2011-2012 Final Report*

Conclusions 12

• CL1
  their positions at the expense of the public. The public can petition to consolidate districts.
• CL2
  The legislation empowering LAFCOs to initiate district reorganizations also provides that registered voters may initiate special district consolidations by notifying the applicable LAFCO and circulating a petition. Upon complying with specified procedures, members of the public can apply for consolidation, and the LAFCO must hold a public hearing prior to making a decision. So, if neither LAFCO nor the districts are willing to initiate consolidation, the public can do so. In the case of JPAs, where LAFCO has no authority, the public will have to exert its influence directly through attending JPA board meetings. Since JPA boards generally are selected by participating organizations instead of being elected by 2011-2012 Alameda County Grand Jury Final Report the public, citizens may have to direct their concerns to the boards of the participating agencies that they do elect. When a JPA collects fees from the public, there must be a mechanism for the public to influence policy and governance. When a JPA receives no direct public fees, but is formed to facilitate cooperation and efficiencies between agencies, the participating agencies must provide for periodic and objective evaluation of the costs and benefits of continuing the JPA.
• CL3
  The collection, processing and analysis of forensic evidence is crucial to solving crimes and ensuring the fair administration of justice. During this investigation the Grand Jury heard testimony that the men and women of the various Alameda County crime labs are very competent, hard working and highly trained in their chosen disciplines. The Grand Jury concludes that the expertise of these individuals could be better utilized, and the outcome of forensics testing in Alameda County could be greatly enhanced with regional consolidation, proper governance, increased funding, and better facilities. As noted, all the various law enforcement leaders agreed to the recommendations of the 2001 Grand Jury that a group be formed to study the consolidation of a countywide crime lab. However, the recommendation subsequently failed due to political disagreement among the parties. Consolidation is even more relevant today. While Alameda County has failed to move forward in the past decade, other large metropolitan areas have found innovative ways to make their operations more efficient. 2011-2012 Alameda County Grand Jury Final Report Facing an extremely high violent crime rate, it is critical that OPD's Crime Lab is staffed properly and its technology kept current. Among the Grand Jury's concerns are the inability of the city of Oakland to provide sufficient funding and its continuing use of grants for its crime lab. Without proper funding, staffing will remain low, the lab will be unable to reduce its backlog, and facilities will remain inadequate. As a result of the Oakland police not being fully staffed, less evidence is being collected, yet a large forensics-testing backlog remains. Although grants provide a temporary fix, a long-term viable solution for forensics testing needs to be found immediately. Additionally, lack of a case management system prevents effective communication between the crime lab, OPD investigators, and county prosecutors. The Grand Jury heard direct testimony from an elected official that the FBI is currently assisting Oakland in the reduction of its forensics testing backlog. Additionally, the Grand Jury learned that same official repeated this information at a public event. The Grand Jury confirmed that this is inaccurate as the FBI is not aiding the OPD Crime Lab in reducing its forensic testing backlog. This is further evidence of the disconnect between the OPD Crime Lab and Oakland elected city officials. The Grand Jury believes the public has the right to timely and factual information regarding safety issues in their city. Oakland must not have a "go it alone" attitude in solving the problems its crime lab faces and must cooperatively seek solutions to its ongoing problems. The Grand Jury learned that financing a new crime lab building to accommodate one regional lab might face challenges; however, we also learned that consolidation would save taxpayer dollars in the long run. We strongly encourage all parties involved to seek a solution to this issue. Space and facility cost issues should not be reasons to disregard the need for consolidation. Oakland and Alameda County must cooperate with each other in order to best serve the citizens and the victims of the county. Long standing proprietary decisions by either organization to go it alone must not override the public's interest. 2011-2012 Alameda County Grand Jury Final Report The Alameda County Chiefs of Police and Sheriff's Association is well placed to develop a lab consolidation plan that addresses a governance model representing the needs of all entities. The Grand Jury recognizes the sheriff and Oakland police chief must be catalysts to the process and encourages them to move forward aggressively for the benefit of the citizens of Alameda County.
