The 2018–2019 Santa Cruz County Civil Grand Jury Requires that the Santa Cruz County Board of Supervisors

The County Administrative Office lacks the resources necessary to be the sole administrator of major contracts such as the public defense contracts. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): The County Administrative Office (CAO) has the resources appropriate for a department its size. This includes the ability to administer the 58 contracts that the CAO oversaw in Fiscal Year (FY) 2018-19. In administering the public defense contracts, the CAO accounts for quality of service and stakeholder requirements using data and other resources available to the office. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

Negotiating multi-year, fixed price contracts for public defender services without anticipating the possibility of falling caseloads has cost the County several millions of dollars and created a windfall for public defense contractors. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): Negotiating multi-year, fixed price contracts allows for fiscal predictability while maintaining above adequate services for the County’s indigent clients. While caseloads could be one potential factor in compensation, it is not the only variable that drives cost of service. Other factors have to be considered in assessing a complex service system such as hours per case, the increase in specialty court assignments, the increase in use of digital evidence, and changes to the State and local criminal justice system. Simply because caseloads have decreased slightly, it does not follow that the public defense contracts could have been cheaper. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

No one person or department within County government knows exactly how much total compensation the County pays to the public defense contractors, because payment records commingle some fee payments with cost reimbursements. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree) Payment records in the County financial system can be sorted by vendor. The County’s financial system, ONESolution, can provide reports on how much was paid to any one person, company or legal entity. Payment history is maintained electronically going back to 1998. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

The County’s portrayal of its public defense services is not transparent. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): This finding stems from the Grand Jury’s claim that, “Allowing Mr. Biggam to appear to be the Public Defender makes his contract and County government less transparent.” Mr. Biggam’s firm has held the County contract for public defense services for over 30 years. Every year the County publishes, and has a hearing for, the budget that supports the entire public defense system of the County, including the contract for main public defense services. Additionally, the contract and all subsequent extensions and amendments were approved by the Board. As the Grand Jury report states, we agree that Mr. Biggam’s status leads to no specific harm or confusion by clients or the public. The Grand Jury claims that a 1978 memo from County counsel proves that Mr. Biggam is not the Public Defender. The scope of the memo speaks only to the firm’s ability to provide services outside Santa Cruz County, and says nothing as to whether Mr. Biggam is, or is not, the Public Defender. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

The County’s accounting for separate overhead subsidies has for years caused the County to understate the compensation of the County’s public defense contractors in line-item budgets and in reports to the Board of Supervisors. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): The budget for the Public Defender includes all costs associated with the required services. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

The County’s duty to fund public defense services does not require the County to provide public defense contractors with free office space. X AGREE PARTIALLY DISAGREE – explain the disputed portion DISAGREE – explain why Response explanation (required for a response other than Agree): Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

When the County provides free office space to a contractor, the Controller’s Office does not know to ask whether the cost of the office space should be included in the contractor’s compensation for tax purposes. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): The County rents various facilities throughout the County for which the Auditor- Controller’s Office makes the lease payments. The Auditor-Controller did not have a process in place to review each of these leases to determine if any IRS fringe benefit rules would apply for the person or party using the leased space. Such a process will be in place prior to the issuance of 2019 year-end 1099 forms to County vendors. The review process will include seeking legal assistance to review the IRS Fringe Benefit Exclusions instructions to determine if these areas are included or not and what retroactive reporting to the IRS will be required. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

The County’s contract policies and standard forms are not integrated with each other, are difficult to use, are not available to the public, are incomplete, and in some cases are poorly written. AGREE X PARTIALLY DISAGREE – explain the disputed portion DISAGREE – explain why Response explanation (required for a response other than Agree): The County’s policies and procedures are updated twice per year through an open and transparent Board process, and County staff are regularly trained on contracting policies and standard forms. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

The County’s public defense contracts violated written County policies without consequences. AGREE X PARTIALLY DISAGREE – explain the disputed portion DISAGREE – explain why Response explanation (required for a response other than Agree): The primary Public Defender contract was originally written many years ago. Over the years, the County policies have changed, and although the contract has been revised there may be elements of updated contract requirements that are not included. However, no County policies were violated. The County does have a standard Independent Contractor Agreement (ICA) that is the preferred medium for professional service agreements. When contracts deviate from this standard, the contract is reviewed by the County Risk Manager and County Counsel, and approved by the Board. Multi-year contracts such as the ones for public defense services are approved annually on the Continuing Agreements List (CAL). The County retains the right to enter into various types of agreements with vendors that provide the desired services. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

Standard forms are an excellent way to implement some County policies, but they must be used to be effective. X AGREE PARTIALLY DISAGREE – explain the disputed portion DISAGREE – explain why Response explanation (required for a response other than Agree): Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

County leaders misinterpret the meaning of County Counsel’s approval of a contract “as to form.” AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): County leaders understand that County Counsel is not providing legal advice on a contract when it is “Approved as to form”. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors

The County lost potentially valuable information when the County destroyed copies of contracts with, and reports submitted by, the public defense contractors. AGREE PARTIALLY DISAGREE – explain the disputed portion X DISAGREE – explain why Response explanation (required for a response other than Agree): The Auditor-Controller’s Office complies with Accounting Standards & Procedures for Counties record retention policies as issued by the State Controller. There is a potential benefit to permanently keeping all forms of documentation the County produces, however, the risk-benefit analysis performed at the State level provides the Auditor-Controller with guidance for record retention. Respond by September 25, 2019 Santa Cruz County’s Public Defense Contracts Santa Cruz County Board of Supervisors