Sunday, January 31, 2010

An introduction to the Lake County Grand Jury

Written by Fred Christensen
Sunday, 31 January 2010
Editor's note: Fred Christensen is foreperson of the 2009-10 Lake County Grand Jury. He compiled and wrote the following article – with thanks to present and past grand jurors for their help – to explain and describe the functions of the grand jury.

LAKE COUNTY – The institution of the grand jury is of ancient origin. Its use as an instrument of government predates its introduction into our country during colonial times. It has been continued and used throughout American history.

As constituted today, the Grand Jury is a part of the judicial branch of government – “an arm of the court.” It does not have the functions of either the legislative or executive branches, and it is not a police agency.

Additionally, it does not mandate policy change. It is an examining and investigative body that makes recommendations to improve systems, procedures and methods of operations in designated local government.

In Lake County, the grand jury generally performs only civil functions.


The grand jury is composed of 19 men and women of various backgrounds chosen from throughout Lake County.

The presiding Lake County Superior Court judge appoints a foreperson who presides at all full jury proceedings and is responsible for directing the business of the grand jury.

Most grand jury work is done by committees, whose focus areas usually include environment, juvenile justice, social services, health administration, criminal justice, public works, special districts and public schools.

The grand jury and its committee meet several times a month. They meet with county and city officials, visit county facilities, and conduct independent research on matters of interest or concern.

The committees report to the full grand jury and conclusions are reached after discussion and study of the issues.

The grand jury may seek advice or request the services of the county counsel, district attorney, presiding judge of the superior court or state attorney general.

The grand jury has a variety of functions and responsibilities.

The Lake County Grand Jury's watchdog responsibilities include its major function, which is to examine county and city government and special districts to ensure that their duties are lawfully carried out.

The grand jury reviews and evaluates procedures, methods and systems utilized by these entities to determine whether more efficient and economical programs may be employed.

In addition, the grand jury is authorized to:


Inspect and audit books, records and financial expenditures to ensure that public funds are properly accounted for and legally spent;

Inspect books and records of Lake County's special districts;

Examine the books and records of any nonprofit organization receiving county or city funds;

Inquire into the conditions of jail and detention facilities;

Inquire into any charges of willful misconduct in an office by public officials or employee.

Another of the grand jury's functions includes responding to citizens' complaints.

The grand jury receives letters from citizens alleging misconduct by officials, suspicions of misconduct or governmental inefficiencies. Anyone may ask the grand jury to conduct an investigation. All complaints are confidential.

Generally, the grand jury limits investigations to the operations of governmental agencies, charges of wrongdoing within public agencies or the performance of unlawful acts by public officials. The grand jury cannot investigate disputes between private parties.

The juror selection process

The court solicits applicants for the grand jury by advertising in local news publications. Applications may be obtained by mailing a letter with a self-addressed, stamped envelope to the Lake County Grand Jury coordinator, 255 N. Forbes St., Fourth Floor, Lakeport, CA 95453. Applications also are available at each Lake County Superior Court Clerk's Office, located at 255 N. Forbes St. in Lakeport or at 7000 A South Center Drive in Clearlake.

Once applications have been screened and approved, they are randomly selected to be grand jury members.

Prospective grand jurors must possess the following qualifications, according to Penal Code 893:


Be a citizen of the United States who is 18 years of age or older, who shall have been a resident of the state and the county for one year immediately before being selected.

Be in possession of his or her natural faculties, of ordinary intelligence, sound judgment and fair character.

Possess sufficient knowledge of the English language.

A person is not legally qualified to serve if any of the following apply if they:


Are serving as a trial juror in any court in the state.

Have been discharged as a grand juror in any court in the state within one year.

Have has been convicted of malfeasance in office or any felony or other high crime.

Are serving as an elected public officer.

Desirable qualification for a grand juror include the following:


Have the time to make the necessary commitment. It is not uncommon to serve 10 to 15 hours a week or more.

Be open-minded with concern for the positions and views of others.

Have the ability to work with others.

Have an interest in community affairs.

Possess investigative skills and an ability to write reports.

Have a general knowledge of the functions, authorities, and responsibilities of county and city government, and other civil entities.