• CL4
  The Grand Jury concludes that the county's GSA has well-established, comprehensive procurement policies to help ensure that vendors are chosen through a fair, ethical and competitive process. Yet, the Grand Jury is concerned that once vendors are chosen, weak oversight and the lack of formal evaluations of contractors put taxpayer dollars at risk. Evidence-based contracting is a widely used tool that should be adopted by the county. County contract administrators should be professionally trained to ensure that large-dollar contracts are properly overseen. County departments and the Board of Supervisors should have access to formal vendor evaluations to ensure poor performing vendors are held accountable and not rehired. The current policy requiring individual departments to handle all contract oversight impedes communication between departments contracting for similar services. One idea presented to the Grand Jury would entail GSA reassigning two staff positions to a performance audit function that would be responsible for training individual department personnel in contract management and would regularly audit specific large contracts for compliance with performance measures. With over $250 million in GSA contracts countywide, proper contract administration becomes extremely important in ensuring efficient use of taxpayer money. In a time of decreasing budgets and limited resources, any advantage the county can leverage from contract oversight is a benefit to the citizens. 2011-2012 Alameda County Grand Jury Final Report
• CL5
  BRSB is a governmental entity with its own source of revenue – registration fees. The board is elected by Berkeley residents and is generally pro tenant with little accountability to the landlords who fund the operations of the board. Thus, the board has little to no incentive to control costs. In an era where most governmental entities must control costs, BRSB has been exempt from these pressures because it has a dedicated source of funds and is a self-sustaining 2011-2012 Alameda County Grand Jury Final Report bureaucracy. Berkeley voters are the only ones who can change the direction of the BRSB and so far they have not shown any inclination to do that. While the BRSB does provide rent control that voters appear to want, the board is not providing strong enough oversight, not holding the agency accountable - not scrutinizing personnel hiring, not questioning compensation, not balancing both landlord and tenant interests, not trying to constrain increases in registration fees. For example, the executive director makes an exorbitant salary that comprises nearly 5% of the entire budget of the agency. The Grand Jury finds this unacceptable and concludes the board needs to reprioritize services and to reduce costs not only in its administration but in services to the citizens of Berkeley. The Berkeley Rent Stabilization Board's independence from the city of Berkeley Too often, it operates without traditional contributes to its excesses. administrative controls that could be provided by the city of Berkeley.
• CL6
  Except in a few areas, the county is not using evidence-based evaluations of health and social service programs operated by CBOs. The Grand Jury concludes that the SSA and HCSA must initiate such evaluations on a larger scale. This means that agencies must develop performance measures that provide evidence that they are making reasonable progress in reducing problems. This information will make it possible to allocate more dollars to the good performers and eliminate weaker programs. Both SSA and HCSA have improved their oversight of CBOs in recent years but there is much more to be done. HCSA has adopted more sophisticated oversight than SSA. Many CBO staff members need training to improve their financial and programmatic performance. Training could be provided by a consulting group like FCMAT, the Fiscal Crisis and Management Assistance Team. This is a statewide funded financial strike team assigned to rescue troubled school districts. The Grand Jury learned that FCMAT now offers an extensive training program to aid CBOs in financial and operational protocols. CBOs with weak performance should be required to take such training. 2011-2012 Alameda County Grand Jury Final Report The Grand Jury concludes there are many shortcomings in current oversight of CBOs. All staff involved with CBOs must work more closely together throughout the whole process to minimize disconnects. Program managers or finance staff members must go out into the field to interact with CBO staff much more often to review processes and performance. There is no substitute for developing relationships with CBO staff. The Grand Jury understands that policies and procedures are being introduced by SSA and HCSA to improve oversight of CBOs; however, much more needs to be done to improve the services for citizens of the county and to ensure that taxpayer dollars are spent wisely.
• CL7
  Poor management, unsophisticated financial controls, and a broken governance model are among the major problems that have led to FAME's current crisis. While the Grand Jury heard testimony that FAME's acting CEO is working diligently to fix the mismanagement of the past, it appears that the barriers are far too great for success. After a yearlong investigation, the Grand Jury concludes that FAME's charter should be revoked. The Grand Jury found that ACOE has a passive interpretation of their oversight responsibilities of public charter schools, taking the position that "[we] are the authorizers...not the people in charge." (New York Times, March 11, 2010) The Grand Jury believes the ACOE focused too narrowly on the second FCMAT report and ignored the structural problems with the CEO's contract and other governance issues in FCMAT's initial report. The ACOE Board of Education ultimately renewed FAME's charter despite having this information that should have alerted them to an ill-fated situation. The Grand Jury noted that because FAME charter school receives the same dollar amount for classroom students as for independent study students, and is not required to segregate those funds, FAME was able to channel money from the Independent Study program elsewhere, enabling them to fund an excessive CEO salary, bonuses and benefits. 2011-2012 Alameda County Grand Jury Final Report The Grand Jury found that FAME has been badly managed for years. The administrator was given overly generous pay and benefits; use of funds was questionable; board positions remained vacant in violation of their charter; there were allegations of nepotism; poor communication between board and fiscal staff; failure to pay vendors which resulted in a lack of educational resources; utilities and facility rent not paid for months; higher costs as a result of bridge loans; and increasing legal fees. The problems at FAME could have been prevented. The victims of FAME's failure are the students and the taxpayers. The importance of effective oversight cannot be overstated. FAME's board of directors should have made better decisions; ACOE should have taken a more proactive stand in questioning the renewal of FAME's charter; and FAME's former CEO should have been held more accountable. The Grand Jury heard testimony that new leadership at FAME is attempting to address the problems but we believe the situation is beyond repair. ACOE is starting the process of revoking FAME's charter. The Grand Jury supports that decision and is hopeful that ACOE will in fact follow through. We trust that ACOE will make the right decision on behalf of the students and taxpayers of Alameda County. 2011-2012 Alameda County Grand Jury Final Report
• CL8
  The Grand Jury found that the implementation of risk management/workers' compensation programs is effective only if there is aggressive training of managers and education of employees, and a solid working relationship with an effective third-party administrator. Finally, the various city and county agencies should maintain a good working relationship with the District Attorney's Office and refer fraud cases for prosecution. The 2011-2012 Grand Jury encourages a future Grand Jury to further investigate this financially important issue.
