Grand Jury Report 2010-2011

Commendations 26

• CM1 Page 20
  The NSP used money to purchase homes that needed to be renovated, instead of using the money for soft second loans.
• CM2 Page 20
  Some of the homes that were purchased by the City of Los Banos did not meet the NSP requirements/guidelines.
• CM3 Page 20
  Realtor participation procedure/guidelines were changed in the middle of the process.
• CM4 Page 20
  There was insufficient communication between the NSP administrators and the local realtors.
• CM5 Page 20
  It appears that not all allocated funds were used appropriately.
• CM6 Page 20
  Habitat for Humanity should not have received money during the initial phase of the NSP distribution of funds. The Merced County Civil Grand Jury conducted an interview with personnel from the City of Los Banos Redevelopment Agency, the Merced County Redevelopment Agency Advising Agency, Merced County Association of Government (MCAG), and local realtors, as well as with, the complainant. Various documents and correspondence were also reviewed. Findings The Civil Grand Jury found that, due to time constraints, the City of Los Banos had to purchase homes in a short period of time or risk losing the funds. The NSP was faced with two difficult problems; outside investors were willing to pay a higher price on foreclosed homes, and banks were not willing to loan money for homes that needed major renovations. With limited funding and strict regulations, the NSP was not able to compete with outside investors to purchase homes within the City of Los Banos. There was, also, too large a gap between what banks were willing to loan on a first mortgage and what the soft second loans would cover. The NSP administrators elected to purchase homes instead of disbursing soft second loans. Due to NSP regulations, the staff from NSP was unable to find enough homes within the selected tracts that met these requirements. The NSP advisor received approval from the State of California to purchase homes outside of the designated area; however, all of the other NSP requirements had to be met. The NSP administrators stated in their interview that they were continually forced to modify their communications with the local realtors, due to the demands and constraints of the NSP program. These modifications may have caused realtors to receive outdated information and miss opportunities to participate in the program because of time constraints. Invitations to attend training seminars were sent to local offices by fax, with a short response time allotted for participation. Formal written invitations were not sent to offices because of these time constraints. The NSP Advisor and the City Manager, working together, created a small committee to interview candidates, selecting one individual to hire as the official real estate agent for the City of Los Banos. All paperwork was processed through proper channels. However, one of the individuals on the selection committee was the supervisor of the individual who was eventually chosen. Questioning revealed that of the eight applicants, six were from the same realty office. The Civil Grand Jury determined that all NSP funds were accounted for, and are still in circulation to purchase more homes to benefit homebuyers. Habitat for Humanity was given $1 million, so that they could acquire homes that needed major repairs and renovate them; thereby, allowing low income families who could not otherwise own a home, the ability to purchase one. There was no regulation about when, or if, Habitat for Humanity should receive further funding.
• CM7 Page 9
  The Civil Grand Jury salutes all people involved in the well-being, health, care, and education of children. We recognize that the Child Protective Services caseworkers carry a heavy case load. The demand on educators to teach not only academic subjects but also social standards and life skills takes patience and understanding. We believe that by working together through improved communication, everyone involved will benefit.
• CM8 Page 10
  Complaint No. 09-10-27 Merced County Fire Department Summary The 2010-2011 Merced County Civil Grand Jury received an anonymous complaint requesting that it investigate the alleged mismanagement of the Merced County Fire Department. The complainant identified five conditions or incidents that were described as being inappropriate, and possibly illegal. The complainant made numerous allegations, including: abuse of overtime system and payments; failure to accurately document hours worked; improper government activity; misappropriation of Merced County funds; gross negligence by management staff; incompetence/inefficiency of staff; abuse of authority; inappropriate timesheet activity; failure to perform duties; suspicious vendor and policy (appropriations) changes for benefit of family and friends; misappropriation/theft of department equipment; mistreatment of employees, including discrimination, favoritism, hostile work environment, and retaliation; and violations of Merced County “Weapons in the Workplace” policies with regard to animal cruelty. The Merced County Civil Grand Jury received specific complaints against the Division Chief and two Battalion Chiefs, alleging, among other things, conflicts of interest, misuse of public and private funds, excess overtime and a general lack of management within the department.