Final report

At the end of its term, the grand jury issues a final report, including reports released during the year, documenting its investigations and recommendations. Copies of the final report are distributed to public officials, libraries, the news media, any interested parties and any entity that is the subject of one of the reports.

According to law, the elected county officers must respond within 60 days following the release of the final report.

The Lake County Board of Supervisors and other public agency governing boards must respond within 90 days.

The grand jury's final report will respond to all citizens submitting complaints. The citizen may have no further acknowledgment other than that their complaint was received.

Complaint forms may be requested from the Lake County Grand Jury, P.O. Box 1078, Kelseyville, CA 95451, telephone 707-279-8619; the complaint form, along with other information about the grand jury, also is available online at .

Follow Lake County News on Twitter at and on Facebook at .

Monday, January 18, 2010

Monterey County officials defend health care effort

Officials respond to grand jury criticism
Herald Salinas Bureau
Updated: 01/18/2010 08:42:30 AM PST

A lack of progress on a year-old effort to better coordinate Monterey County's health care system is a result of a rapidly changing industry and the difficulty of putting in place new electronic systems, the top administrators for the county Health Department and county hospital said.

Their comments came in the wake of last week's critical grand jury report that found a lack of cooperation and accountability between the Heath Department and Natividad Medical Center.

County health officials acknowledged the integration effort had failed to meet previously set deadlines and timelines for progress on six key improvement initiatives aimed at improving coordination between the department and Natividad.

But both Health Department director Len Foster and Natividad CEO Harry Weis said it wasn't for lack of trying, and they said both organizations are still committed to working together.

Both men said the demands of adjusting to a transforming health care landscape at the state and national level, as well as the challenges of installing new information technology systems that are at the core of many of the initiatives, had stunted progress.

At the same time, the Board of Supervisors has already decided to step in to provide closer oversight for the fledgling effort by ordering quarterly reports to the Health and Human Services committee headed by Supervisors Jane Parker and Simon Salinas.

Last fall, Parker had expressed frustration at the lack of progress on the improvement initiatives after a report to the board from a "core team" of county health administrators. She pointed out the plethora of missed deadlines and noted that the report was not only late but "it was almost like it had been copied" from an earlier report delivered several months before.

'Very little progress'

"It felt like very little progress had been made," Parker said, while noting improvement in the coordination of care for pregnant and postpartum women. "That concerned me because that integration and coordination of health care services is fundamentally important to improving the county's system. There has been some progress made but it hasn't been enough."

Hospital and Health Department officials are expected to deliver a report on the initiatives at the next Health and Human Services committee meeting Jan. 27.

The initiatives, involving improved continuum of care, sharing of patient information, and coordination of management between the county's separate health care organizations, were adopted as a kind of alternative to a more sweeping merger of the Health Department and county hospital under a consolidated Health Services Agency, which would have become the county's largest department.

That merger was a key part of a long-range strategic plan for Natividad developed by its consultant, Huron Consulting subsidiary Wellspring Partners. But the proposal drew heavy opposition from scores of Health Department workers concerned about the loss of autonomy and the impact on funding for its operations, especially its federally qualified health clinics.

Instead of the merger, the board agreed more than a year ago to allow local health officials to work on the initiatives they had agreed were essential to a streamlined health care system, and assigned the core team including Foster, Weis, county Clinical Services director Dr. Julie Edgcomb, and assistant hospital administrator Carol Adams, to oversee the process.

Grand jury critical

In its report, the grand jury found that Health Department and hospital leadership had "failed to develop a common vision" for an integrated county health care system, that progress had been slow and team cooperation was "sporadic," and that the two organizations "have not demonstrated their commitment" to implementing the integration.

As a result, nearly all deadlines were missed and the various timelines changed with little accountability.

"As yet," the report said, "little (integration) has materialized."

Foster, who is leaving at the end of March, ripped the grand jury's report for failing to recognize the efforts that the Health Department contributed to the process, and pointed out that it was the hospital's struggles to implement new information technology systems that delayed progress.

"It's not because of any lack of participation or willingness to act on the part of the Health Department," Foster said. "Most of the progress has been pushed by the Health Department. I'm not going to blame Natividad; I think their plate is full. It leads me to believe the grand jury didn't understand what they were looking at.

"These improvement initiatives are important and we enthusiastically support them. I just wish we could see more progress."