• CL9
  Oakland has a long history of using public resources to fund low-income housing and local non-profit organizations that develop and manage them. In the case of OCHI, the city failed to protect its $24 million investment by not adequately monitoring the various properties or the non-profit organization responsible for 2011-2012 Alameda County Grand Jury Final Report them. The Grand Jury acknowledges the steps taken in 2011 to train staff and improve the process of qualifying and monitoring low-income housing providers. However, the Grand Jury is gravely concerned that Oakland cannot maintain an adequate level of expertise to protect its investments in low-income housing. The city used $10.8 million in redevelopment agency funds to supplement staff costs to administer low-income housing programs. These funds are no longer available, so how will improvements be funded? In many cases, non-profit organizations are the appropriate providers of low- income housing. However, there is considerable risk in utilizing inexperienced, under-resourced community groups for the sake of partnering with political constituents. The Grand Jury heard testimony that non-profits can be successful in this field, but it requires high quality people, discipline and training, inspections and auditing process, economy of scale, and use of good, accountable property managers. The funding systems for subsidized housing are very complex. To succeed, an organization needs a high level of financial expertise usually found in private industry. Furthermore, it is tempting, but dangerous, to use development fees and similar financial benefits to fund the growth and operation of community housing organizations. The Grand Jury heard testimony from a successful non-profit and from a private developer that the self- perpetuating nature of development fees and government grants to fund affordable housing is a recipe for failure, not totally unlike a pyramid scheme. The Grand Jury wonders whether Oakland understands the benefits of using private funding to finance and manage affordable housing, such as:
• CL10
  Private investors have a strong incentive not to abandon their properties since
• CL11
  they have a vested interest, i.e. their own funds Because of their vested interest, private investors may manage properties more closely Private investors may make more cost-effective decisions, rehabilitating units at a level that is appropriate for its neighborhood 2011-2012 Alameda County Grand Jury Final Report · Private investors can do quality work with less bureaucracy and fewer political/social burdens, i.e., living wage, etc. Private investors can move more quickly The Grand Jury is concerned that the current system of funding low-income housing is so complex and fragmented that it is virtually impossible to administer. Some concerns are: Unnecessary complication of regulatory agreements that set income limits too high Loss of tax revenue from welfare exemptions for projects with overly liberal income restrictions (i.e., would rental units be equally affordable without subsidies, given market rates in their neighborhood?) Unnecessary cost of government bureaucracy to oversee complex system of subsidies Weakness in oversight such as lack of audits of tenant income, regulatory agreement compliance, property tax exemptions, approved use of rental units, collectability of "soft loans", etc. Difficulty of keeping records current on property tax assessments, welfare exemptions, property ownership, regulatory agreements, low income units available, outstanding loans, etc. The Grand Jury hopes Oakland will objectively evaluate the benefits of using a simple voucher system or other ways to assist very low-income tenants without such large investments or cumbersome programs. The system needs to make it easier to monitor whether a tenant qualifies, allow more market-driven pricing, simplify the subsidies for property owners, and encourage rehabilitation instead of new construction. Perhaps the city should focus on inspecting subsidized units and let their financing be more market driven. 2011-2012 Alameda County Grand Jury Final Report
• CL12
  In conclusion, we recommend that future grand juries continue to have a Response Committee. We found that following through on investigations increases effectiveness and this impact should increase over time as agencies come to expect follow up. Improvements in government need constant vigilance from public watchdogs, like the Alameda County Civil Grand Jury, that provide non-partisan continuity. 2011-2012 Alameda County Grand Jury Final Report