California Watch - Money and Politics en Bullet train bidder has history of cost overruns <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard">Anonymous</span> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/high_speed_rail_8.jpg" title="" /> <span class="image-insert-photo-credit">California High-Speed Rail Authority</span> <span class="image-insert-description"> </span></p> <p>SACRAMENTO &ndash; The lowest-bidding partnership for the first segment of California&rsquo;s high-speed rail line includes a firm with a history of cost overruns and costly lawsuits.</p> <p>The California High-Speed Rail Authority on Friday announced that the American joint venture of Tutor Perini/Zachry/Parsons was the &ldquo;best apparent value&rdquo; with a low bid of $985 million &ndash; below the $1.09 billion bid by the next-lowest bidder.</p> <p>On construction projects in California, the lowest bidder has a strong advantage in the eventual selection process. Rob Wilcox, a spokesman for the authority, declined to comment on bidders as the matter is finding its way to the authority&rsquo;s board of directors.</p> <p>&ldquo;Five world-class teams competed for this opportunity, and the process is ongoing,&rdquo; Wilcox said.</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>The first segment of the estimated $68 billion system is proposed to run 28 miles from Madera to Fresno in the San Joaquin Valley.</p> <p>According to <a href="" target="_blank">an August report</a> by <a href="" target="_blank">The Bay Citizen</a>, sister site of California Watch, 11 major projects in the San Francisco Bay Area completed by Tutor in the last dozen years cost local governments $765 million more than they expected, or 40 percent above the initial bids.</p> <p>A company spokesman did not return a message seeking comment. CEO Ron Tutor said in the August report that attacks against him were unfounded and overruns were caused by contracting agencies changing the projects in midstream.</p> <p>At San Francisco International Airport, the city alleged in a 2002 lawsuit that the company purposely bid low to win a $626 million expansion contract, then charged $980 million for the job. Tutor said there wasn&rsquo;t &ldquo;a single fact&rdquo; justifying the city&rsquo;s position but eventually agreed to pay $19 million to settle.</p> <p>The company&rsquo;s list of projects includes an extension of Bay Area Rapid Transit to the San Francisco airport, the Alameda Corridor rail line and the San Diego Convention Center.</p> <p>In 1993, the Port of San Diego paid the company $17 million to settle a $53 million lawsuit over the convention center project. In the lawsuit, the company blamed port-hired construction managers for delays that cost the company money.</p> <p>Kevin Williams, a former San Francisco contracting officer who has testified in court against Tutor, said his experience with the company goes back decades.</p> <p>&ldquo;Tom Bradley, the late mayor of Los Angeles, said it best: Ron Tutor was the change-order artist, the king, and he&rsquo;s proven himself to be just that,&rdquo; Williams told U-T San Diego on Monday.</p> <p>Williams said Tutor &ldquo;is going to make up the difference somehow by lowballing. That is as old as history itself in the construction industry.&rdquo;</p> <p>Kevin Dayton, president and chief executive of Labor Issues Solutions and a critic of the bullet train project, said the rail authority is going to have to monitor change-order requests very closely.</p> <p>&ldquo;People are always accusing each other in the construction industry of pulling the change-order racket: winning the low bid and then piling up costs afterward,&rdquo; said Dayton, a former lobbyist for Associated Builders and Contractors Inc. &ldquo;Sometimes, it is a matter of architectural errors, but everyone always blames everybody else for it, saying, &lsquo;The drawings were bad; the engineering was bad, et cetera.&rsquo; &rdquo;</p> <p>Dayton also questioned whether the four losing teams &ndash; who are eligible to be paid a $2 million stipend to cover their costs for seeking the contract &ndash; might now be required to sign statements agreeing not to publicly challenge the process.</p> <p>The next-lowest bidder was Dragados/Samsung/Pulice. Officials there could not be reached for comment.</p> <p>In a statement posted on its website before the announcement, the team said with a combined value of $8 billion in executed design-build projects in the last five years, it offers the authority and building communities &ldquo;a proven successful record of compliance, execution and on time delivery of complex infrastructure projects all over the world.&rdquo;</p> <p>Five teams submitted proposals to design and build the first segment. The proposals were evaluated and ranked based 70 percent on cost and the remainder for technical merit. Officials said factors such as an understanding of the project, schedule capability, approach and safety were part of the technical scoring.</p> <p>The lowest-bidding partnership &ndash; Tutor Perini Corp. of Sylmar, Zachry Construction Corp. of Texas and Parsons Corp. of Pasadena &ndash; received the highest overall score of 90.55 out of 100.</p> <p>The trio received a perfect 70 percent for its price proposal and received the lowest score &ndash; 20.55 &ndash; for its technical proposal.</p> <p>Rail officials say they expect to present a contract to their board of directors in the coming weeks. The agency&rsquo;s cost estimate for the first segment was $1.2 billion to $1.8 billion.</p> <p>If they are unable to award the contract to the best-value bidder, they may proceed with the next most highly ranked, officials said.</p> <p><em>This story resulted from a partnership among California news organizations following the state&#39;s high-speed rail program, including The Fresno Bee, The Sacramento Bee, California Watch, The Bakersfield Californian, The Orange County Register, the San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, the Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.