform new and experienced patrol officers ofthe purpose and capabilities ofthe High Tech Crimes detail. Presentation content inc~udes digital evidence recognition and preservation and(ih overview of what circumstances warrant call out ofthe Computer Forensics Lab investigator. Additionally, Field Training Officers incorporate basic digitalevidence training for newly hired officers as circumstances arisein the field; i.e. theft ofGPS-enabledelectronic devices, call/text data for cell phones in possession ofknown criminals,etc. Policeoftlcer probationers are therefore exposed to hands-on learning oppofhmities regarding the recognition, preservation and use of digital evidence in everyday police work. .,

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R2c: Include trainillg in digital evidence collection, analysis and use in "roll call" training. Response 2c:. The Torrance Police Department has already implemented this recommendation. As mentioned earlier,personnel from the High Tech Crimesdet(iil and Detectives Division periodically present digital evidence information to patrol staff. These presentations are made at daily patrolbriefings and heighten officer awareness of digital evidence impoliance, recognition and preservation. Patrol officers are also informed ofthe capabilities ofthe High Tech Crimes detail and under what circumstances the detail's specialized skills should be called out to a crime scene. Recommendation2d. Take stepsto~cquire the POST certification for High Tech training courses for forensic. examiners and cyber investigators to allow for reimbtirselDent of the costs. Respollse 2d: Therecormnendatiori is not applicable .. It is the Torrance PoliceDepartment's understanding that POST certification is the responsibility ofthe training provider. The department is not a provider ofHigh Tech training. Sincerely, ~"1----- ~n\(Neu Chief ofPolice C· I T YO F TORRANCE November 30, 2011 Mr. Bob Cremer, Chairperson, Continuity Committee 2011-2012 Los Angeles County Civil Grand Jury· Clara Shortridge Foltz Criminal Justice Center 210 W. Temple St.; 11th FIQor, Rm. 11-506 Los Angeles, CA 90012 Dear Mr. Cremer: This correspondence is in response to your letter dated November 18,2011 which noted that the Los Angeles County Civil Grand Jury had not received the required responses from the Torrance Police Department. . Copies ofthe Torrance Police Department's written response letters, as well as the confinnation receipt letters have been enclosed for your reference as follows: (1) "E-Subpoena, One Way to End the Paper Chase" response letter (1) "High Tech Forensics and Cyber Security Crime Fighting in the Digital Age" response letter (I) "E-Subpoena, One Way to End the Paper Chase" confinnation receipt letter (1) "High Tech Forensics and Cyber Security Crime Fighting in the Digital Age" confinnation receipt letter Please feel free to contact me, Kent Sentinella, Administrative Analyst at (310) 618 ...5677 should you require anything further. Sincerely, JOHN J.NEU ChiefofPolice 14~ Kent Sentirtella, Administrative Analyst Torrance Police Department . Enclosures ( 4) cc: Mr. Alf Schonbach, Foreperson 3300 Civic Center Drive- Torrance, California 90503-5056 • Telephone 310/618-5677 • Facsimile 310/618-5635 lMI.fI....ier Polia Dpartment a .........-----Quality People - Quality Service---.- ....------ Jeff A. Piper Chief of Police Serving the Communities of Whittier and Santa Fe Springs September 19, 2011 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012 RE: Response to Civil Grand Jury High Tech Forensics Recommendations Dear Presiding Judge, Please allow this correspondence to fulfill the requirements set forth in Penal Code Sections 933( c) and 933.05 in responding to the High Tech Forensics report submitted by the Civil Grand Jury.

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R3: The timeframe for implementation will depend on the cost of the implementation and the ability to coordinate the requirements of the Information Technology Departments of the City of Redondo Beach and the District Attorney's Office. The Police Department does not have information technology personnel dedicated to the department and projects are based on priority need. The Redondo Beach Police Department agrees that the E-Subpoena system can be beneficial and improve procedure, but not for the reasons stated by the Grand Jury report. We disagree with some of assertions of the Grand Jury; they are not accurate as applied to the Redondo Beach Police Department. The Grand Jury uses the los Angeles Police Department and others as the litmus test for efficiency and effectiveness. One size does not fit all, and the report does not account for agencies that have instituted subpoena control with policy, procedure and other computer programs for many years. The Redondo Beach Police Department has instituted a monitored and controlled subpoena program for more than thirteen years. We adapted practices learned from the Torrance Police Department that implemented these programs before us. The report emphasizes the strict time requirements of arraignment and preliminary hearing as being one of the primary needs for the system. It posits that the DA's lack of knowledge of completed service is the reason for issuing subpoenas to all officers on a case. "When paper subpoenas are delivered and hand distributed, the DA has no timely confirmation of who is served. For example, if six officers investigate a crime, unless the prosecutor knows the lead officer receives their subpoena the DA often sends to all six officers involved." This is stated again on , item 7.a. Our experience is that two very different criteria affect the number of subpoenas and the timeliness of subpoena delivery that far exceeds the effects of confirmation. First, the filing deputy, and not the prosecutor for the preliminary hearing, determines the number of officers subpoenaed to a case. The prelim deputy often does not receive or see the case until the day of the prelim and does not determine officers' attendance. If the police department attempts to reduce the number of officers appearing, it is done through personal contact with the witness coordinator for the local office. Second, the three-day workweek affects the ability of the department to serve officers if the subpoenas arrive on or after the last workday of their schedule. When leave time is granted, this exacerbates the problem. The Redondo Beach Police Department retrieves its local subpoenas daily from the court and distributes them as soon as possible on the next available work day of the officers. More than 90% of all felony subpoenas for the Redondo Beach officers are from the Torrance Office. Delays do not occur for the majority of the department's subpoenas. A Court Liaison Officer dedicated to the retrieval, delivery, and proof of service of subpoenas manages our cases daily. The Court Liaison Officer confers with the witness coordinator in the Torrance DA's Office daily to reduce the number of officers called to cases. They work closely together, and they are effective. This combined with a Court Subpoena Database that has been used in our Department since about 1998 saves as much as $60,000 or more in costs per month. It is the personal contact and credibility ofthese persons that realizes the reductions. When our liaison officer attempts to achieve the same results with foreign courts in other parts of Los Angeles and Orange County, they meet with resistance and often cannot reduce the number of officers. This occurs even with evidence of proof of service. This is why we believe the comments of the report are not accurate regarding the controlling factor to reduce the number of officers subpoenaed to appear. With certain defense attorneys, the control is even less, as we believe they subpoena all officers to cause an economic disadvantage in an attempt to discourage going to trial by raising overtime costs. , Item 12 "Less manpower is needed to generate mail and manually track each subpoena." We believe that this will only be true if we are able to create an interface between our existing court tracking software and the e-Subpoena system and/or our Court Liaison Officer has the ability to receive notification of service in real time to allow adequate follow-up when subpoena timelines are critical. Their current involvement in service and validation of service for the DA will be impeded if the transactions are between the system and the officer only, and they require the Court Liaison Officer to run ad hoc queries to determine status. It is imperative that our management knows when the officer is subpoenaed and their response to the subpoena. , Item 16 "Several departments that have implemented e-Subpoena encourage their officers to check email on their days off." We know from previous labor issues in the City of Redondo Beach that this will cause labor objections and assertions that this violates FLSA de minimus rules. If the time lines of a court appearance are close, the department will have to make contact with the officer to give a verbal order with or without the e-Subpoena system. We are interested in determining how the system will deal with officers that are in long-term leave status or that are on leave. There are legitimate excusable circumstances that prevent officers' f .., attendance at court. With our current procedures, we are aware of these circumstances and can assist in finding alternatives to mitigate them. "This new system also permits law enforcement management to track offending officers with a history of missed hearings or who intentionally run up court appearance overtime. Previously, such officers could not be disciplined, as the agency had no knowledge of officers who were abusing the system./I Again, the Grand Jury is making an assumption based on the LAPD and not on other agencies. We have long held our officers accountable to court appearances, and we have concern that the direct link between officer and the DA can lessen this accountability through the technology rather than improving it. We have attempted to contact the DA's Office regarding the requirements and process to implement the e-Subpoena system. We will attempt to implement the system as long as it enhances our ability to hold officers accountable for their court appearances. Sincerely, { j County of Los Angeles CIVIL GRAND JURY CLARA SHORTRIDGE FOLTZ CRIMINAL JUSTICE CENTER 210 WEST TEMPLE STREET· ELEVENTH FLOOR· ROOM 11-506 • LOS ANGELES, CALIFORNIA 90012 TELEPHONE (213) 893-1047' FAX (213) 229-2595 http://www.grandJury.cQ.la.ca.us/ November 18,2011 Chief Joe Payne South Pasadena Police Department 1422 Mission Street South Pasadena, California 91030 Dear Chief Payne: Pursuant to Penal Code §933, all Agencies cited in the 2010-2011 Los Angeles County Civil Grand Jury Final Report are required to respond to the recommendations provided in the Final Report within sixty days for elected officials and no longer than ninety days for public agencies. Please note, as oftoday's date the Los Angeles County Civil Grand Jury has not received· the required responses from your agency. If you have already responded to the recommendation(s) in the Final Report, please disregard this notice. Thank you for your cooperation. Sincerely, /J /! ~-:L- t-~~"-<'\. Bob Cremer, Chairperson, Continuity Committee 2011-2012 Los Angeles County Civil Grand Jury Alf Schonbach, Foreperson 2011-2012 Los Angeles County Civil Grand Jury E..SUBPOENA ONE WAY TO END THE PAPER CHASE Committee Members Chairperson: Joseph H. Saner John A Rangel Susan Stetson METHODS AND PROCEDURES The CGJ reviewed DA prepared e-Subpoena presentation materials, an overview of the County's Information Systems Advisory Board (ISAB" Proactive Information Exchange (PIX) system, and several LEA e~Subpoena Policy/Procedure statements. The CGJ analyzed statistics of subpoenas issued by the DA during 2010 and prepared a Report of LEAs in descending order of number of subpoenas received. In addition, CGJ members met or spoke with representatives of the DA, ISAB and the following LEAs and City Attorneys to discuss the system:

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R4: City of Bell Police Department

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R5: City of Bell Gardens Police Department

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R6: City of Beverly Hills Police Department

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R7: City of Burbank Police Department

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R8: City of Covina Police Department

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R9: City of Culver City Police Department

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R10: City of Gardena Police Department

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R11: City of Glendale Police Department

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R12: City of Glendora Police Department

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R13: City of I-!untington Park Police Department

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R14: City of Inglewood Police Department

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R15: City of Inglewood City Attorney

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R16: City of Long Beach Police Department

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R17: City of Los Angeles Fire Department

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R18: City of Los Angeles Unified School District School Police

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R19: City of Manhattan Beach Police Department

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R20: City of Monrovia Police Department

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R21: City of Monterey Park Police Department

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R22: City of Pasadena Police Department

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R23: City of Redondo Beach Police Department

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R24: City of San Fernando Police Department

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R25: City of San Gabriel Police Department

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R26: City of South Pasadena Police Department

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R27: City of Torrance Police Department

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R28: City of West Covina Police Department

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R29: City of Whittier Police Department 2010·2011 c. Improved control using case management systems versus ad hoc e-mail d. PIX ensures reliable delivery/return receipt and a standard interface to different law enforcement agency systems All DA, Public Defender, APD, and City Attorneys/City Prosecutors in the future can use the same message formats and delivery mechanisms.

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📋February 17, 2012 — Implementation of E-Subpoena system

228 pages 8 findings 19 recommendations

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Findings & Recommendations 8 findings

F1: LADOT agrees with the finding. Note that the issue reviewed by the CGJ focused on whether or not signs should be posted in an existing temporary preferential parking district.

F2: Localized Joint Task Force Model The respondent agrees with the findings.

F2a: LADOT agrees with the finding, as it relates to the department received an incomplete petition in 2008.

F2b: LADOT agrees with the finding, as it relates to a request to post signs, not "installation ( of a PPD".

F2c: LADOT agrees with the finding, as it relates to sign posting, not "establishment of a PPD".

F3: LADOT has no position on the finding. LADOT has no record of the stated "attempts by residents to get the reasons for rescindment (of the request for sign posting]".

F13: Recommendation: Approve the responses to the 2010-11 findings and

Additional Recommendations 10

Not linked to specific findings.

R4: City of Bell Police Department 19. City of Manhattan Beach Police Department

R5: City of Bell Gardens Police Department 20. City of Monrovia Police Department

R6: City of Beverly Hills Police 21. City of Monterey Park Police Department Department

R7: City of Burbank Police Department 22. City of Pasadena Police Department

R9: City of Culver City Police Department 24. City of San Fernando Police Department

R13: City of I-!untington Park Police Department 27. City of Torrance Police Department

📋February 17, 2012 — Implementation of the E-Subpoena program

228 pages 6 findings 10 recommendations

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Findings & Recommendations 6 findings

F1: LADOT agrees with the finding. Note that the issue reviewed by the CGJ focused on whether or not signs should be posted in an existing temporary preferential parking district.

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F2a: LADOT agrees with the finding, as it relates to the department received an incomplete petition in 2008.

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F2b: LADOT agrees with the finding, as it relates to a request to post signs, not "installation ( of a PPD".

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F2c: LADOT agrees with the finding, as it relates to sign posting, not "establishment of a PPD".

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F3: LADOT has no position on the finding. LADOT has no record of the stated "attempts by residents to get the reasons for rescindment (of the request for sign posting]".

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Additional Recommendations 10

Not linked to specific findings.

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R2: LADOT agrees with the recommendation, but will not implement in the foreseeable future due to budgetary and staff constraints. ### September 27,2011 2 Re ,-lei loj4jJl BOARD OF FIRE CITY OF Los ANGELES FIRE DEPARTMENT COMMISSIONERS CALIFORNIA BRIAN L. CUMMINGS GENETHIA HUDLEY·HAYES FIRE CHIEF PRESIDENT CASIMIRO U. TOLENTINO 200 NORTH MAIN STREET VICE PRESIDENT LOS ANGELES. CA 90012 DIANA M. BONTA (213) 97&3800 ANDREW FRIEDMAN FAX: (213) 97&3815 JILL FURILLO HITP://WWW.LAFD.ORG LETICIA GOMEZ ANTONIO R. VILLARAIGOSA EXECUTIVE ASSISTANT I MAYOR September 27,2011 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 Subject: RESPONSE TO THE FINAL 2010-2011 CIVIL GRAND JURY REPORT RECOMMENDATIONS (e-Subpoena) The Final Report of the 2010-2011 Civil Grand Jury Report puts forth a number of recommendations related to the implementation of a computerized automated system (e-Subpoena) to manage the issuance and tracking of subpoenas issued by the Los Angeles County District Attorney's office to law enforcement agencies throughout the county of Los Angeles. The Final Report of the 2010-2011 Civil Grand Jury Report identifies the Los Angeles Fire Department (LAFD) as one of the agencies required to provide a written response to Recommendation number one (1) of the 2010-2011 Civil Grand Jury Report. Recommendation number one (1) reads as follows: "Implement e-Subpoena as a cost saving and operational efficiency measure for local law enforcement agencies receiving at least one hundred fifty (150) DA subpoenas quarterly." The finding of an internal LAFD assessment of the implementation of the e-Subpoena program suggest that the implementation of the e-Subpoena program is not feasible at this time due to limited financial resources and additional staffing requirements. AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER Los Angeles County Superior Court September 27,2011 of2 The LAFD estimated the following financial expenditures in order to implement e-Subpoena: 1. Roughly $75,000 to $100,000 is required to procure new hardware, software and network equipment to operate an in-house e-Subpoena application. 2. Approximately $80,000 to $90,000 would also be required to procure the additional Microsoft Active Directory (AD) licenses to provide e-mail licenses to LAFD members who do n'ot have a department issued e-mail account. 3. Two to three additional positions would be needed to meet the minimum staffing needs required to manage and support the e-Subpoena program. Although the LAFD cannot implement the e-Subpoena program at this time due to the current fiscal constraints, it recognizes the value and efficiencies derived from the use of a program such as e-Subpoena and will look into the implementation and deployment of e-Subpoena in the near future. ( Sincerely, -...,,:::~ ( /i <llnunttr nf 1Jln5 i\ng:eI:e5 d§henff'5 Eepatitttettf lIea()-IJUa:rnrs 47DD 3Ra:molta: 16luukua:r() jJl[.nmerey JTa:rk, OIa:lifornia: 91754-2169 LEROY D. BACA. SHERIFF September 30, 2011 The Honorable Lee Smalley Edmond Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11 ~506 Los Angeles, California 90012-3210 Dear Judge Edmond: 2010-2011 GRAND JURY RECOMMENDATIONS FOR ELECTRONIC LEGAL SERVICE AND LEGAL DOCUMENT DELIVERY This is in response to your memorandum dated July 18,2011, directing a written response to Recommendations 3 and 4 of the 2010-2011 Grand Jury report entitled "E-Subpoena One Way to End the Paper Chase." These recommendations pertain to the utilization of electronic means to accomplish legal service transactions and delivery of legal documents between justice agencies and the courts. RECOMMENDATION NO.3 Los Angeles County Sheriff's Department and Los Angeles Police Department evaluate electronically transmitting documents such as police reports and probable cause determinations among law enforcement agencies, prosecutors and the Court. RESPONSE The Information Systems Advisory Body (ISAB) ofthe Countywide Criminal Justice Coordination Committee, which represents a number of County agencies including the Sheriff, Judges, District Attorney and Public Defender, is in the process of implementing this recommendation. ISAB has identified several electronic Probable Cause Determination (ePCD) service and delivery system implementation options including development of a system utilizing a private vendor; development of a system utilizing in-house LASD information technology; or, adoption of an existing system. ISAB solicited and received an estimate from an existing County IT vendor (Global 360) for the cost of developing a custom ePCD solution, and is also closely evaluating an existing ePCD system developed by the Los Angeles County Superior Court, :7l 7radifion 0/ dervice ( Judge Edmond - 2- September 30,2011 ISAB estimates that a best option will be selected and an ePCD solution will be implemented within one to two years. Regarding the electronic delivery ofpolice reports, LASD currently has a small scale, ad-hoc implementation with expansion efforts underway. LASD crime/incident reports are usually completed manually, on paper forms and then partially converted into digital form at the station level. Some report information is inputted into the Los Angeles Regional Crime Information System (LARCIS) during processing. The paper form is also converted to a digital image capable ofbeing electronically transmitted, but this process can take as long as six months. Technical obstacles to full implementation ofdigital police report delivery are in the process of being addressed. The Sheriffs Integrated Records Retrieval and Assembly System (SIRRAS) is being replaced by the Sheriffs Electronic Criminal Documents Archive (SECDA) which uses a universal imaging format. LASD is also replacing equipment in its patrol vehicles to more capable mobile data computers. In conjunction with this replacement effort, is the development ofa Field Based Incident Reporting System (FIBRS). Upon completion ofthese two technology upgrade initiatives, LASD will have the infrastructure in place to create, archive and transmit police reports in electronic form. LASD also intends to replace its obsolete records management system (LARCIS) with a more modem system (iNets) that will give LASD the capability to implement a completely electronic, "paperless" records system. In conclusion, planning and implementation are underway, by ISAB and LASD, to electronically create, store and transmit Probable Cause Determination and police reports internally and externally to other criminal justice agencies. RECOMMENDATION NO.4 LASD to expand implementation offiling Pitchess motions electronically. A Pitchess motion defines those portions ofa deputy's personnel file which may be made available to defonse counsel. RESPONSE Electronic filing ofPit chess motions has been implemented among LASD, Public Defender's Office and Office of the County Counsel. The system will soon be utilized by more justice agencies within the County. A plan to add additional functions and capabilities has also been established. The idea of electronic delivery ofPit chess motions was conceived and brought to fruition by the LASD Risk Management Bureau's Discovery Unit in collaboration with the Public Defender's Office, Office ofthe County Counsel, Alternate Public Defender's Office, and the Civil Service Commission. Following a successful pilot program in 2009 at the Compton Courthouse, the Sheriff and Public Defender applied for and were awarded a $75,000 grant from the County's Quality and Productivity Commission. This grant provided funding for the hardware and Judge Edmond - 3 - September 30, 2011 software resources needed to put the system, named ePitchess, into production at the fourteen busiest courthouses throughout the County. Since the initial deployment, this innovative system has achieved significant operating efficiencies among all participating entities in the form oftime and resource savings and much better accountability and tracking. The ePitchess system was expanded to include the Alternate Public Defender and the county Civil Service Commission. Justice agencies outside county government are also adopting ePitchess; the Los Angeles Police Department and the Los Angeles City Attorney currently have a pre-production pilot program in progress. A four-phase program plan has been established to guide the ePitchess system to a future "build-out" state: Phase I implements Pitchess motion document creation, filing and receipt acknowledgement capabilities; Phase II adds opposition document creation and filing; Phase III adds compliance report creation and filing; Phase IV adds scheduling information and services. Current production systems encompass Phases I and II. Future expansion, which will occur as organization sponsors emerge and resources become available, will successively add Phases III and IV capabilities. In conclusion, the electronic filing ofPit chess Motions has been implemented among the Los Angeles County Sheriffs Department, Public Defender's Office and Office of the County Counsel. The inclusion ofthe Alternate Public Defender, Los Angeles Police Department and Los Angeles City Attorney's office is imminent. A program plan has been established to enhance the impressive efficiencies ofePitchess by adding further capabilities and functions in the future. Sincerely, ~ LE OYD.BACA S$RlFF LDB:DB:JG:ES:llr c: DSB DSB File (2011GJRecommendation092211) THE PORT OF LOS ANGELES 425 S. Palos Verdes Street Post OHlce Box 151 San Pedro. CA 90733-0151 TEL/TDD 310 SEA-PORT www.portollosangeles.org Antonio R. Villaraigosa Mayor, City of Los Angeles Board of Harbor Cindy Mlsclkowskl David Adan Robin M. Kramer Douglas P. Krause Sung Won Sohn. Ph.D. Commissioners President Vice President Geraldine Knatz. Ph.D. Executive Director September 12, 2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 Dear Judge: We have received the audit report from the Los Angeles County Civil Grand Jury (LACCGJ) related to the Harbor Department and appreciate the efforts undertaken in your review of the Port of Los Angeles. We would like to respond to the recommendations therein.

