San Joaquin County Grand Jury • 2005-2006

2005/06 San Joaquin County Civil Grand Jury Final Report*

Published: June 14, 2005 111 pages Consolidated Report
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Findings and Recommendations 17 findings

F1
Cost overruns on waterfront/Events Center Projects • Cost overruns resulted from redesigns and change orders initiated by the City Manager, sometimes without the advance knowledge or approval of the Council. • The City Council failed in its fiduciary responsibility of oversight of taxpayer monies. The original Guaranteed Maximum Price (GMP) approved by the City Council for the Arena was $67.1 million; however, after redesigns and change orders the total spent was in excess of $99 million. The GMP for the Arena was negotiated very late into the project. • There was no Guaranteed Maximum Price (GMP) for the Ballpark, with original estimates starting at $8 million. Final cost for the Ballpark was more than $21 million after design changes and construction delays. • The 2005/06 Grand Jury established early in the investigation through testimony and documents that the true cost of the project was not known at an early stage of planning nor as construction began. The magnitude of the costs grew over time.
No recommendations for this finding
F2
Lack of project oversight • The City Council gave very broad powers to the City Manager to oversee design, construction, and management of the Events Center project. • Many major decisions were made by the City Manager without prior approval by the City Council, some of which were quite costly in the final project. • The City Council provided little oversight for design changes and change orders, with approval often given after the fact. • During its investigation, the 2005/06 Grand Jury found that the financing sources were difficult to track and confirm. The recent external audit conducted by the Macias Consulting Group, Inc., indicated difficulty in determining the overall cost of the project because of poor accounting procedures.
No recommendations for this finding
F3
Lack of proper utility inspections prior to being signed off. • The 2005/06 Grand Jury was informed early on that improper inspection reports were generated in the project, including signoff of permits before the work was completed; however, the Grand Jury could find no confirmation one way or another of this allegation. The Macias audit confirmed that environmental reports, legal inspections, and permits were not included, reported, or tracked.
No recommendations for this finding
F4
Poor communication between City departments, developers, and contractors. • Input from other involved parties, users, and consultants was either ignored, or not requested, by the City Manager. The City Manager made significant decisions about the projects without informing or involving other interested parties or other City departments and staff. The seating and layout for the Arena was changed unilaterally by the City Manager. Tom Volpe, Ports owner, ultimately had little input as to the size, the configuration, or the seating in the Ballpark. Based on written correspondence and other information reviewed by the Grand Jury, the members determined that Mr. Volpe felt he was shut out of the planning and building process of the Ballpark.
No recommendations for this finding
F5
Appearance that the City Manager unilaterally controlled projects, finances, change orders, etc., without City Council knowledge and/or approval. • Many major decisions were made by the City Manager without prior approval by the City Council. • Cost overruns resulted from redesigns and change orders which were initiated by the City Manager, sometimes without Council knowledge. • The City Council gave very broad powers to the City Manager to oversee design, construction, and management of the Events Center project, and subsequently had to approve increased construction costs for the project, often after the fact.
No recommendations for this finding
F6
Transfer of funds from budget categories into infrastructure fund and public facility fee revenues. • The costs of the Events Center projects have been met by transferring funds into and out of the general fund and other accounts as well as by bond monies. Project costs were covered by a combination of funds from the Redevelopment Agency, Community Development, the General Fund, Public Facilities Fees, and Utilities Department fees, among others. • Movement of general funds to cover project costs and bond repayment has affected other city projects and operations. • Funds set aside for street work in the Charter and Airport districts have been redirected to the Events Center projects or the Hotel Stockton. • The first phase of the Williams Brotherhood Park Community Center will not get a gymnasium and other planned amenities at this time because funds have been spent on the Events Center projects or the Hotel Stockton. • Personnel from at least five City departments were reassigned to, or assisted in work on the Events Center projects. Their salaries were paid out of the budgets from their original departments, so actual total personnel costs for the Events Center projects cannot be determined, as confirmed in the Macias audit. This action also deprived the public of services in those understaffed departments. • There is possible non-compliance with fees within the California Government Code §66001, which requires identification of the purpose of a fee and its relationship to the development project upon which it will be used, as well as a relationship between the need for the facility and the fee. This section also requires that the accounting and expenditures of this fee be specific. • There is possible non-compliance with fees within the California Government Code §66002, which requires that a capital improvement plan indicate the location, size, time of availability, and estimates of cost for the project financed with these fees. • There is possible non-compliance with fund transfers within the California Government Code Section 66006 which requires that the documentation for interfund transfers or loans include specific information about the transfer or loan, including the date for repayment and the rate of interest to be paid. In addition, California Government Code §66006 requires that fees be expended solely for the purpose for which the fee was collected. It further requires (as stated above) that fund transfers or loans require specific documentation.--The costs were met by transferring funds from the general fund and other accounts. --Terms and repayment of loans from one account to another are not readily determined. --Funds set aside for street work and Charter and Airport districts have been depleted and spent on the Events Center projects. --The first phase of Williams Brotherhood Park Community Center will not get a gymnasium and other planned amenities because funds have been diverted to help pay for the Events Center projects.
No recommendations for this finding
F7
Violations of Stockton's own policy, resolutions, and guidelines. (California Government Codes §§66000, 66001, 66002, 66006) • The City Council failed to adhere to the City's Charter in allowing the City Manager to expend funds well above the $20,000 limit, without prior Council approval.
