The Public Eye

Reports from the Bee's investigative team

October 15, 2010
Undeliverable ballots cost the county money

The Sacramento County election's office recently began sending out vote-by-mail ballots, and hundreds are already returned - as undeliverable mail.

The rising count of returned ballots - expected to reach about 15,000 for the Nov. 2 election - is adding to the county's red ink.

Each ballot costs about $1.50 to produce and mail. If you do the arithmetic, you see how costs add up: $22,500, perhaps more.

It doesn't seem like a lot of money, but every penny counts as government agencies look to find savings.

"That's less money needed from the county's general fund," said Brad Buyse, local elections spokesman. The general fund is the pool of money the county uses to pay for county services.

Most of the returned mail stems from voters failing to notify the agency of a change of address.

"People need to keep their registration information up to date, " said Alice Jarboe, assistant registrar.

As of Thursday, about 1,800 ballots had been sent back to the county's election headquarters on 65th Street in south Sacramento.

To see if your registration is current, call (916) 875-6451 or see: http://www.elections.saccounty.net

The deadline to register to vote or change your address is Monday.

- Bobby Caina Calvan

October 8, 2010
State pays recycling firm 8 percent of its claim

SIMS Recycling Solutions has settled a dispute with the state of California over public funds it had sought for recycling electronic wastes.

According to an agreement reached quietly in August, SIMS will receive 8 percent, or $265,000, of $3.3 million it claimed for recycling 8.3 million pounds of monitors and televisions under California's pioneering 2005 e-waste legislation.

In order to qualify for payment, recyclers must prove e-waste is from California by documenting where it was collected. But 79 percent of the collection addresses SIMS provided to the state were invalid, records show.

Jeff Hunts, manager of the e-waste payment program for CalRecycle, called the agreement a "profound win" for the state.

"It is a recognition of the importance of source documentation to demonstrate the eligibility of the material," Hunts said.

In appeal documents, SIMS maintained the e-waste was, in fact, from California and blamed the problem, in part, on sloppy and fabricated documentation from e-waste suppliers.

"It is now clear ... that there is a likelihood that (e-waste) handlers may, in some cases, have provided deliberate false data," SIMS manager Andrew Mason wrote in a June letter to the state.

SIMS Recycling Solutions, which calls itself the world's largest electronics recovery and recycling company, has facilities in northern and southern California. Its state headquarters is in Roseville.

--Tom Knudson

September 27, 2010
Track congressional races with this handy interactive map

election.JPGThe fall election just five weeks away, political junkies are watching for signs of a political shift in the control of the U.S. House and U.S. Senate. To help them OpenSecrets.org and the New York Times have launched an impressive online map that brings together much useful information on every congressional race. The main map color-codes states and House districts to show which are solidly (or continuing) Democrat or Republican and which ones are in play this November. (19  Senate seats and 101 House seats are in play.) Clicking on a race brings up a data profile on each candidate that includes:

Campaign finance: a general breakdown of donations by PAC, individual and self-financing sources, as well as an analysis of donations by top contributors, sectors, industries and geographies.

Legislation: bills sponsored and co-sponsored by the candidate.

Voting record: individual vote on major bills, plus the total chamber vote broken out by party. 

Demographics: a statistical snapshot of the state or House district that includes race, age education, income breakdowns.

September 26, 2010
Some school agencies balk at CSBA fees

Three California School Boards Association members are showing their displeasure with the embattled nonprofit by withholding a total of $65,800 in fees, and a handful of others are joining in.

However, it appears most school districts and county offices of education are deciding to stick with CSBA, which has been engrossed in a financial scandal involving Scott Plotkin, the association's now-retired executive director.

CSBA spokeswoman Susan Swigart said of the 965 members for 2009-10, the association anticipates less than 2 percent will not renew their membership.

Some cited concerns over executive pay at CSBA. Plotkin announced in July he would retire after it was revealed he was paid $516,517 in 2008 and $403,955 in 2009 after receiving sizable bonuses and other compensation.

Plotkin also admitted using CSBA's credit cards to withdraw cash at casinos. He said he repaid that money.

