Friday, May 29, 2015

Marin IJ Editorial: Good questions about county budget

One of the most important public services of the civil grand jury is its citizens’ view of how the public’s business is being conducted.
Often, this valuable assessment involves cutting through thick layers of bureaucracy.
That was the challenge facing the 2014-15 Marin County Civil Grand Jury, when it tried to look into the costs and benefits of Marin’s $47.1 million mental health services.
These 19 citizens who form the independent jury found their task formidable as they reported that the important county program’s budget is undecipherable.
If it’s difficult for the grand jurors, is it clear for the five county supervisors, who approve the grants applications and distributions throughout the year? Is it clear for taxpayers, whose money the programs are spending?
The grand jury determined the program’s “budget process is flawed,” not a reassuring assessment for the distribution of $47.1 million. The grand jury repeatedly asked for specific budget information and could not get information about specific expenses and benefits.
It cited a similar problem in its assessment of the budget for county homeless programs.
The grand jury added that the budget lacks any measurement of “whether the programs are effective, successful or efficient.”
“Notwithstanding the sizeable $47.1 million budget, the county must ensure that the services are being delivered efficiently, which is essential to maximize available resources,” the grand jury report stated.
Governmental budgets should not require translation for outsiders. This is not an impossible problem to solve, but it has to be, and should be, a public priority. The costs and benefits of taxpayer expenses should be crystal clear to not only bureaucrats, but to anyone who takes the time to look at those budgets.
Transparency and clarity should be important goals.
May 28, 2015
Marin Independent Journal

[Napa County] Grand jury wants more winery audits

Napa County’s policy of choosing 20 wineries at random each year to see if they are complying with county rules doesn’t go far enough for the grand jury.
Not when Napa County has about 350 wineries actively producing wine, raising the possibility that a winery could go a couple of decades without an audit. Not when winery compliance with county rules has become a hot-button issue in the community.
“The audits are limited in scope and all conditions specified by the use permits are not reviewed,” a new Napa County grand jury report stated. “This coupled with the relatively small number of wineries audited may not give a full picture of compliance.”
Napa County should audit each winery every five years or at intervals the county Planning Commission and Board of Supervisors deem appropriate, the grand jury recommended. In addition, the county should reveal the identities of wineries that fail to receive a clean audit.
Planning, Building and Environmental Services Director David Morrison said Tuesday that the county has yet to formulate its responses to these and other recommendations in the report.
The grand jury called its report “Are Napa County Wineries Following the Rules?”
Napa County’s annual winery audit looks at such issues as whether the selected wineries are complying with permitted wine production and visitation limits. It looks at whether wineries required to source 75 percent of their grapes from Napa County are doing so.
For the audits done for 2011 through 2013, 30 percent to 40 percent of the wineries each year failed to meet at least one use permit requirement, the grand jury report said.
The Board of Supervisors discussed code enforcement on March 3. It touched on the grand jury idea of identifying the winery audit scofflaws.
“How about we have a wall of shame?” Supervisor Mark Luce said at that meeting. “I think that’s what people really care about — their reputations.”
He suggested later that a wall of shame for winery audit violations could be posted on the Internet. But it was unclear at that meeting whether Luce’s idea will gain traction with his colleagues.
Napa Valley Vintners represents about 500 local vintners. Spokesman Rex Stults on Tuesday said the group holds compliance workshops for its members. About 1,000 people have attended over seven years.
Last summer’s wine audits saw a spike in infractions, some minor, Stults said. Eight of the 20 wineries had an infraction.
“The timing could not have been worse and folks have been latching onto that and are proclaiming the sky is falling,” Stults said. “Hopefully, there is not an overreaction in general.”
Stults didn’t address the grand jury’s recommendations because he had just seen them and Napa Valley Vintners has yet to take a position on them.
“Our constant position is all businesses – not just wineries – should be following all relevant laws and regulations,” he said.
Residents are discussing a growing wine industry and its impact on traffic, the environment and other quality-of-life issues, the grand jury report stated. The county should determine whether winery laws provide the framework needed to maintain a wine industry consistent with agricultural protection laws, it recommended.
Napa County is already addressing this issue to some extent. The Board of Supervisors held a March 10 growth summit and subsequently appointed an Agricultural Protection Advisory Committee to look at winery and farming issues.
The grand jury report noted the difficulties of determining how many wineries are located in the county. One complication is “virtual wineries” that use brick-and-mortar wineries to do their crushing and processing.
Napa County’s winery data base lists 467 wineries. A county report from March said there are 348 wineries actively producing wine and a Federal Alcohol, Trade and Tax Bureau report for 2014 said there are 603 wineries.
May 28, 2015
Napa Valley Register
By Barry Eberling

Report: Officials masked big pension hike

Blog note: The writer of this piece is the California columnist for the San Diego Union-Tribune. He references a recent Marin County Grand Jury report on public pensions to argue for reforms at the state level.

