Sierra Community College District Complaints 98b-32 and 99b-32

R1

Immediately amplify the information flow from the College administration to the Board of Trustees. Publish minutes of Board actions that can be understood by the public without a review of meeting tapes.

R2

Develop a method that will allow the public to review Board meeting tapes on a standard recorder in a neutral location such as the College library.

R3

Obey the Brown Act. (cid:1) The College’s Response to the Grand Jury Final Report 1, Titled “Sierra Community College District, Secret Settlement of Gender Discrimination Lawsuit” In monitoring how the Board of Trustees and the College administration would address the Grand Jury report, it was observed by the Grand Jury that one of the first responses by the College President/Superintendent was to conceal the response process from public view. At a Board meeting of February 8, 2000, the President/Superintendent said to the Board, “I don’t want to be a part of this. I want to be out of this thing, and I think what David [Parker, Board of Trustees’ President] is suggesting is to have a draft of a response mailed to your homes individually and that would be confidential and privileged information because it comes from the law firm.” Fortunately the President/Superintendent’s suggestion was not implemented. The Sierra College Board of Trustees did conduct a series of public meetings to address Grand Jury Final Report 1, titled “Sierra Community College District, Secret Settlement of Gender Discrimination Lawsuit.” From those meetings and from further investigation by the Grand Jury following publication of the report, a series of facts have emerged which help to clarify the role some Trustees had in the decision to maintain the confidentiality of the Furtado settlement and in setting the College on a course of conduct designed to defend the concealment of the terms and conditions of the settlement of the Furtado lawsuit. (cid:1) Formation of the Subcommittee On May 26, 1998, a three-member subcommittee of the Board of Trustees of Sierra College was appointed pursuant to § 70902 (d), Education Code of the State of California to deal with all aspects of the Furtado litigation. Testimony before the Grand Jury revealed that the subcommittee was formed for the purpose of isolating Trustee Sally Robison from receiving further information regarding the lawsuit. She was considered to be an adverse party to the College. In § 70209 (d) of the Education Code it states: “Wherever in this section or any other statute a power is vested in the governing board, the governing board of a community college district, by majority vote, may adopt a rule delegating the power to district’s chief executive officer or any other employee or committee as the governing board may designate; provided however, that the governing board shall not delegate any power that is expressly made non-delegable by statute. Any rule delegating authority shall prescribe the limits of the delegation.” The subcommittee was lawfully appointed pursuant to the provisions of § 70902 (d). The Board, from testimony given to the Grand Jury by all members of the Board of Trustees who served on the Board at the time, and from the subcommittee members themselves, limited the subcommittee by prohibiting them from making any decisions regarding the settlement of the Furtado case. Any decisions required were to be taken back to the full Board of Trustees.