The 32 members of the CSBA board of directors approved Plotkin's salary and bonuses, as well as a $43,000 severance payment.

The Sacramento County Board of Education debated at length Tuesday whether to withhold dues of $12,535. The board opted to pay its dues and send a letter of concern to CSBA.

Sacramento County schools chief Dave Gordon said he has some concerns about districts not utilizing CSBA, which he said provides valuable resources to districts such as training.

"Their staff has been of high quality in my experience, " Gordon said.

Three districts opting to withhold fees include:

Sacramento City Unified -- Will remain in CSBA this year only if the nonprofit's executive board retires and if the district's $36,161 dues are reduced by 50 percent.

Swigart said, "It is unlikely the school board's requests will be granted."

Santa Clara County Board of Education -- Will delay payment of $12,693 until trustees review findings from an independent audit ordered by CSBA.

Capistrano Unified School District -- It dropped out, citing the scandal.

-- Melody Gutierrez

September 24, 2010
'Super PACs' proliferate, spend big money on elections

Federal court decisions, Citizens United and SpeechNow.org, opened the door for political organizations to spend huge sums on advertising explicitly supporting or opposing candidates for office. According to the Center for Responsive Politics, the Federal Elections Commission has so far authorized 33 "independent expenditure-only (IE) committees" that are legally allowed to raise unlimited funds from individuals, corporations, unions and other groups. CRP has been tracking the proliferation these so-called super PACs which advocate from both sides of the political spectrum. You can see the complete list here.

You can also browse the latest campaign spending of all IE groups with a searchable database created by the government watchdog The Sunlight Foundation. The data is sortable by committee, candidate and race. To date independent expenditures total some $57 million in the 2010 federal election cycle.

California races targeted by IE groups include the U.S. Senate and House districts 3, 10, 11, 19, 32, 36, 44, 45 and 47. Barbara Boxer's candidacy, for example, attracted $57,614 in IE funds ($3,484 in support; $54,130 in opposition). Carly Fiorina, in contrast, prompted $274,065 in independent spending ($235,362 in support; $38,703 in opposition). Boxer's biggest IE supporter is NARAL Pro Choice America. Fiorina's biggest is the Susan B. Anthony List, a pro-life political organization. 

September 21, 2010
In Home Supportive Services fraud task force nabs 60 defendants

A Sacramento County task force created to root out fraud in a fast-growing social service program announced it has filed criminal cases against 60 defendants for about $780,000 in fraud in the past year.

Those cases have so far led to 40 people being sentenced for fraud-related crimes and to the ordered restitution of more than $500,000 in funds.

The statistics were part of the first annual report from the In Home Supportive Services Fraud Task Force to the Board of Supervisors. The supervisors created the task force a year ago to increase scrutiny on the ballooning social service program that aims to keep elderly and disabled residents in their homes and out of institutions.

The task force is headed by the District Attorney's Office and includes staff from the Department of Human Assistance and the Department of Health and Human Services.

"There are many opportunities for fraud in this program," said Laura West, a deputy district attorney, addressing the supervisors at their Tuesday meeting. The state tried to make a program that was easy for some of the most vulnerable residents to use, but in doing so created opportunities for fraud, she said.

Sacramento County is one of the few counties that has been able to reduce the cost of IHSS cases, West told the board. The county lowered costs 2.2 percent from fiscal year 2008-09 to 2009-10 while other comparable counties saw annual increases. Santa Clara County's costs went up 3.2 percent, Alameda's went up 5.7 percent and Ventura's went up 6.5 percent.

There were a number of factors that contributed to the reduction, including the task force's efforts, West said. The reduction saved the county about $1.1 million in local funds.

Supervisor Roger Dickinson pointed out that the fraud amount is minuscule when compared to the overall size of the program. A $1.1 million savings is a fraction of a percent of the total case expenses that far exceed $200 million a year.

Dickinson also pointed out that 60 criminal defendants are less than half a percent of all care providers. The figures would seem to refute the argument made by those who assail the program - often those on the right seeking to slash the program - which is that as much 25 percent of the costs for the program go to fraud, Dickinson said.

"These numbers don't even start to scratch the surface of that figure," Dickinson said.

