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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

El Dorado County Grand Jury • 2000-2001

Board of Supervisors Response to the

Published: December 07, 2001 200 pages Consolidated Report
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Findings 87 findings

F1
The then Undersheriff did not attend work from January 28, 2000, until his retirement on May 5, 2000. Response to F1: The respondent agrees with the finding.
F2
Section 1006 of the El Dorado County Salary & Benefits Resolution for Unrepresented Employees states, “sick leave taken in excess of eighty hours may be supported by a Doctor’s excuse”. Response to F2: The respondent disagrees wholly with the finding. Section 1006 of the El Dorado County Salary & Benefits Resolution for Unrepresented Employees does not contain the quote cited in the finding. What it does say is: “Departments may request information in order to aid in the determination of whether the sick leave use is legitimate. A department head may require a physician’s statement or acceptable substitute from an employee who applies for sick leave (emphasis added).” 7
F3
Payroll records indicate that the then Undersheriff was paid for two hundred (200) hours of sick leave form January 28, 2000 to May 5, 2000. Response to F3: The respondent agrees with the finding.
F4
The action described in Finding 3 resulted in the “use” of accumulated sick leave for which the then Undersheriff would not have been entitled to receive payment at the time of his retirement. Response to F4: The respondent agrees with the finding.
F5
The then Undersheriff was not sick during this period. Response to F5: The respondent disagrees wholly with the finding. The Sheriff has no personal knowledge of the then Undersheriff’s health during the period in question. The Sheriff will investigate the Grand Jury’s finding pursuant to Section 1006 of the El Dorado County Salary & Benefits Resolution for Unrepresented Employees and if it is determined that the then Undersheriff was not ill, a demand for repayment of funds will be pursued.
F6
The affected employee was entitled to receive payment for 504 hours of sick leave upon retirement under Section 1009 (A) The El Dorado County Salary & Benefits Resolution for Unrepresented Employees. Response to F6: The respondent agrees with finding.
F7
The affected employee received payment for 504 hours of sick leave upon his retirement. Response to F7: The respondent agrees with the finding.
F8
County custom and practice, with the knowledge and concurrence of Human Resources Department, is to accept the transmittal of a Personnel Payroll Form (“PPF”) as notice of authorization by a department head of the assignment of an employee to an acting position. A PPF is a form that notifies HRD of a change of employee status. For payroll purposes that change is noted on the form by entry of an alphanumeric code. Response to F8: The respondent agrees with the finding.
F9
The use of Personnel Payroll Forms is inadequate to assure compliance with the County’s acting and/or overfill policies and procedures for the following reasons: a. Personnel Payroll Forms are completed and forwarded by a staff employee within the Department and fail to establish a record that the department head either knows of, or has authorized, the reassignment. b. Personnel Payroll Forms are not necessarily submitted to Human Resources Department prior to the employee’s commencement of work in the higher class position; instead, they must only be submitted to HRD in time to authorize compensation for the pay period worked in the higher classification. c. The reassigned status created by the Personnel Payroll Forms is permanent and open-ended, allowing a department head, at the end of the six-month period, to ignore the County’s requirement for reauthorization of the affected employee’s compensation for working in the higher class. d. Use of Personnel Payroll Forms is inappropriate for reauthorization of acting positions, as PPFs are designed to document a change in employee status, while the required reauthorization would in fact retain the existing status of the effected employee. e. Use of Personnel Payroll Forms fails to provide the County protection against a department’s inadvertent or intentional failure to notify Human Resources Department either that the employee is no longer performing work at the higher class or that the authorization for the particular position no longer exists. In effect, an employee, once elevated in pay, could continue to be paid at a higher compensation rate indefinitely, whether or 12 not (i) the employee either continued to work in the higher classification or (ii) the assignment to which the employee had been temporarily elevated had subsequently been filled by another employee. (See F15.) Response to F9: Respondent disagrees partially with the finding. Respondent disagrees partially with the finding in “a” and “e”. Respondent agrees that the payroll/personnel form alone is inadequate to assure compliance with the County’s acting and/or overfill policies and procedures. Regarding the finding listed in “a”, most department heads sign the payroll/personnel forms for their department. In some larger departments, the Department Head may delegate this task to a subordinate. Respondent also disagrees partially with the statement in “e” that when an employee is no longer performing work at the higher class or that the authorization for a particular position no longer exists “. an employee . . . could continue to be paid at a higher compensation rate indefinitely. . .” Checks and balances exist in the system to preclude an employee indefinitely receiving compensation at a higher level when another employee formally fills the position.
F10
Resolution Section 501. Authorized Personnel states in part: “Except as otherwise provided by law, the Board of Supervisors shall, by resolution, specify the number and classification of all positions authorized for each department of the County. …All additions, deletions or modifications to the Authorized Personnel Allocation Resolution shall be made by amending Resolution. No person shall receive any compensation for services as a County employee whose employment is not authorized by the Authorized Personnel Allocation Resolution,…” The Grand Jury believes “all positions” means all positions. Response to F10: The respondent disagrees partially with the finding. Section 501 is correctly quoted as a stand alone statement. Respondent cannot comment on Grand Jury’s belief.
F11
In February 2000, the Sheriff assigned an employee to the position of Undersheriff in an acting capacity because of the extended leave status of the then regular Undersheriff. Response to F11: The respondent agrees with the finding.
