Fresno County Grand Jury • 2005-2006

Reports 2005-2006

Published: July 13, 2006 104 pages Consolidated Report
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Note: Missing finding numbers detected: F27, F29, F30, F31, F32, F33, F34, F35, F36, F37, F38, F39, F40, F41, F42, F43, F44, F45, F46, F47, F48, F49, F50, F51, F52, F53, F54, F55, F56, F57, F58, F59, F60, F61, F62, F63, F64, F65, F66, F67, F68, F69, F70, F71, F72, F73, F74, F75, F76, F77, F78, F79, F80, F81, F82, F83, F84, F85, F86, F87, F88, F89, F90, F91, F92, F93, F94, F95, F96, F97, F98, F99, F100, F101, F102, F103, F104, F105, F106, F107, F108, F109, F110, F111, F112, F113, F114, F115, F116, F117, F118, F119, F120, F121, F122, F123, F124, F125, F126, F127, F128, F129, F130, F131, F132, F133, F134, F135, F136, F137, F138, F139, F140, F141, F142, F143, F144, F145, F146, F147, F148, F149, F150, F151, F152, F153, F154, F155, F156, F157, F158, F159, F160, F161, F162, F163, F164, F165, F166, F167, F168, F169, F170, F171, F172, F173, F174, F175, F176, F177, F178, F179, F180, F181, F182, F183, F184, F185, F186, F187, F188, F189, F190, F191, F192, F193, F194, F195, F196, F197, F198, F199, F200, F201, F202, F203, F204, F205, F206, F207, F208, F209, F210, F211, F212, F213, F214, F215, F216, F217, F218, F219, F220, F221, F222, F223, F224, F225, F226, F227, F228, F229, F230, F231, F232, F233, F234, F235, F236, F237, F238, F239, F240, F241, F242, F243, F244, F245, F246, F247, F248, F249, F250, F251, F252, F253, F254, F255, F256, F257, F258, F259, F260, F261, F262, F263, F264, F265, F266, F267, F268, F269, F270, F271, F272, F273, F274, F275, F276, F277, F278, F279, F280, F281, F282, F283, F284, F285, F286, F287, F288, F289, F290, F291, F292, F293, F294, F295, F296, F297, F298, F299, F300, F301, F302, F303, F304, F305, F306, F307, F308, F309, F310, F311, F312, F313, F314, F315, F316, F317, F318, F319, F320, F321, F322, F323, F324, F325, F326, F327, F328, F329, F330, F331, F332, F333, F334, F335, F336, F337, F338, F339, F340, F341, F342, F343, F344, F345, F346, F347, F348, F349, F350, F351, F352, F353, F354, F355, F356, F357, F358, F359, F360, F361, F362, F363, F364, F365, F366, F367, F368, F369, F370, F371, F372, F373, F374, F375, F376, F377, F378, F379, F380, F381, F382, F383, F384, F385, F386, F387, F388, F389, F390, F391, F392, F393, F394, F395, F396, F397, F398, F399, F400, F401, F402, F403, F404, F405, F406, F407, F408, F409, F410, F411, F412, F413, F414, F415, F416, F417, F418, F419, F420, F421, F422, F423, F424, F425, F426, F427, F428, F429, F430, F431, F432, F433, F434, F435, F436, F437, F438, F439, F440, F441, F442, F443, F444, F445, F446, F447, F448, F449, F450, F451, F452, F453, F454, F455, F456, F457, F458, F459, F460, F461, F462, F463, F464, F465, F466, F467, F468, F469, F470, F471, F472, F473, F474, F475, F476, F477, F478, F479, F480, F481, F482, F483, F484, F485, F486, F487, F488, F489, F490, F491, F