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R2a: Establish a "High Tech Forensics Bureau." This willfacilitate: i. Promotions and career opportunities for those who are trained and skilled in this area without having to leave the discipline. ii. Succession planning and transfer ofhigh tech expertise, preserving the investment made in creating the expertise. LAPD's Response: The Department agrees with the finding that a "High Tech Forensics Bureau" should be established to facilitate theaforementioned advantages. The Department already has a Scientific Investigation Division (SID) whose areas of:responsibility include the collection and analysis offorensic evidence, staffed by highly trained civilian employees. Therefore, the recommendation to establish a bureau will be considered as implemented.

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R2b: Update regular law eriforcement recruit and detective training to include orientation, procedures, protocols and other training with respect to digital evidence. LAPD's Response: The Department agrees with the finding and has implemented the recommendation. In November 2010, the Recruit Lesson Plan was updated to include orientation, procedures, protocols and other training with respect to digital evidence .. In December 2010, Special Order No. 34 was published, delineating the procedures for the retrieval {, ) and booking of audio and video evidence. This order was issued to all LAPD employees via the Learning Management System.

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R2d: Take steps to acquire the POST certification for High Tech training courses for forensic examiners and eyber investigators to allow for reimbursement ofthe costs. LAPD's Response: The Department does not agree with the finding and will not implement the recommendation. Scientific Investigation Division staff requires significant technical training and continuing education to develop and maintain their expeltise. To fulfill this need, the Narcotics Analysis Laboratory Trust Fund (NALTF) was created in the late 1990's 1:J fund narcotics related analysis and equipment, in addition to training opportunities for all members of SID. Approximately $150,000 is available through NALTF for training each fiscal year. Furthermore, SID staff also attends training and continuing education events funded through State and federal grants. The Honorable Lee Smalley Edmon 1.14 ) Technical training is also available through the California Criminalistic Institute, State of California Department of Justice, and Peace Officer Standards and Training (POST) Robert Presley Institute of Criminal Investigations at no cost to POST supported or State of California based law enforcement agencies. Since there are sufficient funding available for SID personnel and non-SID personnel to attend high technology courses, the recommendation will not be implemented. Jails Committee

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R2e: Include training in digital evidence collection, analysis and use in "roll call" training. LAPD's Response: The Department partially agrees with the finding and has implemented part ofthe recommendation. From January 2011 through June 2011, SID provided roll call training to employees assigned to Office ofOperations and Detective Bureau on the digital multimedia evidence retrieval. The analysis ofdigital evidence remains the responsibility of SID and therefore the analysis of digital training was not provided.

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R3: LASD and LAP D evaluate electronically transmitting other documents such as police reports andprobable cause determinations among law enforcement agencies, . prosecutors and the Court. LAPD's Response: Th.e Department agrees with the finding. The recommendation has not yet been implemented. The recommendation requires changes in the long standing procedures at the courts, Los Angeles County Sheriff's Department and LAPD. The Department is presently investigating the possibility ofproviding more services in six to twelve months to the public and other law enforcement agencies electronically. These include electronic filing and requesting of police reports, electronic case filing with the Offices of the District Attorney and City Attorney and systems to notify detectives of results from fingerprint and other forensic investigations. These projects are in the early stages of development and in many cases will require cooperation or joint development with various agencies and municipalities, Docunlellts such as Probable Cause Determinations calIDot be electronically distributed sim:e the Courts require the original . , ·-i report. . AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER www.LAPOOnfine.org www.joinLAPO.com The Honorable Lee Smalley Edmon 1.14 Hi-Tech Forensics

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R3a: West Los Angeles Police Department - To establish continuous training for the staff: i. To ensure they are informed ofthe results ofthe previous Correctional Standards Report ii, To ensure that staffadhere to the recommendations made in the previous Correctional Standards Report

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R3b: Establish a central location for safety gear. LAPD's Response: The Department does not agree with the finding and Recommendations 3a and 3b. The Civil Grand Jury visited West Los Angles Area Community Police Station (WLA (,' , '~ CPS) to inspect their jail for housing conditions, medical needs, food, staff training, safety and .I fire procedures, administrative processes and guidelines, as well as inmate living needs. West Los Angeles Area Community Police Station did not have a jail and had informed the Civil Grand Jury accordingly. However, the Civil Grand Jury continued their inspection and found WLA CPS staff not well versed in the existing jail policies and procedures. Since WLA CPS did not have ajail, the employees were neither expected to know nor responsible for knowing jail policies and procedures such as housing conditions, medical needs, food, staff training, safety and fire procedures, administrative processes and guidelines, as well as inmate living needs. Therefore, LAPD will not implement Recommendations 3a and 3b. Note: The report referred to WLA CPS as West Los Angeles Police Department. West Los Angeles Area Community Police Station personnel confirmed that an inspection was conducted by the Civil Grand Jury. There is no West Los Angeles Police Department. Should you have any questions or require further information, please have a member ofyour staff contact Police Administrator Gerald L. Chaleff, Special Assistant for Constitutional Policing, at (213) 486-8730. yrulYY ~ rr!. Chief POLICE DEPARTMENT City of Manhattan Beach 420 15th Street MANHATIAN BEACH, CALlFORNIA 90266 (310) 802-5103 FAX (310) 802-5101 EVE R.lRVINE CHIEF OfPOU<;E August 4, 2011 Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, Ca. 90012 Dear Presiding Judge: We recently received the 2010-2011 Los Angeles County Civil Grand Jury Report. The report makes the recommendation that the City of Manhattan Beach Police Department implement e-Subpoena as a cost saving and operational efficiency measure. In addition, the report recommends the City Attorney I City Prosecutor utilize the e-Subpoena system in locations wherein the police depaltment is using the system. I have reviewed the report and agree that the e-Subpoena system could benefit our Department in the area of cost savings and improved efficiency. As a result of the Grand Jury recommendation, I have instlUcted my staff to begin an analysis of the e Subpoena program to determine whether we should implement the program here at the Manhattan Beach Police Department. I have asked that the review be completed within six months of the date of the Grand Jury report. This analysis and implementation review is to be completed by December 30, 2011. I want to thank you for bringing this new e-Subpoena program to my attention and I will be anxiously awaiting the results of our analysis of this program. Thank you, ~ EVE R. IRVINE CHIEF OF POLICE "Policing through Partllerships" City of Manhattan Beach Web Site: www.citvmb.info City of HUNTINGTON PARK California POLICE DEPARTMENT 6542 MILES AVENUE, HUNTINGTON PARK, CALIFORNIA 90255-4386 TEL. (323) 826-6629 • FAX (323) 826-6680 JORGE CISNEROS CHIEF OF POLICE August 3,2011 Presiding Judge Los Angeles Superior Court Clara Shortage Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, California 90012-3210 Re: Response to Recommendations by the 2010-2011 Los Angeles County Civil Grand Jury To Whom it May Concern: ( ~. On June 30, 2010, the Huntington Park Police Department received a portion ofthe 2010 2011 Los Angeles County Civil Grand Jury Report that affects this agency. The Huntington Park Police Department is responding to recommendation number one; Implement e-subpoena as a cost saving and operational efficiency measure for local law enforcement agencies receiving at least one hundred fifty (150) DA subpoenas quarterly. The Huntington Park Police Department agrees with the 2010-2011 Los Angeles County Civil Grand Jury recommendations in regards to recommendation number one, in fact we were in the process of evaluating the e-subpoena system prior to the recommendations and are supportive ofthis efficiency measure. The Huntington Park Police Department is currently working with a third party vendor to implement the e-subpoena system. We anticipate this system to be fully functional within the next 90 days and will notify you once the program has been fully implemented. If we can be of any further assistance please contact Lieutenant Anthony Porter at (323)826-6641 Zi JClrge Cisneros Chief of Police JC/AP laccgjresp CITY OF LOS ANGELES CALIFORNIA Jaime de la Vega DEPARTMENT OF TRANSPORTATION GENERAL MANAGER 100 S, Main St., 10th Floor LOS ANGELES, CA 90012 (213) 972·8480 FAX (866) 530·3154 ANTONIO R. VILLARAIGOSA MAYOR September 28, 2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Court 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, California 90012-3210 Subject: Response to "Final Report, 2010-2011 Civil Grand Jury, County of Los Angeles", June 30,2011 re: Preferential Parking Your Honor: { >, The Los Angeles Department of Transportation's response to the Civil Grand Jury's (CGJ) findings and recommendations are attached. Feel free to contact me at (213) 972-8448 or jaime.delavega@lacity.org or Assistant General Manager Amir Sedadi at (213) 972-8422 or amir.sedadi@lacity.org if you have any questions or need additional information. " " e la Vega I Manager Enclosure cc: Amir Sedadi, Assistant General Manager Tamara Martin, Parking Permits Division Los Angeles Department of Transportation (LADOT) Response to "Final Report, 2010-2011 Civil Grand Jury, County of Los Angeles", June 30,2011 re: Preferential Parking For purposes of the following responses, LADOT assumed that the term "PPD" refers to temporary preferential parking district 130 and petition activity surrounding sign posting on the 1600 block of Hi-Point Street.

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R4: Los Angeles City Council, the DWP Board of Commissioners and LACERS Board of Administrators need to amend the reciprocity agreement between LACERS and WPERP with regard to the transfer of employer pension contributions in order to prevent such inequity in the future. LACERS Response: As stated in the answer to Recommendation #3, as system administrator, the LACERS Board has no authority to negotiate retirement benefits, including but not limited to reciprocity benefits with WPERP. If you have any questions or require further information, please do not hesitate to contact Tom Moutes, LACERS General Manager at 213-473-7280. Sincerely, ~~ent Board of Administration RC:TM:bc 2011-0902-072 C: Eric Garcetti, City Council President Gerry F. Miller, Chief Legislative Analyst Miguel A. Santana, City Administrative Officer Matthew Rudnick, Mayor's Office LACERS Board of Administration OFFICE OF THE MAYOR ANT 0 N loR. V ILL A R A I GO S A September 12, 2011 Presiding Judge Los Angeles Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012-3210 Dear Judge: We have received the audit report from the Los Angeles County Civil Grand Jury (LACCGJ) related to the Harbor Department and appreciate the efforts undertaken in your review of the Port of Los Angeles. Our office concurs with Board of Harbor Commission President Cindy Miscikowski's responses to the recommendations in the report. We would like to respond additionally to recommendation 3.

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

52 pages 6 findings 2 recommendations

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Findings & Recommendations 6 findings

F1: Total CalPERS and retiree health UAAL, including and Pension Obligation Bond debt, equaled $116.6 million as of June 30, 2009, which is significant.

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F2: A significant portion of this liability is related to OPEB, or retiree health benefits provided to City employees. As of June 30, 2009, the UAAL for OPEB equaled $49.1 million, or 42.2% of all unfunded retirement obligations in 2009.

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F3: OPEB liabilities are growing rapidly. In part, this is because the City has chosen not to fund its Annual Required Contribution at the levels recommended by actuaries. In FY 2008-2009, the City contributed only 34.2% of the requirement; and, in FY 2009- 2010, the City contributed only 30.2% of the requirement. In FY 2009-2010, this represented a funding shortfall of approximately $2.7 million. Since 2007, the City has also not funded the full amount of the ARC for the MMRP closed plan.

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F4: The policy to fund these benefits on a pay-as-you-go basis is striking because the City has unique pension funding authority authorized by the voters when they approved special property tax levies in 1946 and 1952. Revenue from this levy were sufficient to nearly fund the full cost of the CalPERS Annual Required Contribution in FY 2009-2010. As a result, the City only needs to fund the OPEB, MMRP and POB debt from discretionary resources.

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F5: With the exception of attempts to reduce the City’s pick up of the employees contribution to CalPERS, the City appears to have done very little to reign in the cost of the retirement benefits that it provides. A blue ribbon committee in 2006 recommended revenue solutions to cope with the City’s “pension-funding shortfall,” 282 A 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY and subsequent steps by the City Council have involved adopting a resolution to pass through the portion of property tax revenue collected by the Redevelopment Agency from the special property tax levy.

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F6: The City has moved forward aggressively to pre fund its OPEB obligations, being one of only 14 out of 70 OPEB cities to do so in the County. While the City’s most recent actuarial evaluation from 2008 reported a funded ratio of only 45.2% on $5.8 million in liabilities, recent finance reports show that the cash balance in the fund has grown substantially to $3.4 million as of January 31, 2011.

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Additional Recommendations 2

Not linked to specific findings.

R1: Monterey Park’s City Council adopt policies to fully fund the ARC for both the MMRP and OPEB retirement benefit plans for employees in order to ensure future funding of benefits and earn investment income which would discount the annual required contributions

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R2: Monterey Park’s City Council direct its City management to explore alternatives for reducing retirement benefit costs, including possible additional revisions to the amount of the employee contribution pick up paid by the City and alternative employee cost sharing arrangements for retiree health benefits. REQUEST FOR RESPONSE California Penal Code Sections48 §933 (c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the CGJ publishes its Report (filed with the Clerk of the Court). Respond to: Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 All responses for the 2010 - 2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 City of Monterey Park 2 City of Monterey Park 48 Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 CGJ Report 2010 – 2011 PHASE II: SECTION 5 HERMOSA BEACH POLICE SAFETY PLAN SUMMARY The Hermosa Beach Police Safety Plan is one of 3 plans the City provides to its employees through CalPERS. In 2009, this plan had the highest contribution rate in the County at approximately 57.9% of salaries for the employer and employee share of pension benefit costs for uniformed personnel. The City also contributed to a defined benefit retiree health plan for these employees at a rate of approximately 5.3% of salaries, for a total retirement contribution rate of 62.2% in that year. Pension contributions are projected by CalPERS to increase by an additional 8.0% by 2012, increasing the total effective rate for uniformed Police Department retirement benefits to 70% of salaries by that year if retiree health rates remain static. This growth in contributions is also occurring with the Miscellaneous and Fire Safety plans for Hermosa Beach. Also administered for the City by CalPERS, the Miscellaneous employee effective contribution rate was 27.1% of salaries in 2009 and could increase by an additional 2% by 2012.The Fire Safety employee effective contribution rate was 51.9% in 2009, and could increase by an additional 3% by 2012. In total for the 3 plans, CalPERS projects that the City will be required to contribute $4,149,982 on base salaries of $12,751,612 in FY 2011-2012, or approximately 32.5% of salaries excluding retiree health benefits. The City has recognized the significance of the funding difficulties that it faces and has initiated several strategies to reduce costs including proposals to labor unions to modify pension formulas. However, the City is not proposing to reduce or eliminate the City’s commitment to pick up the 7% (Miscellaneous) and 9% (Safety) employee contributions for CalPERS pensions at this time. The City is considering the issuance of Pension Obligation Bonds (POBs) to take advantage of current lower interest rates on borrowing. In recent analysis, bond advisors have estimated that POBs would save an estimated $329,818 over 8 years. PURPOSE The Hermosa Beach Police Safety Plan was chosen by the CGJ for in-depth review, based on the high annual required contribution for pension and retiree health benefits, amounting to over 62% of pensionable salaries in 2009, and expected to rise to over 70% of pensionable salaries by 2012.

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

347 pages 20 findings 18 recommendations

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Findings & Recommendations 20 findings

F1: The e-Subpoena system provides prosecutorial and defense agencies with an automated means to serve law enforcement officers. Currently, the following agencies use the system: a. District Attorney’s Office b. Alternate Public Defender (APD)1 The Los Angeles Public Defender is developing this capability.

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F2: The Los Angeles City Attorney and Long Beach City Prosecutor also electronically subpoena officers, but their requests are sent internally with their respective cities’ systems. To the CGJ’s knowledge, most other City Attorneys/City Prosecutors are using paper based subpoenas.

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F3: E-Subpoena is a means of delivering subpoenas to law enforcement personnel throughout the County electronically and receiving “proof of service” automatically. Prior to development of e-Subpoena, subpoenas were either mailed, hand carried or sent to the Justice Data Interface Controller (JDIC) printer at the law enforcement agency. This method was slow and did not provide the DA with proof that the officer/deputy was served.

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F4: The e-Subpoena process begins when a Deputy DA or APD inputs in their respective Case Management System (CMS) when an officer is needed in court on a specific date and time. CMS generates an electronic message to the officer. Although more complicated, this is essentially an e-mail. The message is sent to PIX, which then routes the message to the law enforcement agency. Depending upon the technology used by the law enforcement agency when delivering the message to the officer, a “proof of service” is returned via PIX to the originator when: a. The officer opens their e-mail b. The officer positively responds that they received it PIX provides the secure system for sending and receiving messages among agencies. The system is also used to notify an officer when they are no longer needed to appear and/or for rescheduling. JDIC-received and paper subpoenas are manually logged and tracked by the law enforcement agency, and no automated “proof of service” is returned to the originator. An overview provided by the DA describes the system benefits: a. More reliable than paper and regular e-mail b. Complete logging of delivery and receipt 1 The Alternate Public Defender is Court-appointed counsel for indigent defendants who cannot be represented by the Public Defender because of a conflict of interest. c. Improved control using case management systems versus ad hoc e-mail d. PIX ensures reliable delivery/return receipt and a standard interface to different law enforcement agency systems All DA, Public Defender, APD, and City Attorneys/City Prosecutors in the future can use the same message formats and delivery mechanisms.

