HomeMy WebLinkAbout07.a.4) Review draft response to Grand Jury Report No. 11057a. y
Central Contra Costa Sanitary District
August 4, 2011
TO: HONORABLE MEMBERS OF THE BOARD
FROM: ELAINE R. BOEHME, SECRETARY OF THE DISTRICT''
CC: JIM KELLY, GENERAL MANAGER
RANDY MUSGRAVES, DIRECTOR(OF ADMINISTRATION
MICHAEL SCAHILL, COMMUNICATION SERVICES MANAGER
SUBJECT: AGENDA ITEM 7.a.4) - Review draft response to Grand Jury Report
No. 1105 — "Ethics and Transparency Issues in Contra Costa County"
Contra Costa County Grand Jury Report No. 1105 entitled "Ethics and Transparency
Issues in Contra Costa County" was received by the District on June 1, 2011. A copy is
attached.
The District's draft response, due August 24, 2011, is also attached. The Board is being
asked to review the draft response and provide direction to staff, if any. The response
will be sent to the Grand Jury after Board review and comment.
Attachments:
1) Grand Jury Report No. 1105
2) Draft response
N:\ADMINSUP\ADMIN \DIST- SEC \Grand Jury\2011 \Memo to Board enc. GJ Rept. 1105 and draft response.doc
Grand Jury
May 26, 2011
James M. Kelly, General Manager
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Dear James M. Kelly, General Manager:
Contrc,
Costa
County
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,s,a- c6 "u "HT4
725 Court StreE
Aftac�i�nJenf 1. Box 91
, CA 94553 -009
I
JON 0 12011
BY
Attached is a copy of Grand Jury Report No. 1105, "Ethics and Transparency Issues in Contra
Costa County" by the 2010 -2011 Contra Costa Grand Jury.
In accordance with California Penal Code Section 933.05, this report is being provided to you at
least two working days before it is released publicly.
Section 9335(4) of the California Government Code requires that (the responding person or
entity shall repgrt one of the, following.actions) in.respect t9 . each findin .
(1) The respondent agrees with the finding.
(2) The respondent disagrees with the finding.
(3) The respondent partially disagrees with the finding.
In the cases of both (2) and (3) above, the respondent shall specify the portion of the finding that
is disputed, and shall include an explanation of the reasons therefor.
In addition, Section 933.05(b) requires that the respondent reply to each recommendation by
stati.n_? one of the foPovAng -actions:
1. The recommendation has been implemented, with a summary describing the
implemented action.
2. The recommendation has not yet been implemented, but will be implemented in the
future, with a time frame for implementation.
3. The recommendation requires further analysis. This response should explain the scope
and parameters of the analysis or study, and a time frame for the matter to be prepared for
discussion. This time frame shall not exceed_six months from the date of the publication
of the Grand Jury Report.
Central Contra Costa Sanitary District
May 26, 2011
Page 2
4. The recommendation will not be implemented because it is not warranted or is not
reasonable, with an explanation thereof.
Please be reminded that Section 933.05 specifies that no officer, agency, department or
governing body of a public agency shall disclose any contents of the report prior to its public
release. Please insure that your response to the above noted Grand Jury report includes the
mandated items. We will expect your response, using the form described by the quoted
Government Code, no later than August 24, 2011.
It would be greatly appreciated if you could send this response in hard copy to the Grand Jury as
well as by e -mail to icuev contracosta.courts.ca. ov (Word document).