</em></p> Money and Politics Daily Report California High-Speed Rail Authority construction high-speed rail Ron Tutor High-speed rail Tue, 16 Apr 2013 17:24:26 +0000 Christopher Cadelago 18862 at Winning bid to start high-speed rail far below estimates <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/tim-sheehan" title="View user profile." class="fn">Tim Sheehan</a></span> </div> </div> </div> <p class="image-insert" style="width: 300px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/high_speed_rail_5_2.jpg" title="" /> <span class="image-insert-photo-credit">High-Speed Rail Authority</span> <span class="image-insert-description"> </span></p> <p>A trio of American companies outbid four other teams of contractors vying for the contract to build the first segment of California&#39;s proposed high-speed train system in the San Joaquin Valley &ndash; and for several hundred million dollars less than state engineers estimated.</p> <p>The consortium of Tutor Perini Corp. of Sylmar, Zachry Construction Corp. of Texas and Parsons Corp. of Pasadena offered the low bid of less than $1 billion. Five construction teams submitted bids in January to the California High-Speed Rail Authority for the first stretch of the rail line from east of Madera to the south end of Fresno.</p> <p>Engineers for the rail authority &ndash; the state agency in charge of developing the statewide train system &ndash; had at one time estimated that the 28-mile portion would cost between $1.5 billion and $2 billion to design and build. More recent estimates suggested the bids would likely come in at $1.2 billion to $1.8 billion.</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>The Tutor Perini/Zachry/Parsons bid of $985,142,530 was deemed the &quot;apparent best value&quot; by the rail authority, based on a total score that considered both the price and the technical expertise of the competing companies. While Tutor/Perini/Parsons had the lowest technical score of the five bids &ndash; 20.55 out of 30 possible points &ndash; it also racked up 70 out of 70 points in the financial assessment.</p> <p>The other four bids were:</p> <ul> <li>$1,085,111,111 by Dragados/Samsung/Pulice, a joint venture of Dragados SA of Spain; Samsung C&amp;T America, a subsidiary of South Korean multinational Samsung Group; and Pulice Construction Inc. of Arizona</li> <li>$1,263,309,632 by California High-Speed Rail Partners, composed of Fluor Corp. of Texas, Swedish-based Skanska and PCL Constructors of Canada</li> <li>$1,365,770,098 by California Backbone Builders, a consortium of two Spanish construction firms: Ferrovial Agroman and Acciona</li> <li>$1,537,049,000 by California High-Speed Ventures, made up of Kiewit Corp. of Nebraska, Granite Construction of Watsonville and Comsa EMTE of Spain</li> </ul> <div>Rob Wilcox, a spokesman for the rail authority, said a contract proposal will be presented to the agency&#39;s board within weeks in anticipation of awarding a contract in time for construction to begin this summer. <p>&nbsp;</p> <p>By that time, Wilcox said, the rail authority expects to have begun acquiring the land it needs for the right of way. About 75 parcels are needed by the end of September, and a total of 356 pieces of property will be needed &ndash; in whole or in part &ndash; for the entire Madera-Fresno section.</p> <p>Once a contract is awarded, he added, &quot;there will be a ramp-up of hiring&quot; by the contractor for workers. Detailed reports from 2011 estimated that rail construction would be directly responsible for about 1,300 jobs each year in the Valley during the four- to five-year construction period, with additional spin-off jobs resulting from the activity.</p> <p>One component of the contract will be a goal adopted by the rail authority that small businesses &ndash; including companies owned by minorities, women and disabled veterans &ndash; be hired as subcontractors to perform 30 percent of the work.</p> <p>The Tutor Perini/Zachry/Parsons bid pencils out to about $35.2 million per mile from Avenue 17 near the BNSF Railway freight tracks east of Madera to American Avenue at the south end of Fresno. The construction section will include a bridge over the San Joaquin River; elevated tracks over Herndon Avenue; a tunnel under Belmont Avenue, Highway 180 and a freight railroad line; an elevated railway to cross over Highway 99 at the south end of Fresno; and 12 street or road overpasses.</p> <p>Not included in the contract is the relocation of a 2.5-mile stretch of Highway 99 between Ashlan and Clinton avenues through west-central Fresno. That&#39;s where the six-lane freeway snuggles up against a Union Pacific Railroad yard, leaving no room to shoehorn the new high-speed tracks into their planned route. The rail authority has agreed to pay Caltrans up to $226 million to handle the chore of moving the freeway 100 feet to the west.</p> <p>The Madera-Fresno section is the first of five major construction contracts for the high-speed railroad infrastructure in the San Joaquin Valley. The next three contracts cover pushing the line to the northwestern outskirts of Bakersfield, and the fifth pays for laying steel rails spanning the entire 130-mile Madera-Bakersfield section. Together, the five construction packages were originally estimated to cost about $6 billion &ndash; including more than $3 billion in federal stimulus and transportation money from the Obama administration that must be spent by Sept. 30, 2017.</p> <p>For months, rail authority CEO Jeff Morales and other officials with the agency expressed hope that a competitive construction climate would bring bids that were lower than engineers&#39; estimates. Last month, Morales suggested that if those hopes materialized, there could be enough money left to extend construction of the Valley section northward to downtown Merced.</p> <p>The Merced-Bakersfield line is proposed to be the backbone of a 520-mile, $68 billion passenger rail system linking San Francisco and Los Angeles with electric trains capable of traveling at up to 220 mph. Trains are not expected to carry passengers until 2022 at the earliest, when the authority hopes to operate between Los Angeles and Merced, where passengers would connect on existing Amtrak or other commuter train lines to the Bay Area.</p> <p>Obstacles remain in the railroad&#39;s path, however. Two lawsuits are pending against the rail authority in Sacramento County Superior Court. The first, which will be heard by a judge Friday, alleges that the agency violated the California Environmental Quality Act in May 2012 when it approved the Merced-Fresno section. That suit was filed by the Farm Bureau organizations in Madera and Merced counties, the Chowchilla Water District, the grassroots agriculture organization Preserve Our Heritage, and the Fagundes farming family which owns land in Madera and Merced counties.