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F5: E-Subpoena was started approximately five (5) years ago with LAPD.

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F6: Electronic notice of delivery and receipt occurs between PIX and the following agencies: a. LASD b. LAPD c. Long Beach Police Department d. Inglewood Police Department e. Culver City Police Department f. Montebello Police Department The last three (3) agencies on the preceding list use a third-party vendor that supply and maintain the technology for LEA delivery and receipt. At least one LEA reported that the implementation took one (1) month followed by a two (2) month period of running the systems in parallel. The biggest implementation problem encountered was officer resistance to change.

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F7: Additional benefits are: a. Electronic service reduces officer overtime from having to subpoena more officers than actually needed (blanket subpoenas) since the DA can now verify which officer(s) were served. b. With planned court closures, travel time as well as court overtime are reduced. c. Because the officer is positively served and will appear, the DA, Public Defender, and APD reduce their case continuance costs. d. Accuracy is improved through officer validation; the sender ensures that the correct officer is served. e. The law enforcement agency’s subpoena control personnel can review and manage multiple requests more efficiently. f. Risk of loss of JDIC-printed or paper subpoenas is reduced. g. Follow-up phone calls are minimized. h. Formal audit trail of service is provided. 24 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY i. Management follow-up and auditing statistics are available.

F8: E-Subpoena results in fewer continuances/dismissals, swifter justice for crime victims, decreased criminal case backlog, and potentially reduces incarceration time and costs.

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F9: Different internet standards are used by various agencies and a third-party vendor. For example, messaging protocol and identification standards exist but are not used consistently by all departments. Currently, PIX must convert e-subpoenas into at least four (4) different technologies in order to send them to different law enforcement agencies.

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F10: Although the CGJ could not locate the source of the information, it noted from public statements that e-Subpoena resulted in significant savings to LAPD in court overtime. LAPD representatives explained that due to the different components of court overtime (number of cases filed, number of officers subpoenaed, etc.), these savings could not be calculated precisely.

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F11: Several departments reported that court affairs/subpoena control personnel time spent performing subpoena control was reduced by 50%, freeing personnel to work on other critical department functions. In addition, the volume of paper and postage was reduced 50-65%.

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F12: Less manpower is needed to generate mail and manually track each subpoena. In larger departments, less time is spent locating officers who have been transferred.

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F13: Less time is spent attempting to determine if an officer was served.

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F14: In this time of municipal budget constraints, whatever can be done to streamline the process and reduce court overtime is desirable.

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F15: Ten (10) cities within the County use the City Attorney/City Prosecutor to prosecute misdemeanors2. In cities where e-Subpoena is installed, some City Attorneys/City Prosecutors are still issuing paper subpoenas.

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F16: Several departments that have implemented e-Subpoena encourage their officers to check e-mail on their days off, although requiring that may violate Fair Labor Standards Act de minimus rules.

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F17: One LEA that has not implemented e-Subpoena was concerned about the actual direct and indirect costs of the system.

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F18: A concern raised was the situation where an officer is subpoenaed at the last minute. In these cases, the subpoena control officer would be required to contact the subpoena recipient regardless of whether the department was using paper copies or e-Subpoena.

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F19: At least one LEA was concerned that their city was behind the technology curve and may not have the infrastructure to handle e-Subpoena. The District Attorney prosecutes misdemeanors, as well as felonies, for the remaining 78 cities as well as the unincorporated areas of the County.

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F20: The following is a Table of law enforcement agencies receiving at least one hundred fifty (150) subpoenas from the DA during the period October through December 2010 and their e-Subpoena implementation status: LOS ANGELES DISTRICT ATTORNEY-ISSUED LAW ENFORCEMENT SUBPOENAS AGENCIES RECEIVING AT LEAST 150 SUBPOENAS FOR THE PERIOD OCTOBER THRU DECEMBER, 2010 No. e-Subpoena Agency Issued Status CALIFORNIA HIGHWAY PATROL 2,128 Interested PASADENA POLICE DEPARTMENT 988 GLENDALE POLICE DEPARTMENT 903 HUNTINGTON PARK POLICE DEPARTMENT 685 BURBANK POLICE DEPARTMENT 612 HAWTHORNE POLICE DEPARTMENT 604 Interested WHITTIER POLICE DEPARTMENT 593 SANTA MONICA POLICE DEPARTMENT 537 In process LASD - VARIOUS 515 Implemented GARDENA POLICE DEPARTMENT 501 DOWNEY POLICE DEPARTMENT 490 Interested EL MONTE POLICE DEPARTMENT 474 Interested POMONA POLICE DEPARTMENT 456 Interested ALHAMBRA POLICE DEPARTMENT 433 L. A. CITY FIRE DEPARTMENT 422 SOUTH GATE POLICE DEPARTMENT 421 Interested TORRANCE POLICE DEPARTMENT 403 MONTEREY PARK POLICE DEPARTMENT 366 WEST COVINA POLICE DEPARTMENT 364 L. A. UNIFIED SCHOOL DISTRICT PD 318 L. A. COUNTY CORONER 300 Interested EL SEGUNDO POLICE DEPARTMENT 274 Interested MONTEBELLO POLICE DEPARTMENT 271 In process L. A. COUNTY PROBATION 255 Interested SAN FERNANDO POLICE DEPARTMENT 216 MANHATTAN BEACH POLICE DEPARTMENT 189 BEVERLY HILLS POLICE DEPARTMENT 182 COVINA POLICE DEPARTMENT 176 MONROVIA POLICE DEPARTMENT 168 GLENDORA POLICE DEPARTMENT 163 SAN GABRIEL POLICE DEPARTMENT 163 BELL GARDENS POLICE DEPARTMENT 159 REDONDO BEACH POLICE DEPARTMENT 159 BELL POLICE DEPARTMENT 157 LAPD – VARIOUS 155 Implemented SOUTH PASADENA POLICE DEPARTMENT 154 26 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY

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Additional Recommendations 18

Not linked to specific findings.

R1: The LADWP’s governance needs clarification and simplification. A stronger, independent Commission system may be warranted. Establishing a single governing board, with clear authority and considerable independence from day-to-day political influences, is an appropriate place to start. Strengthening the governance structure is essential to ensuring reliable electrical supplies, low rates, and adequate payments to the City, as well as to maintaining Los Angeles’ leadership among the nation’s municipal utilities. The LADWP should return to a commission system that restores integrity by balancing independence and accountability. A plan to decrease political involvement by the Mayor and Council would allow the LADWP to operate for the benefit of the ratepayers. Consider separating the policy making function of the Mayor and Council from the operational responsibilities of the Board and General Manager. The Council and Mayor could set policies and communicate them in writing to the Board which, in turn, would transmit them to the General Manager. It would require the Mayor or Council not give instructions to individuals who report directly to the Board or General Manager, directly or indirectly. Board policies should set out the utility’s purpose and ends to be achieved. They should also designate what actions of the General Manager are considered unacceptable to the Board, both general and in specific. The General Manager may then make all decisions and carry out any activities not expressly prohibited by the Board, without seeking further approval.

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R2: Establish guidelines for Commissioner appointments, and reduce the politics of appointment, real or perceived. Examples of guidelines to be written and agreed upon might be to appoint Commissions based on specific levels of expertise (financial, utility operations, corporate governance, education level, or geographic representation). Also ensure that the candidates have the time, inclination and ability to stay the entire five years. It is important that “politics” (or political contributions) be taken out of the choice for Commissioners. There are a variety of ways to deal with this issue. One is to have a Citizens Council choose the Commissioners or have Commissioners themselves choose a replacement for a member whose staggered term is up. Another example might be to have the Mayor choose two (2) members, the Council chooses two (2) members and the Neighborhood Councils choose one (1) member. Whatever the approach, the perception and the reality must be that money does not buy a Commission position. 92 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY

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R3: Expect LADWP Commissioners to serve full five-year terms. LADWP needs a historical and continuous level of knowledgeable and experienced Commissioners who can make decisions primarily based on their independent judgment. The Commission may remain responsible to the Mayor and Council, but it should be insulated from undue political influences on normal LADWP business matters. To maintain independence and continuity, LADWP Commissioners should be expected to serve out their terms unless there is cause for their removal. They should not resign when succeeding Mayors are elected. An amendment returning to the previous Charter language allowing for removal by the Mayor with Council approval or for cause by a two-thirds vote of the Council, may be warranted.

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R4: Reduce the bureaucratic impact to the Department due to Mayor or Council involvement. While citywide coordination of the Department is an important function of the Mayor’s office, the current wording of Executive Order 4 is all encompassing. Regular, informal consultation with the Mayor’s office rather than formal ED 4 submittals would potentially speed up and improve the decision making processes of the Commission. Likewise, the threat of Prop 245 fosters bureaucratic delay, takes up scarce management time, encourages more paperwork to justify decisions and adds uncertainty to normal business dealings. Pension Issue and Impact of Employee Transfers Finding and Recommendation 5. Although there was originally some concern that personnel were taking higher paying jobs at LADWP for only a short time (pension spiking) in order to increase lifetime pensions, such does not appear to be the case. However, the number of transfers from the City to the Department may have a negative impact on the pension funding for the Department. The City has taken advantage of the Department’s ability to accept additional personnel and provide pension coverage to them (eventually through increased rates) by transferring up to 1600 employees in the last five (5) years. Those transfers were part of a larger effort to keep City workers from losing their jobs in departments hit hard by the budget crisis. While it is a noble goal to protect employees from layoffs, it is unfair to place the financial burden (both salary and pension costs) on the backs of the LADWP ratepayer. The Segal Company performed an analysis of the Reciprocal Arrangement between the Water and Power Employee’s Retirement Plan (WPERP) and the Los Angeles City Employee’s Retirement System (LACERS) due to the financial impact the Reciprocity Program has had on the WPERP during the period from April 1, 2004 through March 31, 2010. Currently, when a former City employee transfers to the LADWP the WPERP recognizes prior service with LACERS, provided the member agrees to have their employee contributions transferred into WPERP. Under the Plan’s Reciprocity Program, when a member transfers, full credit for service is established in WPERP, but only their employee contributions are transferred from LACERS to WPERP; employer contributions made to LACERS associated with their service are not transferred to WPERP. Since only employee contributions are transferred, WPERP incurs an additional unfunded liability when an employee transfers to LADWP from the City. (The Department makes a 110% contribution into WPERP after the employee contributions have been transferred from LACERS. This has the effect of providing immediate employer funding for part of the actuarial loss caused by the transfer but that contribution may eventually impact rates.) The Segal Company found a large unfunded actuarial accrued liability (UAAL) as a result of these transfers. The total of the increases in UAAL, determined as of each valuation date due to the 1,331 members whose service and employee contributions has already been transferred to the WPERP as of March 31, 2010, is approximately $128.4 million. These amounts, accumulated with 8% interest to July 1, 2010, total $152.4 million. The average age for these members, years of service and average employee contributions transferred are 41.3, 6.9 years and $28,400 respectively. In addition, The Segal Company received partial information for 292 members that were identified by the Retirement Office as transfers but whose service and employee contributions were not yet transferred to WPERP as of the end of the observation period. The UAAL as of each valuation date due to these members is about $30.5 million. The average age for these members, estimated average amount of service and average employee contributions to be transferred are 40.7, 7.8 years and $37,900 respectively. The grand total of the increases in UAAL for LADWP accumulated to July 1, 2010, including both groups, is about $183.1 million. Worried about the cost of those transfers, LADWP officials moved to suspend full retirement benefits for any new worker who comes to the utility from another City agency. The City Council vetoed that measure.

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R5: The City and LADWP should come to an agreement to rescind the reciprocity agreement until such time as the number of employees transferred back and forth between the City and LADWP reaches equilibrium. Personnel should only be transferred as required by LADWP and then only with full financial contribution to the pension fund. 94 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY Succession Planning Finding and Recommendation 6. Succession planning does not take place within LADWP to any meaningful extent. Given the high turnover of senior management, it is essential that the next several layers of management have the necessary tools, including trained professionals as replacements, to accomplish their functions. Additionally, there are many positions that will be in need of replacement in the next several years; and succession planning will assist the Department in meeting those needs. This is a City-wide concern. The Los Angeles City Controller conducted a performance audit regarding the City of Los Angeles’ hiring practices and determined that “The City of Los Angeles does not strategically plan for its workforce needs.” In a department where so many people who serve the citizens of the City are eligible to retire in the next several years, this is also an intolerable situation for LADWP. It is difficult in a civil service environment to accomplish succession planning for specific positions. Because employee selection in the City of Los Angeles is based on a well established civil service system in place for well over 100 years, LADWP relies on the Civil Service Commission and the City Personnel Department to assist in meeting their hiring needs. Although filling entry-level positions is important, succession planning to fill supervisory and managerial positions is even more important and must be a priority for the Department. Once identified, a substantial amount of training and leadership development will be required. The key is the successful transfer of technical and operational knowledge to adapt to the current environment. According to the Department, as of January 1, 2010, approximately 40% of LADWP’s workforce was fifty (50) years of age or older. Within the next five (5) years, approximately 20% of the workforce will be eligible for retirement. LADWP must determine how to continue to deliver its services in the future with decreased staff due to upcoming retirements. To ensure that LADWP has the appropriate resources and positions needed to meet the business goals and objectives, there must be a sufficient number of candidates available to be considered for each job classification, especially those that are critical or have been difficult to fill. This issue alone will require collaborating internally as well as with the Personnel Department’s various divisions to consider ways to address this, such as allocating positions, consolidating job classifications, submitting examination requests and pursuing regular and executive recruitment activities. Additionally, a specific manager may not identify a replacement prior to departure. This does not provide an opportunity for training in the specifics of any job. Personnel are thrown into a job situation that may be new to them and, given all the other personnel scheduled to depart, the institutional knowledge necessary for effective performance may not be available. A change in the civil service rules may be necessary on at least a temporary basis to allow personnel to train their replacements. The Department has responded to some of these challenges by creating a Workforce Planning Group within the Human Resources Section of the LADWP. This is a good beginning to ensure that services continue to be provided to the citizens of Los Angeles. The Department’s Human Resources Manager appears to have a strong grasp of what is required to accomplish this goal and has developed a well thought out initial plan. But the process will need more resources than the current four (4) individuals assigned to assist him. Additionally, some changes in the current methods of hiring and promoting personnel may be required to ensure continuity of knowledge and ability.

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R6: Fully staff and fund the Workforce Planning Group to encourage a full review of options for future LADWP employment. Also work with City Personnel Department and the Civil Service Office to allow some changes in hiring and promotional practices for high level essential jobs. An example would be to allow a process whereby individuals could be chosen for certain jobs prior to the departure of a senior or highly essential position. Current methodology for position listing, testing and choice could be followed, but the timing of the replacement may differ. That way, the individual could have access to the current incumbent’s knowledge, techniques and contacts to ensure a seamless transition. It may also provide reduced costs since it would not be necessary to potentially hire the incumbent to return as a consultant to assist in the transition. It is clear, given the immediate nature of this issue, that “out of the box” thinking will be necessary within LADWP as well as support provided by City and civil service personnel. 96 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY II. IBEW POLITICAL INVOLVEMENT

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R7: Determine if the current state of union/management relations is equitable and not favorable to one side at the expense of the other. LADWP management personnel can only accomplish what they try to accomplish. If they continue to allow the Union to “win” the majority of issues, they only have themselves to blame for future problems. Elected officials should strongly consider an effort to reduce continuing union involvement in the management of the Department, other than through normal channels. Of course, this may impact the level of support and money provided to the elected officials but efficient and effective management of the Department should be the overwhelming goal. The ratepayer should be the primary concern.

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R8: Immediately develop a confidential strike preparation plan and ensure that cross-training and documentation of essential functions is included in the process and plan. It is incumbent on management to ensure that operations continue under a variety of circumstances, including a work stoppage. Additional attention from management to the possible contingency of a work action is warranted and ratepayers need to be assured that the Department management is looking out for their interests. III. CITY TRANSFER AND ECAF ISSUES

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R9: Take steps to ensure that this transfer problem doesn’t recur. Some steps to be taken include: a. Develop an earlier budgeting process so Council will know what transfer funds to expect ahead of any grandstanding. b. Provide a presentation of the budget to the Council in clear and concise terms that are not “technical engineering oriented”. c. Conduct a proactive review of RPS and capital project alternatives including goal extension or reduction. d. Develop long-term projections of costs associated with RPS and major projects to ascertain if additional transfers will impact consumer costs.

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R10: The CGJ agrees with the CCF recommendation that a “new proposal for rate restructuring should be drafted and analyzed. One aspect of this proposal would be to split the current ECAF into several separate rate components. This will provide the Council (and the public) with greater visibility of LADWP’s cost structure and of the justification for any rate increases.” CCF goes on to state that: a. Costs that are clearly out of LADWP control should remain in the ECAF. b. At an appropriate frequency, Council should approve an LADWP procurement plan. As long as procurement has been in accord with the plan, ECAF cost recovery should be a pure, uncapped pass through. c. Costs that are predictable, such as long-term contract costs or energy efficiency costs, should be removed from the ECAF. d. Revenue losses attributable to DSM should be passed through without a cap but as a separate bill component in addition to ECAF. e. The City Transfer should not be tied to fluctuating ECAF revenues but rather entirely to more stable base rate revenues. This will create greater certainty of City Transfer payments and remove elements of the City Transfer from the current ECAF structure. 116 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY While such a change means that the City Transfer will fluctuate as a percentage of total revenue as ECAF revenues change, it will result in lower volatility in rates as well as in payments to the City. f. The Council should separately define a rate stabilization program that will mitigate or spread out rate increases. Rate stabilization has the effect of financing a cost increase and its impact on City finances and LADWP capital adequacy should be explicitly considered. g. Develop a clearer, more pure, definition of the ECAF rate (for review by Council and the public). h. An automatic rate change based on a pure ECAF rate should be approved. It should be pointed out that the Department has received this type of recommendation previous to the CCF Report. In July of 2007, a Revenue Requirements Study prepared for the Chief Legislative Analyst and the City Administrative Officer states, “Energy Services has bundled several different cost recovery elements in the ECAF…….neither the Board nor management are presented the ECAF budgeted revenues by element.” The recommendation made in that report was to “Unbundle the ECAF into its elements for presentation to management and to the Board.” In their response to the report, LADWP agreed that all future presentations to management and the Board would unbundle the ECAF elements.