F12
In May 2000, the regular Undersheriff retired. This action left the Department with one Undersheriff performing in an acting capacity. Response to F12: The respondent agrees with the finding. 13
F13
In August 2000 the then acting Undersheriff had been in an overpay position for six (6) months. No reauthorization was written and forwarded to Human Resources Department by the Department. Response to F13: The respondent agrees with the finding other than reference to “overpay” vs. “acting pay” under Section 1408 (2) of the Salary and Benefits Resolution.
F14
On October 1, 2000, the Sheriff appointed a second employee to the permanently authorized position of Undersheriff. Response to F14: The respondent agrees with the finding.
F15
Upon the appointment of the regular Undersheriff in October 2000, the legal authorization for the acting Undersheriff’s position ceased to exist. Response to F15: The respondent disagrees wholly with the finding. Section 1408(2) of the Salary & Benefits Resolution for Unrepresented Employees provides that “in exceptional circumstance when a vacancy does not exist but an employee has been assigned to perform duties which exceed the scope of that employee’s classification, and when determined and justified by the Chief Administrative Officer, in his sole discretion, an Unrepresented Management or Confidential employee will be entitled to pay for a higher classification in accordance with the other provisions of this Section 1408.” Section 1408(5) provides “Higher pay assignments shall not exceed six months except through reauthorization.” Though desirable, 1408(5) does not require written reauthorization, nor does it specify who provides reauthorization. The CAO was aware of and verbally approved the continued acting status of an Undersheriff after six months.
F16
The employee assigned the position of acting Undersheriff continued to be compensated at the rate of Undersheriff until March 2001, subsequent to the initiation of this investigation. One of the effects of this compensation was to increase retirement benefits for the employee. Response to F16: The respondent disagrees partially with the finding. Retirement benefits are provided by contract; a person’s entitlement varies according to PER’s formulas. Changes in pay do affect individuals’ retirement entitlements. The employee assigned the position of acting Undersheriff continued to be compensated at the rate of Undersheriff until February 23, 2001, not March 2001. The initiation of an investigation by the Grand Jury had nothing to do with the termination of that pay. The employee assigned the position of acting Undersheriff was to retire at the end of December 2000, ending the acting appointment. The employee changed his plans in order to take advantage of the enhancement to the County’s retirement plan (3% at 55). The Sheriff should have terminated the acting appointment at the end of December, but agrees that he failed to do so. Staff brought that matter to his attention on February 14, 2001 and he immediately ordered acting pay to be terminated at the earliest possible date, which was February 23, 2001. Whether the additional compensation will increase the employee’s retirement benefits is pure speculation. Those benefits are based on the highest year’s compensation and until the employee actually retires, there is no way to know whether the ten-pay period acting time will be included in that calculation or not.
F17
The retention of an acting Undersheriff after the appointment of a regular Undersheriff constitutes the employment of two (2) persons in the capacity of Undersheriff. · The addition of a second Undersheriff’s position to the Department would have required the Board of Supervisors to amend the Authorized Personnel Allocation Resolution. (Section 501) · The authorization of a second Undersheriff as an overfill would have required the approval of the Chief Administrative Officer and the Director of Human Resources Department. [Section 503(c)] · The authorization of a second Undersheriff as an “exceptional circumstance” would have required the approval of the Chief Administrative Officer. [Section 1408 (2)] Response to F17: The respondent disagrees partially with the finding. Two persons were acting in the capacity of Undersheriff, one through formal appointment and one through verbal approval by the CAO in the continued acting status pursuant to Section 1408 (2).
F18
There is a conflict between the provisions of the Resolution as stated in Section 501 and the language of Sections 503(c) and 1408 (2). Response to F18: The respondent agrees with the finding that there appears to be a conflict in the language. However, as specific language generally supercedes general language under the rules of statutory construction, practice has provided that Section 503(c) supercedes in cases of an overfill and Section 1408(2) supercedes Section 501 in cases of designation in an acting capacity. 15
F19
Even if there were no such conflict, there was no authorization by the Chief Administrative Officer, or by the Director of Human Resources Department, for the continued employment and/or compensation of two Undersheriffs. There was no action by the Board of Supervisors to create a second position of Undersheriff. Response to F19: The respondent disagrees partially with the finding. Respondent agrees there was no written authorization. However, the CAO advised the Director of Human Resources of the continued retention of the acting Undersheriff in such capacity. Respondent agrees there was no action by the Board, but none was required.
F20
There is no legal basis for the continued compensation of employees for work, in a higher classification, which those employees no longer perform. That situation would cause the County to expend funds for work it did not receive, and thus would constitute a misuse of public funds Response to F20: The respondent agrees with the finding based on the stated assumption that the employee no longer performs the work at that higher level. Section 1408(5) provides “Higher pay assignments shall not exceed six months except through reauthorization. Though desirable, 1408(5) does not require written reauthorization, nor does it specify who provides reauthorization.” The CAO was aware of and verbally approved the continued acting status of an Undersheriff after six months.
F21
There is no mechanism in the County’s Personnel and Payroll system to automatically detect and alert County staff to several conditions: a. employees remaining in acting positions for periods in excess of six (6) months without reauthorization; b. employees being paid for working in a higher classification after having ceased to work in that capacity; and c. A greater number of employees being compensated for working in a classification than a department has authorization to employ. Response to F21: The respondent agrees with the finding. 16
F22
At the time of the filing of the complaint, the DA’s Office sent a 10 day letter to the defendant directing the defendant to submit to “a standard law enforcement identification booking” procedure.
