Butte County 2006-2007 Grand Jury Final Report

R1

The Department of Public Works should schedule and perform periodic inspection and maintenance of County drainage ditches. 2. The Board of Supervisors should instruct the Department of Public Works to be more responsive to citizen complaints. 97 3. The Board of Supervisors should adopt a resolution clarifying the County responsibility to maintain county-constructed ditches. Responses Required (Penal Code §933 & §933.05) Butte County Board of Supervisors Butte County Public Works Director 98 Domestic Violence/Own Recognizance Program Reasons for the Investigation A complaint form was submitted to the Grand Jury listing concerns with a program administered from the Butte County District Attorney’s Office. The program was identified as the Domestic Violence/Own Recognizance (DV/OR). The first concern in the complaint was: Is the DV/OR Program a diversion program and, as a consequence, an illegal one based on Penal Code §1203.097? A second concern focused on the 32-week batterer’s intervention program in DV/OR: Is it a legal requirement in that the same Penal Code requires a program of 52 weeks? The final concern was: Is the practice of referring clients/domestic batterers in the DV/OR program exclusively to one service provider in the community a legal practice? The Grand Jury decided to investigate.

R2

The Auditor-Controller should continue the recently implemented programs designed to improve interaction and be open to suggestions for effective change.

R3

The Auditor-Controller should implement methods to improve the upward, downward, and lateral flow of communication.

R4

The Auditor-Controller should implement cross-training in those sections that are not currently doing so.

R5

Human Resources should plan and implement management communication skill workshops for supervisors at all levels, in all departments.

R6

Human Resources should plan and implement workshops which include educating all staff on behaviors that are gender biased in nature but often not recognized as such as a result of cultural conditioning.

R7

Human Resources should better educate employees about the grievance procedures to be followed in case of a retaliatory action.

R8

The Auditor-Controller should place a higher priority on the development of the office procedural manual and respective desk manuals. Staff should be held accountable to a timeline. A mechanism should be in place to encourage employee input.

R9

The Auditor-Controller’s Office should continue offering educational programs to help outside departments in their responsibilities for completing paper work more effectively.

R10

The CAO should inform the Grand Jury of all meetings of the Audit Committee. Responses Required (Penal Code ξ933 and 933.05) Butte County Auditor-Controller Butte County CAO Butte County Human Resources 25

R11

The FRRPD Board and management should use the line of credit only for cash flow management.

R12

The FRRPD Board should budget to pay off the incurred debt well in advance of the ten year limit.

R14

The FRRPD Board should arrange to have a financial staff of between two and three full time equivalents, including the FM.

R15

The FRRPD Board should ensure that the financial manager position be filled by a degreed professional with some years of appropriate experience.

R16

The FRRPD Board should see that the accounting software is set up and running so that a monthly formal report can be made to the Board of Directors. If the existing staff cannot complete the setup work by August 1, 2007, the work should be contracted out to a financial consulting firm.

R13

which appear at the end of this report. Issue: Financial Management – Staffing Background: In the course of our investigation of the various financial issues concerning the District, the Grand Jury noted that the financial management was in disarray. We focused on the financial management staffing to see if that might be part of the problem. Investigation: The Financial Manager (FM) was most cooperative in our interview. During the interview we learned that the FM had some relevant experience and was currently working towards a degree in accounting. There was a sense that the FM was overwhelmed partly because of the newness of the job, but also because the former staff members who held any corporate knowledge of how things worked had either quit or been fired. Also, the lack of appropriate support staff required that the FM do the day-to-day tasks such as posting payments to the correct accounts and delivering daily receipts to the County Treasurer’s Office. This impeded progress in getting the books organized. When we inquired about the obviously incorrect balance sheet (Exhibit H) submitted in response to subpoena, we learned that the new accounting software had not yet been set up, so it was not possible to produce a meaningful financial picture. This was still true at the time of the interview (March 21, 2007) although a few weeks later the Board Chairman, after being questioned about the financial situation, sent to the Grand Jury an updated balance sheet (Exhibit I) which included the missing liability entry for the debt to the Bank of the West. However, it appeared that the balance sheet had been corrected manually, so it does not necessarily signify that the new software is fully operational. At every FRRPD Board meeting attended by Grand Jury members, in March, April and May, presentation of a financial report was on the agenda. Each time, the FM offered an apology for being unable to present a financial report. Our interview with representatives of the Butte County Auditor-Controller’s Office, who work with the FRRPD FM on a day-to-day basis, confirmed our impression that the FRRPD is inadequately staffed to handle their financial affairs. The Auditor-Controller’s office recommended that the FRRPD contract with a professional financial advisor to get things in order, but no action has been taken on that advice. The Auditor-Controller’s Office also supplied copies of correspondence (both internal and with the FRRPD) which delineated a number of situations in which funds were not handled properly. For example, (Exhibit J) in January 2007 the District drew approximately $250,000 from the line of credit established with the bank and then did not use the money for several months and lost track of it. This caused not only confusion but also resulted in an unnecessary interest expense estimated at about $5000. See Findings 17, 18, 19 and Recommendations 14, 15, 16 which appear at the end of this report. Issue: Public Service and Relations - Conduct of Board Meetings Background: The Grand Jury received a letter complaining about the conduct of the FRRPD Board meetings. The complaint noted that the FRRPD had changed the time of the meetings to 3:30 in the afternoon, which is much less conducive to citizen participation than the evening meetings which were the earlier practice. The letter went on to report that at a recent Board meeting, the Board members were huddled around a conference table so that members of the public could not make eye contact with the Board members, nor could they easily hear the Board member discussion. When a complaint was made, they were told by a Board member “it works for us.” The letter goes on to state that one Board member, the same member who had argued earlier for even more severe limits on public comments at the meeting, filibustered the meeting by reading magazine articles aloud to use up the time remaining. This was viewed as another technique to limit public comment and input. Investigation: The details of the written complaint were confirmed during interviews with the authors; the Board member who had argued for limits in public input and then had filibustered the meeting was identified as Director Thompson. One complainant had attended the FRRPD Board meetings regularly for many years, but had recently stopped because of the Board’s apparent policy of discouraging public participation. When interviewed, the Board chairman denied that the Board had adopted a policy of discouraging public attendance and participation at Board meetings. The meeting time change was described as a cost cutting measure; the District would not have to pay extra to hourly employees if their presence was required. In a follow up letter (Exhibit K), the Chairman said that the local newspaper had been contacted and would publicize the Board meetings, but as of this writing in early June, no such notice has been observed. In order to better understand the issue, members of the Grand Jury attended a number of FRRPD Board meetings as follows: February 28, 2007 Two Grand Jury members attended March 14, 2007 Three Grand Jury members attended March 28, 2007 Two Grand Jury members attended April 11, 2007 Three Grand Jury members attended May 9, 2007 Four Grand Jury members attended The Grand Jury members attended as members of the public and wore no identifying badges. There was no advance notice to the Board; the Grand Jury members did not ask to speak at any of the meetings; they were there only to observe. All of the meetings, except one, were held in the room adjacent to the gymnasium in the Oroville Municipal Auditorium. A movable partition separates this room from the gymnasium. The FRRPD headquarters and offices are in this same building. The acoustics in the meeting room are terrible. Many of the Board members are soft-spoken, so it is difficult for the audience to hear what they are saying. This problem is much worse when there is a noisy athletic event in progress in the adjacent gym as was often the case. There is no audio system. It is questionable whether the narrow entry doors provide access for the disabled. The one meeting that was held at a different site was no better. The site was outdoors at Riverbend Park. The ability to hear what was said by the Board members was even worse than at the Municipal Auditorium. The new Policies and Procedures Handbook, supplied by the District in response to subpoena, states that the Board meetings will normally be held at the Oroville City Council Chambers. The change to the present location evidently became a standard practice in the fall of 2006. All of the meetings we attended were in fact held in the afternoon. The Board Chairman testified that the meetings had been 196 held in the evening until the fall of 2006 when the Board changed the regular meeting time to 3:30 pm. The only notice of meetings is a posting on the front door of the FRRPD office. Although the regular meetings are scheduled at the same times each month, the Board has been holding many special meetings which, by law, require even less advance notice (24 instead of 72 hours). For example, the special Board meeting held on January 5, 2007, had no other purpose than to approve the increase in the line of credit with the Bank of the West from $1,000,000 to $2,000,000. Because this increase did not actually take place until January 30, the