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R11: Increase the transparency of the cost of each current ECAF item by showing the item and amount on the ratepayer’s monthly bill. The CGJ suggests following the CCF recommendation with an additional recommendation intended to provide transparency, not just to Council but to the public at large. Print on each residential bill a statement indicating the costs associated with any “controllable” large expenditure that was previously in the ECAF. A statement showing the cost to the consumer for the RPS program, DSM program and the City Transfer (separately) should be clearly available to the public for their review and ultimate approval. Statements might read as follows: “The portion of your bill collected by LADWP for the City of Los Angeles to support government services not related to LADWP (City Transfer) is $XXX or XXX%. The City contribution shown here reflects the amount of your bill that goes toward government transfers. However, on your actual bill, this charge is included in the Electric or usage charge.” In addition to City transfer costs, the Department should also present similar information for “Renewable Program Charges” or “DSM charges” to the ratepayer. This provides the ultimate level of transparency to the public and allows for discussion of each element at the Board and Council meetings. IV. RATEPAYER ADVOCATE ISSUES

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R12: Ensure that the Ratepayers function is clearly defined and that the function is not captured by politicians or a bureaucracy that will stagnate their independence and ability. It is important to identify what the function will be focused on and, as importantly, what it will not be focused on. The Ratepayer Advocate will have enough work to do without taking on the “savior of LADWP operations and public perception” role. The position should not be involved in the management of the Department or have the right to veto management decisions or set rates. The OPA should not be involved in holding LADWP accountable for meeting the City’s or Mayor’s goals, some of which will be extremely expensive to the ratepayer. That should be the job of the Board of Commissioners, City Council and the Mayor. They should, however, have input into various rate alternatives and timing differences prior to the policy decision being made so that the impact to the ratepayer is known. The OPA should take a long-term perspective on its review of rates. For example, it should shine the light on long-term plans that will have massive implications for residential and commercial rates, not just on the rate increase that may be mentioned for next year. It is important that the position provide advice and counsel to lawmakers on balancing LADWP’s plans to invest in clean power, as one example, with its need to fulfill Charter responsibility to keep rates lower than others. The primary focus should be what is best for the ratepayer. The Advocate can highlight the long term implication of these decisions. This long term perspective and visibility is more important than just blocking specific rate hikes, which may be desired by many, but may not be in the long term best interest of the City or the ratepayer. In summary, the function should provide visibility to the public and guidance to the Council on various anticipated rate increases, and provide expert advice on rate actions and strategies which will protect the ratepayer by identifying the most economical method to accomplish the City’s policy goals and the LADWP’s long-term interests. The ratepayer should be placed first in implementing the Advocate’s responsibility. The Advocate can also be instrumental in ensuring that large categories of costs, such as DSM, RPS and the City Transfer, have visibility on the customer bills. (Also see Recommendation 10.)

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R13: Ensure that the public has primary input into the appointment of the Ratepayer Advocate. The “citizen’s committee” should have ample representation from Neighborhood Councils and other citizen-based organizations. It is only with broad based input that the public will have the confidence that the position won’t bend to any specific political will. As important as the actual information provided by the Ratepayer Advocate is the fact that the existence of the position itself should be viewed by the public to be honest, independent, trustworthy and knowledgeable. This is probably the single best opportunity for the City and Department management to improve the perception of LADWP with the rate paying public. 124 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY Summary of Report Findings and Recommendations

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R14: Although the Department had numerous reasons for not wanting to make the transfer without a rate increase that it felt it deserved, holding the City “hostage” under these circumstances was inappropriate since the Department had the cash to make the transfer, although they had it reserved for other uses.

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R15: The ECAF as currently constituted at LADWP contains several elements that typically would not be found in a Cost Adjustment Factor.

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R16: The current ECAF design does not provide for adequate oversight and transparency into long-term commitments made by the Department, particularly with respect to Renewable Portfolio Standard (RPS) and Demand Side Management (DSM).

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R17: The implementation of a Ratepayer Advocate at LADWP would be unusual in the municipal utility industry.

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R18: Some people believe that the impact of the Ratepayer Advocate ballot measure is minimized because other proposed Charter amendments were not approved for the same ballot. RECOMMENDATIONS

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

4 pages 1 findings 4 recommendations

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Findings & Recommendations 1 findings

F1: DWP employee relations management staff has not initiated any substantive meet and confer sessions with employee bargaining groups to modify aspects of the retirement benefit package in an effort to reduce costs, despite total annual retirement benefit contributions of approximately $360 million or 46.9% of pensionable salaries in FY 2009-2010. August 10, 2010, The Segal Company, Re: Reciprocity program – Impact of Possible Suspension of Program 2010 – 2011 For at least 3 years, the DWP management has chosen to contribute amounts exceeding 250% of the Annual Required Contribution to its Retiree Health Benefits Fund. During this period, they have made $317,394,370 in excess contributions, while simultaneously requesting utility rate increases and advising City officials that the Department would be unable to pay the full amount of the 8% transfer to the City in FY 2009-2010, because of insufficient cash resources. The City and LACERS may owe the WPERP $183 million or more in UAAL for employees who transferred from City employment to DWP employment during the past 6 years, increasing the WPERP contribution requirements by $11.7 million annually over the next 15 years. The City Council referred this matter to the City Administrator, WPERP and LACERS to refine the analysis on October 13, 2010; but no further action has been taken since that time.

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Additional Recommendations 4

Not linked to specific findings.

R1: The DWP Board of Commissioners give direction to management to evaluate and report back in closed session on alternatives for reducing the Department’s cost of employee retirement benefits.

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R2: The DWP Board of Commissioners advise the new Ratepayer Advocate and the City Council of the decision by the DWP management to accelerate payment of the Retiree Health Benefit Fund ARC in each of the past three fiscal years to ensure that the prepayments are fully considered when the DWP seeks future rate increases or indicates that it is unable to make revenue transfers to the General Fund.

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R3: Los Angeles City Council, the DWP Board of Commissioners and LACERS Board of Administrators need to expedite reaching an agreement regarding transferring funds to WPERP to cover the cost of an increased UAAL imposed on DWP, estimated by actuaries to equal as much as $183 million for the 6-year period between 2004 and 2010, due to Los Angeles City employees who have moved from City departments to DWP so that the burden is not imposed on ratepayers.

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R4: Los Angeles City Council, the DWP Board of Commissioners and LACERS Board of Administrators need to amend the reciprocity agreement between LACERS and WPERP with regard to the transfer of employer pension contributions in order to prevent such inequity in the future. A 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY REQUEST FOR RESPONSE California Penal Code Sections42 §933 (c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the Civil Grand Jury publishes its Report (filed with the Clerk of the Court). Respond to: Presiding Judge LAC Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 All responses for the 2010 - 2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 City of Los Angeles (Department of Water and Power Board of Commissioners) 2 City of Los Angeles (Department of Water and Power Board of Commissioners) City of Los Angeles (City Council) City of Los Angeles (LACERS Board of Administrators) 3 City of Los Angeles (Department of Water and Power Board of Commissioners) City of Los Angeles (City Council) City of Los Angeles (LACERS Board of Administrators) 4 City of Los Angeles (Department of Water and Power Board of Commissioners) City of Los Angeles (City Council) City of Los Angeles (LACERS Board of Administrators) 42 Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 Civil Grand Jury Report 2010 – 2011

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

20 pages 20 findings 5 recommendations

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Findings & Recommendations 20 findings

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F5: E-Subpoena was started approximately five (5) years ago with LAPD.

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F8: E-Subpoena results in fewer continuances/dismissals, swifter justice for crime victims, decreased criminal case backlog, and potentially reduces incarceration time and costs.

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F12: Less manpower is needed to generate mail and manually track each subpoena. In larger departments, less time is spent locating officers who have been transferred.

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F13: Less time is spent attempting to determine if an officer was served.

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F14: In this time of municipal budget constraints, whatever can be done to streamline the process and reduce court overtime is desirable.

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F16: Several departments that have implemented e-Subpoena encourage their officers to check e-mail on their days off, although requiring that may violate Fair Labor Standards Act de minimus rules.

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F17: One LEA that has not implemented e-Subpoena was concerned about the actual direct and indirect costs of the system.

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Additional Recommendations 5

Not linked to specific findings.

R1: Implement e-Subpoena as a cost saving and operational efficiency measure for local law enforcement agencies receiving at least one hundred fifty (150) DA subpoenas quarterly.

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R2: Encourage the City Attorney/City Prosecutor to use the system in cities where the Police Department is using e-Subpoena.

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R3: LASD and LAPD evaluate electronically transmitting other documents such as police reports and probable cause determinations3 among law enforcement agencies, prosecutors and the Court.

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R4: LASD to expand implementation of filing Pitchess motions electronically. A Pitchess motion defines those portions of a deputy’s personnel file which may be made available to defense counsel.

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R5: The DA staff is encouraged to conduct an e-Subpoena training class for court liaison/subpoena control officers and encourage departments still receiving paper subpoenas to implement e-Subpoena. REQUEST FOR RESPONSE California Penal Code Sections4 §933(c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the Civil Grand Jury publishes its Report (filed with the Clerk of the Court). Respond to: Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 All responses for the 2010 - 2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 City of Alhambra (Police Department) City of Bell (Police Department) City of Bell Gardens (Police Department) City of Beverly Hills (Police Department) City of Burbank (Police Department) 3 Probable Cause determination is a LEA prepared, Court approved document which permits an agency to detain a suspect. Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 Civil Grand Jury Report City of Covina (Police Department) City of Gardena (Police Department) City of Glendale (Police Department) City of Glendora (Police Department) City of Huntington Park (Police Department) City of Los Angeles Fire Department City of Los Angeles Unified School District (School Police) City of Manhattan Beach (Police Department) City of Monrovia (Police Department) City of Monterey Park (Police Department) City of Pasadena (Police Department) City of Redondo Beach (Police Department) City of San Fernando (Police Department) City of San Gabriel (Police Department) City of South Pasadena (Police Department) City of Torrance (Police Department) City of West Covina (Police Department) City of Whittier (Police Department) 2 City of Inglewood (City Attorney) 3 City of Los Angeles (Police Department) County of Los Angeles (Sheriffs Department) 4 County of Los Angeles (Sheriffs Department) 5 County of Los Angeles (District Attorney) 28 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY Acronyms APD Alternate Public Defender CGJ Los Angeles County Civil Grand Jury CMS Case Management System DA Los Angeles District Attorney’s Office ISAB Los Angeles County Information Systems Advisory Board JDIC Justice Data Interface Controller LAPD Los Angeles Police Department LASD Los Angeles Sheriffs Department LEA Law enforcement Agency PIX Proactive Information Exchange THIS PAGE INTENTIONALLY LEFT BLANK 30 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY HIGH TECH FORENSICS AND CYBER SECURITY CRIME FIGHTING IN THE DIGITAL AGE “We have to do better at what we do. Our public deserves it.” Committee Members Chairperson - Meg George Grace Hernandez Beverly T. Kishimoto Max E. Van Doren HIGH TECH FORENSICS AND CYBER SECURITY CRIME FIGHTING IN THE DIGITAL AGE “We have to do better at what we do. Our public deserves it.”1 SUMMARY The use of digital evidence to successfully prosecute crimes is becoming critically important. In part, this is due to the proliferation in the use of digital devices. Specific training in the collection and processing of digital evidence is needed, as is the acquisition of the hardware and software required to analyze the evidence. Computers, cell phones and other digital devices are increasingly intertwined with the commission of crimes, raising the importance of the resources and priority that must be given to cyber security, cyber investigations and high tech forensic2 examinations to provide public safety. These cyber and forensic services are provided within Los Angeles County (LAC) and its cities by regional high tech crimes task forces (RTFs) (RTFs cover more than one county.), local high tech crimes task forces, police department high tech forensic labs or through private companies. In addition seventeen (17) municipal police agencies have some in-house high tech forensic crime capability. LAC is home to critical infrastructure, businesses and industries that are vulnerable to cyber attack. It must be in a position to provide response support to such attacks, so that such business and industry will identify Los Angeles as a safe and welcoming place to locate. Those who harm us (be it crooks, cyber terrorists, or nation-states) are highly motivated and continuously improving. To counter this assault effectively we must be highly motivated and continuously improving to be effective in the efforts to: provide public safety, catch the perpetrators and successfully prosecute them. This requires vision, commitment, equipment, training and resources. Technology is evolving at a rapid pace requiring frequent upgrades to equipment, software and training. Funding of high tech forensics, cyber investigation and cyber security in LAC has largely been through government transfers (grants from State and Federal programs). This source of funding has been decreasing and continues to be under pressure due to continuing cuts and constraints. Borrowing the endowment concept from the University system, a possible new source of funding might be the establishment within law enforcement of a High Tech Forensics Examination – Cyber Investigations – Cyber Badge Endowment Program (Endowed Badge). The Endowed Badge (EB) would be awarded on a rotating basis. Funding of each EB would be through a public private partnership, and the EB could be named by the benefactor; e.g., Port of Los Angeles EB, Apple EB, Harry Potter EB, Warner Brothers EB, Wells Fargo EB, Exxon EB, DWP EB, etc. Business and industry has a vested interest in a safe City/County in which to do business; hence, there may be interest from many sectors to participate in funding an EB and 1 Graham, Gordon “Affairs in Government 2010. Some Thoughts on Risk Management,” December 3, 2010 2 In the Report, High Tech Forensics concerns digital information; it does not include DNA or fingerprint analysis naming one of the EBs. Eight (8) initial Endowed Badges are visualized. The eight (8) are comprised of five (5) EBs where each LAC Board of Supervisors District sets up and oversees the public-private partnership funding; plus three (3) EBs, where each of the City of Los Angeles Proprietary Departments ( Department Of Water and Power, Port of Los Angeles, Los Angeles International Airport (LAWA)) sets up and oversees the public-private partnership funding for a total of eight (8) EBs. The EB concept is to use a combination of government and private funds to pay for training of sworn officers in the arena of high tech forensics-cyber investigations and cyber security. There are legal issues to explore and logistical issues to analyze. The example of the partnership between Los Angeles and Microsoft in the area of fighting piracy may provide insight of a process to be followed. PURPOSE The Civil Grand Jury (CGJ) investigated the level of engagement and commitment of government entities within LAC in the prevention and prosecution of high tech crimes, as well as in the use of digital evidence in crime fighting efforts. Computers, cell phones and other digital devices are increasingly intertwined with the commission of crimes, raising the importance of resources and priority that must be given to cyber security, cyber investigations and high tech forensic examinations to provide public safety. In view of the shrinking budgets at all government levels, this Report recommends how to sustain the current level of cyber security, cyber investigations and high tech forensic examinations in the County and cities, while further developing the capability and staying ahead of the curve.

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

9 pages 9 findings 5 recommendations

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Findings & Recommendations 9 findings

F1: Regional Joint Task Force Model: a. RCFL, ECTF, SCHTTP and ICAC are each excellent examples. b. Provide for easy collaboration, flexibility of staff allocation, leveraging of multi- agency funding and resources and mentoring c. Membership may be formalized through a Memorandum of Understanding (MOU) or an informal agreement. d. Improved service on a regional scale e. Maximize Federal, State and County resources

F2: Localized Joint Task Force Model: a. A well structured example of this model included: i. Three (3) neighboring cities with the FL located in the Police Department of one (1) of the cities ii. Four (4) sworn officers from the three (3) cities iii. Two (2) sworn officers from two (2) RTFs b. Membership may be formalized through an MOU or may be informal. c. Supported by the citing city’s Information Technology (IT) Department d. This FL is a member of SCHTTF and TF e. Provides for easy collaboration, flexibility of staff allocation, leveraging of multi agency funding and resources and mentoring f. Improved service to participating cities constituents

F3: Loosely aligned group of single jurisdiction FL: a. The FLs are located in the Police Department of each of the cities. b. The FL is a one-officer or one- tech shop. c. Association is loosely structured and based on a mutual aid model.

F4: Single jurisdiction FL with membership in Regional Joint Task Force(s). a. The FL is located in the Police Department of that city. b. The FL has one (1) to five (5) trained staff, generally a combination of sworn and tech. c. Is available to other law enforcement agencies on a mutual aid model FL Skills and Equipment Considerations

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F5: Highly motivated staff

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F6: Highly qualified staff

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F7: Improved service to constituents as a goal 12 Graham, ibid. 40 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY

F8: Procurement guidelines that recognize and take into account the rapidity with which technology is changing

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F9: Systems to monitor best practices, compliance and changing technology and to reward performance Training In employing the RPM approach in any field, including high tech forensics, training is a core ingredient. The purpose of training must be to create officers who are prepared, equipped, and ready to perform and respond to any situation that presents itself. Anyone can train personnel after something goes bad13. The real challenge is delivering training proactively to prevent problems prior to occurrence. If trained personnel are not available to utilize a FL, then it is largely an expensive box with equipment and software that is lying fallow and becoming obsolete. Whether it is a State of the art new regional FL or a small FL in a converted area of an existing facility, it requires well qualified and well trained personnel. High tech is a fast evolving field; continuous improvement is the name of the game. Today’s new “thing” may be out of date tomorrow. Today, most hard drives are magnetic, but the trend is towards switching ceramic hard drives. Storage is moving to the “cloud.” And so on. The cyber intruders, terrorists and crooks are continuously improving their mode of attack, trying and developing new tactics, software and hardware. Our forensic examiners and cyber investigators have to be continuously improving as well. Training is critical and MUST be ongoing as the technology is always evolving.

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Additional Recommendations 5

Not linked to specific findings.

R1: The District Attorney, being the nexus of all law enforcement in the County as prosecutor of felonies, should take the lead role and become the central repository for coordination of high tech information by doing the following: a. Establish and keep up to date a list of all training available for high tech forensics examination, cyber investigation and cyber security, including local, State and Federally sponsored training, as well as private training opportunities. It is likely the DA’s high tech Forensic Division is already doing this internally and could, with little effort and cost, make this information available to the Task Forces, the LAC Sheriff and the municipal police departments. b. Provide outreach to all police departments and the sheriff on a regular basis regarding the value of and training in high tech forensics in crime fighting in Los Angeles County. i. This could be done through seminars for groups of law enforcement officers organized geographically by Supervisorial District or area; e.g., South Bay, San Gabriel Valley, West LA, San Fernando Valley, etc. ii. Individual department “roll-call” training should also be part of this program. c. Keep a log of the use of digital evidence in the prosecution of cases, both high tech crimes and “old school” crimes. The log should indicate the nature of the digital evidence (cell phone photo, location info, contact info, computer file, GPS, etc.); its importance to the case (useful, important, critical); and the role it played (allowed case to settle, critical to achieving a guilty verdict, sentence enhancements, freed an innocent person, enabled the return of stolen property to rightful owner, etc.). The DA should encourage municipal departments to do this for misdemeanors as well. This will build a body of evidence to help inform decision makers in the budgeting process and persuade law enforcement agencies with no in-house capability to see a need. d. Establish a program for all deputy DAs to acquire the basic knowledge and skills necessary to develop their cases using digital evidence in a manner a judge and jury can understand e. Develop and conduct seminars to educate the judges in digital evidence use in the criminal justice process

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R2: Arcadia PD, Beverly Hills PD, City of Los Angeles PD, Culver City PD, Downey PD, Glendale PD, LAC District Attorney, LAC Sheriff, Santa Monica PD, Monrovia PD, Redondo Beach PD, Torrance PD, Whittier PD. a. Establish a “High Tech Forensics Bureau.” This will facilitate: i. Promotions and career opportunities for those who are trained and skilled in this area without having to leave the discipline ii. Succession planning and transfer of high tech expertise, preserving the investment made in creating the expertise. b. Update regular law enforcement recruit and detective training to include orientation, procedures, protocols and other training with respect to digital evidence c. Include training in digital evidence collection, analysis and use in “roll call” training. d. Take steps to acquire the POST certification for High Tech training courses for forensic examiners and cyber investigators to allow for reimbursement of the costs.

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R3: LAC Chief Information Office and Internal Services Department should conduct internal reviews concerning cyber security and infrastructure protection from Cyber attacks and terrorism: a. LAC must have protocols, policies and procedures facilitating timely, efficient rapid response by the most able cyber security resources available and ancillary emergency response by other agencies, if warranted, in the event of a cyber intrusion, fire wall breach or other cyber attack. b. These should include coordination with key third party vendors. Many basic services within the LAC are provided by third party vendors. The Metropolitan Water District and California Edison are two (2) examples.