Sincerely,
• / r
LINDA L. CHEW, Foreperson
2010 -2011 Contra Costa County Civil Grand Jury
A REPORT BY
THE 2010 -2011 CONTRA COSTA COUNTY GRAND JURY
725 Court Street
Martinez, California 94553
REPORT 1105
Ethics and Transparency Issues in Contra Costa County
APPROVED BY THE GRAND JURY:
Date: MAY 4, 2011
ACCEPTED FOR FILING:
Date:
LINDA L. CHEW
GRAND JURY FOREPERSON
I %,
HN LAETTNER
JUDGE OF THE SUPERIOR COURT
Contact: Linda Chew
Foreperson
(925) -567 -9638
Contra Costa County Grand Jury Report 1105
ETHICS AND TRANSPARENCY ISSUES IN CONTRA COSTA COUNTY
TO: Contra Costa County Board of Supervisors
Contra Costa Local Agency Formation Commission
Cities in Contra Costa County
Independent Special Districts in Contra Costa County
SUMMARY
Ethical behavior and transparency (openness) by public officials are essential to good
government. Despite the fact that County officials receive ethics training, the Grand Jury has
found instances of ethical breaches.
In some cases, there have been public accusations of ethical misbehavior and/or
misrepresentation, charges of nepotism and cronyism, and allegations of long -term County
mismanagement of a mitigation fund.
The Grand Jury believes that greater effort must be made to improve openness and
accountability, to display more sensitivity to ethical considerations, and to be aware of any
appearances of impropriety to the public.
BACKGROUND
Effective January 1, 2006, AB 1234 (Government Code Sections 53232, et seq.) required that
local officials who receive compensation, salary, stipends, or expense reimbursements must
receive training in public service ethics laws and principles. The requirement applies not only to
the governing body of a local agency but also to members of commissions, committees, boards,
or other local agency bodies, whether permanent or temporary, decision - making or advisory.
Training must be renewed every two years.
According to the Fair Political Practices Commission and the California Attorney General,
training regarding conflicts of interest, perquisites of office and governmental transparency
should include the following:
(1) Laws relating to personal financial gain by public servants...
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 1
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(A) Laws prohibiting bribery (Pen. Code, § 68)
(B) Conflicts of Interest under the Political Reform Act (Gov. Code, §§ 87100, 87103).
(C) Contractual Conflicts of Interest (Gov. Code, § 1090 et seq.).
(D) Conflicts of Interest and Campaign Contributions (Gov. Code, § 84308).
(E) Conflicts of Interest When Leaving Office (Gov. Code, §§ 87406.3, 87407).
(2) Laws relating to claiming perquisites of office
(3) Government transparency laws
(4) Laws relating to fair processes
The Grand Jury has divided the remainder of this report into several sections. Each section
contains its own findings and recommendations. An overall finding and recommendation has
also been made that may apply to all agencies throughout the County.
LAFCO: SOME MEMBERS OVERSTEPPING THEIR BOUNDARIES
BACKGROUND
The Contra Costa Local Agency Formation Commission ( LAFCO) reviews, approves, or
disapproves changes in organization to cities and special districts including annexations,
detachments, new formations and incorporations. Its members (commissioners) serve the entire
county and are to be neutral decision makers. LAFCO commissioners are guided by a
Commissioner's Handbook which states:
"Government Code Section 56325.1 states that while serving on the Commission all
members shall exercise their independent judgment on behalf of the interests of
residents, property owners and the public as a whole."
In May, 2010, two LAFCO commissioners addressed a developer- sponsored local ballot measure
to extend the Urban Limit Line of the City of Brentwood. Prior to the election, these
commissioners signed a public letter indicating that they were speaking not only as LAFCO
spokespeople, but as representatives of the Contra Costa County Mayors' Conference, their
appointing agency. They stated that should Brentwood voters defeat Measure F, LAFCO could
annex the land in question to Antioch. Further, certain other LAFCO commissioners, instead of
speaking to these statements, chose to weigh in supportively on the content of the letter, when
the matter was not before LAFCO. The measure failed, and both LAFCO and the Mayors'
Conference took some action to address this.
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 2
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LAFCO stated that its procedures do not allow for reprimand or removal of offenders, but
inserted new language into the Commissioner's Handbook (1.4 Rules and Procedures — Section F.5)
which details when a commissioner may act as a spokesperson.
The Mayors' Conference, while voting (12 -4) not to remove the involved commissioners, issued
an admonishment, and adopted an amendment to the Conference Policies and Procedures
statement prohibiting individual positions from being expressed as representative of the will of
the Conference. In its motion, the Mayors' Conference stated that it "is not in the business of
taking issues on individual matters, especially when pitting one city against another."
