San Joaquin County Grand Jury French Camp McKinley Fire District a District in Disarray

1 The District’s Policy Manual requires significant customization in order to adequately meet the needs of the District.

2 By not following their grievance procedures, the District’s Fire Chief and Board left their employees without recourse to resolve problems other than litigation. F2.3 The District’s leadership failed to address grievances and complaints of a toxic work environment, requiring the District to settle three employment-related lawsuits totaling over $400,000. F2.4 The District’s failure to conduct an annual grievance audit may have resulted in unnecessary financial liability. Recommendations R2.1 The French Camp McKinley Board of Directors develop a clear and concise grievance policy and form by December 31, 2019. R2.2 The French Camp McKinley Board of Directors revise the District Policy Manual to require that an annual grievance audit be sent to the Board of Directors no later than February each calendar year by March 1, 2020. R2.3 By December 31, 2019, the French Camp McKinley Board of Directors develop a policy that requires the Board receive a copy of all internal investigative reports within 10 days of completion. 3.0 Board Oversight Roles and Responsibilities Special Districts in California are local government agencies that provide essential services to millions of residents. Each District provides a specific type of service. The Fire Protection District Law of 1987 is the statutory authority for fire protection districts. Some of the provisions of the law include: • Every district shall be governed by a legislative body known as a board of directors. • Claims against a district shall be audited, allowed, and paid by order of the district board. French Camp McKinley Fire District is governed by a five-member Board of Directors whose primary responsibilities include providing financial oversight and formulating and overseeing strategic policy direction. The District Policy Manual lists 15 responsibilities of Board members including: • Developing a list of qualifications, job description, and evaluation process for the Fire Chief • Hiring and supervising the Fire Chief • Developing goals and measurable objectives for the District and the Fire Chief • Monitoring progress towards reaching established goals • Developing policies which ensure that District business is conducted in accordance with all applicable laws, statutes, regulations, and codes The Grand Jury found that some members of the Board of Directors do not fully understand their roles and responsibilities as outlined in the District Policy Manual. Evaluating the Fire Chief Including the current Interim Fire Chief, the District has had four Fire Chiefs in the past nine years. The Board has failed to set goals and expectations or provide feedback for the Fire Chief. Some Board members said that in the past, they took the word of the Fire Chief that all was well within the District, and admitted they had no objectives by which to measure performance. Inadequate Financial Reporting California Government Code section 53891(a) requires that special districts furnish the State Controller with a report of all financial transactions that took place during the prior fiscal year. These reports are to be filed within seven months after the close of each fiscal year. California Government Code section 26909(a)(1) also requires that an audit for every special district be filed with the County Auditor-Controller annually. The audit must be filed within 12 months of the end of the special district’s fiscal year. While the French Camp McKinley Fire District is current with the State Controller filings, the most recent annual audit filed with the County Auditor-Controller is for fiscal year 2014-2015. Annual audits are critical because they can identify financial improprieties and enable the Board to take appropriate action. Some Board members were unaware that the District is delinquent in filing these audits with the County. Financial Misconduct Alleged financial misconduct by District employees was identified by the Interim Fire Chief and confirmed by the County Auditor-Controller’s office. The misconduct may cost the District over $100,000 and went undetected by the Board of Directors Finance Subcommittee. Findings F3.1 Board responsibilities are not clearly understood by all board members, which has contributed to ineffective leadership of French Camp McKinley Fire District. F3.2 Without a formalized annual review process, the Board is unable to measure the Fire Chief’s performance. F3.3 Board members have not held the Fire Chief accountable for failing to communicate critical personnel issues, which has led to significant employee turnover and expensive investigations and lawsuits. F3.4 The Board is failing in their fiduciary responsibilities as evidenced by the District’s delinquency in filing annual audits, the lack of policies providing financial controls, and inadequate financial oversight. Recommendations R3.1 French Camp McKinley Board members perform an annual review of the Fire Chief no later than July of each calendar year, beginning July 2020. R3.2 French Camp McKinley Board members file annual audits with the County Auditor for 2015- 2016, 2016-2017, and 2017-2018, with copies sent to the Grand Jury by December 31, 2019. R3.3 French Camp McKinley Board members adopt and follow the financial guidance provided in the document “San Joaquin County Best Practices for Accounting and Reporting for Locally- Governed Special Districts” by December 31, 2019. 4.0 The Future of French Camp McKinley Fire District The map illustrating the boundaries of the District shows a small island surrounded by larger fire districts. The map can be deceiving in that it does not reflect the large number of facilities and people under the protection of the District. Furthermore, it does not convey the potential for accidents involving hazardous materials, given the traffic generated by the Union Pacific Intermodal station and the Pilot Flying J Truck Stop. The District provides fire services to the Pilot Flying J facility, while Lathrop Manteca Fire District is mandated to provide hazardous materials cleanup. Consolidation Consolidation of French Camp McKinley Fire District has been a topic of discussion for more than 30 years. The last Municipal Services Review (MSR) for all County fire districts, performed in 2011 by LAFCO, determined the French Camp McKinley Fire District should “explore other organizational structures” in order to achieve greater operational efficiencies. The MSR recommended the District either: a. Contract with the City of Stockton, or b. Consolidate with a neighboring fire district. More recently, the Manteca Bulletin has called for re-evaluation of the efficiency and viability of smaller independent fire districts. In an article published June 25, 2018, “Sounding the Alarm for Fire Service Consolidations,” the editor speculated that citizens would be better served through consolidations among the small surrounding districts. The newspaper revisited the issue on January 22, 2019, in an article titled, “Time to Rethink Fire Service for Manteca, Lathrop, Ripon & French Camp.” The Manteca Bulletin’s proposals for consolidation are not based on French Camp McKinley’s internal deficiencies, but on economies of scale, population growth patterns, financial viability, and improved levels of fire protection service. Considering the absence of steady leadership, excessive turnover of personnel, and financial instability, the ability of the District to adequately protect some of the County’s critical assets and facilities that serve its constituents is questionable. Findings F4.1 Considering the history of failed leadership from French Camp McKinley’s Board of Directors, excessive turnover of the District’s Fire Chiefs, profound personnel problems, lawsuits, and investigations, the ability of French Camp McKinley Fire District to effectively provide fire protection services to its constituents, including the critical County facilities within its jurisdiction is questionable. F4.2 The District’s Board has failed to follow-up on repeated recommendations to explore consolidation. Recommendations R4.1 The Board of Directors of French Camp McKinley Fire District initiate the process, including an analysis, for consolidating with another fire district by October 31, 2019. R4.2 The San Joaquin County Board of Supervisors conduct an independent review to ascertain whether French Camp McKinley Fire District is the most viable option for providing fire protection services for critical County facilities by March 31, 2020. Conclusion French Camp McKinley Fire District has been struggling on multiple fronts for the last decade and is currently in disarray. Continual turnover of the Fire Chief position and failed oversight by the District’s Board of Directors has exposed the District to expensive investigations and litigation. Although the Interim Fire Chief has made progress in his short tenure at the District, the process required to transform the District into a fully functional, efficient Fire District will take many years at best. The constituents of this District, and the hard-working firefighters that serve them, deserve better. Disclaimers Grand Jury reports are based on documentary evidence and the testimony of sworn or admonished witnesses, not on conjecture or opinion. However, the Grand Jury is precluded by law from disclosing such evidence except upon the specific approval of the Presiding Judge of the Superior Court, or another judge appointed by the Presiding Judge (Penal Code Section 911. 924.1 (a) and 929). Similarly, the Grand Jury is precluded by law from disclosing the identity of witnesses except upon an order of the court for narrowly defined purposes (Penal Code Sections 924.2 and 929). Response Requirements California Penal Code Sections 933 and 933.05 require that specific responses to all findings and recommendations contained in this report be submitted to the Presiding Judge of the San Joaquin County Superior Court within 90 days of receipt of the report. The French Camp McKinley Fire District Board of Directors shall respond to all Findings and Recommendations except R4.2. The San Joaquin County Board of Supervisors shall respond to Recommendation R4.2 Mail or hand deliver a hard copy of the response to: Honorable Linda L. Lofthus, Presiding Judge San Joaquin County Superior Court 180 E Weber Ave, Suite 1306J Stockton, California 95202 Also, please email a copy of the response to Ms. Trisa Martinez, Staff Secretary to the Grand Jury, at grandjury@sjcourts.org

