Monday, June 20, 2016

Santa Clara [County]: Civil grand jury calls for audit related to Levi's Stadium

SANTA CLARA -- The civil grand jury Monday released findings from its four-month investigation into the finances of Levi's Stadium, capping a volatile year for Santa Clara which saw the sudden resignation of one mayor and accusations of backroom dealings from the next.
But despite the anticipation surrounding the investigation, the 13-page report ultimately could not verify claims that taxpayer dollars are being used to support the multi-million dollar stadium. That accusation, which led to the civil grand jury probe, is a violation of the 2010 voter-approved Measure J, which promised Santa Clara residents that no general fund dollars would pay for the venue's operations.
"It is unclear whether unreimbursed city general funds are used for stadium operations and maintenance in violation of Measure J," the jurors wrote.
When city employees, including police and fire officials, spend time setting up for NFL events or providing security during games, they're required to report those hours separately on their time sheets so the city can bill the San Francisco 49ers for the event. But there's no way to tell if an employee fails to accurately report hours worked for stadium events -- whether deliberate or accidental.
The grand jury recommended the city order an independent audit to confirm if general funds have been used to subsidize Levi's Stadium. The audit, which was already requested by Mayor Lisa Gillmor, should outline how city employees get reimbursed for time spent on stadium business, the report said.
Gillmor, who was appointed mayor in February after former Mayor Jamie Matthews suddenly quit, has long suspected the city is violating Measure J and accused officials of engaging in backroom deals. Gillmor went public with her suspicions last month after nearly a dozen employees -- including police officers -- privately told her they worked during Niners games or non-NFL events at the stadium, but the hours were paid with general fund dollars without reimbursement.
The civil grand jury interviewed eleven people and reported many employees said they "were told by superiors to improperly charge Stadium activities to the city."
But, the jurors concluded, there was no evidence to corroborate this information. When asked how the general fund is protected, many city employees consistently replied, "I don't know," the report said. The jury said an audit will shed light on this process.
"What disturbs me is they were told this was happening, and the audit is more important than ever now," Gillmor said in an interview Monday. "The grand jury made it clear that we have to make major changes to fulfill our promise to the voters and protect our tax dollars. I vow that we are going to fix this."
Gillmor plans to ask the City Council to extend the audit's time frame to when Measure J passed in 2010 -- one of the jury's recommendations -- instead of April 2014 when the first NFL season kicked off. She'll also ask the city to establish a whistle-blower protection program and wants the city manager and city attorney to report what steps are being taken to comply with Measure J.
The Niners pay $170,000 for public safety costs per game, according to the team's lease. When costs exceed that amount, the 49ers pay the difference upfront but get reimbursed by the Stadium Authority later. The base rate grows 4 percent a year, but public safety costs have exceeded that amount every year. The city's fire and police chiefs decide how many people to assign to each game.
But since public safety costs have exceeded the threshold every year since Levi's Stadium opened, the jurors recommended invoking an option in the team's lease that allows the city to renegotiate public safety costs.
The jurors also called for reassigning the role of city finance Director Gary Ameling as the Stadium Authority's treasurer and auditor to avoid the appearance of any "conflict of interest."
The Stadium Authority, which includes the mayor and six City Council members, was formed to oversee the construction of Levi's Stadium, be its landlord and oversee other business.
June 20, 2016
San Jose Mercury News
By Ramona Giwargis

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