2013-2014 Final Report

Conclusions 14

• CL1 Page 125
  The Grand Jury requested an analysis of the credit card usage and the process used to reduce the number of credit cards. In a letter from the port dated September 25, 2013, it was noted that the port did not have such an evaluation.
• CL2 Page 25
  Removing public blight by towing and disposing of abandoned, wrecked and dismantled vehicles can be an important tool to improve the quality of life in large cities such as Oakland. The police department has traditionally been responsible for overseeing Oakland’s program under which nearly 10,000 vehicles were towed annually, bringing in over $1 million to the city coffers. Yet, largely due to staffing cutbacks, there is insufficient and fragmented oversight of the program especially in the area of finance. After the city negotiated a new contract with meaningful oversight provisions over a decade ago, the city has done little to implement any of the improvements and has failed to show that it can even account for the money it is due under the contract. The city’s lax record keeping and insufficient employee training, along with its fragmented management of the program, can lead to public frustration. Further, the city’s towing practices are inconsistent with existing city policies, adding to public confusion. While the city and the police department continue to face serious financial pressures, a unified approach to management and implementation of Oakland’s tow program can only help.
• CL3 Page 37
  The Washington Hospital Health Care System is a public agency with a publicly elected governing board. The Grand Jury acknowledges that it operates state of the art medical facilities and is an asset to the community. However, despite numerous public complaints over the years concerning the district’s lack of openness, it continues to fall short of its obligation to the public to conduct business in an open and transparent manner, as befitting a public agency. The Grand Jury concludes that the way in which the district and its related entities conduct their meetings and respond to public record requests only adds to the perception that it functions in secrecy and discourages public access. In addition to making required materials available to the public, the Grand Jury believes that it would benefit the district to make an effort to educate the public as to why so much of its meeting time is spent in closed sessions. Openess and transparency are essential to public trust, and use of public money deserves public input. 37
• CL4 Page 46
  School districts statewide are suffering from a lack of funding. OUSD is facing additional daunting issues such as poor record keeping, high staff turnover, and too many under-enrolled schools. The lack of correct, comprehensive and completed financial audits by OUSD has added to the district’s woes. OUSD’s inability to reconcile their books has resulted in higher borrowing costs. The district’s formerly lax financial policies resulted in the borrowing of $100 million from the state in 2003, which has yet to be completely repaid. In addition to repaying past obligations, the district will also need to issue bonds to finance future infrastructure projects. The lack of an acceptable audit has damaged the district’s credit rating and, hence, its ability to both borrow money and issue bonds at the lowest possible rates. Procedures for awarding ADA funding, as well as newly-established funding procedures for California schools (utilizing the Local Control Funding Formula), will require accurate student attendance reporting, which has been an issue in past audits. Not only has OUSD’s past inability to provide accurate data caused loss of ADA funding, but new LCFF requirements will be even more stringent. OUSD must learn from past audit mistakes and be diligent in providing accurate data. The lack of successful audits fosters an atmosphere of low expectations in the district. When the management of the district cannot keep its financial house in order, students, parents and employees cannot be expected to fulfill their responsibilities. The district itself has recognized a need for diligence in its five- year strategic plan, which states that implementation starts “…with coordinating, aligning, and leveraging all resources to organize all fiscal, human, and physical assets.” The Grand Jury acknowledges that there are no simple remedies for the financial difficulties of the Oakland Unified School District. Year after year, the district has repeated errors that continue to threaten the education of its students. While progress seems to have been made with the required audits, the students of OUSD will continue to suffer until OUSD gets its financial house in order. 46
• CL5 Page 55
  During Fiscal Years 2011-2013, OFD’s failed billing and collection practices contributed to the city of Oakland losing potentially $1.4 million in un-recovered fees, fines and abatement costs. This has not only cost taxpayers in lost revenue, but it has also reduced the effectiveness of the fire department’s ability to provide fire prevention services.