1 Board responsibilities are not clearly understood by all board members, which has contributed to ineffective leadership of French Camp McKinley Fire District.

1 Considering the history of failed leadership from French Camp McKinley’s Board of Directors, excessive turnover of the District’s Fire Chiefs, profound personnel problems, lawsuits, and investigations, the ability of French Camp McKinley Fire District to effectively provide fire protection services to its constituents, including the critical County facilities within its jurisdiction is questionable.

The District’s Policy Manual requires significant customization in order to adequately meet the needs of the District.

The District does not review and regularly update the Policy Manual, placing the District at risk for financial liability.

The lack of access to an electronic Policy Manual makes it more difficult for staff and Board members to receive, review, and implement policy updates.

Not having procurement policies and procedures for disposing of surplus equipment, the District risks excess spending without accountability, and financial loss when the sale of surplus is not maximized.

Not requiring the Board to approve policy updates leaves them without the ability to provide appropriate policy oversight for the District.

Without clearly defined testing procedures, firefighters are deprived of the opportunity for promotions based upon their training, experience, and qualifications.

Public safety may be compromised when department promotions are not based on the results of objective testing procedures.

Public safety may be put at risk when testing procedures allow less qualified candidates to be promoted into positions that require them to make critical decisions based on qualifications, training, and experience. F 2.2 By not following their grievance procedures, the District’s Fire Chief and Board left their employees without recourse to resolve problems other than litigation.

The District’s leadership failed to address grievances and complaints of a toxic work environment, requiring the District to settle three employment-related lawsuits totaling over $400,000.

The District’s failure to conduct an annual grievance audit may have resulted in unnecessary financial liability.

Board responsibilities are not clearly understood by all board members, which has contributed to ineffective leadership of French Camp McKinley Fire District.

Without a formalized annual review process, the Board is unable to measure the Fire Chief’s performance.

Board members have not held the Fire Chief accountable for failing to communicate critical personnel issues, which has led to significant employee turnover and expensive investigations and lawsuits.

The Board is failing in their fiduciary responsibilities as evidenced by the District’s delinquency in filing annual audits, the lack of policies providing financial controls, and inadequate financial oversight.

Considering the history of failed leadership from French Camp McKinley’s Board of Directors, excessive turnover of the District’s Fire Chiefs, profound personnel problems, lawsuits, and investigations, the ability of French Camp McKinley Fire District to effectively provide fire protection services to its constituents, including the critical County facilities within its jurisdiction is questionable.

The District’s Board has failed to follow-up on repeated recommendations to explore consolidation.