approval could have been done at the regular meeting five days later on January 10. During the week of April 23, 2007, the FRRPD held three Board meetings as follows: Monday, April 23 Special Meeting (Budget discussion) Wednesday, April 25 Regular Meeting Thursday, April 26 Special Meeting (To approve impact fee letter) The public is not well served if important discussions and actions take place in special meetings. It should be noted that the regular Board meetings are scheduled twice a month. We observed that members of the audience were treated appropriately at those meetings where Director Thompson was absent. When he was present, the Grand Jury observed that Director Thompson exhibited hostile and verbally abusive behavior towards the audience. Some examples are: o According to the minutes of the April 11th meeting, Director Thompson spoke as follows: “…informed them that he wanted to discuss something that had not been approved by the board, nor did they have any prior knowledge of it. He stated that he didn’t like there [sic] Gestapo tactics and believes they are on the verge of harassment for frequent appearances at our Board meetings. He would like to know what they are investigating. He also stated that he is preparing a letter to be sent to the Attorney General with a list of Grand Jury members’ names from this year and last year and he does not understand the witch hunting.” (Exhibit L) o At the meeting on May 9th, Director Thompson conspicuously photographed the Grand Jury members in attendance, both inside and outside the building. During the Pledge of Allegiance, he added the words “and to the Grand Jury” into his recitation. Later, Director Thompson made an insulting reference to the “members of the Gestapo present” while gesturing towards the audience. o One of the Grand Jury members attending the March 28th meeting was interfered with by another member of the audience who sat next to the Grand Jury member and suggested that she had no 197 business taking notes because she did not understand what was going on. The interference was continued by talking directly into the Grand Jury member’s ear, so that it was very difficult for her to hear what was being said in the meeting. The offending person was later identified as the spouse of an FRRPD Director. Director Thompson’s expressed lack of familiarity with Grand Jury responsibilities and procedures is especially bizarre because he once served on a Butte County Grand Jury. The new Board policy is effectively discouraging public participation; the Grand Jury members were usually the only public attendees. The District lawyer was briefly present at one meeting. A consultant to the District was present at another. A member of the Citizens Oversight Committee was present at one meeting. On two other occasions we observed two other community groups that sent representatives to a meeting. See Findings 20, 21 and Recommendations 17, 18, 19 which appear at the end of this report. Issue: Public Service and Relations - Citizens Oversight Committee Background: In 2002 the residents of the FRRPD voted to approve a benefit assessment district supported by an annual tax added to their real estate tax bills. The tax is collected by Butte County and disbursed to the Park District as a separate fund for maintenance of FRRPD facilities. The former General Manager testified that the District, in the promotional literature encouraging voters to support the benefit assessment, promised to set up a Citizens Oversight Committee to oversee the allocation and utilization of the benefit assessment funds. This committee was formed. When the Grand Jury studied the district’s web site in March 2007, an advertisement was found seeking citizen volunteers to fill vacancies on the Citizens Oversight Committee; the advertisement gave an October of 2006 deadline for submittal of applications. The advertisement was many months out of date. Investigation: When the Grand Jury began to attend the Park District Board meetings, we learned from the discussions that the Oversight Committee had more than one vacancy, had not been able to achieve a quorum to support a meeting for several quarters; and that there had been essentially no recruiting activity since the web site advertisement had been placed in the summer of 2006. When we interviewed the Board Chairman on March 22, 2007, she expressed some surprise at the fact that the web site advertisement was out of date. In a letter to the Grand Jury following the interview (Exhibit K), the Chairman stated 198 that the web site notice would be updated; it subsequently was updated to eliminate the long past October 2006 deadline for applications. At the May 9, 2007, Board meeting, the most recently attended as of this writing, the issue was further discussed. It was suggested that candidates would be interviewed and new members for the Oversight Committee selected just prior to the next regular board meeting. See Finding 22 and Recommendation 20 which appear at the end of this report. Issue: Programs for Seniors Background: In our review of the FRRPD Website, the Grand Jury noticed that the District is working with only one of the two senior citizen organizations in the greater Oroville area. Complainants who were interviewed indicated a lack of senior programs. Investigation: We interviewed representatives of one senior citizen organization at length. We also questioned past and present Board members about the adequacy of programs oriented towards participation by seniors. Everyone agreed that there were too few offerings. The Board members attributed this to lack of funds. In our review of past and present FRRPD Activity Guides (Exhibits M and N), we found an overall reduction in program offerings in all age categories. In the offerings for seniors, we found that FRRPD no longer offers trips and tours, many of which were heavily attended by seniors. Social dances have also been eliminated. These cuts may have been made as a result of declining enrollment and participation, but as with any programming, there needs to be promotion. Representatives from the senior community have attended board meetings to express their desire for more offerings, but to date, their concerns have not been adequately addressed. The former General Manager provided us with the history of the FRRPD working relationship with senior organizations. He also said that there had been efforts to work cooperatively with both seniors organizations in Oroville, but that these past efforts had proved unsuccessful, due to personality conflicts. See Findings 23, 24 and Recommendations 21, 22 which appear at the end of this report. Issue: Conflict of Interest Incident Background: Two citizen complainants indicated during their interviews that an FRRPD Director voted at a Board meeting to award a contract to a firm owned by a close relative of the Board member. In a situation of this sort, the proper procedure is that the Board member disclose the conflict of interest, then recuse himself from the discussion and abstain from the vote on the contract award. Investigation: The Grand Jury interviewed the Board member involved who admitted that the incident had indeed occurred and stated that it was now recognized by that Board member to have been improper. The vote came up soon after the election of the Board member and before receiving ethics training. We reviewed the subpoenaed FRRPD Policies and Procedures Handbook received on January 24, 2007. The Handbook gives no substantive guidance to Board members on any ethics issue. The Handbook incorporates the standard Conflict of Interest Code by reference, but gives no summary of its provisions. This leaves a new director or employee in a potentially awkward situation with no guidance at hand. The Grand Jury also reviewed the FRRPD Directors Handbook, originally dated January 12, 1984, and revised periodically through February 6, 1995. We obtained this document from a former FRRPD Board member. The current Board seems to be unaware of this earlier Handbook. The earlier handbook has appended to it a succinct summary of the ethics obligations of a Board member. If this handbook were still in use, a new Board member would have a convenient and timely way to become informed on avoiding conflict of interest situations. See Finding 25 and Recommendation 23 which appear at the end of this report. Issue: Skate & Bike Park Funding Background: The 2005-06 Grand Jury investigated and reported on the funding of the Skate & Bike Park. They found that funds were committed without the required Board approval. In the formal response to the 2005-06 Grand Jury report, the FRRPD stated that the funds had been properly approved at a Board meeting, but that the records of that meeting had been destroyed. The FRRPD directed the General Manager to conduct an investigation of the Skate and Bike Park funding and report to the Board. The General Manager responded with a “time line” showing the dates on which all of the required funding approvals had occurred. The Board formally accepted the General Manager’s report and declared that the issue was settled as described in the Board minutes of December 13, 2006: “B. RESOLUTION 928-06 ADOPTING TIMELINE IN REGARDS TO AUTHORIZATION MADE BY THE BOARD OF DIRECTORS FOR THE FEATHER RIVER RECREATION AND PARK DISTRICT SKATE AND BIKE PARK GM Sharkey read the timeline. Chairman Gurr read the resolution. Director Allen thanked GM Sharkey for the through [sic] timeline. The District’s Attorney, Jessica Miller, stated that if further information is requested regarding the funding or any other issue surrounding the Bedrock Skate and Bike Park, she will respond with a letter and this 200 resolution. If she deems it necessary, she will have a Director who was present at the time period in question write a letter attesting to the validity of what the timeline states. Director Gill motioned to approve Resolution 928-06. Director Hill seconded the motion and it passed by the following vote: Ayes: Directors Allen, Gill, Hill, Thompson, and Chairman Gurr Noes: Absent:” The published minutes do not include the wording of the resolution. Investigation: The Grand Jury interviewed two former Board members and the former legal counsel to the Board. All three were involved in Board activities at the time in question. They were in agreement that the funding had not been approved at a Board meeting, and that the minutes had not been destroyed; rather, they never existed because there had been no approval and no Board meeting at which an approval occurred. We also reviewed in detail the report of the prior Grand Jury and the extensive records kept by a former member of the Board who was familiar with district activities at the time. We noted that the investigation requested by the Board was conducted by the General Manager who was implicated by the 2005-06 Grand Jury in the alleged mishandling of funds. See Finding 26 and Recommendation 24 which appear at the end of this report.