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R4: The LAC Board of Supervisors should task their lobbyist in Sacramento and Washington with looking at opportunities to redirect fees and taxes on land line phones, cell phones or internet access services to provide funding allocated to the support high tech forensics, cyber security and forensic examination programs

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R5: LAC and the City of Los Angeles establish a "High Tech Endowed Badge Program” to support the training and equipping of FE and CI throughout local law enforcement. Initially, establishment of eight (8) EBs could be evaluated. Setting up five (5) EBs by the LAC Board of Supervisors District one for each Supervisorial District; and setting up three (3) EBs by the City of Los Angeles one for each of the Proprietary Departments (Department Of Water and Power, the Port of Los Angeles, Los Angeles International Airport (LAWA)) for a total of eight (8) EBs. Funding Training through an Endowed Badge – A Concept Borrowing a concept from the University system, the CGJ believes there is a future in establishing, within law enforcement, a High Tech Forensics Examination – Cyber Investigations – Cyber Security Endowed Badges Program. If possible, these could be “named” endowed badges (EB). It is in the interest of business to have a safe City/County in which to do business. There may be interest from many sectors to participate in this EB public private partnership. 44 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

58 pages 17 findings 10 recommendations

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Findings & Recommendations 17 findings

F1: According to the LASD, inmates released from jail are rearrested at a rate of 42.2% within the first six (6) months. After six (6) months of release, the recidivism rate for rearrest increases to 57.4%. Two (2) of the strongest, most consistent predictors contributing to recidivism among County jail inmates are lack of employment and substance abuse. Data indicates there is a high likelihood inmates will return to jail if not provided with guidance and direction within eight (8) hours of release.

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F2: At Pitchess, the CGJ observed a marked difference in the environment, interactions and activities in housing units where classes were and were not being held. Inmates not involved in classes were in crowded dormitory facilities, playing cards, watching TV, pacing or engaged in minimal constructive activities. In contrast, inmates enrolled in the MERIT program who are housed separately were in classrooms filled to capacity or engaged in listening to dynamic motivational speakers’ presentations. Several CGJ observers were moved to tears by the sincerity and focus demonstrated by these inmates.

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F3: According to the Los Angeles District Attorney’s website, the County of Los Angeles has approximately fourteen hundred (1,400) known street gangs. External community support organizations note that gang leaders are recruiting new members at a younger age with some new members being fourth generation gang members. It is estimated that of the 85,000 gang members in Los Angeles County, approximately: 4. 90% will be arrested by the age of 18 5. 75% will be arrested twice by the age of 18 6. 95% will not finish high school 7. 60% will be in prison or dead by the age of 20

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F4: Lack of a uniform pre-payment billing process throughout the facilities adversely affects the level of ORSA enrollment. ORSA is preferable because reimbursements are higher for the uninsured ORSA population from the State and Federal cost reimbursement pools. The Registration PRW provides patients with information regarding available low- cost/no-cost programs during the patients’ financial screening. While the process from preliminary medical evaluation up to the PRW registration is generally consistent across the facilities, each hospital’s practices differ after the PRW registration. At LAC+USC Pre-Payment billing envelopes are distributed only if the patient returns after they are seen by the doctor and requests this information from the Registration PRW. At Olive View, Pre-Payment envelopes are not provided at any time. If patients would like to use this form of payment, they must visit the cashier and request this information. For these two facilities, patients who specifically request the Pre-Payment plan typically are aware of the program before their hospital visit as noted by facility staff. Since the Registration PRW does not provide the envelopes unless requested, this indirectly encourages a greater number of patients to apply to ORSA. From a program reimbursement perspective, Table 5 shows LAC+USC and Harbor-UCLA Pre-Payment population as compared to the ORSA population in Fiscal Years 2007- 2010. Alternatively, Harbor-UCLA automatically issues Pre-Payment billing envelopes with discharge materials to each patient with a LAC address. In this facility, patients decide between immediate remuneration or returning to the financial office and applying for ORSA, Medi-Cal, or other low income insurance programs. This method of distribution indirectly encourages more Pre-Payment applications. From an in-house billing and collection perspective, Pre-Payment is preferable, as the facility initially collects more than ORSA (until DHS seeks reimbursement funds). However, these methods influence patients with adequate financial means to apply for the Pre-Payment plan as income verification is not required. Table 5 shows that the number of patients at Harbor-UCLA claim Pre-Payment is significantly higher, despite a considerably larger LAC+USC patient volume: Table 5. Pre-Payment Plan and ORSA Visits, LAC-USC and Harbor-UCLA UCLA, FY 2007-2010 Prepayment -Number ORSA - Number of visits Total Year Facility of visits and percentage and percentage of total Visits of total visits visits LAC-USC 691,046 16,271 2.35% 311,702 45.11% FY 2009-10 Harbor-UCLA 344,401 27,239 7.91% 94,664 27.49% FY 2008- LAC-USC 521, 960 19,124 3.66% 190,636 36.52% 09 Harbor-UCLA 337,992 31,907 9.44% 94,508 27.96% LAC-USC 505,881 25,380 5.02% 207,105 40.94% FY 2007-08 Harbor-UCLA 317,708 43,138 13.58% 99,571 31.34%

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F5: Facilities have different practices and procedures regarding the Extended Payment Plan Policy causing difficulties in collections. Establishing more EPP usage can potentially improve overall collection rates. Patients would rather pay off their debt incrementally than have their accounts transferred to debt collectors. 66 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY Increasing the use of EPP appears also to be an incentive for hospitals. Hospital staff noted that EPP allows the hospital to recoup some of the cost of service (an estimated average of $0.60 for every dollar of cost according to staff). Furthermore, it is important that patients are aware of all payment and coverage options, particularly ones that encourage patient responsibility for service payment. The hospitals’ practice of the EPP varies.4 LAC+USC reviews contracts and monthly minimums with the patient but then transfers the account to outside collection agencies. These outside vendors will communicate with the patients to receive their monthly payments and levy a service surcharge of 15-20% of the funds collected. Alternatively, Olive View manages and collects these EPP payments in-house and limits their use of outside collection agencies. Harbor-UCLA follows a similar method and sends the EPP accounts to collections only if the account becomes delinquent. Currently, County hospitals limit their efforts to educate patients regarding the EPP option. The CGJ’s interviews revealed that the collection levels for EPP accounts appear to be relatively higher than other types of accounts. (For example, Olive View staff indicated that over 80% of EPP accounts are successfully collected.)5

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F6: Patient accounts classified as “Self-Pay” may be a misnomer; they may never pay. At the initial financial screening, the Registration PRW first categorizes patients as Medi- Cal or Self-Pay. If the patient is approved for a low-cost/no-cost program, the categorization changes according to the accepted programs.6 However, if the patient does not pay their share of cost, their account becomes delinquent and is transferred to collection. The categorization then shifts to Self-Pay. Although current write-offs include the Self-Pay population, there are a variety of residual account types that fail to be collected in-house. Table 6 outlines the types of patients who are initially classified as Self-Pay patients, and the accounts that are referred to the Self-Pay population. Table 6. Self Pay Patient Characteristics Homeless Ineligible for programs Out of county residents Classified Self-Pay Insurance co-pay Patients Patients who have not received financial screening Non-compliant (undocumented immigrants, patients reluctant to provide insurance information to avoid deductable, and patients disinclined to provide information that disqualifies them for low-cost/no cost programs.) Pending and denied Medi-Cal applications Residual Accounts that Residual costs from patient responsibility or share of cost (Medi-Cal, Pre- Shift to Self-Pay payment, ORSA, ATP) While the hospital system, molded by policy and regulation, is designed to provide low income populations with more access to medical care and to prevent hospital facilities from making medical decisions based on economic reasons alone, it is vulnerable to public misuse. There are numerous anecdotal references about patients who have the 4 See Extended Payment Plan 5 Note that the hospitals’ staffs were not able to provide detailed data on the volume and charge totals of the EPP accounts 6 ATP, ORSA, Medi-Cal, Medi-Care, Self-Pay 2010 – 2011 financial means to pay for their own medical care. However, they opt to withhold critical information and, at times, even provide false information to avoid paying their medical bills. Quantifying the level of fraud or public abuse of the medical system is difficult and beyond the scope of our investigation. But in the CGJ’s analysis, it appears there are areas within the public hospital medical care system that are vulnerable to public abuse.

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F7: Although there has been confusion as to the difference between the total service charge and actual cost of service, the bottom line is: a significant loss to the County. There is a difference between the actual cost and the charged amount for rendered services. The actual cost represents the direct cost to the hospital providing treatment. The charged amount represents the service cost plus overhead. During patient billing and collection, the facilities and collection agencies seek payment for the service charge. If the account becomes delinquent and ultimately declared by the County Treasurer and Tax Collector (TTC) to be uncollectible, the service charge is written off. The total service charge written off is the amount reported and released publicly. However, the actual service cost is lower, estimated by management to be approximately 53% of the service charge. Table 7 lists the total service charges for the three (3) hospitals, as well as the estimated actual costs for service based on this reported cost-to-charge ratio: Table 7. Estimated Total DHS Medical Care Service Charges and Costs Estimated Actual Cost of Service Total Charges for (Approx. 53% of Year Service Total Charge) FY 09-10 $733,685,430 $395,676,552 Note: These costs include the ORSA, ATP, Medi-Cal and Self-Pay accounts. DHS then uses Federal and State funds to reimburse the hospital facilities for their actual costs.

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F8: Research shows that before you can prepare parolees for a job by teaching job skills, it is imperative that you prepare their minds for a new and different way of thinking when they reenter society upon release. According to a 2010 publication by the LASD on EBI, the LASD recognizes that inmates who are better prepared mentally, psychologically and educationally for transition and reentry into the community have a much higher success rate. The principles of EBI are designed specifically to assist inmates in their transition from custody to civilian life.

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F9: LASD previously had a long-term contract with a school district for instructors to provide EBI training to inmates. Negotiations are underway for a new contract that is expected to be finalized by mid-2011. At that time, instructors will teach EBI courses through the contracted organization. Ultimately, the goal over the next two (2) years is to develop an educational program to administer EBI course work to inmates in conjunction with a Federal workforce investment program. 54 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY

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F10: Custody Assistants (CAs) are LASD employees working in the jail system to manage inmates. Some CAs have been provided limited training to instruct inmates in various programs such as parenting and anger management. The amount of time spent in training varies from ten (10) hours to thirty-two (32) hours with additional workbook and video instruction. This limited training appears to be inadequate in contrast to four (4) year bachelor degrees and teaching credentials required by school district teachers. The effectiveness of the CA instructors is measured and may need to be assessed for effectiveness. This issue did not appear to be a concern with females at CRDF as much as the male population at other jails.

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F11: Concerns were expressed during this investigation from various organizations about limited access of inmates to civilian, non-sworn personnel if CAs are being charged with teaching and acting as case managers. As case managers, they seek to ensure participants have tools needed to reintegrate into the community. The concern was whether inmates will relate to and confide in LASD employee instructors with the same level of trust as they would to a civilian teacher. While the CGJ understands the security and safety issues related to uncontrolled access of inmates to civilians, questions were raised about the LASD attempting to limit external involvement with inmates. Of particular concern was whether an inmate’s needs to connect with family, make contact with their attorneys and receive meaningful assistance was adequately met.

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F12: The Inmate Welfare Fund (IWF) is a fund derived from revenue sharing contracts such as inmate phone calls, vending machines and commissaries where inmates can purchase food and personal items with money put into an account by their families. The fund generates approximately $47 million a year and is “to be expended for the benefit, education and welfare of inmates.” The IWF allocates 51% for inmate programming and services (which includes EBI courses) and 49% for jail maintenance. The Inmate Welfare Commission is an advisory body which makes

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F13: In addition, the CGJ found that the EBI program faces four (4) major obstacles:

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F14: Inability to effectively translate course material for the Spanish speaking population

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F15: Lack of adequate exposure to program benefits by the Board of Supervisors and other influential sectors of County government

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F16: Effectively marketing the program internally to local government leaders and externally to potential corporate partners

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F17: Apprehension of participation by male inmates due to internal jail house politics and gang peer pressure

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Additional Recommendations 10

Not linked to specific findings.

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R7: Develop and implement a staff policy and procedure that ensures patient awareness of the availability of the Extended Payment Plan option

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R8: Establish a directive to expand the use of EPP by uninsured patients who have the means to pay for services

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R9: Design and implement a program to analyze and prosecute abuse of the LAC public hospital medical care system

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R10: Change the classification from Self-Pay to Financial Liability because currently it is not a self-pay system but a financial liability for the County 2010 – 2011 REQUEST FOR RESPONSE California Penal Code Sections7 §933(c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the Civil Grand Jury published its Report (filed with the Clerk of the Court). Respond to: Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, Ca 90012 All responses for the 2010-2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 LAC DHS 2 LAC DHS 3 LAC DHS 4 LAC DHS 5 LAC DHS 6 LAC DHS 7 LAC DHS 8 LAC DHS 9 LAC DHS 10 LAC DHS 7 Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 Civil Grand Jury Report 70 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY ACRONYMS ATP Ability to Pay CGJ Civil Grand Jury CHC Comprehensive Health Center DHS Department of Health Services DSH Disproportionate Share Hospital EMTALA Emergency Medical Treatment and Active Labor Act EPP Extended Payment Plan ER Emergency Room FPL Federal Poverty Level FY Fiscal Year Harbor-UCLA Harbor-UCLA Medical Center ICN Initial Contact Nurse LAC+USC Los Angeles County Medical Center MLK Martin Luther King Jr. Multi-Service Ambulatory Care Center MRUN Medical Record Number Olive View Olive View Medical Center ORSA Outpatient Reduced-Cost Simplified Application PPP Public-Private Partnership Program PRW Patient Resource Worker RLA Rancho Los Amigos National Rehabilitation Center SNCP Safety Net Care Pool TTC Los Angeles County Treasure and Tax Collector USCB United States Collection Bureau, Inc. 2010 – 2011 THIS PAGE INTENTIONALLY LEFT BLANK 72 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY CITY OF LOS ANGELES DEPARTMENT OF WATER AND POWER Who’s Really In The Dark? Committee Members Chairperson - Mitchell Group Grace Hernandez Kenneth A. Jones Linda Loding Judy Packer Virginia Smith-Rader LOS ANGELES DEPARTMENT OF WATER AND POWER WHO’S REALLY IN THE DARK?

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📋June 30, 2011 — Los Angeles County Civil Grand Jury Report on Ladwp

18 pages 7 findings 5 recommendations

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Findings & Recommendations 7 findings

F13: The Department has provided substantial funds to the City of Los Angeles in the form of Power and Water transfers for many years. The Power system alone has provided over $2 billion to the City in the last twelve (12) years with another $204 million from the Water system (up to the time the transfer was stopped by the Courts). Exhibit 16. Summary of Power and Water Transfer Amounts shows the money received by the City of Los Angeles for the last twelve (12) years. Exhibit 16 Summary of Power and Water Transfer Amounts Year Power % of Water % of Transfer Operating Transfer Operating Revenues Revenues 1998-1999 $108,145,800 5 $16,252,500 5 1999-2000 $112,000,000 5 $22,200,000 5 2000-2001 $119,800,000 5 $25,500,000 5 2001-2002 $179,153,000 5 $27,247,000 5 2002-2003 $185,358,000 7 $27,523,000 5 2003-2004 $210,214,000 7 $27,649,000 5 2004-2005 $160,166,700 7 $29,815,100 5 2005-2006 $157,894,300 7 $27,914,300 5 2006-2007 $174,747,200 7 0 0 2007-2008 $182,003,900 7 0 0 2008-2009 $222,505,900 7 0 0 2009-2010 $220,475,000 8 0 0 TOTAL $2,032,463,800 $204,100,900 Source: LADWP Summary of City Transfer Declarations for Fiscal Years 1999-2010

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F14: Although the Department had numerous reasons for not wanting to make the transfer without a rate increase, the Department felt it deserved, holding the City “hostage” under these circumstances was inappropriate. The Department had the cash to make the transfer, stating they had it reserved for other uses. The Department said it could not afford the transfer. This caused a substantial argument from the Council on their need for the money and a public relations nightmare with the public, who was told that the Department was unreasonable by requiring a rate increase before making the transfer. In reality, the money had previously been budgeted for the transfer. But since the Department had doubled its unrestricted cash balance to $300 million, it felt that it could no longer afford to make the scheduled transfer to the City without rate relief. Saying they did not have the cash was inappropriate and set off a series of events and negative public and Council perceptions that will take many years to correct. What is uncertain is whether the doubling of the amount of cash (from $150 million to $300 million) was “overkill” and whether or not a smaller increase to $225 million, for example would have satisfied the bond agencies and still have money left for the almost $75 million transfer. What is known is that by refusing to make the transfer, the Department’s credibility and reputation as a good “citizen” was in jeopardy. The real question is whether a cash position of $225 million (which would have been the $300 million less the transfer) in addition to the $547 million would have sufficed for the rating agencies, since that would also have brought LADWP’s minimum targeted liquidity levels to over one hundred (100) days, also in line with comparable peers. That difference would potentially have allowed the transfer without the ensuing problems. That will never be known for sure. Newspaper articles were relentless on the “greed” of the LADWP management. In reality, the Department was only trying to protect themselves and the ratepayer; but they had a poor way of explaining that to the satisfaction of the public. What then transpired was a battle between the Mayor, the Council and the Controller (all publicly elected officials) on who would be the greater 110 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY friend of the public. The Department was caught in the middle of a situation that should never have gotten that far.