F23
A 10-day letter is issued for the purpose of notifying a defendant to surrender, at the defendant’s convenience, for booking prior to a specified date. It is used in those cases, which meet the following criteria: · The defendant has not previously been arrested and booked for an act which is the basis for the complaint charged; · A warrant has not already been issued for the defendant for charges resulting from the complaint; · Where the DA believes the defendant will voluntarily comply with the directed booking.
F24
The use of a 10 day letter does not provide the Court, or any Law Enforcement Agency within El Dorado County, with a notice that will trigger a default warning in the event the defendant does not comply with the written direction for booking.
F25
At a pre-arraignment conference on some date prior to the defendant’s scheduled arraignment, the defendant’s attorney made a request of the court for a postponement of the required booking.
F26
The Chief Assistant District Attorney was present at this conference. 22
F27
There is conflicting evidence regarding the position of the DA’s representative on the issue of postponement of booking.
F28
There is no reported record of this conference and therefore the position of the DA’s representative on this request is not documented.
F29
At the original date set for the defendant’s arraignment, the court record reflects: · A representative of the DA’s Office was not present; · The defendant’s attorney and the victim’s attorney were in attendance; · A representation by the defendant’s attorney was made to the Court, “We’re very close to a civil compromise in this.”; and · The Court granted the defendant’s attorney’s request for a continuance of an arraignment hearing to facilitate the arrangement of a civil compromise agreement or be assigned to a trial court.
F30
In October 2000, the case was heard by a visiting judge, and at that time it was settled by civil compromise pursuant to California Penal Code Sections 1377 and 1378.
F31
California Penal Code Section 1377 provides: “When the person injured by an act constituting a misdemeanor has a remedy by a civil action, the offense may be compromised, as provided in Section 1378, except when it is committed as follows: a. By or upon an officer of justice, while in the execution of the duties of his or her office. b. Riotously. c. With an intent to commit a felony. d. In violation of any court order as described in Section 273.6 or 273.65. e. By or upon any family or household member, or upon any person when the violation involves any person described in Section 6211 of the Family Code or subdivision (b) of section 13700 of this code. f. Upon an elder, in violation of Section 368 of this code or Section 15656 of the Welfare and Institutions Code. g. Upon a child, as described in Section 647.6 or 11165.6.” (Emphasis added)
F32
California Penal Code Section 1378 provides: “If the person injured appears before the court in which the action is pending at any time before trial, and acknowledges that he has received satisfaction for the injury, the court may, in its discretion, on payment of the costs incurred, order all proceedings to be stayed upon the prosecution, and the defendant to be discharged therefrom; but in such case the reasons for the order must be set forth therein, and 23 entered on the minutes. The order is a bar to another prosecution for the same offense.”
F33
California Penal Code Section 1379 states: “No public offense can be compromised, nor can any proceeding or prosecution for the punishment thereof upon a compromise be stayed, except as provided in this Chapter.”
F34
The Chief Assistant District Attorney was present at the hearing at which this case was civilly compromised.
F35
There was no court reporter present at the hearing at which the case was settled and the civil compromise approved. Accordingly, there is no transcript of the DA’s position regarding this case disposition.
F36
The DA’s standard policy on civil compromise, where civil compromises are legally permissible, is one of the following: · No position on the proposal; or · Opposition to the proposal.
F37
In practice the Court generally will not approve a civil compromise in the face of an objection by the DA.
F38
The practical effect of the DA taking no position in opposition to a civil compromise is, in the opinion of the Grand Jury, a de facto approval of the proposed civil compromise.
F39
Dispositions of criminal cases by civil compromise are unusual events in El Dorado County.
F40
Two of the sixty-one aforementioned cases, were disposed by civil compromise. This case was one. The second, with a loss value of approximately $500, was charged as a felony, later reduced to a misdemeanor, and subsequently civilly compromised on April 10, 2001.
F41
During the course of the disposition hearing the defendant’s booking status was not brought to the attention of the visiting magistrate.
F42
The defendant in the case, which is the subject of this complaint, never submitted to the required booking as directed in the 10-day letter.
F43
The case having been disposed by civil compromise, the criminal justice system no longer has authority to compel the defendant to submit to a “standard law enforcement identification booking.” 24
F44
The Grand Jury found no evidence that El Dorado County Sheriff Hal Barker attempted to cover-up the defendant’s criminal misconduct, nor did he at any time attempt to influence, or interfere with the investigation of this case.
F45
The procedures followed by the District Attorney’s Office during the investigation, filing, proceedings, and disposition of this case were not legally impermissible.
F46
A courtesy copy of this letter was routed to the CAO. Response to F46: The respondent agrees with the finding. The copy provided to the CAO was not merely a “courtesy copy”, but was in fact confirmation of the issues outlined by County Counsel and County Counsel’s
F47
In a memorandum from the County Treasurer/Tax Collector dated February 8, 2000, to the District III Supervisor, several recommendations were made regarding the Project. The last of these reads: “All Star Investments, LLC, should fully disclose to all interested parties all income from all sources on this deal, including any spread on the interest rate.” Response to F47: The respondent agrees with the finding.
