Santa Cruz County 2005-2006 - California Grand Jury Reports

From the annual report

The consolidated year-end volume. The individual investigations it contains are listed separately below.

📑 Year-End Report

The full consolidated volume; individual reports are listed below.

Individual reports (18)

June 30, 2006 — Window Dressing or Effective Oversight? Citizen Oversight Committee, Measure D Bonds Cabrillo Community College District

16 pages 11 findings 10 recommendations

Quick View Full Details →

Findings & Recommendations 11 findings

F1: The specific project list which defines for the voters what they are voting on is not clear and consistent in the District Master Plan, voter pamphlet, COC Annual Report and the performance audits. Response: The Cabrillo Community College Governing Board DISAGREES. Cabrillo College has consistently met all of the reporting and compliance requirements for school bond funds. The purposes of each of the reports, 1) District Facility Master Plan, 2) COC Annual Report and 3) Proposition 39 performance audit differ from the purpose of the voter pamphlet. • The District Facility Master Plan (FMP) is a comprehensive document that sets forth a long term vision for the facility needs of the college. It includes projects funded not only by local bond funds, but also funds provided by the state capital outlay program, redevelopment agencies, and local contributions. Twice a year, the FMP is submitted to the Governing Board at a public meeting for approval and to the COC for review. This report provides a detailed summary of projects recently completed, projects under construction, and projects approved for future construction. This semi-annual report also provides recommendations for changes to FMP projects; scope, budget or schedule. In addition, a monthly FMP Project Status Report is submitted to the Governing Board and to members of the COC for their review. This report provides monthly updates on the status of major active FMP projects. • In compliance with Proposition 39, the voter pamphlet is a brief summary of portions of the Facility Master Plan which are authorized projects to be funded with Measure D funds. • The COC Annual Report contains a summary of the “results of its (COC) activities” for the prior year. (Ed. Code 15280) and a statement regarding whether the District is in compliance with state law in accounting for and expending public bond funds. Window Dressing or Effective Oversight? - 6 • The Proposition 39 Annual Performance Audit reflects only a description of the projects on which bond money was spent as authorized by Measure D and a conclusion as to whether or not bond funds were used for teacher or administrator salaries.

Related Recommendations (1)

R1: For bond measures, the district should develop a clearly numbered specific facilities project list for the voter pamphlet and use that specific list in future tracking and reporting. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The District Facility Master Plan is a detailed and comprehensive report, expanding on the COC Annual Report. This report is submitted as an action item to the Governing Board and Citizens’ Oversight Committee twice a year approving changes in scope, budget and/or scheduling. It tracks all of the Measure D projects to date and includes other projects funded by other sources as well. In addition, the FMP is submitted monthly to the Governing Board and Citizens’ Oversight committee for review and discussion on the status of active projects.

F2: The district has narrowly interpreted (as reflected by the development and provisions in the by-laws) the requirement for COC independence. It meets the minimum membership requirements specified in the California Education Code. Response: The Cabrillo Community College Governing Board DISAGREES. COC “independence” means that the committee is not populated with persons who have conflicts of interest with the District, the implementation of Measure D, or the consultants who assist in the execution of Measure D. In all respects the establishment and empowerment of the District COC satisfies all Proposition 39 requirements. The COC satisfies the membership requirements of Education Code 15282, is totally independent, and satisfies Education Code 15278(b) which states: “The purpose of the citizens' oversight committee shall be to inform the public concerning the expenditure of bond revenues.”

Related Recommendations (1)

R2: For future Citizen Oversight Committee annual reports, the committee should develop a specific facilities project list that translates all of the Measure D project categories to a project list and identifies those projects for which Measure D funds are planned but have not been expended to date. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The Education Code (15280) requires that “the citizens’ oversight committee shall issue regular reports on the results of its activities. A report shall be issued at least once a year.” The activities of the committee, as defined in Education Code 15278(b) are to review expenditures of bond funds, satisfy themselves that such expenditures were made for voter-approved purposes and that no money was applied to teacher or administrative salaries or other school operating expenses and then to inform the public concerning the past expenditures of those funds. The Governing Board and staff tracks all projects for which Measure D funds are planned but have not been expended to date.

F3: The district limited the membership to the legally required seven members and did not pursue expanding the number of members to obtain relevant expertise on the oversight committee to provide more effective oversight. Response from the Cabrillo Community College Governing Board: The Cabrillo Community College Governing Board AGREES that the membership of the COC satisfies the legal requirements, and DISAGREES that the District did not pursue expanding the membership beyond the requirements of the Education Code. Expanding the membership was discussed with the District bond counsel who advised against membership expansion on the grounds it would defeat the legislative intent of Proposition 39 and dilute the voice of members who represent groups often opposed to bond taxes, i.e. taxpayers, seniors, and business persons. The expertise of the members of the COC represents the community’s interest in providing effective and knowledgeable oversight of Measure D funds as follows: • General contractor/developer with significant number of construction projects, apartments, homes, school facilities • Local business owners: insurance, food franchise • Previous experience on school oversight committees • Public School Board Member • Local Financial Institution Board Member • Community relations • Representative of very large local employer • Santa Cruz County Assessor • Technical writer, editor • Student Senate leadership and budget management – 7 Window Dressing or Effective Oversight?

Related Recommendations (1)

R3: The independence of the oversight committee should be strengthened. The committee should be more proactive and take the following steps with the district’s concurrence and cooperation: • Review, recommend changes to the district, if any and, formally adopt the by-laws, with or without comments. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The recommendations are not consistent with the requirements of the Education Code or are currently permitted by the operation of the committee. As previously stated, the committee’s independence is assured by the membership selection requirements of the Education Code and the Ethics Policy Statement relating to the committee. Further, the Education Code contains no provision for an oversight committee to adopt its own bylaws. Currently, the committee has been advised that if the committee has any comments on the existing bylaws approved by the Board that such – 11 Window Dressing or Effective Oversight? suggestions may be made to district staff or may be presented to the Board of Trustees in public session. With respect to the selection of independent auditor and the process of preparing and delivering the audit, California Constitution directs that it is a district responsibility, not a committee responsibility. The Committee, as required by law, does receive and review, to whatever extent they determine, the audit. The recommendations offered by the Grand Jury are inconsistent with the current laws allocation of the accountability safeguards in Proposition 39 between the District and the committee. • Review and formally comment on the selection of the independent auditor prior to the appointment. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The California Constitution directs that the process of preparing and delivering the audit is the District’s responsibility. • Review and formally recommend changes to the District, if any, on the audit scope and methodology prior to the audit being conducted. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The California Constitution directs that the process of preparing and delivering the audit is the District’s responsibility. • Review and comment to the District on the final audit report and formally accept with or without comments. Response from the Cabrillo Community College Governing Board: This recommendation has been implemented.

F4: The Citizen Oversight Committee by-laws were, in effect, imposed on the committee without significant discussion or a vote by the committee members. These by-laws limited the committee’s authorized activities (only four listed activities) to less than what was communicated to the voters that is to “work with the Citizen’s Oversight Committee on prioritizing ... projects...” per the voter pamphlet. Response: The Cabrillo Community College Governing Board DISAGREES. As formulated by the Education Code, the COC is an advisory committee empowered by State law, established by the Cabrillo College Governing Board, overseen by the Governing Board and the COC is without the authority to expand its powers or establish its own bylaws. While the bylaws did not reflect the phrase from the Full Ballot Text that the “District would work with the Citizens’ Oversight Committee on prioritizing those project in the event factors beyond the District’s control require that projects be reconsidered,” such inclusion was not necessary. The District has had a successful, open dialogue with the COC regarding what projects have been selected for funding, and how those projects progress; Student Activities Center, Arts Education Classrooms, Allied Health Classrooms, Watsonville Educational Center Expansion, accessibility projects, and remodeling and renovating existing and vacated classroom, lab and office space. In fact, only one Measure D project has been deferred, the second access bridge across Soquel Drive, and the deferral of the project was discussed with the COC.

Related Recommendations (1)

R4: Increase efforts to solicit membership in the Citizen Oversight Committee to a broader audience such as with newspaper advertisements and/or announcements inviting individuals with specific relevant expertise to apply. Response from the Cabrillo Community College Governing Board: This recommendation has been implemented. The District currently uses newspaper advertisements, as well as other forms of publicity, to attract applicants to serve on the Committee. The District will continue to seek individuals who satisfy the qualifications of membership as set forth in Education Code and if applicants also possess experience in construction projects, accounting, finance, etc., those applicants will have those experiences recognized in the selection process and, assuming they satisfy the Education Code categories, would be attractive members of the committee. Window Dressing or Effective Oversight? - 12

F5: The independent performance audit reports by two CPAs did not express an opinion about whether or not there had been any misappropriation of funds. Response: The Cabrillo Community College Governing Board PARTIALLY AGREES. Proposition 39 does not provide any guidance as to the content of a performance audit. In the absence of performance audit standards, Cabrillo worked with their auditors prior to the audit to define a process that fulfills the intent of Proposition

Related Recommendations (1)

R5: Revise by-laws to describe the process for resolving issues of concern to the oversight committee. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The bylaws and operating practice currently provide ways through which concerns can be expressed. First, the committee has exclusive control over the agenda of its meetings. If a concern arose, the committee would agendize the issue and discuss it at its next properly noticed public meeting. If the committee requests the District respond to a concern, the response is provided by the District at this meeting or at a subsequent meeting. If the committee is not satisfied with the answer of the staff, Section 5.8 of the bylaws states that “individual members of the committee retain the right to address the Board [of Trustees] either on behalf of the Committee or as an individual.” The Board then has the duty to respond to any concerns expressed.

F6: The district has not defined and published an integrated construction quality control program document and a construction safety program document for the Measure D projects. Window Dressing or Effective Oversight? - 8 Response: The Cabrillo Community College Governing Board DISAGREES The District has defined quality control and safety program requirements in the contracts with the construction managers, architects, inspectors and contractors. The contractors are contractually responsible for the quality of their work as described in the contract documents, Section 2.3.4.2 (Construction Quality). The construction manager has the authority and responsibility to address defective or deficient construction or workmanship as stated in section 2.3.4.3 of the contract (Rejection of Work). The Inspector of Record also has responsibility for the quality of work on the site as required by Section 9-81130 of the Education Code. In addition the Architect of Record’s agreement with the District requires that the Architect shall “advise the District regarding defects and deficiencies observed by the Architect in the work of the contractors.” With regards to safety, the contractors are clearly responsible for safety on the job site as defined in section 4.9.1 of their General Conditions which states: The Contractor shall be solely responsible for initiating, maintaining and supervising all safety programs required by applicable law, ordinance, regulation or governmental orders in connection with the performance of the contract, or otherwise required by the type or nature of the Work. The Contractor’s safety program shall include all actions and programs necessary for compliance with California or federally statutorily mandated workplace safety programs, including without limitation, compliance with the California Drug Free Workplace Act of 1990 (California Government Code 8350 et seq.). Without limiting or relieving the Contractor of its obligations hereunder, the Contractor shall require that its Subcontractors similarly initiate and maintain all appropriate or required safety programs. With regards to safety each Contractor is defined as the “controlling employer” for purposes of the Multi-Employer Worksite Rules of the California Occupational Safety and Health Administration (California Code of Regulations 336.10). The District has implemented more frequent safety inspections as a result of concerns from the Grand Jury. The District has contracted with Safework to conduct inspections on a twice per month basis and to insure that prior safety notices have been remedied.

Related Recommendations (1)

R6: Revise by-laws to include the committee’s role in prioritizing projects for delays or cancellations as described in Measure D. Response from the Cabrillo Community College Governing Board: This recommendation has not been implemented, but will be implemented during the spring 2008 semester.

F7: One inspector of record did not agree that he had responsibility for what was called “quality control” by the construction manager. Response from The Cabrillo Community College Governing Board: The Cabrillo Community College Governing Board AGREES that the inspector of record may not have agreed to having responsibility for quality control, but DISAGREES with the inspector of record’s opinion. As mentioned in item 6 the inspector of record is responsible for the document completion on the site as is required by Section 81130 of the Education Code as follows: “(a) The Department of General Services under the police power of the state shall supervise the design and construction of any school building or the reconstruction or alteration of, or addition to, any school building, if not exempted under Section – 9 Window Dressing or Effective Oversight? 81133, to ensure that plans and specifications comply with the rules and regulations adopted pursuant to this article and building standards published in Title 24 of the California Code of Regulations, and to ensure that the work of construction has been performed in accordance with the approved plans and specifications, for the protection of life and property.” The District is not aware of any other inspector on site (of which there are currently five) who agrees with the opinion of the one cited. Conclusions

Related Recommendations (1)

R7: The district should document the roles and responsibilities of the district, the construction manager, the contractors and the inspector of record for construction quality control and safety. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented on existing work due to the fact this is addressed in current contract language. On future projects, District will revise contract language as necessary to provide additional clarif[ication] regarding roles.

F8: The oversight of the Measure D Bond projects is more than “window dressing,” but it can be improved. Window Dressing or Effective Oversight? - 10

Related Recommendations (1)

R8: In the future, the auditor should use a more specific facilities project list. Response from the Cabrillo Community College Governing Board: This recommendation has been implemented.

F9: In future audits, the processes and a sufficient number of invoices should be tested to allow the auditor to render an opinion with a high and defined level of confidence that there has been no misappropriation of funds. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The performance audit report requires that the accountant not issue an opinion, either positive or negative.

Page 13

Related Recommendations (1)

R9: In future audits, the processes and a sufficient number of invoices should be tested to allow the auditor to render an opinion with a high and defined level of confidence that there has been no misappropriation of funds. Response from the Cabrillo Community College Governing Board: This recommendation will not be implemented. The performance audit report requires that the accountant not issue an opinion, either positive or negative.

F39: The critical component is to design a process that compares the amounts spent to the purposes specified in the bond language the voters approved. This type of report requires that the accountant not issue an opinion, either positive or negative. The auditors have reported in the performance audits the following for Cabrillo: “Our review of the expenditures for the period July 1, 2005 through June 30, 2006, did not reveal any items that were paid from the general obligation bond funds that did not comply with the purpose of the Bonds as approved by the registered voters of the District on March 2, 2004.” The financial audit reports include a summary of what projects were funded with bond monies and state a conclusion whether bond money was or was not used for teacher or administrative salaries or other school operating expenses.

F2004: The investigation reviewed the performance of the oversight committee, including its reports to the public. The investigation did not reveal any misappropriation of funds or any violations of the law or regulations in the creation and operation of the committee. However, it did reveal several areas where the district and the committee could improve oversight and provide greater transparency to the public in the expenditure of the bond funds. Definitions COC Citizen Oversight Committee. Independent Audit An audit by a Certified Public Accountant of the financial statement of the District’s Measure D Bond Fund and a performance audit to assure that funds have only been expended on voter approved projects. Measure D Funds The $118.5 million Measure D Bond Funds passed by the County voters in March 2004 to use for construction, rehabilitation and leasing of school facilities. Background Legislation Proposition 39, an initiative constitutional amendment and statute, was passed by state voters in November of 2000. It amended the California Constitution and resulted in a revision to the California Education Code. It provided for a 55% vote to pass local bond measures, in lieu of the standard 2/3 vote requirement, if specific accountability requirements were incorporated in the bond measure. These “accountability requirements” (Article XIIIA Sec 1 (b) (3) of the California Constitution) for school bond measures are summarized as follows: • Must require that funds can only be spent for construction, rehabilitation, and/or leasing of facilities including furnishings and equipment. • Must contain a list of specific school facilities projects to be funded. – 1 Window Dressing or Effective Oversight? • Must require an independent annual performance audit to ensure that funds have only been spent for the projects listed in the measure. • Must require an independent annual financial audit until funds have been spent. In addition, California Education Code Sections 15278-15282 directs that the bond measure require the formation of an independent Citizen Oversight Committee. Its purpose is to inform the public as to the district’s compliance with the above accountability requirements. The scope of its activities is divided into two categories, required and optional, as follows: Required Optional 1. Ensure that the district conforms to 1. Receive and review performance accountability requirements. audits.

Page 1

Additional Recommendations 1

Not linked to specific findings.

R10: In future audits, the auditor should report on the number of invoices examined and the total invoices processed for the Measure D fund. – 13 Window Dressing or Effective Oversight? Response from the Cabrillo Community College Governing Board: This recommendation has not been implemented, but will be implemented for the June 2008 audit. Responses Requested Entity Findings Recommendations Respond Within Cabrillo Community 1 - 7 1 - 10 90 Days College Governing October 1, 2007 Board

June 30, 2006 — Citizen Oversight Committee, Measure D Bonds at Cabrillo Community College District

10 pages 8 findings 10 recommendations

Quick View Full Details →

Findings & Recommendations 8 findings

F5: The independent performance audit reports by two CPAs did not express an opinion about whether or not there had been any misappropriation of funds.

F6: The district has not defined and published an integrated construction quality control program document and a construction safety program document for the Measure D projects.

F7: One inspector of record did not agree that he had responsibility for what was called “quality control” by the construction manager. Window Dressing or Effective Oversight? - 6 Conclusions

F8: The oversight of the Measure D Bond projects is more than “window dressing,” but it can be improved.

Additional Recommendations 10

Not linked to specific findings.

R1: For bond measures, the district should develop a clearly numbered specific facilities project list for the voter pamphlet and use that specific list in future tracking and reporting.

R5: Revise by-laws to describe the process for resolving issues of concern to the oversight committee.

R6: Revise by-laws to include the committee’s role in prioritizing projects for delays or cancellations as described in Measure D.

R7: The district should document the roles and responsibilities of the district, the construction manager, the contractors and the inspector of record for construction quality control and safety.

R8: In the future, the auditor should use a more specific facilities project list.

R10: In future audits, the auditor should report on the number of invoices examined and the total invoices processed for the Measure D fund. Responses Requested Entity Findings Recommendations Respond Within Cabrillo Community 1 - 7 1 - 10 90 Days College Governing October 1, 2007 Board Window Dressing or Effective Oversight? - 8

June 22, 2006 — Use of the Taser by Local Law Enforcement Agencies

10 pages 21 findings 5 recommendations

Quick View Full Details →

Findings & Recommendations 21 findings

F1: Every local law enforcement agency has a Taser policy in place.

F2: All local law enforcement agencies have reviewed and revised their Taser Policies within the past twelve months.

F3: Not all local law enforcement agencies publish a “use of force” report that includes Taser use and deployment.

F4: Every local law enforcement agency uses either the M26 or X26 Taser. No local agency currently issues a Taser to each individual officer.

F5: Every local law enforcement agency currently employs an officer trained to instruct in the proper use of the Taser according to individual department policy.

F6: Every local law enforcement agency uses the most current Taser training material provided by Taser International for initial and updated Taser training. POST does not provide Taser training to California law enforcement officers.

F7: Taser training officers must be re-certified every two years.

F8: Only officers who have received Taser training are authorized to carry a Taser.

F9: Every local law enforcement agency requires that officers who are going to carry Tasers on their duty shifts, must test the weapon prior to departing the office.

F10: Officers carry a Taser on the opposite side of their bodies from their lethal weapons.

F11: It is reported by training officers that the mere threat of using a Taser will often de- escalate a volatile situation.

F12: The range of probes from a Taser is fifteen to twenty-one feet from weapon to target, thus reducing the proximity of physical contact.

F13: When either the M26 or the X26 is discharged, small, colored and transparent, coded microdots, called afids, disburse into the surrounding area. The afids facilitate the collection of evidence and are traceable to the taser weapon used.

F14: Barbs that penetrate the skin can be removed easily by officers or medical personnel.

F15: Commonly, photos are taken of barb sites after removal. - 28 The Taser: Don’t Be Shocked

F16: The M26 and X26 Taser models have built-in memory that documents use of the weapon and are capable of being downloaded and used for statistical data gathering. Not all local law enforcement agencies have purchased the computer hardware to download this information.

F17: Local law enforcement agency administrators were knowledgeable about the Taser and the controversy surrounding its use.

F18: A search of the literature by the Grand Jury found that death or injury, associated with Taser utilization by law enforcement, occurred disproportionately in suspects on drugs, in states of excited delirium, or in those who received persistent multiple shocks.

F19: It is difficult for law enforcement officers to quickly recognize the broad range of symptoms exhibited in states of excited delirium.

F20: All of the policy items listed in the ACLU-NC “Best Practices Taser Policy” are partially or fully addressed in the Taser Policy of every local law enforcement agency.

F21: Local law enforcement administrators and training officers have told the 2005-2006 Grand Jury that officer Workers Compensation claims and suspect injuries have declined since Taser use began. Conclusions

Additional Recommendations 5

Not linked to specific findings.

R1: Local law enforcement agencies should continue to be diligent in updating their Taser policies to conform to changing regulations and technology.

R2: Currently, all Taser training officers receive their training from Taser International. Local law enforcement administrators should lobby POST to provide independent training for Taser use.

R3: Local law enforcement agencies should publish a Use of Force Report to include Taser usage. Portions of this report could be shared with members of the community to foster educational awareness and improve community relations.

R4: The Grand Jury recommends that law enforcement agencies within the county begin a tracking system to determine if a correlation between Taser deployment and the number of law enforcement officer Workers Compensation claims exists.

R5: Local law enforcement agencies should train their personnel in the recognition of symptoms related to excited delirium and establish policies for handling persons in that state. As soon as reasonably possible, the services of medical professionals should be enlisted to render appropriate care.

May 10, 2006 — The Dollars and Sense Don’t Add Up: Bond Measures E and H Santa Cruz City Schools

66 pages 71 findings 15 recommendations

Quick View Full Details →

Findings & Recommendations 71 findings

F1: The E and H bonds were originally each sold in three series: A, B, and C:7 Bond Sold Date Bond Amount Bond Term Ends Series A, Elementary July 1, 1998 $7,000,000.00 August 1, 2027 Series B, Elementary March 1, 2000 $15,500,000.00 August 1, 2029 Series C, Elementary October 2001 $5,598,115.65 February 1, 2026 TOTAL ELEM. $28,098,115.65 Series A, High School July 1, 1998 $15,000,000.00 August 1, 2027 Series B, High School March 1, 2000 $31,000,000.00 August 1, 2029 Series C, High School October 2001 $11,997,433.50 February 1, 2026 TOTAL HIGH SCH. $57,997,433.50 In April 2005, Series A and B Elementary and High School bonds were refinanced: Refinance, Series A and B, Elementary April 2005 $22,785,000 August 1, 2029 Refinance, Series A and B, High School April 2005 $45,500,000 August 1, 2029 Table 2. Santa Cruz City Schools Bond Sales, Measures E and H.

F2: Total Elementary bond sales, Series A, B, and C exceeded the $28 million dollar cap established in Bond Measure E. Response: Santa Cruz County Auditor-Controller AGREES. Response: Santa Cruz City Schools AGREES.

F3: When asked about exceeding the $28 million cap on the Elementary bonds, district administrative staff referred the Grand Jury’s questions to the district’s bond financial advisor, Northcross, Hill and Ach. The Grand Jury was told, 7 Official Statements, Santa Cruz City Elementary School District, General Obligation Bonds, Election of 1998, Series A, B, and C; Official Statements, Santa Cruz City High School District, General Obligation Bonds, Election of 1998, Series A, B, C; Official Statement, Santa Cruz City Elementary School District, 2005 General Obligation Refunding Bonds; Official Statement, Santa Cruz City High School District, 2005 General Obligation Refunding Bonds. - 10 The Dollars and Sense Don’t Add Up: “Unintentionally, $98,115.65 was issued in bonds over the 28 million dollar amount approved by the voters. The district has made provision to repay the $98,115.65 and all interest that has accrued.” The amount of the interest earned is unknown to the Grand Jury. Response: Santa Cruz County Auditor-Controller AGREES. Response: Santa Cruz City Schools AGREES. Initial drafts of the bond authorization for the Santa Cruz City Elementary School District (County of Santa Cruz, California) General Obligation Bonds, Election of 1998, proposed a maximum authorization of $28.1 million. When adopted, the resolution authorizing the bonds provided for a maximum of $28 million (the additional $100,000 amount was inadvertently omitted). It was assumed, upon the issuance of each series, that the authorized amount was $28.1 million. Upon issuance of the Series C Bonds, the $28 million limit was exceeded by $98,115.65. This fact was discovered in early June 2006. On June 16, 2006, the total sum of $114,325.65, $98,115.65 from the District (representing unexpended proceeds of the Series C Bonds), $8,105.00 from the District’s financial advisor and $8,105.00 from the District’s bond counsel, was deposited with the paying agent and invested in U.S. Treasury Securities and held for the payment of the Series C Bonds. The amounts paid by the District’s financial advisor and by the District’s bond counsel represents the total amount paid by the taxpayers and will be used to reimburse those amounts collected by the District for such payment.

F4: The last of the original Elementary bonds was sold in 2001, but repayment of the $98,115.65 overage has not yet been made as of June 10, 2006. Response: Santa Cruz County Auditor-Controller AGREES. School District staff advised the County Auditor-Controller that the $98,115.65 overage has been returned to the District’s third party bond paying agent on June 16, 2006, who will repay this amount at the next call date. The Auditor-Controller has not verified this information. Response: Santa Cruz City Schools PARTIALLY AGREES. The $98,115.65 overage was repaid on 6/16/06.

F5: When Elementary and High School Bonds, Series A and B were refinanced in April 2005, the total amount of the refunding bonds was $4,280,000 higher than the remaining principal of the original Series A and B bonds. The Elementary Series A and B Bonds were refinanced for $22,785,000 (the outstanding principal was $21,030,000); the High School Series A and B Bonds were refinanced for The Dollars and Sense Don’t Add Up: - 11 $45,500,000 (the outstanding principal was $42,975,000).8 Response: Santa Cruz County Auditor-Controller AGREES. Response: Santa Cruz City Schools AGREES.

Related Recommendations (1)

R1: The Grand Jury recommends that the Santa Cruz County Auditor initiate an outside, independent audit to scrutinize the bond sales and refinancing, and expenditure of bond funds. If there was surplus cash gained from the refinancing, it should be accounted for and used to reduce the bond debt. Response: Santa Cruz County Auditor-Controller PARTIALLY DISAGREES. The County Auditor-Controller does not generally have authority to audit School District activities. The County Auditor-Controller is generally responsible for the fiscal oversight of County functions or those under the Board of Supervisor’s control. However, if a district has funds in the County treasury, the Board of Supervisors can direct the Auditor-Controller to perform an audit of that district as well. California Government Code Section 26883 states: In addition to the power now possessed by the Board of Supervisors to enter into contracts for audits, the Board shall have the power to require that the County Auditor-Controller shall audit the accounts and records of any department, office, board or institution under its control and of any district whose funds are kept in the County treasury. . . Nevertheless, the issues raised in this Grand Jury report are important and should be addressed. The County Auditor-Controller has communicated with Santa Cruz City Schools District staff to research and respond to the findings and recommendation contained in this reply. Unfortunately, the School District’s reply is not due for another 30 days. Consequently, the response to a few of the findings in this report are incomplete, particularly Findings 7 and 10 regarding the legal cap on the amount of the refunding bonds and the 29 year life of the bonds. Hopefully, the School District’s response will include an independent legal opinion that the issues raised in The Dollars and Sense Don’t Add Up: - 37

F6: SCCS District’s bond financial advisor stated that “the amount of the refunding bonds is determined by the amount needed to establish an escrow to pay off the old bonds, which includes interest and principal due . . . and pay the costs of issuance.” Response: Santa Cruz County Auditor-Controller AGREES. The Santa Cruz County Auditor-Controller does not know whether the District’s financial advisor made this statement, but generally speaking, this is how the amount of refunding bonds are determined. Response: Santa Cruz City Schools AGREES.