492, F493, F494, F495, F496, F497, F498, F499, F500, F501, F502, F503, F504, F505, F506, F507, F508, F509, F510, F511, F512, F513, F514, F515, F516, F517, F518, F519, F520, F521, F522, F523, F524, F525, F526, F527, F528, F529, F530, F531, F532, F533, F534, F535, F536, F537, F538, F539, F540, F541, F542, F543, F544, F545, F546, F547, F548, F549, F550, F551, F552, F553, F554, F555, F556, F557, F558, F559, F560, F561, F562, F563, F564, F565, F566, F567, F568, F569, F570, F571, F572, F573, F574, F575, F576, F577, F578, F579, F580, F581, F582, F583, F584, F585, F586, F587, F588, F589, F590, F591, F592, F593, F594, F595, F596, F597, F598, F599, F600, F601, F602, F603, F604, F605, F606, F607, F608, F609, F610, F611, F612, F613, F614, F615, F616, F617, F618, F619, F620, F621, F622, F623, F624, F625, F626, F627, F628, F629, F630, F631, F632, F633, F634, F635, F636, F637, F638, F639, F640, F641, F642, F643, F644, F645, F646, F647, F648, F649, F650, F651, F652, F653, F654, F655, F656, F657, F658, F659, F660, F661, F662, F663, F664, F665, F666, F667, F668, F669, F670, F671, F672, F673, F674, F675, F676, F677, F678, F679, F680, F681, F682, F683, F684, F685, F686, F687, F688, F689, F690, F691, F692, F693, F694, F695, F696, F697, F698, F699, F700, F701, F702, F703, F704, F705, F706, F707, F708, F709, F710, F711, F712, F713, F714, F715, F716, F717, F718, F719, F720, F721, F722, F723, F724, F725, F726, F727, F728, F729, F730, F731, F732, F733, F734, F735, F736, F737, F738, F739, F740, F741, F742, F743, F744, F745, F746, F747, F748, F749, F750, F751, F752, F753, F754, F755, F756, F757, F758, F759, F760, F761, F762, F763, F764, F765, F766, F767, F768, F769, F770, F771, F772, F773, F774, F775, F776, F777, F778, F779, F780, F781, F782, F783, F784, F785, F786, F787, F788, F789, F790, F791, F792, F793, F794, F795, F796, F797, F798, F799, F800, F801, F802, F803, F804, F805, F806, F807, F808, F809, F810, F811, F812, F813, F814, F815, F816, F817, F818, F819, F820, F821, F822, F823, F824, F825, F826, F827, F828, F829, F830, F831, F832, F833, F834, F835, F836, F837, F838, F839, F840, F841, F842, F843, F844, F845, F846, F847, F848, F849, F850, F851, F852, F853, F854, F855, F856, F857, F858, F859, F860, F861, F862, F863, F864, F865, F866, F867, F868, F869, F870, F871, F872, F873, F874, F875, F876, F877, F878, F879, F880, F881, F882, F883, F884, F885, F886, F887, F888, F889, F890, F891, F892, F893, F894, F895, F896, F897, F898, F899, F900, F901, F902, F903, F904, F905, F906, F907, F908, F909, F910, F911, F912, F913, F914, F915, F916, F917, F918, F919, F920, F921, F922, F923, F924, F925, F926, F927, F928, F929, F930, F931, F932, F933, F934, F935, F936, F937, F938, F939, F940, F941, F942, F943, F944, F945, F946, F947, F948, F949, F950, F951, F952, F953, F954, F955, F956, F957, F958, F959, F960, F961, F962, F963, F964, F965, F966, F967, F968, F969, F970, F971, F972, F973, F974, F975, F976, F977, F978