F48
The Grand Jury found no evidence that this request was ever made of All Star. No such information was ever provided to the County by All Star. Response to F48: The respondent agrees with the finding. The response is subject to two qualifications. First, the respondent has no knowledge of what evidence the Grand Jury found. Second, the respondent has found no documentary evidence that the information was provided, but has no knowledge of oral communications between All Star and Hanford. Because County Policy A-11 and Penal Code section 933.05 require that we either agree, or partially or wholly disagree with each finding, we agree with the finding because we have no knowledge to the contrary.
F49
In an attachment to a letter dated May 23, 2000, All Star represented the Costs for Phase I of the Project to be $38,100,000. Response to F49: The respondent agrees with the finding.
F50
The County received a grant from the State Bureau of Corrections (BOC) in the amount of $1.4 million, the funds to be applied to the construction or renovation of a juvenile hall facility. The grant included a deadline for the use of funds. Response to F50: The respondent agrees with the finding. The grant included deadlines for construction to commence, and for construction to be complete.
F51
Repeated changes in the Project caused delays in the required CEQA process, which, combined with other lease issues, led to negotiations for the Juvenile Hall portion of the Project not being completed in a sufficiently timely manner to allow the expenditure of the grant funding prior to the grant deadline. The funds were returned to the State without prejudice. Response to F51: The respondent disagrees partially with the finding. The grant award was turned back to the state, but no grant money was ever received from the state. Changes in the project causing delays in the CEQA process and lease issues contributed to this result. There were additional issues, however, some related to Board of Corrections requirements, that also contributed to the respondent’s inability to meet the construction deadlines in the grant.
F52
All Star made a demand to the CAO for payment, in a letter dated June 7, 2000, which reads in part: “We request that the County honor the commitments made in the July 9, 1999 Letter of Agreement, as amended September 9, 1999, and provide All Star Investments with immediate payment of the aggregate total of $1,400,000 now due and owing for the environmental and design documentation furnished to the County.” No supporting invoices or other documentation justifying the amount of such payment was submitted by All Star to the County. Response to F52: The respondent agrees with the finding.
F53
On June 14, 2000, notwithstanding the absence of supporting invoices or other documentation justifying the amount of All Star’s claim, the CAO prepared an Agenda Transmittal and letter attachment recommending to the BOS that the All Star billing be approved for payment, and paid, in the amount of $1,400,000. These funds were to be paid from the Department 15 Capitol Facilities Construction Account. The CAO represented to the BOS that it had previously approved “a Letter of Agreement and amendments thereto calling for the payment of $1.4 million to All Star Investments” in the event the lease was not finalized by April 2000. (Emphasis added). That was incorrect. The BOS had actually authorized the payment of up to $1.4 million, not a flat fee of $1.4 million. The matter was scheduled as Agenda Item #86 on the BOS Calendar for June 27, 2000. The Agenda item itself, as opposed to the documents submitted to the members of the BOS in support of the Agenda item did not publicly specify the amount of payment to be made. Response to F53: The respondent agrees with the finding. 70
F54
The CAO’s recommendation to the BOS was misleading, in that it did not advise the BOS of the following facts: a. That the $600,000 figure for the Phase I Court Facility was a cap, rather than a fixed fee; b. That the $500,000 figure for the Sheriff’s Facility was a cap, rather than a fixed fee; c. That the $300,000 for the Juvenile Hall had been approved on the basis of the CAO’s representation of it as a cap, rather than a fixed fee, contrary to the language of the agreement (Amendment #1) itself; d. That no supporting backup for All Star’s claim for its own services, or allocation of that claim between three separate portions of the Project, had been received; and e. That no supporting backup for All Star’s claim for subcontractors’ services, or allocation of those claims between the three separate portions of the project, had been received. Response to F54: The respondent agrees with the finding. The response is subject to one qualification. Although the Agenda transmittal was inaccurate, the term “misleading” seems to imply that the inaccuracy was intentional. The respondent has no knowledge of any such intent underlying the CAO’s
F55
After input from the Auditor/Controller, at the June 27 meeting of the BOS, the CAO modified his recommendation to authorize payment to All Star “after proper invoices are received and reviewed by the CAO, County-Counsel and Auditor-Controller.” Response to F55: The respondent agrees with the finding. The CAO modified his recommendation after discussion with the Auditor/Controller and County Counsel.
F56
Except for the input of the Auditor/Controller, it appears the sum of $1.4 million would have been paid to All Star without any determination having been made by the CAO or the BOS: a. That $600,000 had actually been expended by All Star for the Phase I Court facility; b. That $500,000 had actually been expended by All Star for the Sheriff’s facility; 71 c. That the amounts of All Star’s subcontractors claims, and allocation of those claims between the three separate phases of the project, were justified; or d. That the amount of All Star’s claim for its own services was justified. Response to F56: The respondent agrees with the finding. County Counsel provided information in addition to the Auditor/Controller.
F57
All Star submitted an invoice dated 7/10/00. It is a single item invoice for “Professional Services rendered for the schematic design for the El Dorado Juvenile Hall Facility”. The amount billed was $300,000. Because of the language of Amendment #1, which constituted a fixed fee agreement, the Auditor paid the claim in full on September 6, 2000. Response to F57: The respondent agrees with the finding.