Weis, who left Huron to take over as the hospital's top administrator last year, said he appreciated the grand jury's interest and said he believes the public will ultimately be "very excited" when a full report of the progress on integration made thus far is made available. He said a summary response involving such a complex issue is not the best way to go.

He acknowledged that responding to changes in the health care industry, including those in progress and expected such as national health care reform, and difficulties with information technology, had forced hospital leadership to set priorities that helped delay progress on the initiatives. He said some of the initiatives actually could be altered by the changing landscape of health care and that taking a cautious approach is the right way to go.

"We're not being harmed by trying to do this right the first time," Weis said. "Our journey has a considerable ways to go. We're very excited about the future."

While acknowledging the complexity of integrating differing electronic records systems had helped stymie progress, the grand jury suggested simply that more money and attention be given to those efforts so the other initiatives could proceed. More important, the grand jury recommended that more realistic, achievable deadlines be set, that a better integration plan be adopted and that "result-driven, focused work groups" be created for each initiative.

Possible board action

Parker said she hopes the Health and Human Services committee process will create more accountability, but if that doesn't work, she said the board may have to consider what kind of alternative organizational model may be most effective at getting the two organizations to work together.

She said the board has "taken a step back" on the Health Services Agency merger, but is still "moving in that direction" while trying to determine how best to shape such an agency, based on what's best for patients as well as the various health providers involved.

Foster and Weis said a formal response to the grand jury report will be formulated and sent to the County Administrative Officer.

Jim Johnson can be reached at 753-6753 or

Grand jury calls for broader hotel tax in Tulare County

A hotel occupancy tax that's led to confusion for some bed-and-breakfast owners — and, in at least two instances, forfeited tax revenue for Tulare County — should be made more clear and more broad, according to a report issued last week by the Tulare County grand jury.

The tax should cover nearly any short-term rental within the county's jurisdiction, the report said. The recommendation, if followed by the county, would require private homes and vacation cabins rented occasionally for short terms to fall under the tax, which adds 10 percent to hotel bills throughout the unincorporated areas of the county.

The transient occupancy tax, or TOT, has brought between $900,000 and $1.2 million to the county annually during the last five years.

Currently, only 59 rental properties are subject to the tax, which was adopted in 1964 and has been amended several times, most recently in 2008. The properties include hotels, inns, tourist homes, motels, lodging houses, dormitories, mobile homes and public or private clubs that are rented out for 30 consecutive days or less to the same user.

Not subject to the tax, according to the current ordinance, are private homes, vacation cabins or similar facilities rented by those "not regularly engaged in the business of renting" and who rent only "occasionally and incidentally" to their own use of a structure.

In its report, the grand jury called such wording "ambiguous," saying that it failed to define clearly what types of rental accommodations are subject to the tax and what constituted a rental period.

That gray area, according to the panel, resulted last year in the successful appeal, before the Board of Supervisors, of the tax bills of two vacation-lodging operators.

The appeals forced the county to forfeit $12,000, according to the Tax Collector's Office.

On top of that, the grand jury said the county has been unable to collect transient taxes for years on "numerous short-term rentals" because of the ordinance's vague wording and miscommunication between rental owners and the county tax collector.

#A revised ordinance that would impose the tax on "any rental that is rented less than 30 consecutive days to the same renter."

#Clarification of what constitutes a full day of rental and what constitutes partial-day use.

#Registration and inspection of all properties subject to the transient tax. (According to the county, the current budget does not allow for general site inspections by staff. In August, the county hired an investigator to locate rental owners who were not complying with the ordinance, a move that resulted in the recovery of more than $34,000 in fees and penalties, according to the Tax Collector's Office.)

Revision expected before April

It was not clear last week how many additional rental accommodations in Tulare County would be subject to the tax if the grand jury's recommendations were followed.

The Tax Collector's Office, collaborating with the county counsel, is already working on a revision of the ordinance, which it plans to present to the Board of Supervisors within the next three months, according to Rita Woodard, the Tulare County tax collector.

In an e-mail Thursday, Woodard did not say how the revision would incorporate the grand jury's recommendations, if at all.