R17

The FRRPD Board should adopt a resolution affirming the Board’s commitment to public attendance at, and participation in, the Board meetings.

R18

The FRRPD Board should change the logistics and conduct of the Board meetings so as to facilitate public participation: a. Change the time of all meetings back to the evening. b. Change the venue back to City Council Chambers or some other location that has adequate acoustics, an audio system, accessibility for the disabled, and is not impacted by external noise. c. Require that all Board members treat attendees with respect. d. Provide 72 hour prior public notice of the meetings by arranging for publication in the local newspaper and by keeping the District website current. e. Publish the agenda and minutes on the website at least 72 hours prior to a regularly scheduled meeting and at least 24 hours prior to a special meeting. f. Restrict the use of special board meetings to emergency situations. 204

R19

The FRRPD Board should adopt a resolution which formally recognizes that Board Member Thompson’s behavior has become an embarrassment to the FRRPD and to the community, and which requests his immediate resignation from the Board.

R13

which appear at the end of this report. Issue: Financial Management – Staffing Background: In the course of our investigation of the various financial issues concerning the District, the Grand Jury noted that the financial management was in disarray. We focused on the financial management staffing to see if that might be part of the problem. Investigation: The Financial Manager (FM) was most cooperative in our interview. During the interview we learned that the FM had some relevant experience and was currently working towards a degree in accounting. There was a sense that the FM was overwhelmed partly because of the newness of the job, but also because the former staff members who held any corporate knowledge of how things worked had either quit or been fired. Also, the lack of appropriate support staff required that the FM do the day-to-day tasks such as posting payments to the correct accounts and delivering daily receipts to the County Treasurer’s Office. This impeded progress in getting the books organized. When we inquired about the obviously incorrect balance sheet (Exhibit H) submitted in response to subpoena, we learned that the new accounting software had not yet been set up, so it was not possible to produce a meaningful financial picture. This was still true at the time of the interview (March 21, 2007) although a few weeks later the Board Chairman, after being questioned about the financial situation, sent to the Grand Jury an updated balance sheet (Exhibit I) which included the missing liability entry for the debt to the Bank of the West. However, it appeared that the balance sheet had been corrected manually, so it does not necessarily signify that the new software is fully operational. At every FRRPD Board meeting attended by Grand Jury members, in March, April and May, presentation of a financial report was on the agenda. Each time, the FM offered an apology for being unable to present a financial report. Our interview with representatives of the Butte County Auditor-Controller’s Office, who work with the FRRPD FM on a day-to-day basis, confirmed our impression that the FRRPD is inadequately staffed to handle their financial affairs. The Auditor-Controller’s office recommended that the FRRPD contract with a professional financial advisor to get things in order, but no action has been taken on that advice. The Auditor-Controller’s Office also supplied copies of correspondence (both internal and with the FRRPD) which delineated a number of situations in which funds were not handled properly. For example, (Exhibit J) in January 2007 the District drew approximately $250,000 from the line of credit established with the bank and then did not use the money for several months and lost track of it. This caused not only confusion but also resulted in an unnecessary interest expense estimated at about $5000. See Findings 17, 18, 19 and Recommendations 14, 15, 16 which appear at the end of this report. Issue: Public Service and Relations - Conduct of Board Meetings Background: The Grand Jury received a letter complaining about the conduct of the FRRPD Board meetings. The complaint noted that the FRRPD had changed the time of the meetings to 3:30 in the afternoon, which is much less conducive to citizen participation than the evening meetings which were the earlier practice. The letter went on to report that at a recent Board meeting, the Board members were huddled around a conference table so that members of the public could not make eye contact with the Board members, nor could they easily hear the Board member discussion. When a complaint was made, they were told by a Board member “it works for us.” The letter goes on to state that one Board member, the same member who had argued earlier for even more severe limits on public comments at the meeting, filibustered the meeting by reading magazine articles aloud to use up the time remaining. This was viewed as another technique to limit public comment and input. Investigation: The details of the written complaint were confirmed during interviews with the authors; the Board member who had argued for limits in public input and then had filibustered the meeting was identified as Director Thompson. One complainant had attended the FRRPD Board meetings regularly for many years, but had recently stopped because of the Board’s apparent policy of discouraging public participation. When interviewed, the Board chairman denied that the Board had adopted a policy of discouraging public attendance and participation at Board meetings. The meeting time change was described as a cost cutting measure; the District would not have to pay extra to hourly employees if their presence was required. In a follow up letter (Exhibit K), the Chairman said that the local newspaper had been contacted and would publicize the Board meetings, but as of this writing in early June, no such notice has been observed. In order to better understand the issue, members of the Grand Jury attended a number of FRRPD Board meetings as follows: February 28, 2007 Two Grand Jury members attended March 14, 2007 Three Grand Jury members attended March 28, 2007 Two Grand Jury members attended April 11, 2007 Three Grand Jury members attended May 9, 2007 Four Grand Jury members attended The Grand Jury members attended as members of the public and wore no identifying badges. There was no advance notice to the Board; the Grand Jury members did not ask to speak at any of the meetings; they were there only to observe. All of the meetings, except one, were held in the room adjacent to the gymnasium in the Oroville Municipal Auditorium. A movable partition separates this room from the gymnasium. The FRRPD headquarters and offices are in this same building. The acoustics in the meeting room are terrible. Many of the Board members are soft-spoken, so it is difficult for the audience to hear what they are saying. This problem is much worse when there is a noisy athletic event in progress in the adjacent gym as was often the case. There is no audio system. It is questionable whether the narrow entry doors provide access for the disabled. The one meeting that was held at a different site was no better. The site was outdoors at Riverbend Park. The ability to hear what was said by the Board members was even worse than at the Municipal Auditorium. The new Policies and Procedures Handbook, supplied by the District in response to subpoena, states that the Board meetings will normally be held at the Oroville City Council Chambers. The change to the present location evidently became a standard practice in the fall of 2006. All of the meetings we attended were in fact held in the afternoon. The Board Chairman testified that the meetings had been 196 held in the evening until the fall of 2006 when the Board changed the regular meeting time to 3:30 pm. The only notice of meetings is a posting on the front door of the FRRPD office. Although the regular meetings are scheduled at the same times each month, the Board has been holding many special meetings which, by law, require even less advance notice (24 instead of 72 hours). For example, the special Board meeting held on January 5, 2007, had no other purpose than to approve the increase in the line of credit with the Bank of the West from $1,000,000 to $2,000,000. Because this increase did not actually take place until January 30, the approval could have been done at the regular meeting five days later on January 10. During the week of April 23, 2007, the FRRPD held three Board meetings as follows: Monday, April 23 Special Meeting (Budget discussion) Wednesday, April 25 Regular Meeting Thursday, April 26 Special Meeting (To approve impact fee letter) The public is not well served if important discussions and actions take place in special meetings. It should be noted that the regular Board meetings are scheduled twice a month. We observed that members of the audience were treated appropriately at those meetings where Director Thompson was absent. When he was present, the Grand Jury observed that Director Thompson exhibited hostile and verbally abusive behavior towards the audience. Some examples are: o According to the minutes of the April 11th meeting, Director Thompson spoke as follows: “…informed them that he wanted to discuss something that had not been approved by the board, nor did they have any prior knowledge of it. He stated that he didn’t like there [sic] Gestapo tactics and believes they are on the verge of harassment for frequent appearances at our Board meetings. He would like to know what they are investigating. He also stated that he is preparing a letter to be sent to the Attorney General with a list of Grand Jury members’ names from this year and last year and he does not understand