</p> <p>The second case, lodged by Kings County, farmer John Tos and Hanford resident Aaron Fukuda, charges that the rail authority&#39;s plans are illegal under Proposition 1A, the $9.9 billion high-speed rail bond measure approved by California voters in 2008. That suit, which hopes to block the sale of bonds, will be heard in Sacramento in late May.</p> <p><em>The reporter can be reached at 559-441-6319, <a href="&#109;&#97;&#105;&#108;&#116;&#111;&#58;&#116;&#115;&#104;&#101;&#101;&#104;&#97;&#110;&#64;&#102;&#114;&#101;&#115;&#110;&#111;&#98;&#101;&#101;&#46;&#99;&#111;&#109;" target="_blank">&#116;&#115;&#104;&#101;&#101;&#104;&#97;&#110;&#64;&#102;&#114;&#101;&#115;&#110;&#111;&#98;&#101;&#101;&#46;&#99;&#111;&#109;</a> or @tsheehan on Twitter. This story resulted from a partnership among California news organizations following the state&#39;s high-speed rail program, including The Fresno Bee, The Sacramento Bee, California Watch, The Bakersfield Californian, The Orange County Register, the San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, the Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.</em></p> </div> Money and Politics Daily Report California High-Speed Rail Authority high-speed rail High-speed rail Mon, 15 Apr 2013 17:14:02 +0000 Tim Sheehan 18861 at Some Calif. retirement trustees cancel Hawaii conference plans <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/jennifer-gollan" title="View user profile." class="fn">Jennifer Gollan</a></span> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/Hilton_pool.jpg" title="The Hilton Hawaiian Village Waikiki Beach Resort, site of this year's National Conference on Public Employee Retirement Systems, has five swimming pools." /> <span class="image-insert-photo-credit"><a class="image-insert-photo-credit-url" href="" target="_blank">nemuneko.jc/</a></span><span class="image-insert-description">The Hilton Hawaiian Village Waikiki Beach Resort, site of this year&#39;s National Conference on Public Employee Retirement Systems, has five swimming pools.</span></p> <p>At least three board members overseeing underfunded municipal retirement systems in California have scrapped plans to attend a conference in Hawaii even as conference organizers defended the gathering after a recent California Watch report revealed that some pension funds planned to send as many as five board members each at public expense.</p> <p>Conference organizers also removed from their website a &ldquo;<a href="">2013 Attendance Justification Tool Kit</a>,&rdquo; which suggested that pension trustees rationalize their attendance at the conference as a way to network and boost their pension funds.&nbsp;</p> <p>The moves follow a <a href="">Feb. 27 story</a> by California Watch, which reported that four of the state&rsquo;s 24 largest independent municipal retirement systems intended to send board members to the conference in Waikiki in May. The plans collectively are grappling with a multibillion-dollar shortfall for pension benefits owed to current and future retirees.&nbsp;</p> <p>Board members who canceled their trips last week include Debora Allen and Jerry Telles from the Contra Costa County Employees&rsquo; Retirement Association and Herman Santos, chairman of the Board of Investments for the Los Angeles County Employees Retirement Association.</p> <p>Telles and Santos did not return calls seeking comment on why they decided not to attend the conference after all. Trustees from the Los Angeles City Employees&rsquo; Retirement System and the San Diego County Employees Retirement Association did not return several calls and emails to determine whether they still plan to attend. Attendance will cost $2,600 or more per trustee, by some estimates.&nbsp;</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>&ldquo;I didn&rsquo;t see the full agenda before I volunteered to go,&rdquo; said Allen, adding that when she reviewed the agenda last week, she decided it was not worth the system&rsquo;s money to attend.</p> <p>Richard Cabral, also from the&nbsp;<a href="">Contra Costa County Employees&rsquo; Retirement Association</a>, said he still plans to attend the conference to network.</p> <p>Santos, an attorney in the Los Angeles County public defender&rsquo;s office, canceled his trip the day after the story appeared to work on a trial scheduled during the week of the conference, said Gregg Rademacher, chief executive of the Los Angeles County Employees Retirement Association.</p> <p>&ldquo;Mr. Santos is a public defender and does his best to coordinate the judicial calendar with his retirement plan commitments,&rdquo; Rademacher wrote in an email.&nbsp;</p> <p>No fees were incurred as a result of the cancellations, officials in Contra Costa and Los Angeles counties said.&nbsp;</p> <p>Hank Kim, executive director and counsel for the trade association organizing the national conference, did not return messages requesting comment.</p> <p>But in an <a href="">open letter posted Tuesday</a> on the conference website, organizers defended their decision to gather money managers, consultants and pension administrators in Honolulu.</p> <p>&ldquo;Our current President grew up there,&rdquo; the letter said, referring to President Barack Obama. In addition, organizers wrote, &ldquo;Honolulu is as economical as it is beautiful. The cost of lodging and food is lower than in many places on the mainland, and airfares from anywhere in the U.S. are competitively priced.&rdquo;</p> <p>The letter continued:<strong> </strong>&ldquo;Objecting to Honolulu because it has beautiful beaches &ndash; something you&rsquo;ll also find in popular convention cities in California and Florida &ndash; is like objecting to New York because it has Broadway and Times Square or objecting to New Orleans because it has jazz clubs and great food.&rdquo;</p> <p>In an <a href="">open letter posted on the website</a> of the San Diego County Employees Retirement Association, officials also defended the conference.&nbsp;</p> <p>&ldquo;Continued and reasonable education is a small investment when compared to the increased value it provides to the $9 billion fund and our members,&rdquo; officials wrote in the Feb. 27 letter.</p> <p>Joe Nation, a professor of the practice of public policy at Stanford University, who researches public employee pensions, said traveling to Hawaii does not send the right message and praised the trustees who pulled out of the conference.