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F15: The ECAF as currently constituted at LADWP contains several elements that typically would not be found in a cost adjustment factor. The CCF report does an excellent job of discussing the ECAF at LADWP, as follows: The ECAF operates as a ‘pass-through’ of renewable energy costs, fuel/natural gas costs, purchased power costs and energy conservation costs as well as providing rate stabilization requirements. Fuel costs and purchased power costs represent the traditional Fuel Cost Adjustment (FCA). These costs are dependent on market prices. While a utility can follow best- practice procurement and hedging plans, it cannot completely control the market price of fuel and purchased power. Some renewable energy costs are also dependent on market prices (long-term renewable Power contracts whose prices are indexed to gas prices or power prices) but others, such as long term fixed-price Purchase Power Agreement costs, prepaid energy costs, transmission costs or the capital costs of LADWP-built renewable resources, are not dependent on market prices and, therefore, would not typically be part of an FCA. Energy conservation costs such as the costs of energy efficiency programs are also not part of the typical FCA. On the other hand, revenue losses due to Demand Side Management (DSM) are often considered unpredictable and out of the utility’s control. Therefore, in many cases, including that of the California IOUs, these losses are passed through by an adjustment mechanism (revenue decoupling) similar to an FCA. The ECAF also contains a separate element that accounts for the City Transfer payments that are made as a percentage of total revenues. This adds 8% to all other ECAF costs such that the Department is essentially kept whole on the 8% of ECAF revenues that are transferred to the City as ECAF costs rise and fall. While this makes sense given the way City Transfer payments are calculated today, the fact that City Transfer payments are tied to volatile ECAF revenues at all introduces additional volatility both to customers and to the City, as well as adding additional complexity to the ECAF balancing account. The ECAF is intended to limit the speed at which rates grow. Cost increases in excess of the cap are accumulated in the ECAF account and deferred until the quarterly cost increase would otherwise be less than the cap. While this provides a limited amount of rate stabilization, it is at cross purposes with the role of the ECAF in enabling a quick response to uncontrollable cost increases. During times when the cap prevents revenues from increasing as quickly as costs, an under collection of ECAF costs accumulates. This under collection must be financed by the Department, negatively impacting cash levels as well as debt- coverage ratios. A well designed rate stabilization plan usually includes a method to amortize under collections within a defined time horizon; the ECAF cap can prevent timely amortization. In addition to renewable energy costs, a decoupling mechanism for energy efficiency improvements was introduced that incorporated into ECAF a charge for revenues lost due to energy efficiency improvements. This allowed LADWP to maintain base revenue levels while reducing overall electricity demand. Additional language changes created a small rate stabilization fund, updated language to reflect a 7% City Transfer (now 8%), expanded decommissioning costs from nuclear facilities to all generation facilities, and specifically included emissions fees, interest expense above 4%, uncollectible bills, asset write-offs, and extraordinary expenses. 114 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY The ECAF rate is calculated on a quarterly basis by estimating the following twelve (12) months of costs, described above, adding any previous under or over collection of ECAF, and dividing by the estimated energy demand for the following twelve months. From this rate, an amount of 1.25 cents/kWh is subtracted to yield the ECAF rate to be charged to customers over the next quarter. This 1.25 cents is meant to reflect a portion of the ECAF charge that is included in base rates, implying that current base rates are higher than needed to cover base operations. In FY 2009, costs booked to the ECAF account totaled slightly over $1.3 billion. In summary, there are now six (6) distinct categories of expenses currently included in the ECAF rate: a. Fuel - Includes all costs associated with natural gas, coal, and nuclear fuel procurement, including emissions, greenhouse gas reduction and retirement costs b. Purchased Power - Includes all purchased power costs, including associated transmission, short-term energy market purchases as well as long-term purchased Power c. RPS costs - Includes all charges associated with renewable resource energy, capacity, RPS related prepayment expense, operations and maintenance, depreciation, and interest expenses for generation and transmission d. DSM expenses - Includes qualified DSM costs, defined as costs incurred for the acquisition and installation of devices and systems, including incentive payments, audit costs related to DSM, and administrative costs, which are part of those programs or projects designed to lower and control power system demand or consumption (limited to 10% of three (3) items above) e. DSM Revenue Loss Recovery - Includes lost revenue due to the implementation of DSM programs, helping to preserve LADWP’s rate base as demand is reduced through energy efficiency f. City Transfer - Includes a factor of 8% added to all ECAF expenses to cover the portion of the City Transfer associated with ECAF revenues. (This does not include the City Transfer component associated with base rate revenues, which is built into the existing base rate structure.) In effect, only a few of these costs are considered “uncontrollable” and, therefore, should be included in ECAF: fuel, some renewable costs tied to fuel and DSM revenue losses.

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F16: The current ECAF design does not provide for adequate oversight and transparency into long-term commitments made by the Department, particularly with respect to Renewable Portfolio Standard (RPS) and Demand Side Management (DSM). The presence of so many elements into a single cost adjustment factor reduces transparency into the cost drivers behind ECAF increases. Understanding the causes of ECAF increases today requires a detailed decomposition and analysis that is difficult for policy makers and customers to understand. The act of bundling market-driven elements with less volatile costs that lie within the Department’s control can limit overall transparency and potentially lead to a lack of accountability for those costs. Under the current system, ECAF increases are passed through to customers automatically without detailed rate review. Long-term commitments have predictable costs and, as such, they can be made with specific consideration for their impact on costs. Under the current structure, commitments that are both predictable and within the Department’s control can be passed through to ratepayers without review. This includes major capital project commitments that represent strategic (and therefore changeable and not operational) decisions. Finally, rate responses to volatile fuel and purchased power costs should not be constrained by the presence of a very tight cap on ECAF changes. Exposure to market prices should be passed through uncapped to the ratepayer to avoid the potential for financial distress. CCF concluded that the costs associated with ECAF are set to increase rapidly over the next two (2) years. Without a significant increase in the ECAF rates, this will put significant pressure on LADWP’s debt ratios, with the potential that ratios in 2011 will be well under target levels. At the same time, a cap on market-based drivers presents a significant risk to the Department in the event of a market price shock, providing support for the argument that the ECAF should be decomposed into separate elements with their own individual mechanisms for rate review. Any effort to reconstitute the ECAF won’t be simple. Any effort to promote transparency must not be at the expense of expediency, and care must be taken to prevent disproportionate impacts on individual classes of ratepayers.

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F17: The implementation of a Ratepayer Advocate at LADWP would be unusual in the municipal utility industry. While the majority of states have Ratepayer Advocate positions or groups, those organizations monitor rates imposed by IOUs, not for publicly owned utilities. The concept is that public utilities are owned by the people, and the people’s representatives (the elected City Council) would ensure that the people were protected and would do what the people want. However, in many locations including Los Angeles, Council members have complained that they could not get the information that they needed from the utility and that, at times, the information was not consistent, informative or transparent. There is also concern in many jurisdictions, including many in Los Angeles, that special interest groups, such as unions (who have substantial political power due to their monetary contributions) have greater input into the reviews and decisions of elected representatives than they have in the public at large. For example, it might be in the City’s best interest and the utility’s best interest to have an immediate focus on solar or wind power, but a Ratepayer Advocate could provide a transparency on the cost of such proposal and present alternatives in terms of focus or timing that might benefit the consumer. As shown in Exhibit 18. Ratepayer Advocate Organizations at Surveyed Municipal Utilities, there are very few “official” Ratepayer Advocate organizations in other municipal utilities that could found. 120 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY Exhibit 18 Ratepayer Advocate Organizations at Surveyed Municipal Utilities Utility Ratepayer Advocate Organizations LADWP Office of Public Accountability recently passed during the municipal Election CPS Energy No indication of Ratepayer Advocate. They have a newly formed Citizens Ratepayer coalition but it is not independent or government (it is non-profit). They ask for donations to help with legal costs on the website. SMUD No indication of Ratepayer Advocate function. MLGW No indication of Ratepayer Advocate function. JEA No indication of Ratepayer Advocate function. Austin Energy No indication of Ratepayer Advocate function. CSU No indication of Ratepayer Advocate function.

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F18: Some people believe that the impact of the Ratepayer Advocate ballot measure is minimized because other proposed Charter amendments were not approved for the same ballot. As the deadline for the March 8, 2011 ballot measure drew closer, there were competing proposals from public advocates and Council members. At one point, the Council voted for three (3) supposed LADWP reforms: a. Creating an Office of Public Accountability with a Ratepayer Advocate b. Requiring LADWP’s budget to be submitted earlier with a guarantee that “surplus” funds will come to the City of LA for General Fund uses c. Granting the City Council the authority to remove the LADWP’s General Manager or LADWP Commissioners with a two-thirds Council vote. The Council could also override the Mayor’s removal of the General Manager or Commissioners with a two-thirds vote. Only the first two (2) items were on the March 8, 2011 ballot (and both passed with large majorities), with the third being vetoed by Mayor Villaraigosa so that it would not go before the voters. The Mayor’s obvious goal was to ensure that he kept control over the appointment and removal of Department management and governance. There were seven (7) votes from the Council to override the Mayor’s veto, which was insufficient by one (1). The thought by some of the people who proposed these changes was that as long as the Mayor controlled the appointments of LADWP Commissioners and General Managers, any attempt at serious Ratepayer Advocacy would be minimized. The end result is that the Office of Public Accountability will be limited to the review of Water and Power rates and will rely on the City Council and Mayor to pass ordinances to ensure the thorough review and analysis of LADWP’s strategic plan, operations, finances and management. As one consumer activist stated, “…the establishment of a Ratepayers Advocate supported by the Office of Public Accountability is a hollow and symbolic gesture unless they are supported by subsequent ballot measures that reform the Commission process and establish a City Prosecutor…..The last thing LA needs now is oversight reform that consists of more audits and advice with no authority or mandate to enforce the law…..it is important to remember that oversight and accountability mean little, if anything at all, without enforcement authority and a mandate for prosecution.”

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F19: Although the final wording of the Ratepayer Advocate ballot measure may be interpreted as being effective, the implementation of the measure, and therefore its strength, is up to Council ordinance. There was an original version of the Ratepayer Advocate position which declared “the role of the OPA shall be to (1) promote efficiency and effectiveness of the Department; (2) provide centralized focus on ratepayer protection and consumer complaints; and (3) provide independent analysis of Department actions, particularly as they relate to Water and Electricity rate actions. The OPA shall advocate against excessive rates and shall provide expert advice on rate actions and strategies which most economically accomplish the City’s policy goals and protect the Department’s long-term interests.” The final wording of the proposed ballot measure indicates that the proposed focus will be on determining if rates are too high, not if LADWP is using revenues to overhaul infrastructure and move towards green energy and a sustainable, local water supply. The issues are if the Ratepayer Advocate should be expected to question whether, for example, the use of wind power (which is substantially higher generation cost compared to any other RPS item) is appropriate or whether, given the decision to go with wind, the rates are minimized and accurate. It is a subtle but very important distinction that will have huge impacts to both the work load of the Ratepayer Advocate and to his/her overall impact and effectiveness. After numerous motions from various Council members on the wording of a Ratepayer Advocate ballot measure, and after considering a higher level of funding (0.1% rather than 0.025% of annual revenues), the following was the actual wording decided upon and the wording that went to the public for voting on March 8, 2011. Section 683. Office of Public Accountability (a) The role of the Office of Public Accountability (OPA) shall be to provide public independent analysis of Department actions as they relate to water and electricity rates. (b) The OPA shall be headed by an Executive Director, who shall be exempt from civil service. The Executive Director shall be appointed by a citizens committee to a five- year term, subject in appointment to confirmation by the Council and Mayor. The Council shall by ordinance provide for the removal of the Executive Director in a procedure similar to that set forth in City Charter Section 575 (e), and only for the reasons provided by ordinance. The Council by ordinance shall prescribe the composition and manner of selection of the citizens committee. (c) The Executive Director shall (1) report directly to, but shall not be instructed by, the board; (2) have full charge and control of all work of the OPA; (3) be responsible for the proper administration of its affairs; (4) appoint, discharge, suspend, or transfer all of its employees, subject to the civil service provision of the Charter; (5) issue instructions to OPA employees in the line of their duties, subject to the civil service provisions of the Charter; (6) prior to the beginning of each fiscal year and in accordance with a schedule prescribed by ordinance, submit to the City 122 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY

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Additional Recommendations 5

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📋June 30, 2011 — Civil Grand Jury County of LOS Angeles

26 pages 18 findings 18 recommendations

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Findings & Recommendations 18 findings

F1: The governance of the Department of Water and Power is distributed among several different groups including the Board of Water and Power Commissioners, the Mayor, the City Council, the City attorney and IBEW.

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F2: There has been a significant turnover in both Commissioners and General Managers for the LADWP, especially in recent years, which diminishes the overall governance continuity.

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F3: There is a perception that political contributions rather than specialized skills or experience may play a primary part in the decision to appoint personnel to the Commission or other governance positions.

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F4: There are a variety of governance structures in place at other municipal utilities; there is no one structure that meets all needs.

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F5: Although there was originally some concern that personnel were taking higher paying jobs at LADWP for only a short time (pension spiking) in order to increase lifetime pensions, such does not appear to be the case. However, the number of transfers from the City to the Department may have a negative impact on the pensions for the Department.

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F6: Succession planning does not take place within LADWP to any meaningful extent.

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F7: The IBEW is very active in local and state elections, local and state legislation and in ongoing City politics. It also contributes substantial time and money to the election of City politicians, including various Council members, the Mayor and the City Attorney which potentially allows for a substantial amount of power in the day-to-day governance of the Department.

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F8: There is considerable belief that the unions are increasingly involved in the operations and management of the Department.

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F9: The public sector unions, especially IBEW, have been successful for their members by accomplishing a higher level of salary and benefits than other employee unions. This information is of concern to many ratepayers since it will increase the rates developed to pay for services.

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F10: The IBEW represents about 88% of all LADWP employees which is an unusually high percentage for utilities.

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F11: Although the LADWP and the IBEW engage in “mutual gains bargaining” through a Joint Labor Management Resolution Board (JRB), the bargaining results are reportedly more in favor of the Union. The number of grievances filed by the Union has not materially changed as a result of this process.

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F12: The LADWP is at risk by having a high percentage of essential personnel in the same Union and does not have a current “strike plan” to continue operations and serve the citizens of Los Angeles in case of a work action.

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F13: The Department has provided substantial funds to the City of Los Angeles in the form of Power and Water transfers for many years.

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F14: Although the Department had numerous reasons for not wanting to make the transfer without a rate increase that it felt it deserved, holding the City “hostage” under these circumstances was inappropriate since the Department had the cash to make the transfer, although they had it reserved for other uses.

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F15: The ECAF as currently constituted at LADWP contains several elements that typically would not be found in a Cost Adjustment Factor.

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F17: The implementation of a Ratepayer Advocate at LADWP would be unusual in the municipal utility industry.

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F18: Some people believe that the impact of the Ratepayer Advocate ballot measure is minimized because other proposed Charter amendments were not approved for the same ballot.

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Additional Recommendations 18

Not linked to specific findings.

R1: The governance of the Department of Water and Power is distributed among several different groups including the Board of Water and Power Commissioners, the Mayor, the City Council, the City attorney and IBEW.

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R2: There has been a significant turnover in both Commissioners and General Managers for the LADWP, especially in recent years, which diminishes the overall governance continuity.

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R3: There is a perception that political contributions rather than specialized skills or experience may play a primary part in the decision to appoint personnel to the Commission or other governance positions.

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R4: There are a variety of governance structures in place at other municipal utilities; there is no one structure that meets all needs.

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R5: Although there was originally some concern that personnel were taking higher paying jobs at LADWP for only a short time (pension spiking) in order to increase lifetime pensions, such does not appear to be the case. However, the number of transfers from the City to the Department may have a negative impact on the pensions for the Department.

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R6: Succession planning does not take place within LADWP to any meaningful extent.

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R7: The IBEW is very active in local and state elections, local and state legislation and in ongoing City politics. It also contributes substantial time and money to the election of City politicians, including various Council members, the Mayor and the City Attorney which potentially allows for a substantial amount of power in the day-to-day governance of the Department.

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R8: There is considerable belief that the unions are increasingly involved in the operations and management of the Department.

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R9: The public sector unions, especially IBEW, have been successful for their members by accomplishing a higher level of salary and benefits than other employee unions. This information is of concern to many ratepayers since it will increase the rates developed to pay for services.

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R10: The IBEW represents about 88% of all LADWP employees which is an unusually high percentage for utilities.

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R11: Although the LADWP and the IBEW engage in “mutual gains bargaining” through a Joint Labor Management Resolution Board (JRB), the bargaining results are reportedly more in favor of the Union. The number of grievances filed by the Union has not materially changed as a result of this process.

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R15: The ECAF as currently constituted at LADWP contains several elements that typically would not be found in a Cost Adjustment Factor.

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R17: The implementation of a Ratepayer Advocate at LADWP would be unusual in the municipal utility industry.

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R18: Some people believe that the impact of the Ratepayer Advocate ballot measure is minimized because other proposed Charter amendments were not approved for the same ballot. RECOMMENDATIONS

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📋Port Activities and Community Input Mandates

112 pages 15 findings 10 recommendations

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Findings & Recommendations 15 findings

F1: The community input process in the Port of Los Angeles community has degraded and does not have the organizational strength to be effective. Status of the Port Community Advisory Committee (PCAC) PCAC exists and operates today though there have been several changes made in its funding and organization. The biggest changes occurred in 2009 when the Port (not BOHC) eliminated staff support for five (5) of the nine (9) original PCAC subcommittees. This was accomplished by reducing the overtime budget that allowed Port staff to attend PCAC subcommittees in the evening. The Port also eliminated the funding of private consultants that formerly had performed work on behalf of PCAC and its subcommittees. Finally, the Port eliminated funding for renting space at a hotel in San Pedro for PCAC meetings. The rationale for these changes was that Port revenues had decreased due to the economic recession, and operating expenses were cut as a result. Also, many subcommittee meetings were lightly attended, often by the same people; and their scopes tended to overlap with other subcommittees. PCAC now has four (4) subcommittees: Steering, Wilmington Waterfront, San Pedro Coordinated Plan and EIR/Aesthetic Mitigation. The scopes of defunded subcommittees that dealt with specific 160 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY environmental issues such as water, air, and noise have been rolled into the EIR/Aesthetic subcommittee. Though PCAC is a standing committee of BOHC, these changes were never formally vetted nor approved by BOHC. Another issue with PCAC is the composition of membership. As originally envisioned, PCAC was to include a broad representation of constituents in the harbor community including neighborhood and residential associations, labor and business groups, educational institutions, representatives from local government and economic development agencies. As it has unfolded in the last ten (10) years, certain groups have failed to appoint members and some appointed members have failed to consistently attend. This has resulted in PCAC being dominated by members from the Neighborhood Councils and residential groups. Business groups have been under- represented. Several constituent organizations either no longer exist or they lack any legal structure as a registered corporation with the State. Lack of a legal structure makes it more difficult to ensure that an organization has bylaws, elects officers, conducts periodic meetings and maintains a legitimate address for notices and agendas. Some of the existing PCAC constituent organizations are reportedly nothing more than a small, informal group of neighbors. Table 2 shows the status of some of these organizations: Table 2. PCAC Member Organization Status Organization Current Status # of votes Wilmington Community Advisory No legal structure 3 Committee Harbor City/Harbor Gateway Chamber Suspended 1 of Commerce Pacific Avenue Corridor Task Force No legal structure 1 Wilmington Commercial Dissolved 1 District/Business Improvement District Crescent Area Residents Association No legal structure 1 Dana Strand Residents Association No legal structure; 1 No appointed member Point Fermin Residents Association No legal structure 1 Rancho San Pedro Residents No legal structure; 1 Association No appointed member San Pedro & Peninsula Homeowners Suspended 3 Coalition Wilmington Citizens Committee No legal structure 1 At large member from Council Dist 15 No appointed 1 member Education at large – LA Harbor College No appointed 1 member Total 16 2010 – 2011 Some of these organizations such as Point Fermin and Crescent are, in fact, active but do not meet regularly lack bylaws. Dana Strand and Rancho San Pedro Residents have not appointed a representative. Representatives from Council District 15 and Los Angeles Harbor College have resigned and have not been replaced. In total, sixteen (16) out of thirty-six (36) voting seats are unfilled, have never been filled, or represent organizations that no longer exist or lack a legal structure. It may be time to address the composition of PCAC to ensure that it has equitable representation from legitimate organizations that have a stake in Port operations and appoint active members. Existing PCAC bylaws provide for no term limits for PCAC members. This is left up to the appointing organizations. The voting Co-Chair of PCAC is elected for a one-year term but can be re-elected with no term limit. This has resulted in institutional memory among PCAC membership. It has also led to domination by entrenched interests, particularly among representatives of homeowner groups which form the largest constituency within PCAC. Attendance has been an issue for PCAC for years. PCAC bylaws require a quorum of 50% of the voting membership of eighteen (18) members. Beginning in late 2008, attendance began to decline at the monthly PCAC meetings. In late 2009, attendance declined to the point that a quorum was not present at three (3) consecutive meetings. Meetings that did have quorums were razor thin. The last time a PCAC meeting had twenty (20) or more members attend was in June 2009, a standard that formerly was often achieved. The sub-committees have been meeting sporadically. The EIR Sub-Committee has met only once since July 2010. The Wilmington Waterfront and San Pedro Planning Sub- Committees have been meeting fairly regularly but sometimes miss a month or two. Along with declining attendance is the problem of light agendas. Meetings in recent months have featured agendas that were light on substance or major action items. Agendas are often light at the Sub-Committee meetings as well, with agendas featuring more status reports than action items. In 2010 only three (3) motions were approved by PCAC for referral to BOHC, two (2) of those dealing with the Battleship USS Iowa. In contrast, in 2007, twelve (12) motions were approved by PCAC for referral to BOHC. In 2008, fourteen (14) motions were approved. In 2009, nine (9) were approved. Clearly, PCAC is running out of things to do. This paucity of substantive business is partially the price of success. Many of the projects and mitigation measures that were the focus of PCAC deliberations in earlier years have been completed. As mentioned above, PCAC has notched many successes in how these projects have been shaped or influenced. Many of these projects such as the Wilmington Buffer, San Pedro Waterfront, Pier 300/400, the Plan, etc. are now completed, in development or nearing construction. In recent years, there have not been as many projects with EIRs that required debate. This may change in the future as the Port contemplates a new generation of major projects such as Pier 300 expansion, main channel deepening and development of near-dock intermodal rail facilities. This last project, in particular, may produce new community relation challenges as the rail facilities will be close to residential areas. However, until these new EIRs are at the point where PCAC can review them, monthly meetings may be too often. Another factor in the declining PCAC agendas is that the Port staff is bypassing PCAC and transferring the Committee’s mission of organizing community input and working on environmental mitigation projects either to itself or to newly created entities. The Port has taken upon itself the task of organizing community input related to the development of the San Pedro waterfront. Port staff have successfully organized several workshops to present 162 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY the project and gather input, something that PCAC may not be set up to do. But whereas PCAC had a role in collecting and shaping community input and presenting