Santa Clara Battle for police endorsement

By Tracey Kaplan
Posted: 01/18/2010 12:00:00 AM PST
Updated: 01/18/2010 12:21:52 AM PST

Until now, the race for Santa Clara County district attorney was shaping up as a referendum on incumbent Dolores Carr's character amid reports of ethical lapses.

But now a policy dispute has erupted online that could determine which candidate, Carr or high-profile prosecutor Jeff Rosen, wins what may be the most important endorsement in the race — from the powerful San Jose police union.

The dispute between Carr and Rosen is over how much information the public should be privy to when suspects die at the hands of police.

Early online reactions by officers to the candidates' positions seem to indicate they are not happy with Rosen's support for a slightly more open, public process. But community groups also reject Rosen's position, saying it falls far short of the transparency they're seeking.

The debate comes at a time when a series of Mercury News articles have heightened scrutiny over the department's use of force and arrest practices in immigrant communities. It also follows the controversy over Daniel Pham, a knife-wielding, mentally ill man shot to death last year by two officers responding to reports he had attacked a family member.

The union's board is poised to make the highly sought endorsement next month, after declining Carr's request to support her last year before Rosen officially entered the race.

"Whoever gets the San Jose police endorsement can send out letters saying they have that support," said political consultant Rich Robinson. "That third-party validation is pretty heady stuff in this race."

Police in Santa Clara and Los Gatos already have come out in support of Rosen — in a rare demonstration of opposition to a sitting district attorney, despite the fact that Carr's stepson is a police officer and her husband just retired from the San Jose force. The deputy sheriff's union, also influential, has yet to make its endorsement. But with more than half of the county's voters living in San Jose, and its police department being the largest in the county, its endorsement traditionally carries the most weight in any race for the district attorney post. The candidates' remarks and officers' comments are posted on, a site coordinated by the San Jose Police Officers' Association.

Different stances

In online statements, both Carr and Rosen say they oppose open grand jury investigations, turning aside calls from some community critics to make them public. Carr's predecessor, George Kennedy, opened grand juries on at least two occasions. However, Carr and Rosen both contend that open grand juries politicize the judicial process and sacrifice the privacy of people who haven't been charged with crimes.

But while Carr defends the practice of using closed grand juries, Rosen rejects both open and closed panels.

Carr recently declined to open the grand jury in the Pham case or to explain why the panel ultimately declined to indict the officers.

"The way we have reviewed these cases, without opening the grand jury sessions to the media and the public, has served our community well for decades," Carr wrote. "I will continue to do what I believe is right even in the face of significant media pressure."

Other models

In contrast, Rosen says that even though he believes lethal force is justified in the "vast majority" of cases, closed grand juries leave the public with too many unanswered questions and increase mistrust of police. A Mercury News analysis found that in 2008, San Jose police received 117 use-of-force complaints and sustained none.

Rosen says Santa Clara County is the only large county in the state where criminal grand juries routinely handle lethal force cases. He advocates bringing police and community groups together to explore other models, that include allowing the district attorney to decide whether to bring charges and explain the rationale in a public report — as is done in Los Angeles, Sacramento and other counties — and having the coroner hold open inquests, like in Contra Costa County.

"Perhaps in cases where a decision not to prosecute is made, the DA's office will issue a thorough report, with exhibits and attachments, that answers the public's legitimate desire to know what happened and why," Rosen wrote.

In Alameda County, District Attorney Nancy E. O'Malley said the buck stops with her. "We conduct an independent investigation upon which the DA makes the determination," she said in an e-mail. In San Francisco, the district attorney also makes the decision.

Rosen's position angers some San Jose police officers, judging by some of the comments on the Web site. One brands it "double talk," and another a "frightening viewpoint." One anonymous commentator on the Web site expressed concern that if the decision were taken away from the grand jury, police critics would pressure the district attorney to indict every officer who responded with lethal force. But some legal experts say district attorneys under the current system can easily manipulate the grand jury to do their bidding.

Rosen's proposal also falls far short of the open grand jury community activists are still seeking.

"I don't think Rosen is offering a legitimate alternative," said community activist Raj Jayadev, a leader of a multiethnic coalition of more than 15 community and service-based organizations concerned about what it says is the use of excessive force by police. "Neither one of these candidates is anxious to say anything that riles law enforcement or really gets the public any answers."

Contact Tracey Kaplan at 408-278-3482.