</p> <p>&ldquo;It&rsquo;s better for everyone because it looked like a junket to me,&rdquo; Nation said. &ldquo;The point is for them to manage money and to run a system for retirees. If someone really wants to travel, they should be a flight attendant.&rdquo;</p> Money and Politics Daily Report California pensions hawaii pensions Fri, 08 Mar 2013 08:05:02 +0000 Jennifer Gollan 18828 at Private contractor struggles to deliver public bus service, records show <fieldset class="fieldgroup group-credits"><div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/zusha-elinson" title="View user profile." class="fn">Zusha Elinson</a></span> </div> </div> </div> </fieldset> <div class="field field-type-text field-field-body"> <div class="field-items"> <div class="field-item odd"> <p class="image-full-width" style="width: 640px;"><img alt="" class="imagecache-image-full-width" src="/files/_DSC4921 640.jpeg" title="A former Fairfield transit manager says MV Transportation, which was based in the suburban city halfway between Sacramento and++" /> <span class="image-insert-photo-credit">Michael Short/California Watch</span> <span class="image-insert-description">A former Fairfield transit manager says MV Transportation, which was based in the suburban city halfway between Sacramento and San Francisco, didn&rsquo;t deliver what it promised in its contract.</span></p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>Cash-strapped cities embracing private contractors as saviors of their public transportation systems may find a cautionary tale in Fairfield.</p> <p>The suburban city halfway between Sacramento and San Francisco was the headquarters of MV Transportation, a rising star in public transit outsourcing. But the company failed to deliver the bus service it promised its hometown, emails, documents and interviews show.</p> <p>Between 2008 and 2010, the company was fined 295 times by local transit officials for poor performance, including too many accidents, missed bus runs and late buses.</p> <p>The use of private contractors has grown dramatically in California. Contractors ran 223 million miles of bus and train service in the state in 2011, a 42 percent increase in a decade, according to the National Transit Database. Last year, they picked up 166 million riders in California, up 29 percent. Government-run public transit systems still carried far more riders last year with 1.2 billion, a slight dip from a decade ago.</p> <p>Even in the Bay Area, a stronghold of public employee unions, officials are more eagerly considering outsourcing public transit to save money. Alameda County is mulling contracting out bus routes in the growing suburbs of Fremont and Newark, managed for decades by AC Transit. Last summer, Marin County officials considered outsourcing bus service to a private company, deciding against it only when the public agency cut its price to compete.</p> <p>But the arrangements are not all unmitigated successes. Some fall short of heralded savings. Others bring lower wages and less bus service. In Fairfield, then-Transit Manager George Fink said he couldn&rsquo;t hold politically connected MV Transportation to the contract, calling it a wake-up call to transit agencies thinking about outsourcing.</p> <p>Riders like retiree Albert Sanchez are the collateral damage. One sunny afternoon, Sanchez and his wife waited for a bus from the mall in Fairfield to their home a few miles away, in Suisun City. Sanchez said the outsourced Fairfield and Suisun Transit &ndash; known as FAST &ndash; has failed to live up to its optimistic acronym.</p> <p>&ldquo;The bus is always late. It&rsquo;s always late,&rdquo; said Sanchez, an inveterate public transit user who moved from San Francisco eight years ago.</p> <p>Sanchez said that the previous week, he&rsquo;d waited at the stop for two hours. One Friday, he walked four miles home because buses stop running at 8:30 p.m.</p> <p>Documents and interviews reinforce Fink&rsquo;s allegations that the Fairfield City Council and his bosses frequently intervened. Once, Fink said, he clocked the time between his criticism of MV Transportation and a call from his boss, Assistant Public Works Director Wayne Lewis, at 32 minutes.</p> <p>Lewis, who now leads FAST, said Fink was a rigid manager who always stuck to the &ldquo;letter of the law.&rdquo; Lewis added, however, that he understood the frustration city employees feel when contractors &ldquo;have access to elected officials and staff doesn&rsquo;t.&rdquo;</p> <p>MV Transportation has been a generous donor to local charities and pumped tens of thousands into low-dollar Fairfield City Council races.</p> <p>&ldquo;Anything that was critical, 89 percent of the time, it would circle back to us,&rdquo; Fink said. &ldquo;They would engage the City Council, and they would call the city manager and then he would talk to me and tell me to back off.&rdquo;</p> <p>During Fink&rsquo;s five-year tenure in Fairfield, which ended in 2010, records and interviews show he was ordered not to issue an audit critical of MV Transportation and to stop penalizing the company for poor performance, and his staff was ordered to halt regular bus inspections.</p> <p>Chuck Timm, a city councilman until 2011, said the company gained no special access to city leaders and praised its performance.</p> <p>&ldquo;As a councilmember and as a citizen, they were great community partners, and they did an excellent job,&rdquo; Timm said.&nbsp;</p> <p>Timm prefaced his comments by noting that he was &ldquo;friends with the boss,&rdquo; former MV Transportation CEO Jon Monson. Timm also received a $10,000 campaign donation from the company in 2007, according to state campaign finance filings.</p> <p>Cristina Russell, an MV Transportation spokeswoman, declined to comment, saying, &ldquo;A response would unnecessarily cast a negative light on a positive relationship.&rdquo;</p> <p><strong>Other agencies consider contracting</strong></p> <p>In Alameda County, even the possibility of contracting out some bus routes in Fremont and Newark worries AC Transit Director Chris Peeples.</p> <p>&ldquo;Mainly what it would do is screw the union,&rdquo; Peeples said. &ldquo;The contracted-out systems are a whole lot cheaper because of less compensation per hour and dramatically less in benefits.