--Robert Lewis

September 16, 2010
Rocklin Unified backs off from energy consultant

Rocklin Unified will try to cut its energy costs without the help of a $1 million contract with an outside agency – for now.

The school board voted Aug. 18 to form an advisory committee to look at ways to reduce energy use instead of hiring Energy Education, which specializes in energy conservation at school sites.

The decision came a week after the proposed contract was featured in this column.

But the board is leaving its options open. Its members said they want a report from the advisory group in four months. They will then revisit the idea of entering into an energy conservation agreement with a consultant.

District officials had hoped to reap $800,000 a year in energy savings with the help of Energy Education. The contract would cost $24,700 a month for four years and does not include the salary of an "energy specialist" and the cost of computer software. The software would have cost $13,950 the first year and $2,000 each year after that.

– Diana Lambert

September 14, 2010
State school board group releases severance package details

Nearly two months after the California School Boards Association faced public scrutiny over its top executive's pay, the non-profit released details Tuesday of its severance agreement with Scott Plotkin.

CSBA paid $43,000 to cut ties with Plotkin and to recognize him for "his long years of service" to the organization, according to a statement from the CSBA Board of Directors.

Plotkin retired Sept. 1 after admitting to using a company credit card to withdraw cash at area casinos while drawing a salary much higher than executive directors at similar non-profits.

Plotkin earned $307,805 in 2006; $384,462 in 2007; $516,517 in 2008; and $403,955 in 2009. Plotkin's base salary was much lower in each of those years, but his pay was inflated through bonuses and other compensation. In 2008, Plotkin received a $175,000 bonus and in 2009 he received nearly $75,000 in bonuses and other compensation.

The CSBA statement said Plotkin's base salary through September 2013 was $328,000. The statement said Plotkin's employment contract - which The Bee has asked for and was denied - included termination provisions that could have put CSBA on the hook for more than $1 million.

With the severance agreement complete, the statement said CSBA could now release its details.

"Rather than expending legal fees and contending with the further damage that a protracted legal battle could entail, the Board determined that the best course of action was to reach mutual agreement on Mr. Plotkin's separation," the statement said. "The Board is pleased that Mr. Plotkin agreed to the proposal."

The full statement is available online on CSBA's financial accountability page at http://www.csba.org

CSBA is not a government agency, but is indirectly funded by taxpayers. Much of its funding comes from membership dues and other fees paid by public school districts. CSBA employees receive pensions through the California Public Employees' Retirement System, of which Plotkin, 56, will be eligible.

Several area school boards have considered not renewing their membership after learning of Plotkin's pay and use of corporate credit cards.

Sacramento City Unified trustees will decide at Thursday's school board meeting as to whether the district will renew its current CSBA membership and utilize other services, which amount to $36,161 a year.

--Melody Gutierrez

August 24, 2010
CSU responds to audits of foundations, auxiliaries

California State University officials are concerned that they have erroneously mixed public and private funds in accounting for the foundations that support the system's 23 campuses, according to a report the California Faculty Association is releasing Wednesday.

The report is based on minutes from a series of closed-door meetings of CSU executives that a political researcher for the professors' union said she discovered online.

Minutes from a May 2010 meeting of the university's top business officials say they were trying to "clean up any mess before it gets to be bigger."

"There continue to be findings from the internal auditors that some campuses have monies held inappropriately by auxiliary organizations. The finding is that funds should be moved to the state side," the minutes say.

The faculty union has been fighting to bring more public scrutiny to CSU foundations and other auxiliary organizations that are considered private entities but closely affiliated with the public colleges. Such organizations hold about 20 percent of CSU's budget and are typically in charge of commercial practices on the campuses, from real estate deals to fund-raising events. But many have been caught spending money inappropriately - including an audit this year that said Sacramento State's auxiliary should not have paid for remodeling the university president's kitchen.

Last year Gov. Arnold Schwarzenegger vetoed a bill the union sponsored that would have subjected the auxiliary organizations to the California Public Records Act. A second version of the bill, SB 330, has passed both houses and is now on the governor's desk.