• CM9 Page 12
  The Grand Jury would like to commend both the Merced County Fire Department and CALFIRE for their successful work in protecting and educating Merced County. Their efforts have not gone unnoticed by the Grand Jury.
• CM10 Page 13
  Complaint 10-11-01 Merced County Irrigation District Summary The Merced County Civil Grand Jury received a complaint concerning the cleaning of a privately owned ditch authorized and directed by Merced Irrigation District (MID) Management. MID’s equipment and employees were employed to do the work. Method The Civil Grand Jury interviewed MID General Manager, MID Board of Directors, MID employees, and landowners within the MID district. Documents containing information on MID policies received from MID management were reviewed, as well as the California Code (Article 16, Public Finance) which is very specific concerning the use of public utilities assets for a private benefit.
• CM11 Page 14
  The Civil Grand Jury thanks all of those involved in this investigation. We realize that all concerned had MID’s and the public’s interest as the number one priority.
• CM12 Page 15
  Complaint 09-10-09 City of Los Banos: Community Center Summary The Merced County Civil Grand Jury received a complaint, 09-10-09, for an investigation of the two embezzlement cases in the City of Los Banos. The complainant 09-10-09 also questioned the wisdom of spending $12.5 million on building a Community Center when the City of Los Banos had recently declared fiscal hardship. The complainant was questioning whether the money that the City of Los Banos received was a Grant that they would not have to pay back, or a Bond that would have to be repaid. In addition, the complainant would like to know if the Community Center is able to sustain itself, once completed and in operation. The complainant also stated that the citizens deserved to have answers to many questions regarding two embezzlement cases that occurred within the City in a very short time period. This report pertains to the spending of $12.5 million to build the community center. The complaint regarding the two embezzlement cases is in a separate report. For information on the City of Los Banos embezzlement cases, please refer to Complaint 09-10-13. Method The Civil Grand Jury conducted interview with the City of Los Banos Council Members, employees of the city, the City Manager, the City and County RDA Directors, as well as the complainant. Various documents and correspondence were also reviewed by members of the Civil Grand Jury.
• CM13 Page 17
  The Grand Jury thanks all of those involved in this investigation. We realize that all concerned had the City of Los Banos and the public interest of the Community Center as their number one priority.
• CM14 Page 18
  Complaint 09-10-13 City of Los Banos Summary The Merced County Civil Grand Jury received a request for an investigation of two embezzlement cases involving the City of Los Banos. The complainant felt that the investigation done by the Los Banos Police Department failed to adequately address some of the issues. The complainant also questioned the hiring practices of the city, especially in regards to background checks. The complainant also questioned whether the City of Los Banos Human Resources Department was aware that the second embezzler had a previous record of embezzling from the private sector. Method A complaint was submitted to Merced County Civil Grand Jury regarding two embezzlement cases that took place in the City of Los Banos, resulting in a total loss of over $2 million. The complainant felt that the City of Los Banos had failed to address several pertinent issues, including the fact that the City of Los Banos had hired a forensic accountant to work along with the Los Banos Police Department. In addition, the Los Banos Police Department performed an investigation of its own city government giving the appearance of impropriety. The Civil Grand Jury conducted interviews with the City of Los Banos Council Members, employees of the city, the City Manager, the City and County RDA Directors, as well as the complainant. Various documents and correspondence were also reviewed by members of the Civil Grand Jury. The Civil Grand Jury also consulted with the District Attorney’s office.