&rdquo;</p> <p>Scott Haggerty, an Alameda County supervisor leading a policy advisory committee to study &ldquo;Tri-City and Tri-Valley Transit&rdquo; for the Metropolitan Transportation Commission, said transit agencies that use private companies have done a better job than AC Transit at keeping costs down. But Haggerty emphasized that no decision has been made and talks are ongoing.</p> <p>Last summer, David Rzepinski, general manager of the Marin County Transit District, which serves the scenic county&rsquo;s 255,000 residents, went shopping for a company to run the district&rsquo;s buses. Rzepinski had been paying Golden Gate Transit $133 an hour. He found that private companies would do the work for between $92 and $115 an hour.</p> <p>The bus drivers union protested. With the threat of contracting hanging over the negotiations, Golden Gate lowered its rate to $120 an hour, so Marin Transit ended up sticking with the incumbent. The new deal will help balance the budget, Rzepinski said.</p> <p><strong>Friction with transit staff</strong></p> <p>With public transportation in the suburbs, some problems are embedded in city planning, or lack thereof. Cities like Fairfield are built for cars and often are too spread out to justify extended hours or more regular service. But problems such as late buses and accidents are more closely related to management and oversight.</p> <p>When Fink arrived in Fairfield in 2005, MV Transportation already was running the bus system, which carries about 1 million passengers a year. When the city put the contract out to bid again, he and other city officials added penalties for poor service. MV won an $18.2 million, four-year contract. Soon after, the fines started rolling in.</p> <p>Over a two-year period beginning in 2008, the company was fined 295 times for a total of $164,000, according to a 2010 city audit, released in place of the one Fink sought to issue. MV was fined for the 14 months when the preventable accident rate exceeded the allowed 1 per 100,000 miles. FAST officials fined MV nine times for not meeting the agreed-upon 90 percent on-time arrival rate and 18 times for buses that never showed at all. The company was penalized twice for drivers using cellphones while driving, six times for drivers speeding and 13 times for drivers being out of uniform.</p> <p>MV executives were furious about the fines. In meetings with the FAST staff, they complained they were &ldquo;losing money&rdquo; and the deal they signed was too punitive, according to meeting notes and internal memos.&nbsp;</p> <p>As the friction between Fink and the company peaked in the summer of 2009, Monson, then MV&rsquo;s board chairman, made $10,000 campaign donations to City Councilman John Mraz and City Councilwoman Catherine Moy. Those were hefty sums, even in a city with no campaign contribution limits. When contacted for comment, Mraz called Fink an expletive and hung up the phone. Moy did not return emails or phone calls.</p> <p><strong>Fines, inspections put aside</strong></p> <p>Monson and other executives began to meet directly with the City Council instead of city transit staff. In a 2010 memo, Lewis &ndash; the assistant public works director &ndash; complained that the &ldquo;city has allowed MV to circumvent the normal management chain. Often, local issues are discussed and resolved without the input of transit staff by the City Manager&rsquo;s office, City Council, and MV executives.&rdquo;</p> <p>Fines against MV were halted by the city for months, and old ones weren&rsquo;t paid as the city manager overruled some on appeal. Bus inspections that had been yielding fines also were stopped.</p> <p>In an interview, Lewis said he killed an audit of MV ordered by Fink because it was too punitive. He said that while many of the fines were valid, &ldquo;there were enough of them that &hellip; would seem like they were frivolous,&rdquo; such as one for a bus driver&rsquo;s untucked shirttail.</p> <p>Lewis added that Fairfield and Suisun Transit and MV Transportation are &ldquo;in a good place now.&rdquo;</p> <p>But problems persisted after Fink left in 2010. The bus service performance &ldquo;exhibited mostly negative trends in all areas&rdquo; related to efficiency and productivity, according to a 2010 audit by the Metropolitan Transportation Commission, which oversees transit funding in the Bay Area. An MV spokeswoman declined to comment, and Lewis did not return calls seeking comment on the audit.</p> <p>And in June 2011, an MV Transportation bus operator was involved in a fatal collision. The bus driver, identified as Dale Lee Karuza in multiple lawsuits, was turning left across a Suisun City street when he collided with an oncoming car, killing a passenger. Police cited the primary cause of the collision as the bus failing to yield right of way, according to the California Highway Patrol&rsquo;s summary. Investigators also concluded that the car was speeding.</p> <p>Fink now works at the San Joaquin Regional Rail Commission in Stockton. Reflecting back on his time in Fairfield, he said it taught him a lesson about outsourcing public transit.</p> <p>&ldquo;If you had a contractor that wanted to run the business and not maximize their profit at every turn, then it would be fine,&rdquo; Fink said. &ldquo;As it tends to work out, you&rsquo;re spending 85 percent of the time making sure that they&rsquo;re doing everything in the contract instead of doing the things you need to be doing, like getting grant money doing transit planning.&rdquo;&nbsp;</p> </div> </div> </div> Money and Politics Wed, 06 Mar 2013 08:05:04 +0000 Zusha Elinson 18823 at Retirement systems to send members to Hawaii summit <fieldset class="fieldgroup group-credits"><div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/jennifer-gollan" title="View user profile." class="fn">Jennifer Gollan</a></span> </div> </div> </div> </fieldset> <div class="field field-type-text field-field-body"> <div class="field-items"> <div class="field-item odd"> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/Hilton_pool.jpg" title="The Hilton Hawaiian Village Waikiki Beach Resort, site of this year's National Conference on Public Employee Retirement Systems, has five swimming pools." /> <span class="image-insert-photo-credit"><a class="image-insert-photo-credit-url" href="" target="_blank">nemuneko.jc/</a></span><span class="image-insert-description">The Hilton Hawaiian Village Waikiki Beach Resort, site of this year&#39;s National Conference on Public Employee Retirement Systems, has five swimming pools.