the witch hunting.” (Exhibit L) o At the meeting on May 9th, Director Thompson conspicuously photographed the Grand Jury members in attendance, both inside and outside the building. During the Pledge of Allegiance, he added the words “and to the Grand Jury” into his recitation. Later, Director Thompson made an insulting reference to the “members of the Gestapo present” while gesturing towards the audience. o One of the Grand Jury members attending the March 28th meeting was interfered with by another member of the audience who sat next to the Grand Jury member and suggested that she had no 197 business taking notes because she did not understand what was going on. The interference was continued by talking directly into the Grand Jury member’s ear, so that it was very difficult for her to hear what was being said in the meeting. The offending person was later identified as the spouse of an FRRPD Director. Director Thompson’s expressed lack of familiarity with Grand Jury responsibilities and procedures is especially bizarre because he once served on a Butte County Grand Jury. The new Board policy is effectively discouraging public participation; the Grand Jury members were usually the only public attendees. The District lawyer was briefly present at one meeting. A consultant to the District was present at another. A member of the Citizens Oversight Committee was present at one meeting. On two other occasions we observed two other community groups that sent representatives to a meeting. See Findings 20, 21 and Recommendations 17, 18, 19 which appear at the end of this report. Issue: Public Service and Relations - Citizens Oversight Committee Background: In 2002 the residents of the FRRPD voted to approve a benefit assessment district supported by an annual tax added to their real estate tax bills. The tax is collected by Butte County and disbursed to the Park District as a separate fund for maintenance of FRRPD facilities. The former General Manager testified that the District, in the promotional literature encouraging voters to support the benefit assessment, promised to set up a Citizens Oversight Committee to oversee the allocation and utilization of the benefit assessment funds. This committee was formed. When the Grand Jury studied the district’s web site in March 2007, an advertisement was found seeking citizen volunteers to fill vacancies on the Citizens Oversight Committee; the advertisement gave an October of 2006 deadline for submittal of applications. The advertisement was many months out of date. Investigation: When the Grand Jury began to attend the Park District Board meetings, we learned from the discussions that the Oversight Committee had more than one vacancy, had not been able to achieve a quorum to support a meeting for several quarters; and that there had been essentially no recruiting activity since the web site advertisement had been placed in the summer of 2006. When we interviewed the Board Chairman on March 22, 2007, she expressed some surprise at the fact that the web site advertisement was out of date. In a letter to the Grand Jury following the interview (Exhibit K), the Chairman stated 198 that the web site notice would be updated; it subsequently was updated to eliminate the long past October 2006 deadline for applications. At the May 9, 2007, Board meeting, the most recently attended as of this writing, the issue was further discussed. It was suggested that candidates would be interviewed and new members for the Oversight Committee selected just prior to the next regular board meeting. See Finding 22 and Recommendation 20 which appear at the end of this report. Issue: Programs for Seniors Background: In our review of the FRRPD Website, the Grand Jury noticed that the District is working with only one of the two senior citizen organizations in the greater Oroville area. Complainants who were interviewed indicated a lack of senior programs. Investigation: We interviewed representatives of one senior citizen organization at length. We also questioned past and present Board members about the adequacy of programs oriented towards participation by seniors. Everyone agreed that there were too few offerings. The Board members attributed this to lack of funds. In our review of past and present FRRPD Activity Guides (Exhibits M and N), we found an overall reduction in program offerings in all age categories. In the offerings for seniors, we found that FRRPD no longer offers trips and tours, many of which were heavily attended by seniors. Social dances have also been eliminated. These cuts may have been made as a result of declining enrollment and participation, but as with any programming, there needs to be promotion. Representatives from the senior community have attended board meetings to express their desire for more offerings, but to date, their concerns have not been adequately addressed. The former General Manager provided us with the history of the FRRPD working relationship with senior organizations. He also said that there had been efforts to work cooperatively with both seniors organizations in Oroville, but that these past efforts had proved unsuccessful, due to personality conflicts. See Findings 23, 24 and Recommendations 21, 22 which appear at the end of this report. Issue: Conflict of Interest Incident Background: Two citizen complainants indicated during their interviews that an FRRPD Director voted at a Board meeting to award a contract to a firm owned by a close relative of the Board member. In a situation of this sort, the proper procedure is that the Board member disclose the conflict of interest, then recuse himself from the discussion and abstain from the vote on the contract award. Investigation: The Grand Jury interviewed the Board member involved who admitted that the incident had indeed occurred and stated that it was now recognized by that Board member to have been improper. The vote came up soon after the election of the Board member and before receiving ethics training. We reviewed the subpoenaed FRRPD Policies and Procedures Handbook received on January 24, 2007. The Handbook gives no substantive guidance to Board members on any ethics issue. The Handbook incorporates the standard Conflict of Interest Code by reference, but gives no summary of its provisions. This leaves a new director or employee in a potentially awkward situation with no guidance at hand. The Grand Jury also reviewed the FRRPD Directors Handbook, originally dated January 12, 1984, and revised periodically through February 6, 1995. We obtained this document from a former FRRPD Board member. The current Board seems to be unaware of this earlier Handbook. The earlier handbook has appended to it a succinct summary of the ethics obligations of a Board member. If this handbook were still in use, a new Board member would have a convenient and timely way to become informed on avoiding conflict of interest situations. See Finding 25 and Recommendation 23 which appear at the end of this report. Issue: Skate & Bike Park Funding Background: The 2005-06 Grand Jury investigated and reported on the funding of the Skate & Bike Park. They found that funds were committed without the required Board approval. In the formal response to the 2005-06 Grand Jury report, the FRRPD stated that the funds had been properly approved at a Board meeting, but that the records of that meeting had been destroyed. The FRRPD directed the General Manager to conduct an investigation of the Skate and Bike Park funding and report to the Board. The General Manager responded with a “time line” showing the dates on which all of the required funding approvals had occurred. The Board formally accepted the General Manager’s report and declared that the issue was settled as described in the Board minutes of December 13, 2006: “B. RESOLUTION 928-06 ADOPTING TIMELINE IN REGARDS TO AUTHORIZATION MADE BY THE BOARD OF DIRECTORS FOR THE FEATHER RIVER RECREATION AND PARK DISTRICT SKATE AND BIKE PARK GM Sharkey read the timeline. Chairman Gurr read the resolution. Director Allen thanked GM Sharkey for the through [sic] timeline. The District’s Attorney, Jessica Miller, stated that if further information is requested regarding the funding or any other issue surrounding the Bedrock Skate and Bike Park, she will respond with a letter and this 200 resolution. If she deems it necessary, she will have a Director who was present at the time period in question write a letter attesting to the validity of what the timeline states. Director Gill motioned to approve Resolution 928-06. Director Hill seconded the motion and it passed by the following vote: Ayes: Directors Allen, Gill, Hill, Thompson, and Chairman Gurr Noes: Absent:” The published minutes do not include the wording of the resolution. Investigation: The Grand Jury interviewed two former Board members and the former legal counsel to the Board. All three were involved in Board activities at the time in question. They were in agreement that the funding had not been approved at a Board meeting, and that the minutes had not been destroyed; rather, they never existed because there had been no approval and no Board meeting at which an approval occurred. We also reviewed in detail the report of the prior Grand Jury and the extensive records kept by a former member of the Board who was familiar with district activities at the time. We noted that the investigation requested by the Board was conducted by the General Manager who was implicated by the 2005-06 Grand Jury in the alleged mishandling of funds. See Finding 26 and Recommendation 24 which appear at the end of this report.

R20

The FRRPD Board should fulfill its election commitment by assuring that the Citizens Oversight Committee has sufficient members and performs its duties.

R21

The FRRPD Board and General Manager should explore ways to increase their offerings for seniors. This should be a focus area for a qualified Recreation Director, once hired.