• CL6 Page 98
  The Grand Jury concludes that the city of Emeryville failed to conduct appropriate due diligence to determine if the method suggested by the developer for calculating the prepayment of a fixed interest rate loan was the proper method. Furthermore, the Grand Jury also concludes that city staff lacked the expertise to make such a recommendation on their own. Fortunately, the oversight board chose not to approve the Note Prepayment Agreement for the reasons outlined in this report. Although the review of the city’s actions by the oversight board clearly worked in this case, it is troubling to the Grand Jury that the city would commit to such a significant financial decision based upon insufficient research into best practices and accepted industry standards. In determining their options, decision-makers were seemingly blinded by the opportunity to generate immediate cash. In the future, the Grand Jury would hope that decision-makers would recognize when more data and expert advice is required to fulfill their fiduciary duty to the citizenry. Although the Grand Jury is critical of Emeryville’s failure to conduct the proper due diligence, it is apparent that the statutory framework requiring review by the oversight board functioned as intended. FINDINGS & RECOMMENDATIONS None RESPONSES REQUIRED None 98
• CL7 Page 99
  EAST BAY MUNICIPAL UTILITY DISTRICT RATE INCREASES EXECUTIVE SUMMARY The Grand Jury investigated the East Bay Municipal Utility District (EBMUD) after learning that there had been a succession of rate increases for many years. At the June 11, 2013 EBMUD board meeting, a compounded water rate increase of more than 20% over two budget years was granted. Many public objections were raised at the meeting which are summarized as follows: the two increases taken together and compounded produced a more than 20% increase which was not consistent with the increases of other government agencies; the rate increase would create an unfair burden on low-income people; it was unfair that people who conserve should be penalized; it was unfair to single-family homeowners; EBMUD provided scant information in its budget documents to support the proposed rate increase; the district did not provide proof that it was needed and it was inflationary. The Grand Jury in its investigation of EBMUD finds that the district is a well-run, well-compensated agency, and delivers high quality water and wastewater treatment services in a professional manner. However, the Grand Jury has concerns regarding the transparency of reports to the public with regard to rate increases.
• CL8 Page 104
  In requesting future rate increases, EBMUD should provide impartial and objective analyses regarding the history of past rate increases for at least 10 years, and a concise description of all the factors that drive the rate increase request, including water usage or conservation, new service connections, and infrastructure costs, as well as employee compensation, unfunded liabilities, and bond rating issues. The analysis should describe the total cost of the proposed rate increase on the water or sewer consumer at the 25th percentile point, the 50th percentile point and the 75th percentile point, while factoring in all other applicable costs such as tiered pricing, elevation charges, seismic charges and any other surcharges and special charges. The Grand Jury finds that the East Bay Municipal Utility District appears to be a well-managed and professional organization that provides excellent water and wastewater treatment services. It is not the fault of EBMUD that their organization is exempt from the rate and tax increase constraints to which most other types of local government agencies are subject. It is not surprising that this category of agencies including water, sewer and refuse collection has experienced revenue increases from the public proportionately greater than counties, cities, school districts and other special districts. Nevertheless, the Grand Jury has found that EBMUD has not been sufficiently transparent in its efforts to justify the recent rate increase to the public. EBMUD should provide greater outreach to the public.