</span></p> <p>When the head of one of the state&rsquo;s largest independent pension funds received an invitation recently for his staff to attend a conference in Hawaii, his response lacked the aloha spirit.</p> <p>&ldquo;I don&rsquo;t plan on approving anyone to attend this conference given its location. &hellip;&nbsp;Hawaii is just not the right message to send at this time,&rdquo; William Raggio, interim general manager of the Los Angeles Fire and Police Pensions, warned in an email to his staff.</p> <p>But other pension plans couldn&rsquo;t resist. Four of the state&rsquo;s 24 largest independent municipal retirement systems intend to send up to five board members each, a survey by California Watch has found.</p> <p>They include the city of Los Angeles, as well as Contra Costa, Los Angeles and San Diego counties &ndash; which are short a combined $17.5 billion to pay promised retiree pension benefits, according to figures provided by the plans.</p> <p>Conference organizers expect about 1,000 pension trustees, money managers and consultants from across the nation to converge on the famed beaches of Waikiki from May 19 to 23 for the <a href="" target="_blank">National Conference on Public Employee Retirement Systems</a>, billed as the largest gathering of its kind for public pension plans.</p> <p>An agenda shows most conference sessions end by early afternoon, leaving ample time for surfing, golfing, tanning or relaxing at one of the conference hotel&rsquo;s five swimming pools. The total cost per attendee: $2,600 or more, by some estimates, including airfare, hotel, registration and other expenses.</p> <p>The conference website supplies board members hoping to shore up support for their expenses-paid trip a &ldquo;<a href=" " target="_blank">2013 Attendance Justification Tool Kit</a>.&rdquo; The site also includes &ldquo;7 Tips for Building Your Case for Attending the Annual Conference,&rdquo; which suggests that trustees emphasize how the conference could help them &ldquo;build a networking list&rdquo; and identify ways to help &ldquo;save your fund money.&rdquo;</p> <p>Asked why pension officials needed a tool kit to rationalize their trip to Honolulu, Hank Kim, executive director and counsel for the trade association organizing the national conference, said, &ldquo;In hindsight, maybe &lsquo;justification&rsquo; wasn&rsquo;t the best choice of words.&rdquo;</p> <div id="dropped_media_205_277"> <div style="float: right; width: 275px; background-color: #eee; padding: 10px; margin: 15px;"> <h6 style="margin-top: 0px; margin-bottom: 15px;">Pension board members attending the Hawaii conference</h6> <p><strong>Los Angeles City Employees&rsquo; Retirement System</strong><br /> - Jeffrey Penichet, board vice president<br /> - Elizabeth Greenwood, commissioner<br /> Expenses have not been finalized.&nbsp;Penichet and Greenwood did not return calls and emails requesting comment.</p> <p><strong>Los Angeles County Employees Retirement Association</strong><br /> - Herman Santos, chairman of the Board of Investments<br /> Hotel stay estimated to cost $1,139.60. Other expenses have not been finalized. Santos referred questions to Gregg Rademacher, chief executive of the pension plan, who issued a written statement: &ldquo;While conferences are generally held in the continental U.S., we are fortunate that our 50th state, Hawaii, is easier and more cost effective to attend than policy and investment conferences on the East Coast, namely, Washington D.C. and New York city. Although the flight times are approximately the same for Honolulu and Washington D.C., flying to and lodging in Hawaii is consistently more cost effective (and safe). The best case scenario is having a world-class conference, such as a NCPERS conference, in your home town, however, that is seldom the case.&rdquo;</p> <p><strong>Contra Costa County Employees&rsquo; Retirement Association </strong><br /> - Terry Buck, trustee: registration is $1,000<br /> - Richard Cabral, trustee: registration is $650<br /> - Jerry Telles, trustee: registration is $1,000<br /> - Gabe Rodrigues, alternate trustee: registration is $1,000<br /> - Debora Allen, trustee: registration is $650<br /> Estimated travel costs for the board members have not been finalized. Buck, Telles, Rodrigues and Allen referred requests for comment to the plan&rsquo;s chief executive, Marilyn Leedom, who did not return calls.</p> <p><strong>San Diego County Employees Retirement Association </strong><br /> - David Myers, board chairman<br /> - E.F. &ldquo;Skip&rdquo; Murphy, vice chairman<br /> - Tim Hancock, alternate board member<br /> Travel estimated to cost $2,650 each. Calls and emails to Myers, Murphy and Hancock were referred to the pension plan&rsquo;s chief executive, Brian White. A spokesman for White issued a statement that said: &ldquo;NCPERS makes the decision on the location, dates and other elements of the conference. &hellip; NCPERS is a national organization and a preeminent resource for providing education to pension trustees and officials.&rdquo;</p> </div> </div> <p>Critics of government spending &ndash; and some pension officials &ndash; say travel to exotic destinations by those overseeing ailing pension funds is unseemly, especially as taxpayers watch their public services diminish to offset growing pension costs.&nbsp;</p> <p>&ldquo;There&rsquo;s no such thing as a free trip to Waikiki,&rdquo; said Joe Nation, a professor of the practice of public policy at Stanford University, who specializes in public employee pensions. &ldquo;Everybody loses; taxpayers will have to pay more, or beneficiaries will have to pay more, or a combination of the two.&rdquo;</p> <p>Nation, a former Assembly Democrat from Marin, added that the pension managers &ldquo;would have higher returns and their beneficiaries would be better off if they were to forgo this trip or travel close to home.&rdquo;</p> <p>The conference in Hawaii was planned and booked back in 2006, before the recent recession, Kim said. Still, organizers expect a strong turnout as trustees and money managers seek to gain an edge in a recovering economy.</p> <p>&ldquo;Being able to have discussions and network with pension officials from all over the country is one of the things that our members find most valuable,&rdquo; said Kim, whose organization represents nearly 560 public pension plans nationwide.</p> <p>Sessions are to include &ldquo;Avoiding a Front Page Scandal at Your Pension Fund: Learning by Example,&rdquo; and &ldquo;How Do We Transform the Way People Think, Talk, and Act about Pensions?