F58
Examination of billings and invoices associated with the work of All Star and its subcontractors shows that the reimbursable expenses associated with the Juvenile Hall Facility would have been less than $140,000. Thus the fixed fee provision of Amendment #1 ultimately cost the County in excess of $160,000. Mixing of a “fixed fee” agreement with other “cap” agreements in the same project created a foundation for additional issues regarding the amounts due and payable by the County. Response to F58: The respondent agrees with the finding.
F59
All Star submitted to the County a one-page Invoice, dated July 17, 2000, seeking payment in the amount of $1,123,222.20 for the following costs: a. $450,000 for Development and Management Services rendered for the El Dorado County Courthouse and Sheriff Facility. The claim for those costs was supported by a one-page memo, dated July 3, 2000, asserting that an Ellen Warner spent 1,800 hours on the project, at a rate of $250 per hour, and that the hourly rate was “inclusive of all management, accounting and overhead.” b. $503,840.00 for Nacht & Lewis Architects. c. $63,668.85 for Carlton Construction Co. d. $4,066.50 for The Hoyt Co. e. $5,000.00 for Walker Parking Consultant. f. $45,997.03 for Legal Services. 72 g. $45,000.00 for Financing Services. h. $5,669.82 for Miscellaneous Expenses. No subcontractor invoices or other billing documents were submitted in support of the claim. Response to F59: The respondent agrees with the finding.
F60
In a letter dated August 3, 2000, All Star responded to a concern which the County had raised regarding the possibility All Star was double billing for work preformed on the Juvenile Hall Facility. The letter reads in part: “We have reviewed the billing and back up submitted to you previously, and confirm that the Juvenile Facilities costs are not included in the Sheriff and Courthouse Project.” Response to F60: The respondent agrees with the finding.
F61
Ellen Warner, the person identified in the claim referenced in F59 (a.) above, was represented to the County by All Star through numerous communications on All Star letterhead, to be “VICE PRESIDENT, All Star Investments, LLC”. Further, according to the CAO in a letter to All Star dated October 25, 2000, “John Thomas has readily acknowledged that his company [All Star] did not incur a reimbursable cost to Ellen Warner in the amount of $250.00 per hour.” Response to F61: The respondent agrees with the finding.
F62
Invoices obtained from Nacht and Lewis, the company identified in the claim referenced in F59 (b.) above, for billings to All Star for work preformed on the Project, show total billings of $523,077.08. Of that sum, however, $120,849.60 is clearly marked and billed exclusively to work preformed on the Juvenile Hall Facility. Response to F62: The respondent agrees with the finding.
F63
Examination of billings from Carlton Engineering, the company identified in the claim referenced in F59 (c.) above, discloses that the amount actually billed by Carlton Engineering was $62,961.87, of which $6,453.30 was directly attributable to work preformed for the Juvenile Hall Facility. This was subsequently confirmed by a letter from All Star dated November 17, 2000. Response to F63: The respondent agrees with the finding.
F64
As a result of the review of “proper invoices” by the Auditor/Controller and County Counsel, the Auditor/Controller determined that All Star was 73 legitimately entitled to the amount of $376,358.64 for services preformed on the Project in addition to the $300,000 fixed fee paid for the Juvenile Hall Facility. The total paid by the County to All Star for its services was $676,358.64, not the $1.4 million originally claimed by All Star. Response to F64: The respondent agrees with the finding. The response is subject to the following clarification. County Counsel and the Auditor-Controller requested and received invoices and billing records directly from the sub- contractors, and those invoices and documents were the basis for the payment. “Proper invoices” were not received from All Star.
F65
Diligence on the part of the Offices of the Auditor/Controller and County Counsel resulted in savings to the County in excess of $700,000. Response to F65: The respondent agrees with the finding.
F66
An escrow, No. PV-207337, was opened at Inter-County Title Company in connection with the purchase of Parcel A by exercising the Purchase Option which had been acquired through escrow No. PV-206564. As of February 15, 2001, when escrow No. PV-207337 closed, the County had expended a sum in excess of $235,000 to purchase Parcel A, not counting the $70,000-plus which the County had paid for the Option to purchase that parcel. Response to F66: The respondent agrees with the finding.
F67
As of February 15, 2001, the County had expended solely for the acquisition of the Logan Building and related parcels, out-of-pocket, approximately $2,155,000. That sum is essentially identical to the sum which Frank, on February 24, 2000, had told Hanford would be required to acquire those parcels. That sum does not include the approximately $130,000 which the County has expended, out-of- pocket, on non-county-employee labor and materials for changes to the lower floor of the Building for occupancy by the Sheriff's Office, nor does it include the amount, unquantified as of the date of this report, of non-out-of-pocket costs of county employee time incurred in the making of those changes. Response to F67: The respondent agrees with the finding.
F68
The 1999/2000 Grand Jury found that, "[a]s of June 1, 2000, the [BOS] has failed to inform the public of its specific intended use of the Logan property." The BOS agreed with that finding, but stated that "[o]nce this decision [regarding which County departments would ultimately occupy the Logan facility] is reached, it will be announced publicly by the Board." As of March 1, 2001, however, ten months later, and with the exception of the Sheriff's Department's occupancy of the lower floor, no such announcement had been made. Response to F68: The respondent agrees with the finding. No announcement has been made because no decision has been reached.