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F2: The Clean Air Action Plan Is Not Analytically Sound Clean Air Action Plan The Plan was originally prepared and approved by the governing boards of both San Pedro bay ports in 2006 and then updated in 2010. The Plan sets emission reduction goals for three (3) types of pollutants a. Diesel Particulate Matter (DPM) b. NOx or Oxides of Nitrogen c. SOx or Oxides of Sulfur 2010 – 2011 The Plan also sets a goal of reducing of Particulate Matter less than 2.5 microns in diameter (PM ) but assumes that DPM reductions will also result in reductions in PM . 2.5 2.5 rather than setting a specific target. The Plan establishes a baseline of 2005 emission levels and emission reduction goals for the years 2014 and 2023. The goals are expressed as percentage reductions such as 77% reduction for DPM, 59% reduction for NOx and 93% reduction for SOx by the year 2023. These goals are not controlled for cargo growth so the reductions have to be achieved irrespective of cargo volumes. These goals also dovetail with overall basin- wide air quality goals established by the South Coast Air Quality Management District (SCAQMD). The Plan, if implemented successfully, will achieve the Port’s “fair share” of emission reduction as required by the SCAQMD. By far the major polluters are ocean going vessels and heavy duty trucks. Technologies and capital investments for achieving reduction goals are heavily weighted toward these polluters. These strategies include: d. Reducing vessel speeds up to 40 nautical miles from Point Fermin, thereby burning less fuel as they approach the ports e. Setting emission standards for heavy duty trucks that exceed EPA standards, along with incentives for truck operators to replace older trucks with those running cleaner burning engines f. Switching fuels on ocean going vessels with cleaner burning fuels g. Setting standards for cleaner burning engines for ocean going vessels h. Using shore-based power sources for ocean going vessels when docked at berth, instead of running heavily polluting auxiliary engines i. Establishing an Emission Control Area (nationwide) that sets pollution standards for ocean going vessels up to two hundred (200) nautical miles off the coast Table 3 shows the emission reduction targets vs. current emission levels vs. the emissions forecast given the current cargo volume forecast through the year 2023. Table 3 Emission Reduction Standards and Forecasts (Figures are annual tons of emissions. Deficit number in parentheses means that target reduction is not met.) 2005 2009 2014 2014 2014 2023 2023 2023 Pollutant Baseline Actual Target Forecast Deficit Target Forecast Deficit DPM 2,025 1,004 567 576 (9) 459 527 (68) NOx 34,444 21,755 26,866 27,865 (999) 14,286 28,244 (13,958) SOx 12,421 6,358 869 890 (21) 1,010 994 16 As shown in the Table 3, the combined Port effort is forecast to nearly meet the targeted emission reduction standards for each pollutant. A major exception to this is NOx in the year 2023. There is less confidence in the forecast for NOx reductions because of uncertainties regarding the reduction strategies and technologies, particularly for improvements in ocean going vessel engines. As these technologies are tested and proven, the ports may be more confident in upgrading the forecast in future updates to the Plan. 164 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY The Plan shows a serious commitment on the part of the ports of Los Angeles and Long Beach to limit the environmental impacts of port operations. The Plan includes ambitious goals for emission reductions and wide ranging and controversial strategies for achieving those reductions. No doubt, implementation of the Plan will result in cleaner air and increased health status for area residents. The Plan expresses a goal to reduce health risk from Port operations. Increased health risk is assumed to be positively correlated with exposure to DPM, which is considered to be a carcinogen. The Plan further assumes that reducing DPM will reduce the risk of cancer and improve the health status of nearby residents, as cancer is a reliable proxy for many health risks. In fact, health risks are impacted by all particulate matter, not just DPM. Particulate matter in general is highly correlated with respiratory disease and impaired lung development. Most of the emission sources at the Port are diesel engines which explain the reliance on DPM as a marker for particulate matter in the Plan. However, given the enormous costs associated with implementing the Plan, the Port may want to take the extra step of targeting and measuring total particulate matter (PM and PM ) in addition to DPM. 2.5 10

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F3: Los Angeles County could benefit from a Regional Port Authority consolidating the Ports of Long Beach and Los Angeles. Existing Coordination Between Ports The ports of Los Angeles and Long Beach are both municipally controlled by their respective cities. Each port is governed by a Board of Harbor Commissioners. The two (2) ports are adjacent to each other and are roughly the same size both in terms of area and workload. The ports also share much of the same infrastructure, including the outer harbor (the waterways between the breakwater and the piers). The transportation infrastructure such as freeways, railways and rail yards are also shared by the customers of both ports. Both ports are financial guarantors for the Alameda Corridor Transportation Authority (ACTA) which operates a major rail corridor between the ports and the rail yards in east Los Angeles. In the past few years, the two (2) ports have widely coordinated on environmental programs. This is a recognition that the ports have to implement similar mitigation programs to ensure that costs are shared equitably, and neither port can benefit by foregoing participation. For example, the ports have coordinated in producing a joint Plan. Specific programs from this Plan are implemented jointly. For example, both ports have enacted similar regulations on vessel speed reductions and cleaner fuels, powering ships with shore based power when they are in port and replacing older truck engines with newer, cleaner burning engines. The ports are now working on a joint WRAP that will require the same type of joint effort and coordination. Both ports are dominated by container terminals. In the past, both ports also served other types of shippers such as liquid bulk, autos, break bulk, and cruise ship operators. In recent years, there has been some consolidation. The Port of Los Angeles has largely gotten out of the liquid bulk; e.g., petroleum business: and this type of cargo has consolidated in Long Beach. Wood products have largely consolidated at the Port of Long Beach as well. 2010 – 2011 Detriments of Current Port Structure In the past, the ports did not often compete for shipping traffic. Usually, there was little excess terminal capacity so steamship lines and terminal operators would have little choice in properties. In other cases, the steamship line or terminal operator worked with one port to develop a facility specifically for their requirements. Terminals were never built without a tenant in mind. In the past two (2) or three (3) years as cargo growth has trailed off and even decreased, the ports have started to compete for shipping traffic. For example, Hyundai Merchant Marine recently moved from Long Beach to Los Angeles. This is a concern since both ports serve the same market, use the same landside transportation infrastructure; and longshoremen are covered by the same collective bargaining agreement. The ports do not have many ways differentiating themselves other than lease rates or the configuration of a specific property. Should the ports engage in rate-based competition, it would result in a transfer of economic value from the publicly owned ports to privately held lessees, contrary to sound public policy goals which should preclude this type of subsidy. This may become a larger problem when the Panama Canal expansion is completed in three (3) years as shipping traffic potentially bypasses the West Coast altogether. There is duplication in some specialized facilities. For example, both ports operate cruise ship terminals (though the Port of Long Beach cruise terminal is technically leased out by another city department). Los Angeles is planning to open yet a third cruise ship terminal at Kaiser Point in the next few years. Should the cruise ship business lessen, there may be temptation to compete for this business resulting in a transfer of economic value from the publicly owned ports to private cruise ship lines. Finally, the ports compete for the same staff which theoretically increases personnel costs. There are duplicative administrative structures at both ports which precludes the ability to economize by sharing management positions. Potential Benefits of Consolidation Consolidating the control and governance of the two (2) ports could realize significant benefits. One major benefit is already being realized. As mentioned earlier, the two (2) ports are coordinating on environmental mitigation efforts such as the Plan and WRAP. This coordination requires negotiations between the environmental management units of each port as well as the approval of the two (2) governing boards. Consolidation would eliminate the need for these negotiations and the potential tradeoffs, compromises and uncertainty that undoubtedly occur with these negotiations. Consolidation would also be an explicit recognition that the two (2) ports share the same ecosystem and the source of pollutants is difficult to trace from one port or another. Consolidated ports would remove temptation for the two (2) ports to compete for shipping traffic on financial terms. This would ensure that private shipping interests are not being subsidized by publicly owned agencies through favorable lease terms. The consolidated port would still have to compete for shipping traffic with other port authorities in North America; but due to its location, sheer size and access to a vast local market, it could still compete effectively with other 166 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY West Coast ports. The distraction of competing with a nearby port authority would be removed. The combined port authority could compete as a united front. A consolidated port could benefit from a streamlined management structure including a consolidated governing board. This would result in unified decision making over port operations and development. In addition to more streamlined decision making, it would realize economies by reducing the number of management positions needed to staff the consolidated management structure. Infrastructure decisions may be streamlined through consolidation of ensuring that all facilities are used optimally throughout the port. For example, cruise ship operations could be consolidated at one or two facilities rather than the three that are either in operation or in the construction stage. Challenges to Consolidation Port consolidation faces some serious challenges. A major legal hurdle is that the two ports are located on separate land grants from the State. These grants would have to undergo some sort of consolidation which would require an act of the State Legislature. All existing lease contracts would also have to be assigned to the new port entity. Depending on the lease terms, some tenants may want to negotiate new terms. The consolidated port would most likely be governed through a port authority, a special district dedicated to operating the port. This would also require an act of the Legislature to create this special district. The region has precedents for a special district of this magnitude. The Metropolitan Water District of Southern California or the Los Angeles County Metropolitan Transportation Authority is successful examples of regional special districts. The role of the two (2) cities (Los Angeles and Long Beach) would have to be determined. The two (2) mayors might have appointment powers over the authority’s governing board, or the board might be elected region wide. Consolidation would also require consolidating, assuming or refinancing the existing port revenue bonds that each city has issued. It is conceivable that the bond markets may perceive less financial risk in a consolidated port authority than in the current city controlled structure. This would result in less debt service, reduced financing costs and more rate flexibility. Perhaps the most serious hurdle would be the loss of local control. A consolidated port authority would mean less control for the cities of Los Angeles and Long Beach unless they retained appointment powers for the governing board. A hybrid structure for the governing board where the mayors appoint some portion of the board while the remaining seats are elected region wide may make the most sense. In any scenario, amendments would have to be made to both city charters. 2010 – 2011

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F4: The Port of Los Angeles is adequately secured from external threats. Current Security Mandates and Level of Compliance The mandate for security of Port facilities is divided by jurisdiction. The Federal government has jurisdiction for ensuring security in all cargo and cruise terminals. This jurisdiction is further divided as follows: The U.S. Coast Guard has authority for securing the terminal facilities. This authority is granted by the Maritime Transportation Security Act (as enabled by the Code of Federal Regulations 33 CFR 105). These regulations require operators of deep draft; e.g., container terminals and cruise terminals to prepare a Facilities Security Plan which is approved by the Coast Guard. Each terminal lessee has a plan for their terminal property. The Coast Guard is responsible for enforcing the terms of these plans at the Port and has a small force of armed security staff to respond to violations of the plans. The Coast Guard has the authority to shut down a terminal in the event of a serious violation. A primary enforcement tool for the Coast Guard is the Transportation Worker Identification Credential (TWIC) which is required for access to any Coast Guard secured areas such as container terminals. The Port Police does not have access to the terminals unless requested by the Coast Guard or the terminal operator. The Coast Guard also has shared jurisdiction over the waterways with the Port. The U.S. Customs and Border Patrol has jurisdiction over the actual cargo. They monitor incoming containers through examination of records and will inspect certain high risk cargoes and containers such as those originating in the Middle East. Customs and Border Patrol also operates gamma radiation detection equipment at the exit gates of all container terminals. This equipment detects the presence of radiation and flags containers for more extensive inspection including opening the container and examining the contents. Security for other leased facilities at the Port, other than cargo and cruise terminals, is the responsibility of the individual lessees, which can include restaurant and hotel operators, warehouse operators and other industrial property lessees. This responsibility is established in the terms of individual leases and is similar to those found in standard commercial leases. Security for non-leased Port property is the responsibility of the Port Police. This includes waterways, roadways, common areas, parks and Port operated facilities. The Port Police have no mandate or responsibility for Homeland Security or counter terrorism. Instead, the Port Police is responsible for enforcing the Port Tariff; i.e., rules promulgated by BOHC for Port users, the Los Angeles Municipal Code and the State Penal and Vehicle Codes. The Port Police have a staff of 217, including 131 sworn police officers. The Port Police use an array of cameras, water-born sonar devices and patrol craft to monitor Port property. The Port Police augments the capabilities of the Federal authorities for certain functions such as water patrol and inspections using divers. Port divers inspect the hulls of ships if warranted. Drugs have been found hidden in hull cavities in the past. Water craft will provide a protective screen around cruise ships as they enter and exit the Port. 168 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY History of Security Incidents at the Port Since 2006, there have been only two (2) security breaches on Port property. Both involved fake TWICs and were investigated by the Coast Guard and prosecuted by the U.S. Justice Department. No further details are available. The Port Police tracks crimes and arrests on Port property involving violations of State or local laws. Reported crimes are approximately two hundred (200) per year with about two-thirds of these classified as Part I crimes; e.g., violent and property crimes. Theft and vandalism are frequent crimes reported at the Port in addition to traffic infractions. Port Police also make 400-500 arrests each year. About half of these arrests involve apprehending persons with outstanding warrants or for failure to appear. Rather than Homeland Security related issues, Port Police workload is similar to that of a municipal police force with the addition of a sizeable surveillance function.

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F5: Longer term savings could be achieved by modifying some pension benefit provisions for new employees. These include: changing the basic benefit formulas to levels that existed prior to 2001 and restricting or eliminating service credit enhancement provisions, such as sick leave and “air time” service credit.

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F6: Regular review of actuarial assumptions facilitates keeping pension plans focused on prevailing investment climates, actuarial trends and other factors that influence pension assets, liabilities and sustainability. For example, the pension plan administrators of both CalPERS and LACERA review actuarial assumptions annually with their respective governing boards and evaluate them more rigorously on at least a triennial basis.

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F7: The risk of “pension spiking” could be reduced substantially by converting to a 36-month or longer basis for calculating Final Average Salary for at least 85% of CalPERS member agencies in LAC.

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F8: Besides regular salary, some jurisdictions allow other categories of compensation to be included in the calculation of pensionable salaries, including sick leave buy-back and certain categories of special pay and bonuses. This results in higher pension benefits and costs.

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F9: Hybrid defined benefit and defined contribution pension plans would more equitably share the risk of investment losses between the employer and employee. A jurisdiction’s ability to modify pension provisions for retirees, existing employees or future employees varies by group and may be controlled by statute and case law. A 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY

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F10: A small percentage of LAC CalPERS member agencies (13.2%) have decided to adopt post retirement COLA provisions that have a potential to increase pension system costs at rates that exceed inflation, effectively increasing the present value of retiree compensation over time.

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F11: The actuarial assumed rate of return using both the 10-year and a 15-year smoothing methodologies cause swings in actual investment gains and losses to moderate actuarial investment performance, and thus the actuarial value of assets. These methodologies ensure that jurisdictions contribute an amount each year that is closer to the normal contribution rate.

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F12: The overwhelming majority of jurisdictions in LAC are not prefunding retiree health benefits or contributing the Annual Required Contribution determined by actuaries, deciding instead to fund these benefits on a pay-as-you-go basis. This practice is inconsistent with recommendations by actuaries and the Government Finance Officers Association. In addition, this is a costly policy that reduces the jurisdictions’ capacity to discount contribution rates and, instead, passes full costs onto the taxpayer.

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F13: Opportunities may exist for some jurisdictions to cap benefit amounts, require copayments from retirees or implement other changes that would reduce costs for jurisdictions providing retiree health benefits to current retirees in the short term. However, each instance would need to be assessed by the jurisdictions’ legal counsel to ensure that such modifications would not be a violation of contract law.

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F14: It is unlikely that retiree health benefits can be modified for current retirees and employees. However, jurisdictions could change the benefit offered to new hires by establishing benefit caps or defined contribution components, establishing improved cost sharing agreements with employees and modifying plan design to more effectively couple retiree health benefits with Medicare. Such change may involve negotiations with collective bargaining groups.

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F15: Pension Obligation Bonds are not used extensively by Los Angeles County jurisdictions. However, there are indications that some jurisdictions are considering POBs to fund UAAL that developed during the recent economic downturn. The GFOA and other experts recommend that jurisdictions proceed cautiously when considering POB borrowings by: a. Thoroughly evaluating financial benefits and risks b. Fully recognizing “other issues” that may arise if the bonds are issued such as: i. The loss of flexibility in difficult economic times because of the need to make timely payments of principal and interest in order to not default on the bonds ii. Potential misunderstanding by policy makers regarding the possibility that an unfunded liability may recur in the future iii. Potential pressures for additional benefits by government employees if plans are fully funded and government’s contribution as a percentage of payroll has declined relative to neighboring jurisdictions 2010 – 2011 PHASE II: SECTION 1 LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION SUMMARY The Los Angeles County Employees Retirement Association (LACERA) administers the pension system for the County of Los Angeles, acts as the trustee of contributions that have been made by the County and plan members, and invests assets in a manner that attempts to moderate risk and maximize returns. LACERA provides advice and counsel to County managers on the financial impact of proposed changes to the County’s retirement system, and are partners with the County on benefit design, funding strategy and other aspects of pension system management. Overall, LACERA is well run and effective at fulfilling its responsibilities, and the County has done a good job at moderating pension costs. However, LACERA could explore the benefits of changes to actuarial methodologies used to smooth investment returns and the County could, with input from LACERA, focus on discussions with employee bargaining groups to redesign benefits, including exploring benefit caps and establishing defined contribution alternatives; examining opportunities for cost reductions from modifying certain provisions that create opportunities for pension spiking; and consider policy changes to ensure the pre-funding of OPEB benefits by increasing annual contributions and narrowing the allowed uses of the County Contribution Credit Reserve. PURPOSE The Los Angeles County (LAC) and LACERA were chosen by the Civil Grand Jury (CGJ) for in- depth review based on its status as the largest plan in the region and relatively high dollar amount of liability. LACERA also has a better than average funded ratio and multiple plan tiers, as well as the County’s substantial pension obligation bond debt and retiree health benefit unfunded liability.

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Additional Recommendations 10

Not linked to specific findings.