&rdquo;</p> <p>Richard Cabral, one of five board members from the <a href="" target="_blank">Contra Costa County Employees&rsquo; Retirement Association</a> who plans to attend, said he doesn&rsquo;t think current and future retirees view &ldquo;my travel as a boondoggle.&rdquo;</p> <p>&ldquo;There are trustees who are trying to further their own personal wealth, who are looking for employment with money managers,&rdquo; said Cabral, a board member since 1977. &ldquo;But my job is here.</p> <p>&ldquo;The real big value is interacting with other trustees. It helps to get different points of view,&rdquo; said Cabral, who also serves as president of the American Federation of State, County and Municipal Employees, AFL-CIO Local 512, a union that represents 300 employees in Contra Costa County.</p> <p>But fellow Contra Costa pension trustee John Gioia questioned the plan to send a large delegation using public funds, especially to a place like Hawaii.</p> <p>&ldquo;Pension trustees should exercise self-discipline and consider public perception in deciding which conferences to attend, otherwise the pension board may have to set limits on the number of trustees it sends,&rdquo; said Gioia, who also is a county supervisor.</p> <p>Full travel costs for most local pension board members attending the conference have not been finalized. Along with the five board members from Contra Costa County, attendees will include three from the <a href="" target="_blank">San Diego County Employees Retirement Association</a>, two from the <a href="" target="_blank">Los Angeles City Employees&rsquo; Retirement System</a> and one from the <a href="" target="_blank">Los Angeles County Employees Retirement Association</a>.</p> <p>Pension administrators in San Diego County estimate that they will spend a total of $7,950 to send three trustees: board Chairman David Myers, Vice Chairman E.F. &ldquo;Skip&rdquo; Murphy and alternate board member Tim Hancock. That includes airfare, conference registration and a five- or six-night stay at the&nbsp;Hilton Hawaiian Village Waikiki Beach Resort.</p> <p>Calls to Myers, Murphy and Hancock were referred to Brian White, the plan&rsquo;s chief executive. Through a spokesman, White issued a statement that said: &ldquo;California state law requires board members to fulfill an education requirement. SDCERA assists Board members in fulfilling this requirement to educate and continuously improve the knowledge and understanding of complex topics and trends involving the governance of a public pension fund. Educational seminars typically cover critical topics such as legal requirements, investing, and trustee ethics.&rdquo;</p> <p>Those new training requirements went into effect in January. Under a law amended by the state Legislature last year, boards overseeing pension systems in 20 California counties must ensure board members receive 24 hours of education every two years.</p> <p>Some of the more frugal pension plans encourage their trustees to attend seminars in state.</p> <p>&ldquo;We want to save money,&rdquo; said Greg Frank, a management analyst for the San Joaquin County Employees&rsquo; Retirement Association, a $2 billion plan covering roughly 11,000 current and future retirees. &ldquo;We give the trustees classes to attend that are local, in places like Berkeley. It&rsquo;s real easy to keep it in California and keep costs down.&rdquo;</p> <p>The bill&rsquo;s author, Assemblyman Bob Wieckowski, D-Fremont, said he did not believe pension board members &ndash; or, for that matter, groups of trustees &ndash; needed to travel to exotic locations to fulfill the new training requirements.</p> <p>While the Hawaii conference would fulfill the requirements, so do programs set up through accredited academic institutions in California.&nbsp;Educational conferences scheduled over the next two years include those in Napa, Indian Wells, Sacramento and Monterey.</p> <p>&ldquo;I didn&rsquo;t think that running up travel expenses and hotel rooms was a requirement of getting educated,&rdquo; Wieckowski said. &ldquo;We&rsquo;re asking the public to show fiscal restraint, the cities and counties and the state are providing less services, and people are paying more taxes. So you would think these decision-makers &nbsp;would reflect that.&rdquo;</p> <p><em>This story was edited by Amy Pyle. It was copy edited by Nikki Frick and Christine Lee.</em></p> </div> </div> </div> Money and Politics Wed, 27 Feb 2013 08:05:02 +0000 Jennifer Gollan 18817 at School discipline reform groups question plans for armed security <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/susan-ferriss" title="View user profile." class="fn">Susan Ferriss</a></span> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/LA school police.jpg" title="Los Angeles police Sgt. Frank Preciado and Officer Wendy Reyes watch children arriving at Main Street Elementary School." /> <span class="image-insert-photo-credit">Nick Ut/Associated Press</span> <span class="image-insert-description"> Los Angeles police Sgt. Frank Preciado and Officer Wendy Reyes watch children arriving at Main Street Elementary School.&nbsp;</span></p> <p>As the White House considers proposals to allocate federal money for armed guards in schools, prominent school discipline reform groups have issued a report denouncing the idea as a misguided reaction to the school shooting in Newtown, Conn.</p> <p>&ldquo;Placing more police in schools has significant and harmful unintended consequences for young people that must be considered before agreeing to any proposal that would increase the presence of law enforcement in schools,&rdquo; says an <a href="" target="_blank">issue brief [PDF]</a> released Friday by the Advancement Project, Dignity in Schools and other organizations.</p> <p>The <a href="" target="_blank">Advancement Project</a>, founded in 1999, has offices in Washington, D.C., and California and has worked with school districts and states to adopt alternatives to suspensions and expulsions. <a href="" target="_blank">Dignity in Schools</a> also is devoted to working with districts and advocating fewer suspensions and less involvement of law enforcement in school discipline.</p> <p>The groups called on the White House and Congress, before they act, to consider how the school discipline climate changed after more police were introduced to schools in response to the Columbine shootings in Colorado nearly 15 years ago.