F69
As of March 1, 2001, George Martin ("Martin"), the Director of DGS, was, for the first time, in the process of seeking bids for an independent study to be conducted by a consultant in order to determine occupancy feasibility and what those costs were likely to be. As of that date, out-of-pocket costs approximating $130,000 had already been expended in connection with the occupancy by the Sheriff's Department of the lower floor of the Building. That expenditure, however, is approximately $100,000 less than what would have been expended had the Sheriff's request for purchase of two modular facilities to be located in the parking area of the existing Sheriff's facility, and related remodeling of that existing facility, been approved and implemented. 1 05 Response to F69: The respondent agrees with the finding.
F70
As of March 9, 2001, the County had expended, in both acquisition costs and remodeling costs for the lower floor of the Logan Building, approximately $2,300,000, not counting the time costs of County employees involved in that remodeling. Moreover, no remodeling or retrofitting costs or expenditures had yet been incurred in connection with the middle and upper floors of the Logan Building, and no costs or expenditures had been incurred in connection with the design and construction of any proposed facility to be located on Parcel A. Response to F70: The respondent agrees with the finding.
F71
On March 13, 2001, on request of newly elected Supervisors Baumann and Borelli, the BOS undertook discussion of the subject of whether the County should continue to expend funds in connection with the Logan Building, or whether the County should sell it and cease further expenditure of funds thereon. The BOS directed Martin, the Director of DGS, to investigate: · The space needs of the County generally; · The most likely appropriate potential departments or agencies to be assigned to use the Logan Building; and · The probable costs of retrofitting the Logan Building to make it usable for those departments or agencies; and · To report the results of that investigation back to the BOS on April 24, 2001. That direction effectively obligated DGS, which had no specific expertise in the subject, to perform the same functions for which it had previously solicited bids from consultants, in a highly compacted time frame. Response to F71: The respondent disagrees partially with the finding. We disagree with the statement that the Department of General Services had no specific expertise in the subject.
F72
On April 24, 2001, the Director of DGS presented a report to the BOS in response to the BOS's direction of March 13, 2001. In that report, the DGS Director made the following representations to the BOS: · Minimum retrofit costs would total $349,000; · Complete retrofit costs would total (depending upon whether the existing tile on the middle floor was or was not removed prior to the installation of carpeting) $389,000 to $397,000; · Purchase of furniture, not including desk top office supplies, for approximately forty-five (45) employees occupying the Building would cost an additional $157,500; · Actual cost of the Logan Building and related parcels was $2,157,637; · The Building and related parcels had appraised values of $1,565,000 for the Building (Parcel C), $110,000 for the parking area (Parcel B) and $255,000 1 06 for the "lot" (Parcel A), or a total of $1,930,000. · The County's acquisition cost was $227,637 over that total appraised value of $1,930,000; · Fair market value of the Logan Building and related parcels, for resale purposes, is between $1,000,000 and $1,450,000; · Continued occupancy of the lower floor of the Building by the Sheriff's Department, avoiding the purchase of two modular units for that purpose, would effect an annual savings of $30,000; · Potential rental to private businesses of the five suites on the upper floor of the Building would generate annual rental income of $53,742; and · The ability to rent out the middle floor of the Building is marginal at best. Response to F72: The respondent agrees with the finding.
F73
In his report the DGS Director then identified various County departments which, in his view, might be the most likely candidates to occupy the middle floor of the Building, and recommended · That the Building not be sold at this time; · That the Sheriff's Department continue to occupy the lower floor; · That the upper floor be rented out to private businesses; · That there be a "thorough analysis" of the appropriateness of occupancy of the Building by the departments which he had identified; and · That rental demand for the middle floor of the Building be "probe[d]." Response to F73: The respondent agrees with the finding.
F74
Inherent in the report of the DGS Director is the proposition that, if the Logan Building were to be sold, the County would probably sustain a loss of approximately $750,000 to $1,000,000. Whether that amount would or would not exceed the amount of additional funds necessary to retrofit the Building for purposes of efficient use by the County is, in the view of the Grand Jury as of the time of rendering this Report, a question requiring further study and investigation by qualified design and engineering professionals. Absent such study and investigation, however, it is the tentative view of the Grand Jury that the amount of those retrofitting costs would exceed the amount of the loss that the County would sustain upon a sale of the Logan Building and related parcels. Response to F74: The respondent disagrees partially with the finding. The Grand Jury holds the “tentative view” that it will cost the County more to retrofit the Logan Building than the $750,000-$1,000,000 loss the Grand Jury believes the County might realize if it sold the properties today. We disagree with the Grand Jury’s tentative view, however, and see no basis for it in the findings of fact. The DGS Director estimated retrofit costs at approximately half of the Grand Jury’s projected loss. Even All Star Investments’ estimate, cited in F60. (which one might expect to be a high estimate), does not exceed the Grand 1 07 Jury’s figure.
F75
The BOS, as a group, did not tour or otherwise view the Logan Building prior to authorizing its purchase. Some, but not all, of the members of the BOS did view it on an individual basis. At least one of the members of the BOS, however, never saw the Logan Building before voting to authorize its purchase. Response to F75: The respondent agrees with the finding.