R13

which appear at the end of this report. Issue: Financial Management – Staffing Background: In the course of our investigation of the various financial issues concerning the District, the Grand Jury noted that the financial management was in disarray. We focused on the financial management staffing to see if that might be part of the problem. Investigation: The Financial Manager (FM) was most cooperative in our interview. During the interview we learned that the FM had some relevant experience and was currently working towards a degree in accounting. There was a sense that the FM was overwhelmed partly because of the newness of the job, but also because the former staff members who held any corporate knowledge of how things worked had either quit or been fired. Also, the lack of appropriate support staff required that the FM do the day-to-day tasks such as posting payments to the correct accounts and delivering daily receipts to the County Treasurer’s Office. This impeded progress in getting the books organized. When we inquired about the obviously incorrect balance sheet (Exhibit H) submitted in response to subpoena, we learned that the new accounting software had not yet been set up, so it was not possible to produce a meaningful financial picture. This was still true at the time of the interview (March 21, 2007) although a few weeks later the Board Chairman, after being questioned about the financial situation, sent to the Grand Jury an updated balance sheet (Exhibit I) which included the missing liability entry for the debt to the Bank of the West. However, it appeared that the balance sheet had been corrected manually, so it does not necessarily signify that the new software is fully operational. At every FRRPD Board meeting attended by Grand Jury members, in March, April and May, presentation of a financial report was on the agenda. Each time, the FM offered an apology for being unable to present a financial report. Our interview with representatives of the Butte County Auditor-Controller’s Office, who work with the FRRPD FM on a day-to-day basis, confirmed our impression that the FRRPD is inadequately staffed to handle their financial affairs. The Auditor-Controller’s office recommended that the FRRPD contract with a professional financial advisor to get things in order, but no action has been taken on that advice. The Auditor-Controller’s Office also supplied copies of correspondence (both internal and with the FRRPD) which delineated a number of situations in which funds were not handled properly. For example, (Exhibit J) in January 2007 the District drew approximately $250,000 from the line of credit established with the bank and then did not use the money for several months and lost track of it. This caused not only confusion but also resulted in an unnecessary interest expense estimated at about $5000. See Findings 17, 18, 19 and Recommendations 14, 15, 16 which appear at the end of this report. Issue: Public Service and Relations - Conduct of Board Meetings Background: The Grand Jury received a letter complaining about the conduct of the FRRPD Board meetings. The complaint noted that the FRRPD had changed the time of the meetings to 3:30 in the afternoon, which is much less conducive to citizen participation than the evening meetings which were the earlier practice. The letter went on to report that at a recent Board meeting, the Board members were huddled around a conference table so that members of the public could not make eye contact with the Board members, nor could they easily hear the Board member discussion. When a complaint was made, they were told by a Board member “it works for us.” The letter goes on to state that one Board member, the same member who had argued earlier for even more severe limits on public comments at the meeting, filibustered the meeting by reading magazine articles aloud to use up the time remaining. This was viewed as another technique to limit public comment and input. Investigation: The details of the written complaint were confirmed during interviews with the authors; the Board member who had argued for limits in public input and then had filibustered the meeting was identified as Director Thompson. One complainant had attended the FRRPD Board meetings regularly for many years, but had recently stopped because of the Board’s apparent policy of discouraging public participation. When interviewed, the Board chairman denied that the Board had adopted a policy of discouraging public attendance and participation at Board meetings. The meeting time change was described as a cost cutting measure; the District would not have to pay extra to hourly employees if their presence was required. In a follow up letter (Exhibit K), the Chairman said that the local newspaper had been contacted and would publicize the Board meetings, but as of this writing in early June, no such notice has been observed. In order to better understand the issue, members of the Grand Jury attended a number of FRRPD Board meetings as follows: February 28, 2007 Two Grand Jury members attended March 14, 2007 Three Grand Jury members attended March 28, 2007 Two Grand Jury members attended April 11, 2007 Three Grand Jury members attended May 9, 2007 Four Grand Jury members attended The Grand Jury members attended as members of the public and wore no identifying badges. There was no advance notice to the Board; the Grand Jury members did not ask to speak at any of the meetings; they were there only to observe. All of the meetings, except one, were held in the room adjacent to the gymnasium in the Oroville Municipal Auditorium. A movable partition separates this room from the gymnasium. The FRRPD headquarters and offices are in this same building. The acoustics in the meeting room are terrible. Many of the Board members are soft-spoken, so it is difficult for the audience to hear what they are saying. This problem is much worse when there is a noisy athletic event in progress in the adjacent gym as was often the case. There is no audio system. It is questionable whether the narrow entry doors provide access for the disabled. The one meeting that was held at a different site was no better. The site was outdoors at Riverbend Park. The ability to hear what was said by the Board members was even worse than at the Municipal Auditorium. The new Policies and Procedures Handbook, supplied by the District in response to subpoena, states that the Board meetings will normally be held at the Oroville City Council Chambers. The change to the present location evidently became a standard practice in the fall of 2006. All of the meetings we attended were in fact held in the afternoon. The Board Chairman testified that the meetings had been 196 held in the evening until the fall of 2006 when the Board changed the regular meeting time to 3:30 pm. The only notice of meetings is a posting on the front door of the FRRPD office. Although the regular meetings are scheduled at the same times each month, the Board has been holding many special meetings which, by law, require even less advance notice (24 instead of 72 hours). For example, the special Board meeting held on January 5, 2007, had no other purpose than to approve the increase in the line of credit with the Bank of the West from $1,000,000 to $2,000,000. Because this increase did not actually take place until January 30, the approval could have been done at the regular meeting five days later on January 10. During the week of April 23, 2007, the FRRPD held three Board meetings as follows: Monday, April 23 Special Meeting (Budget discussion) Wednesday, April 25 Regular Meeting Thursday, April 26 Special Meeting (To approve impact fee letter) The public is not well served if important discussions and actions take place in special meetings. It should be noted that the regular Board meetings are scheduled twice a month. We observed that members of the audience were treated appropriately at those meetings where Director Thompson was absent. When he was present, the Grand Jury observed that Director Thompson exhibited hostile and verbally abusive behavior towards the audience. Some examples are: o According to the minutes of the April 11th meeting, Director Thompson spoke as follows: “…informed them that he wanted to discuss something that had not been approved by the board, nor did they have any prior knowledge of it. He stated that he didn’t like there [sic] Gestapo tactics and believes they are on the verge of harassment for frequent appearances at our Board meetings. He would like to know what they are investigating. He also stated that he is preparing a letter to be sent to the Attorney General with a list of Grand Jury members’ names from this year and last year and he does not understand the witch hunting.” (Exhibit L) o At the meeting on May 9th, Director Thompson conspicuously photographed the Grand Jury members in attendance, both inside and outside the building. During the Pledge of Allegiance, he added the words “and to the Grand Jury” into his recitation. Later, Director Thompson made an insulting reference to the “members of the Gestapo present” while gesturing towards the audience. o One of the Grand Jury members attending the March 28th meeting was interfered with by another member of the audience who sat next to the Grand Jury member and suggested that she had no 197 business taking notes because she did not understand what was going on. The interference was continued by talking directly into the Grand Jury member’s ear, so that it was very difficult for her to hear what was being said in the meeting. The offending person was later identified as the spouse of an FRRPD Director. Director Thompson’s expressed lack of familiarity with Grand Jury responsibilities and procedures is especially bizarre because he once served on a Butte County Grand Jury. The new Board policy is effectively discouraging public participation; the Grand Jury members were usually the only public attendees. The District lawyer was briefly present at one meeting. A consultant to the District was present at another. A member of the Citizens Oversight Committee was present at one meeting. On two other occasions we observed two other community groups that sent representatives to a meeting. See Findings 20, 21 and Recommendations 17, 18, 19 which appear at the end of this report. Issue: Public Service and Relations - Citizens Oversight Committee Background: In 2002 the residents of the FRRPD voted to approve a benefit assessment district supported by an annual tax added to their real estate tax bills. The tax is collected by Butte County and disbursed to the Park District as a separate fund for maintenance of FRRPD facilities. The former General Manager testified that the District, in the promotional literature encouraging voters to support the benefit assessment, promised to set up a Citizens Oversight Committee to oversee the allocation and utilization of the benefit assessment funds. This committee was formed. When the Grand Jury studied the district’s web site in March 2007, an advertisement was found seeking citizen volunteers to fill vacancies on the Citizens Oversight Committee; the advertisement gave an October of 2006 deadline for submittal of applications. The advertisement was many months out of date. Investigation: When the Grand Jury began to attend the Park District Board meetings, we learned from the discussions that the Oversight Committee had more than one vacancy, had not been able to achieve a quorum to support a meeting for several quarters; and that there had been essentially no recruiting activity since the web site advertisement had been placed in the summer of 2006. When we interviewed the Board Chairman on March 22, 2007, she expressed some surprise at the fact that the web site advertisement was out of date. In a letter to the Grand Jury following the interview (Exhibit K), the Chairman stated 198 that the web site notice would be updated; it subsequently was updated to eliminate the long past October 2006 deadline for applications. At the May 9, 2007, Board meeting, the most recently attended as of this writing, the issue was further discussed. It was suggested that candidates would be interviewed and new members for the Oversight Committee selected just prior to the next regular board meeting. See Finding 22 and Recommendation 20 which appear at the end of this report. Issue: Programs for Seniors Background: In our review of the FRRPD Website, the Grand Jury noticed that the District is working with only one of the two senior citizen organizations in the greater Oroville area. Complainants who were interviewed indicated a lack of senior programs. Investigation: We interviewed representatives of one senior citizen organization at length. We also questioned past and present Board members about the adequacy of programs oriented towards participation by seniors. Everyone agreed that there were too few offerings. The Board members attributed this to lack of funds. In our review of past and present FRRPD Activity Guides (Exhibits M and N), we found an overall reduction in program offerings in all age categories. In the offerings for seniors, we found that FRRPD no longer offers trips and tours, many of which were heavily attended by seniors. Social dances have also been eliminated. These cuts may have been made as a result of declining enrollment and participation, but as with any programming, there needs to be promotion. Representatives from the senior community have attended board meetings to express their desire for more offerings, but to date, their concerns have not been adequately addressed. The former General Manager provided us with the history of the FRRPD working relationship with senior organizations. He also said that there had been efforts to work cooperatively with both seniors organizations in Oroville, but that these past efforts had proved unsuccessful, due to personality conflicts. See Findings 23, 24 and Recommendations 21, 22 which appear at the end of this report. Issue: Conflict of Interest Incident Background: Two citizen complainants indicated during their interviews that an FRRPD Director voted at a Board meeting to award a contract to a firm owned by a close relative of the Board member. In a situation of this sort, the proper procedure is that the Board member disclose the conflict of interest, then recuse himself from the discussion and abstain from the vote on the contract award. Investigation: The Grand Jury interviewed the Board member involved who admitted that the incident had indeed occurred and stated that it was now recognized by that Board member to have been improper. The vote came up soon after the election of the Board member and before receiving ethics training. We reviewed the subpoenaed FRRPD Policies and Procedures Handbook received on January 24, 2007. The Handbook gives no substantive guidance to Board members on any ethics issue. The Handbook incorporates the standard Conflict of Interest Code by reference, but gives no summary of its provisions. This leaves a new director or employee in a potentially awkward situation with no guidance at hand. The Grand Jury also reviewed the FRRPD Directors Handbook, originally dated January 12, 1984, and revised periodically through February 6, 1995. We obtained this document from a former FRRPD Board member. The current Board seems to be unaware of this earlier Handbook. The earlier handbook has appended to it a succinct summary of the ethics obligations of a Board member. If this handbook were still in use, a new Board member would have a convenient and timely way to become informed on avoiding conflict of interest situations. See Finding 25 and Recommendation 23 which appear at the end of this report. Issue: Skate & Bike Park Funding Background: The 2005-06 Grand Jury investigated and reported on the funding of the Skate & Bike Park. They found that funds were committed without the required Board approval. In the formal response to the 2005-06 Grand Jury report, the FRRPD stated that the funds had been properly approved at a Board meeting, but that the records of that meeting had been destroyed. The FRRPD directed the General Manager to conduct an investigation of the Skate and Bike Park funding and report to the Board. The General Manager responded with a “time line” showing the dates on which all of the required funding approvals had occurred. The Board formally accepted the General Manager’s report and declared that the issue was settled as described in the Board minutes of December 13, 2006: “B. RESOLUTION 928-06 ADOPTING TIMELINE IN REGARDS TO AUTHORIZATION MADE BY THE BOARD OF DIRECTORS FOR THE FEATHER RIVER RECREATION AND PARK DISTRICT SKATE AND BIKE PARK GM Sharkey read the timeline. Chairman Gurr read the resolution. Director Allen thanked GM Sharkey for the through [sic] timeline. The District’s Attorney, Jessica Miller, stated that if further information is requested regarding the funding or any other issue surrounding the Bedrock Skate and Bike Park, she will respond with a letter and this 200 resolution. If she deems it necessary, she will have a Director who was present at the time period in question write a letter attesting to the validity of what the timeline states. Director Gill motioned to approve Resolution 928-06. Director Hill seconded the motion and it passed by the following vote: Ayes: Directors Allen, Gill, Hill, Thompson, and Chairman Gurr Noes: Absent:” The published minutes do not include the wording of the resolution. Investigation: The Grand Jury interviewed two former Board members and the former legal counsel to the Board. All three were involved in Board activities at the time in question. They were in agreement that the funding had not been approved at a Board meeting, and that the minutes had not been destroyed; rather, they never existed because there had been no approval and no Board meeting at which an approval occurred. We also reviewed in detail the report of the prior Grand Jury and the extensive records kept by a former member of the Board who was familiar with district activities at the time. We noted that the investigation requested by the Board was conducted by the General Manager who was implicated by the 2005-06 Grand Jury in the alleged mishandling of funds. See Finding 26 and Recommendation 24 which appear at the end of this report.