, F979, F980, F981, F982, F983, F984, F985, F986, F987, F988, F989, F990, F991, F992, F993, F994, F995, F996, F997, F998, F999, F1000, F1001, F1002, F1003, F1004, F1005, F1006, F1007, F1008, F1009, F1010, F1011, F1012, F1013, F1014, F1015, F1016, F1017, F1018, F1019, F1020, F1021, F1022, F1023, F1024, F1025, F1026, F1027, F1028, F1029, F1030, F1031, F1032, F1033, F1034, F1035, F1036, F1037, F1038, F1039, F1040, F1041, F1042, F1043, F1044, F1045, F1046, F1047, F1048, F1049, F1050, F1051, F1052, F1053, F1054, F1055, F1056, F1057, F1058, F1059, F1060, F1061, F1062, F1063, F1064, F1065, F1066, F1067, F1068, F1069, F1070, F1071, F1072, F1073, F1074, F1075, F1076, F1077, F1078, F1079, F1080, F1081, F1082, F1083, F1084, F1085, F1086, F1087, F1088, F1089, F1090, F1091, F1092, F1093, F1094, F1095, F1096, F1097, F1098, F1099, F1100, F1101, F1102, F1103, F1104, F1105, F1106, F1107, F1108, F1109, F1110, F1111, F1112, F1113, F1114, F1115, F1116, F1117, F1118, F1119, F1120, F1121, F1122, F1123, F1124, F1125, F1126, F1127, F1128, F1129, F1130, F1131, F1132, F1133, F1134, F1135, F1136, F1137, F1138, F1139, F1140, F1141, F1142, F1143, F1144, F1145, F1146, F1147, F1148, F1149, F1150, F1151, F1152, F1153, F1154, F1155, F1156, F1157, F1158, F1159, F1160, F1161, F1162, F1163, F1164, F1165, F1166, F1167, F1168, F1169, F1170, F1171, F1172, F1173, F1174, F1175, F1176, F1177, F1178, F1179, F1180, F1181, F1182, F1183, F1184, F1185, F1186, F1187, F1188, F1189, F1190, F1191, F1192, F1193, F1194, F1195, F1196, F1197, F1198, F1199, F1200, F1201, F1202, F1203, F1204, F1205, F1206, F1207, F1208, F1209, F1210, F1211, F1212, F1213, F1214, F1215, F1216, F1217, F1218, F1219, F1220, F1221, F1222, F1223, F1224, F1225, F1226, F1227, F1228, F1229, F1230, F1231, F1232, F1233, F1234, F1235, F1236, F1237, F1238, F1239, F1240, F1241, F1242, F1243, F1244, F1245, F1246, F1247, F1248, F1249, F1250, F1251, F1252, F1253, F1254, F1255, F1256, F1257, F1258, F1259, F1260, F1261, F1262, F1263, F1264, F1265, F1266, F1267, F1268, F1269, F1270, F1271, F1272, F1273, F1274, F1275, F1276, F1277, F1278, F1279, F1280, F1281, F1282, F1283, F1284, F1285, F1286, F1287, F1288, F1289, F1290, F1291, F1292, F1293, F1294, F1295, F1296, F1297, F1298, F1299, F1300, F1301, F1302, F1303, F1304, F1305, F1306, F1307, F1308, F1309, F1310, F1311, F1312, F1313, F1314, F1315, F1316, F1317, F1318, F1319, F1320, F1321, F1322, F1323, F1324, F1325, F1326, F1327, F1328, F1329, F1330, F1331, F1332, F1333, F1334, F1335, F1336, F1337, F1338, F1339, F1340, F1341, F1342, F1343, F1344, F1345, F1346, F1347, F1348, F1349, F1350, F1351, F1352, F1353, F1354, F1355, F1356, F1357, F1358, F1359, F1360, F1361, F1362, F1363, F1364, F1365, F1366, F1367, F1368, F1369, F1370, F1371, F1372, F1373, F1374, F1375, F1376, F1377, F1378, F1379, F1380, F1381, F1382, F1383, F1384, F1385, F1386, F1387, F1388, F1389, F1390, F1391, F1392, F1393, F1394, F1395, F1396, F1397, F