Today's report marks the second time in recent months that proponents of the bill have trotted out internal university documents to demonstrate what they say is the need for greater accountability. The last time was in April, when the bill's author, Sen. Leland Yee, held a press conference for Cal State Stanislaus students who said they found copies of Sarah Palin's contract to speak at their school in a campus Dumpster. Because the contract was with the foundation at Cal State Stanislaus, university officials had refused to release it to the public.

"Publicly, the CSU administration insists that the funds held in these organizations are privately raised and are not taxpayer dollars. However, as these documents detail, there is actually a commingling of state and private dollars in the funds controlled by the auxiliaries," says the faculty association's report.

Cal State officials responded by saying they were aware that some funds had been mixed and are working on fixing the problem.

The university's internal auditor had raised the issue and Benjamin Quillian, chief financial officer for the CSU, said he brought it to the attention of campus leaders.

"The campuses are already in the process of moving monies that need to be moved," Quillian said.

It's not uncommon for private and public money to get mixed when auxiliaries run campus functions, such as football games or conferences, he said. On some CSU campuses, an auxiliary organizes the game and takes the money from ticket sales, but has to pay the university for use of campus police.

"There have been some auxiliaries that have not been reimbursing the state in a timely fashion," Quillian said. "The internal auditor pointed this out and recommended the money be moved in a more timely fashion."

-- Laurel Rosenhall

August 24, 2010
Study suggests UC Davis administration is bloated

Between 1993 and 2007, UC Davis quadrupled the number of administrators on its payroll while reducing its share of instructors and researchers, according to a study of personnel patterns at nearly 200 universities across the nation.

UC Davis officials disputed the findings, saying it mistakenly classified some teachers as administrators.

The Goldwater Institute, which advocates for small government, analyzed the number of employees per 100 students at the top public and private universities.

Overall, it found that even though student enrollment grew, universities did not become more efficient. Instead, most increased the number of employees they had per 100 students, particularly in managerial ranks.

The trend was especially true at UC Davis, says the report, "Administrative Bloat at American Universities: The Real Reason for High Costs in Higher Education."

Among the universities studied, UC Davis had the third-highest growth rate in its number of administrators. Administrator ranks grew by 318 percent during the period studied, while the number of instructors and researchers per 100 students shrank by 4.5 percent and the number of clerical workers went down by 38.8 percent, the study shows.

Across all the universities studied, tuition during the period analyzed grew by 66.7 percent, when adjusted for inflation. "The most striking point here is that university spending per student is increasing in real terms, most rapidly in the area of administration," wrote authors Jay P. Greene, Brian Kisida and Jonathan Mills.

"It is not clear why it has cost nearly two-thirds more to administer each student over this 15-year period. We know that universities are hiring many more administrators per student and that they must also be paying those administrators higher salaries."

UC Davis officials responded by saying the university is working on streamlining its bureaucracy. Chancellor Linda Katehi has directed five administrative units to consolidate operations into three shared service centers, Assistant Executive Vice Chancellor Robert Loessberg-Zahl said in a statement. Those changes will save UC Davis between $9 million and $16 million over the next two to four years, he said.

University officials took issue with the Goldwater Institute's definition of "administrator." Loessberg-Zahl said the report wrongly counts computer programmers, engineers, veterinarians, librarians, physicians, nurses and coaches as "administrators."

"Many of the employees that the report classifies and counts as 'administrators' actually are staffers in direct service to UC Davis' core academic mission of teaching, research and public service, and who work in academic departments," said Loessberg-Zahl's statement.

The salaries of many of those employees are paid by research grants from outside funding sources, he said.

"That means that neither the state nor student fees support these employees, who in fact are central to the service and research missions of the university," Loessberg-Zahl said.

- Laurel Rosenhall

August 17, 2010
Audit of EdFund finds questionable spending

A recent audit found that EdFund, the student loan guaranty agency that federal authorities want to close, inappropriately spent nearly $8,000 on coffee, gift cards and lunches and $71,000 on prohibited political lobbying.

"These types of expenditures do not benefit students, and thus are inappropriate uses of state funds," wrote the state Finance Department's Fred Klass of in a July 16 letter to the head of EdFund's board.