• CM15 Page 14
  The Civil Grand Jury thanks all of those involved in this investigation. Glossary/Appendix Soft Second Loan (Soft Second Gap Financing): difference between primary loan and purchase price. May include closing costs (capped) and partial down payment (subject to primary lenders requirements.). Neighborhood Stabilization Program (NSP): was part of the Housing and Economic Recovery Act of 2008. It is designed to assist low to moderate income families purchase a home. Some of the NSP regulations include:  housing units must be foreclosed and vacant  purchase price must be at least 1% below the appraised value  homes must be located within Los Banos Census Tracts 22.02 and 23.02 (unless approval is received from the State of California)  homes must be modest housing units
• CM16 Page 23
  Complaint 10-11-02 Planada School District Board of Trustees Summary The Merced County Civil Grand Jury received a complaint concerning conflict of interest, unfair hiring practices by the Board of Trustees of the Planada School District, and nepotism. The complainant also questioned changing the year of elections for school board members. Method Members of the Merced County Civil Grand Jury interviewed the complainant, the Planada School District Superintendent, members of the Board of Trustees and other employees of the school district. Documents received from the Planada School District office included Board of Trustees policies and procedures, Board minutes for 2010 board meetings and the county school board election code.
• CM17 Page 31
  We, the Merced County Civil Grand Jury, commend the staff and supervisory personnel at the John Latorraca Correctional Center for their efforts to maintain safe work conditions and safety standards for all inmates.
• CM18 Page 32
  Iris Garrett Juvenile Justice Correction Center Mandated Annual Inspection Introduction California Penal Code, Section 919 (b) mandates that the Civil Grand Jury inspect correctional facilities within the county each year. The Merced County Civil Grand Jury visited Iris Garrett Juvenile Justice Correction Center located at 2840 West Sandy Mush Road, Merced, on March 22, 2011. The Civil Grand Jury members toured the entire facility. We were met by Chief Probation Officer Scott Ball, Assistant Chief Chris Bobbit and Program Manager Heidi Szakala. We met with Judge David Moranda who is assigned full time to the court within the facility.
• CM19 Page 33
  The staff and administration of Iris Garrett Juvenile Correction Center are to be commended for the excellent work they are doing. The facility is very secure and well managed. The staff strives to provide novel and innovative programs for the juveniles at the facility. We are impressed with all that we saw and heard concerning the operation of the facility.
• CM20 Page 34
  Merced County Sheriff’s Department Mandated Annual Inspection – Main Jail and Office Introduction The Merced County Grand Jury inspected the main Merced County Jail at 700 West 22nd Street, Merced on April 20, 2011. This was a mandated inspection as prescribed by California Penal Code 919(b). Members of the Grand Jury met with Commander James Scott who conducted the tour. Following is an overview of the jail operations and a report of the facility’s personnel and equipment needs.
• CM21 Page 35
  The staff of the Merced County Main Jail is to be commended for the professional manner in which they perform their duties and their commitment to public safety under such stressful conditions.
• CM22 Page 36
  Los Banos Police Department and Jail Mandated Inspection Introduction The Merced County Grand Jury inspected the Los Banos Police Department and Jail located at 945 5th Street, Los Banos, CA. This was a mandated inspection as prescribed by California Penal Code § 919(b). Members of the Grand Jury were met at the facility by Police Chief Gary Brizzee. Chief Brizzee conducted a thorough tour of the jail and police department facilities and answered questions by the Grand Jury. Following is an overview of the jail operations and a report of the facility’s personnel and equipment needs.
• CM23 Page 37
  The staff of the Los Banos Police Department and Jail is to be commended for the professional manner in which they perform their duties and their commitment to public safety.
• CM24 Page 38
  Dos Palos Police Department Mandated Inspection Introduction On May 19, 2011, members of the Merced County Grand Jury inspected the City of Dos Palos Police Department located at 1546 Golden Gate Avenue, Dos Palos California. The Merced County Grand Jury has, at its discretion under California Penal Code 925(a), the option to investigate and report on the operations, accounts, and records of officers, functions, methods or system of performing duties of law enforcement agencies within Merced County. We were met by the Dos Palos Chief of Police Barry Mann and given a brief overview of the department, followed by a tour of the facilities. Chief Mann has been with the department since 2001 and became Police Chief in 2004.
• CM25 Page 39
  The Civil Grand Jury commends Chief Mann for his efforts in improving police and community relations and applauds his resourceful methods in providing exemplary public safety services on a very tight budget. We believe Chief Mann’s position as Resource Officer is an asset to the community.
• CM26 Page 2
  Responses to the 2009-2010 Final Report