R22

The FRRPD Board and General Manager should work cooperatively with both greater Oroville senior organizations to arrange facilities and programs for seniors.

R13

which appear at the end of this report. Issue: Financial Management – Staffing Background: In the course of our investigation of the various financial issues concerning the District, the Grand Jury noted that the financial management was in disarray. We focused on the financial management staffing to see if that might be part of the problem. Investigation: The Financial Manager (FM) was most cooperative in our interview. During the interview we learned that the FM had some relevant experience and was currently working towards a degree in accounting. There was a sense that the FM was overwhelmed partly because of the newness of the job, but also because the former staff members who held any corporate knowledge of how things worked had either quit or been fired. Also, the lack of appropriate support staff required that the FM do the day-to-day tasks such as posting payments to the correct accounts and delivering daily receipts to the County Treasurer’s Office. This impeded progress in getting the books organized. When we inquired about the obviously incorrect balance sheet (Exhibit H) submitted in response to subpoena, we learned that the new accounting software had not yet been set up, so it was not possible to produce a meaningful financial picture. This was still true at the time of the interview (March 21, 2007) although a few weeks later the Board Chairman, after being questioned about the financial situation, sent to the Grand Jury an updated balance sheet (Exhibit I) which included the missing liability entry for the debt to the Bank of the West. However, it appeared that the balance sheet had been corrected manually, so it does not necessarily signify that the new software is fully operational. At every FRRPD Board meeting attended by Grand Jury members, in March, April and May, presentation of a financial report was on the agenda. Each time, the FM offered an apology for being unable to present a financial report. Our interview with representatives of the Butte County Auditor-Controller’s Office, who work with the FRRPD FM on a day-to-day basis, confirmed our impression that the FRRPD is inadequately staffed to handle their financial affairs. The Auditor-Controller’s office recommended that the FRRPD contract with a professional financial advisor to get things in order, but no action has been taken on that advice. The Auditor-Controller’s Office also supplied copies of correspondence (both internal and with the FRRPD) which delineated a number of situations in which funds were not handled properly. For example, (Exhibit J) in January 2007 the District drew approximately $250,000 from the line of credit established with the bank and then did not use the money for several months and lost track of it. This caused not only confusion but also resulted in an unnecessary interest expense estimated at about $5000. See Findings 17, 18, 19 and Recommendations 14, 15, 16 which appear at the end of this report. Issue: Public Service and Relations - Conduct of Board Meetings Background: The Grand Jury received a letter complaining about the conduct of the FRRPD Board meetings. The complaint noted that the FRRPD had changed the time of the meetings to 3:30 in the afternoon, which is much less conducive to citizen participation than the evening meetings which were the earlier practice. The letter went on to report that at a recent Board meeting, the Board members were huddled around a conference table so that members of the public could not make eye contact with the Board members, nor could they easily hear the Board member discussion. When a complaint was made, they were told by a Board member “it works for us.” The letter goes on to state that one Board member, the same member who had argued earlier for even more severe limits on public comments at the meeting, filibustered the meeting by reading magazine articles aloud to use up the time remaining. This was viewed as another technique to limit public comment and input. Investigation: The details of the written complaint were confirmed during interviews with the authors; the Board member who had argued for limits in public input and then had filibustered the meeting was identified as Director Thompson. One complainant had attended the FRRPD Board meetings regularly for many years, but had recently stopped because of the Board’s apparent policy of discouraging public participation. When interviewed, the Board chairman denied that the Board had adopted a policy of discouraging public attendance and participation at Board meetings. The meeting time change was described as a cost cutting measure; the District would not have to pay extra to hourly employees if their presence was required. In a follow up letter (Exhibit K), the Chairman said that the local newspaper had been contacted and would publicize the Board meetings, but as of this writing in early June, no such notice has been observed. In order to better understand the issue, members of the Grand Jury attended a number of FRRPD Board meetings as follows: February 28, 2007 Two Grand Jury members attended March 14, 2007 Three Grand Jury members attended March 28, 2007 Two Grand Jury members attended April 11, 2007 Three Grand Jury members attended May 9, 2007 Four Grand Jury members attended The Grand Jury members attended as members of the public and wore no identifying badges. There was no advance notice to the Board; the Grand Jury members did not ask to speak at any of the meetings; they were there only to observe. All of the meetings, except one, were held in the room adjacent to the gymnasium in the Oroville Municipal Auditorium. A movable partition separates this room from the gymnasium. The FRRPD headquarters and offices are in this same building. The acoustics in the meeting room are terrible. Many of the Board members are soft-spoken, so it is difficult for the audience to hear what they are saying. This problem is much worse when there is a noisy athletic event in progress in the adjacent gym as was often the case. There is no audio system. It is questionable whether the narrow entry doors provide access for the disabled. The one meeting that was held at a different site was no better. The site was outdoors at Riverbend Park. The ability to hear what was said by the Board members was even worse than at the Municipal Auditorium. The new Policies and Procedures Handbook, supplied by the District in response to subpoena, states that the Board meetings will normally be held at the Oroville City Council Chambers. The change to the present location evidently became a standard practice in the fall of 2006. All of the meetings we attended were in fact held in the afternoon. The Board Chairman testified that the meetings had been 196 held in the evening until the fall of 2006 when the Board changed the regular meeting time to 3:30 pm. The only notice of meetings is a posting on the front door of the FRRPD office. Although the regular meetings are scheduled at the same times each month, the Board has been holding many special meetings which, by law, require even less advance notice (24 instead of 72 hours). For example, the special Board meeting held on January 5, 2007, had no other purpose than to approve the increase in the line of credit with the Bank of the West from $1,000,000 to $2,000,000. Because this increase did not actually take place until January 30, the approval could have been done at the regular meeting five days later on January 10. During the week of April 23, 2007, the FRRPD held three Board meetings as follows: Monday, April 23 Special Meeting (Budget discussion) Wednesday, April 25 Regular Meeting Thursday, April 26 Special Meeting (To approve impact fee letter) The public is not well served if important discussions and actions take place in special meetings. It should be noted that the regular Board meetings are scheduled twice a month. We observed that members of the audience were treated appropriately at those meetings where Director Thompson was absent. When he was present, the Grand Jury observed that Director Thompson exhibited hostile and verbally abusive behavior towards the audience. Some examples are: o According to the minutes of the April 11th meeting, Director Thompson spoke as follows: “…informed them that he wanted to discuss something that had not been approved by the board, nor did they have any prior knowledge of it. He stated that he didn’t like there [sic] Gestapo tactics and believes they are on the verge of harassment for frequent appearances at our Board meetings. He would like to know what they are investigating. He also stated that he is preparing a letter to be sent to the Attorney General with a list of Grand Jury members’ names from this year and last year and he does not understand the witch hunting.” (Exhibit L) o At the meeting on May 9th, Director Thompson conspicuously photographed the Grand Jury members in attendance, both inside and outside the building. During the Pledge of Allegiance, he added the words “and to the Grand Jury” into his recitation. Later, Director Thompson made an insulting reference to the “members of the Gestapo present” while gesturing towards the audience. o One of the Grand Jury members attending the March 28th meeting was interfered with by another member of the audience who sat next to the Grand Jury member and suggested that she had no 197 business taking notes because she did not understand what was going on. The interference was continued by talking directly into the Grand Jury member’s ear, so that it was very difficult for her to hear what was being said in the meeting. The offending person was later identified as the spouse of an FRRPD Director. Director Thompson’s expressed lack of familiarity with Grand Jury responsibilities and procedures is especially bizarre because he once served on a Butte County Grand Jury. The new Board policy is effectively discouraging public participation; the Grand Jury members were usually the only public attendees. The District lawyer was briefly present at one meeting. A consultant to the District was present at another. A member of the Citizens Oversight Committee was present at one meeting. On two other occasions we observed two other community groups that sent representatives to a meeting. See Findings 20, 21 and Recommendations 17, 18, 19 which appear at the end of this report. Issue: Public Service and Relations - Citizens Oversight Committee Background: In 2002 the residents of the FRRPD voted to approve a benefit assessment district supported by an annual tax added to their real estate tax bills. The tax is collected by Butte County and disbursed to the Park District as a separate fund for maintenance of FRRPD facilities. The former General Manager testified that the District, in the promotional literature encouraging voters to support the benefit assessment, promised to set up a Citizens Oversight Committee to oversee the allocation and utilization of the benefit assessment funds. This committee was formed. When the Grand Jury studied the district’s web site in March 2007, an advertisement was found seeking citizen volunteers to fill vacancies on the Citizens Oversight Committee; the advertisement gave an October of 2006 deadline for submittal of applications. The advertisement was many months out of date. Investigation: When the Grand Jury began to attend the Park District Board meetings, we learned from the discussions that the Oversight Committee had more than one vacancy, had not been able to achieve a quorum to support a meeting for several quarters; and that there had been essentially no recruiting activity since the web site advertisement had been placed in the summer of 2006. When we interviewed the Board Chairman on March 22, 2007, she expressed some surprise at the fact that the web site advertisement was out of date. In a letter to the Grand Jury following the interview (Exhibit K), the Chairman stated 198 that the web site notice would be updated; it subsequently was updated to eliminate the long past October 2006 deadline for applications. At the May 9, 2007, Board meeting, the most recently attended as of this writing, the issue was further discussed. It was suggested that candidates would be interviewed and new members for the Oversight Committee selected just prior to the next regular board meeting. See Finding 22 and Recommendation 20 which appear at the end of this report. Issue: Programs for Seniors Background: In our review of the FRRPD Website, the Grand Jury noticed that the District is working with only one of the two senior citizen organizations in the greater Oroville area. Complainants who were interviewed indicated a lack of senior programs. Investigation: We interviewed representatives of one senior citizen organization at length. We also questioned past and present Board members about the adequacy of programs oriented towards participation by seniors. Everyone agreed that there were too few offerings. The Board members attributed this to lack of funds. In our review of past and present FRRPD Activity Guides (Exhibits M and N), we found an overall reduction in program offerings in all age categories. In the offerings for seniors, we found that FRRPD no longer offers trips and tours, many of which were heavily attended by seniors. Social dances have also been eliminated. These cuts may have been made as a result of declining enrollment and participation, but as with any programming, there needs to be promotion. Representatives from the senior community have attended board meetings to express their desire for more offerings, but to date, their concerns have not been adequately addressed. The former General Manager provided us with the history of the FRRPD working relationship with senior organizations. He also said that there had been efforts to work cooperatively with both seniors organizations in Oroville, but that these past efforts had proved unsuccessful, due to personality conflicts. See Findings 23, 24 and Recommendations 21, 22 which appear at the end of this report. Issue: Conflict of Interest Incident Background: Two citizen complainants indicated during their interviews that an FRRPD Director voted at a Board meeting to award a contract to a firm owned by a close relative of the Board member. In a situation of this sort, the proper procedure is that the Board member disclose the conflict of interest, then recuse himself from the discussion and abstain from the vote on the contract award. Investigation: The Grand Jury interviewed the Board member involved who admitted that the incident had indeed occurred and stated that it was now recognized by that Board member to have been improper. The vote came up soon after the election of the Board member and before receiving ethics training. We reviewed the subpoenaed FRRPD Policies and Procedures Handbook received on January 24, 2007. The Handbook gives no substantive guidance to Board members on any ethics issue. The Handbook incorporates the standard Conflict of Interest Code by reference, but gives no summary of its provisions. This leaves a new director or employee in a potentially awkward situation with no guidance at hand. The Grand Jury also reviewed the FRRPD Directors Handbook, originally dated January 12, 1984, and revised periodically through February 6, 1995. We obtained this document from a former FRRPD Board member. The current Board seems to be unaware of this earlier Handbook. The earlier handbook has appended to it a succinct summary of the ethics obligations of a Board member. If this handbook were still in use, a new Board member would have a convenient and timely way to become informed on avoiding conflict of interest situations. See Finding 25 and Recommendation 23 which appear at the end of this report. Issue: Skate & Bike Park Funding Background: The 2005-06 Grand Jury investigated and reported on the funding of the Skate & Bike Park. They found that funds were committed without the required Board approval. In the formal response to the 2005-06 Grand Jury report, the FRRPD stated that the funds had been properly approved at a Board meeting, but that the records of that meeting had been destroyed. The FRRPD directed the General Manager to conduct an investigation of the Skate and Bike Park funding and report to the Board. The General Manager responded with a “time line” showing the dates on which all of the required funding approvals had occurred. The Board formally accepted the General Manager’s report and declared that the issue was settled as described in the Board minutes of December 13, 2006: “B. RESOLUTION 928-06 ADOPTING TIMELINE IN REGARDS TO AUTHORIZATION MADE BY THE BOARD OF DIRECTORS FOR THE FEATHER RIVER RECREATION AND PARK DISTRICT SKATE AND BIKE PARK GM Sharkey read the timeline. Chairman Gurr read the resolution. Director Allen thanked GM Sharkey for the through [sic] timeline. The District’s Attorney, Jessica Miller, stated that if further information is requested regarding the funding or any other issue surrounding the Bedrock Skate and Bike Park, she will respond with a letter and this 200 resolution. If she deems it necessary, she will have a Director who was present at the time period in question write a letter attesting to the validity of what the timeline states. Director Gill motioned to approve Resolution 928-06. Director Hill seconded the motion and it passed by the following vote: Ayes: Directors Allen, Gill, Hill, Thompson, and Chairman Gurr Noes: Absent:” The published minutes do not include the wording of the resolution. Investigation: The Grand Jury interviewed two former Board members and the former legal counsel to the Board. All three were involved in Board activities at the time in question. They were in agreement that the funding had not been approved at a Board meeting, and that the minutes had not been destroyed; rather, they never existed because there had been no approval and no Board meeting at which an approval occurred. We also reviewed in detail the report of the prior Grand Jury and the extensive records kept by a former member of the Board who was familiar with district activities at the time. We noted that the investigation requested by the Board was conducted by the General Manager who was implicated by the 2005-06 Grand Jury in the alleged mishandling of funds. See Finding 26 and Recommendation 24 which appear at the end of this report.