No recommendations for this finding
F8
Communication between City staff and City Council related to decisions. • Sometimes the City Council lacked specific information about the projects in order to make good decisions about construction, design, and costs. Council Members were given large packets of information on matters requiring important financial decisions for review only twenty-four hours prior to Council meetings. • City staff did not always provide information requested by individual City Council members outside of Council meetings with regards to the Events Center. • Lack of sufficient communication existed between the City Manager and the City Council in the project's decision-making process.
No recommendations for this finding
F9
Transfer of monies from City funds to finance redevelopment projects. • Some of the costs for redevelopment projects were met by transferring funds from the general fund and other accounts, including moving money to the general fund so that it was available for the Events Center projects. • Movement of general funds to cover project costs and bond repayment has affected other City projects and operations, such as public works, lighting, park maintenance, and security.
Related Recommendations (1)
R9
Whether monies from various City budget accounts were used and transferred appropriately to finance redevelopment projects.
F10
Documentation and authorization for loans. • Documentation and/or information about the terms and repayment of loans from one City budget account to another as outlined in California Government Code §66006 have not been provided to the Grand Jury. • See #6 above.
Related Recommendations (1)
R10
Whether loans from one budget area to another were documented and authorized adequately to indicate the precise terms of the loan and the repayment schedule.
F11
The scope of on-going costs of maintenance, utilities, and other City services for these new facilities. • Ports owner, Tom Volpe, signed a contract and paid in advance for the use of the Ballpark. He received a twenty-five year contract for $1.2 million. This up-front payment allows the Ports use of the facility for $680 a game (based on the current schedule). During baseball season, the Ports organization has full use of the facility from April through September. Also, the Ports organization has been given the right to use the facility for ten additional events, beyond their scheduled ballgames. • The City of Stockton's website shows a population of 279,513. The ERA report shows a population of 581,200, which includes the entire County. Clearly, the City was taxing its citizens to build facilities in hopes of bringing in citizens from the rest of the County. If the realistic population was applied to the ERA, no similar-sized community would have been listed for comparison. • Tom Volpe wanted fewer fixed seats and more grass seating in the Ballpark, but after he signed an agreement and the City Council approved the contract, the former City Manager added more seats and removed the second level. The changes in configuration have an impact on the concession revenues in the Ballpark. • The major portion of the costs for utilities and for maintenance of the facilities falls to the City of Stockton. • The actual costs of utilities, the costs of maintenance for the facilities, and the costs of the financing of the sports teams contracts have not been made available, despite requests for detailed information by the Grand Jury.
Related Recommendations (1)
R11
What were the on-going costs of maintenance, utilities, and other City services for these new facilities.
F12
Policies and procedures regarding capital projects. • The City Charter contains policies for governance operations. The Grand Jury found that projects of this size in other cities are often handled by private contractors so that oversight is adequately performed by persons who have expertise, while the decision-making powers rest with the City Council. • The City Council did not hold the City Manager accountable to the City Charter policy of the spending limit of $20,000 per change order without prior City Council approval. At one City Council meeting in December 2004, the members approved a request for $1 million in increased costs for the projects. In actuality, the increase encompassed more than $11 million in increased costs, all done before approval by the City Council. In the duties and responsibilities outlined in the City Charter for the City Manager, these significant increases to the project costs should have been brought to the Council for approval prior to the expenditure. • There is possible non-compliance with fees within the California Government Code §66001, as outlined in #6 above. • There is possible non-compliance with fees within the California Government Code §66002, as outlined in #6 above. • There is possible non-compliance with fund transfers within the California Government Code §66006, as outlined in #6 above.
Related Recommendations (1)
R12
Whether the Stockton City Council has adequate policies and procedures in place to oversee fiscal management of large projects such as the Ballpark and Arena and whether they are being followed by the City Council and its designees.
F13
CONREP staff was not available to take a telephone call from the Stockton Police Department on December 27, 2003, despite policy which indicates staff on duty or on call twenty-four hours a day, seven days a week.
No recommendations for this finding
F14
The CONREP program has a case load of thirty-six (36) clients, whereas the maximum case load, based on recommended staffing ratios, should be twenty-seven (27).
No recommendations for this finding
F15
When the decision is made to commit a person to Atascadero who is incompetent to stand trial, the wait for admission is often two months or more, causing the clients to be housed in the County Jail.
No recommendations for this finding
F16
CONREP staff relied on information from an unreliable collateral contact (the father) despite allowing the client weekend leaves to stay with his father. No verification was done on a regular basis to ensure that the client was staying where he agreed to stay.
No recommendations for this finding
F17
The CONREP Program Manual of the San Joaquin County Mental Health Services provided to the Grand Jury contains policies, which are all dated July 1, 1996, and are approved by the Mental Health Director. Included in the materials were revisions of many of the policies dated July 1, 2004, some of which contain crossed out sections and handwritten entries. These policies contain no approval signature. In addition, the California Department of Mental Health CONREP Manual has updated policies and procedures, some as recent as August 2005. It appears that the County's Manual is out of date. Of special note, the County's Manual contains no policy for "Non-compliance"—based on CONREP's policy 1340.26. Another policy contained in the July 1, 2004 revision—"Special Incident Reports"—is blank.
No recommendations for this finding

Additional Recommendations 8

These recommendations are not explicitly linked to specific findings.

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.