Finance audited EdFund's expenditures from November 2008 through October 2009. It found EdFund billed the California Student Aid Commission for unallowable expenses. Among them:

• $70,891.60 to a lobbying firm to urge Congress to maintain the role of guaranty agencies in legislation meant to change the student loan industry.

• $4,334.25 for Starbucks coffee service in the office, including coffee, tea, hot chocolate and condiments.

• $1,598.19 in employee appreciation lunches.

• $1,475 in gift cards for employee recognition.

• $562.02 for condolence flowers, pre-paid parking for an employee event, an ice machine repair and unallowed travel expenses.

EdFund, a quasi-public agency in Rancho Cordova, insures a $38 billion portfolio of federal student loans made by private banks. When students default, EdFund repays the banks, then gets reimbursed by the federal government. Last month, citing EdFund's problems, the U.S. Department of Education said it wants to close it this fall.

- Laurel Rosenhall

August 11, 2010
School group fears it may lose members

California School Boards Association President Frank Pugh wrote to school board members Wednesday that he is worried about membership renewals and pledged that the nonprofit will be more transparent in the future.

Pugh's letter is in response to criticism the organization received over Executive Director Scott Plotkin's annual pay. Plotkin announced last month he would retire Sept. 1 after admitting he used his company credit card to withdraw cash from area casinos while receiving a half-million-dollar salary in the 2007-2008 fiscal year.

According to two tax filings, which CSBA made available to its members, it appeared Plotkin had received two $175,000 bonuses that tipped his salary well over $500,000 in 2007 and 2008.

CSBA spokeswoman Brittany McKannay said that bonus was awarded once but was duplicated on tax filings after the organization stopped filing for the fiscal year and moved to a calendar year. McKannay said the $175,000 bonus was awarded in June 2008 and "therefore was required to be reported in both."

The tax filings show Plotkin's salary in 2007-2008 was $540,395, including the bonus.

The 2008-2009 filing showed Plotkin's total compensation was $563,333, which also included a $175,000 bonus.

"Scott Plotkin was not rewarded the $175,000 bonus twice," McKannay said. His actual compensation for the two years, therefore, was $175,00 less than reported in tax filings, McKannay said.

The 2008 tax return showed Plotkin also received a $10,200 car allowance, a $9,000 administrative allowance, a companion travel allowance of up to $3,000 and a tax deferred annuity of up to 10 percent of his annual gross salary.

McKannay said the 2009 tax filing is not due until November. That filing will reflect a 4 percent bonus that Plotkin received, but McKannay had no other details of his pay for that year.

CSBA will meet Aug. 17 to discuss "a number of critical issues," including ways to ensure transparency on compensation issues, Pugh wrote.

McKannay said CSBA's directors will also determine whether they will comply with The Bee's Public Records Request, which asked, in part, for Plotkin's most current pay.

- Melody Gutierrez

August 10, 2010
Conservation consultant may get $1 million school district contract

The Rocklin Unified School District may spend $1 million to hire a company to show it how to save money on energy - a step another district has taken for free.

The 16-school district in Placer County may sign on with Energy Education, which specializes in energy conservation at school sites.

The cost of the contract - $24,700 a month for four years - does not include the salary of an "energy specialist" and the cost of computer software. The software will cost $13,950 the first year and $2,000 each year after that.

The energy specialist is likely to be a teacher earning additional hours for the work, said Larry Stark, assistant superintendent.

The district hopes to reap $800,000 a year in energy savings with the consultant's help. The contract comes with a money-back guarantee that the program will save money.

Rocklin Unified has to cut $18 million from its budget over three years. The cuts have meant furloughs, layoffs and the elimination of programs, Stark said.

The consultant's price tag seems steep to some. "It seems like a lot of money to come up with," said Kathy O'Keefe, a district employee and parent. "I've had teachers tell me they can't buy books this year."

Elk Grove Unified recently reported saving $1 million in an energy conservation program at its 63 schools last year. District staff designed the program with the free help of the Sacramento Municipal Utility District and a committee of staff and parents.

Stark acknowledges that the Rocklin district's energy provider - Pacific Gas & Electric - has a similar program but said the district can realize greater savings with the help of Energy Education.