Pension debts are sky-high, but little interest at the Capitol

SACRAMENTO — “There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true,” wrote the 19th century Danish philosopher Soren Kierkegaard. It must be an enduring trait of mankind and especially of politicians, who often fool themselves (and the public) about major problems.
I’m referring to unfunded pension liabilities — the soaring amount of debt to pay for past pension promises to state and local public employees.
As Stanford University scholar David Crane wrote this week in the Capitol Weekly, “As the stock market reaches record levels, little is heard any more from public officials who used to blame market declines for rising pension costs.” Those pension costs keep rising — and keep sucking more funds out of classrooms and local government agencies even in good economic times. The main point in his article revolves around the words, “little is heard.”
In 1999, legislators passed SB 400, which retroactively increased pensions for the California Highway Patrol — and encouraged public-safety agencies across the state to follow. “Though that act amounted to the single greatest issuance of debt in state history, public officials chose an accounting method that supported a claim that the retroactive increases wouldn’t ‘cost a dime,’” he added.
How can state officials continue to use dubious accounting methods today, designed mainly to underplay the size of the pension debt?
A report released last month by the Marin County Civil Grand Jury provides a stark look at how such increases were quietly foisted on the public — and perhaps why the problem continues today. Many observers argue that what happened in that suburban Bay Area county was not an aberration. Simply put, Marin officials took extraordinary measures to hide what they were doing from the public, allegedly in violation of the state’s disclosure rules.
According to the report, the county’s governments increased pension benefits 38 times between 2001 and 2006. Each time, agencies were supposed to provide public notice about the proposed changes, obtain actuarial reports detailing the future costs of the benefit hikes, and detail the degree to which the increases will affect the funds’ financial conditions.
“The grand jury found that the public employers appear to have violated these requirements in a variety of ways — providing little, if any, notice to the citizens of Marin County that they would be responsible in the future for hundreds of millions of dollars in pension costs,” according to the report.
The hikes often were approved on the so-called “consent calendar” (by consent of council members without discussion) so that “even if members of the public were in attendance at the board or council meeting, they might not realize that a pension increase was being approved or not realize the financial impact thereof.”
Marin officials echoed the approach of state officials, who quietly passed that landmark 1999 legislation without a full public airing. In his 2010 testimony before the state Senate regarding a proposed pension-reform measure, Crane said CalPERS claimed at the time that “no increase over current employer contributions is needed for these benefit improvements.” Yet CalPERS recently boosted costs to local and state agencies by around 50 percent — and few legislators were concerned enough about the impact to seriously revisit pension reform — or look at ways to more thoroughly account for the level of debt today.
May 27, 2015
The San Diego Union-Tribune
By Steven Greenhut

[Marin County] Pension group fired up by grand jury report

Marin Citizens push for transparency after findings detail violations

A recent report from the Marin County civil grand jury serves as both redemption and motivation for a local group that has been advocating pension reform in Marin.
The report, which investigated the County of Marin, City of San Rafael, Novato Fire Protection District and the Southern Marin Fire Protection District, found that these employers granted no less than 38 pension enhancements from 2001 to 2006, each of which appears to have violated various elements of the California Government Code.
The Citizens for Sustainable Pension Plans (CSPP) responded strongly to the grand jury report.
“The report exposes the self-serving culture of staff who proposed unfunded retirement enhancements that benefited them and that were approved by compliant supervisors in the early 2000’s,” said CSPP member Dick Tait.
The grand jury report states, “One result of these pension enhancements is that they contributed to the increase of the unfunded pension liability of MCERA (Marin County Employees’ Retirement Association); this unfunded liability increased from a surplus of $26.5 million in 2000 to a deficit of $536.8 million in 2013.”
“The findings of this 2015 Grand Jury further emphasize the need for meaningful pension reform in 2016,” said CSPP member Jody Morales. “Previous grand jury reports have been routinely dismissed by Marin County supervisors, while officials continued to run up the tab for Marin’s taxpayers from a surplus of $26.5 million in 2000 to a deficit of $537 million in 2013. This was done without public notice and in violation of government codes. This should not go unaddressed.”
The group feels that the Marin County Board of Supervisors needs to get out of the way if pension reform is to take place.
“The County Board of Supervisors needs to recuse itself from evaluating the report and select an independent citizen committee to further evaluate the grand jury findings,” CSPP member Michael Lotito said. “In particular Supervisor [Steve] Kinsey must not in any way participate in any discussions about the report as he was a board member during the 2001-2006 time frame in question. On information and belief, Supervisor Kinsey may have benefited from the enhancements and was certainly a member of the Board when the actions in question took place, giving rise to an appearance, at least, of a conflict of interest.”
The report is viewed as a positive step forward. David Wren, another CSPP member, said, “The grand jury did a superior job of pointing out how even at the highest levels of county government a lack of transparency and poor judgment can cost taxpayers plenty. It truly underscores the need to investigate all government entities in Marin and also presents an important opportunity to potentially undue illegal contracts. If the grand jury report found that public employees were owed additional compensation due to violations, what would be the outcome? Would these employees just walk away and say ‘It’s OK, let’s fix it going forward?’”
CSPP member David Brown added, “The issue is all about disclosure and the public’s right to know. It is possible the public might have been fine with the enhancements but it never had a voice. The four entities mentioned in the report each need to retain an actuary to assess the financial impact of the questionable assessments. Grand juries in every county ought to perform the same analysis.”
In an email to Marinscope, CSPP wrote, “CSPP’s grievance is not with the rank and file employee of the county. It is with the exorbitant salaries, pensions and benefits being paid to the top few percent of county workers, referred to in the press as the ‘top brass.’ This abuse of the system has led to layoffs of frontline workers and cuts in services to the citizens of Marin.
Vital departments on which many of our residents rely are being shut down due to the shift of funds needed to pay overly generous pensions and post retirement benefits.”
CSPP is surveying more than 130 Marin political leaders and appointees, being asked to respond to the grand jury report, entitled “Pension Enhancements: A Case of Government Code Violations and A Lack of Transparency.”
May 27, 2015
Marinscope Community Newspapers
By Chris Rooney, Marinscope contributor