F76
The 1999/2000 Grand Jury found that "the County appear[ed] to have paid significantly more than either the property's appraised value or the price noted in the real estate marketing documents." In its response thereto, the 1999/2000 BOS stated that that appraisal was "predicated upon the facility being utilized as an income generating property," and that "changing the use from income producing to non-commercial government use no longer justifie[d] this significant discount." That response ignored the fact that the only "discount" discussed in the Spencer Appraisal Report was a discount from $1,675,000 "stabilized" value, based on the income method of valuation, to $1,530,000 "as is" value. That response also ignored the fact that the "comparable sales" valuation of the Logan Building, as discussed in the Spencer Appraisal Report, was $1,620,000. For these reasons, this Grand Jury concludes that the 1999/2000 BOS was less than candid and forthright in its response to the 1999/2000 Grand Jury Report on the Logan Building. Response to F76: The respondent disagrees wholly with the finding. The 1999/2000 BOS was fully candid and forthright in its response to the prior Grand Jury. Spencer appraised the value of the Logan Building primarily using the “income approach.” The value under that approach was significantly diminished because of the prolonged vacancies the building had experienced. That is the “discount” to which the BOS referred. The fact that the Grand Jury may disagree with the substance of the 1999/2000 BOS response does not render the response “less than candid and forthright.”
F77
The 1999/2000 Grand Jury found that "[a]ny required internal modifications [of the Building] will require expenditure of additional funds." In response thereto, the BOS stated that "[m]odifications and renovations of this complex will be required to meet the specific functional requirements of its, yet to be determined, new tenant. However, the current total cost remains $600,000 less than the estimated cost to have built a new comparable facility (1.7 acres with the same square footage); and that assumes a suitable site would be available and that no major environmental impacts were identified or would require mitigation." That response evaded the following issues: · That the "replacement cost" figure did not appropriately value the Logan Building, because the building was overbuilt for the area and no other 1 08 Building, because the building was overbuilt for the area and no other purchaser would have paid replacement-cost for the Building; · That the County had no legitimate need to acquire an "overbuilt" building; · That the interior of the Building was not configured in a manner which would reasonably accommodate the County's needs, without the existence of substantial wasted space; · That because the County did not then know (and, with the exception of the lower floor of the Building, as of June 20, 2001 still does not know) the identity of the "yet to be determined new tenant," it therefore had no legitimate basis for speculating that the costs of modifications and renovations required to meet the specific functional requirements of that tenant would be less than $600,000; and · That, by referring only to "major environmental impacts [which] would require mitigation," the County ignored the potential ADA impacts arising from the issue of access to the upper floor. For these reasons, this Grand Jury concludes that the 1999/2000 BOS was less than candid and forthright in its response to the 1999/2000 Grand Jury Report on the Logan Building. Response to F77: The respondent disagrees partially with the finding. The basis for the 1999/2000 BOS’s statement that a comparable new facility would cost $600,000 more is unclear, and a majority of that BOS has left office. The BOS response, however, is clearly a “generic” one, not necessarily tied to the Spencer Appraisal Report, to the notion of replicating an “overbuilt” facility, or to the identity of a prospective tenant of such a new facility. The reference to environmental impacts clearly applied to the hypothetical construction of a new facility, not to ADA impact issues at the Logan Building. The fact that the Grand Jury may disagree with the substance of the 1999/2000 BOS response does not render the response “less than candid and forthright.”
F78
The 1999/2000 Grand Jury recommended that the BOS "be more forthcoming with the citizen taxpayers regarding all aspects of its acquisition of the Logan property." In response thereto, the 1999/2000 BOS stated that "[t]he
F79
Although the 1999/2000 Grand Jury investigation of the Logan Building acquisition was initiated on the basis of a complaint alleging the existence of conspiratorial conduct, the 2000/2001 Grand Jury was unable to develop any direct evidence of a specific conspiracy. Although Albaugh and the Lyons both lived in Auburn, the Grand Jury was unable to develop any direct or specific evidence that they had any contact or communications with, or even knew, each 1 10 other. The Grand Jury was also unable to develop any direct evidence of other conspiratorial conduct on the part of any other persons involved in the acquisition of the Logan Building and related parcels. Response to F79: The respondent agrees with the finding. The respondent is aware of no evidence, direct or indirect, general or specific, that would suggest any conspiratorial conduct among Albaugh, Lyons, or anyone else, or even what the purpose of such a conspiracy would be. The Grand Jury’s finding is ambiguous, not even suggesting the nature of the conspiracy. In addition, the phrase “Although Albaugh and the Lyons both lived in Auburn,” appears to be a non sequitur in that it implies, without basis, that the fact that both Albaugh and Lyons lived in Auburn alone should give rise to the suspicion of conspiratorial conduct.
F80
The existing interior of the middle floor of the Logan Building is configured (and partially constructed) in such a way that, if and when it is assigned for use by county agencies, the following situations will result and potential impacts, by way of example only, will occur: · The nature and quantity of restroom facilities within the Building, while appropriate for a single-owner business, are inadequate for a County building serving public needs, and substantial additional plumbing improvements and expansion will be required; · The floor-tile covering most of the middle floor of the Building, while obviously luxurious and expensive, is unsuited to traffic by the public. It either will have to be (i) removed and replaced or (ii) covered by some kind of carpeting. If that is not done, it will constitute a potentially dangerous condition as to which the County will be exposed to potential liability for slip-and-fall incidents; · Either (i) there will be a significant amount of wasted and unusable space on the middle floor, or (ii) a considerable amount of the expensive built-in cabinet and drafting-table fixtures on that floor will have to be removed, reconfigured and replaced. Significant, but as yet unquantified, remodeling and/or retrofitting costs will be necessary to mitigate these, and other, problems. Response to F80: The respondent disagrees partially with the findings with the finding. The Director of DGS has provided a preliminary quantification of remodeling and/or retrofitting costs. The adequacy of restroom facilities will depend upon how the building is occupied and used.