Related Recommendations (1)

F7: Elementary bonds, Series C and Elementary 2005 Refunding Bonds total $28,383,115.65, again exceeding the $28 million cap established by the bond measure. Response: Santa Cruz County Auditor-Controller PARTIALLY AGREES. The elementary bonds, Series C and Elementary 2005 refunding bonds do total $28,383,115.65. Whether this exceeded the $28 million cap established by the bond measure is a legal matter which the Auditor-Controller is not qualified to determine. Response: Santa Cruz City Schools PARTIALLY AGREES. The issuance of refunding bonds, where the refunding bonds bear interest at a lower rate than the refunded bonds, always will require a higher amount of refunding bonds than refunded bonds. This is because federal tax law limits the investment rate of the escrow created to pay the refunded bonds to the interest rate on refunding bonds. Therefore, more dollars are needed, at a lower rate, to pay fewer dollars at a higher rate. This is common practice for general obligation refunding bonds. California law specifically permits the refunding bonds to have a principal amount greater than the bonds refunded. Official Statement, Santa Cruz City Elementary School District, 2005 General Obligation Refunding Bonds; Official Statement, Santa Cruz City High School District, 2005 General Obligation Refunding Bonds. - 12 The Dollars and Sense Don’t Add Up: Government Code Section. 53552. Whenever the legislative body of a local agency determines that prudent management of the fiscal affairs of the local agency requires that it issue refunding bonds under the provisions of this article, it may do so without submitting the question of the issuance of the refunding bonds to a vote of the qualified electors of the local agency . . . . Refunding bonds shall not be issued if the total net interest cost to maturity on the refunding bonds plus the principal amount of the refunding bonds exceeds the total net interest cost to maturity on the bonds to be refunded plus the principal amount of the bonds to be refunded . . . . Subject to this limitation, the principal amount of the refunding bonds may be more than, less than, or the same as the principal amount of the bonds to be refunded. (emphasis added) In all cases, the total net interest cost to maturity on the refunding bonds plus the principal amount of the refunding bonds is less than the total net interest cost to maturity on the bonds refunded plus the principal amount of the bonds refunded.

Related Recommendations (1)

F8: The April 2005 refinancing of the Elementary and High School Bonds, Series A and B is not detailed on the SCCS Bond Projects Budget, Report from July 1, 1998 to April 30, 2006. Response: Santa Cruz County Auditor-Controller DISAGREES. School District staff advised the Auditor-Controller that this is not an accurate finding, but the Auditor-Controller has not verified this information. The Auditor- Controller has no opinion. Response: Santa Cruz City Schools DISAGREES. The SCCS Bond Projects Budget Report is designed to report on the status of revenue received and available for expenditure on the construction projects and related support costs, and the status of expenditures made from those funds. The April 2005 refinancing of the Elementary and High School Series A and B Bonds do not appear in this budget report because the refinancing did not result in any additional funds available to be expended on the construction projects.

Related Recommendations (3)

R7: The SCCS District should provide a complete bond projects budget document that includes bond refinancing details. Response: Santa Cruz City Schools DISAGREES. See response to Finding # 8.

R04-05: 05-06 06-07 07-08 08-09 Natural Bridges $68,000 $83,232 $84,897 $86,595 $88,326 Loma Prieta $140,000 $165,000 $200,000 $228,400 $275,500 $208,000 $248,232 $284,897 $314,995 $363,826 Table 5. Santa Cruz City Schools Lease Revenues, 2004-2009. Response: Santa Cruz City Schools PARTIALLY AGREES. The lease revenue in the table is reversed for Natural Bridges and Loma Prieta. 50. In August 2004, a citizen who attended two BOC meetings expressed concern about bond funds that had been used on schools that were later closed. The citizen felt that the lease money from those schools should be used to reduce the bond debt. Response: Santa Cruz City Schools AGREES. The BOC discussed the citizen’s recommendation, but felt that the amount of tax savings to the individual tax payer would be an insignificant amount, whereas the amount of revenue loss to the General Fund would be significant. 51. District administrative staff reported to the BOC committee that legal counsel said it was not illegal to lease out the renovated schools and not use the revenues to defray 27 Agenda Packet, Santa Cruz City Schools, Bond Oversight Committee Meeting, November 18, 2004. The Dollars and Sense Don’t Add Up: - 29 the debt. The BOC approved a motion to not recommend using lease revenues to retire bond debt. Response: Santa Cruz City Schools AGREES. The lease revenue is deposited to the General Fund to support operating expenses at the schools. Transferring this revenue to reduce Bond debt would require cuts in school budgets. District Office Relocation/Renovation 52. Even after Natural Bridges and Branciforte elementary schools had been closed, and the four alternative schools on three sites were moved to the former Branciforte Elementary campus, the district still needed to reduce overhead and save operating expenses due to declining enrollment. The district offices on Mission Street were sold, and ten classrooms at Soquel High School were chosen to serve as administrative offices (Soquel High School’s enrollment dropped from 1693 students in 1998 to 1234 students in 2005-06). The Adult Education Office, the Purchasing Department, and District Warehouse were moved to Palm Street. The Workability Program and Food Services Office were moved to DeLaveaga Elementary School. Response: Santa Cruz City Schools PARTIALLY AGREES. The sale of 2931 Mission Street and the relocation of the District office occurred prior to the reorganization of the schools. The Workability Office was moved to Harbor High School. 53. Classrooms identified to house the district offices at Soquel High had already been remodeled using bond funds. At least an additional $460,537 in bond money was spent for the district office remodel. Response: Santa Cruz City Schools AGREES. The additional cost was to convert classrooms to office space, to add electrical, a telephone system, data wiring, and to add parking. 54. At its April 9, 2003 meeting, the SCCS Board approved the use of up to $1 million in bond funds for district office relocation and improvements. In its advisory capacity, the BOC did not recommend this action. Response: Santa Cruz City Schools AGREES. 55. To date, at least $1,285,486 of bond project money has been spent on district office and adult education relocation. This total includes $274,424 for change orders, or - 30 The Dollars and Sense Don’t Add Up: twenty-seven (27%) of the original contract amount of $1,011,062. Response: Santa Cruz City Schools PARTIALLY AGREES. $1,291,631 has been spent on District Office/Adult Education relocation. Of that amount, $280,659 was for change orders, 27.7% of the original contract amounts. 56. A BOC member called the use of bond money for offices “not ethical,” and stated that the district could use anticipated redevelopment revenue to pay for the classroom conversions and other relocation projects. “There was a promise (the bond money) would never be used for administrative costs. It was to improve the student environment, not the district office environment.”28 Response: Santa Cruz City Schools PARTIALLY AGREES. The ballot measure said that Bond funds would not be used for administrative salaries. The District’s Bond Counsel advised the District that it would be a legal use of the Bond funds, given the ballot language, for relocating District Office facilities. Selling the old District Office at 2931 Mission Street will save $400,000 per year in debt service payments in the General Fund, which provides more operating funds for schools and students. Oversight/Public Communication 57. The BOC has been meeting bi-monthly since 1998. These meetings are open to the public. Minutes and any reports released are public information. Meetings are held at Soquel High School, Room 312. Oversight committee members stated that meeting notices are posted at school sites and the district office. 58. In 1998, a bond web page was developed with links to each school site providing regular updates on bond-related issues. 59. In June 1999, the communications sub-committee of the BOC worked on placing bond-related information on the SCCS web page. Signs relating to bond projects were designed for placement at the school sites. 60. On August 26, 1999, the BOC stated that the Board of Education, Bond Oversight Committee, and district administration should work jointly to create a public relations program and method of presentation for each school site, the press, and the public in general. Response: Santa Cruz City Schools AGREES. The BOC has made repeated attempts to have the stories about the Bond Projects reported in the press. The press has not responded favorably to their attempts. We 28 Santa Cruz Sentinel, “Moving costs stir school-bond debate,” May 29, 2003. The Dollars and Sense Don’t Add Up: - 31 think that the school sites have been kept informed. However, the general public has not been very well informed because the press has been unresponsive. The BOC has had discussions about how to handle this. Most of the ways the BOC could find to inform the public involved the use of bond funds. The BOC has been very reluctant to spend bond funds on mailings and ads. The BOC has tried to ensure that the money was used to the benefit of the students in the classroom. 61. District staff and BOC members were interviewed for “Community Express,” a Community Television of Santa Cruz show. The show aired four times in Fall 1999 and outlined the school bond issues and future project plans. 62. A brochure “The Road to Renovation” detailed the status of Measure E and H projects and was distributed to parents from the school sites and mailed to households within the district in May 2000. This brochure indicated there would be ongoing communication to keep the public aware of progress and improvements. 63. In July 2000, a Board of Education member noted that the district’s web site was in need of updating. 64. The Grand Jury observed that as late as October 17, 2005, there was a “Bond Projects” section on the Santa Cruz City Schools web site. Information was out of date; the last update had been posted in 2001. By February of 2006, that section of the web site was no longer accessible, and posts “Forbidden: You don’t have permission to access … (this site) on this server.” Response: Santa Cruz City Schools PARTIALLY AGREES. The District did not maintain detailed information on the Bond Projects on the SCCS website. There were not adequate resources dedicated to maintaining the SCCS website, including the Bond Projects information on the website. However, the SCCS website had a link to the Strategic Construction Management (SCM) website, where information on projects at each school site was available. When the District website was redesigned in September 2005, the link to SCM was inadvertently omitted. It was reinstated on 9/26/06. Without knowing specifically which website the Grand Jury attempted to access when receiving the “Forbidden: You don’t have permission to access…” message, it is difficult to respond to why that message was received. That message is a standard response on any web server when a web page cannot be found. 65. When asked about the inaccessibility of the web site, district staff responded that the webmaster worked one half-day per week and that there were no resources in the district to put more effort into the web site. - 32 The Dollars and Sense Don’t Add Up: Response: Santa Cruz City Schools AGREES. 66. Strategic Construction Management publishes SCCS site construction newsletters on its web site. Newsletters for completed bond projects include construction budget summaries, schedules, and architect, inspector, and contractor information. Web site summaries of current projects have none of this information.29 Response: Santa Cruz City Schools AGREES. 67. The construction budget summaries for “Completed Projects” on the Strategic Construction Management web site do not match the figures printed on the Santa Cruz City Schools Bond Project, Status of Project Closeout, May10, 2006. The Strategic Construction Management web site is the only one displaying information on the SCCS bond construction projects. Response: Santa Cruz City Schools AGREES. The costs reported on the website include hard costs and soft costs (architect fees, DSA fees, IOR fees, bidding costs). The costs reported on the Project Close-out Report are only hard costs paid to contractors. 68. According to district administrative staff, by the end of summer 2006, ninety-eight percent (98%) of bond funds will be spent. The BOC’s final meeting is scheduled for November 2006. If there is any money left over, district staff will oversee expenditures. Construction projects could extend into Spring 2007. Response: Santa Cruz City Schools AGREES. The only remaining project after November, 2006, will be the new Santa Cruz High School swimming pool projects that will be funded 50% with Bond Funds. 69. Strategic Construction Management will be paid $34,500 to produce a Bond Projects Report. This fee is included in their July 1, 2006 to December 31, 2006 contract extension. Response: Santa Cruz City Schools DISAGREES. Strategic Construction Management, http://strategic-cm.com/main/santacruzcityschools.htm. The Dollars and Sense Don’t Add Up: - 33 This was a proposal based on ill-defined scope and provided to the BOC for discussion purposes. This was never approved. 70. At its May 18, 2006 meeting, the BOC reviewed options for its final committee report which may be in the form of newspaper ads or inserts, postcards, a newsletter, a twenty-four page report, or a video. Response: Santa Cruz City Schools AGREES. Conclusions Bonds E and H 1. Measure E, Series A, B, and C bond sales exceeded the voter-approved amount of $28 million by $98,115.65. The $28 million cap was exceeded a second time when the Measure E, Series A and B bonds were refinanced, this time by $383,115.65. 2. A savings of over $3 million in interest is projected due to the refinancing of the Elementary and High School Bonds, Series A and B that were sold for $4,280,000 million more than the principal remaining. Although interest was decreased, the total debt was increased. The purpose of the refinancing appears to be to extract more funds and not to lower property taxes. 3. The 2005 refinancing of the Elementary and High School Bonds is not shown on the SCCS Bond Projects Budget, Report from July 1, 1998 to April 30, 2006. Voters are entitled to full disclosure regarding all bond details. 4. Contrary to the language of the Voter Information Pamphlet, the bond terms of both the Elementary and High School bonds are greater than twenty-five years. 5. Property owners in the Santa Cruz City Schools District are paying a higher percentage of their property taxes to repay bonds E and H in the 2005-2006 tax year than they paid in the 2004-2005 tax year. To date, the decreased bond interest rates have not reduced property taxes. 6. Over the next twenty-three years, property tax deposits will earn interest that could be used to reduce bond debt. 7. The SCCS District has exceeded its fiscal authority granted in Measures E and H by selling bonds for more than the voter-approved limit. By so doing, it could make it more difficult for voters to approve future bond projects. Project Management 8. As of April 30, 2006, expenses for architects/engineers, and construction management total sixteen percent (16%) of the total bond project expenditures, or over $18 million. - 34 The Dollars and Sense Don’t Add Up: 9. The district did not have personnel on staff with adequate construction knowledge to manage large construction projects. 10. The district could not find an efficient and cost-effective method of construction program management. There were many layers of construction supervision and coordination paid for with bond dollars: general contractors, architects, Strategic Construction Management, and the district’s Construction Program Coordinator. 11. Originally, the Strategic Construction Management contract was for $1.2 million and all projects were to be completed by December 2004. By the end of 2006, payments to Strategic Construction Management will reach nearly $3 million, and projects are still continuing. 12. Additional payments were made to Strategic Construction Management for moving services that were part of their original contract with SCCS for which a fixed-price bid had been submitted. 13. Total bond project construction management fees from 1998 to present appear excessive, and will top $7 million before the end of 2006. 14. The bidding process for the Construction Program Manager was not conducted according to Public Contract Code Procedures. Bid documentation is not available from the district to determine whether the lowest bidder was accepted; and documentation that the bids were opened in public as mandated by the Public Contract Code has not been made available by the district. Bidding 15. When the board voted to no longer require re-bidding projects that surpassed the ten percent change order threshold, it removed the cap on change orders. 16. A contractor should not have been considered “responsible” if that contractor’s previous jobs had excessive change orders and if court action was necessary. 17. When projects were bid with alternates, this allowed contractors to manipulate the system by giving a low bid or zero on alternates, thereby allowing a contractor to submit the lowest bid. The bid would not necessarily be awarded to a responsible bidder. Change Orders 18. The SCCS Bond Project, Status of Project Closeout, May 10, 2006 is incomplete; therefore, a true assessment of costs and overruns cannot easily be made. 19. The amount of change orders appears excessive. This could be due, in part, to the removal of the ten percent (10%) cap requiring project re-bidding. 20. There was no financial incentive for contractors and architects to keep change orders to a minimum. The Dollars and Sense Don’t Add Up: - 35 Division of the State Architect Oversight 21. The Architects of Record have not fulfilled their responsibilities to secure project closeout and certification by the DSA. 22. District administrative staff has not seen the projects through to closeout by insisting that the Architects of Record submit all closeout documentation. 23. The district, architect, and engineer failed to file DSA Form-5 before IORs started project 01-103363 as required by the California Code of Regulations. 24. IOR documentation for project 01-103363 is incomplete and shows a gap of eighteen days with no IOR site notations or reports. It is a violation of the California Code of Regulations for a project to proceed without an IOR. 25. Since district and DSA documentation of IOR assignments and dates do not match, the Grand Jury was unable to determine whether projects progressed without an assigned IOR, or without a DSA-approved IOR. School Closures/Leasing 26. Although bond funds were used to renovate the Natural Bridges and Loma Prieta sites, lease revenues have not been used to repay bond debt. District Office Relocation/Renovation 27. Despite the fact that the Voter Information Pamphlet arguments in favor of the bond measures clearly stated that bond funds were not to be used for administrative offices, the SCCS Board used bond funds for this purpose. 28. The SCCS Board ignored BOC recommendations not to use bond funds for district office renovations and relocation. 29. Lack of planning resulted in wasted money at Soquel High when ten classrooms that had already undergone renovation and modernization were remodeled for district offices. 30. The SCCS District spent more than $1.2 million on district office renovations and relocations. The district inappropriately approved $1 million for this purpose; no bond money should have been used. Oversight/Public Communication 31. The BOC is scheduled to disband in November 2006. Projects may continue until at least Spring 2007, and there will be no BOC oversight. Bonds were passed under the assumption that an oversight committee would be in place for the duration of the projects. - 36 The Dollars and Sense Don’t Add Up: 32. The district has not maintained the bond project information on its web site. This could have been a valuable means of providing ongoing, up-to-date public information on the bond projects. 33. Over the last eight years, there has been no ongoing form of public communication with district residents regarding the bond projects. Efforts made, such as starting a web page, being interviewed for Santa Cruz Community Television, and producing a brochure, all took place between 1998-2000. 34. As of this late date, the BOC has not yet determined the format and scope of its final report. The Grand Jury questions whether this will give the BOC time to prepare a comprehensive report. 35. Paying Strategic Construction Management $34,500 to help prepare a final report detailing the bond projects could result in a loss of objectivity and detail in evaluating the projects’ successes and failures. Recommendations 1. The Grand Jury recommends that the Santa Cruz County Auditor initiate an outside, independent audit to scrutinize the bond sales and refinancing, and expenditure of bond funds. If there was surplus cash gained from the refinancing, it should be accounted for and used to reduce the bond debt. Response: Santa Cruz County Auditor-Controller PARTIALLY DISAGREES. The County Auditor-Controller does not generally have authority to audit School District activities. The County Auditor-Controller is generally responsible for the fiscal oversight of County functions or those under the Board of Supervisor’s control. However, if a district has funds in the County treasury, the Board of Supervisors can direct the Auditor-Controller to perform an audit of that district as well. California Government Code Section 26883 states: In addition to the power now possessed by the Board of Supervisors to enter into contracts for audits, the Board shall have the power to require that the County Auditor-Controller shall audit the accounts and records of any department, office, board or institution under its control and of any district whose funds are kept in the County treasury. . . Nevertheless, the issues raised in this Grand Jury report are important and should be addressed. The County Auditor-Controller has communicated with Santa Cruz City Schools District staff to research and respond to the findings and recommendation contained in this reply. Unfortunately, the School District’s reply is not due for another 30 days. Consequently, the response to a few of the findings in this report are incomplete, particularly Findings 7 and 10 regarding the legal cap on the amount of the refunding bonds and the 29 year life of the bonds. Hopefully, the School District’s response will include an independent legal opinion that the issues raised in The Dollars and Sense Don’t Add Up: - 37 Findings 7 and 10 are within the confines of the law. Response: Santa Cruz City Schools PARTIALLY AGREES. If the County Auditor decides to audit the bond sales and refinancing, the District will cooperate with the County Auditor. The District did not realize any surplus cash from the refinancing. The refinancing did reduce the bonded debt. 2. An outside, independent performance audit should be conducted to analyze, assess, and report on the Santa Cruz City Schools District’s operational and construction management policies, procedures, and practices regarding Bond Measures E and H. Investigation as to whether all California Code of Regulations, Title 24 standards were followed should be included. Response: Santa Cruz City Schools DISAGREES. The District will not conduct an independent performance audit of the construction program for the following reasons: 1. The Board and the BOC have been satisfied with the program. 2. The schools have been satisfied with the outcome of the projects. 3. The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit. 4. Low priority for the expenditure of funds for an audit. The plans and specifications for the projects were approved by the DSA before bidding to ensure compliance with Title 24. DSA-certified inspectors inspected the projects during construction to ensure plans and specifications were followed by the contractors. 3. The SCCS District should insist that the architects submit all documents related to completed bond projects under DSA supervision so the projects can be certified and closed out. Architect fees should be withheld until DSA certification is complete. Response: Santa Cruz City Schools PARTIALLY AGREES. The District is insisting that the architects submit all documents on completed projects so the projects can be closed out by the DSA. The current architect contracts do not provide for withholding of fees pending completion of final DSA project close- out. 4. For future major construction projects, the SCCS District should consider hiring an experienced, qualified construction project manager or team as a limited-term district - 38 The Dollars and Sense Don’t Add Up: employee(s). This would cost less than hiring a construction management firm. Response: Santa Cruz City Schools PARTIALLY AGREES. For future major construction projects, the District will consider hiring an experienced qualified construction project manager or team as limited-term District employees. It is not clear that this would cost less or be more effective than hiring a construction management firm. The BOC has been very satisfied with the decision to engage the services of Strategic Construction Management. 5. The SCCS District should replace the funds used for District Office relocation and renovation to reduce bond debt. Response: Santa Cruz City Schools DISAGREES. See response to Finding # 56. 6. The SCCS District should use lease revenues and interest on future property tax collections to reduce the bond debt. Response: Santa Cruz City Schools DISAGREES. See response to Finding # 51. 7. The SCCS District should provide a complete bond projects budget document that includes bond refinancing details. Response: Santa Cruz City Schools DISAGREES. See response to Finding # 8. 8. The SCCS District should provide a complete bond projects closeout document detailing all bond construction projects. Response: Santa Cruz City Schools AGREES. The Bond Oversight Committee will produce a final report of the Bond Projects by November 2006. 9. Future construction projects should be awarded to the contractor submitting the lowest base bid. Alternates should be bid separately. Response: Santa Cruz City Schools DISAGREES. The Dollars and Sense Don’t Add Up: - 39 The process being used complies with Public Contract Code and has been approved by District legal counsel. 10. For future construction projects, the contractors hired should adhere to the ten-percent cap on change orders previously in effect. Response: Santa Cruz City Schools DISAGREES. Future modernization projects may require exceeding the 10% change order threshold for the reasons outlined in the response to Findings # 31 and 32. 11. The SCCS District should provide an objective summary and analysis of bond projects from beginning to end. This should include project details, budget, and completion dates; financial accounting; analysis of successes and failures; and suggestions for improvement for any future bond or construction projects. Response: Santa Cruz City Schools PARTIALLY AGREES. The District has provided on-going bi-monthly reports to the Board and BOC, including project status and budget status. These reports are available to anyone interested in them. The BOC will produce a final report on all of the projects by November, 2006. 12. The SCCS District should make sure its web site is comprehensive and updated frequently. The final bond projects report and analysis should be posted on that web site. Response: Santa Cruz City Schools AGREES. Financial resources will first need to be identified to fund the regular updates of the District’s web site. The Bond Projects Final Report will be available on the District web site. 13. The BOC should continue to operate until all bond projects are completed. Response: Santa Cruz City Schools DISAGREES. The BOC has recommended and the Board has approved that the last BOC meeting will be on November 16, 2006. The only construction project that will continue after that date will be the Santa Cruz High School swimming pool. The Board and the BOC do not think that the BOC needs to continue to meet to oversee one project that is funded 50% by Bond Funds. - 40 The Dollars and Sense Don’t Add Up: 14. District support staff is to be commended for its helpfulness, promptness, and courtesy when providing requested documentation. Responses Required Entity Findings Recommendations Respond Within Santa Cruz City 2-12, 14, 15, Schools Board of 19, 20, 23, 24, 90 Days Trustees 27-29, 31, 32, 1-13 (October 1, 2006) 34-44, 46, 47, 51, 53-56, 64- 70 Santa Cruz County 60 Days Auditor/Controller 1-15 1 (September 1, 2006) The Dollars and Sense Don’t Add Up: - 41

F09: The contract was awarded for $1,204,700 when the lowest bid was actually $1,151,399. Response: Santa Cruz City Schools PARTIALLY DISAGREES. Contracts are always awarded to the lowest bidder as defined in section 10 of our Instructions to Bidders (Exhibit 5) which are based on Public Contract Code section 20103.8 (Exhibit 6), and advice from District legal counsel (Exhibit 7). A copy of bid # 2006-09 (Exhibit 8) shows that, as defined in our bid documents, Robert Bothman was the low bidder based on the total bid with all alternates. The Dollars and Sense Don’t Add Up: - 25 Change Orders

F9: According to the Official Statements for the bond sales, property owners residing in the Santa Cruz City Schools District will be repaying bonds E and H until 2029. Response: Santa Cruz County Auditor-Controller AGREES. Response: Santa Cruz City Schools AGREES. The Dollars and Sense Don’t Add Up: - 13

F10: The Voter Information Pamphlet for Bond Measures E and H contained an “impartial analysis by County Counsel” stating that “under current California law, the term of the bonds cannot exceed twenty-five years.”9 This term is also stated in the California Education Code, Section 15144: “The number of years the whole or any part of the bonds are to run shall not exceed 25 years, from the date of the bonds or the date of any series thereof.”10 Response: Santa Cruz County Auditor-Controller PARTIALLY AGREES. The voter information pamphlet did include this statement. California Education Code Section 15144 authorizes bonds up to 25 years. California Government Code authorizes bonds up to 40 years. Whether the 29 year bonds that were issued under the Government Code are legally compliant for a School District is a legal matter which the Auditor-Controller is not qualified to determine. Response: Santa Cruz City Schools PARTIALLY AGREES. The bonds were authorized by resolution adopted by the Governing Board, with the following stipulations: Said bonds proposed to be issued and sold shall bear interest at a rate not exceeding the maximum rate allowable by law, at the time or times of the sale thereof, such interest to be payable annually or semiannually thereafter, and the number of years the whole or any part of the principal amount of the bonds shall be payable shall not exceed twenty-five (25) years (or such greater maximum term as may be permitted by law) from the date of the bonds or the date of any series thereof. (emphasis added) Section 53506 of the California Government Code provides full authority for the issuance of bonds by a school district and is intended to provide a complete additional and alternative method for doing so, supplemental and additional to the powers conferred by any other laws. This section authorizes the issuance of bonds for up to 40 years. The School District has no control over the analysis of ballot measures written by the County Counsel, who did not mention the authority that school districts have under the Government Code to issue general obligation bonds for terms up to 40 years. The terms on Series A and B of Measures E and H were 28 years.

F11: On April 13, 2005, the SCCS Board of Education passed resolutions authorizing the refinancing (refunding) of the general obligation Bond Measures E and H, Series A 9 County of Santa Cruz Sample Ballot and Voter Information Pamphlet for Special School District Election, Tuesday, April 14, 1998. California Education Code, Section 15144, http://caselaw.lp.findlaw.com/cacodes/edc.html. - 14 The Dollars and Sense Don’t Add Up: and B to take advantage of decreased interest rates. Response: Santa Cruz County Auditor-Controller AGREES. School District staff advised the Auditor-Controller that this is an accurate finding, but the Auditor-Controller has not verified this information. Response: Santa Cruz City Schools AGREES.

F12: SCCS District’s bond financial advisor stated that the refunding of the bonds will result in lower debt service payments, with the majority of savings in 2006-2010, and that the refinancing will lower taxes. Response: Santa Cruz County Auditor-Controller PARTIALLY AGREES. The Santa Cruz County Auditor-Controller does not know whether the District’s financial advisor made this statement, but law requires any debt refinancings to result in lower annual debt service payments. The debt service payments for the Santa Cruz City Schools Series A and B bonds were reduced after the refinancing. Debt service payments for A and B totaled $4,714,087 in FY 2004-05 before the refinancing. Debt service payments were reduced to $4,439,449 in FY 2005-06 and $4,010,865 in FY 2006-07 after refinancing. Following is a schedule detailing this. 2004-05 2005-06 2006-07 Elementary Schools A (1998) 466,655 B (1998) 1,083,070 A and B Total 1,549,725 A and B Refinanced (2005) 1,453,347 1,319,610 C (1998) 400,000 400,000 405,001 Total 1,949,725 1,853,347 1,724,611 High School A (1998) 1,002,470 B (1998) 2,161,892 A and B Total 3,164,362 A and B Refinanced (2005) 2,986,102 2,691,255 C (1998) 855,000 855,000 855,751 Total 4,019,362 3,841,102 3,547,006 The Dollars and Sense Don’t Add Up: - 15 Total Elementary and High Schools A (1998) 1,469,125 B (1998) 3,244,962 A and B Total 4,714,087 A and B Refinanced (2005) 4,439,449 4,010,865 C (1998) 1,255,000 1,255,000 1,260,752 Total 5,969,087 5,694,449 5,271,617 Debt service for the refinancing bonds (A and B) will continue at approximately $4 million until FY 2010-11, at which time it will increase to about $4.7 million, where it will remain until the bonds mature in 2029. Response: Santa Cruz City Schools PARTIALLY AGREES. The taxpayers for both the elementary school district and the high school district will see significantly lower tax rate on the bills they receive during the fall of 2006. These bills will be for the fiscal year 2006-07. The timing of the savings is consistent with the statement referenced above.