R4

Complaint The Sierra College District has given $250,000 to the Sierra College Foundation over the last five years. The Sierra College Foundation lost $25,000 in 1995/1996. The records of Foundation finances were inadequate. The Foundation Executive Director made a gift of real property to the Foundation to gain a tax deduction. The property was later sold at a fraction of the value stated when the donation was made. An audit of the Foundation in May 1996 revealed accounting irregularities. Investigation The Grand Jury spent an extensive amount of time reviewing Foundation financial records from 1994 to the present. In addition, Sierra College staff, personnel, former employees and members of the Board of Trustees were interviewed. An audit of the Foundation’s accounts dated May 1996 was also reviewed. The Sierra College Foundation has existed for a lengthy period of time. It is a California non-profit corporation with its own appointed/elected 18 member Board of Directors. It qualifies as an Internal Revenue Code § 501 (c)(3), tax-free organization and can accept donations that allow the donor to take a tax deduction. Its purpose is to receive donations for scholarships for general or specific distribution to students; to receive donations for expenditure on College equipment as identified by the Foundation Board and to raise funds for the above purposes. Over the lengthy history of the Foundation, it has received periodic infusions of money from the Sierra College District general funds. In testimony given before the Grand Jury, several Trustees and the College President/Superintendent agreed that the sum of money granted to the Foundation was around $250,000 over the last nine to ten years. The Foundation, despite its independent status as a California non-profit corporation, is in reality an auxiliary organization of Sierra College. The signatories on Foundation accounts are College administrators and employees with the exception of the Foundation President. The audits of the College are inclusive of Foundation audits and language in the audits indicates that the Foundation is considered to be an arm of the College. The transfer of College funds to the Foundation has been done with approval of the Sierra College Board of Trustees. The purpose of these infusions of funds into the Foundation’s coffers has been described as necessary to keep the Foundation operational as the Foundation has never generated sufficient funds to support itself. These fund transfers from College to Foundation have been variously described in minutes of Board meetings and/or Board member interviews as both loans and gifts. Board minutes of August 22, 1995 cite a $22,500 “loan” from the Board of Trustees to the Foundation. The Grand Jury investigation concluded that such transfers were never repaid nor is there any expectation they would ever be repaid. No documentation, such as promissory notes or collateral papers, has ever been created in any fund transfer. Board members were extensively questioned about this documentation and not one indicated any concern about the lack of such documentation. Board members, with few exceptions, consider the transfer of funds to the Foundation as a legitimate expenditure of College funds. In 1995, the Foundation, with the concurrence of College District administration, hired a new Executive Director. It was felt at the time that the Foundation needed an active program to raise funds. As part of this fundraising plan, several grants administered by the College Economic Development staff were moved to Foundation control so that administrative fees could be collected and a money stream would be created to bolster the Foundation’s financial picture. At about the same time, April 1995, $300,000 of Foundation funds on deposit with the Placer County Treasurer were withdrawn and deposited into a money market account held by Westamerica Bank. In June 1995, these funds were divided and re-deposited into accounts at the same bank, labeled as Scholarship account, Special account, and Operating account. From records available, these accounts were holding accounts. Funds were transferred in and out of these accounts and to and from each of the three accounts. In that same month, June 1995, a $75,000 revolving line of credit was taken out secured by the funds already on deposit at Westamerica Bank. The $75,000 line of credit was to be utilized as “seed” money to pay overhead until the grant money fees started to come in. This revolving line of credit utilized $140,000 over the life of the loan. Repayment of the loan apparently came from Foundation accounts. It is impossible to tell what specific funds were used to repay these loans as the accounts co-mingled all manner of funds from numerous sources. The Grand Jury, in an effort better to understand the purpose and nature of these accounts, reviewed the bookkeeping records currently utilized and apparently utilized at the time of these transactions. The funds collected from whatever source, i.e., fundraiser, donations, grant fees, etc., were deposited into one holding account. The computer bookkeeping system then broke these funds into numerous sub-funds specifically identifying the monies. It appears to be an effective control system; however, the rationale for the creation of the three Foundation accounts entitled Scholarship, Special and Operating is a mystery to be resolved. During the same time period (1995/1996), a plan was devised to sponsor a “street fair” to be held on weekends in the College parking lot. This planned event was unsuccessful due to weather conditions at the time, and the Foundation lost approximately $25,000 on the venture. Another plan for Foundation fundraising was the establishment of a golf driving range on College property. That never materialized due to financing problems, but substantial attorney fees for preparation of documents were incurred. In early 1996, an audit was performed which was published in May 1996. In that audit it was stated that the Executive Director had donated a parcel of property located in Nevada County to the Foundation. The donated property was appraised at $34,500. Several months after that donation, the property was sold by the Foundation for $10,000: $5,000 in cash and a $5,000 note due and payable a few weeks after close of escrow. The donor - the then Executive Director - had been authorized by the Foundation Board of Directors to sign documents. He did so as the Foundation signing authority on the sale transaction of the property that he had previously donated. This Executive Director subsequently resigned. The May 1996 audit of the Foundation was reviewed for mention of the above donation. The auditor did note the donation and listed the funds received as $3,900 (which was after closing costs), but made no mention of the $5,000 note. Records were obtained from the Foundation pursuant to subpoena and it was discovered that the $5,000 note was paid but on an installment basis at the rate of $250 per month plus interest. That note was paid in full. The May 1996 Foundation audit did in fact reveal a number of bookkeeping discrepancies, none of which was significant. The audit also revealed that the Foundation investment portfolio had not been adequately accounted for. College personnel subsequently corrected these discrepancies. Following the May 1996 audit, the Foundation Board, President/Superintendent and the Board of Trustees reduced the size of the Foundation efforts. At present it consists of an organization that receives donations and holds a few fundraisers per year. It also receives income from a weekend car sales lot at the College.

R5

Complaint The College President/Superintendent and the Board of Trustees have engaged in the practice of “serial board meetings.” Investigation The Grand Jury investigated this allegation since the practice of “serial board meetings” is a violation of the intent of the Brown Act (Open Meeting). The Grand Jury found that the President/Superintendent held meetings with members of the Board of Trustees to discuss matters agendized for full Board meetings before the scheduled meetings. The practice of “serial board meetings” continued for a number of years until the Board and the administration were criticized by the press for Brown Act violations. Some Trustees have testified that such “serial board meetings” are no longer held. However, other Trustees have testified that they are still being held. The practice of “serial” board meetings violates the intent of the Brown Act.

R6

Complaint The Board of Trustees adopted an antagonistic and biased attitude toward Trustee Sally Robison. Investigation The Grand Jury investigated and found that the Board of Trustees has from time to time become involved in internal strife. At one point in the summer and fall of 1996 considerable time, effort and attorney fees were devoted to an attempt to unseat then Board President Sally Robison. Testimony revealed that the event initiating the attempted removal was action by Robison to place an item on the Board agenda without the permission and in the absence of the President/Superintendent. Board custom provided that the agendizing of items for the Board was the responsibility of the President/Superintendent. State law allows any citizen to place an item on the agenda of a community college board.