Sacramento Grand Jury Report: City Misused $21M

Grand Jury Report: City Misused $21M
Sacramento City Leaders Concerned By Report

POSTED: 11:19 pm PST January 12, 2010
UPDATED: 11:40 pm PST January 12, 2010

SACRAMENTO, Calif. -- Sacramento city leaders said they are concerned about a recent grand jury report.

Sacramento city council members Steve Cohn and Lauren Hammond said they are taking a close look into the alleged misuse of utilities.

A grand jury investigation claimed the department misused $21 million since 2003 to purchase land, maintain and repair property in Old Sacramento, and even fix drainage at Arco Arena.

City leaders said the entire report may not be in black and white.

"It may sound black and white but it's not. When you use utility funds after a city event, does it count under solid waste utility or does it not count," said City Council Steve Cohn. The city has 90 days to respond to the grand jury report.

Saturday, January 16, 2010

Water tops Monterey County grand jury's list of complaints; lack of cooperation to blame

Water woes include lack of teamwork
Herald Staff Writers
Updated: 01/15/2010 08:40:19 AM PST

A lack of cooperation among agencies and local interest groups to seek sound solutions is to blame for Monterey County's long-standing water problems, said the final report issued Thursday by the 2009 civil grand jury.

"Cooperation is crucial to the success of the multiple, integrated projects required to fix the problems," the report stated. "Monterey County is faced with overpumping on the Carmel River, seawater intrusion, water contamination and severe water shortages," the report stated, adding that old and leaky distribution systems make the problem worse.

The grand jury report takes issue with other institutions and agencies in the county, including state prisons in Soledad, the county's Emergency Medical Services Agency, Natividad Medical Center, the county Health Department, a countywide anti-terrorism group, the city of Pacific Grove and Chualar schools.

The institutions and agencies mentioned are required to respond to the report, but the grand jury has no real power to enforce its recommendations.

Water was a key topic in Thursday's report. The issuance of a cease-and-desist order to California American Water in October by the state Water Resources Control Board, calling for pumping reductions in the Carmel River water supply, heightens the need for implementation of the grand jury's recommendations, the report said. Cal Am is the Peninsula's water purveyor and the river is its primary source.

The grand jury said seawater desalination is essential to making more water available in the county.

Three proposals that involve desalination were evaluated by the grand jury.

The Monterey Regional Water Supply Program is more cost-effective and environmentally responsible than the other two plans; a large desalination plant in Moss Landing and a desalination facility in north Marina, the report said.

The regional project, which would include a desalination plant, recycled water, storage of Carmel River water during the winter and other sources, appears to have the most support among local agencies, the grand jury found.

Cal Am, the Marina Coast Water District and the county Water Resources Agency are negotiating a potential water purchasing agreement under the regional project.

Soledad prisons

For the second year in a row, the grand jury expressed concerns regarding conditions at the state prisons in Soledad. The jury cited overcrowding at the Correctional Training Facility and a lack of vocational and educational programs at Salinas Valley State Prison.

Lynda Dunn, director of the Monterey County Office for Employment Training, said Thursday she has been told 60 to 70 teachers are being laid off at the two Soledad prisons.

The report said visitor conditions are an issue at Salinas Valley, where families are forced to park unsafely on the shoulder of the road overnight to ensure access the next morning.

The jury said both prisons are secure but illegal possession of cell phones by inmates is a continuing problem that could lead to escapes.

Emergency medical services

The jury issued a scathing judgment of county's Emergency Medical Services Agency, saying it was failing in its taxpayer-funded mission to provide training and equipment to the county's paramedics and first responders. The report said the agency is spending a fraction of the money it has collected since a 1988 vote approved a $12-per-parcel assessment for its services.

Of the $1.6 million the agency took in during fiscal year 2007-08, the report states, it spent only $625,000 in training and equipment. It carried over more than $1.8 million to 2008-09.

The jury said the lack of training is straining the agency's relations with emergency responders and educators at Monterey Peninsula College. It found a lack of regard and accountability between the agency and the EMS Council, a group of emergency services representatives and community members charged with oversight.

The jury said the Board of Supervisors was aware of the problems but had not made it a priority to fix them.

The report recommends that the county improve emergency care by putting in place a fire-based paramedic program and establishing a trauma center at Natividad.