F13: For tax year 2004-2005, property owners residing in the Santa Cruz City Schools District within the City of Santa Cruz were paying property taxes at a rate of .068% toward bonds E and H. In tax year 2005-2006, the rate increased to .081%. Response: Santa Cruz County Auditor-Controller AGREES. These property tax rates are stated correctly. However, these rates include the Series C bonds which were not refunded. The property tax rates for just the Series A and B bonds (excluding the Series C bonds) were .054% for FY 2004-05 and .068% for FY 2005-2006. There was a one time increase in the tax rates for FY 2005-06, but it was followed by a significant decrease to .008% for FY 2006-07. The primary reason for the one time rate increase in FY 2005-06 is because taxes are collected in the previous fiscal year to make the August debt service payment in the following fiscal year, further complicated by the mechanisms of the bond refinancing and the associated reserve funds during this period. The much lower rate in FY 2006-07 compensates for the higher rate the previous year. In the future, the property tax rates to pay this debt service will stabilize at below the pre-refunding rate of .054%, tracking with the total debt service payments indicated in item 12 above. Response: Santa Cruz City Schools PARTIALLY AGREES. The tax rate is calculated by the County of Santa Cruz. The primary considerations are the debt service on the bonds, the reserve factor established by the county and the assessed value. Of the three factors the district can control only the debt service on - 16 The Dollars and Sense Don’t Add Up: the bonds. The High School refunding resulted in $2.5 million in total debt service savings and the Elementary School refunding resulted in $1.2 million in total debt service savings. In the tax year 2005-06 the combined refundings resulted in 6,393.99 of debt service savings. In 2006-07 the combined tax rate on the E and H bonds is .024272% (see Exhibit 1).

F14: Interest earned on bond sale proceeds has been used for the bond projects and has not been used to repay the bond.11 Response: Santa Cruz County Auditor-Controller AGREES. School District staff advised the Auditor-Controller that this is an accurate finding, but the Auditor-Controller has not verified this information. This is a legally acceptable and common practice. Response: Santa Cruz City Schools AGREES.

F15: As property tax is collected to repay bonds E and H, the money is deposited in the pooled investment fund of the county until the district draws it out. These deposits earn interest. Response: Santa Cruz County Auditor-Controller PARTIALLY AGREES As property tax is collected to repay bonds E and H, the money is deposited in the County’s pooled investment fund. However, the District does not draw the funds out of the County. Rather, the County makes the debt service payments directly to the Bond Paying Agent. Response: Santa Cruz City Schools PARTIALLY AGREES. The District does not draw the funds out of the County pooled investment fund. The County transfers the funds directly to the Bond Paying Agent, who uses the funds to make interest payments to Bond holders and to retire Bonds as they come due. Budget Expense Summary

F16: Following is a summary of the SCCS Bond Projects Budget expenses from July 1, 1998 to April 30, 2006:12 ITEM EXPENSE PERCENTAGE OF EXPENSES Construction Contracts $82,431,328 74% Architects/Engineers $11,212,596 10% 11 Santa Cruz City Schools, Bond Projects Budget, Report from July 11, 1998 to April 30, 2006. Santa Cruz City Schools, Bond Projects Budget, Report from July 11, 1998 to April 30, 2006. The Dollars and Sense Don’t Add Up: - 17 Construction Management $6,928,864 6% Miscellaneous Construction Costs $4,178,084 4% Reserves $3,901,483 4% Staff Salaries and Other Support $2,225,522 2% TOTAL EXPENSES $110,877,877 100% Table 3. Summary of SCCS Bond Projects Budget Expenses, July 1, 1998 to April 30, 2006. Project Management

F17: In January 2001, the Bond Projects staff requested authority from the school board and the BOC to use their discretion before bidding projects in the future, and to decide whether to bid projects with one general contractor or use multiple-prime contractors.

F18: Results of the first four major bond projects undertaken at one high school, one junior high school and two elementary were described as follows: “All four projects were completed late, two of the four projects are over budget, the quality of some of the work was sub-standard on two projects, and sub-standard work was allowed to stand when first done, assuming it would be rectified as part of the punch list at the end of the projects, but after many spaces had been reoccupied. Some work that was planned to be included in some projects was left out of the initial plans and specs and had to be added with change orders, adding time and cost to the project.”13

F19: At the October 24, 2001, SCCS Board of Education meeting, district administrative staff dissatisfaction with the ability of the construction managers to monitor and control the work on multiple prime projects was reported. District staff recommended: • bidding future construction projects using general contractors • terminating the two elementary and secondary Construction Managers’ contracts • increasing Inspector of Record time on projects to better monitor quality of work • increasing architect involvement in construction administration • reorganizing district support and oversight of projects • pre-qualifying bidders for future projects Response: Santa Cruz City Schools AGREES.

F20: District administrative staff stated that using general contractors had the advantages of less contract administration, total coverage of work, and direct lines of accountability. Disadvantages were that the general contractor might not select the 13 Santa Cruz City Schools, Request for Proposals, Management Services for Construction Projects, 2001. - 18 The Dollars and Sense Don’t Add Up: lowest subcontractor bid and could charge up to a fifteen percent markup on subcontractor change orders.14 District administrative staff stated that using general contractors could cost more, but there would be clear lines of responsibility and “headaches would be reduced.” Response: Santa Cruz City Schools PARTIALLY AGREES. District administrative staff also believed that bidding projects with General Contractors instead of multiple-prime contractors would reduce legal costs. The District has been involved in two construction lawsuits, both with contractors on multiple-prime projects and none with general contractors. The clear lines of responsibility and accountability for any construction issues are with the general contractor. When multiple-prime contractors are on a project, the lines of responsibility and accountability can become blurred between prime contractors.

F21: On November 15, 2001, district administrative staff reported to the BOC that the SCCS Board had approved a plan to hire a consultant to provide general oversight and management of the construction program. The board’s preference was to hire professionals in the construction management field to manage future projects, instead of having district employees in the project management role. The board stated that it did not have confidence that district employees could provide management, in light of the problems that had been reported by school staff at Branciforte Junior High on that school’s projects.15

F22: Seven firms responded to the district’s Request for Proposal (RFP) for a construction program manager. Three finalists were interviewed, and Strategic Construction Management was chosen by the SCCS Board as the Construction Program Manager to be effective February 1, 2002. District administrative staff and volunteers stated the board liked the fact that Strategic Construction Management was local and had ties to the community.

F23: The district has not been able to produce the fixed-price bids and requested supporting documentation for this selection process. This documentation is public record. Response: Santa Cruz City Schools PARTIALLY AGREES. The selection of a CM firm was not a bid process. It was a Request for Proposals for selecting professional services, for which the public bid requirements do not apply. Four CM firms were interviewed by the BOC Interview Committee, who ranked them as follows:

F24: The Grand Jury could find no documentation that the bids for the Construction Program Manager were opened publicly as required by the Public Contract Code.16 Response: Santa Cruz City Schools DISAGREES. Contracting for construction management services is contracting for professional services and is not subject to the lowest bid requirements of the Public Contract code. The fees for professional services are typically negotiated from a proposal and are not bid. This process is the same process used when hiring architects or state-certified inspectors. According to the District’s legal counsel on our construction program, Paul Taylor of Hefner, Stark and Marois, the District is not subject to section 10180 of the Public Contract Code that applies to State agencies but is subject to Government code section 4525 et seq. (See Exhibit 2.) 25. “Previously, the district used its staff to oversee multiple contractors at individual schools. Officials expect the new system, which includes hiring a general contractor for each project, will simplify the process and attract more bids, particularly from area contractors. The district will pay Strategic $1.2 million. District officials expect to finish all projects by December 2004.”17

F25: Since district and DSA documentation of IOR assignments and dates do not match, the Grand Jury was unable to determine whether projects progressed without an assigned IOR, or without a DSA-approved IOR. School Closures/Leasing

F26: Construction Management budgets were reduced by $2,128,663 due to termination of the two previous Construction Management contracts. Architect Fee budgets were then increased $1,288,160 for increased services for construction administration due to reorganization of management for the projects. These adjustments, when combined with the new Strategic Construction Management contract for $1.2 16 California Public Contract Code, Section 10180, http://www.aroundthecapitol.com/code/contents.html?sec=pcc 17 Santa Cruz Sentinel, “Firm will oversee school construction projects,” February 15, 2002. - 20 The Dollars and Sense Don’t Add Up: million, produced an immediate overall increase for the bond projects of over $360,000.

F27: Since February 1, 2002, there have been numerous contract extensions and additional payments approved for Strategic Construction Management, summarized as follows: Original Moving Contract Contract Moving Contract Contract18 Services19 Renewal20 Extension21 Contract22 Extension23 TOTAL Term 2/2/02 – 8/23/02 – 3/1/04 – 10/1/05 – 5/05 – 7/1/06 – 2/28/04 2/28/04 8/31/05 6/30/06 9/05 12/31/06 Amount $1,205,104 $99,825 $958,058 $374,325 $27,254 $224,500 $2,889,066 Table 4. Approved Contracts for Strategic Construction Management Paid by Bond Funds. Response: Santa Cruz City Schools PARTIALLY AGREES. The original contract with Strategic Construction management was based on the projects originally planned out of the $86 million in E and H bond funds. The renewal and subsequent extensions in the SCM contract were added when the District received an additional $26.5 million in State SB50 funds. The District also added $15 million in other District funds to the projects that increased the need for Strategic CM services. Refer to attached spreadsheet (Exhibit 3).

F28: In addition to bond funds, payments totaling $68,273 to Strategic Construction Management have been approved by the SCCS Board: $48,221 from the General Fund to “plan and coordinate moving of furniture, equipment and supplies (March 24, 2004); and $20,052 from the Capital Facilities Fund to “plan and coordinate the relocation of 21 portable classrooms” (April 21, 2004). Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, February 27, 2002. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, August 14, 2002. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, December 10, 2003. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, June 8, 2005 22 Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, June 8, 2005. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, April 26, 2006. The Dollars and Sense Don’t Add Up: - 21 Response: Santa Cruz City Schools PARTIALLY AGREES. These services were related to school reorganization and consolidation and were not paid for with Bond funds (see Exhibit 3).

F29: In the RFP for Management Services for Construction Projects that was part of the Strategic Construction Management Agreement with the district, one requirement is to “plan and coordinate the moving of staff, furniture, material and equipment related to the construction projects.” Strategic Construction Management submitted a fixed fee proposal to secure this contract. Response: Santa Cruz City Schools PARTIALLY AGREES. Strategic Construction Management’s original scope included moving as it related to construction projects, such as moving classroom furniture as part of on-going construction, and moving furniture and equipment within a given campus as a result of work directly related to the Bond construction projects. The increase in services/fees were required for the management and coordination of moves at the various construction sites beyond those considered in the District’s scope of services as described in the Request for Proposals (RFP) for management services for construction projects. The Strategic Construction Management original fee proposal was based on the District’s scope of services as described in the RFP. The District’s RFP was not specific regarding the scope, phasing requirements and amount of time required to coordinate and direct the moves at the numerous school sites. Included in Strategic Construction Management’s scope of services and fixed fee was 200 hours dedicated for planning and coordinating the moving of staff, furniture, materials and equipment during construction. The allocated fee for this service was $15,000. At the time of the request for the fee increase, Strategic Construction Management had expended approximately 390 hours related to the moves. Strategic Construction Management was providing services that included: preparing documents to solicit a minimum of three (3) moving quotes, leading pre-quotation school site walks, receiving quotations, developing phasing plans, meeting with staff and faculty to determine packing needs, arranging for the delivery of cardboard boxes and storage containers and being available to coordinate and facilitate moves. In addition to the amount of time needed to support the District with their moves, Strategic Construction Management had not been provided with “full-time clerical support” as described in the RFP. Not having this support took Strategic staff away from the duties they anticipated.

F30: In March 2002, the board approved a district Construction Projects Coordinator position to serve as a liaison between Strategic Construction Management and the district sites. The position is funded through the elementary and secondary bonds. The head of the district Maintenance Department was appointed to the position. - 22 The Dollars and Sense Don’t Add Up: Bidding

F31: The SCCS Board of Education approved a resolution to no longer require a public re-bidding of work once change orders exceeded the cost of the original bid by over ten percent (10%), as had been previously required. It was stated that the re-bid process can cause a six- to eight-week delay, and since the district had a general contractor in charge of bond-funded projects, the chances of exceeding a ten percent overrun were considerably less. Response: Santa Cruz City Schools PARTIALLY DISAGREES. A copy of Board resolution #22-01-02 authorizing exceeding the 10% limit on change orders and the cover memo that went to the Board with the resolution, are attached as Exhibit 4. Nowhere in the cover memo does it say that the chances of exceeding the 10% limit were less because of having a general contractor in charge of the construction projects, as alleged by the Grand Jury in this finding. There were two reasons that the Board approved the resolution allowing change orders to exceed 10% of the original bid. They were:

Related Recommendations (2)

R10: For future construction projects, the contractors hired should adhere to the ten-percent cap on change orders previously in effect. Response: Santa Cruz City Schools DISAGREES. Future modernization projects may require exceeding the 10% change order threshold for the reasons outlined in the response to Findings # 31 and 32.

F32: The SCCS Bond Project, Status of Project Closeout, May 10, 2006, revealed that out of sixty-nine projects, thirty-seven (or 54%) exceeded a ten percent cost overrun due to change orders. Response: Santa Cruz City Schools PARTIALLY DISAGREES. Most of the change orders that exceeded 10% of the original bid were based on additional work requested by the District, or were due to unforeseen conditions discovered during the construction process. Budget contingency reserves had been established to cover these costs.

F33: In October 2005, the SCCS Board voted to become subject to the Uniform Public Construction Cost Accounting Procedures and to provide for informal bidding procedures under the Uniform Public Construction Cost Accounting Act Procedures. This allowed projects from $35,000 to $125,000 to be bid using a pre-approved list of satisfactory contractors, while projects over $125,000 were subject to formal bidding procedures. The rationale was that this would allow more flexibility in the execution of work; speed up bidding procedures; improve timeliness of project completion; reduce paperwork and expenses related to advertising; and simplify administration.

F34: The SCCS District was advised by legal counsel to set a consistent policy for the acceptance of bids. Subsequently, it was decided to award contracts based on the lowest total bid on each project. Projects often contain several alternates, which may or may not be actually included in the final project. The contract, however, is still awarded on the total bid. Response: Santa Cruz City Schools PARTIALLY AGREES. Legal Counsel advice was based on the methodology used to define lowest bid in conformance with Public Contract Code. - 24 The Dollars and Sense Don’t Add Up:

F35: When projects contain alternates, contractors can bid low or even zero (0) on some alternates, thereby lowering their overall total bid. Response: Santa Cruz City Schools PARTIALLY DISAGREES. If a contractor bids low or zero on the alternates and they have the lowest total bid that is accepted by the District, they are still obligated to complete the alternates for the amount of their bid.

F36: In March 2006, the district awarded a bond project contract to a bidder whose past projects for the district included a project that had change orders totaling 34.1% of the original contact amount, a Stop Notice, and had gone to court. That same bidder had previously completed district bond projects with change orders of 32.3%, 36.9%, and 118.8% of the original contract amounts. Response: Santa Cruz City Schools PARTIALLY DISAGREES. This contractor was CRW Industries, Inc. The cause of change orders on previous CRW projects exceeding 10% of the original contract amount was primarily due to the District requesting additional work and on unforeseen conditions. The “Stop Notice” that was filed on CRW was based on employees of a subcontractor filing a lawsuit against the subcontractor over a pay dispute, and filing the Stop Notice to keep the District from paying CRW so CRW could not pay the subcontractor until the pay dispute was resolved with the subcontractor. The Stop Notice had nothing to do with any action by CRW. CRW was the low bidder on the Santa Cruz High School Kiln Building project at $131,792. The fact that CRW change orders on previous projects exceeded 10% of the original contract amounts is not legal grounds for declaring CRW a “not responsible” bidder on future projects.

F37: Contracts were not always awarded to the lowest bidder as evidenced by Bid # 2006-

F38: The SCCS Bond Project, Status of Project Closeout, May 10, 2006, document does not include all bond projects, notably those undertaken in 1998-1999. Approximately $4 million worth of projects are not detailed, nor are their change orders. Response: Santa Cruz City Schools PARTIALLY AGREES. The first projects were done in 1999. They were small projects consisting of installing new play structures at the elementary schools, resurfacing the Soquel High School student parking lot, installing an outdoor eating area cover at Mission Hill, termite eradication at Branciforte Junior High and installing new gym roofs at Santa Cruz High School and Harbor High School. Many of these projects were maintenance projects and did not require Department of the State Architect approval. The project close-out report was not started until the first round of major modernization projects were begun in 2000 and began close-out in 2001. The small early projects were not added to the report.

F39: The SCCS, Bond Project, Status of Project Closeout, May 10, 2006, showed twenty projects with change orders exceeding twenty percent (20%) of the original project contract. These percentages range from 21.7% to 118.8%, resulting in additional costs of $5,479,544 above the original contract amount of $17,779,162 for those twenty projects. This reflected a 30.8% increase over the original contract amounts. Response: Santa Cruz City Schools PARTIALLY AGREES. For all projects listed on the 5/10/06 Status of Project Close Report, total change order costs were $9,621,580, or 14.1% of total original contract amounts of $68,468,271. This is not an unreasonable average change order percentage for renovation and modernization projects. As mentioned in the response to Finding # 32, many of these change orders were generated by District requests for additional work and additional work required to correct unforeseen conditions.

F40: Sixty-nine completed or nearly-completed projects detailed on the SCCS, Bond Project, Status of Project Closeout, May 10, 2006, had change orders totaling $9,621,580, or fourteen and one-half percent (14.5%) of their original contract total of $66,457,279. Response: Santa Cruz City Schools DISAGREES. See response to finding #39. - 26 The Dollars and Sense Don’t Add Up:

F41: District officials stated that general contractors typically make a fifteen-percent markup on change orders. Response: Santa Cruz City Schools AGREES. The General Contractor’s 15% mark-up on change orders is to cover the General Contractor’s bonds, insurance overhead and profit, and was specified in the contract documents. Division of the State Architect Oversight

F42: According to the Santa Cruz City Schools, Bond Project, Status of Project Closeout, dated May 10, 2006, sixty-four projects have had Notices of Completion filed. Of those sixty-four projects, only one is listed in the “DSA Closeout Complete” column, and only two are listed in the “Closeout Sent to DSA” column. The Architect of Record is responsible for submitting the required closeout documents for final certification.24 Response: Santa Cruz City Schools PARTIALLY AGREES. The Bond Project Status of Projects Close-Out Report of 7/12/06 (Exhibit 9 attached) indicates that all project close-out documents have been submitted to DSA on twelve projects. Eight of the projects listed are still under construction and not ready for close-out document submittal. Four projects have final DSA close-out. Final DSA close-out can take from two to five years. Both architect firms, DES and Beverly Prior, have staff that are actively working on gathering and completing project close-out documents for submittal to DSA, and are making regular reports to the District on their status. Close-out documents come from some material suppliers, from portable classroom manufacturers, and from the IOR Once close-out documents are received by DSA, it can take DSA staff as long as two years to complete processing of those documents and closing out of the project files. This is due to understaffing at DSA.

F43: The Grand Jury found at least one instance of a project being started without prior DSA notification by the IOR (DSA Project Code 01-106000). This appears to be a violation of the Code of Regulations, Title 24, Part 1, Section 4-331. Response: Santa Cruz City Schools DISAGREES. This was the Soquel High School Ag Facility relocation project. The IOR’s (Fred Powers) Qualification Record DSA-5 was submitted to DSA on 9/30/04. It was 24 2001 California Building Standards Administrative Code, California Code of Regulations, Title 24, Part 1, Sections 4-339 and 4-341, http://www.bsc.ca.gov/title_24/documents/Part1/2001_part1.pdf. The Dollars and Sense Don’t Add Up: - 27 approved by DSA on 10/4/04. The Contract Information form SSS-102 was submitted to DSA on 11/1/04 and indicated that work would start on 11/1/04. We recall that work actually started around the first of December. This does not appear to be an accurate statement.

F44: Inspector of Record assignment date records obtained from the SCCS District and the DSA do not match. Response: Santa Cruz City Schools PARTIALLY DISAGREES. The District was not provided copies of the records provided to the Grand Jury by the DSA and therefore cannot comment on this finding. 45. “The school board must provide for and require competent, adequate and continuous inspection by an inspector . . .” and; “The project inspector . . . must be approved by the DSA for each individual project.”25

F46: In reviewing the IOR field reports for Santa Cruz High Modernization, project number 01-103363, there is a gap of eighteen days with no IOR reports or notations. One inspector had been terminated on May 2, 2002, and the next IOR report was dated May 20, 2002. Response: Santa Cruz City Schools: The Santa Cruz High School Inspector was released for specified reasons. A second inspector was engaged but replaced by the DSA Field Engineer. A third inspector was subsequently replaced by a fourth inspector by the DSA Field Engineer. Since only demolition was underway and no structural or fire/life safety work was involved, lapse in coverage was less stringent. DSA drove the missing coverages due to their manipulation of the inspector selection process – no fault of the District.

Related Recommendations (2)

R2: An outside, independent performance audit should be conducted to analyze, assess, and report on the Santa Cruz City Schools District’s operational and construction management policies, procedures, and practices regarding Bond Measures E and H. Investigation as to whether all California Code of Regulations, Title 24 standards were followed should be included. Response: Santa Cruz City Schools DISAGREES. The District will not conduct an independent performance audit of the construction program for the following reasons:

R4: Low priority for the expenditure of funds for an audit. The plans and specifications for the projects were approved by the DSA before bidding to ensure compliance with Title 24. DSA-certified inspectors inspected the projects during construction to ensure plans and specifications were followed by the contractors.

F47: DSA Field Notes from the supervising field engineer from July 10, 2002, stated the first item requiring resolution on project 01-103363 was that the IOR had been replaced by two subsequent IORs, the last of which had not submitted DSA Form-5. The DSA Form-5, which must be signed by the district, architect, and engineer, must be filed ten days prior to an IOR beginning a project.26 Response: Santa Cruz City Schools: 25 2001 California Building Standards Administrative Code, California Code of Regulations, Title 124, Part 1, Section 4-333(b). California Department of General Services, Division of the State Architect, Project Inspector Qualification Record, DSA-5, revised, March 27, 2003. - 28 The Dollars and Sense Don’t Add Up: See the response to #46. DSA pulled inspectors from the project and, since no inspections were required or called for, no Form 5 was filed. School Closures/Leasing

Related Recommendations (2)

F48: In January 2001, the BOC questioned the prudence of using bond funds to modernize schools that might be closed in the future due to declining enrollment.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F49: In June 2004, Natural Bridges and Branciforte Elementary schools closed. Branciforte became a campus for small district alternative schools. Natural Bridges is leased by Pacific Collegiate, a charter school that is funded by the state. This site is not being used as part of Santa Cruz City Schools. Proposition 39 obligates the district to provide a certain amount of space rent free since sixty percent of the students come from within SCCS boundaries. Pacific Collegiate leases space for the forty percent of the students from outside the district. The district also leases space to another school, Carden El Encanto, at the former Loma Prieta High School site. Lease funds go into the general fund. Following is a summary of the current and projected lease income for these two sites:27 LEASE REVENUES 04-05 05-06 06-07 07-08 08-09 Natural Bridges $68,000 $83,232 $84,897 $86,595 $88,326 Loma Prieta $140,000 $165,000 $200,000 $228,400 $275,500 $208,000 $248,232 $284,897 $314,995 $363,826 Table 5. Santa Cruz City Schools Lease Revenues, 2004-2009. Response: Santa Cruz City Schools PARTIALLY AGREES. The lease revenue in the table is reversed for Natural Bridges and Loma Prieta.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F50: In August 2004, a citizen who attended two BOC meetings expressed concern about bond funds that had been used on schools that were later closed. The citizen felt that the lease money from those schools should be used to reduce the bond debt. Response: Santa Cruz City Schools AGREES. The BOC discussed the citizen’s recommendation, but felt that the amount of tax savings to the individual tax payer would be an insignificant amount, whereas the amount of revenue loss to the General Fund would be significant.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F51: District administrative staff reported to the BOC committee that legal counsel said it was not illegal to lease out the renovated schools and not use the revenues to defray 27 Agenda Packet, Santa Cruz City Schools, Bond Oversight Committee Meeting, November 18, 2004. The Dollars and Sense Don’t Add Up: - 29 the debt. The BOC approved a motion to not recommend using lease revenues to retire bond debt. Response: Santa Cruz City Schools AGREES. The lease revenue is deposited to the General Fund to support operating expenses at the schools. Transferring this revenue to reduce Bond debt would require cuts in school budgets. District Office Relocation/Renovation

Related Recommendations (3)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

R6: The SCCS District should use lease revenues and interest on future property tax collections to reduce the bond debt. Response: Santa Cruz City Schools DISAGREES. See response to Finding # 51.

F52: Even after Natural Bridges and Branciforte elementary schools had been closed, and the four alternative schools on three sites were moved to the former Branciforte Elementary campus, the district still needed to reduce overhead and save operating expenses due to declining enrollment. The district offices on Mission Street were sold, and ten classrooms at Soquel High School were chosen to serve as administrative offices (Soquel High School’s enrollment dropped from 1693 students in 1998 to 1234 students in 2005-06). The Adult Education Office, the Purchasing Department, and District Warehouse were moved to Palm Street. The Workability Program and Food Services Office were moved to DeLaveaga Elementary School. Response: Santa Cruz City Schools PARTIALLY AGREES. The sale of 2931 Mission Street and the relocation of the District office occurred prior to the reorganization of the schools. The Workability Office was moved to Harbor High School.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F53: Classrooms identified to house the district offices at Soquel High had already been remodeled using bond funds. At least an additional $460,537 in bond money was spent for the district office remodel. Response: Santa Cruz City Schools AGREES. The additional cost was to convert classrooms to office space, to add electrical, a telephone system, data wiring, and to add parking.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F54: At its April 9, 2003 meeting, the SCCS Board approved the use of up to $1 million in bond funds for district office relocation and improvements. In its advisory capacity, the BOC did not recommend this action. Response: Santa Cruz City Schools AGREES.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F55: To date, at least $1,285,486 of bond project money has been spent on district office and adult education relocation. This total includes $274,424 for change orders, or - 30 The Dollars and Sense Don’t Add Up: twenty-seven (27%) of the original contract amount of $1,011,062. Response: Santa Cruz City Schools PARTIALLY AGREES. $1,291,631 has been spent on District Office/Adult Education relocation. Of that amount, $280,659 was for change orders, 27.7% of the original contract amounts.