He said districts that go it alone generally save 7 percent to 10 percent in energy costs. He said that Energy Education can cut energy costs by 20 percent to 30 percent. "They are professionals at doing this," Stark said, noting that the company works with 1,200 districts nationwide.

The contract likely will be on the Aug. 18 board agenda, said Wendy Lang, school board president.

The Sacramento City Unified School District signed a 4.5-year contract with Energy Education in 2009, said Gabe Ross, district spokesman. The district paid $26,500 a month the first year. Ross said that amount doubled when the district started paying incentives as it began to realize savings. He said the program reduced energy costs by $1 million the first year.

The San Juan Unified School District recently negotiated a slightly different contract with the company, paying nothing up front but paying it 50 percent of the energy savings on the back end. And unlike most districts, which hire an energy specialist on their own dime, San Juan has two employees paid by Energy Education.

The projections call for $1.7 million in savings during the first year, said Trent Allen, district spokesman.

- Diana Lambert

August 3, 2010
Corrections officials say budget woes affect weapons training

The state Office of the Inspector General has found that some state prisons are refusing to implement weapons training recommendations - leading to alarming safety concerns.

At Salinas Valley State Prison in Soledad and the California Institution for Men in Chino, prison officials "allow custody officers who have not fulfilled quarterly weapons proficiency requirements to work in armed posts," including regular employees, guards providing vacation or sick relief, or those swapping assignments.

Corrections Secretary Matthew Cate responded in a letter that budget shortages have made such training infeasible.

The Department of Corrections and Rehabilitation "opens itself to potentially costly lawsuits in the event of a questionable shooting," says the report, "and creates a situation that may lead to tragedy." The agency found 23 percent of Salinas Valley officers it reviewed hadn't met weapons requirements.

Donald Specter, director of the nonprofit Prison Law Office, said officers without sufficient training in armed stations could be "potentially a serious problem."

The Inspector General's Office, which provides some oversight on corrections operations, prepared the report (available at www.oig.ca.gov) to follow up on audits that took place between 2000 and 2008.

About two-thirds of problems identified in the audits were fixed. Folsom State Prison implemented all applicable recommendations. In contrast, Salinas Valley complied with just eight of 21 recommendations, neglecting educational opportunities for inmates, conducting improper cell searches and failing to document use-of-force incidents in a timely manner, the report says.

- Charles Piller

July 27, 2010
Locals defend SHRA's spending on four-plexes

Nice work, Sacramento Housing and Redevelopment Agency.

That was essentially the finding of a special committee the Sacramento Housing and Redevelopment Commission convened to review an inspector general's report alleging SHRA had misused millions in federal funds for redeveloping neighborhoods hit by the foreclosure crisis.

The HUD's U.S. Department of Housing and Urban Development's Office of the Inspector General released a scathing report questioning SHRA's use of Neighborhood Stabilization Program funds to rehab four-plexes at Norcade Circle near Folsom Boulevard and Highway 50, and at Lerwick Road near Watt Avenue and Auburn Boulevard. The IG found the $500,000 SHRA budgeted per four-plex to be exorbitant.

The panel - made up of members appointed by the City Council and Board of Supervisors - heaped praise on agency staff last week and explained that much of the high cost is due to sensible design features.

"All of the air conditioning units were roof mounted as opposed to ground level," commissioner Cyril Shah said. Several others also used that example for why the rehabs cost $500,000 per property as opposed to the $100,000 per property the IG's office said would have been more reasonable.

Commissioners said they feel good about the project and were hopeful the regional HUD office would, too. In mid-September, HUD will issue a response to the IG's report. The IG has recommended SHRA be forced to repay more than $1 million in federal funds and re-budget more than $3.8 million currently budgeted for the Norcade Circle and Lerwick Road properties.

_ Robert Lewis


 



About The Public Eye

Welcome to The Bee's newest blog: Public Eye. In the coming months, you will see us breaking news here as well as following up on investigations we have published with tidbits, news breaks and behind-the-scenes descriptions of our news-gathering process. Know of a wrong we could right? Send our fraud squad your tips at: fraudsquad@sacbee.com.

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