Hospital administrators have resisted the idea as too costly. But the jury said the numbers of patients being air-lifted to San Francisco Bay Area hospitals well exceeds the number needed to support a trauma center under state guidelines.

Health care integration

The jury found fault with the fledgling effort to integrate Natividad Medical Center and the county Health Department.

The jury said progress has been slow and cooperation "sporadic" among members of a team coordinating six core integration initiatives that include technological integration of patient information and consolidating management of the county's ambulatory clinics.

The initiatives were developed as an alternative to the proposed merger of the two entities into a Health Services Agency.

The grand jury found the core team missed deadlines on the initiatives with little accountability. The jury recommended the county spend more on technology to integrate patient records so the rest of the initiatives can proceed and that the team set and meet realistic deadlines.

Homeland security

The grand jury called for greater transparency from the local Anti-Terrorism Body, a group funded by the Department of Homeland Security to help plan for and purchase equipment for first responders.

The grand jury found that the group "does not operate transparently in the spirit of California's open-meeting laws."

The report said state guidelines call for the group to be comprised of a public health officer, city and county fire chiefs, a city police chief and the county sheriff.

Its meetings are closed to the public, and though some subcommittee meetings are open, their agendas aren't posted in advance and public opinion is not invited, which the grand jury concluded violates the Brown Act's open-meeting provisions.

After studying whether security might be a concern in opening the meetings, the group decided that the nature of the anti-terrorism body's discussions did not warrant an exemption from open-meeting laws.

Pacific Grove fees

Pacific Grove drew criticism from the county grand jury for its plan check fees, which it said are sharply higher than neighboring cities.

The city should "demonstrate that the building and plan check fees are justified" in keeping with the state attorney general's opinion that fees should not exceed the cost of providing service.

For a 1,400 square-foot home, Pacific Grove's fees are $4,325 for plan checks and $5,766 for permits, a total of $10,091, the grand jury said.

Pacific Grove charges 31 percent more than Salinas, 36 percent more than the city of Monterey and 50 percent more than Monterey County, the report said. The figures were compiled in June.

The report said the grand jury "repeatedly asked for a cost justification," and said the city staff would only say that fees "generate enough revenue to pay for only about two-thirds of the cost of providing services."

Chualar schools

After investigating the hiring and layoff practices of the classified employees of the Chualar Union Elementary School District, the grand jury concluded that the district did not maintain a proper re-hire list.

To remedy the situation, the grand jury told the district to update and maintain accurate records, to comply with the state education code and its own labor agreements, and to rehire improperly laid off employees.

Staff writers Claudia Meléndez Salinas, Julie Reynolds and Lane Wallace contributed to this report.

Pacific Grove responds to grand jury over building permit fees

Acting deputy city manager responds to grand jury
The Monterey County Herald
Herald staff report
Updated: 01/16/2010 01:30:04 AM PST

A Pacific Grove official is disputing a county grand jury statement that the city has not provided justification for its building permit fees, which are higher than those of neighboring cities.

"I provided lots of data" to the jury, Jim Becklenberg, acting deputy city manager, said Friday.

While Pacific Grove's fees range from 31 percent to 61 percent higher than nearby cities, they only account for two thirds of the cost of providing service, Becklenberg said.

"We do have more intense involvement by planners" than some other towns, Becklenberg said.

The civil grand jury report said Pacific Grove has fees "not common to other jurisdictions because of the large number of coastal archaeological sites and historic properties."

The City Council is required to respond to the grand jury, but the jury has no enforcement powers.

Saturday, January 9, 2010

Grand jury questions Sacramento’s use of utility funds

By Robert Lewis and Loretta Kalb
Published: Thursday, Jan. 7, 2010 - 12:00 am | Page 2B
Last Modified: Thursday, Jan. 7, 2010 - 2:14 pm

Sacramento city officials ignored information showing the city may have improperly diverted more than $21 million between 1996 and 2008 in water, sewer and other utility funds to cover general government expenses, the Sacramento County grand jury has found.

On Wednesday, the grand jury released the findings of its investigation into the city's compliance with Proposition 218, a 1996 voter-approved initiative that barred local governments from shifting the cost of general government operations to utility ratepayers.