Related Recommendations (1)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

F56: A BOC member called the use of bond money for offices “not ethical,” and stated that the district could use anticipated redevelopment revenue to pay for the classroom conversions and other relocation projects. “There was a promise (the bond money) would never be used for administrative costs. It was to improve the student environment, not the district office environment.”28 Response: Santa Cruz City Schools PARTIALLY AGREES. The ballot measure said that Bond funds would not be used for administrative salaries. The District’s Bond Counsel advised the District that it would be a legal use of the Bond funds, given the ballot language, for relocating District Office facilities. Selling the old District Office at 2931 Mission Street will save $400,000 per year in debt service payments in the General Fund, which provides more operating funds for schools and students. Oversight/Public Communication

Related Recommendations (3)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

R5: The SCCS District should replace the funds used for District Office relocation and renovation to reduce bond debt. Response: Santa Cruz City Schools DISAGREES. See response to Finding # 56.

F57: The BOC has been meeting bi-monthly since 1998. These meetings are open to the public. Minutes and any reports released are public information. Meetings are held at Soquel High School, Room 312. Oversight committee members stated that meeting notices are posted at school sites and the district office.

Related Recommendations (2)

R11: The SCCS District should provide an objective summary and analysis of bond projects from beginning to end. This should include project details, budget, and completion dates; financial accounting; analysis of successes and failures; and suggestions for improvement for any future bond or construction projects. Response: Santa Cruz City Schools PARTIALLY AGREES. The District has provided on-going bi-monthly reports to the Board and BOC, including project status and budget status. These reports are available to anyone interested in them. The BOC will produce a final report on all of the projects by November, 2006.

R12: The SCCS District should make sure its web site is comprehensive and updated frequently. The final bond projects report and analysis should be posted on that web site. Response: Santa Cruz City Schools AGREES. Financial resources will first need to be identified to fund the regular updates of the District’s web site. The Bond Projects Final Report will be available on the District web site.

F58: In 1998, a bond web page was developed with links to each school site providing regular updates on bond-related issues.

Related Recommendations (2)

F60: On August 26, 1999, the BOC stated that the Board of Education, Bond Oversight Committee, and district administration should work jointly to create a public relations program and method of presentation for each school site, the press, and the public in general. Response: Santa Cruz City Schools AGREES. The BOC has made repeated attempts to have the stories about the Bond Projects reported in the press. The press has not responded favorably to their attempts. We 28 Santa Cruz Sentinel, “Moving costs stir school-bond debate,” May 29, 2003. The Dollars and Sense Don’t Add Up: - 31 think that the school sites have been kept informed. However, the general public has not been very well informed because the press has been unresponsive. The BOC has had discussions about how to handle this. Most of the ways the BOC could find to inform the public involved the use of bond funds. The BOC has been very reluctant to spend bond funds on mailings and ads. The BOC has tried to ensure that the money was used to the benefit of the students in the classroom.

Related Recommendations (2)

F61: District staff and BOC members were interviewed for “Community Express,” a Community Television of Santa Cruz show. The show aired four times in Fall 1999 and outlined the school bond issues and future project plans.

Related Recommendations (2)

F62: A brochure “The Road to Renovation” detailed the status of Measure E and H projects and was distributed to parents from the school sites and mailed to households within the district in May 2000. This brochure indicated there would be ongoing communication to keep the public aware of progress and improvements.

Related Recommendations (2)

F63: In July 2000, a Board of Education member noted that the district’s web site was in need of updating.

Related Recommendations (2)

F64: The Grand Jury observed that as late as October 17, 2005, there was a “Bond Projects” section on the Santa Cruz City Schools web site. Information was out of date; the last update had been posted in 2001. By February of 2006, that section of the web site was no longer accessible, and posts “Forbidden: You don’t have permission to access … (this site) on this server.” Response: Santa Cruz City Schools PARTIALLY AGREES. The District did not maintain detailed information on the Bond Projects on the SCCS website. There were not adequate resources dedicated to maintaining the SCCS website, including the Bond Projects information on the website. However, the SCCS website had a link to the Strategic Construction Management (SCM) website, where information on projects at each school site was available. When the District website was redesigned in September 2005, the link to SCM was inadvertently omitted. It was reinstated on 9/26/06. Without knowing specifically which website the Grand Jury attempted to access when receiving the “Forbidden: You don’t have permission to access…” message, it is difficult to respond to why that message was received. That message is a standard response on any web server when a web page cannot be found.

Related Recommendations (3)

R8: The SCCS District should provide a complete bond projects closeout document detailing all bond construction projects. Response: Santa Cruz City Schools AGREES. The Bond Oversight Committee will produce a final report of the Bond Projects by November 2006.

F65: When asked about the inaccessibility of the web site, district staff responded that the webmaster worked one half-day per week and that there were no resources in the district to put more effort into the web site. - 32 The Dollars and Sense Don’t Add Up: Response: Santa Cruz City Schools AGREES.

Related Recommendations (3)

F66: Strategic Construction Management publishes SCCS site construction newsletters on its web site. Newsletters for completed bond projects include construction budget summaries, schedules, and architect, inspector, and contractor information. Web site summaries of current projects have none of this information.29 Response: Santa Cruz City Schools AGREES.

Related Recommendations (4)

R9: Future construction projects should be awarded to the contractor submitting the lowest base bid. Alternates should be bid separately. Response: Santa Cruz City Schools DISAGREES. The Dollars and Sense Don’t Add Up: - 39 The process being used complies with Public Contract Code and has been approved by District legal counsel.

F67: The construction budget summaries for “Completed Projects” on the Strategic Construction Management web site do not match the figures printed on the Santa Cruz City Schools Bond Project, Status of Project Closeout, May10, 2006. The Strategic Construction Management web site is the only one displaying information on the SCCS bond construction projects. Response: Santa Cruz City Schools AGREES. The costs reported on the website include hard costs and soft costs (architect fees, DSA fees, IOR fees, bidding costs). The costs reported on the Project Close-out Report are only hard costs paid to contractors.

Related Recommendations (4)

F68: According to district administrative staff, by the end of summer 2006, ninety-eight percent (98%) of bond funds will be spent. The BOC’s final meeting is scheduled for November 2006. If there is any money left over, district staff will oversee expenditures. Construction projects could extend into Spring 2007. Response: Santa Cruz City Schools AGREES. The only remaining project after November, 2006, will be the new Santa Cruz High School swimming pool projects that will be funded 50% with Bond Funds.

Related Recommendations (3)

R3: The Bond projects are nearly complete. There would be no future projects to which to apply any recommendations from a performance audit.

R13: The BOC should continue to operate until all bond projects are completed. Response: Santa Cruz City Schools DISAGREES. The BOC has recommended and the Board has approved that the last BOC meeting will be on November 16, 2006. The only construction project that will continue after that date will be the Santa Cruz High School swimming pool. The Board and the BOC do not think that the BOC needs to continue to meet to oversee one project that is funded 50% by Bond Funds. - 40 The Dollars and Sense Don’t Add Up:

F69: Strategic Construction Management will be paid $34,500 to produce a Bond Projects Report. This fee is included in their July 1, 2006 to December 31, 2006 contract extension. Response: Santa Cruz City Schools DISAGREES. Strategic Construction Management, http://strategic-cm.com/main/santacruzcityschools.htm. The Dollars and Sense Don’t Add Up: - 33 This was a proposal based on ill-defined scope and provided to the BOC for discussion purposes. This was never approved.

F70: At its May 18, 2006 meeting, the BOC reviewed options for its final committee report which may be in the form of newspaper ads or inserts, postcards, a newsletter, a twenty-four page report, or a video. Response: Santa Cruz City Schools AGREES. Conclusions Bonds E and H

F2002: The Dollars and Sense Don’t Add Up: - 7 Reviewed: Memoranda/Reports/Minutes/Agendas: Advantages/Disadvantages of Using Multiple Prime v. Single General Contractor, agenda packet, Bond Oversight Committee meeting, January 27, 2000. California Department of General Services, Division of the State Architect, Project Inspector Qualification Record, DSA-5, revised March 27, 2003. Communications Matrix for Bond Projects Participants, November 29, 2001. IOR Bi-Monthly Progress Reports, Santa Cruz High, May 2002. Memo from Northcross, Hill and Ach, June 8, 2006. Official Statements, Santa Cruz City Elementary School District, General Obligation Bonds, Election of 1998, Series A, B, and C. Official Statements, Santa Cruz City High School District, General Obligation Bonds, Election of 1998, Series A, B, and C. Official Statement, Santa Cruz City Elementary School District, 2005 General Obligation Refunding Bonds. Official Statement, Santa Cruz City High School District, 2005 General Obligation Refunding Bonds. Santa Cruz City Schools, Agreement for Consultant Services, Construction Program Management Services, Strategic Construction Management, February 1, 2002. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, May 12, 1999 to May 10, 2006. [Please see Appendix for specific dates.] Santa Cruz City School Bond Oversight Committee Meeting Minutes, May 16, 1998 to May 18, 2006. [Please see Appendix for specific dates.] Santa Cruz City Schools “Bond Oversight Committee Roles and Responsibilities,” revised April 17, 2002. Santa Cruz City Schools Bond Project, Status of Project Closeout, May 10, 2006. Santa Cruz City Schools, Bond Projects Budget, Report from July 1, 1998 to April 30, 2006. Santa Cruz City Schools District Bond Projects Status Reports, November 17, 1999 to January 25, 2006. [Please see Appendix for specific dates.] Santa Cruz City Schools, Request for Proposals, Management Services for Construction Projects, undated. Soquel High School Bond II Modernization Project IIIA, Bid #2004-21, Opened June 3, 2004. Soquel High School Bond 2 Phase II Rebid, Bid #2006-09, Opened December 22, 2005. Newspaper Articles/Pamphlets: Contra Costa Times, “Schools’ refinancing questioned,” April 30, 2006. County of Santa Cruz Sample Ballot and Voter Information Pamphlet for Special School District Election, Tuesday, April 14, 1998. “Road to Renovation: Keeping You Informed,” Santa Cruz City Schools, undated. - 8 The Dollars and Sense Don’t Add Up: Santa Cruz Sentinel: “Bond-funded school repairs set to start in Santa Cruz,” May 13, 1999. “Bonds making a difference,” March 22, 2001. “Branciforte remodeling project disappoints staff,” October 14, 2001. “Error could cost schools thousands,” April 8, 2005. “Firm will oversee school construction projects,” February 15, 2002. “Moving costs stir school-bond debate,” May 29, 2003. “Santa Cruz City Schools finds surplus in general fund,” April 20, 2006. “Students say last goodbye to Natural Bridges, Branciforte schools,” June 12, 2004. Web sites: Building Standards Commission, http://www.bsc.ca.gov. California Code of Regulations, http://www.bsc.ca.gov/title_24/documents/part1/2001_part1.pdf. California Education Code, http://caselaw.lp.findlaw.com/cacodes/edc/15200- 15205.html. California State Constitution, http://www.leginfo.ca.gov/const.html. California Public Contract Code, http://www.aroundthecapitol.com/code/contents.html?sec=pcc. “Choosing the Best Delivery Method for Your Facility Projects,” http://www.mbpce.com/news_pubs_delivery.html. Division of the State Architect, http://www.dsa.dgs.ca.gov. Division of the State Architect On-Line Project Tracking System, http://www.applications.dgs.ca.gov/dsa/etrackerweb/DistrictProject.asp?client id=44-h2 and http://www.applications.dgs.ca.gov/dsa/etrackerweb/DistrictProject.asp?client id=44-42. General Obligation Bonds, http://www.calschools.com/static/GOBond.htm. Santa Cruz City Schools, http://www.sccs.santacruz.k12.ca.us. Santa Cruz City Schools, Bond Projects, http://www.sccs.santacruz.k12.ca.us/bizservices/BondProject/bondproject.htm (this web site is no longer accessible). Santa Cruz County Office of Education, http://www.santacruz.k12.ca.us/board/index.html. Santa Cruz Sentinel, http://www.santacruzsentinel.com. State Education Oversight Commissions, http://www.ecs.org/clearinghouse/57/86/5786.htm. Strategic Construction Management, http://strategic- cm.com/main/santacruzcityschools.htm. TBW&B, Public Finance Strategies, LLC, http://www.tbwb.com/clients.htm. 2001 California Building Standards Administrative Code, California Code of Regulations, Title 24, Part 1, http://www.bsc.ca.gov/title_24/documents/Part1/2001_part1.pdf. The Dollars and Sense Don’t Add Up: - 9 Visited: Ten Santa Cruz City School sites. Findings Bonds E and H 1. The E and H bonds were originally each sold in three series: A, B, and C:7 Bond Sold Date Bond Amount Bond Term Ends Series A, Elementary July 1, 1998 $7,000,000.00 August 1, 2027 Series B, Elementary March 1, 2000 $15,500,000.00 August 1, 2029 Series C, Elementary October 2001 $5,598,115.65 February 1, 2026 TOTAL ELEM. $28,098,115.65 Series A, High School July 1, 1998 $15,000,000.00 August 1, 2027 Series B, High School March 1, 2000 $31,000,000.00 August 1, 2029 Series C, High School October 2001 $11,997,433.50 February 1, 2026 TOTAL HIGH SCH. $57,997,433.50 In April 2005, Series A and B Elementary and High School bonds were refinanced: Refinance, Series A and B, Elementary April 2005 $22,785,000 August 1, 2029 Refinance, Series A and B, High School April 2005 $45,500,000 August 1, 2029 Table 2. Santa Cruz City Schools Bond Sales, Measures E and H.

Page 7

Additional Recommendations 1

Not linked to specific findings.

R14: District support staff is to be commended for its helpfulness, promptness, and courtesy when providing requested documentation.

May 10, 2006 — Bond Measures E and H: Santa Cruz City Schools

37 pages 70 findings 15 recommendations

Quick View Full Details →

Findings & Recommendations 70 findings

F2: Total Elementary bond sales, Series A, B, and C exceeded the $28 million dollar cap established in Bond Measure E.

F3: When asked about exceeding the $28 million cap on the Elementary bonds, district administrative staff referred the Grand Jury’s questions to the district’s bond financial advisor, Northcross, Hill and Ach. The Grand Jury was told, “Unintentionally, $98,115.65 was issued in bonds over the 28 million dollar amount approved by the voters. The district has made provision to repay the $98,115.65 and all interest that has accrued.” The amount of the interest earned is unknown to the Grand Jury. Official Statements, Santa Cruz City Elementary School District, General Obligation Bonds, Election of 1998, Series A, B, and C; Official Statements, Santa Cruz City High School District, General Obligation Bonds, Election of 1998, Series A, B, C; Official Statement, Santa Cruz City Elementary School District, 2005 General Obligation Refunding Bonds; Official Statement, Santa Cruz City High School District, 2005 General Obligation Refunding Bonds. - 10 The Dollars and Sense Don’t Add Up:

F4: The last of the original Elementary bonds was sold in 2001, but repayment of the $98,115.65 overage has not yet been made as of June 10, 2006.

F5: When Elementary and High School Bonds, Series A and B were refinanced in April 2005, the total amount of the refunding bonds was $4,280,000 higher than the remaining principal of the original Series A and B bonds. The Elementary Series A and B Bonds were refinanced for $22,785,000 (the outstanding principal was $21,030,000); the High School Series A and B Bonds were refinanced for $45,500,000 (the outstanding principal was $42,975,000).8

F7: Elementary bonds, Series C and Elementary 2005 Refunding Bonds total $28,383,115.65, again exceeding the $28 million cap established by the bond measure.

F8: The April 2005 refinancing of the Elementary and High School Bonds, Series A and B is not detailed on the SCCS Bond Projects Budget, Report from July 1, 1998 to April 30, 2006.

F09: The contract was awarded for $1,204,700 when the lowest bid was actually $1,151,399. Change Orders

F9: According to the Official Statements for the bond sales, property owners residing in the Santa Cruz City Schools District will be repaying bonds E and H until 2029.

F11: On April 13, 2005, the SCCS Board of Education passed resolutions authorizing the refinancing (refunding) of the general obligation Bond Measures E and H, Series A and B to take advantage of decreased interest rates.

F13: For tax year 2004-2005, property owners residing in the Santa Cruz City Schools District within the City of Santa Cruz were paying property taxes at a rate of .068% toward bonds E and H. In tax year 2005-2006, the rate increased to .081%. Official Statement, Santa Cruz City Elementary School District, 2005 General Obligation Refunding Bonds; Official Statement, Santa Cruz City High School District, 2005 General Obligation Refunding Bonds. County of Santa Cruz Sample Ballot and Voter Information Pamphlet for Special School District Election, Tuesday, April 14, 1998. California Education Code, Section 15144, http://caselaw.lp.findlaw.com/cacodes/edc.html. The Dollars and Sense Don’t Add Up: - 11

F14: Interest earned on bond sale proceeds has been used for the bond projects and has not been used to repay the bond.11

F16: Following is a summary of the SCCS Bond Projects Budget expenses from July 1, 1998 to April 30, 2006:12 ITEM EXPENSE PERCENTAGE OF EXPENSES Construction Contracts $82,431,328 74% Architects/Engineers $11,212,596 10% Construction Management $6,928,864 6% Miscellaneous Construction Costs $4,178,084 4% Reserves $3,901,483 4% Staff Salaries and Other Support $2,225,522 2% TOTAL EXPENSES $110,877,877 100% Table 3. Summary of SCCS Bond Projects Budget Expenses, July 1, 1998 to April 30, 2006. Project Management

F19: At the October 24, 2001, SCCS Board of Education meeting, district administrative staff dissatisfaction with the ability of the construction managers to monitor and 11 Santa Cruz City Schools, Bond Projects Budget, Report from July 11, 1998 to April 30, 2006. Santa Cruz City Schools, Bond Projects Budget, Report from July 11, 1998 to April 30, 2006. Santa Cruz City Schools, Request for Proposals, Management Services for Construction Projects, 2001. - 12 The Dollars and Sense Don’t Add Up: control the work on multiple prime projects was reported. District staff recommended: • bidding future construction projects using general contractors • terminating the two elementary and secondary Construction Managers’ contracts • increasing Inspector of Record time on projects to better monitor quality of work • increasing architect involvement in construction administration • reorganizing district support and oversight of projects • pre-qualifying bidders for future projects

F23: The district has not been able to produce the fixed-price bids and requested supporting documentation for this selection process. This documentation is public record.

F24: The Grand Jury could find no documentation that the bids for the Construction Program Manager were opened publicly as required by the Public Contract Code.16 14 “Advantages/Disadvantages of Using Multiple Prime v. Single General Contractor, agenda packet, Bond Oversight Committee meeting, January 27, 2000. Santa Cruz City School Bond Oversight Committee Meeting Minutes, November 15, 2001. California Public Contract Code, Section 10180, http://www.aroundthecapitol.com/code/contents.html?sec=pcc The Dollars and Sense Don’t Add Up: - 13 25. “Previously, the district used its staff to oversee multiple contractors at individual schools. Officials expect the new system, which includes hiring a general contractor for each project, will simplify the process and attract more bids, particularly from area contractors. The district will pay Strategic $1.2 million. District officials expect to finish all projects by December 2004.”17

F28: In addition to bond funds, payments totaling $68,273 to Strategic Construction Management have been approved by the SCCS Board: $48,221 from the General Fund to “plan and coordinate moving of furniture, equipment and supplies (March 24, 2004); and $20,052 from the Capital Facilities Fund to “plan and coordinate the relocation of 21 portable classrooms” (April 21, 2004). Santa Cruz Sentinel, “Firm will oversee school construction projects,” February 15, 2002. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, February 27, 2002. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, August 14, 2002. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, December 10, 2003. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, June 8, 2005 22 Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, June 8, 2005. Santa Cruz City Schools, Board of Education for the Elementary and Secondary Districts Minutes, April 26, 2006. - 14 The Dollars and Sense Don’t Add Up:

F32: The SCCS Bond Project, Status of Project Closeout, May 10, 2006, revealed that out of sixty-nine projects, thirty-seven (or 54%) exceeded a ten percent cost overrun due to change orders.

F35: When projects contain alternates, contractors can bid low or even zero (0) on some alternates, thereby lowering their overall total bid.

F37: Contracts were not always awarded to the lowest bidder as evidenced by Bid # 2006-

F41: District officials stated that general contractors typically make a fifteen-percent markup on change orders. Division of the State Architect Oversight

F44: Inspector of Record assignment date records obtained from the SCCS District and the DSA do not match. 45. “The school board must provide for and require competent, adequate and continuous inspection by an inspector . . .” and; “The project inspector . . . must be approved by the DSA for each individual project.”25 24 2001 California Building Standards Administrative Code, California Code of Regulations, Title 24, Part 1, Sections 4-339 and 4-341, http://www.bsc.ca.gov/title_24/documents/Part1/2001_part1.pdf. 25 2001 California Building Standards Administrative Code, California Code of Regulations, Title 124, Part 1, Section 4-333(b). - 16 The Dollars and Sense Don’t Add Up:

F48: In January 2001, the BOC questioned the prudence of using bond funds to modernize schools that might be closed in the future due to declining enrollment.

F51: District administrative staff reported to the BOC committee that legal counsel said it was not illegal to lease out the renovated schools and not use the revenues to defray 26 California Department of General Services, Division of the State Architect, Project Inspector Qualification Record, DSA-5, revised, March 27, 2003. Agenda Packet, Santa Cruz City Schools, Bond Oversight Committee Meeting, November 18, 2004. The Dollars and Sense Don’t Add Up: - 17 the debt. The BOC approved a motion to not recommend using lease revenues to retire bond debt. District Office Relocation/Renovation

F55: To date, at least $1,285,486 of bond project money has been spent on district office and adult education relocation. This total includes $274,424 for change orders, or twenty-seven (27%) of the original contract amount of $1,011,062.

F58: In 1998, a bond web page was developed with links to each school site providing regular updates on bond-related issues.

F59: In June 1999, the communications sub-committee of the BOC worked on placing bond-related information on the SCCS web page. Signs relating to bond projects were designed for placement at the school sites. Santa Cruz Sentinel, “Moving costs stir school-bond debate,” May 29, 2003. - 18 The Dollars and Sense Don’t Add Up:

F63: In July 2000, a Board of Education member noted that the district’s web site was in need of updating.

Additional Recommendations 15

Not linked to specific findings.

R3: The SCCS District should insist that the architects submit all documents related to completed bond projects under DSA supervision so the projects can be certified and closed out. Architect fees should be withheld until DSA certification is complete.

R4: For future major construction projects, the SCCS District should consider hiring an experienced, qualified construction project manager or team as a limited-term district employee(s). This would cost less than hiring a construction management firm.

R5: The SCCS District should replace the funds used for District Office relocation and renovation to reduce bond debt.

R6: The SCCS District should use lease revenues and interest on future property tax collections to reduce the bond debt.

R7: The SCCS District should provide a complete bond projects budget document that includes bond refinancing details.

R8: The SCCS District should provide a complete bond projects closeout document detailing all bond construction projects.

R9: Future construction projects should be awarded to the contractor submitting the lowest base bid. Alternates should be bid separately. The Dollars and Sense Don’t Add Up: - 23

R10: For future construction projects, the contractors hired should adhere to the ten-percent cap on change orders previously in effect.

R12: The SCCS District should make sure its web site is comprehensive and updated frequently. The final bond projects report and analysis should be posted on that web site.

R13: The BOC should continue to operate until all bond projects are completed.

R14: District support staff is to be commended for its helpfulness, promptness, and courtesy when providing requested documentation.

April 21, 2006 — Watsonville Municipal Airport: Headed for a Crash?

32 pages 39 findings 17 recommendations

Quick View Full Details →

Findings & Recommendations 39 findings

F1: AMBAG has declared that the City of Watsonville must plan for 2,283 new housing units in the 2000-2007 period.6

Related Recommendations (1)

R1: While the City of Watsonville has a mandated housing goal, it does not have a mandated location for the housing.

F2: City Council Resolution 199-02 was the text for Measure U and amended 1994’s “Watsonville 2005 General Plan” (now replaced by WatsonvilleVISTA 2030) by extending the city boundaries to include Buena Vista areas I, II, and III as proposed locations for meeting mandated housing goals.

Related Recommendations (1)

R1: While the City of Watsonville has a mandated housing goal, it does not have a mandated location for the housing.

F3: Santa Cruz County’s Local Agency Formation Commission (LAFCO) must approve any city boundary extensions. Response: LAFCO AGREES.

F4: Measure U as presented in the pre-election voter information pamphlet reduced the text of Resolution 199-02 from eighteen (18) pages to a single sentence with a generic analysis by the City Attorney regarding Urban Limit Lines: 6City of Watsonville Housing Element, chart 4, p. 4-1. - 6 Watsonville Municipal Airport: “Shall the City of Watsonville amend the Watsonville 2005 General Plan thereby imposing certain restrictions on growth, as specified, and restricting later amendments all as provided in the Watsonville Urban Limit Line and Development Timing Initiative?” A copy of the full text of Resolution 199-02 was only available upon request.7

F5: A group called the Friends of Buena Vista presented their opposition to Measure U on the voter’s information pamphlet, but because the area is currently outside the city limits, none of the residents of the areas to be annexed were able to vote on the measure. Response: The Santa Cruz County Board of Supervisors AGREES.

F6: The Friends of Buena Vista and other entities hired an attorney in 2005 to challenge the City of Watsonville’s draft environmental impact document regarding construction in the Buena Vista areas.

F7: Neither City Council Resolution 199-02, nor Measure U, mentioned any possible impact on the airport nor possible conflicts between housing and the airport, such as safety and noise pollution. Response: City of Watsonville: Measure U was circulated to establish a voter approved Urban Growth Boundary to protect important agricultural lands and environmentally sensitive habitats within the Pajaro Valley while providing the City with some assurance as to the opportunity to meet the housing and employment needs of its residents. The initiative established a phased approach to development along with assuring a public review mechanism (Specific Plan) for future development proposals. It is of note that citizen initiatives, such as Measure U, are not subject to the California Environmental Quality Act (CEQA).

F8: The Watsonville Air Show is a significant regional event, generating annual revenue between $500,000 and $3 million.8

Related Recommendations (1)

R2: Watsonville Municipal Airport is not sufficiently valued as an economic asset to the City of Watsonville and to Santa Cruz County.

F9: Studies show the overall annual economic impact of the airport to the region is a minimum of $45 million (in 2006 dollars) and could range as high as $600 million when indirect economic impacts are included.9 Response: The Santa Cruz County Board of Supervisors: 7City of Watsonville Voter Information Pamphlet, Measure U, 2002. 8www.watsonvilleairport.com; Don French, quoted in Register-Pajaronian, p. 6, June 18, 2005. 9AMBAG Airports Economic Impact Study, p 14, 2003. Watsonville Municipal Airport: - 7 The County agrees that Watsonville Airport has significant economic benefit to the County, but cannot confirm the specific dollar amounts cited. The source cited for this finding is AMBAG’s 2003 Airports Economic Impacts Study, which is likely the most recent and authoritative study on this topic. The County cannot find any reference to the airport’s annual regional economic benefit being a “minimum of $45 million (in 2006 dollars)” in the AMBAG Airport Study, however, we note that it states that the annual benefit would top $662 million if indirect as well as direct impacts are counted.

Related Recommendations (1)

R2: Watsonville Municipal Airport is not sufficiently valued as an economic asset to the City of Watsonville and to Santa Cruz County.

F10: Businesses and independent owners from all over the county base their aircraft at the airport.10

F11: Itinerant aircraft use the airport, bringing business and recreational visitors who add approximately $9 million a year to the area.11

F12: Watsonville Airport is used in the day-to-day operations of local government entities including the California Highway Patrol, Civil Air Patrol, Drug Enforcement Agency, FEMA, the FBI, National Oceanic and Atmospheric Services, and the Department of Fish and Game.