The Grand Jury recognizes that some corrective actions have been taken. However, some
LAFCO members weighed in favorably on the import of the letter. While LAFCO had the option
to recommend removal to the offending members' appointing authority for "malfeasance of
office" (Commissioner Handbook 1.2), it did not do so.
FINDINGS
1. Some LAFCO members committed ethical breaches by indicating that they spoke on behalf of
LAFCO and the Mayors' Conference on matters not before LAFCO.
2. Certain other LAFCO members weighed in inappropriately on the statements.
RECOMMENDATIONS
1. All LAFCO members, including the public member, should receive regular training per AB
1234 *, on the LAFCO Commissioners Handbook with particular focus on LAFCO's mission
statement and ethics, as well as the Updated Commissioner Representation policy (1.4 Rules
and Procedures — Section F.5).
2., LAFCO should promptly consider appropriate action when a violation of its policies occurs.
*AB 1234 - Local Officials Ethics Training Requirement
The newest of these ethics training requirements applies to certain local public officials. While similar to the rules
for state officials that have been in place since 1998, the rules applicable to local officials are different in content,
including a requirement that these officials receive training not only in applicable ethics laws but also in ethics
principles and agency rules.
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 3
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NEPOTISM ALIVE IN CEMETERY DISTRICT
BACKGROUND
Nepotism is favoritism (as in appointment to a job) based on kinship.l
Nepotism undermines public trust by making government look like a family business run not for
the community, but for the families in power.
The Contra Costa County Board of Supervisors (BOS) makes appointments to certain special
district boards. Each Supervisor recommends appointments for their respective district, after
public notice of vacancy and interviews of applicants have been completed.
Recently, when a Supervisor's spouse sought an opening on the board of a small cemetery
district, this notice and interview process was not initially followed. As a result, there was
significant public reaction to the appearance of nepotism.
The spouse of one Supervisor sat on LAFCO, which regulates County boundaries. A prerequisite
for this person's inclusion on LAFCO was being on the board of a special district. This person's
current special district membership was ending soon and he sought a special district slot
elsewhere.
In violation of California's Maddy Act (Gov. Code Section 54970 - 54974) the Clerk of the Board
failed to advertise /post this opening to the public. As a result, several interested candidates were
not considered or interviewed. The Supervisor self - recused and another Supervisor
recommended appointment of the spouse. Ultimately, the BOS referred the process to an
impartial outside panel, so as to avoid any real or perceived conflict -of- interest. The position was
then advertised and applications from eight people were received.
After an interview process, a different individual was recommended by the special panel and was
appointed by the BOS.
Subsequently, the BOS adopted an anti - nepotism policy that prohibits appointment by BOS
members of relatives, domestic partners, and individuals with shared business interests to
Boards, Councils, and Advisory Panels.
I Merriam- Webster Dictionary
2 Robert Wechsler
Director of Research, City Ethics
http://www.cityethics.org/node/81 I
FINDINGS
1. There was a failure to advertise /post the open position, in compliance with the Maddy Act.
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 4
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2. The initial recommendation to appoint the spouse of the Supervisor for the open special
district position was not consistent with the appointment procedure.
3. At a minimum, these improprieties created the appearance of nepotism.
4. The formation of an outside, impartial panel to interview and select an applicant was
appropriate.
5. The adoption of a County anti - nepotism policy was proper.
RECOMMENDATIONS
1. The County should adopt a policy requiring the formation of impartial selection committees in
situations where there are conflicts of interest, real or perceived, that cannot be adequately
addressed by a normal recusal process.
THE DECOMPOSING OF THE KELLER CANYON MITIGATION FUND
BACKGROUND
The Keller Canyon Mitigation Fund (KCMF) was established in 1992 to lessen the impacts of an
East County landfill on roads, open space, and the surrounding community. Funds are generated
through dumping fees and granted through an application process. Approximately $14 million
has been awarded over the past ten years.