"The grand jury found that, at best, the city has not done enough to determine whether the city is violating the law and, at worst, has shifted millions of dollars in costs from the general fund to utility enterprise funds," according to the report.

Marty Hanneman, Department of Utilities director, said officials have been working with the city attorney since 2007 to determine if the city has been violating Proposition 218.

"There's a lot of things that aren't black and white and clear here," Hanneman said, adding that the city has discontinued several practices noted in the grand jury's report.

City Attorney Eileen Teichert said she could not discuss legal advice given staff members. But she said Proposition 218 issues arise often.

"We've had a lot of Prop. 218 issues brought to our attention, particularly with utility issues," she said.

Utilities are supposed to be self-supporting funds to pay for water and solid waste removal. If officials divert money, bills for ratepayers might go up to offset the loss of funds and utilities' aging infrastructure might go unrepaired.

The report did not say whether either of those happened in the city.

In 2008, the Utilities Department brought in an outside consultant to review the city's compliance with Proposition 218. The consultant's draft report, completed in May of that year, found the city may have inappropriately diverted more than $21 million from the utilities fund to pay for other city expenses.

Those expenses included:

• $2 million annually in subsidized water rates for city departments.

• $2 million to buy property for the proposed Natomas Auto Mall.

• A $1 million annual allocation to help developers with utility upgrades on downtown projects.

The consultant didn't say these costs definitely violated Proposition 218 but that they should prompt legal review.

City officials tried to suppress the consultant's report, the grand jury alleged.

"Sworn testimony from multiple sources reveals that the city manager and his subordinates have suppressed a 44-page report that analyzed the potential costs of Proposition 218 noncompliance," the grand jury said.

While the report doesn't name the officials, Ray Kerridge was city manager at the time and Hanneman the assistant city manager in charge of utilities.

Kerridge did not return calls for comment Wednesday afternoon. Hanneman said officials didn't try to suppress the consultant's report.

"Before we bring anything forward to the City Council, we want to make sure it's accurate," he said.

The consultant who wrote the draft as part of a $25,000 contract was terminated before producing a final report. Hanneman said the city ended the contract because "we were running out of money."

"We felt that we didn't need to go further," he said.

The City Council got copies of the draft report in July 2008 but never discussed the issues publicly, according to the grand jury. The grand jury did not say how the report came to the council's attention.

The city did end a number of the practices the consultant found might be violations of Proposition 218, Hanneman added. For example, the city has stopped allocating money from utility funds for developers and is increasing water rates paid by the parks department to the full amount over 15 years, he said.

Councilwoman Sandy Sheedy said she did not remember seeing the consultant's 2008 report.

"We are really going to have some discussion on this, some briefings. And we're going to have it all done in public," Sheedy said.

Mayor Kevin Johnson, in a prepared statement, said he "will be following up with staff to see how we can not only resolve these issues but prevent them."

Other cities have been sued for violating Proposition 218, and the Sacramento County Taxpayers' League will be looking at the allegations, said Bob Blymyer, the group's executive director.

The grand jury, among its recommendations, urged the city to release the consultant's report, hire outside counsel and explain why it failed to act.

The city is to respond in writing by April 6.

Wednesday, January 6, 2010

Victorville asks San Bernardino County Grand Jury to investigate its books

VICTORVILLE • Over protest from Mayor Pro Tem Mike Rothschild, the council voted to move forward with an investigation into city finances — with the San Bernardino County grand jury at the helm.

Councilman Ryan McEachron first requested a forensic audit to specifically look for evidence of any fraudulent activities after a year in office hearing continued concerns from residents that malfeasance had helped land Victorville in the financial hole it’s currently in.

But since calling for the investigation in December, McEachron said it’s been suggested to him that if the city hires its own auditing firm, the public’s perception of the results “might be tainted in some way.”

And so he told the council Tuesday night that he had asked the grand jury — which is already investigating a number of city practices — if they’d be willing to hire a firm as the only way to guarantee the audit is viewed as completely independent and objective.

“I think it’s a waste of money,” Rothschild said, before casting his vote against the audit. He said he thinks it adds “no value to this city.”

For the full story, read Wednesday's Daily Press. To subscribe to the Daily Press in print or online, call (760) 241-7755 or click here.

Brooke Edwards may be reached at (760) 955-5358 or at