R7

Complaint Attorneys representing the Sierra College Board of Trustees attempted to procure telephone records of an elected official, namely Trustee Sally Robison. The contention of the complainant is that such an action is an unwarranted invasion of the privacy of the elected official as well as of the constituents represented by that person. Investigation The issue of procurement of the telephone records of Sierra College Trustee Sally Robison first arose on May 26, 1998, when she was confronted in a closed session of the Board. A letter, addressed to the President/Superintendent, dated April 15, 1998, authored by the attorney to the Board and the College, mentioned Robison’s resistance to efforts to obtain her telephone records. That letter was shown to the Board in that closed session by means of an overhead projector. Robison, in testimony before the Grand Jury, stated she was astounded by the revelation on May 26, 1998, as she was totally unaware that anyone was seeking her telephone records. She tried on several occasions following that meeting to get information regarding the attorney’s statement. No response was given. At a public meeting in February 2000, the attorney’s letter of April 15, 1998 reappeared as part of the response to Grand Jury Final Report 1 titled, “Sierra Community College District, Secret Settlement of Gender Discrimination Lawsuit.” It became a public issue and the Grand Jury received a complaint. Investigation revealed that the law firm representing the President/Superintendent researched the issue of the employment history of Trustee Sally Robison on October 2,

R8

Complaint The President/Superintendent of Sierra College acted without prior Board approval. Investigation The Grand Jury found that there were a significant number of occasions during the construction projects at the Rocklin and Nevada City campuses that change orders were implemented prior to being approved by the Board of Trustees. These change orders for the most part were routine in nature and were non-controversial.

R9

Complaint The President/Superintendent has failed to provide accurate and adequate information to the Board of Trustees, to the public, to the press and to the Grand Jury. Investigation (cid:1) Board Agendas and Minutes The Grand Jury found several disturbing practices which tend to deprive the Board of Trustees of a full and complete flow of information regarding the conduct of College affairs. Several years ago, either by administrative action or Board direction, the information contained in agendas of Board meetings and supporting “packet” documents was substantially reduced. The motivation for such action has been described as an effort “to save paper and thirty trees,” “to streamline the Board agenda,” “to reduce routine paperwork.” Items omitted include copies of warrants paid by the District, among other things. The reasons for such practices may be commendable, but the end result is in fact a diminution of the flow of information to the Board and to the public. The Grand Jury reviewed minutes of Board meetings for several years and concluded that the description of Board actions were many times so vague that it was impossible to determine what action the Board had taken. Board members testified that reduction of descriptions of Board activities in the minutes was intentional. It was done to avoid arguments over the wording of minutes copied from meeting tapes by staff secretaries and was legal according to the advice given by the College district’s attorneys. (cid:1) Media Relations Several years ago the practice of routinely preparing press releases for the media was discontinued. The staff person responsible for preparation of press releases was ordered by the President/Superintendent to cease performing that service, to discontinue attendance at Board meetings and to refrain from personal contact with Board members. During the time period 1996-1997, the Auburn Journal newspaper published a series of articles which were critical of the Sierra College administration and the Board of Trustees. The President/Superintendent and legal counsel for the College on at least four occasions complained to the newspaper publisher about negative press coverage. The President/Superintendent wrote a letter to the newspaper’s owner complaining about the newspaper editor. The result of those efforts is difficult to discern but the “offending” reporter and the editor subsequently left the employ of the newspaper and negative coverage ceased. Negative coverage of Sierra College, with the exception of the stories related to the publication of and response to the Grand Jury Final Report 1 titled, “Sierra Community College District, Secret Settlement of Gender Discrimination Lawsuit,” continues to be absent from virtually all Placer County publications, which are owned by the same newspaper organization. (cid:1) Tapes of Board of Trustees Meetings One of the chronic complaints by members of the public is the difficulty of reviewing Board of Trustee’s meeting tapes. Currently, if a member of the public wishes to hear a meeting tape, that person is required to go to the College President/Superintendent’s office, request to listen to a tape of the meeting in question, wait, sometimes for a lengthy period, listen to the tape on a tape recorder and provide a blank tape if a copy is desired. Tape quality, as determined by Grand Jury testimony and from the experience of Grand Jury members, is marginal and the content is frequently undecipherable. Several suggestions have been made by members of the public about the taping problems. One of them was to make the tapes available in the College library rather than the President/Superintendent’s office. The Board has failed to act on these requests. (cid:1) Brown Act Violations The Sierra College Board of Trustees has been criticized for years over Brown Act violations. Serial meetings by the President/Superintendent with Board members were open and blatant until press coverage curtailed the practice. The use of “Friday Letters,” which are prepared by the President/Superintendent and sent to Board members, and which on occasion discuss agendized matters of public business prior to Board meetings, is an ongoing practice. The Board President has made formal statements of Board positions before any meetings occur at which a Board position could be formalized. All these acts are examples of a Board of Trustees and President/Superintendent who seem to have forgotten that they are elected and appointed officials of a public, tax- supported institution. They have allowed themselves to adopt the position that their business is not the public’s business. (cid:1) The Furtado Settlement The handling of the Furtado settlement is illustrative of the manipulation and control of the flow of information to the Board of Trustees and the public.