In 2005, the BOS voted to eliminate the Finance Committee oversight of the KCMF. Since then
the District Supervisor, the Supervisor's Chief -of- Staff, and a County employee comprise the
KCMF Committee, and have had discretion in the awarding of grants. Eligible recipients of
grants have expanded from those who were truly impacted by the landfill to any non - profit
groups the KCMF Committee deems eligible.
In 2010, a group of concerned citizens complained about irregularities with the KCMF's
operations. The group conveyed its concerns to various County agencies. Among these were:
• KCMF is being used illegally as a political "slush fund."
• KCMF lacks required grantee and management paperwork (applications, work plans,
progress reports, etc.).
• Substantial expenditures are being made outside of the intent and guidelines of the
KCMF, often without required BOS approval.
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 5
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The Contra Costa County Auditor - Controller's office addressed the charges in its November 5,
2010, "Response to Allegations Concerning the Keller Canyon Mitigation Fund" Report
(Auditor's report).
A fraud audit was not performed. However, it was determined that the "internal control
environment of the KCMF is seriously deficient" and that because of this there is "a possibility
of fraud and abuse ". In addition, it was determined that over the last 10 years, $634,372 was
spent without required BOS approval, and that since 2005, when BOS Finance Committee
oversight ended, the fund has had a deficit in each of the following years.
The Auditor's report detailed some problem areas with the fund and recommended, among other
goals, restoring transparency, accountability, and' public confidence in county governance with
regard to the KCMF.
One recommendation calls for establishment of an ethics policy and training for KCMF
Committee members. This recommendation, which "includes a recusal provision," seeks to
eliminate numerous instances where KCMF Committee members also sit on boards of grantee
organizations.
At the time this Grand Jury report was written, the BOS had instructed the Finance Committee to
review the Auditor's Report and its recommendations.
FINDINGS
Proper oversight of the KCMF by the BOS is lacking, which provides opportunity for
impropriety.
2. The KCMF has distributed grants without the required applications, work plans, and follow -up
reports.
3. The KCMF, as currently administered, is not transparent, and lends itself to a perception of
being a "political slush fund," (defined as "A sum of money used for illicit or corrupt
purposes, as for buying influence." (Webster's New Universal Unabridged Dictionary)).
4. Ethical concerns are raised when grants are awarded to organizations whose boards include
members of the granting committee.
5. Despite the fact that $14 million has been distributed over the past ten years, no annual report
has been issued. At the time of the writing of this report, no County - linked website to the
KCMF could be found.
6. Due to a lack of publicly available information about the KCMF, not all non - profit
organizations, nor the public, are aware of the fund, its mission, and its processes, and thus are
unable to benefit from it.
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 6
Grand jury Reports are posted at h /www.cc- courts.orLY/grandiury
RECOMMENDATIONS
1. The BOS should direct the County Administrator's Office to more closely monitor the KCMF
activity and ensure compliance with BOS approval requirements, as well as application, work
plan and performance reporting requirements.
2. The BOS should require training on and compliance with a County ethics policy for all KCMF
Committee members.
3. An annual report for the KCMF should be issued, and a County- linked website should be
established to clarify mission, application and selection process and requirements.
4. The BOS should consider re- establishing the Finance Committee oversight of grant awards.
5. The BOS should ensure that all County mitigation funds, or similar funds under the control of
a single Supervisor, receive proper supervision.
OVERALL FINDING
The Grand Jury finds that:
1. Avoiding the appearance of unethical behavior especially with regard to conflicts -of interest
and nepotism, is crucial to public confidence in governance.
OVERALL RECOMMENDATION .
1. Each of the 19 cities, 28 independent special districts and the County should review and report
to the Grand Jury on the adequacy of its:
a) nepotism policy;
b) conflict -of- interest policy; and
c) ethics training policy.