R23

The FRRPD Board and General Manager should include in the revision of the Policies and Procedures Handbook (recommended elsewhere in this report) a summary of the conflict of interest related obligations of Board members and other designated officials of the District.

R24

The Butte County District Attorney should conduct an investigation into the alleged mishandling of funds for the Skate and Bike Park project and into the possibly biased Board-requested investigation of the appropriation process to see if criminal charges should be brought against the Board and the General Manager. Required Responses (Penal Code §933 & §933.05) Feather River Recreation & Park District Board of Directors Butte County District Attorney 205

R13

which appear at the end of this report. Issue: Financial Management – Staffing Background: In the course of our investigation of the various financial issues concerning the District, the Grand Jury noted that the financial management was in disarray. We focused on the financial management staffing to see if that might be part of the problem. Investigation: The Financial Manager (FM) was most cooperative in our interview. During the interview we learned that the FM had some relevant experience and was currently working towards a degree in accounting. There was a sense that the FM was overwhelmed partly because of the newness of the job, but also because the former staff members who held any corporate knowledge of how things worked had either quit or been fired. Also, the lack of appropriate support staff required that the FM do the day-to-day tasks such as posting payments to the correct accounts and delivering daily receipts to the County Treasurer’s Office. This impeded progress in getting the books organized. When we inquired about the obviously incorrect balance sheet (Exhibit H) submitted in response to subpoena, we learned that the new accounting software had not yet been set up, so it was not possible to produce a meaningful financial picture. This was still true at the time of the interview (March 21, 2007) although a few weeks later the Board Chairman, after being questioned about the financial situation, sent to the Grand Jury an updated balance sheet (Exhibit I) which included the missing liability entry for the debt to the Bank of the West. However, it appeared that the balance sheet had been corrected manually, so it does not necessarily signify that the new software is fully operational. At every FRRPD Board meeting attended by Grand Jury members, in March, April and May, presentation of a financial report was on the agenda. Each time, the FM offered an apology for being unable to present a financial report. Our interview with representatives of the Butte County Auditor-Controller’s Office, who work with the FRRPD FM on a day-to-day basis, confirmed our impression that the FRRPD is inadequately staffed to handle their financial affairs. The Auditor-Controller’s office recommended that the FRRPD contract with a professional financial advisor to get things in order, but no action has been taken on that advice. The Auditor-Controller’s Office also supplied copies of correspondence (both internal and with the FRRPD) which delineated a number of situations in which funds were not handled properly. For example, (Exhibit J) in January 2007 the District drew approximately $250,000 from the line of credit established with the bank and then did not use the money for several months and lost track of it. This caused not only confusion but also resulted in an unnecessary interest expense estimated at about $5000. See Findings 17, 18, 19 and Recommendations 14, 15, 16 which appear at the end of this report. Issue: Public Service and Relations - Conduct of Board Meetings Background: The Grand Jury received a letter complaining about the conduct of the FRRPD Board meetings. The complaint noted that the FRRPD had changed the time of the meetings to 3:30 in the afternoon, which is much less conducive to citizen participation than the evening meetings which were the earlier practice. The letter went on to report that at a recent Board meeting, the Board members were huddled around a conference table so that members of the public could not make eye contact with the Board members, nor could they easily hear the Board member discussion. When a complaint was made, they were told by a Board member “it works for us.” The letter goes on to state that one Board member, the same member who had argued earlier for even more severe limits on public comments at the meeting, filibustered the meeting by reading magazine articles aloud to use up the time remaining. This was viewed as another technique to limit public comment and input. Investigation: The details of the written complaint were confirmed during interviews with the authors; the Board member who had argued for limits in public input and then had filibustered the meeting was identified as Director Thompson. One complainant had attended the FRRPD Board meetings regularly for many years, but had recently stopped because of the Board’s apparent policy of discouraging public participation. When interviewed, the Board chairman denied that the Board had adopted a policy of discouraging public attendance and participation at Board meetings. The meeting time change was described as a cost cutting measure; the District would not have to pay extra to hourly employees if their presence was required. In a follow up letter (Exhibit K), the Chairman said that the local newspaper had been contacted and would publicize the Board meetings, but as of this writing in early June, no such notice has been observed. In order to better understand the issue, members of the Grand Jury attended a number of FRRPD Board meetings as follows: February 28, 2007 Two Grand Jury members attended March 14, 2007 Three Grand Jury members attended March 28, 2007 Two Grand Jury members attended April 11, 2007 Three Grand Jury members attended May 9, 2007 Four Grand Jury members attended The Grand Jury members attended as members of the public and wore no identifying badges. There was no advance notice to the Board; the Grand Jury members did not ask to speak at any of the meetings; they were there only to observe. All of the meetings, except one, were held in the room adjacent to the gymnasium in the Oroville Municipal Auditorium. A movable partition separates this room from the gymnasium. The FRRPD headquarters and offices are in this same building. The acoustics in the meeting room are terrible. Many of the Board members are soft-spoken, so it is difficult for the audience to hear what they are saying. This problem is much worse when there is a noisy athletic event in progress in the adjacent gym as was often the case. There is no audio system. It is questionable whether the narrow entry doors provide access for the disabled. The one meeting that was held at a different site was no better. The site was outdoors at Riverbend Park. The ability to hear what was said by the Board members was even worse than at the Municipal Auditorium. The new Policies and Procedures Handbook, supplied by the District in response to subpoena, states that the Board meetings will normally be held at the Oroville City Council Chambers. The change to the present location evidently became a standard practice in the fall of 2006. All of the meetings we attended were in fact held in the afternoon. The Board Chairman testified that the meetings had been 196 held in the evening until the fall of 2006 when the Board changed the regular meeting time to 3:30 pm. The only notice of meetings is a posting on the front door of the FRRPD office. Although the regular meetings are scheduled at the same times each month, the Board has been holding many special meetings which, by law, require even less advance notice (24 instead of 72 hours). For example, the special Board meeting held on January 5, 2007, had no other purpose than to approve the increase in the line of credit with the Bank of the West from $1,000,000 to $2,000,000. Because this increase did not actually take place until January 30, the approval could have been done at the regular meeting five days later on January 10. During the week of April 23, 2007, the FRRPD held three Board meetings as follows: Monday, April 23 Special Meeting (Budget discussion) Wednesday, April 25 Regular Meeting Thursday, April 26 Special Meeting (To approve impact fee letter) The public is not well served if important discussions and actions take place in special meetings. It should be noted that the regular Board meetings are scheduled twice a month. We observed that members of the audience were treated appropriately at those meetings where Director Thompson was absent. When he was present, the Grand Jury observed that Director Thompson exhibited hostile and verbally abusive behavior towards the audience. Some examples are: o According to the minutes of the April 11th meeting, Director Thompson spoke as follows: “…informed them that he wanted to discuss something that had not been approved by the board, nor did they have any prior knowledge of it. He stated that he didn’t like there [sic] Gestapo tactics and believes they are on the verge of harassment for frequent appearances at our Board meetings. He would like to know what they are investigating. He also stated that he is preparing a letter to be sent to the Attorney General with a list of Grand Jury members’ names from this year and last year and he does not understand the witch hunting.” (Exhibit L) o At the meeting on May 9th, Director Thompson conspicuously photographed the Grand Jury members in attendance, both inside and outside the building. During the Pledge of Allegiance, he added the words “and to the Grand Jury” into his recitation. Later, Director Thompson made an insulting reference to the “members of the Gestapo present” while gesturing towards the audience. o One of the Grand Jury members attending the March 28th meeting was interfered with by another member of the audience who sat next to the Grand Jury member and suggested that she had no 197 business taking notes because she did not understand what was going on. The interference was continued by talking directly into the Grand Jury member’s ear, so that it was very difficult for her to hear what was being said in the meeting. The offending person was later identified as the spouse of an FRRPD Director. Director Thompson’s expressed lack of familiarity with Grand Jury responsibilities and procedures is especially bizarre because he once served on a Butte County Grand Jury. The new Board policy is effectively discouraging public participation; the Grand Jury members were usually the only public attendees. The District lawyer was briefly present at one meeting. A consultant to the District was present at another. A member of the Citizens Oversight Committee was present at one meeting. On two other occasions we observed two other community groups that sent representatives to a meeting. See Findings 20, 21 and Recommendations 17, 18, 19 which appear at the end of this report. Issue: Public Service and Relations - Citizens Oversight Committee Background: In 2002 the residents of the FRRPD voted to approve a benefit assessment district supported by an annual tax added to their real estate tax bills. The tax is collected by Butte County and disbursed to the Park District as a separate fund for maintenance of FRRPD facilities. The former General Manager testified that the District, in the promotional literature encouraging voters to support the benefit assessment, promised to set up a Citizens Oversight Committee to oversee the allocation and utilization of the benefit assessment funds. This committee was formed. When the Grand Jury studied the district’s web site in March 2007, an advertisement was found seeking citizen volunteers to fill vacancies on the Citizens Oversight Committee; the advertisement gave an October of 2006 deadline for submittal of applications. The advertisement was many months out of date. Investigation: When the Grand Jury began to attend the Park District Board meetings, we learned from the discussions that the Oversight Committee had more than one vacancy, had not been able to achieve a quorum to support a meeting for several quarters; and that there had been essentially no recruiting activity since the web site advertisement had been placed in the summer of 2006. When we interviewed the Board Chairman on March 22, 2007, she expressed some surprise at the fact that the web site advertisement was out of date. In a letter to the Grand Jury following the interview (Exhibit K), the Chairman stated 198 that the web site notice would be updated; it subsequently was updated to eliminate the long past October 2006 deadline for applications. At the May 9, 2007, Board meeting, the most recently attended as of this writing, the issue was further discussed. It was suggested that candidates would be interviewed and new members for the Oversight Committee selected just prior to the next regular board meeting. See Finding 22 and Recommendation 20 which appear at the end of this report. Issue: Programs for Seniors Background: In our review of the FRRPD Website, the Grand Jury noticed that the District is working with only one of the two senior citizen organizations in the greater Oroville area. Complainants who were interviewed indicated a lack of senior programs. Investigation: We interviewed representatives of one senior citizen organization at length. We also questioned past and present Board members about the adequacy of programs oriented towards participation by seniors. Everyone agreed that there were too few offerings. The Board members attributed this to lack of funds. In our review of past and present FRRPD Activity Guides (Exhibits M and N), we found an overall reduction in program offerings in all age categories. In the offerings for seniors, we found that FRRPD no longer offers trips and tours, many of which were heavily attended by seniors. Social dances have also been eliminated. These cuts may have been made as a result of declining enrollment and participation, but as with any programming, there needs to be promotion. Representatives from the senior community have attended board meetings to express their desire for more offerings, but to date, their concerns have not been adequately addressed. The former General Manager provided us with the history of the FRRPD working relationship with senior organizations. He also said that there had been efforts to work cooperatively with both seniors organizations in Oroville, but that these past efforts had proved unsuccessful, due to personality conflicts. See Findings 23, 24 and Recommendations 21, 22 which appear at the end of this report. Issue: Conflict of Interest Incident Background: Two citizen complainants indicated during their interviews that an FRRPD Director voted at a Board meeting to award a contract to a firm owned by a close relative of the Board member. In a situation of this sort, the proper procedure is that the Board member disclose the conflict of interest, then recuse himself from the discussion and abstain from the vote on the contract award. Investigation: The Grand Jury interviewed the Board member involved who admitted that the incident had indeed occurred and stated that it was now recognized by that Board member to have been improper. The vote came up soon after the election of the Board member and before receiving ethics training. We reviewed the subpoenaed FRRPD Policies and Procedures Handbook received on January 24, 2007. The Handbook gives no substantive guidance to Board members on any ethics issue. The Handbook incorporates the standard Conflict of Interest Code by reference, but gives no summary of its provisions. This leaves a new director or employee in a potentially awkward situation with no guidance at hand. The Grand Jury also reviewed the FRRPD Directors Handbook, originally dated January 12, 1984, and revised periodically through February 6, 1995. We obtained this document from a former FRRPD Board member. The current Board seems to be unaware of this earlier Handbook. The earlier handbook has appended to it a succinct summary of the ethics obligations of a Board member. If this handbook were still in use, a new Board member would have a convenient and timely way to become informed on avoiding conflict of interest situations. See Finding 25 and Recommendation 23 which appear at the end of this report. Issue: Skate & Bike Park Funding Background: The 2005-06 Grand Jury investigated and reported on the funding of the Skate & Bike Park. They found that funds were committed without the required Board approval. In the formal response to the 2005-06 Grand Jury report, the FRRPD stated that the funds had been properly approved at a Board meeting, but that the records of that meeting had been destroyed. The FRRPD directed the General Manager to conduct an investigation of the Skate and Bike Park funding and report to the Board. The General Manager responded with a “time line” showing the dates on which all of the required funding approvals had occurred. The Board formally accepted the General Manager’s report and declared that the issue was settled as described in the Board minutes of December 13, 2006: “B. RESOLUTION 928-06 ADOPTING TIMELINE IN REGARDS TO AUTHORIZATION MADE BY THE BOARD OF DIRECTORS FOR THE FEATHER RIVER RECREATION AND PARK DISTRICT SKATE AND BIKE PARK GM Sharkey read the timeline. Chairman Gurr read the resolution. Director Allen thanked GM Sharkey for the through [sic] timeline. The District’s Attorney, Jessica Miller, stated that if further information is requested regarding the funding or any other issue surrounding the Bedrock Skate and Bike Park, she will respond with a letter and this 200 resolution. If she deems it necessary, she will have a Director who was present at the time period in question write a letter attesting to the validity of what the timeline states. Director Gill motioned to approve Resolution 928-06. Director Hill seconded the motion and it passed by the following vote: Ayes: Directors Allen, Gill, Hill, Thompson, and Chairman Gurr Noes: Absent:” The published minutes do not include the wording of the resolution. Investigation: The Grand Jury interviewed two former Board members and the former legal counsel to the Board. All three were involved in Board activities at the time in question. They were in agreement that the funding had not been approved at a Board meeting, and that the minutes had not been destroyed; rather, they never existed because there had been no approval and no Board meeting at which an approval occurred. We also reviewed in detail the report of the prior Grand Jury and the extensive records kept by a former member of the Board who was familiar with district activities at the time. We noted that the investigation requested by the Board was conducted by the General Manager who was implicated by the 2005-06 Grand Jury in the alleged mishandling of funds. See Finding 26 and Recommendation 24 which appear at the end of this report.