F13: The Watsonville City Council has discussed the possibility of shortening Runway 8-26. This would limit the number of aircraft that could land there, particularly in restrictive weather conditions. The Watsonville City Council rejected this option. Response: Caltrans Division of Aeronautics: Caltrans Division of Aeronautics AGREES that this would limit the number of aircraft that could land there but PARTIALLY AGREES about shortening the runway. Shortening a runway can potentially limit the type of aircraft able to utilize the runway. Limiting the type could also be said to therefore, limit the number. Caltrans Division of Aeronautics PARTIALLY AGREES to “particularly in restrictive weather conditions.” Local pilot users of the airport have indicated that the fog bank often covers Runway 2-20, but often does not reach Runway 8-26. Therefore, pilots who do not have a Federal Aviation Administration issued instrument rating, which would be required to use Runway 2-20 in this example, are still able to utilize the airport under visual conditions by using Runway 8-26. Caltrans Division of Aeronautics AGREES that “the Watsonville City Council rejected this option.”

Related Recommendations (1)

R9: WatsonvilleVISTA 2030 threatens the viability of the Crosswind Runway 8-26.

F14: One of the guiding principles of Watsonville planners is to “encourage development patterns that protect and are compatible with agricultural lands”12 which also exist in the Buena Vista areas I, II, and III. In addition, these areas are part of aircraft 10AMBAG Monterey Bay Regional Airport System Plan, Table 2-10, 2005. 11AMBAG Airports Economic Impact Study, p. 12, 2003. 12WatsonvilleVISTA2030. - 8 Watsonville Municipal Airport: safety zones. In Buena Vista I, this space includes Safety Zone 1, 2, and 3 (Runway Protection Zone, Inner Approach Zone, and Inner Turning Zone) for Runway 8. Response: The Santa Cruz County Board of Supervisors: The County has no jurisdiction over Watsonville planners and cannot comment on the accuracy of this finding. Response: City of Watsonville: Measure U established the Buena Vista Area as the preferred future growth area after exhaustive consultation with various stakeholders including the Santa Cruz County Farm Bureau, California Association of Family Farmers, Santa Cruz County and Watsonville Wetlands Watch. Measure U amended the Watsonville 2005 General Plan (since replaced) and was most recently, as required by the initiative, incorporated in the adopted Watsonville Vista 2030 General Plan and evaluated as part of the general Plan Environmental Impact Report (EIR). It is not unusual for airports within the State to have residential uses near them. The California Airport Land Use Planning Handbook (CALUP) fully contemplates residential development in proximity to airports and provides examples of ways that local jurisdictions might address this. The Handbook establishes strategies to employ when local considerations result in decisions to allow residential development that might normally be considered incompatible. Response: Caltrans Division of Aeronautics: Caltrans Division of Aeronautics PARTIALLY AGREES to “One of the guiding principles of Watsonville planners is to ‘encourage development patterns that protect and are compatible with agricultural lands’ which also exist in the Buena Vista areas I, II, and III.” This is not within the area of expertise of the Division of Aeronautics. However, the California Land Conservation Act, better known as the Williamson Act, has been the State’s premier agricultural land protection program since its enactment in 1965. The California Legislature passed the Williamson Act in 1965 to preserve agricultural and open-space lands by discouraging premature and unnecessary conversion to urban uses. It is our understanding that property within the Buena Vista development, may be subject to the Williamson Act. Caltrans Division of Aeronautics PARTIALLY AGREES to “In addition, these areas are part of aircraft safety zones.” It is unknown how much of the agricultural lands are part of “aircraft safety zones.” However, portions of the Buena Vista I, II, and III development are within what the California Airport Land Use Planning Handbook refers to as Safety Compatibility Zones 1, 2, 3, part of 4, and 6. Watsonville Municipal Airport: - 9 Caltrans Division of Aeronautics PARTIALLY AGREES to “In Buena Vista I, this space includes Safety Zone 1, 2, and 3 (Runway Protection Zone, Inner Approach Zone, and Inner Turning Zone) for Runway 8.” The Safety Compatibility Zones under which the Buena Vista I project lies are Zones 1, 2, 3, part of 4 and 6 for Runway 8, and are referred to as the following: Zone 1: Runway Protection Zone Zone 2: Inner Approach/Departure Zone Zone 3: Inner Turning Zone Zone 4: Outer Approach/Departure Zone Zone 6: Traffic Pattern Zone

F15: Watsonville Airport provided essential logistical support during the Loma Prieta earthquake disaster relief operation. County emergency planners assume the airport, if available, will be used again in this capacity during future major disaster relief operations. Response: The Santa Cruz County Board of Supervisors and the Office of Emergency Services AGREE.

Related Recommendations (1)

R3: Watsonville Airport is an essential regional asset in future disaster relief operations in Santa Cruz County.

F16: County emergency planners believe that in the event of a massive evacuation, all highways would be gridlocked with outbound traffic, as happened in Houston during the 2005 Hurricane Rita evacuation. Should a massive evacuation occur here, Watsonville Airport will be the only practical means of getting significant disaster relief assistance into Santa Cruz County. Response: The Santa Cruz County Board of Supervisors and the Office of Emergency Services AGREE. In the unlikely need for a massive evacuation, local highways would indeed be of limited utility in moving large numbers of people or resources. While Watsonville Airport would be a vital asset in the response effort, and would remain the only facility capable of handling fixed wing cargo aircraft, other air support could be staged in multiple areas of the County using helicopters. Additionally, in an event that would require massive evacuation, it is possible that seaborne logistical support may also be activated.

Related Recommendations (1)

R3: Watsonville Airport is an essential regional asset in future disaster relief operations in Santa Cruz County.

F17: The airport is not included in the county’s OES planning process. Although it is acknowledged as an essential facility in the Santa Cruz County Operational Area Emergency Management Plan, there has been no significant direct contact between county or city emergency planners and airport personnel regarding the coordination of emergency efforts. - 10 Watsonville Municipal Airport: Response: The Santa Cruz County Board of Supervisors and the Office of Emergency Services DISAGREE. The airport is included in the County’s emergency planning process and it is considered an essential asset in area plans. As a fixed facility with known capacities, the airport would be utilized by command authorities in the most flexible manner for a given incident. Detailed plans are not required for the airport to be tasked accordingly. Additionally, Watsonville’s emergency personnel are actively engaged with the County’s emergency management agencies and are well aware of how the airport facility could be tasked in a disaster through the Standardized Emergency Management System. There is close coordination between the County and the City of Watsonville. Response: City of Watsonville: The City believes that the level of coordination has been appropriate. Furthermore, the Airport is under the direct supervision of the Public Works and Utilities Director who is directly involved with the City’s emergency response program as well as those of neighboring jurisdictions. The City is willing to provide any additional information or details as deemed necessary by the Santa Cruz County OES. Response: The City of Santa Cruz DISAGREES. The airport is included in the County’s emergency planning process, and it is considered an essential asset in area plans. As a fixed facility with known capacities, the airport would be utilized by command authorities in the most flexible manner for a given incident, and detailed plans are not required for it to be tasked accordingly. Additionally, Watsonville’s emergency personnel are actively engaged with the County’s emergency management agencies and are well aware of how the airport facility could be tasked in a disaster and how that would occur through the Standardized Emergency Management System. The City of Santa Cruz is required to coordinate with County OES when requesting use of the Watsonville Airport. Response: The City of Capitola PARTIALLY AGREES. For emergency planning purposes the Airport comes under the jurisdiction of the City of Watsonville for local emergency planning and then County OES for regional planning. The logistical use and planning around that use of the Watsonville airport for regional emergency response matters is the responsibility of County OES. Response: The City of Scotts Valley AGREES. Watsonville Municipal Airport: - 11

Related Recommendations (1)

R3: Watsonville Airport is an essential regional asset in future disaster relief operations in Santa Cruz County.

F18: Runway 8-26 has been used to significantly increase capacity during disaster relief operations. Response: City of Watsonville: We do not believe that Runway 8-26 has been used to significantly increase capacity. Runway 8-26 is intended for use during certain weather conditions (wind/fog), which may or may not limit use of Runway 2-20. Runway 2-20 is and continues to be the principal runway providing 24-hour access to general aviation. These runways continue to function as intended and there would be neither an increase nor decrease in proportion during disasters.

Related Recommendations (1)

R4: Crosswind Runway 8-26 is critical to the vitality and efficacy of Watsonville Municipal Airport.

F19: Runway 8-26 is used in twelve percent (12%) of all takeoffs and landings at the airport.13 Response: City of Watsonville: This is true. It is of note that takeoff and landing figures for Runway 8-26 include what are considered “optional” operations such as practice (touch and goes) and shortcut flights that are not dictated by weather conditions. We would recommend that footnote 13 be revised to reflect the most recent adopted Airport Master Plan (dated April 12, 2005).

Related Recommendations (1)

R4: Crosswind Runway 8-26 is critical to the vitality and efficacy of Watsonville Municipal Airport.

F20: Runway 8-26 can be used by all aircraft currently based at the airport. The importance of the runway to future airport operation is demonstrated by the improvements planned, such as the blast pads built at each end of the runway to protect against erosion from heavier aircraft taking off. Response: City of Watsonville: The Airport Master Plan includes a Capital Improvements Plan (CIP) that identifies potential airport improvements and potential timing of those improvements. Blast pads and the other airport improvements are typical airport improvements regardless of the type of runway. Furthermore, these improvements are planned to coincide with proposed industrial development next to Runway 8-26.

Related Recommendations (1)

R4: Crosswind Runway 8-26 is critical to the vitality and efficacy of Watsonville Municipal Airport.

F21: Runway 8-26 increases airport availability from ninety-four (94%) to ninety-nine percent (99%). Crosswind Runway 8-26 is particularly important during adverse wind and fog conditions14 prevalent in the summer. Summer weekends tend to be the busiest time at the airport. Response: City of Watsonville: 13Watsonville Municipal Airport Master Plan, p. 26, 2002. 14Watsonville Municipal Airport Master Plan, p. 36, 2002 - 12 Watsonville Municipal Airport: Runway 2-20 is adequate and available to serve General Aviation needs. Runway 8-26 provides additional availability above and beyond general aviation needs and FAA guidelines. In fact, the FAA would not likely fund construction of a Runway 8- 26 if Watsonville Municipal Airport were to be built today because Runway 2-20 is more than adequate. Furthermore, the City has initiated improvements to Runway 2-20 including extension and installation of an Instrument Landing System (ILS) that will increase the availability of Runway 2-20.

Related Recommendations (1)

R4: Crosswind Runway 8-26 is critical to the vitality and efficacy of Watsonville Municipal Airport.

F22: Runway 8-26 can keep the airport open during maintenance of Runway 2-20 or if an accident closes 2-20 again. Response: City of Watsonville: Runway 8-26 is a secondary crosswind runway for use when wind/fog preclude use of Runway 2-20. Runway 8-26 is an inferior runway to Runway 2-20 for a number of reasons notably its length and lack of night lighting. Proper planning and scheduling of maintenance of 2-20 would eliminate material downtime of Runway 2-20 much as what occurs on major transportation facilities such as Highway 1. For these same reasons, an accident on 2-20 would not necessarily require use of Runway 8.26. Single runway airports exist throughout the state, many of which also serve commercial air traffic and experience similar weather conditions. These airports include Camarillo, Half Moon Bay, Lake Tahoe, Lompoc, Marina, Oxnard, San Carlos, Santa Monica and Visalia to name just a few. Single runway airports throughout the state are able to address both maintenance and accident scenarios.

Related Recommendations (1)

R4: Crosswind Runway 8-26 is critical to the vitality and efficacy of Watsonville Municipal Airport.

F23: The proposed densities for Buena Vista I specified in WatsonvilleVISTA 2030 will result in more households being exposed to the risks of off-airport accidents and subject to noise pollution. Response: City of Watsonville: There are no proposed densities under the Watsonville Vista 2030 General Plan, only potential densities. The General Plan calls for the entire Buena Vista Area to be studied under a future Specific Plan process with full public dialogue on potential densities. The Specific Plan process includes an extensive public process and evaluation under CEQA. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. As referenced in Finding 14 and our response, Buena Vista I is within Safety Compatibility Zones 1, 2, 3, part of 4, and 6, according to the California Airport Land Use Planning Handbook (“Handbook”). The Handbook recommends certain Basic Safety Compatibility Qualities for each Safety Compatibility Zone (Table 9- B). They are as follows: Watsonville Municipal Airport: - 13 Zone 1: Runway Protection Zone Risk Factors / Runway Proximity Basic Compatibility Qualities • Very high risk • Airport ownership of property • Runway protection zone as encouraged defined by FAA criteria • Prohibit all new structures • For military airports, clear • Prohibit residential land uses zones as defined by AICUZ • Avoid nonresidential uses except if very criteria low intensity in character and confined to the sides and outer end of the area Zone 2: Inner Approach/Departure Zone Risk Factors / Runway Proximity Basic Compatibility Qualities • Substantial risk: RPZs • Prohibit residential uses except on large, together with inner safety agricultural parcels zones encompass 30% to 50% • Limit nonresidential uses to activities of near-airport aircraft which attract few people (uses such as accident sites (air carrier and shopping centers, most eating general aviation) establishments, theaters, meeting halls, • Zone extends beyond and, if multi-story office buildings, and labor- RPZ is narrow, along sides of intensive manufacturing plants RPZ unacceptable) • Encompasses areas overflown • Prohibit children’s schools, day care at low altitudes — typically centers, hospitals, nursing homes only 200 to 400 feet above • Prohibit hazardous uses (e.g. runway elevation aboveground bulk fuel storage) Zone 3: Inner Turning Zone Risk Factors / Runway Proximity Basic Compatibility Qualities • Zone primarily applicable to • Limit residential uses to very low general aviation airports densities (if not deemed unacceptable because of noise) • Encompasses locations where aircraft are typically turning • Avoid nonresidential uses having from the base to final moderate or higher usage intensities approach legs of the standard (e.g., major shopping centers, fast food traffic pattern and are restaurants, theaters, meeting halls, descending from traffic buildings with more than three pattern altitude aboveground habitable floors are generally unacceptable) • Zone also includes the area where departing aircraft • Prohibit children’s schools, large day - 14 Watsonville Municipal Airport: normally complete the care centers, hospitals, nursing homes transition from takeoff power • Avoid hazardous uses (e.g. aboveground and flap settings to a climb bulk fuel storage) mode and have begun to turn to their en route heading Zone 4: Outer Approach/Departure Zone Risk Factors / Runway Proximity Basic Compatibility Qualities • Situated along extended • In undeveloped areas, limit residential runway centerline beyond uses to very low densities (if not deemed Zone 3 unacceptable because of noise); if alternative uses are impractical, allow • Approaching aircraft usually higher densities as infill in urban areas at less than traffic pattern altitude • Limit nonresidential uses as in Zone 3 • Particularly applicable for • Prohibit children’s schools, large day busy general aviation care centers, hospitals, nursing homes runways (because of elongated traffic pattern), runways with straight-in instrument approach procedures, and other runways where straight-in or straight-out flight paths are common • Zone can be reduced in size or eliminated for runways with very-low activity levels Zone 6: Traffic Pattern Zone • Risk Factors / Runway Basic Compatibility Qualities Proximity • Allow residential uses • Generally low likelihood of • Allow most nonresidential uses; prohibit accident occurrence at most outdoor stadiums and similar uses with airports; risk concern very high intensities primarily is with uses for • Avoid children’s schools, large day care which potential consequences centers, hospitals, nursing homes are severe • Zone includes all other portions of regular traffic patterns and pattern entry Watsonville Municipal Airport: - 15 routes Public Utilities Code 21674.7(b) states in pertinent part: “It is the intent of the Legislature to discourage incompatible land uses near existing airports. Therefore, prior to granting permits for the renovation or remodeling of an existing building, structure, or facility, and before the construction of a new building, it is the intent of the Legislature that local agencies shall be guided by the height, use, noise, safety and density criteria that are compatible with airport operations, as established by this article, and referred to as the Airport Land Use Planning Handbook, published by the division… .” Safety compatibility criteria are a reflection of the potential consequences of an accident. Basic safety compatibility qualities for each zone are based on risk factors and runway proximity. Therefore, since most of the Buena Vista I project is in conflict with the recommended Basic Safety Compatibility Qualities in the Handbook, more households will be exposed to the risks of off-airport accidents.

Related Recommendations (4)

R5: If development proceeds according to WatsonvilleVISTA 2030, noise pollution may become a serious issue in the Buena Vista areas.

R6: If development proceeds according to WatsonvilleVISTA 2030, the risk that an engine failure will have life threatening consequences to those on the ground is unacceptably increased.

R8: The Watsonville City Council’s failure to enforce the maximum population densities in airport safety zones may increase Watsonville’s exposure to legal liability in the event of an off-airport accident in these areas. The fact that there are high populations within the safety zones of other runways at the airport does not justify continuing the practice of violating airport safety zone building densities northwest of Runway 8.

R10: The Watsonville City Council has chosen to fulfill its housing planning needs at the expense of airport safety and noise pollution.

F24: The Watsonville City Council has eliminated Safety Zone 3 (Inner Turning Zone), northwest of Runway 8 to justify greater housing density in Buena Vista I.15 This action has been opposed by Santa Cruz County Second District Supervisor Ellen Pirie, CalTrans, and others.16 Response: City of Watsonville: Safety Zone 3 has been eliminated following extensive public review and hearings. The City determined that Runway 8 is a low activity runway and that, based upon the CALUP handbook and unique operational conditions of Watsonville Municipal Airport, in consultation with the Director of the Caltrans Division of Aeronautics, Gillfillan Associates, the Federal Aviation Administration, the Airport Manager, local pilots, airport business owners and other interested parties, Safety Zones 1, 2, 4 and 5 were adequate. City Council, Caltrans and the FAA were provided notice of the hearing of April 12, 2005 in which revisions to Runway 8 were proposed. No comments were received from Caltrans or the FAA. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. Eliminating Safety Zone 3 is not necessarily justification for greater housing density, rather its elimination would allow for greater housing density.

Related Recommendations (3)

R9: WatsonvilleVISTA 2030 threatens the viability of the Crosswind Runway 8-26.

R35: CalTrans has stated that formally designating a runway as low activity does not justify the elimination of Safety Zone 3.30 Enforcing lower population densities in 29Recommendations on Revision to the Watsonville Airport Crosswind Runway (8-26), City Council Airport Committee, p. 4, April 1, 2006. 30ALUP Handbook, fig. 9K; Frederick - CalTrans letter to Watsonville, April 21, 2006. Watsonville Municipal Airport: - 21 Safety Zone 3 by limiting housing construction is intended to reduce the consequences of an off-airport accident. Safety zones are intended to delineate higher probabilities of an off-aircraft accident based on large numbers of operations at airports across the country. Response: The Santa Cruz County Board of Supervisors: The County is familiar with the Airport Land Use Planning Handbook guidelines, but does not necessarily agree with the rest of the finding. The County believes that the issue of how best to address safety issues regarding Zone 3 requires a more complex interpretation of the guidelines. Response: City of Watsonville: This finding is incorrect. The April 21, 2006 letter indicates that the action violated the Division of Aeronautics interpretation of the CALUP Handbook. The FAA has no regulation authority over Safety Compatibility Zones 3, 4, 5 and 6. We would note that the footnoted Figure 9k from the CALUP clearly notes that the “examples are for general guidance only.” It is also of note that relocating the Runway Protection Zone entirely on airport property to comply with FAA regulations was a large part of the City’s consideration of Runway 8-26 modifications. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. Safety Zones are intended to delineate higher probabilities of an off-airport accident, not an “off-aircraft” accident. Safety Zones were derived from concentrations of historic accidents. Safety Zone compatibility criteria are a reflection of the potential consequences of an accident and that potential does not change even if the activity is low. Basic safety compatibility qualities for each zone are based on risk factors and runway proximity.

R36: The recommendation approved by Watsonville’s City Council Airport Committee was inconsistent with the report prepared by their airport planning consultant, Walter Gillfillan and Associates. That report’s Option 3 presents the pros and cons for shortening Runway 8 and moving Safety Zone 3 (Inner Turning Zone) onto airport property. The Gillfillan report did not recommend eliminating Safety Zone 3 in any of its options. Response: City of Watsonville: The Committee recommendation was consistent with the Gillfillan Report, although not specifically called out. Gillfillan was directly involved in the Committee process and identified the ultimate approved option. The Gillfillan report clearly indicated that it was not an exhaustive evaluation of options and during the presentations Mr. Gillfillan also noted this fact. - 22 Watsonville Municipal Airport: Response: Caltrans Division of Aeronautics: Caltrans Division of Aeronautics AGREES that “the recommendation approved by Watsonville’s City Council Airport Committee was inconsistent with the report prepared by their airport planning consultant, Walter Gillfillan and Associates.” The Division of Aeronautics PARTIALLY AGREES “that report’s Option 3 presents the pros and cons for shortening Runway 8 and moving Safety Zone 3 (Inner Turning Zone) onto airport property.” The report’s Option 3 does present the pros and cons for shortening the east end of Runway 8 by approximately 500 feet. However, it would not move Safety Zone 3 in its entirety onto airport property. Approximately half of Zone 3 would remain off airport property. The Division of Aeronautics DISAGREES that “the Gillfillan report did not recommend eliminating Safety Zone 3 in any of its options.” Option 2 of the Gillfillan report was to permanently close Runway 8-26. This would in fact result in the elimination of Safety Zone 3, the Inner Turning Zone. Other than Option 2, there were no other recommendations in the Gillfillan report for eliminating Safety Zone 3.

F25: Construction of additional housing northwest of Runway 8-26 will increase the danger from an off-airport landing. Such an event occurred to aircraft N23039 in 15City Council Resolution 74-05, p.3 & p. 5 16Pirie letter to Watsonville, May 5, 2006; Frederick - CalTrans letter to Watsonville, April 21, 2006; agenda packet for Watsonville City Council meeting, May 23, 2006. - 16 Watsonville Municipal Airport: the late 1970’s in the Buena Vista area. At that time, there were no serious consequences because the aircraft was able to land safely in a plowed field.17 Response: City of Watsonville: Off airport landings are rare, but unavoidable. Additional housing does not increase danger for off airport landings. Obviously, open space, no matter where located, provides opportunities for safe off field landings. The city is complying with the

Related Recommendations (4)

R6: If development proceeds according to WatsonvilleVISTA 2030, the risk that an engine failure will have life threatening consequences to those on the ground is unacceptably increased.

R7: In the event of an off-airport accident in the Buena Vista areas, there will likely be a significant demand for closure of Crosswind Runway 8-26 or even the airport itself.

R10: The Watsonville City Council has chosen to fulfill its housing planning needs at the expense of airport safety and noise pollution.

F26: Watsonville VISTA 2030 proposes a school in the Buena Vista II area within Zone 6 (Traffic Pattern Zone), less than a mile from the northwest end of Runway 8-26. CalTrans has stated that Watsonville City Council cannot omit school placement safety investigation requirements within Zone 6.18 Response: City of Watsonville: Watsonville Vista 2030 does not propose a school site within the Buena Vista II area. The City Council did nothing to remove the State’s statutory obligations to perform school placement safety assessments. Response: Caltrans Division of Aeronautics AGREES.

F27: Discussion has occurred by attendees at Watsonville City Council meetings regarding the possibility of shortening Runway 8 to reduce Safety Zones 2 (Inner Safety Zone) and 4 (Outer Safety Zone). Response: City of Watsonville: 17Maintenance log of aircraft N23093, January 1, 1976. 18Frederick - CalTrans letter to Watsonville, April 21, 2006. Watsonville Municipal Airport: - 17 There has been no discussion regarding the shortening of pavement on Runway 8. There has, however, been discussion of relocating the landing threshold of Runway

Related Recommendations (1)

R9: WatsonvilleVISTA 2030 threatens the viability of the Crosswind Runway 8-26.

F28: A shortened runway could raise safety concerns, as was demonstrated when an aircraft had to abort a takeoff from Runway 8. The extra length of the runway allowed the aircraft to land safely, just barely within the confines of the airport.19 Response: City of Watsonville: It is possible that a significantly reduced runway length could raise concerns. There is not currently nor has there ever been a proposal to shorten any runway. In fact, the City is in the process of extending the primary runway, Runway 2-20, by 800 feet. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. A shortened runway is a concern; however, we have no information on the incident referred to.

Related Recommendations (1)

R9: WatsonvilleVISTA 2030 threatens the viability of the Crosswind Runway 8-26.

F29: Excessive noise is already becoming an issue at the new Pajaro Valley High School.20 Response: The Santa Cruz County Board of Supervisors: The County has no jurisdiction over the High School and is not in a position to comment on this finding. Response: City of Watsonville: To the best of our knowledge there has been no significant credible complaints regarding noise and its negative impact on school operations. The Airport Manager did receive one complaint from a PVUSC official since the school opened and it was concerning one specific outdoor weekend event. The school site was the subject of significant review by the State of California as required by State law and the City’s Local Coastal Plan and Program. 19Chauvet, power point presentation to APV, February 25, 2005. 20Frederick - CalTrans letter to Watsonville, April 21, 2006. - 18 Watsonville Municipal Airport:

Related Recommendations (2)

R5: If development proceeds according to WatsonvilleVISTA 2030, noise pollution may become a serious issue in the Buena Vista areas.

R10: The Watsonville City Council has chosen to fulfill its housing planning needs at the expense of airport safety and noise pollution.

F30: The purpose of an Airport Land Use Commission (ALUC) is “to protect public health, safety, and welfare by ensuring the orderly expansion of airports and the adoption of land use measures that minimize the public's exposure to excessive noise and safety hazards within areas around public airports to the extent that these areas are not already devoted to incompatible uses.”21 Santa Cruz County is specifically excepted from requiring the formation of an ALUC by Public Utilities Code, PUC, Section 21670.1 (e), provided that they follow the requirements of Section 21670.1 (d)(2) that “height, use, noise, safety, and density criteria that are compatible with airport operations” are adopted as part of the general plans of the county and city.22 Response: The Santa Cruz County Board of Supervisors AGREES. Response: City of Watsonville: The California Legislature specifically said that no ALUC was required in certain California counties under certain conditions. There is no ALUC required for Watsonville Municipal Airport. Response: LAFCO AGREES.

Related Recommendations (1)

R39: CalTrans has recommended that an independent ALUC be formed.32 Conclusions

F31: The Watsonville City Council has been acting in the capacity of an ALUC. Because it is acting as an ALUC, the Watsonville City Council is mandated by PUC Section 21670.1 (e) to incorporate height, use, noise, safety, and density criteria that are compatible with airport operations, as described in the ALUP Handbook. Response: City of Watsonville: The City Council is not acting as an ALUC nor is it required to act as an ALUC. The City is the sole owner and the City Council is the governing body of the Watsonville Municipal Airport. ALUCs, where required, are an advisory body that is charged to develop compatibility plans, review master plans and to review and advise on development activity in and around the airport. Per State law, no airport owner is bound by the recommendations of an ALUC. The City (and County) has met the requirements established by the legislature under PUC Section 21670.1 including the preparation of compatibility plans and an Airport Master Plan.

Related Recommendations (3)

R11: Failure to enforce ALUP Handbook regulations to achieve the planning goals of Measure U demonstrates an inherent conflict of interest in the City of Watsonville’s ability to serve in the role of an ALUC.

R12: The Watsonville City Council has not given appropriate weight to either the airport’s or Santa Cruz County’s interests while serving as Watsonville Airport’s ALUC. 32Frederick - CalTrans letter to Watsonville, April 21, 2006. Watsonville Municipal Airport: - 25 Recommendations

R39: CalTrans has recommended that an independent ALUC be formed.32 Conclusions

F32: Because Watsonville Airport does not have a separate ALUC, CalTrans often has not received timely notifications of Watsonville City Council actions, especially those outside the guidelines of the ALUP Handbook. CalTrans has stated that this has hampered its ability to offer expert opinions, and has precluded it from timely 21ALUP Handbook, p 1-1, 2002. 22California Public Utilities Code 21670.1(e). Watsonville Municipal Airport: - 19 oversight of planning decisions. Response: City of Watsonville: Omitted in report. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. Often in the past, Caltrans has not received timely notifications of Watsonville City council Actions. An example regarding the CEQA process was discussed in the Division of Aeronautics’ letter to the City of Watsonville dated April 21, 2006.

