Reason for Report Community Service Districts (CSD's) are a category of Special Districts. They are

Road repair CSD's obtain most of their funds through special assessments previously approved by the district property owners and included as a separate item in their property tax bill. Annual funds accumulate over years and are held by the County Treasurer. The reserve funds are available to hire a contractor to provide road repairs when needed. Typically in a district, a repair project does not occur every year. Response to Finding 1: The respondent agrees with the finding.

Road repair CSD's could opt to become Zones of Benefit under CSA #9, but this would necessitate paying fees for County DOT services. Department of Transportation charges hourly rates for time spent assisting ZOB's, and the Auditor- Controller charges one percent of the annual budget for providing financial services. While these fees may be reasonable, road repair CSD budgets on average are considerably smaller than ZOB budgets. Response to Finding 2: The respondent agrees with the finding. 2 3. Road repair districts have limited technical expertise and may have limited understanding of State rules. Roads in their districts are legal public roads and rules must be followed that are not required for private roads in gated communities. Typical problems encountered are: creating or obtaining adequate specifications for road maintenance and drainage construction projects, drafting the scope of work for projects, seeking bids and selecting contractors, inspecting and approving work, and maintaining acceptable financial documentation. Response to Finding 3: The respondent agrees with the finding.

The Manual published by the Department of Transportation should also include the following: A. A section listing contacts, with phone numbers, email addresses and mail addresses, where users can obtain information about sourcing licensed contractors; this listing should include the Builders Exchange of El Dorado County. Response to Recommendation 3A: The recommendation will not be implemented because it is not warranted. Contractor information is readily available on the internet, yellow pages and other sources. The County should not list specific contractor information in an effort to avoid any appearance of favoritism or a perceived recommendation of a particular contractor. B. References for many specifications that are given in the "Road Maintenance and Repair Guidelines" section of the Manual which will allow users to obtain more detailed specification information when needed. Response to Recommendation 3B: The recommendation will not be implemented because it is not reasonable. References for specifications are available for road projects from contractors when projects go out to bid. Including references for specifications will likely involve the Department of Transportation in projects for which the county has no part. Clean Tahoe Program Case No. GJ 07- 011 REASON FOR REPORT The El Dorado County Grand Jury received a letter from the South Lake Tahoe District Attorney’s Office that prompted an investigation of the Clean Tahoe Program’s procedures for managing its funds. BACKGROUND The Clean Tahoe Program is a non-profit organization funded primarily by the City of South Lake Tahoe and El Dorado County. Its mission is to improve the visual quality of the Tahoe Basin within El Dorado County. Because it is publicly financed, it has a fiduciary responsibility, similar to the City and County, to properly manage its funds. The Clean Tahoe Program performs an important service to the community. This is accomplished through the dedication and hard work of the Clean Tahoe staff. METHODOLOGY The Grand Jury visited the offices in South Lake Tahoe of the Clean Tahoe Program and the South Tahoe Refuse Company (STR) to obtain information. STR is a private corporation with an exclusive franchise from the City and County to gather, sort, recycle, and dispose of refuse in the South Tahoe Basin. The investigation included a review of records, cashed checks, credit cards and the security of petty cash. People Interviewed: • Clean Tahoe Program Board, Two Directors • Clean Tahoe Program Manager • Clean Tahoe Program Outside Bookkeeper • Clean Tahoe Program Treasurer • El Dorado County Assistant District Attorney • South Tahoe Refuse Company Controller • South Tahoe Refuse Company President Documents Reviewed: • Clean Tahoe Program Brochure • Clean Tahoe Program By-laws, Procedures and Personnel Manual • Clean Tahoe Program Financial Documents • Clean Tahoe Program Budget vs. Actual Income and Expenses, October ‘06 through September ’07 5 • Clean Tahoe spreadsheets showing field work assignments • Comparative cost study by STR in 2004 showing cost savings if STR assumed Clean Tahoe Program duties • E-mail memos from Clean Tahoe Program Manager • Mission Statement of Clean Tahoe Program • South Tahoe Refuge Company controller memo (11/16/07) with financial spreadsheets RESULTS OF INVESTIGATION In the investigation of Clean Tahoe's management of funds, financial controls were found to be deficient. However, the deficiencies are in the process of being corrected. The Clean Tahoe Program is small and requires management and overhead functions that are disproportionately high and expensive in small publicly financed organizations. These costs would be lower if shared with similar costs in a larger organization. In principle, this can be achieved either by absorbing Clean Tahoe into a larger organization or by selecting a larger organization to perform the essential services that are now performed by the Clean Tahoe Program. The Grand Jury investigated these possibilities and found the following: FINDINGS In accordance with the California Penal Code §933 and §933.05, each finding will be responded to by the government entity to which it was addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. The 2007-2008 El Dorado County Grand Jury has arrived at the following findings: 1. The refuse picked up by the Clean Tahoe Program is deposited at the STR company transfer station in the City of South Lake Tahoe. There, the refuse is processed, with some of it recycled. The Clean Tahoe Program is charged for this at standard rates for this service. Response to Finding 1: The respondent agrees with the finding.

Road repair district directors will benefit from more job training. The Department of Transportation provides annual training classes for ZOB advisory committee members that would be very useful to road repair district directors and could be provided to them at negligible incremental cost. Response to Finding 4: The respondent disagrees partially with the finding. The training provided to the Zone of Benefit Advisory Committees by the Department of Transportation is specifically tailored to address Zones of Benefit and is not necessarily applicable to Community Services Districts. Including CSD members in the ZOB training most likely would be confusing for attendees who are typically looking for specific answers related to Zones of Benefit. In addition, although Department of Transportation staff are knowledgeable concerning Zones of Benefit, they are not trained or knowledgeable about Community Services Districts.

Very recently, the DOT prepared a prototype handbook (“Zone of Benefit Advisory Committee Manual”) for advisory committee members. This Manual includes information on: ethics, the open meeting law (The California Brown Act), road maintenance and repair (engineering) guidelines, contracting and purchasing, insurance, volunteer work procedures, and budget preparation. This Manual is an excellent product, put together from existing information at DOT in a very short period of time. The Department of Transportation is commended for this effort. This Manual would also be very useful to board directors of road repair districts. Response to Finding 5: The respondent agrees with the finding.