REQUIRED RESPONSES
LAFCO section
Findings and Recommendations
Local Agency Formation Commission
1,2
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 7
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NEPOTISM section
Findings
Contra Costa County Board of Supervisors 1 -5
Recommendations
Contra Costa County Board of Supervisors
KELLER CANYON section
Findings
Contra Costa County Board of Supervisors 1 -6
Recommendations
Contra Costa County Board of Supervisors 1 -5
Overall Finding and Recommendation
Finding and Recommendation
Contra Costa County Board of Supervisors
REQUESTED RESPONSES
Overall Finding and Recommendation
Finding and Recommendation
The cities of: Antioch, Brentwood, Clayton, Concord, Danville, El Cerrito, Hercules, Lafayette,
Martinez, Moraga, Oakley, Orinda, Pinole, Pittsburg, Pleasant Hill, Richmond, San Pablo, San
Ramon and Walnut Creek .1
Independent Special Districts:
Crockett Community Services District, Diablo Community Services District, Discovery Bay
Community Services District, Kensington Police Protection and Community Services District,
Knightsen Town Community Services District, Kensington Fire Protection District, Moraga-
Orinda Fire District, Rodeo - Hercules Fire Protection District, San Ramon Valley Fire Protection
District, Los Medanos Community Healthcare District, Mt. Diablo Healthcare District, West
Contra Costa County Healthcare District, Byron- Bethany Irrigation District, East Contra Costa
Irrigation District, Bethel Island Municipal Improvement District, Ambrose Recreation and Park
District, Green Valley Recreation and Park District, Pleasant Hill Recreation and Park District,
Rollingwood -Wilart Park Recreation and Park District, Byron Sanitary District, Central Contra
Costa Sanitary District, Ironhouse Sanitary District, Mt. View Sanitary District, Rodeo Sanitary
District, Stege Sanitary District, West County Wastewater District, Contra Costa Water District
and Diablo Water District, Byron - Brentwood - Knightsen Union Cemetery District 1
Contra Costa County 2010 -2011 Grand Jury Report 1105 Page 8
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August ? ?, 2011
Ms. Linda L. Chew, Foreperson
Contra Costa County Grand Jury
725 Court Street, 4t" Floor
Martinez, CA 94553
gDRAF'A
RE: Central Contra Costa Sanitary District Response to Grand Jury Report 1105
Dear Ms. Chew:
Per the 2010 -2011 Grand Jury Report 1105 approved on May 4, 2011 on "Ethics and
Transparency Issues in Contra Costa County," the required responses of the Central
Contra Costa Sanitary District to the Grand Jury's Overall Finding and Overall
Recommendation is as follows:
OVERALL FINDING
The Grand Jury finds that:
Avoiding the appearance of unethical behavior, especially with regard to conflicts
of interest and nepotism, is crucial to public confidence and governance.
Response: The respondent agrees with the Finding.
OVERALL RECOMMENDATION
Each of the 19 cities, 28 independent special districts and the County should
review and report to the Grand Jury on the adequacy of its:
a) nepotism policy
b) conflict of interest policy
C) ethics training policy
Response: This recommendation has been implemented. The District has
reviewed these policies and found them to be adequate. See District's
responses below for more information.
Contra Costa Grand Jury Report 1105
August ? ?, 2011
Page 2 of 2
a) Nepotism Policy: The District's nepotism policy is set forth in the
District's Memoranda of Understanding with its employee groups and is
strictly adhered to. Members of the immediate family (mother, father,
brother, sister, son, daughter, in -laws, grandparents) of elected officials
and /or employees are not eligible for employment at the District. This also
applies to temporary employees.
b) Conflict of Interest Policy: As required by the Fair Political Practices
Commission (FPPC) and Contra Costa County, the District reviews its
Conflict of Interest Code biennially and files updates with the County for
approval. Designated filers file Form 700s annually in compliance with
FPPC and County regulations. The District is in 100% compliance.
c) Ethics Training Policy: The District conducts biennial Ethics Training for
elected officials and staff, and is fully compliant with AB 1234.
Please do not hesitate to contact me if you have questions or require clarification.
Yours sincerely,
James M. Kelly
General Manager
Central Contra Costa Sanitary District