F81
The Logan Building is located in an area of Diamond Springs which is already subject to significant traffic congestion, and the adaptation of the Building to County uses will exacerbate that problem. Because the acquisition by the County of the Logan Building and related parcels was "categorically exempt" under CEQA, however, no environmental study of those traffic, or any other, 1 11 environmental issues was undertaken prior to its acquisition. Response to F81: The respondent disagrees partially with the finding. Construction has begun on a realignment and signalization of the Pleasant Valley Road - Highway 49 intersection that will dramatically improve traffic conditions in the area. Those improvements were planned and funded before the Logan Building was acquired. These improvements seem likely to offset any adverse traffic impacts of the County’s use of the Logan Building.
F82
There are significantly differing views as to the amount of the total additional costs and expenditures estimated to be required in order to make the Logan Building fit and usable for county purposes. At the low end of the estimates is that of the Director of DGS that those costs involve a minimum of $349,000, and for a complete retrofit will require $389,000 to $397,000, plus an additional $157,000 for employee furniture. In the middle is an estimate of All Star Investments, made during the course of its work on the Justice Center project, that approximately $750,000 would be required for use of the Logan Building by the Sheriff's Office. It is the view of the Grand Jury, however, that if a proper and appropriate job of remodeling is done in order to reconfigure the Building for maximum efficiency of use by the County, the costs and expenditures therefor will exceed, and probably will substantially exceed, seven figures, i.e., $1,000,000 or more. Response to F82: The respondent disagrees partially with the finding. We have no knowledge of the basis for the Grand Jury’s opinion that reconfiguring the building will cost $1 million or more, and the Grand Jury’s estimate greatly exceeds the two cited opinions, with no explanation. Furniture expenses could well be part of any relocation of staff to new quarters, and they should therefore not be assigned as an expense specific to retrofitting the Logan Building.
F83
The Grand Jury expresses no view, as of the time of the preparation of this report, as to whether the County (i) should incur the costs and expenditures necessary to completely retrofit the Building in light of its previously expended funds, or (ii) should "cut its losses" and attempt to dispose of the Building at the best available price, recognizing that it will not be able to recover the full the amount that it has previously expended. The Grand Jury is of the view, however, that that determination should not be made by the BOS until a study and report from a consultant with expertise in the subject, setting forth specific proposed uses and costs, has been completed and presented to the BOS. Response to F83: The respondent partially disagrees with the finding. A consultant may not necessarily be required.
F84
In November 2000, the County Counsel and the CAO asserted claims of confidentiality and privilege as to some of the Grand Jury's inquiries of them 1 12 pertaining to this investigation, and they accordingly testified only as to non- confidential matters. The 1999/2000 BOS then authorized the filing of a lawsuit against the Grand Jury to preclude inquiry into such matters. On April 3, 2001, Superior Court Judge Suzanne Kingsbury signed and filed a Judgment which rejected the County's assertions. The 2001/2002 BOS then authorized disclosure of all matters pertaining to this (and one other) investigation, and the Grand Jury obtained further testimony from the CAO concerning matters previously withheld. Response to F84: The respondent agrees with the finding. The lawsuit was filed only after a legitimate exchange of views among the affected parties failed to resolve the dispute. The parties cooperated in good faith in placing the matter before the Court. The County initiated the lawsuit after representatives of the Grand Jury had indicated that the Grand Jury was prepared to sue the County to resolve the issues. The County determined that it was more forthright to seek judicial resolution immediately, rather than waiting to be sued by the Grand Jury for enforcement of the subpoenas. For additional detail, see also response to finding F78.
F85
Section 703 of the County Charter provides as follows: "Every county officer and employee shall cooperate in providing the Grand Jury with any requested information or documents, except where disclosure is prohibited by law." Response to F85: The respondent agrees with the finding.
F86
In the County's lawsuit against the Grand Jury, in arguing that Section 703 of the County Charter did not constitute a waiver of attorney-client privilege or closed session confidentiality, the County Counsel made the following assertions concerning that provision: · In the ballot arguments made at the time the Charter was adopted by the voters, the "County Counsel's impartial analysis advised, 'The proposed charter makes relatively few substantive changes to provisions already contained in general law,'" and that "[w]aiver of the lawyer-client privilege and closed-session confidentiality as to the Grand Jury were not among them." · "[T]here is no reason in law or logic why section 703 should not simply be declarative of existing law." · "Section 703 is operative as a policy expression of full support for the Grand Jury's work, without altering existing law." Response to F86: The respondent agrees with the finding.
F87
Superior Court Judge Kingsbury, in her April 3 Judgment, did not rule on the question of the legal effect of Section 703 of the County Charter. She did not rule that Section 703 constituted a waiver of privilege or confidentiality by the County as to the Grand Jury, but she also did not rule that it did not constitute such a waiver. It is the view of the Grand Jury, contrary to that of the County 1 13 such a waiver. It is the view of the Grand Jury, contrary to that of the County Counsel that Section 703 was intended to, and does, constitute such a waiver, and that that waiver is additional to and separate from the determinations of state law which Judge Kingsbury made in the Judgment. Response to F87: The respondent agrees with the finding. That is, the respondent agrees that the Grand Jury holds this view.

Recommendations 15