R13

which appear at the end of this report. Issue: Financial Management – Staffing Background: In the course of our investigation of the various financial issues concerning the District, the Grand Jury noted that the financial management was in disarray. We focused on the financial management staffing to see if that might be part of the problem. Investigation: The Financial Manager (FM) was most cooperative in our interview. During the interview we learned that the FM had some relevant experience and was currently working towards a degree in accounting. There was a sense that the FM was overwhelmed partly because of the newness of the job, but also because the former staff members who held any corporate knowledge of how things worked had either quit or been fired. Also, the lack of appropriate support staff required that the FM do the day-to-day tasks such as posting payments to the correct accounts and delivering daily receipts to the County Treasurer’s Office. This impeded progress in getting the books organized. When we inquired about the obviously incorrect balance sheet (Exhibit H) submitted in response to subpoena, we learned that the new accounting software had not yet been set up, so it was not possible to produce a meaningful financial picture. This was still true at the time of the interview (March 21, 2007) although a few weeks later the Board Chairman, after being questioned about the financial situation, sent to the Grand Jury an updated balance sheet (Exhibit I) which included the missing liability entry for the debt to the Bank of the West. However, it appeared that the balance sheet had been corrected manually, so it does not necessarily signify that the new software is fully operational. At every FRRPD Board meeting attended by Grand Jury members, in March, April and May, presentation of a financial report was on the agenda. Each time, the FM offered an apology for being unable to present a financial report. Our interview with representatives of the Butte County Auditor-Controller’s Office, who work with the FRRPD FM on a day-to-day basis, confirmed our impression that the FRRPD is inadequately staffed to handle their financial affairs. The Auditor-Controller’s office recommended that the FRRPD contract with a professional financial advisor to get things in order, but no action has been taken on that advice. The Auditor-Controller’s Office also supplied copies of correspondence (both internal and with the FRRPD) which delineated a number of situations in which funds were not handled properly. For example, (Exhibit J) in January 2007 the District drew approximately $250,000 from the line of credit established with the bank and then did not use the money for several months and lost track of it. This caused not only confusion but also resulted in an unnecessary interest expense estimated at about $5000. See Findings 17, 18, 19 and Recommendations 14, 15, 16 which appear at the end of this report. Issue: Public Service and Relations - Conduct of Board Meetings Background: The Grand Jury received a letter complaining about the conduct of the FRRPD Board meetings. The complaint noted that the FRRPD had changed the time of the meetings to 3:30 in the afternoon, which is much less conducive to citizen participation than the evening meetings which were the earlier practice. The letter went on to report that at a recent Board meeting, the Board members were huddled around a conference table so that members of the public could not make eye contact with the Board members, nor could they easily hear the Board member discussion. When a complaint was made, they were told by a Board member “it works for us.” The letter goes on to state that one Board member, the same member who had argued earlier for even more severe limits on public comments at the meeting, filibustered the meeting by reading magazine articles aloud to use up the time remaining. This was viewed as another technique to limit public comment and input. Investigation: The details of the written complaint were confirmed during interviews with the authors; the Board member who had argued for limits in public input and then had filibustered the meeting was identified as Director Thompson. One complainant had attended the FRRPD Board meetings regularly for many years, but had recently stopped because of the Board’s apparent policy of discouraging public participation. When interviewed, the Board chairman denied that the Board had adopted a policy of discouraging public attendance and participation at Board meetings. The meeting time change was described as a cost cutting measure; the District would not have to pay extra to hourly employees if their presence was required. In a follow up letter (Exhibit K), the Chairman said that the local newspaper had been contacted and would publicize the Board meetings, but as of this writing in early June, no such notice has been observed. In order to better understand the issue, members of the Grand Jury attended a number of FRRPD Board meetings as follows: February 28, 2007 Two Grand Jury members attended March 14, 2007 Three Grand Jury members attended March 28, 2007 Two Grand Jury members attended April 11, 2007 Three Grand Jury members attended May 9, 2007 Four Grand Jury members attended The Grand Jury members attended as members of the public and wore no identifying badges. There was no advance notice to the Board; the Grand Jury members did not ask to speak at any of the meetings; they were there only to observe. All of the meetings, except one, were held in the room adjacent to the gymnasium in the Oroville Municipal Auditorium. A movable partition separates this room from the gymnasium. The FRRPD headquarters and offices are in this same building. The acoustics in the meeting room are terrible. Many of the Board members are soft-spoken, so it is difficult for the audience to hear what they are saying. This problem is much worse when there is a noisy athletic event in progress in the adjacent gym as was often the case. There is no audio system. It is questionable whether the narrow entry doors provide access for the disabled. The one meeting that was held at a different site was no better. The site was outdoors at Riverbend Park. The ability to hear what was said by the Board members was even worse than at the Municipal Auditorium. The new Policies and Procedures Handbook, supplied by the District in response to subpoena, states that the Board meetings will normally be held at the Oroville City Council Chambers. The change to the present location evidently became a standard practice in the fall of 2006. All of the meetings we attended were in fact held in the afternoon. The Board Chairman testified that the meetings had been 196 held in the evening until the fall of 2006 when the Board changed the regular meeting time to 3:30 pm. The only notice of meetings is a posting on the front door of the FRRPD office. Although the regular meetings are scheduled at the same times each month, the Board has been holding many special meetings which, by law, require even less advance notice (24 instead of 72 hours). For example, the special Board meeting held on January 5, 2007, had no other purpose than to approve the increase in the line of credit with the Bank of the West from $1,000,000 to $2,000,000. Because this increase did not actually take place until January 30, the approval could have been done at the regular meeting five days later on January 10. During the week of April 23, 2007, the FRRPD held three Board meetings as follows: Monday, April 23 Special Meeting (Budget discussion) Wednesday, April 25 Regular Meeting Thursday, April 26 Special Meeting (To approve impact fee letter) The public is not well served if important discussions and actions take place in special meetings. It should be noted that the regular Board meetings are scheduled twice a month. We observed that members of the audience were treated appropriately at those meetings where Director Thompson was absent. When he was present, the Grand Jury observed that Director Thompson exhibited hostile and verbally abusive behavior towards the audience. Some examples are: o According to the minutes of the April 11th meeting, Director Thompson spoke as follows: “…informed them that he wanted to discuss something that had not been approved by the board, nor did they have any prior knowledge of it. He stated that he didn’t like there [sic] Gestapo tactics and believes they are on the verge of harassment for frequent appearances at our Board meetings. He would like to know what they are investigating. He also stated that he is preparing a letter to be sent to the Attorney General with a list of Grand Jury members’ names from this year and last year and he does not understand the witch hunting.” (Exhibit L) o At the meeting on May 9th, Director Thompson conspicuously photographed the Grand Jury members in attendance, both inside and outside the building. During the Pledge of Allegiance, he added the words “and to the Grand Jury” into his recitation. Later, Director Thompson made an insulting reference to the “members of the Gestapo present” while gesturing towards the audience. o One of the Grand Jury members attending the March 28th meeting was interfered with by another member of the audience who sat next to the Grand Jury member and suggested that she had no 197 business taking notes because she did not understand what was going on. The interference was continued by talking directly into the Grand Jury member’s ear, so that it was very difficult for her to hear what was being said in the meeting. The offending person was later identified as the spouse of an FRRPD Director. Director Thompson’s expressed lack of familiarity with Grand Jury responsibilities and procedures is especially bizarre because he once served on a Butte County Grand Jury. The new Board policy is effectively discouraging public participation; the Grand Jury members were usually the only public attendees. The District lawyer was briefly present at one meeting. A consultant to the District was present at another. A member of the Citizens Oversight Committee was present at one meeting. On two other occasions we observed two other community groups that sent representatives to a meeting. See Findings 20, 21 and Recommendations 17, 18, 19 which appear at the end of this report. Issue: Public Service and Relations - Citizens Oversight Committee Background: In 2002 the residents of the FRRPD voted to approve a benefit assessment district supported by an annual tax added to their real estate tax bills. The tax is collected by Butte County and disbursed to the Park District as a separate fund for maintenance of FRRPD facilities. The former General Manager testified that the District, in the promotional literature encouraging voters to support the benefit assessment, promised to set up a Citizens Oversight Committee to oversee the allocation and utilization of the benefit assessment funds. This committee was formed. When the Grand Jury studied the district’s web site in March 2007, an advertisement was found seeking citizen volunteers to fill vacancies on the Citizens Oversight Committee; the advertisement gave an October of 2006 deadline for submittal of applications. The advertisement was many months out of date. Investigation: When the Grand Jury began to attend the Park District Board meetings, we learned from the discussions that the Oversight Committee had more than one vacancy, had not been able to achieve a quorum to support a meeting for several quarters; and that there had been essentially no recruiting activity since the web site advertisement had been placed in the summer of 2006. When we interviewed the Board Chairman on March 22, 2007, she expressed some surprise at the fact that the web site advertisement was out of date. In a letter to the Grand Jury following the interview (Exhibit K), the Chairman stated 198 that the web site notice would be updated; it subsequently was updated to eliminate the long past October 2006 deadline for applications. At the May 9, 2007, Board meeting, the most recently attended as of this writing, the issue was further discussed. It was suggested that candidates would be interviewed and new members for the Oversight Committee selected just prior to the next regular board meeting. See Finding 22 and Recommendation 20 which appear at the end of this report. Issue: Programs for Seniors Background: In our review of the FRRPD Website, the Grand Jury noticed that the District is working with only one of the two senior citizen organizations in the greater Oroville area. Complainants who were interviewed indicated a lack of senior programs. Investigation: We interviewed representatives of one senior citizen organization at length. We also questioned past and present Board members about the adequacy of programs oriented towards participation by seniors. Everyone agreed that there were too few offerings. The Board members attributed this to lack of funds. In our review of past and present FRRPD Activity Guides (Exhibits M and N), we found an overall reduction in program offerings in all age categories. In the offerings for seniors, we found that FRRPD no longer offers trips and tours, many of which were heavily attended by seniors. Social dances have also been eliminated. These cuts may have been made as a result of declining enrollment and participation, but as with any programming, there needs to be promotion. Representatives from the senior community have attended board meetings to express their desire for more offerings, but to date, their concerns have not been adequately addressed. The former General Manager provided us with the history of the FRRPD working relationship with senior organizations. He also said that there had been efforts to work cooperatively with both seniors organizations in Oroville, but that these past efforts had proved unsuccessful, due to personality conflicts. See Findings 23, 24 and Recommendations 21, 22 which appear at the end of this report. Issue: Conflict of Interest Incident Background: Two citizen complainants indicated during their interviews that an FRRPD Director voted at a Board meeting to award a contract to a firm owned by a close relative of the Board member. In a situation of this sort, the proper procedure is that the Board member disclose the conflict of interest, then recuse himself from the discussion and abstain from the vote on the contract award. Investigation: The Grand Jury interviewed the Board member involved who admitted that the incident had indeed occurred and stated that it was now recognized by that Board member to have been improper. The vote came up soon after the election of the Board member and before receiving ethics training. We reviewed the subpoenaed FRRPD Policies and Procedures Handbook received on January 24, 2007. The Handbook gives no substantive guidance to Board members on any ethics issue. The Handbook incorporates the standard Conflict of Interest Code by reference, but gives no summary of its provisions. This leaves a new director or employee in a potentially awkward situation with no guidance at hand. The Grand Jury also reviewed the FRRPD Directors Handbook, originally dated January 12, 1984, and revised periodically through February 6, 1995. We obtained this document from a former FRRPD Board member. The current Board seems to be unaware of this earlier Handbook. The earlier handbook has appended to it a succinct summary of the ethics obligations of a Board member. If this handbook were still in use, a new Board member would have a convenient and timely way to become informed on avoiding conflict of interest situations. See Finding 25 and Recommendation 23 which appear at the end of this report. Issue: Skate & Bike Park Funding Background: The 2005-06 Grand Jury investigated and reported on the funding of the Skate & Bike Park. They found that funds were committed without the required Board approval. In the formal response to the 2005-06 Grand Jury report, the FRRPD stated that the funds had been properly approved at a Board meeting, but that the records of that meeting had been destroyed. The FRRPD directed the General Manager to conduct an investigation of the Skate and Bike Park funding and report to the Board. The General Manager responded with a “time line” showing the dates on which all of the required funding approvals had occurred. The Board formally accepted the General Manager’s report and declared that the issue was settled as described in the Board minutes of December 13, 2006: “B. RESOLUTION 928-06 ADOPTING TIMELINE IN REGARDS TO AUTHORIZATION MADE BY THE BOARD OF DIRECTORS FOR THE FEATHER RIVER RECREATION AND PARK DISTRICT SKATE AND BIKE PARK GM Sharkey read the timeline. Chairman Gurr read the resolution. Director Allen thanked GM Sharkey for the through [sic] timeline. The District’s Attorney, Jessica Miller, stated that if further information is requested regarding the funding or any other issue surrounding the Bedrock Skate and Bike Park, she will respond with a letter and this 200 resolution. If she deems it necessary, she will have a Director who was present at the time period in question write a letter attesting to the validity of what the timeline states. Director Gill motioned to approve Resolution 928-06. Director Hill seconded the motion and it passed by the following vote: Ayes: Directors Allen, Gill, Hill, Thompson, and Chairman Gurr Noes: Absent:” The published minutes do not include the wording of the resolution. Investigation: The Grand Jury interviewed two former Board members and the former legal counsel to the Board. All three were involved in Board activities at the time in question. They were in agreement that the funding had not been approved at a Board meeting, and that the minutes had not been destroyed; rather, they never existed because there had been no approval and no Board meeting at which an approval occurred. We also reviewed in detail the report of the prior Grand Jury and the extensive records kept by a former member of the Board who was familiar with district activities at the time. We noted that the investigation requested by the Board was conducted by the General Manager who was implicated by the 2005-06 Grand Jury in the alleged mishandling of funds. See Finding 26 and Recommendation 24 which appear at the end of this report.