Related Recommendations (3)

R39: CalTrans has recommended that an independent ALUC be formed.32 Conclusions

F33: Without adequate documentation to support the critical change to this designation, the Watsonville City Council designated Runway 8 as a low activity runway.23 (cid:190) Waddel Engineering Corporation provided data in 1994 to the airport showing that Runway 8-26 carried twelve percent (12%) of all airport traffic, with five percent (5%) on Runway 8 and seven percent (7%) on Runway 26.24 Watsonville’s City Council Airport Committee reported an adjustment of this pattern [two percent (2%) on Runway 8 and ten percent (10%) on Runway 26] based solely on the estimates of the airport manager.25 (cid:190) Extrapolating from a ten-day airport count, total annual aircraft operations (takeoffs and landings) were estimated at 120,000 in 1991,26 and were later estimated at 122,500 annually.27 Two percent (2%) of this number (2,450) exceeds the guidelines for a low activity threshold (less than 2,000 annual operations)28 by twenty-two percent (22%). However, the new estimate is less than 100,000 aircraft operations annually, again based solely on the estimates of the airport manager without a published study. Response: City of Watsonville: Don French, Airport Manager was the source of both data sets (1994 and 2005). Mr. French confirmed that the 2005 data, provided to the Airport Committee and City Council, represents the most appropriate percentage split for Runway 8-26 usage. Mr. French has, following release of the Grand Jury Report, reaffirmed that the information was correct at the time and remains reliable and accurate. 23Boyle, Principal Planner, “Final EIR Comments”, citing Don French, Airport Manager, March 22, 2006. 24Watsonville Municipal Airport Master Plan 2001-2020, p. 28, August 2002. 25Recommendations on Revision to the Watsonville Airport Crosswind Runway (8-26), City Council Airport Committee, April 1, 2006. 26Watsonville Airport: Airport Economic Impact Study, Appendix, 1991. 27Watsonville Municipal Airport Master Plan 2001-2020, p.30, August 2002. 28ALUP Handbook, p. 9-42 - 20 Watsonville Municipal Airport:

F34: In its April 12, 2005 report, the City Council Airport Committee claims “CalTrans confirmed that the policies in the ALUP Handbook are intended as guidelines and that variations in design, configuration and land use compatibility was [sic] available and within the scope of the City Council.”29 This authority is used to eliminate Safety Zone 3 (Inner Turning Zone), thereby overriding housing densities mandated by the ALUP Handbook. Response: City of Watsonville: The CALUP clearly and repeatedly notes that the handbook is a policy document intended solely to provide guidance. The CALUP also states that compatibility policies differ from airport to airport and community to community and that no single solution is universally acceptable (CALUP Summary ). Per the CALUP, no ALUC in California is required to amend its plans to comply with the Handbook nor are they implementing agencies. An ALUC need only to examine and consider the Handbook and make their recommendation. The City spent extensive time and effort to evaluate options, their implications and the opinions of experts and stakeholders. The City Council formed a Committee to more fully evaluate Runway 8-26 and the specific conditions of Watsonville and Watsonville Municipal Airport. Consultation was sought from many sources over several months from parties including the Caltrans Division of Aeronautics, Gillfillan Associates, the Federal Aviation Administration, the Airport Manager, local pilots, airport business owners and other interested parties. A community workshop was held and four City Council hearings were held to consider options and recommendations from the experts in the aviation field, the public and ultimately the City Council Committee. Only upon this extensive public dialogue and information gathering process did the City Council determine that Safety Compatibility Zones 1, 2, 4 and 5 were adequate. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. The City of Watsonville is always required to comply with the laws of the State of California. In particular, Public Utilities Code 21670.1(e)(B)(i) requires that the city of Watsonville adopt the height, use, noise, safety and density criteria of the Airport Land Use Planning Handbook. The city of Watsonville is responsible for ensuring land use compatibility between the Watsonville airport and its environs. Pursuant to Public Utilities Code 21670(a)(1), the city of Watsonville must prevent the creation of new noise and safety problems.

F35: CalTrans has stated that formally designating a runway as low activity does not justify the elimination of Safety Zone 3.30 Enforcing lower population densities in 29Recommendations on Revision to the Watsonville Airport Crosswind Runway (8-26), City Council Airport Committee, p. 4, April 1, 2006. 30ALUP Handbook, fig. 9K; Frederick - CalTrans letter to Watsonville, April 21, 2006. Watsonville Municipal Airport: - 21 Safety Zone 3 by limiting housing construction is intended to reduce the consequences of an off-airport accident. Safety zones are intended to delineate higher probabilities of an off-aircraft accident based on large numbers of operations at airports across the country. Response: The Santa Cruz County Board of Supervisors: The County is familiar with the Airport Land Use Planning Handbook guidelines, but does not necessarily agree with the rest of the finding. The County believes that the issue of how best to address safety issues regarding Zone 3 requires a more complex interpretation of the guidelines. Response: City of Watsonville: This finding is incorrect. The April 21, 2006 letter indicates that the action violated the Division of Aeronautics interpretation of the CALUP Handbook. The FAA has no regulation authority over Safety Compatibility Zones 3, 4, 5 and 6. We would note that the footnoted Figure 9k from the CALUP clearly notes that the “examples are for general guidance only.” It is also of note that relocating the Runway Protection Zone entirely on airport property to comply with FAA regulations was a large part of the City’s consideration of Runway 8-26 modifications. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. Safety Zones are intended to delineate higher probabilities of an off-airport accident, not an “off-aircraft” accident. Safety Zones were derived from concentrations of historic accidents. Safety Zone compatibility criteria are a reflection of the potential consequences of an accident and that potential does not change even if the activity is low. Basic safety compatibility qualities for each zone are based on risk factors and runway proximity.

Related Recommendations (1)

F36: The recommendation approved by Watsonville’s City Council Airport Committee was inconsistent with the report prepared by their airport planning consultant, Walter Gillfillan and Associates. That report’s Option 3 presents the pros and cons for shortening Runway 8 and moving Safety Zone 3 (Inner Turning Zone) onto airport property. The Gillfillan report did not recommend eliminating Safety Zone 3 in any of its options. Response: City of Watsonville: The Committee recommendation was consistent with the Gillfillan Report, although not specifically called out. Gillfillan was directly involved in the Committee process and identified the ultimate approved option. The Gillfillan report clearly indicated that it was not an exhaustive evaluation of options and during the presentations Mr. Gillfillan also noted this fact. - 22 Watsonville Municipal Airport: Response: Caltrans Division of Aeronautics: Caltrans Division of Aeronautics AGREES that “the recommendation approved by Watsonville’s City Council Airport Committee was inconsistent with the report prepared by their airport planning consultant, Walter Gillfillan and Associates.” The Division of Aeronautics PARTIALLY AGREES “that report’s Option 3 presents the pros and cons for shortening Runway 8 and moving Safety Zone 3 (Inner Turning Zone) onto airport property.” The report’s Option 3 does present the pros and cons for shortening the east end of Runway 8 by approximately 500 feet. However, it would not move Safety Zone 3 in its entirety onto airport property. Approximately half of Zone 3 would remain off airport property. The Division of Aeronautics DISAGREES that “the Gillfillan report did not recommend eliminating Safety Zone 3 in any of its options.” Option 2 of the Gillfillan report was to permanently close Runway 8-26. This would in fact result in the elimination of Safety Zone 3, the Inner Turning Zone. Other than Option 2, there were no other recommendations in the Gillfillan report for eliminating Safety Zone 3.

Related Recommendations (1)

F37: The maximum densities recommended by the ALUP Handbook in Safety Zones as shown in the following table:31 Safety Zone Maximum Density (dwelling units per acre) 1: Runway Protection Zone 0 2: Inner Approach/Departure Zone .05 to .10 3: Inner Turning Zone .20 to .50 4: Outer Approach/Departure Zone .20 to .50 Response: City of Watsonville: As noted in response to Finding No. 23, the Watsonville Vista 2030 does not propose 2,250 homes in the Buena Vista area. The finding is purely hypothetical and should be left to the public process for the Specific Plan and Environmental Impact Report. As noted in response to Finding No. 34, the action of the City Council was taken only after extensive review and public deliberation. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. 31ALUP Handbook, Table 9-C p 9-47. Watsonville Municipal Airport: - 23 The maximum residential densities in the Handbook are as follows: Using the table for Zone 3 as indicated, the maximum density would be one dwelling unit per 2 -5 acres. Either of the density scenarios given in the finding would exceed the dwelling units per acre in Zone 3 as depicted in the Safety Compatibility Criteria Guidelines in the Handbook.

Related Recommendations (1)

R37: The maximum densities recommended by the ALUP Handbook in Safety Zones as shown in the following table:31 Safety Zone Maximum Density (dwelling units per acre) 1: Runway Protection Zone 0 2: Inner Approach/Departure Zone .05 to .10 3: Inner Turning Zone .20 to .50 4: Outer Approach/Departure Zone .20 to .50 Response: City of Watsonville: As noted in response to Finding No. 23, the Watsonville Vista 2030 does not propose 2,250 homes in the Buena Vista area. The finding is purely hypothetical and should be left to the public process for the Specific Plan and Environmental Impact Report. As noted in response to Finding No. 34, the action of the City Council was taken only after extensive review and public deliberation. Response: Caltrans Division of Aeronautics PARTIALLY AGREES. 31ALUP Handbook, Table 9-C p 9-47. Watsonville Municipal Airport: - 23 The maximum residential densities in the Handbook are as follows: Using the table for Zone 3 as indicated, the maximum density would be one dwelling unit per 2 -5 acres. Either of the density scenarios given in the finding would exceed the dwelling units per acre in Zone 3 as depicted in the Safety Compatibility Criteria Guidelines in the Handbook.

F38: If the proposed 2,250 homes are built on the 458 acres in the Buena Vista areas, the resulting average housing density (approximately 5 dwelling units per acre) will exceed the maximum density in Safety Zone 3 by a factor of 10 to 25. Any of the planned “medium” (10-17 dwelling units per acre) density occurring within Safety Zone 3 will exceed by 20 to 80 times the maximum density permitted. Response: The Santa Cruz County Board of Supervisors: While the County is familiar with the Airport Land Use Planning Handbook guidelines, the issue of how best to address safety issues regarding Zone 3 requires a more complex interpretation of the guidelines. Response: City of Watsonville: The City Council has acted in the best interest of the airport consistent with the Public Utilities Code and no ALUC is necessary. There is no reason to believe that an ALUC would have come to a different conclusion. There is no reason to believe that, given the unique Watsonville circumstances, CALUP guidance and a seated ALUC advising, that the City Council would have come to a different conclusion. - 24 Watsonville Municipal Airport: Response: Caltrans Division of Aeronautics AGREES.

Related Recommendations (1)

R38: If the proposed 2,250 homes are built on the 458 acres in the Buena Vista areas, the resulting average housing density (approximately 5 dwelling units per acre) will exceed the maximum density in Safety Zone 3 by a factor of 10 to 25. Any of the planned “medium” (10-17 dwelling units per acre) density occurring within Safety Zone 3 will exceed by 20 to 80 times the maximum density permitted. Response: The Santa Cruz County Board of Supervisors: While the County is familiar with the Airport Land Use Planning Handbook guidelines, the issue of how best to address safety issues regarding Zone 3 requires a more complex interpretation of the guidelines. Response: City of Watsonville: The City Council has acted in the best interest of the airport consistent with the Public Utilities Code and no ALUC is necessary. There is no reason to believe that an ALUC would have come to a different conclusion. There is no reason to believe that, given the unique Watsonville circumstances, CALUP guidance and a seated ALUC advising, that the City Council would have come to a different conclusion. - 24 Watsonville Municipal Airport: Response: Caltrans Division of Aeronautics AGREES.

F39: CalTrans has recommended that an independent ALUC be formed.32 Conclusions

April 13, 2006 — City Council Agenda Report on Rape and Sexual Assault*

6 pages 7 findings

Quick View Full Details →

Findings & Recommendations 7 findings

F1: counties, surrounding regions and the State of California. The 2004 rate in Santa Cruz is 2.10 per 1,000 females. The California rate is .53 per 1,000 females. Reported rapes in the City of Santa Cruz increased by 96% from 1984 to 2004. Reported rapes in California decreased by 18% during the same period. Rate of sexual assaults by strangers is higher in the City of Santa Cruz (36% in

F2: 2003 and 45% in 2004) and especially in the Downtown Beat (75%) than the national average of 17% (National Institute of Justice 2006). Arrest rate for rape in Santa Cruz in 2004 was 18%. Nationally, 42% of reported

F3: rapes were cleared by arrest in 2004 (FBI data). Report data is consistent with national statistics which show that the majority of

F4: rape victims are under the age of 25 while suspects are older. Report data is not consistent with national statistics which show that the race or ethnicity of the suspect and the victim are the same in the vast majority of cases. In Santa Cruz for 2003 and 2004, when the victim and suspect were of different races or ethnicities, it was predominantly in situations of rapes by strangers in the external environment.

F5: Report data revealed that most victims were local residents. For suspects, the unknown category was too large to draw a conclusion. Report data revealed that alcohol and other drugs were noted in approximately 40% of cases although the unknown category was significant for suspects. Report data revealed that 62% of victims who reported the rape to law

F6: enforcement did so immediately and 80% within one day. FISCAL IMPACT: Existing staff will need to prioritize the current workload to staff the proposed Task Force or additional staffing resources will need to be allocated. Submitted by: Katherine Martinez-Greenleaf Commission Chair Attachments: Task Force Charge and Membership Commission Report 2005-2006 Santa Cruz County Grand Jury Final Report MEMORANDUM SANTA CRUZ POLICE DEPARTMENT "Your Police, Our Community" DATE: April 24, 2006 TO: City Council FROM: Chief of Police SUBJECT: CPVAW Presentation Department Overview: Providing an immediate and compassionate response with the highest quality investigative skill to the victims of sexual assault is a top priority for the Santa Cruz Police Department and has been for many years. All officers of the Santa Cruz Police Department are trained to ensure the safety of and take a report from any victim of sexual assault as well as provide support services referral information upon first contact. The State of California through the Penal Code mandates that all police officers receive sexual assault investigation training in the basic police academy. The Penal Code also mandates that officers primarily assigned to investigate sexual assaults (usually detectives) must attend additional certified training. Santa Cruz Police Department prides itself on its ongoing training in sexual assault investigation for all of its officers and has exceeded the state mandated training for many years. Since January 2006, the officers received an additional 8 hours of sexual assault training with a nationally recognized trainer suggested by CPVAW. The Santa Cruz Police Department has had an in-house advocate for the victims of child and adult sexual assault for over 20 years. We are still the only agency in Santa Cruz County that provides this level of response. In addition, the department recently became the only agency in the county to offer a bilingual domestic violence and sexual assault resource page on our website. Report Comment: is: r. Our department believes the City has a great responsibility to the community to provide accurate information on crimes. To achieve this goal we worked extensively with CPVAW and ASR on correcting data and assumptions within their report to provide an accurate reflection of crime in our community. Unfortunately, the staff report mischaracterizes some of the crime information. The following outlines some specific examples of inaccurate data or mischaracterized statistical analysis: Reported rapes in the City of Santa Cruz increased by 96% from 1984 to 2004. Reported rapes in California decreased by 18% during the same period. Re: Item 23 2005-2006 Santa Cruz County Grand Jury Final Report It is statistically inaccurate to take two years of data (1984 and 2004) and represent it as a twenty-year trend. Under this logic, the following would be considered valid statistical analysis: If we experienced ten reported sexual assaults every year from 1984-2003 and then had no reported sexual assaults in 2004 the analysis would read we had a 100 percent decrease in sexual assaults over the twenty-year period (since 1984 would have ten and 2004 would have zero). Clearly this is not statistically sound and does not represent true crime trends in our community. These facts were presented to the Commission and ASR and the decision was made to leave this information in the report.

F7: Reported rapes in California decreased by 18% during the same period. "It is statistically inaccurate to take two years of data (1984 and 2004) and represent it as a twenty-year trend." Chief Skerry, memo to Council 4/24/06 There are references in both the UCR (Uniform Crime Report) and the NCVS (National Crime Victimization Survey) to the percentage decline in rape from 1994 to 2004. It would be misleading if the two years in question were anomalous years and no reference made to the data for the intervening years, but that was not the case here. The data for each of the 20 years was clearly displayed in the presentation. Arrest rate for rape in Santa Cruz in 2004 was 18%. Nationally, 42% of reported . rapes were cleared by arrest in 2004 (FBI data). "The Commission mischaracterized our arrest data as clearance data. At 49% the Santa Cruz Police Department clearance rate exceeds the average national sexual assault arrest rate of 42 percent." Chief Skerry, memo 4/24/06 "Cleared by Arrest" is a term explicitly defined by UCR. It is different from # of arrests. As of writing the Report, the Commission did not have the "Clearance by Arrest" data for SCPD. We had only the total number of arrests from the actual police reports, upon which we based the 2005-2006 Santa Cruz County Grand Jury Final Report Response to Memorandum of April 24, 2006 from Chief Skerry to City Council figure 18% for 2004. SCPD now lists its "Clearance by Arrest and Exceptional Means "data online. For 2004, the number of rapes or attempted rapes Cleared by Arrest or Exceptional Means by SCPD was 8 out of a total of 59. This is 13.5% and well below the UCR figure of 42% which is the national (or more explicitly, west coast) figure for Cleared by Arrest or Exceptional Means. The origin of the Chief's reference to 49% is unclear but it is certainly not the accurate Cleared by Arrest figure. "Comparing the Santa Cruz arrest rate to the national arrest rate shows an even greater discrepancy. The Santa Cruz Police Department arrest rate is 19 percent (listed as 18 percent in the report) compared to FBI national average arrest rate of 8.8 and an average regional rate of 7.6." Chief Skerry, memo 4/24/06 The FBI figure of 8.8 refers to the arrest rate per 100,000 people. The local arrest rate of 18% (or 19%) refers to the percentage of arrests made in one year out of the total incidents of rape or attempted rape reported, not rate of arrest per 100,000 people. Rate of sexual assaults by strangers is higher in the City of Santa Cruz (36% in 2003 and 45% in 2004), especially in the Downtown Beat (75%), than the national average of 17% (National Institute of Justice 2006). "It is important to note that the Relationship of Suspect to Victim was determined by members of the Commission, not by the investigating officers. The percentages also do not reflect raw numbers (the Downtown percentage is a reflection of eight reported cases) even though they erroneously lead the reader to believe a pervasive stranger sexual assault ratio in the Downtown corridor." Chief Skerry, memo 4/24/06 It is not difficult to extract this information from the police reports. Commission members who did this work include two who participated in the 8 hour police training from Sgt. Joanne Archambault and two who have 26 and 33 years experience respectively in the field of sexual assault response. While it is true that percentages are not the same as raw numbers, 8 cases of reported rapes or attempted rapes on women by complete strangers in one Police Beat in one year is a highly significant occurrence that warrants serious attention. Our goal is zero tolerance to rape. "In addition, the determination as to whether alcohol and/or drugs were involved in the 2003/2004 cases was made by members of the Commission. The detectives and victim advocate assigned to the sexual assault caseload believe that alcohol and/or drugs were involved in many of the cases listed as "unknown". Chief Skerry, memo 4/24/06 This may be true. However, the "Unknown" category meant that there was no reference to alcohol and/or drugs either in the Police Report or Supplemental Report for victim or suspect. Were drugs and/or alcohol involved, one would expect reference to that in the Report since such information would be relevant, if not definitive to any case. Thank you for this opportunity to respond to Chief Skerry's memo to Council. We hope this is sufficient reassurance that the Commission presented accurate data and sound statistical analysis to the City Council in April 2006. We look forward to continued good working relationships with Chief Skerry and the SCPD.

December 31, 2005 — Santa Cruz Police Surveillance of First Amendment Activity

22 pages 17 findings 7 recommendations

Quick View Full Details →

Findings & Recommendations 17 findings

F1: There is tension between the competing priorities of law enforcement's responsibility to ensure public safety while protecting constitutional rights of free speech and free assembly. 1.1 Worldwide reports of terrorism, 9/11 and enactment of the U.S. Patriot Act have heightened public sensitivity toward criminal activity on every level, from the lowest local infraction to the most serious national acts. Santa Cruz Police Departmental Directive Section 610, p. 1, July, 2006. S.C. Police Directive, p. 1. S.C. Police Directive, p. 2. S.C. Police Directive, p. 3. Last Night, First Right - 27 Similarly, the public’s sensitivity to and awareness of incursions into constitutionally protected freedom of speech and freedom of assembly is also heightened. Previous holiday-oriented gatherings downtown Santa Cruz had resulted in significant property damage and serious personal injury. 1.2 The officers involved in the undercover operation did not consider the political aims of the group they investigated, focusing instead on the public safety ramifications of the Last Night Parade. 1.3 Some Santa Cruz residents were eager to jump to the conclusion that the Last Night Santa Cruz DIY Parade surveillance was part of a larger conspiracy to squelch civil rights. Response: The Santa Cruz Police Department AGREES. Response from the Capitola Police Department: The Capitola Police Department has insufficient information upon which to base an opinion in this matter. However, what we can comment on is that the Capitola Police Department and its members have not engaged in a conspiratorial fashion, as an agency or in partnership with other law enforcement agencies, to squelch the civil rights of any citizen of Capitola or Santa Cruz County. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office DISAGREES. Since the Sheriff has no personal knowledge on this point, he is unable to agree or partially disagree with it. Response from the Watsonville Police Department: We find it impossible to comment on what some people assume. We are not, have not ever, conspired to squelch civil rights.

F2: In addition to the police surveillance conducted by the Santa Cruz Police Department, there have been reports of law enforcement conducting surveillance of events that have subsequently been determined to be First Amendment-related activities in other areas across the country. 2.1 In April 2005, students at the University of California, Santa Cruz, protested military recruiters’ attendance at an on-campus career fair. It was learned eight months later that the Pentagon had classified the student protest as a “credible threat”12 and Defense Department representatives had conducted undercover monitoring of the event. Response: The Santa Cruz Police Department PARTIALLY AGREES. Our agency was made aware of these events as with all other members of the public: via the media. We cannot definitively say what was done by 12 UC Santa Cruz Message from the Chancellor, Dec. 28, 2005. - 28 Last Night, First Right another agency in monitoring the event or what the rationale for such monitoring was used. Response from the Capitola Police Department: The Capitola Police Department did not have any role in this particular incident and no further basis upon which to comment on this matter. However, it is important to note that in the past, military recruiters have been threatened and assaulted in various forums throughout the United States. Thus, it is reasonable for the government and law enforcement entities to conduct some reasonable level of threat assessment and intelligence gathering before placing recruiters and other employees in harms way. Response: The Scotts Valley Police Department PARTIALLY AGREES. We only know what was reported in various media accounts and are not privy to what actions the Defense Department may or may not have taken. Response: The Santa Cruz County Sheriff's Office PARTIALLY AGREES. The Sheriff agrees with the first sentence and disagrees with the second sentence because he has no personal knowledge or verification on these points that would allow him to agree or partially disagree. Response from the Watsonville Police Department: There seems to be no question to be answered. We have no information to respond to the jury’s statement. 2.2 Monitoring of First Amendment-protected activities in recent years has occurred in Oakland, Fresno, Contra Costa County, San Francisco and New York City.13 Response: The Santa Cruz Police Department PARTIALLY AGREES. The department is not able to confirm that such monitoring took place and does not have any specific information readily available that verifies such claims. Response: The Capitola Police Department AGREES. The Capitola Police Department agrees. Monitoring of First Amendment- protected activities is certainly not limited to the cities mentioned in the Grand Jury Report and likely has taken place for many years. Likewise, monitoring of First Amendment-protected activities if done correctly, for the right reasons, to include either “probable cause” or “a reasonable suspicion” of criminal activity associated with a First Amendment- protected activity is generally in compliance with the law and often assures and protects public safety. ACLU-NC report, “The State of Surveillance,” pp. 12-19, July 2006. Last Night, First Right - 29 Response: The Scotts Valley Police Department PARTIALLY AGREES. We have seen this reported in ACLU documents and some media sources but have not confirmed their veracity nor context. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge on this point that would allow him to agree or partially disagree with them, and this statement appears to be a quote from a publication. Response from the Watsonville Police Department: There seems to be no question to be answered. We have no information to respond to the jury’s statement. 2.3 No evidence has been found that the Santa Cruz Police Department or other Santa Cruz County law enforcement agencies have engaged in undercover surveillance of First Amendment-protected political activity in recent years beyond the Last Night DIY parade.

F3: Parade organizers broke the law, but there is no evidence that the organizers posed a serious threat to public safety. 3.1 By publicly stating they did not intend to apply for a parade permit, the Last Night DIY organizers knowingly intended to break the law. The law broken was an infraction, the lowest level of violation, generally indicative of not being of a serious or threatening nature. 3.2 On New Year’s Eve 2005, the Last Night Santa Cruz DIY Parade was held as planned, and no major problems were reported. 3.3 Following the direction of its new First Amendment policy, a city official contacted organizers of the Dec. 31, 2006, New Year’s Eve’s parade prior to the event and attempted to convince them to apply for a free Noncommercial Event permit. Organizers declined, and the police department did not pursue the matter further. A second Last Night Santa Cruz DIY Parade was held on Dec. 31, 2006, at which no serious problems were reported.