R1: BOHC to restructure PCAC, improving the efficiency and effectiveness of the Committee and refocusing its mission: a. Rename PCAC to Port Region Advisory Committee. Note: the committee will still be referred to as PCAC in this recommendation for ease of understanding b. Adopt a resolution that fulfills the requirements of the ASJ, Article IX-B and better define the role of PCAC: i. Article IX-B requirement is, “(a) the Board will consider all resolutions adopted by PCAC in an expeditious and timely manner; and (b) the Board shall issue a written statement of reasons and appropriate findings for any PCAC resolution rejected by the Board.” ii. Make the resolution clear and specific in defining the types of actions and decisions in which PCAC should engage, including reviewing CEQA documents, mitigation measures costing more than $1 million, as well as, those vetted by the TraPac related non-profit Board. c. Enhance the governance role of BOHC by establishing an annual work plan for PCAC. Require quarterly updates on deliberations through a standing agenda item on the BHS agenda. Furthermore, the BHS resolution should include a requirement that a BOHC member serve as a Co-Chair of PCAC. The role of this Co-Chair would be to ensure that PCAC fulfills its advisory role to BOHC and focuses on mission related activities. d. BOHC to amend PCAC’s by-laws so that PCAC and its sub-committees meet quarterly instead of monthly. e. BOHC to amend PCAC’s by-laws regarding composition of PCAC constituent organizations and voting membership to reflect the relative impacts of Port operations on the groups. For example, residential composition should be weighted higher than business composition insofar as Port operations impact residents more than businesses. The by-laws should also reduce the total composition of PCAC by 40%, thereby eliminating groups that are not as 2010 – 2011 established or lack certification standards, such as a legal structure, elected officers, etc. Table 4 shows how one such restructuring would look: Table 4 Proposed PCAC Composition Type of constituency Organization # of reps Total # Total % Neighborhoods/Residential Central SP 1 Coastal SP 1 Harbor City 1 NW SP 1 Wilmington 2 CD 15 ‐ SP 2 CD 15 ‐ Wilmington 1 Total Neighbor/residential 9 45% Civic Wilmington Comm Advisory 1 1 5% Business/Econ Dev Harbor Assoc of industry 2 SP C of C 1 PMSA 1 Wilmington C of C 1 Total business/econ dev 5 25% Labor ILWU 1 Non‐ILWU 1 Total labor 2 10% Education LA Harbor College 1 1 5% At Large BHC appointed 1 CD 15 appointed 1 Total at large 2 10% Totals 20 20 100% f. BOHC to amend PCAC’s by-laws to include a certification process for PCAC constituent organizations. These organizations should: i. Be registered with the California Secretary of State ii. Have their own by-laws or articles of incorporation iii. Have a purpose that has a nexus or connection with Port operations or the impacts of Port operations iv. Meet at least quarterly in open session v. Elect officers vi. Organizations should be required to recertify annually. Any organization that has not recertified within six (6) months should be decertified and replaced. This requirement would not apply to governmental organizations or subdivisions such as Neighborhood Councils. g. BOHC to amend PCAC’s by-laws to include a certification process for PCAC voting members. The certification requirement should include: 170 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY i. Prospective voting members should have a letter of nomination from their appointing constituent organization. BOHC would then certify their appointment. ii. Certification should be revoked if the voting member has two (2) unexcused absences or three (3) excused absences during a period of four (4) consecutive quarterly meetings. iii. Certification should also be revoked if the voting member is charged with code of conduct breaches in two (2) meetings during a period of four (4) consecutive quarterly meetings. iv. Upon revocation, the voting seat would be filled by the alternate voting member, or the constituent organization could nominate a new member. v. Existing PCAC members can be granted new five-year terms at the discretion of BOHC. h. BOHC to amend PCAC’s by-laws to limit terms for PCAC Co-Chair (not a BOHC member) and PCAC sub-committee chairs to two (2) consecutive one (1) year terms. Terms for all PCAC members should be limited to five (5) years. i. BOHC to amend PCAC by-laws to include a code of conduct for PCAC members. This code of conduct should be enforced by an appointed Sergeant-at-Arms. Breaches of the code of conduct should be documented and enforced pursuant to the revocation process as described above. j. Retain the current roster of sub-committees within PCAC plus the addition of a subcommittee that would assume the responsibilities of the planned non- profit organization to oversee the Port Community Mitigation Trust Fund. This new subcommittee would replace this planned non-profit organization. All recommendations from this subcommittee would then be vetted and approved by PCAC prior to recommendation to BOHC. k. Continue to assign technical and administrative support staff to PCAC meetings in order to provide expert advice and knowledge. The Port should continue to assign legal counsel to PCAC meetings.

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R2: Revisit the Plan to ensure that all particulate matter, not just DPM, is being tracked and those reduction goals are included for PM and PM . 2.5 10

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R3: BOHC to propose to the City of Long Beach the commissioning of independent study of the costs and benefits of a consolidated Port Authority in San Pedro Bay. The study should be overseen by a commission composed of experts in municipal finance, supply chain logistics, public health, and public policy plus representatives from the governments of Los Angeles County, City of Los Angeles, Long Beach and the State of California, including a representative from the State Lands Commission. Should the study suggest that the region would benefit from a consolidated Port Authority; the Commission would be well advised to develop a legislative action plan to enact the recommendations from the study. 2010 – 2011 SUMMARY OF FINDINGS AND RECOMMENDATIONS

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R4: The Port of Los Angeles is adequately secured from external threats. RECOMMENDATIONS

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R5: Develop and maintain consistent criteria participation data for ILP and other TAY services.

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R6: Initiate the process of tracking youths’ denial of ILP services if offered and record date and follow up to reinitiate the ILP.

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R7: Evaluate effectiveness of the existing data management system and explore new software that could streamline data collection and analysis which improves identification of service gaps and accomplishments.

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R8: Increase and improve communication efforts with TAY participants to raise awareness of ILP housing and other TAY related services by improving data collection efforts and maintaining contact with participants after they leave the program.

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R9: Establish confidential e-mail distribution lists and send regularly scheduled e-mails to provide awareness of scholarships, ILP services, available resources, and job opportunities.

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R10: Increase frequency in which participants provide progress updates and complete surveys that measure progress, satisfaction and solicit input and suggestions. Improved and increased communication between participants and staff may allow the recommended evaluation plan to be effectively implemented. The second method for maintaining ongoing communication with youth participants could involve the increased use of social networking, such as facebook.com, since most youths are already using these social networking sites. 198 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY REQUEST FOR RESPONSE California Penal Code Sections6 §933 (c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the Civil Grand Jury publishes its Report (filed with the Clerk of the Court). Respond to: Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 All responses for the 2010 - 2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 County of Los Angeles (DCFS, Probation Department) 2 County of Los Angeles (DCFS, Probation Department) 3 County of Los Angeles (DCFS, Probation Department) 4 County of Los Angeles (DCFS, Probation Department) 5 County of Los Angeles (DCFS, Probation Department) 6 County of Los Angeles (DCFS, Probation Department) 7 County of Los Angeles (DCFS, Probation Department) 8 County of Los Angeles (DCFS, Probation Department) 9 County of Los Angeles (DCFS, Probation Department) 10 County of Los Angeles (DCFS, Probation Department) 6 Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 Civil Grand Jury Report 2010 – 2011 ACRONYMS AA Associate of Arts ACT American College Testing (formerly) AFDC-FC Aid for Families with Dependent Children/Foster Care CAPIT CA State Child Abuse Prevention, Intervention and Treatment program CSW Children Social Worker DCFS Department of Children and Family Services DPO Deputy Probation Officer GED General Educational Development GR General Relief HC Housing Coordinator ILP Independent Living Program KinGap Guardianship Assistance Payment Program LAC Los Angeles County LAHSA Los Angeles Homeless Services Authority LST Life Skills Training PPM Permanent Placement Mode PD Probation Department SAT Scholastic Aptitude Test TAY Transitional Age Youth TC Transition Coordinator 200 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY THP Transitional Housing Program THP+ Transitional Age Program Plus THPP Transitional Housing Placement Program TILP Transitional Independent Living Plan TRC Transitional Resource Centers YDS Youth Development Services 2010 – 2011 THIS PAGE INTENTIONALLY LEFT BLANK 202 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY WHOA! THE STATE OF PUBLIC PENSIONS IN LOS ANGELES COUNTY Committee Members Chairperson - Meg George Beverly T. Kishimoto Susan Stetson Max E. Van Doren ASSESSMENT OF THE STATE OF PENSION PLANS IN LOS ANGELES COUNTY INTRODUCTION The 2010-2011 Los Angeles County Civil Grand Jury (CGJ) conducted an investigation of pensions in Los Angeles County (LAC) entitled: Assessment of the State of Pension Plans in Los Angeles County. This investigation was conducted in accordance with the authorities defined in the California Penal Codes (CPC) §914 through §939. Pursuant to CPC §926 et al, the CGJ engaged the services of an auditing firm to assist it with the pension investigation. This assessment was designed to accomplish the following objectives:

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📋Citizens Complaints

52 pages 6 findings 2 recommendations

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Findings & Recommendations 6 findings

F1: Total CalPERS and retiree health UAAL, including and Pension Obligation Bond debt, equaled $116.6 million as of June 30, 2009, which is significant.

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Additional Recommendations 2

Not linked to specific findings.

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📋Inmate Education

9 pages 9 findings 5 recommendations

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Findings & Recommendations 9 findings

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F5: Highly motivated staff

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F6: Highly qualified staff

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F7: Improved service to constituents as a goal 12 Graham, ibid. 40 2010-2011 LOS ANGELES COUNTY CIVIL GRAND JURY

F8: Procurement guidelines that recognize and take into account the rapidity with which technology is changing

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Additional Recommendations 5

Not linked to specific findings.

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📋Los Angeles DWP

58 pages 17 findings 10 recommendations

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Findings & Recommendations 17 findings

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F13: In addition, the CGJ found that the EBI program faces four (4) major obstacles:

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F14: Inability to effectively translate course material for the Spanish speaking population

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F15: Lack of adequate exposure to program benefits by the Board of Supervisors and other influential sectors of County government

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F16: Effectively marketing the program internally to local government leaders and externally to potential corporate partners

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F17: Apprehension of participation by male inmates due to internal jail house politics and gang peer pressure

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Additional Recommendations 10

Not linked to specific findings.

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R7: Develop and implement a staff policy and procedure that ensures patient awareness of the availability of the Extended Payment Plan option

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R8: Establish a directive to expand the use of EPP by uninsured patients who have the means to pay for services

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R9: Design and implement a program to analyze and prosecute abuse of the LAC public hospital medical care system

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📋Los Angeles Public Libraries Section 3: Standing Committees

4 pages 3 findings 3 recommendations

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Findings & Recommendations 3 findings

F1: The City of Pasadena will be facing a significant financial challenge when it no longer receives funds from the Redevelopment Agency for the payment of Pension Obligation Bond debt presently used to finance the Fire and Police Retirement System. This funding source is due to end in 2014.

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F2: The City is actively considering solutions to the chronic underfunding of the FPRS which are reasonable and prudent.

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F3: The City’s unfunded retiree health liability of $30.8 million is a substantial obligation and is expected to grow with planned increases to the subsidy level for FPRS members and the rapidly rising costs of health care. The City has adopted a pay-as- you go policy, which is more costly in the long run because reserve balances are not available to generate investment income that discounts annual required contributions.

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Additional Recommendations 3

Not linked to specific findings.

R1: The City Council endorse the recommendations being made by management staff regarding actuarial assumptions, cost stabilization, administrative restructuring and funding for the FPRS

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R2: The City Council direct the City Manager to negotiate reductions in the amount of employee contribution picked up by the City for its CalPERS pension plans, up to the full amount of 8% for Miscellaneous and 9% for Safety employees

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R3: The City Council adopt a policy to fully fund the OPEB actuarially determined Annual Required Contribution each year, to build reserves toward future benefit obligations and earn investment income that can reduce the amount of the ARC in future years 2010 – 2011

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📋Nursing Home Safety

18 pages 7 findings 5 recommendations

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Findings & Recommendations 7 findings

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Additional Recommendations 5

Not linked to specific findings.

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📋Pensions Section 2: Areas of Review

90 pages 15 findings 10 recommendations

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Findings & Recommendations 15 findings

F1: It was noted that within thirty (30) days of receipt of a Hearing Examiner’s Report the DOT makes a recommendation to the City Council outlining areas under consideration for a PPD. If the proposed PPD meets all of the program’s criteria, DOT gives notice to area residents stating boundaries and parking restrictions of the permit parking district. Currently a two-year waiting period to obtain Permits has been known to occur.

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F2: The following incidents have occurred: a. In 2008 a petition for Preferential Parking was initiated by the residents of 1600 Block of Hi-Point Street. 176 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY b. After repeated inquiries with DOT for two (2) years, in July 2010 the residents received a letter from DOT stating “preferential parking restriction requirements had been met, and the requested installation of a PPD had been approved.” c. On August 5, 2010 an additional petition was circulated opposing the establishment of a PPD. Of particular concern to the CGJ is that it took approximately two (2) years for approval of the PPD, and one (1) day for it to be denied.

F3: In addition, there have been numerous attempts by area residents to get reasons for rescindment of the PPD, all to no avail.

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F4: When a PPD is approved, there appears to be no formal process for rescinding such a district or informing residents of same.

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Additional Recommendations 10

Not linked to specific findings.

R1: Decisions regarding approval of PPDs be made on a more timely basis after the determination of the PPD. A two (2) year waiting period is unacceptable.

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R2: Updates on the status of requested PPDs be readily available on line and accessible upon request. 2010 – 2011 REQUEST FOR RESPONSE California Penal Code Sections1 §933 (c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the Civil Grand Jury publishes its Report (filed with the Clerk of the Court). Respond to: Presiding Judge Los Angeles County Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street Eleventh Floor, Room 11-506 Los Angeles, CA 90012 All responses for the 2010-2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 City of Los Angeles (Department of Transportation) 2 City of Los Angeles (Department of Transportation) 1 Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 Civil Grand Jury Report 178 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY ACRONYMS DOT Department of Transportation PPD Preferential Parking District PPP Preferential Parking Program LAMC Los Angeles Municipal Code 2010 – 2011 THIS PAGE INTENTIONALLY LEFT BLANK 180 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY TRANSITION AGE YOUTH (TAY) JOURNEY Committee Members Chairperson - George E. Candler, Jr. Co-Chairperson: Laura M. Holmes James R. Boyd Linda Loding Wardah Shakir Susan Stetson TRANSITION AGE YOUTH (TAY) JOURNEY SUMMARY Los Angeles County (LAC) Department of Children and Family Services (DCFS) is charged with providing services and resources to assist Transition Age Youth (TAY) to transition successfully from dependency to self-sufficiency. The Youth Development Services Division (DCFS/PD) receives a budget each year from State and Federal government resources to implement and operate these programs and services. This Report addresses the Findings and corresponding Recommendations of the 2010-2011 Civil Grand Jury (CGJ) for data collection systems and mechanisms needed to effectively provide services to build TAY self-sufficiency. PURPOSE The CGJ investigation assessed the effectiveness of DCFS and the LAC’s Department of Children and Family Services (PD) programs in establishing TAY self-sufficiency.

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R3: Submit ILP and transition housing participation data to the State as part of the reporting requirement for funds.

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R4: Define and develop methodologies, frequency and reliability of work data collection methods and systems to clearly define recorded data so that participation data is more reliable.

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R5: Develop and maintain consistent criteria participation data for ILP and other TAY services.

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R6: Initiate the process of tracking youths’ denial of ILP services if offered and record date and follow up to reinitiate the ILP.

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R9: Establish confidential e-mail distribution lists and send regularly scheduled e-mails to provide awareness of scholarships, ILP services, available resources, and job opportunities.

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📋Port of Los Angeles

26 pages 18 findings 18 recommendations

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Findings & Recommendations 18 findings

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F2: There has been a significant turnover in both Commissioners and General Managers for the LADWP, especially in recent years, which diminishes the overall governance continuity.

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F4: There are a variety of governance structures in place at other municipal utilities; there is no one structure that meets all needs.

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F6: Succession planning does not take place within LADWP to any meaningful extent.

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F8: There is considerable belief that the unions are increasingly involved in the operations and management of the Department.

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F10: The IBEW represents about 88% of all LADWP employees which is an unusually high percentage for utilities.

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F13: The Department has provided substantial funds to the City of Los Angeles in the form of Power and Water transfers for many years.

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F15: The ECAF as currently constituted at LADWP contains several elements that typically would not be found in a Cost Adjustment Factor.

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F17: The implementation of a Ratepayer Advocate at LADWP would be unusual in the municipal utility industry.

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F18: Some people believe that the impact of the Ratepayer Advocate ballot measure is minimized because other proposed Charter amendments were not approved for the same ballot.

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Additional Recommendations 18

Not linked to specific findings.

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R2: There has been a significant turnover in both Commissioners and General Managers for the LADWP, especially in recent years, which diminishes the overall governance continuity.

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R4: There are a variety of governance structures in place at other municipal utilities; there is no one structure that meets all needs.

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R6: Succession planning does not take place within LADWP to any meaningful extent.

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R8: There is considerable belief that the unions are increasingly involved in the operations and management of the Department.

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R10: The IBEW represents about 88% of all LADWP employees which is an unusually high percentage for utilities.

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R15: The ECAF as currently constituted at LADWP contains several elements that typically would not be found in a Cost Adjustment Factor.

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R17: The implementation of a Ratepayer Advocate at LADWP would be unusual in the municipal utility industry.

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R18: Some people believe that the impact of the Ratepayer Advocate ballot measure is minimized because other proposed Charter amendments were not approved for the same ballot. RECOMMENDATIONS

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📋Speakers and Events

104 pages 7 findings 3 recommendations

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Findings & Recommendations 7 findings

F1: The LAPD Communications Division (Division) is comprised of five hundred eighty-three (583) PSRs, police officers and administrative personnel who are assigned to the two (2) ERC facilities, as well as various police stations and specialized divisions throughout the City of Los Angeles. The personnel allocation for the Division is 617. Because of the current hiring freeze and the budget constraints, the Division is limited to 583 employees. The current vacancies will be filled when budgetary limitations are withdrawn.

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F2: There are five (5) work shifts in place providing 24/7 coverage.

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F3: The number of PSRs per shift varies and functions with approximately seventy-five (75) personnel.

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F4: The majority of PSRs are members of the American Federation of State, County and Municipal Employees (AFSCME) union: 80% are female and 20% are male. Only thirty (30) PSRs are not members of AFSCME.

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F5: The starting salary for a PSR is $52,000 per year, advancing to approximately $70,000 per year, with a two-week starting vacation allowance.

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F6: Three (3) million calls are received per year, while 2.1 million are legitimate emergency calls.

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F7: LAPD is confident that work disruptions can be managed by administrative staff, as well as by combining available Division radio frequencies to consolidate all incoming emergency calls.

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Additional Recommendations 3

Not linked to specific findings.

R1: The current status of the renovation of the Hall of Justice

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R2: Whether further investigation of the project was warranted

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R3: To assist investigative committees by recommending, arranging, and participating in interviews with audit firms best suited for a particular investigation

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📋Transitional Age Youth

22 pages 4 findings 4 recommendations

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Findings & Recommendations 4 findings

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Additional Recommendations 4

Not linked to specific findings.

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R2: Revisit the Plan to ensure that all particulate matter, not just DPM, is being tracked and those reduction goals are included for PM and PM . 2.5 10

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R4: The Port of Los Angeles is adequately secured from external threats. RECOMMENDATIONS

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