1398, F1399, F1400, F1401, F1402, F1403, F1404, F1405, F1406, F1407, F1408, F1409, F1410, F1411, F1412, F1413, F1414, F1415, F1416, F1417, F1418, F1419, F1420, F1421, F1422, F1423, F1424, F1425, F1426, F1427, F1428, F1429, F1430, F1431, F1432, F1433, F1434, F1435, F1436, F1437, F1438, F1439, F1440, F1441, F1442, F1443, F1444, F1445, F1446, F1447, F1448, F1449, F1450, F1451, F1452, F1453, F1454, F1455, F1456, F1457, F1458, F1459, F1460, F1461, F1462, F1463, F1464, F1465, F1466, F1467, F1468, F1469, F1470, F1471, F1472, F1473, F1474, F1475, F1476, F1477, F1478, F1479, F1480, F1481, F1482, F1483, F1484, F1485, F1486, F1487, F1488, F1489, F1490, F1491, F1492, F1493, F1494, F1495, F1496, F1497, F1498, F1499, F1500, F1501, F1502, F1503, F1504, F1505, F1506, F1507, F1508, F1509, F1510, F1511, F1512, F1513, F1514, F1515, F1516, F1517, F1518, F1519, F1520, F1521, F1522, F1523, F1524, F1525, F1526, F1527, F1528, F1529, F1530, F1531, F1532, F1533, F1534, F1535, F1536, F1537, F1538, F1539, F1540, F1541, F1542, F1543, F1544, F1545, F1546, F1547, F1548, F1549, F1550, F1551, F1552, F1553, F1554, F1555, F1556, F1557, F1558, F1559, F1560, F1561, F1562, F1563, F1564, F1565, F1566, F1567, F1568, F1569, F1570, F1571, F1572, F1573, F1574, F1575, F1576, F1577, F1578, F1579, F1580, F1581, F1582, F1583, F1584, F1585, F1586, F1587, F1588, F1589, F1590, F1591, F1592, F1593, F1594, F1595, F1596, F1597, F1598, F1599, F1600, F1601, F1602, F1603, F1604, F1605, F1606, F1607, F1608, F1609, F1610, F1611, F1612, F1613, F1614, F1615, F1616, F1617, F1618, F1619, F1620, F1621, F1622, F1623, F1624, F1625, F1626, F1627, F1628, F1629, F1630, F1631, F1632, F1633, F1634, F1635, F1636, F1637, F1638, F1639, F1640, F1641, F1642, F1643, F1644, F1645, F1646, F1647, F1648, F1649, F1650, F1651, F1652, F1653, F1654, F1655, F1656, F1657, F1658, F1659, F1660, F1661, F1662, F1663, F1664, F1665, F1666, F1667, F1668, F1669, F1670, F1671, F1672, F1673, F1674, F1675, F1676, F1677, F1678, F1679, F1680, F1681, F1682, F1683, F1684, F1685, F1686, F1687, F1688, F1689, F1690, F1691, F1692, F1693, F1694, F1695, F1696, F1697, F1698, F1699, F1700, F1701, F1702, F1703, F1704, F1705, F1706, F1707, F1708, F1709, F1710, F1711, F1712, F1713, F1714, F1715, F1716, F1717, F1718, F1719, F1720, F1721, F1722, F1723, F1724, F1725, F1726, F1727, F1728, F1729, F1730, F1731, F1732, F1733, F1734, F1735, F1736, F1737, F1738, F1739, F1740, F1741, F1742, F1743, F1744, F1745, F1746, F1747, F1748, F1749, F1750, F1751, F1752, F1753, F1754, F1755, F1756, F1757, F1758, F1759, F1760, F1761, F1762, F1763, F1764, F1765, F1766, F1767, F1768, F1769, F1770, F1771, F1772, F1773, F1774, F1775, F1776, F1777, F1778, F1779, F1780, F1781, F1782, F1783, F1784, F1785, F1786, F1787, F1788, F1789, F1790, F1791, F1792, F1793, F1794, F1795, F1796, F1797, F1798, F1799, F1800, F1801, F1802, F1803, F1804, F1805, F1806, F1807, F1808, F1809, F1810, F1811, F1812, F1813, F1814