F4: There were no clear policies in place in Santa Cruz in 2005 to provide guidance for this type of surveillance. 4.1 There is little recent case law establishing what is permissible and what is not permissible in the area of police undercover surveillance of First Amendment-protected activities. Much of the case law that guides undercover infiltration of free speech groups dates to the 1960s and 1970s and is not entirely applicable to the civil rights and law enforcement issues that predominate in the post-9/11 world. Response: The Santa Cruz Police Department PARTIALLY AGREES. However, there is a recent Ninth Circuit Court case that addresses many of these issues raised. - 30 Last Night, First Right Response: The Capitola Police Department DISAGREES. In today’s litigious society, where lawsuits and public records act requests often overwhelm public agencies, access to public records and information retained by the government is at an all time high. Likewise, challenges to local, state and federal agencies Intelligence Gathering and Criminal Intelligence Guidelines are also undergoing close scrutiny and substantial revision at all levels of government. The laws governing intelligence and criminal intelligence file guidelines are contained and distributed by the California Peace Officers Association, Criminal Intelligence Standards and Guidelines manual dated July 2003; the State of California Attorney General’s Office; U.S. Department of Justice, Criminal Intelligence Systems Operating Policies for 28 CFR Part 23 Compliance. There are numerous publications available to local law enforcement agencies, which routinely discuss the law and case precedence established by current cases relative to constitutionally protected rights, to include First Amendment-protected activities. Response: The Scotts Valley Police Department PARTIALLY AGREES. We have not conducted independent research to corroborate this finding. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge on these points that would allow him to agree or partially disagree with them. Response: The Watsonville Police Department DISAGREES. In today’s litigious society, where lawsuits and public records act requests often overwhelm public agencies, access to public records and information retained by the government is at an all time high. Likewise, challenges to local, state, and federal agencies Intelligence Gathering and Criminal Intelligence Guidelines are also undergoing close scrutiny and substantial revision at all levels of government. The laws governing intelligence and criminal intelligence file guidelines are contained and distributed by the California Police Officers Association, Criminal Intelligence Standards and Guidelines manual dated July 2003; the State of California Attorney General’s Office; U.S. Department of Justice, Criminal Intelligence Systems Operating Policies for 28 CFR Part 23 Compliance. There are numerous publications available to local law enforcement agencies, which routinely discuss the law and case precedence established by current cases relative to constitutionally protected rights, to include First Amendment-protected activities. 4.2 The office of the California Attorney General in 2003 issued a report that provided a summary of state law regarding police intelligence collection operations titled “Criminal Intelligence Systems: A California Perspective,” but local law enforcement have found it difficult to interpret. Response: The Capitola Police Department PARTIALLY AGREES. The Capitola Police Department has reviewed the referenced report and Last Night, First Right - 31 guidelines. To better understand the recommended policies and procedures contained in the manual, along with the contemporary issues of: Criminal Intelligence Guidelines and the Criminal Intelligence System, the Capitola Police Department has elected to send all command officers to the Criminal Intelligence for Executives Course. This course is taught by staff from the California Attorney General’s Office, along with featured guest speakers. The structure of the course and the information provided helps executives and police command staff better understand the importance of both an effective and legal intelligence gathering process. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office PARTIALLY AGREES. The Sheriff agrees that the Attorney General issued this report but disagrees that local law enforcement agencies have found it difficult to interpret as he has no personal knowledge that would allow him to agree or partially disagree with this statement. Response: The City of Santa Cruz PARTIALLY DISAGREES. The 2003 report as issued by the Attorney General attempts to provide a framework for collection, analysis, and storage of criminal intelligence information. The report provides a series of recommendations culled from previous commissions and studies that emphasize standardization, accuracy, and information sharing between agencies. From the standpoint of the Santa Cruz Police Department, such information is only obtained on active criminal investigations, generally gang cases, and the information is purged pursuant to mandated purge criteria. The Santa Cruz Police Department already participates in countywide standardized information systems and accesses state databases that hold criminal intelligence information. The department does not maintain non-criminal information files on individuals. The report does not appear to focus on First Amendment activities and does not appear specifically germane to the Last Night event. Response: The Watsonville Police Department AGREES. 4.3 Prior to adoption of a new policy by the Santa Cruz Police Department regarding undercover operations of First Amendment-protected activities, only two cities, San Francisco and Washington, D.C., had explicit policies defining when and under what circumstances police may engage in undercover investigation of First Amendment-protected activities. Response: The Santa Cruz Police Department PARTIALLY AGREES. Our agency queried the entire California Chief’s listserve to determine if other California agencies had such a policy and received no affirmative response. Through basic research it was determined that very few agencies had such a policy. However, we are unsure if the two agencies listed in the above finding are the only other two agencies nationwide. - 32 Last Night, First Right Response from the Capitola Police Department: The Capitola Police Department has insufficient information upon which to base an opinion, or response, as we have not independently contacted all police agencies in the entire country regarding this matter. However, in reviewing numerous intelligence and surveillance policies from around the state, it is readily apparent that most agencies require either a “reasonable suspicion” or “probable cause” that criminal activity may be planned or exists, before authorizing either a police surveillance or a criminal intelligence gathering operation. This standard is consistent with the recommendations made by Robert Aaronson, Independent Police auditor, contained on of this report and may explain why other agencies may have previously been silent on First Amendment-protected activity. Generally, the Constitutional protections referenced as First Amendments activities are incongruous with an individual or individuals violating the law and hiding behind the cloak of Free Speech or other alleged protections. Response: The Scotts Valley Police Department DISAGREES. We cannot agree with this finding absent independent research and verification. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge on this point that would allow him to agree or partially disagree with it. Response from the Watsonville Police Department: There seems to be no question to be answered. We take the jury’s word for Washington, D.C. and San Francisco Police Department having policies. 4.4 Police officers receive minimal training in First Amendment and free- speech issues, usually prior to becoming an officer while they are in the police academy. Response: The Santa Cruz Police Department PARTIALLY AGREES. While the agency agrees that First Amendment issues are covered in the policy academy, the department now expects all of our officers to adhere to the new internal policy. Response: The Capitola Police Department DISAGREES. As previously stated, the Chief of Police and all Command Officers attend the State sponsored Criminal Intelligence for Executives Course and receive instruction on both State and Federal guidelines concerning Criminal Intelligence and Intelligence File Guidelines. Likewise, all uniformed and investigative staff receive regular updates and review operational orders concerning all planned protests, demonstrations and labor management incidents, as it relates to the Constitutional rights of those persons involved in protected free speech activity. Additionally, Capitola Police Department Incident Commanders are required by policy and practice to coordinate operations, to the degree possible, with Last Night, First Right - 33 demonstration and free speech organizers and participants, to insure the rights of demonstrators are protected and balanced in contrast to public safety concerns and private property rights. I refer the Grand Jury to the Governor’s Office of Emergency Services, Law Enforcement Branch, Information Bulletin, dated March 12, 2003, entitled: Potential Military Action in the Middle East: Law Enforcement Planning Issues. I further direct the Grand Jury’s attention to page two of that document, which states: “To reiterate, lawful First Amendment speech and protest activity must be respected and protected.” Similar instructions are regularly discussed and incorporated into pre-incident briefings with all staff assigned to the Capitola Police Department. Response: The Scotts Valley Police Department PARTIALLY AGREES. Academy curriculum includes general constitutional instruction. We cannot speak to what additional training independent police agencies provide their officers. Response: The Santa Cruz County Sheriff's Office AGREES. The Sheriff agrees as it relates to the Santa Cruz County Sheriff's Office only. Response: The Watsonville Police Department PARTIALLY AGREES. All Peace Officers get continual training. Some of that training deals with the First Amendment, mostly as it relates to picketing, protests, sit-ins, etc. The Santa Cruz District Attorney has two attorneys assigned to assist agencies in such matters. 4.5 None of the other local law enforcement agencies in Santa Cruz County have a policy in place regarding undercover surveillance of First Amendment activities. The Scott's Valley Police Department is reviewing its policies regarding surveillance and anticipates adopting changes this summer. Response: The Santa Cruz Police Department AGREES. At the time of implementation the department was the only in the county (and one of the few in the state) to have adopted such a policy. Response: The Capitola Police Department PARTIALLY AGREES. The City of Capitola shares the same City Attorney as the City of Santa Cruz. As such, the City Attorney is reviewing our current policy as it applies to surveillance and criminal intelligence guidelines, files and surveillance operations. The review should be completed and submitted to the Police Department within the next month and the policy should be adopted and implemented shortly thereafter. However, the department currently appears to meets industry standards, having received training in the State of California, Department of Justice and the U.S.Department of Justice standards as they apply to Criminal Intelligence Gathering and Surveillance operations. - 34 Last Night, First Right Response: The Scotts Valley Police Department PARTIALLY AGREES. Scotts Valley Police is drafting a policy similar to Santa Cruz Police. We cannot speak to what other local agencies have in regards to such policies. Response: The Santa Cruz County Sheriff's Office PARTIALLY AGREES. The Sheriff partially agrees with the first sentence as it relates to the Santa Cruz County Sheriff's Office only and disagrees with the second statement because he has no personal knowledge that would allow him to agree or partially disagree with that point. Response from the Watsonville Police Department: Our policy in this area is guided by case law and advice of District Attorney’s staff. Our policies are currently being changed and updated through a company of lawyers. 4.6 The police official who authorized the undercover operation was also the one who conducted the department’s internal investigation. 4.7 The Santa Cruz Police Department was reluctant to address the issue to the public’s satisfaction. What was and was not released to the public was also complicated by state-mandated limitations upon what can be legally disclosed regarding police personnel matters, not by obfuscation by the police department.

Related Recommendations (1)

R3: Every law enforcement agency in the county should establish procedures, tailored within constitutional limitations to meet their own unique identities, for authorizing surveillance of groups or individuals that may be protected under the First Amendment. Any such approved surveillance operations should establish a clear chain of command for authorizing such surveillance and include provisions for review by the chief of police and legal counsel. Response from the Santa Cruz Police Department: The recommendation has been implemented. At the time of implementation our agency was the first and only agency within the county to adopt such a policy. Response: The Capitola Police Department PARTIALLY AGREES. The Capitola Police Department agrees that surveillance and undercover operations Last Night, First Right - 41 involving groups or individuals that may be protected under the First Amendment should require prior authorization by the Chief of Police. However, we do not agree that prior authorization requires the review and concurrence of the City Attorney, although in some cases the City Attorney may be asked for his/her legal opinion relative to a surveillance or undercover operation. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office AGREES. This recommendation requires further analysis. The Sheriff's Office, as part of its normal policy review process, is revising several current policies and implementing new ones. A revised Criminal Intelligence policy is being drafted at this time and other police agencies' policies on this subject will be consulted. Response: The Watsonville Police Department PARTIALLY DISAGREES. The courts, through their decisions on many issues including this one, provide the path to follow with counsel from our legal advisors. It would be difficult at best to have a policy that covers every First Amendment possibility. Having said that, we are in the process of adopting new policies using a company, Lexipol, that is made up of lawyers that are experts in the field of law enforcement policies that use as a basis to form the policies: case law, statute law, and best practices. We will bring to their attention, the Grand Jury’s recommendation.

F5: In the wake of the surveillance incident, the Santa Cruz Police Department has created new policies to guide it in the future when balancing public safety and constitutional protections for free speech and assembly. Response: The Santa Cruz Police Department AGREES. Response from the Capitola Police Department: The Capitola Police Department agrees that the Santa Cruz Police Department has created a new policy by adopting Departmental Directive, Section 610. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office PARTIALLY AGREES. The Sheriff has heard that the Santa Cruz Police Department has adopted some changes to their policies but has not seen these changes. Response: The Watsonville Police Department AGREES. 5.1 The City of Santa Cruz employs an independent police auditor, who reports to the city manager, not the police department. He reviews internal affairs investigations for accuracy and thoroughness. Response from the Capitola Police Department: The Capitola Police Department agrees that the City of Santa Cruz Last Night, First Right - 35 employs an independent police auditor and has not further comment on the matter. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office AGREES. Response: The Watsonville Police Department AGREES. 5.2 No other law enforcement agencies in Santa Cruz County employ an independent police auditor as the City of Santa Cruz does. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department PARTIALLY AGREES. We have not verified this finding. Response: The Santa Cruz County Sheriff's Office AGREES. Response: The Watsonville Police Department AGREES. 5.3 The Santa Cruz City Council empowers a subcommittee of three council members to act as a Public Safety Committee and review police issues that come before the city, adding another layer of scrutiny of police actions beyond the independent auditor. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge on this point that would allow him to agree or partially disagree with it. Response: The Watsonville Police Department AGREES. 5.4 Santa Cruz Police Departmental Directive Section 610 establishes a minimum threshold of “reasonable suspicion” of anticipated criminal activity before police can initiate undercover surveillance of First Amendment-protected activity. However, there is no simple all- encompassing definition of what constitutes reasonable suspicion; it will be considered on a case-by-case basis. Response: The Santa Cruz Police Department AGREES. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge on this point and has not viewed the Santa Cruz Police Department Directive Section 610. Response: The City of Santa Cruz AGREES. - 36 Last Night, First Right Response from the Watsonville Police Department: We cannot agree or disagree. We have not read Santa Cruz Police Department Directive Section 610. 5.5 The new Santa Cruz Police Departmental Directive Section 610 establishes a clear chain of command that includes the chief of police that must be followed in authorizing such undercover operations. Both the chief of police and the Santa Cruz city attorney must now review proposed undercover surveillance of First Amendment-protected activity. Response: The Santa Cruz Police Department PARTIALLY AGREES. The directive specifically applies to potential criminal activity. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge on this point and has not viewed the Santa Cruz Police Department Directive Section 610. Response from the Watsonville Police Department: Watsonville Police Department takes the jury’s word for it. 5.6 Several sections of the Santa Cruz Police Department’s new policy regarding surveillance of political activities are now cited as “Best Practices Guidelines for First Amendment Activities,”14 including acknowledgement of citizens’ rights afforded under the U.S. Constitution; the chain of command to be followed in deciding whether to initiate a surveillance operation of political activity; and what police officers can and cannot do when investigating protected claims of political activity. Response: The Santa Cruz Police Department PARTIALLY AGREES. The policy as adopted by the Santa Cruz Police Department addresses the monitoring of First Amendment activities. It does not, however, specifically outline post-event investigations as implied by the above finding. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office DISAGREES. The Sheriff has no personal knowledge as to Santa Cruz Police Department’s new policy regarding surveillance of “political activities.” Response: The City of Santa Cruz PARTIALLY AGREES. The policy as adopted by the Santa Cruz Police Department addresses the monitoring of First Amendment activities. It does not, however, 14 ACLU, pp. 26-30. Last Night, First Right - 37 specifically outline post-event investigations as implied by the above finding. Response from the Watsonville Police Department: Watsonville Police Department takes the jury’s word for it. 5.7 The Santa Cruz City Council Public Safety Committee has requested further review of the new policy regarding surveillance of First Amendment-protected activities by the city manager with regard to five additional points the American Civil Liberties Union of Northern California, recommends be included in the policy. The ACLU recommends that the new policy be expanded to add these protections: Add a reference to the California Constitution's Right of Privacy; narrow the scope of “reasonable suspicion” in determining when undercover operations may be allowed; clarify the meaning of less intrusive tactics in the new policy; add guidance regarding video surveillance; and expand provisions for auditing and reporting of undercover operations. Response: The Santa Cruz Police Department AGREES. Our agency complied with requests for information and participated in the capacity requested by the Public Safety Committee and City Manager. The

F6: Police were not out of line in viewing the Last Night DIY Santa Cruz Parade as a potential threat to public safety, given the history of stabbings and violence at previous downtown events. The parade’s organizers did not intend to cause property damage or personal injury, but large gatherings where people consume alcohol can create dangerous situations which are unanticipated by those planning the event.

Related Recommendations (1)

R6: People taking part in protests and other public activities that claim protection under the First Amendment must recognize the potential for events to spin out of their control, and for criminal elements to attach themselves to those events, creating real public safety problems that police must address.

F7: The absence of police policy in the area of surveillance of politically protected speech and activity suggests that police are involved with more immediate public safety issues and that the Last Night Santa Cruz DIY Parade surveillance was an anomaly rather than “the tip of the iceberg” of wider police surveillance.

F8: The rightness or wrongness of the Last Night Santa Cruz DIY Parade investigation hinges upon interpretations of law and competing priorities upon which reasonable people on both sides of the issue differ. Last Night, First Right - 39

F9: Not considering the political element inherent in the Last Night DIY Santa Cruz Parade hampered police from recognizing potential free speech and First Amendment issues that may have caused them to reconsider the necessity of the undercover operation.

Related Recommendations (2)

R1: Police chiefs and the county sheriff should ensure they are familiar with the most recent case law involving surveillance of activities involving free speech and freedom of assembly that are protected under the California and U.S. Constitutions. Response from the Santa Cruz Police Department: The recommendation has been implemented by our agency. We are unable to respond to the status of other county law enforcement agencies. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office AGREES. This recommendation requires further analysis to determine and research the wide extent of case law on this very complex issue. Response: The Watsonville Police Department PARTIALLY AGREES. Our jobs are not to study case law, but to insure the advisors of our officers do. That would be the assistant district attorneys, city attorneys, California Police Chiefs Association Council, and the California District Attorneys Association. Court Decisions change often.

R2: Law enforcement must be cognizant of the wide range of activities that fall under the umbrella of the First Amendment when considering surveillance operations. Response from the Santa Cruz Police Department: The recommendation has been implemented. The Santa Cruz Police Department implemented the first such policy that helps guide our agency. Response: The Capitola Police Department AGREES. Response: The Scotts Valley Police Department AGREES. Response: The Santa Cruz County Sheriff's Office AGREES. This recommendation requires further analysis to determine potential training on this very complex issue. Response: The Watsonville Police Department AGREES.

F10: Police officers working the streets must navigate a complex web of directives and guidelines in the performance of their duties and are responsible for upholding a wide array of laws. It is the responsibility of police department management to be aware of these developments so that when a situation arises, they can correctly advise their officers how to proceed.

F11: The adoption of Santa Cruz Police Departmental Directive Section 610 and the exposure that police handling of the Last Night Santa Cruz DIY Parade received makes it unlikely that undercover operations of First Amendment-protected activities will be undertaken in the future without more extensive advance scrutiny.

F12: Although the Santa Cruz Police Department conducted its own internal investigation, the independence of the investigation was compromised by the fact that the police official who conducted the internal investigation was also the police official who authorized the undercover operation causing suspicion of the findings by some members of the public.

Related Recommendations (1)

R5: The cities of Watsonville, Capitola and Scotts Valley, and the Santa Cruz County Sheriff’s Department should consider contracting with an independent auditor who is not employed by the police department to review those grievances by the public that cannot be satisfactorily resolved within each department’s internal affairs unit. Response: The Capitola Police Department DISAGREES. The City of Capitola and the Capitola Police Department has a Citizen Complaint process, which includes options for both internal and external investigations conducted by either a member of the Police Department or an independent contract investigator. Likewise, an appeal process exists whereby citizens can appeal the - 42 Last Night, First Right

F13: The report issued by the city’s independent auditor served a useful role and aided in preventing further deterioration of the relationship between the Santa Cruz Police Department and residents. The report enabled residents and the police department to come together in the wake of the controversy to try and find some mutually acceptable common ground.

F14: The Santa Cruz Police Department’s adoption of Departmental Directive Section 610 puts it ahead of almost all other cities in the state and the nation in addressing the potential legalities surrounding this type of investigation.

F15: The Santa Cruz Police Departmental Directive Section 610 is a step forward in spelling out under what conditions undercover surveillance of First Amendment activity may occur.

F16: The more straightforward and less legally complicated Santa Cruz Police Departmental Directive Section 610 is kept, the more likely it is to be understood and adhered to.

Related Recommendations (1)

R4: The City of Santa Cruz should carefully weigh recommendations by the American Civil Liberties Union (ACLU) that Santa Cruz Police Departmental Directive Section 610 be expanded against the desirability of keeping Departmental Directive Section 610 simple and easily understood. Response from the Santa Cruz Police Department: The recommendation has been implemented. Working with the City Manager, City Attorney, ACLU and others the Santa Cruz Police Department weighed the recommendations outlined by the ACLU and Departmental Directive Section 610 has been finalized. Response from the City of Santa Cruz: The recommendation has been implemented. Working with the City Manager, City Attorney, ACLU, and others, the Santa Cruz Police Department weighed the recommendations outlined by the ACLU and Departmental Directive Section 610 has been finalized.

F17: Citizens often interact only with their police department when something bad happens—they receive a traffic citation, are stopped for drunk driving, are told they cannot do something—creating a skewed view of police by some of the public, and of the public by some of the police. - 40 Last Night, First Right

Related Recommendations (1)

R7: Residents should take advantage of community outreach programs provided by police departments, including ride-alongs, neighborhood watch programs, and jail tours. These provide opportunities to get to know how police work in non-emergency situations and can foster a positive rapport that will facilitate mutual trust between the public and law enforcement.

December 13, 2005 — The Welfare of Child Welfare: Comparison of Budgets Synopsis

8 pages 7 findings 2 recommendations

Quick View Full Details →

Findings & Recommendations 7 findings

F1: The State of California determines a minimum total CWS budget for each county. Some factors that influence the total minimum budget are: • number of children served; • cost to employ qualified social workers (as determined by the state); and • state ratios for number of social workers to children in need of services. Of this minimum required budget, the state contributes 70 percent and mandates that counties contribute 30 percent as a county share of the total CWS budget. Monies contributed by counties to their CWS budgets above the minimum required share are supplemented by other monies from state and federal sources. The resulting increased budget may not reflect the 70:30 budget contribution ratio. Response: Santa Cruz County Board of Supervisors AGREES.

F2: Some counties supplement their CWS budget with additional state, federal and other monies. Santa Cruz County CWS has been able to access some of these funds. Response: Santa Cruz County Board of Supervisors AGREES.

F3: In 2002-2003, Santa Cruz County overmatched the required minimum share of the CWS budget by $696,152. In 2003-2004, Santa Cruz County overmatched the required share of the minimum CWS budget by $718,541. Response: Santa Cruz County Board of Supervisors AGREES.

Related Recommendations (1)

R1: Santa Cruz County Human Resources Agency personnel, along with the Board of Supervisors, should be commended for overmatching the required share of the County of Santa Cruz CWS budget. Response: Santa Cruz County Board of Supervisors AGREES. The County appreciates and concurs with the Grand Jury’s commendation.

F4: CWS budgets, county shares of these budgets, number of active cases and budget-to- child ratios vary from county to county. Fiscal Year 2002- Fiscal Year 2003- 2003 2004 Santa Cruz County Population: 251,584 Number of Active Cases 687 809 Total CWS Budget $8,246,650 $9,002,816 County Share Budget $1,538,957 $1,497,975 Total Budget Per Child $12,004 $11,128 County Share Budget Per Child $2,240 $1,852 County A Population: 246, 073 Number of Active Cases 470 391 Total CWS Budget $3,917,501 $4,778,564 County Share Budget $701,473 $967,956 Total Budget Per Child $8,335 $12,221 County Share Budget Per Child $1,493 $2,476 County B Population: 1,678,421 Number of Active Cases 5,638 5,242 Total CWS Budget $202,603,417 $214,665,827 County Share Budget $56,017,081 $52,586,883 Total Budget Per Child $35,936 $40,951 County Share Budget Per Child $9,936 $10,032 County C Population: 697,456 Number of Active Cases 1,175 1,216 Total CWS Budget $29,555,012 $31,736,859 County Share Budget $5,346,921 $7,453,884 Total Budget Per Child $25,153 $26,099 County Share Budget Per Child $4,551 $6,130 County D Population: 131,607 Number of Active Cases 251 227 Total CWS Budget $8,523,987 $8,275,200 County Share Budget $779,255 $820,399 Total Budget Per Child $33,960 $36,455 County Share Budget Per Child $3,105 $3,614 Note: The total CWS budget number includes the 30 percent county share of the minimum budget, the 70 percent state share of the minimum budget and all additional county, state, federal and other dollars contributed to the CWS budget regardless of source. The populations of each county are 2003 US Census Bureau estimates.1 Table 1: Child Welfare Services Dollars Per Child Comparison. Response: Santa Cruz County Board of Supervisors AGREES. In comparing the budgets across counties, it is important to keep in mind that there is significant variation from county to county in the amount of revenue available from taxes, fees and other county-specific sources to supplement the state’s allocation for CWS.

F5: The Grand Jury also researched information from the UC Berkeley “Point in Time” studies found on the UC Berkeley web site. This information, although very thorough in reporting data by children’s ages, caseloads of social workers and numbers of children in each category, is derived from the data of a single given day for each quarter.2 Conclusions

F6: Compared to other counties, Santa Cruz County CWS has less funds available to serve an increasing number of active cases.

Related Recommendations (1)

R2: The County of Santa Cruz should explore other options for obtaining additional money to supplement Child Welfare Services funds. Response: Santa Cruz County Board of Supervisors AGREES. The recommendation has been implemented. The HRA budget approved by the Board of Supervisors in June 2005 provided for the addition of five new social work positions, a social work supervisor, and a program manager to the Family and Children’s Services Division. HRA, in collaboration with public and private agency partners, regularly explores various options for obtaining additional money to supplement CWS funds. For example, in FY 2004/05, HRA collaborated with the Health Services Agency Alcohol and Drug Program to apply successfully for approximately $100,000 of state funds to operate a Dependency Drug Court program to provide specialized services to alcohol and drug-abusing parents of children under age 5 who are in out-of-home placement due to parental neglect or abuse. In the first quarter of FY 2005/06, HRA has applied for nearly $1 million in State Child Welfare Services Outcome Improvement funds, and $1.9 million in federal funds under the Abandoned Infants Act to provide specialized prevention/early intervention services to substance-abusing families with young children. The Board of Supervisors and HRA are committed to improving and enhancing services to Santa Cruz County’s families and children, and will continue to work together to seek out opportunities to do so.

F7: The UC Berkeley “Point in Time” studies do not reflect an annualized number of children served which the Grand Jury believes were needed for this budget analysis.

December 13, 2005 — 2004-2005\;Santa\;Cruz\;County\;Grand\;Jury Final Report and Responses*

2 pages

Quick View Full Details →

Findings and recommendations not yet extracted.

October 07, 2005 — Santa Cruz Grand Jury Report on Local Agency Ethics Compliance

6 pages 13 findings

Quick View Full Details →

Findings & Recommendations 13 findings

F1: The Grand Jury received verification of compliance of AB 1234 from these agencies: • Santa Cruz County: Davenport Sanitation District, Freedom Sanitation District, Graham Hill Rd. County Service Area, Pajaro Storm Drain Maintenance District, County Flood Control & Water Conservation District, County Sanitation District, Solid Waste Disposal District, County Service Area Manager • Cities: Santa Cruz, Scott Valley, Capitola, Watsonville • Water Districts: Scotts Valley, Soquel Creek, San Lorenzo Valley, Pajaro Valley • Fire Protection Districts: Central, Pajaro Valley, Zayante, Aptos/La Selva, Ben Lomond, Scotts Valley, Boulder Creek, Felton • Salsipuedes Sanitary District • Pajaro Valley Cemetery District

F2: The County Administrative Office reported to the County Board of Supervisors outlining requirements of AB 1234, who then directed all county department heads to comply.

F3: All county employees are subject to the provisions of Government Code Section 1126, et seq., Santa Cruz County Code Section 3.40 and Section 173 of the County Personnel Rules and Regulations regarding incompatible activities.

F4: The County Board of Supervisors directed the Personnel Department to maintain records of training completed by officials.

F5: Special district agencies learned of ethics training requirements from counsel, district associations and financial auditors.

F6: Seven agencies provided their written ethics policies.

F7: Most county officials opted to take the ethics course online.

F8: At least four special district agencies had staff who took an online ethics course.

F9: Three agencies staff received training from their independent auditors.

F10: Five identified legal counsel as providing training.

F11: District Association meetings provided training classes to at least eight agencies.

F12: Two agencies reported the training was helpful and informative.

F13: One agency commented that state officials would benefit from this training. Conclusion The agencies in Santa Cruz County are complying with AB 1234 by participating in ethics training and developing policies to comply. Commendation The Santa Cruz County Grand Jury thanks all county agencies for responding to our survey and complying with AB 1234. “The government is merely a servant — merely a temporary servant; it cannot be its prerogative to determine what is right and what is wrong, and decide who is a patriot and who isn't. Its function is to obey orders, not originate them.” — Mark Twain Sources • Responses to Grand Jury questionnaire by 26 county agencies • Web sites: o Institute for Global Ethics http://www.globalethics.org/about/faq.htm o California State Senate http://info.sen.ca.gov/pub/05-06/bill/asm/ab_1201- 1250/ab_1234_bill_20051007_chapterd.html o Office of the Attorney General http://caag.state.ca.us/ethics/ o OnLine AB 1234 Ethics Training http://localethics.fppc.ca.gov/ab1234/ o California Special Districts Association http://www.csda.net/ o Institute for Local Government http://www.ca-ilg.org/trust/ o League of California Cities http://www.cacities.org/resource_files/25287.ELR2007.pdf This page intentionally left blank.

June 24, 2005 — The Welfare of Child Welfare: Comparison of Budgets

6 pages 7 findings 2 recommendations

Quick View Full Details →

Findings & Recommendations 7 findings

F2: Some counties supplement their CWS budget with additional state, federal and other monies. Santa Cruz County CWS has been able to access some of these funds.

F6: Compared to other counties, Santa Cruz County CWS has less funds available to serve an increasing number of active cases.

F7: The UC Berkeley “Point in Time” studies do not reflect an annualized number of children served which the Grand Jury believes were needed for this budget analysis.

Additional Recommendations 2

Not linked to specific findings.

R1: Santa Cruz County Human Resources Agency personnel, along with the Board of Supervisors, should be commended for overmatching the required share of the County of Santa Cruz CWS budget.

R2: The County of Santa Cruz should explore other options for obtaining additional money to supplement Child Welfare Services funds.