• CL9 Page 126
  The Grand Jury was able to conduct a comprehensive comparison between the old and new policies and procedures and found that the port has significantly tightened and strengthened their procedures (see links, below) to ensure that there is now improved oversight. They have also reinforced the ethical responsibility required of all port employees when spending public money. The on-going mandatory ethics training for all employees and commissioners is an important part of this process. The Port of Oakland is to be commended for taking quick, strong, and appropriate action to prevent future misuse of public assets. http://www.portofoakland.com/pdf/about/trans_hosting_policy_130927.pdf http://www.portofoakland.com/pdf/about/trans_purchasing_card_130329.pdf http://www.portofoakland.com/pdf/about/trans_travel_policy_130927.pdf FINDINGS & RECOMMENDATIONS None RESPONSES REQUIRED None 126
• CL10 Page 127
  ALAMEDA COUNTY LIBRARY TRAVEL AND TRAINING INTRODUCTION The Grand Jury received an inquiry about travel and training expenses for the Alameda County Library district (county library). Specifically, the concern cited excessive staff travel costs at a time of significant revenue loss due to the elimination of library funding from the state budget. The county library is classified, under California law, as a dependent special district that is an administrative extension of cities or counties. Such districts are formed to fill local service gaps throughout the state, as requested by local voters. They are an integral part of local government and are directly accountable to the public. The county library serves all unincorporated cities in Alameda County as well as Albany, Dublin, Fremont, Newark and Union City. Branches of the Alameda County Library The county library is also on-site at the Alameda County Juvenile Justice Center, as well as having an E-library and an active bookmobile. The county library offers a variety of programs such as early literacy and life-long learning, art projects, and book clubs. In addition, it works with a variety of county and community programs to provide intern opportunities to Alameda County residents. The library’s active locations served a population of nearly 547,000 Alameda County residents during fiscal year 2012-13, with an annual circulation of library materials in excess of 6.7 million, an annual attendance program of 234,491, and over 2.4 million visitors to their website with its more than 70 million web pages. 127
• CL11 Page 128
  Seventeen languages are spoken in the county library system, with over 100 different languages spoken within the whole service area. In response to community needs for more locations and more hours, the goal of the library is to expand further into the community. In the narrative of the county library’s 2012 budget, the library identified a number of fiscal challenges, specifically: branches were open 30% fewer hours, materials were 50% less than needed, technology was outmoded, and revenue was lost because of the removal of all library funding from the state budget. INVESTIGATION The Grand Jury heard testimony from the county librarian, studied a presentation of the library’s $31 million 2012-13 budget, and reviewed a number of county library documents. These included: ♦ Authorization forms for employee development; ♦ Training/travel instructions and application forms; ♦ Training/conference procedures within California; ♦ Out-of-state travel authorization documents; and ♦ Outline of major library services and community partners. The Grand Jury learned that the county library places a high priority on training and development for its 278 employees, of which 214 are full time. The 2012- 2013 training and development budget was $50,000, of which approximately $21,880 was spent for out-of-state travel costs. Travel expenses are reviewed by the finance officer, the deputy county librarian, and the county librarian, and go through the county audit process. The Grand Jury learned that the library follows the county’s travel reimbursement policies. When monies budgeted for training funds are left over at the end of a fiscal year, the remaining funds revert to the library’s available fund balance for the next fiscal year. This is similar to fiscal management rewards, which is a county policy, similar to a rainy day savings account, for budgeted funds unused during the fiscal year. In reviewing the authorization forms for employee development, it is clearly noted that a major factor in considering a request’s approval is a statement of intent, as well as whether or not an applicant has attended a conference within the past three years. A log is kept of trainings attended. Staff may initiate a request for training, or at times the library presents a training opportunity that would be appropriate for staff. The application for travel includes a statement of the currently held position, committee membership, responsibilities related to the request, and documentation. Further a written statement is required to address the following: “This will directly benefit my current job, or will better equip me to handle changes in my job because….” 128
• CL12 Page 129
  The investment in sending staff members to conferences is not limited to enhancing an employee’s current job or to help with career advancement, but to bring back information to share with other staff. For example, the Grand Jury heard testimony that six attendees went to a meeting of the American Library Association, each attending a different session. Some of the subjects covered were advancing literacy, children’s programs, and community advocacy. A major rationale for sending library employees to conference seminars is for participants to come back and make presentations at in-house training sessions. Further, the Grand Jury learned that California library system is no longer a model for libraries nationwide, thus necessitating out-of-state travel for employees to gain access to state-of-the-art practices.
• CL13 Page 129
  The Grand Jury concludes that Alameda County Library places a high priority on training and development and has an extensive program in place for this purpose. In fact, two new staff positions were approved in July 2013 to be dedicated to employee training and development. The county library has begun restoring hours, services and staff that were cut during previous difficult fiscal times. The Grand Jury also found that staff turnover for the library is exceptionally low at 4.6%, which could reflect job satisfaction. Finally, the Grand Jury investigation found that the Alameda County Library has made judicious use of travel funds. FINDINGS & RECOMMENDATIONS None RESPONSES REQUIRED None 129
• CL14 Page 130
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No Responses Found 1

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