Findings 28 findings

F1 Page 15
The building did not meet the space or configuration requirements of FCERA’s Board and staff. Extensive remodeling would have been required.3
F2 Page 15
No cost estimate was made for the renovations that would be necessary to house the staff prior to the purchase.4 1 Real Estate Due Diligence and the Closing Process - What institutional investors must know to assure that purchases will not unravel, now or later, by Tracy L. DeMay, Acquisitions Director of Closings, The RREEF Funds and published to Real Estate Review, Vol. 28, No. 3, Fall 1998, pp. 45-52. State of California County Employees’ Retirement Law of 1937, Title 3, Article 1. Architects’ cost estimate dated Feb. 2003, F1, F2 4 Title Company closing statement 2
F3 Page 16
The building was, and is, on the National Registry of Historical Sites. This limits changes to the structure.
F4 Page 16
Fresno County maintenance personnel inspected the building and found the following deficiencies noted in a memo dated July 9, 2002: • Old and poorly maintained heating, ventilation and air conditioning equipment • Extensive cracks on plastered brick walls • Roof not inspected but noted as having probable leaks • Some roof beams noticeably deflecting and over-stressed • Expense of pulling new wiring and cable for equipment noted
F5 Page 16
Pest control report item 10B notes possible roof leaks.
F6 Page 16
Seller’s financial information showed an operating rental loss of $26,000 for calendar year 2001.
F7 Page 16
The 2002 meeting minutes make no mention of any selection process for a realtor or any Board vote upon the selected broker or agent.
F8 Page 16
The selected real estate agent was inexperienced and had never sold property as a sole agent. The agent was an acquaintance of two of the Board members.
F9 Page 16
FCERA paid a commission of four percent, $68,000, to the real estate broker. It is not usual or customary for the buyer of a property to pay the commission.
F10 Page 16
At the July 10, 2002 meeting, the Board minutes report “after some discussion and questions from Board members, a motion was made to give authorization to purchase said property for 1.725 million (sic) with a stipulation that a structural engineer (our emphasis) be hired to inspect the property and if there are any major structural damage, the Association would have their $25,000 deposit returned. A formal roll call was taken. The motion passed with six ayes to three nays. A special retirement board meeting would be convened on July 19, 2002 to hear the engineer’s report”.
F11 Page 16
A licensed contractor, not a structural engineer, made the building inspection on July 16, 2002.5
F12 Page 16
California Government Code § 54957.1. (a) of The Brown Act states: “The legislative body ... shall publicly report any action taken in closed session and the vote or abstention of every member present ... concluding real estate negotiations ... shall be reported after the agreement is final, ... The body shall 5 Inspector’s report dated 7/18/02 3 report that approval and the substance of the agreement in open session at the public meeting during which the closed session is held”. • At the special board meeting held on July 19, 2002 negotiations and the vote to purchase were held in closed session. • The only item reported in open session was the result of the vote. • The substance of the agreement was not reported according to law.
F13 Page 17
The closed session report for the July 19, 2002 special meeting minutes for agenda item No. 3 are as follows: “Conference with Real Property Negotiator: Consider Acquiring Property From REHL Estate Properties Located at 1713 Tulare Street, Fresno, Calif. And Terms of Purchase: “The structural engineer’s report was presented to the Board regarding the property located at 1713 Tulare Street. “After examining the report and a brief question and answer session, a motion was made by Board member Arambula, seconded by Board member Abshere to accept the engineer’s report and instruct staff to finalize the agreement to purchase the property at 1713 Tulare Street. “A formal roll call was taken. The motion passed with four ayes to three nayes and one abstention.” This is the sum total of what was reported publicly.
F14 Page 17
There was no documentation or evidence discovered indicating that due diligence was performed as outlined in the “Real Estate Due Diligence and the Closing Process” document.
F15 Page 17
All 2002 board meeting minutes lacked detailed information.
F16 Page 17
The cost to FCERA to purchase, repair and maintain this property through December 31, 2005 was in excess of $2,000,000.6
F17 Page 17
Because of the estimated cost of renovating the train station, the Board decision was to erect a building with an additional cost in excess of $2,000,000. FCERA budget status report for period ending 12/31/04, FCERA Fresno Station operations 08/15/02 through 12/31/05 4
F18 Page 18