June 24, 2005 — Introduction to the Santa Cruz County Grand Jury Two Types of Grand Juries in Santa Cruz County

2 pages

Quick View Full Details →

Findings and recommendations not yet extracted.

Contracting for the Services of an Independent Auditor of County Finances

6 pages 7 findings 4 recommendations

Quick View Full Details →

Findings & Recommendations 7 findings

F1: It has been the practice of the county to request proposals for independent audit services every three or four years.

F2: The current independent audit firm has provided services for seven years.

F3: The 2001-2002 Santa Cruz County Grand Jury Final Report recommended that retention of an independent auditor should be reviewed every three years and changed at least every six years.

F4: This Request for Proposal process was to select an independent auditor to prepare an annual audit for the County of Santa Cruz beginning with the fiscal year ending June 30, 2005. The contract would be awarded for one to three years, whichever would be the most cost effective for the county. - 2 Counting Your Dollars:

F5: The independent audit firm provides various reports to the Santa Cruz County Audit Committee throughout the year. These reports require County Audit Committee review.

F6: The Request for Proposal process began with preparation of the bid documents that: • outlined the requirements of the county; • described the basis on which the bids would be judged; and • requested the qualifications of the bidders. Invitations to Bid were sent to 44 qualifying accounting firms, locally and throughout northern and central California. Four bidders attended the bidders’ conference on December 10, 2004. Proposals were received on January 14, 2005 from all four firms present at the bidders’ conference. The proposals were evaluated according to the criteria established in the bid documents as outlined in Appendix A. Using this comprehensive criteria, the County Audit Committee recommended awarding the contract to the firm that best met the county’s needs: Bartig, Basler, and Ray.

F7: Two members of the Santa Cruz County Grand Jury are active members of the County Audit Committee. Conclusions

Additional Recommendations 4

Not linked to specific findings.

R1: The County of Santa Cruz Auditor should continue to actively seek and qualify new bidders for future invitations for proposals and should update the current list.

R2: Review of the contract for independent audit services or invitation to bid should be scheduled every three years with no one firm providing services for more than two consecutive three-year contracts.

R3: The County of Santa Cruz should continue to notify the Grand Jury of County Audit Committee activities.

R4: The County Audit Committee should continue to meet at least twice each year, more frequently if needed. Counting Your Dollars: - 3

for 2004-2005

24 pages 54 findings 10 recommendations

Quick View Full Details →

Findings & Recommendations 54 findings

F1: Current library system organization balances two conflicting library service issues: • desire to maintain neighborhood-level branch libraries; and • economic necessity of maximizing funding resources by centralizing programs and services.8

F2: The Director of Libraries is supervised by the City Manager and has department head status under the City of Santa Cruz’s personnel system. The Director serves as staff to the Library Joint Powers Authority Board.

F3: Although the JPA Board governs the library, the staff are Santa Cruz City employees.

F4: The Joint Powers Board consists of nine members: • Two members appointed by the Santa Cruz City Council from among its members; • Two members appointed by the Santa Cruz County Board of Supervisors from among its members; • One member appointed by the Capitola City Council from among its members; • One member appointed by the Scotts Valley City Council from among its members; and • Three at-large citizens appointed by majority vote of the board from the qualified electors of the Library Service Area and who represent the geographic diversity of the county.

F5: The JPA Board oversees the operations of the Santa Cruz City-County Library System. It oversees the library budget, adopts and oversees enforcement of rules, regulations and policies necessary for the administration of the library system; sets hours and levels of service for operation of the library system and evaluates the quality of library service. The JPA Board does not concern itself with the day-to-day functioning of the library or the details of the library budget. It relies heavily on staff input to make decisions. The JPA Board duties include conferring with “the City 8 Santa Cruz Public Libraries, The Santa Cruz Library System Facilities Master Plan, 2001/02 – 2005/06, September 2001. - 8 Ready to Check Out? Manager concerning the job performance of the Director of Libraries and any modification or renewal of the contract of the Director of Libraries.”9

F6: The City Manager consults with other administrative heads of member jurisdictions for the director’s personnel reviews (County Administrative Officer, City Manager of Scotts Valley, City Manager of Capitola).

F7: The Director of Libraries was last reviewed in 1999 and initiated a self-review in 2002-2003.

F8: JPA Board members and Santa Cruz City staff could not recollect when the JPA Board was last asked for advice on the performance of the Director of Libraries. Measure B

F9: Measure B, passed by voters in 1996, was a new library tax in the form of a quarter- cent sales tax. Polling data showed that the public valued services to children and seniors, increased open hours and an expanded collection.

F10: The sales tax went into effect March 1997 with funds becoming available in the fiscal year beginning July 1, 1997. The ordinance terminates on April 1, 2013.10

F11: When people voted on Measure B, its purpose was for more open hours and some capital expenditures to expand places like Scotts Valley and Felton branches and to renovate and build when necessary. Measure B did not expressly call for renting additional administrative space.

F12: Measure B commitments included:11 Commitments accomplished: • Youth Service (YS) staff added and collections expanded; • Mobile YS Librarian added; • First 5 Commission Read to-Me-Grant received; • Bookmobile purchased, staff hired; • Outreach staff for seniors hired and programs developed; • Library Book and Materials budget increased 44 percent in Fiscal Year 97-99, but declined starting after January 2002; 9 Joint Powers Agreement between the City of Santa Cruz and the County of Santa Cruz and the Cities of Capitola and Scotts Valley Relating to Library Services, Library Joint Powers Board Bylaws, Article II, g., May 1996. 10 “Text of Measure B (1996 November),” http://www.santacruzpl.org/libraryadmin/btext.shtml, November 1996. Director of Libraries, “Measure B Promises and Accomplishments,” December 21, 2004. Ready to Check Out? - 9 • Open hours expanded; • Reopened Live Oak Branch in 1998, County Redevelopment Agency began construction of new facility in 2004; • Scotts Valley Branch doubled in size, homework center added; • Deferred maintenance accomplished at various branches; and • Multiple improvements made in automation and internet access. Items accomplished, not part of original commitment:12 • Opened new branch in Capitola; • Asbestos abatement at Central Branch, new carpet, painting and HVAC repair; • System Services staff moved to 1543 Pacific Avenue in downtown Santa Cruz; and • Bathrooms and other basic facilities added to Garfield Park Branch. Commitments not accomplished:13 • Construct 2,900 square foot addition to the Central Branch (based on further study, library staff states that 32,000 square feet are needed); • Renovate historic structure occupied by Felton Branch (renovation proved to be impractical and expensive); and • Install one-stop kiosk-type information centers with public access computers throughout county – unworkable without 24/7 staffing. Lease Negotiations

F13: With the passage of Measure B, the library system increased services, added to its collection and hired additional staff, necessitating more space. As a result of overcrowding due to expansion, Administrative Services, Technical Services and Outreach moved to 1543 Pacific Avenue in October 1997.

F14: The JPA Board directed the Director of Libraries to recommend rental space, including possible location, budget and timeline, to accommodate overflow from the Central Branch.

F15: To accommodate the newly hired staff (due to the passage of Measure B) by October 1997, prompt location of space and timely execution of a lease was necessary. Since the Santa Cruz City Council did not meet in August 1997, library and City of Santa 12 Director of Libraries, “Measure B Promises and Accomplishments,” December 21, 2004. Director of Libraries, “Measure B Promises and Accomplishments,” December 21, 2004. - 10 Ready to Check Out? Cruz Redevelopment Agency (RDA) staff requested that the Santa Cruz City Manager be authorized to approve a lease agreement. The lease was subject to the approval of the Santa Cruz City Attorney and the JPA Board.

F16: The recommendation from the Director of Libraries and the Santa Cruz City Director of Redevelopment stated that the new space should be located conveniently to the main branch of the library, should comprise approximately 10,000 square feet and should have a parking area adequate for loading, unloading and parking of book vans. One of the objectives of having library headquarters downtown was to contribute to the city’s recovery from the 1989 earthquake. The building at 1543 Pacific Avenue met the above criteria.

F17: Alternative sites were not considered since there were no other available sites that met the above criteria. City Redevelopment Agency staff recollects that the library director identified this site as meeting the specification.

F18: The lease approval process began with negotiation between the City of Santa Cruz Redevelopment Agency staff and the landlord. The Santa Cruz City Council approved the basic lease terms but was not involved in the details. They relied on the background material prepared by RDA staff.

F19: The original lease, executed in Santa Cruz on September 8, 1997 between Penak J. Ltd. and the Santa Cruz City-County Library System, was signed by the Santa Cruz City Manager. The lease had a five-year term with an additional five-year renewal option.

F20: The JPA Board approved the Director of Libraries’ recommendation that the JPA Board adopt a resolution to renew the lease between the library system and Penak J. Ltd. for library administrative headquarters at 1543 Pacific Avenue for an additional five-year term that ends September 30, 2007. Library Administrative Headquarters

F21: The lease of library administrative headquarters has cost Santa Cruz County residents millions of dollars. In the eight years leading up to 2005, the cost has been $1,936,006. That cost increases annually. By the end of the second five-year lease term, more than $2.5 million will have been spent on administrative headquarters. Ready to Check Out? - 11 Calendar Rent14 NNN15 + Total Rent Elevator HVAC Annual Cost Year Utilities Contract Contract 1997-199816 17 $150,888 $33,096 $183,984 -0- -0- $183,984 1999 $174,108 $35,292 $209,400 -0- -0- $209,400 200018 $182,232 $41,712 $223,944 -0- -0- $223,944 2001 $190,800 $52,884 $243,684 $3,000 -0- $246,684 2002 $199,392 $57,768 $257,160 $3,166 $5,040 $265,366 2003 $202,044 $58,152 $260,196 $5,040 $5,040 $270,276 2004 $204,060 $55,416 $259,476 $5,040 $5,040 $269,556 2005 $201,576 $55,140 $256,716 $5,040 $5,040 $266,796 Total $1,505,100 $389,460 $1,894,560 $21,286 $20,160 $1,936,006 Table 1. Library Administrative Headquarters Rent and Cost History. Sources: Lease for 1543 Pacific Avenue dated September 8, 1997 Renewal of Library Administration Building Lease dated April 10, 2002 Chart from Santa Cruz City Manager, April 4, 2005

F22: The Administrative Unit occupies 3,500 square feet in the Pacific Avenue Suite and includes offices, a conference room and an automation training room. Space is adequate but will not sustain growth. It would be hard to add staff for a grant program or special project. Foreseeable future needs would be met by 4,500 square feet.19 14 In 2005, rent was reduced by $379 per month. Triple net. See Appendix: Definitions. Dates are from October 1997 through December 1998. A memo confirming the area of the premises was signed on June 25, 1998. The original square footage stated in the lease was 11,770 square feet. In this memo, the area was confirmed actually to be 11,190 square feet. Rents are based on square footage. Adjustments were made to compensate for the overpayment of rent. On May 17, 2000, the library system added another 1,123 square feet of rental space, for a total of 12,313 square feet. Santa Cruz Public Libraries, The Santa Cruz Library System Facilities Master Plan, 2001/02 – 2005/06, September 2001. - 12 Ready to Check Out?

F23: Technical Services occupies 5,500 square feet. Sixty percent is devoted to staff work areas including routing for daily delivery to all branches and the balance to shelving for books and other materials being processed. Seven thousand square feet is required to meet current and future needs.20

F24: The Outreach Program occupies 856 square feet on Pacific Avenue. Sixty percent of the space is devoted to shelving library materials and other supplies. The Outreach Program staff workspace of 343 square feet for six people, even workers who are in and out of the building, does not meet library standards. “Conditions are absurdly overcrowded.”21

F25: The Outreach Program requires at least 1,500 square feet for workspace and shelving. If staff moved to a stand-alone facility, a bathroom, break room and storage space would be needed. Access to a loading dock and vehicle parking is required. The space could be located elsewhere in the county near major thoroughfares.22

F26: Library staff reported that the heating system does not work well; the boiler is very old and some offices are often cold. The fire exit from the basement is through The Velvet Underground, a neighboring business. The door was locked in the past, but this has been remedied.

F27: Library staff says that the elevators are small, old and break down frequently. Since the library system pays for elevator servicing and repair costs, this adds to the expense of leasing administrative headquarters.

F28: Loading docks for Outreach and Routing/Receiving, as well as limited staff parking, are available. The building meets the load-bearing requirement for books.23

F29: In Outreach, three people shared a desk designed for one. Crates of books were stacked at the end of aisles on the first floor. In contrast to other rooms, one room had empty shelves.

F30: In June 2004, the JPA Board appointed a subcommittee to consider the cost and relocation of library administrative headquarters. No action was taken.24 20Santa Cruz Public Libraries, The Santa Cruz Library System Facilities Master Plan, 2001/02 – 2005/06, September 2001. Santa Cruz Public Libraries, The Santa Cruz Library System Facilities Master Plan, 2001/02 – 2005/06, September 2001. Santa Cruz Public Libraries, The Santa Cruz Library System Facilities Master Plan, 2001/02 – 2005/06, September 2001. Memo from Director of Libraries to Library Joint Powers Authority Board regarding Headquarters Space, January 26, 2004. Memo from Director of Libraries to Library Joint Powers Authority Board regarding Headquarters Space, January 26, 2004. Ready to Check Out? - 13 Location of Library Headquarters

F31: The library system employs the equivalent of 117.98 full time employees. Forty-two people work at administrative headquarters. Twenty-two of them work two four-hour shifts per week on public desks at the Central Branch, and one senior manager works one four-hour shift. This is the equivalent of 2.4 full-time equivalency (FTE) positions on the Central Branch circulation desk and 2.1 FTE positions at Central Reference and Youth Services. Library system administration believes that administrative headquarters must be located within easy walking distance to the Central Branch.

F32: Locating administrative staff close to Santa Cruz City Hall and the County Building is convenient. Administrative staff workers make daily trips to Santa Cruz City Hall that save mail/delivery time and maintain personal contacts with colleagues in the Finance and Human Resources Departments.25

F33: As many staff as possible work on public desks to preserve contact with the public. Library management believes that keeping in touch with the public allows Technical Services staff and management to improve service. Working on a public desk gives the staff involved a sense of the impact of their work on the public and other staff.26

F34: Rotation of shifts was instituted to relieve staff from long hours “on desk” where repetitive motion could lead to stress injury.

F35: According to some staff members, rotation is inconvenient because the worker stops one job in the middle of the day and goes to another. Because staff fill in at branches other than Central, rotation involves travel time. Staff must acclimatize themselves to different and changing work situations if they fill in sporadically.

F36: The library system has an existing courier service that delivers library materials throughout the 10-branch system, including administrative headquarters. Funding

F37: Library funding comes from the following sources: • County Library Fund - property tax, designated for library service, collected in the unincorporated areas and in the cities of Capitola and Scotts Valley; • member contributions – the cities of Santa Cruz and Watsonville contribute money from their general funds; • Measure B – a quarter-cent sales tax (approved by voters in 1996); • library fee and fine revenue; 25 Memo to the Joint Powers Authority Board from Director of Libraries regarding Headquarters Space, January 26, 2004. Memo to the Joint Powers Authority Board from Director of Libraries regarding Headquarters Space, January 26, 2004. - 14 Ready to Check Out? • State of California Public Library Fund grant; and • income from library bequests and trusts.

F38: According to library staff, Measure B sales tax originally generated sufficient money for library operations but not enough for capital projects. The library has enough revenue to operate the city-county library system. It does not have enough money for updating facilities.

F39: The library budget has been negatively affected by: • higher expenses for employee benefits such as workers’ compensation; • a recession that reduced sales-tax revenues; and • a state government that took local tax revenues to narrow its budget gap.

F40: In response to a projected $700,000 budget deficit, the JPA Board:27 • increased the library system’s schedule of fees and charges; • shortened hours; • eliminated a cumulative total of 9.13 positions since June 2003; • accepted early retirements from staff; • cut library materials budget by $350,000; and • cut Supplies and Services budget – training, staff travel to conferences, supplies for materials processing.

F41: The Director of Libraries estimated the anticipated library system budget deficit for FY 2005-2006 to be $200,384.28 In May 2005, that figure was revised to $173,000.29 This figure may look insignificant when looking at Fiscal Year 2004-05 expected expenditures of $10.8 million,30 but it was enough for the library system to consider closing a branch. Outcomes

F42: The JPA Board has discussed going to the voters for a bond issue and how to otherwise fund long-term capital needs. There is no contingency plan if a bond issue doesn’t pass. If it doesn’t pass, money may continue to be spent the same way it is 27 Director of Libraries, “The Library Budget Deficit: What’s Going On?” November 10, 2003, http://www.santacruzpl.org/libraryadmin/deficit.shtml. Memo from Director of Libraries to Library Joint Powers Authority Board regarding FY 2005-06 Budget Increases and Revenues, March 30, 2005. Santa Cruz Sentinel, “Library chief’s apology falls short for supervisor,” May 4, 2005. 30Santa Cruz Public Libraries, the Library System’s Revenue and Budget: FY 2004-2005, http://www.santacruzpl.org/libraryadmin/04-05bud.shtml. Ready to Check Out? - 15 spent now. The cost of library administrative headquarters is $266,796 this year and will increase each year.

F43: A minimum of $16.8 million is required for capital improvement. If Scotts Valley and Capitola are included the figure goes up to $24.2 million.31

F44: A bond issue on the ballot would request voters throughout the county to approve a 30-year general obligation bond measure on the order of $20 million to support expansion or replacement of the Central Branch, construction of a new branch at Felton, expansion of the Aptos parking lot, upgrading the automation system and installing new materials handling and security technology. The cost would be roughly $6.30 per $100,000 of assessed valuation, or $30 annually for the typical property taxpayer.

F45: The earliest a bond proposal could be ready for placement on a ballot is 2006.32

F46: Some JPA members feel a bond measure would have difficulty passing. They have stated that if a bond issue is proposed, the public should be polled to see if they would vote for it.

F47: JPA Board members say that administrative headquarters rent is high, but holding a bond election is expensive, and the JPA would probably be responsible for that cost.

F48: In the City of Salinas, voters rejected a ballot measure on November 2, 2004 to boost sales tax to preserve city services.33

F49: The Salinas City Council voted on December 14, 2004 to permanently close all three of the city’s libraries.34

F50: Santa Clara County’s library tax ($33.66 per year for a single home, comprising 20 percent of its operating budget) expires in June 2005. Efforts by its Joint Exercise of Powers Authority to pass a measure to renew and increase the tax failed last year. In May 2005, a mail-in ballot offering two options will be sent out. Measure A will renew the tax at the same amount and will avoid service cuts for the coming year. Measure B will increase the amount by $12 per year per single home to restore some cuts in hours and services. The Santa Clara library district has spent at least $80,000 on an opinion poll. The cost of running the election will be $1.8 million (a third of the $5.4 million the tax would raise annually).35

F51: Voters in San Luis Obispo rejected a proposed quarter-cent sales tax hike on November 2, 2004, which would have kept their libraries solvent, necessitating reduced hours and staff layoffs.36 31 Director of Libraries, Library Capital Improvement Program, September 1, 2004. The Mid-County Post, “Library Expansion,” October 5, 2004-October 18, 2004. Santa Cruz Sentinel, “Cash-strapped Salinas set to close libraries,” December 26, 2004. Santa Cruz Sentinel, “Cash-strapped Salinas set to close libraries,” December 26, 2004. San Jose Mercury News, “Library to try tax vote again,” March 24, 2005. 36 “Library Funding, California”, www.ala.org. - 16 Ready to Check Out?

F52: Voters in Berkeley defeated Measure L, a library parcel tax, in November 2004. Supporters of the measure had hoped it would forestall staff layoffs and reduced hours.37

F53: Libraries in 41 states have absorbed more than $50 million in funding cuts last year. At least 10 cities have considered closures.38

F54: At the Santa Cruz City-County Library System JPA Board meeting on May 2, 2005, a proposal was put forth to close the Felton branch to reduce the upcoming fiscal year 2005-06 budget shortfall of $173,000 by $156,355.39 The community strongly opposed the closing, and the JPA Board voted to keep the branch open. Conclusions Library Administration

Additional Recommendations 10

Not linked to specific findings.

R1: The Santa Cruz City Manager should review the Director of Libraries’ job performance according to the Library Joint Powers Authority Agreement. He should solicit the written advice of the JPA Board for these reviews.

R2: The JPA Board should immediately begin to find an alternative to the crowded and inefficient location at 1543 Pacific Avenue.

R3: Library administration should conduct an efficiency study to find reasonable alternatives to the way staff are located within the library system and are rotated in and out of the Central Branch. They should seek professional advice as necessary.

R4: Since the operation of the Santa Cruz City-County Library System depends on Measure B sales tax revenue that will expire in 2013, economy measures and new funding sources must be found to maintain existing levels of service.

R5: If a bond measure is passed, the JPA Board must be very careful to use the funds in the manner specified in the measure.

R6: The library staff and JPA Board must develop contingency plans for any future capital projects if a bond issue is unsuccessful at the polls.

R7: The library system and City of Santa Cruz staff and administrators should be commended for promptly providing comprehensive information to the Grand Jury.

R8: Library system staff is to be commended for their expressed desire to provide the best possible library services to the county.

R9: JPA Board members must make decisions for the good of the overall library system rather than focusing on their own constituencies and parochial concerns. Ready to Check Out? - 19

R20-54: (August 30, 2005) City of Scotts 1-3, 5-9, 11-18, 1-9 60 Days Valley 20-54 (August 30, 2005) Library Joint 1-3, 5-9, 11-18, 1-9 90 Days Powers Authority 20-54 (September 30, Board 2005) Santa Cruz City- 1-3, 5-9, 11-18, 1-9 90 Days County Library 20-54 (September 30, System 2005) Ready to Check Out? - 23 This page left intentionally blank. - 24 Ready to Check Out?

California Public Records Act Compliance by Local Police Agencies

8 pages 5 findings 3 recommendations

Quick View Full Details →

Findings & Recommendations 5 findings

F1: The department does not provide a complete police blotter but provides information in the form of a media release log.

F2: The department’s access to public records policy is in accordance with the California Access to Public Records Act.

F3: When Grand Jury members, without identifying themselves as such, requested information in regard to police activity, copies of the log were provided. Santa Cruz County Sheriff’s Department

F4: The arrest log was made available when citizens identified themselves as members of the Grand Jury.

F5: Copies of the arrest log could only be made by hand. Santa Cruz Police Department

Additional Recommendations 3

Not linked to specific findings.

R1: The Capitola Police Department should create a police blotter that is in compliance with the California Access to Public Records Act and with its own policy in regard to public access to information.

R2: The staff should be educated in its own internal policies and procedures and trained to handle requests for information by the public.

R3: The staff should be commended for its courtesy in response to public requests for information. Santa Cruz County Sheriff’s Department

Central Water District

6 pages 28 findings 4 recommendations

Quick View Full Details →

Findings & Recommendations 28 findings

F1: The Central Water District: • manages groundwater resources within its boundaries; • conducts a water quality monitoring program (since 1959); and • runs a backflow prevention program to ensure water quality within the system.

F2: As of June 30, 2003, Central Water added one new customer and three fire services, bringing the total number of active service connections to 831. This figure includes 48 fire and 12 irrigation services.

F3: Due to the low population density in the district, there has not been a need to provide sewer service to the area. All residences use septic systems, and there is no export of wastewater to Monterey Bay.

F4: The average daily amount of residential water use in California is 138 gallons per day.

F5: According to the 2002-2003 Central Water District Annual Report, average annual residential usage in the district is 53,465 gallons per acre (unaccounted water is lost through leaks before it is measured). Daily residential usage is 173.6 gallons per day. However, due to septic system recharge, a substantial portion of this water is recycled to the aquifer.1

F6: Irrigation consumption records show that consumption is not excessive and is comparable to the annual usage of homes with extensive landscaping.2

F7: A large portion of the Pleasant Valley area is irrigated to support apple and grape crops.

F8: Central Water District has five water production wells currently in service. The vast majority of the water supplies comes from the Rob Roy Junction area and pulls from the Aromas Red Sands Aquifer. There are two other wells in the area but they are used minimally because of high iron and manganese content of the water. Well water is also drawn from the Purisima Aquifer.

F9: Water quality meets state and federal health requirements.3

F10: The Rob Roy Well Field reflected declines in the Aromas Red Sands Aquifer during periods of drought. The years of heavy rainfall that followed have increased water levels to within a few feet of the highest initial recordings.

F11: The district is “upstream” in the aquifers so it is the last to feel the influence of a drought and the first to recover.

F12: The district has seven storage tanks with a total capacity of 1.217 million gallons. According to State Health Department standards, the total storage capacity is adequate, not only for current needs, but also for the storage demand at buildout.

F13: The district has not experienced any seawater intrusion into its wells.4 1 Central Water District Annual Report, July 1, 2002-June 30, 2003. Central Water District Annual Report, July 1, 2002-June 30, 2003. Central Water District 2004 Newsletter and Consumer Confidence Report.

F14: Central Water District is one of the only two districts in Northern Santa Cruz County capable of meeting the demand for water at buildout (projected at 944 service connections) with the facilities presently in place.

F15: The district’s conservation/drought plans consist of: • three-tier pricing based on usage; • voluntary water conservation; and • restricted irrigation.

F16: Central Water does not offer incentives for water conservation appliances such as low-flow toilets.

F17: The Santa Cruz County Planning Department has designated the majority of land within district boundaries as Primary Groundwater Recharge, a designation that dictates a minimum parcel size of 10 acres for new land division.

F18: Through the permit process, the County Planning Department controls the district’s service area.

F19: There is limited space for future growth, with the possible exception of restricted agricultural land being annexed to the district.

F20: If the Board of Supervisors decides to increase housing density in the service area, water capacity could reach buildout level.

F21: In 2002-2003, the county zoning ordinance restricting development in a primary groundwater recharge area was “ ignored in favor of the wishes of a popular community service organization.”5 District concerns were presented to the Planning Commission. Local public pressure and the threat of litigation persuaded the organization to relocate its facility.

F22: Presently there are no plans to increase density in the district. 23. “Senate Bill 1938 addresses modification to groundwater Assembly Bill 3030 plans, which are necessary to qualify for future groundwater project funding.”6

F24: A rate committee, which included the District Manager and Directors of the district, met to calculate current operating cost and estimate future operating and capital improvement cost. They concluded that the current financial condition of the water district was sound.

F25: Pacific Gas and Electric electrical surcharges increased by 50 percent over the previous year, causing the total budgetary expense for power to exceed $100,000.

F26: Workers’ compensation insurance for district employees tripled this year.

F27: Rates and fees for customers have remained the same for the past nine years. Due to the power surcharge, the after-hour service fees have risen to $65, and a $25 return- check fee has been established. Central Water District personnel. Central Water District Annual Report, July 1, 2002-June 30, 2003. Central Water District Annual Report, July 1, 2002-June 30, 2003.

F28: Operational budget comes from rates and fees; the district also receives $60,000 in property tax revenue. With the current state budget shortfall, special districts may lose some or all of their property tax revenue.6

F29: The water-rate structure may increase to offset the loss of the property tax revenue.7 Conclusions

Additional Recommendations 4

Not linked to specific findings.

R1: The Central Water District management and board should be commended for its operation of the service area and resources that fall within the districts boundaries.

R2: The Santa Cruz County Board of Supervisors should keep the Central Water District Board informed of any future proposal to increase the density of the district.

R3: In order to manage growth with the available water supply, the county should adhere to its current zoning ordinances.

R4: Water customers within the district should be made aware of the potential increase in rates due to the loss of property tax monies. Central Water District 2004 Newsletter and Consumer Confidence Report. Central Water District 2004 Newsletter and Consumer Confidence Report.

for 2004-2005

1 pages

Quick View Full Details →

Findings and recommendations not yet extracted.

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.