The Board is currently renting out the train station building and has incurred an operating loss of $219,123. for the period August 15, 2002 through June 30, 2005. CONCLUSIONS C1 The Board performed minimal due diligence for the purchase of its building. C2 The Board voted to buy the building even though the structural engineer stipulation as a condition of purchase, voted on nine days earlier, was not met. C3 The 2002 meeting minutes give no indication that the building search committee kept the entire board apprised of the building search progress. This may have been done in closed session, but the Grand Jury was denied access to this information due to attorney/client privilege. II. Appointments to the Association’s Board of Trustees BACKGROUND The Act defines who may serve as a member of the Board of Trustees and states that “…The fourth, fifth, sixth and ninth members shall be qualified electors of the county who are not connected with the county government in any capacity, except one may be a supervisor, and shall be appointed by the Board of Supervisors…”7 RESOURCES • State of California “County Employees’ Retirement Law of 1937” • State Attorney General’s Opinion Re: 1937 County Retirement Law – Retired Member as Board Member 8 FINDINGS
F19 Page 18
The Act specifies that, with the exception of the supervisor, the other three appointees “may not be connected with the county government in any capacity”. State of California County Employees’ Retirement Law of 1937, Title 3, Article 3 8 California Attorney General’s Opinion No. IL 77-185, dated December 20, 1977 5
F20 Page 19
Attorney General’s opinion finds: “…Accordingly, we conclude that under the County Employees Retirement Act of 1937 a retired member cannot serve as the fourth, sixth or ninth member of the retirement board…”
F21 Page 19
The 2002 Board of Trustees had two appointed members who were connected to County government in some capacity. One of those members has been re- appointed for the 2006-2009 term. CONCLUSIONS C4 The 2002 FCERA Board of Trustees did not conform to The Act. C5 The current FCERA Board does not conform to The Act.
F22 Page 86
A helpful tool in court cases is an IHSS “admonition” form regarding fraud called “Rights and Responsibilities”, which is being used for intake applications for providers and recipients. 13
F23 Page 86
According to SIU these forms are seldom being used by social workers.
F24 Page 86
The State of California now has a database to track providers convicted of fraud.
F25 Page 86
The SIU does not track whether convicted providers are from the registry.
F26 Page 86
Over $9.4 Million in benefit payments are paid monthly in Fresno County14 $11 Million paid annually.
F28 Page 86
Existing law provides that criminal background checks can be requested of the California Department of Justice (DOJ) by IHSS recipients.15 CONCLUSIONS C1 Establishment of the an IHSS Fraud Unit in 2003 was necessary to recover lost funds. C2 The result of SIU investigations has more than offset the cost of running the unit. C3 The SIU is understaffed and they are unable to handle the volume of cases referred to them. C4 Based on ten investigations completed a month by SIU Investigators, it would take 3.5 years to complete the 412 backlogged cases. C5 Money recovered from IHSS fraud does not benefit the SIU or IHSS program, but must be repaid to County, State and Federal Government.16 C6 The SIU could use another van for surveillance and a nighttime video camera. C7 Social workers, as the gatekeepers to protect recipients and providers, are in the best position to report IHSS fraud. C8 Recipients convicted of fraud in the IHSS system are felons, should be denied reapplication to the program. District Attorney’s Fraud Unit – SIU Testimony – Findings: F22, F23, F24, F25, F26 14 District Attorney’s Fraud Unit – SIU Testimony and Highlights – Findings: F16, F17, F18, F19, F20,
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Expenditure per Student by State Total Type FUSD Average Variance Variance Unified 2004-2005 School per ADA Districts Average Daily Attendance(ADA) 75,137 n/a Certificated Salary/ADA $ 3,901 $ 3,664 $ 237 $17,807,469 Non-Certificated Salary/ADA $ 1,090 $ 1,094 $ (4) $ (300,548) Employee Benefits/ADA $ 1,984 $ 1,445 $ 539 $40,498,843 Total $ 6,975 $ 6,203 $ 772 $58,005,764 CONCLUSIONS C1 Unfunded liability • Monies that should be going to students’ education are going toward excessive health benefits. • The District’s health benefits must be brought in line with State averages as soon as possible. • The District has demonstrated that it is not capable of controlling a pay-as- you-go self-insured plan. • The District’s Summary Health Care Plan Document is out of date. The Summary Plan is currently in the process of being updated. C2 Board of Education • The Board is operating a $900,000,000 business. • The paramount qualifications of a board member should be management and financial expertise. • Many board members lack the financial expertise to make informed decisions. • Board members should be free from conflict of interest. • The Board does not seem to have the political will or a sense of urgency in further reducing the unfunded health liability. C3 JIMBY • Board members should be free from conflict of interest. Choosing Our Future 15 Ed-Data website, www.ed-data.k12.ca.us/finance/MC-FinanceResults.asp 45

Recommendations 10

Conclusions 23

Commendations 29

Comments 22

No Responses Found 1

Government entities assigned to respond to this report. No response documents have been linked in our database.

Fresno County Board of Supervisors Elected County Office