</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>&ldquo;We have seen what happens when (schools) ramp up police presence and other security measures in response to a shooting or other violent act. In Colorado, it resulted in more students getting arrested for minor misbehaviors, more students being pushed out of school, and a declining sense of safety in schools,&rdquo; the brief says.</p> <p>&ldquo;These unintended consequences,&rdquo; the report continues, &ldquo;are persistent and pervasive &ndash; despite efforts by parents, students, and the school district, the high arrest rates and racial disparities that resulted from increased police presence and zero tolerance policies still exist.&rdquo;</p> <p>Vice President Joe Biden, who is leading a White House effort on gun control and school safety, is reportedly interested in the idea of allocating federal money to schools that wish to have armed guard protection, according to a recent <a href="" target="_blank">report</a> by The Washington Post.</p> <p>The idea is being championed by one of Congress&rsquo; most ardent liberals, Sen. Barbara Boxer, D-Calif., who told The Postthat Biden is &ldquo;very, very interested&rdquo; in a plan she presented to finance the deployment of police at schools.</p> <p>&ldquo;I don&rsquo;t see why anyone should object to it, left or right,&rdquo; Boxer told The Post. &ldquo;It&rsquo;s an area where I think I can find common ground with my colleagues on all sides.&rdquo;</p> <p>Biden has met with a number of groups this week in his role as leader of the post-Newtown effort &ndash; among them the National Rifle Association.</p> <p>The <a href="" target="_blank">NRA</a>, under scrutiny for its intense efforts to preserve gun ownership liberties, has suggested that schools consider training and arming teachers or other appointed staff inside schools. The NRA has <a href="" target="_blank">offered</a> to pay for and provide training.</p> <p>&ldquo;If we truly cherish our kids more than our money or our celebrities, we must give them the greatest level of protection possible and the security that is only available with a properly trained &ndash; armed &ndash; good guy,&rdquo; NRA Executive Vice President Wayne LaPierre said at a press conference explaining the group&rsquo;s recommendations.</p> <p>LaPierre also urged Congress to appropriate &ldquo;whatever is necessary to put armed police officers in every school.&rdquo;</p> <p>But in its brief, the Advancement Project, whose ideas have gained traction recently in Washington, reacted with dismay to both the NRA and Boxer&rsquo;s recommendations.</p> <p>Following the Newtown killings, Boxer also proposed placing the National Guard in schools.</p> <p>&ldquo;We object to using the limited resources of the federal government to expand the presence of police in schools,&rdquo; the Advancement Project brief says. &ldquo;More specifically, we oppose the legislation offered late last Congress by Senator Barbara Boxer to facilitate the installation of National Guard troops in U.S. schools. We cannot support any such actions that have not been shown to make schools safer and instead can lead to terrifying, fatal mistakes.&rdquo;</p> <p>The Advancement Project report cites specific examples of students ticketed or arrested for minor infractions in various cities with a beefed-up school police presence, including Denver, New York and Los Angeles, as reported by the Center for Public Integrity in a <a href="" target="_blank">series</a> of recent stories.</p> <p>In Denver, where parent-led reforms now are aiming to reverse harsh discipline practices, schools saw a 71 percent jump in referrals of students to police or courts between 2000 and 2004. Most referrals, the brief notes, were for minor infractions such as using obscenities, disruptive appearance and destruction of non-school property.&nbsp;</p> <p>&ldquo;Serious conduct, like carrying a dangerous weapon to school, accounted for only 7% of the referrals,&rdquo; the report says.</p> <p>The Obama administration has noticed these patterns, the report says, and has taken action to encourage or require schools to adopt alternatives to suspensions and involvement of law enforcement in discipline matters.</p> <p>On Dec. 12, Advancement Project Co-Director Judith Browne Dianis testified at the first congressional <a href="" target="_blank">hearing</a> on the so-called &ldquo;school-to-prison pipeline.&rdquo; That&rsquo;s a term coined by groups arguing that the involvement of police in what should be school disciplinary matters is putting some students, especially&nbsp;low-income minorities, on a path to more serious trouble.</p> K–12 Money and Politics Daily Report campus police guns police school discipline schools shooting Tue, 15 Jan 2013 16:03:52 +0000 Susan Ferriss 18784 at Oakland school district mishandled federal money, state finds <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/will-evans" title="View user profile." class="fn">Will Evans</a></span> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/St.Andrew_08_web.jpg" title="St. Andrew Missionary Baptist Church and private school in West Oakland" /> <span class="image-insert-photo-credit">Michael Short/California Watch</span> <span class="image-insert-description"> St. Andrew Missionary Baptist Church and private school in West Oakland&nbsp;</span></p> <p>The Oakland Unified School District failed to follow federal regulations in doling out taxpayer money to benefit local private schools and must pay some of it back, a state review has found.</p> <p>The state Department of Education cited Oakland Unified for not meeting federal requirements in its distribution of federal Title I and Title II money&nbsp;to provide teacher training and tutoring for struggling students at private schools. Private schools are entitled to a share of federal money, but public school districts are responsible for maintaining control of the funds.</p> <p>The <a href="" target="_blank">state found</a> that Oakland Unified paid instructors who were not independent of their private schools, shipped materials directly to the private schools without taking an inventory and&nbsp;let private schools design their own taxpayer-funded programs.</p> <p>State officials expedited the review, originally planned for January, after California Watch <a href="" target="_blank">reported</a> that the district had paid officials at St. Andrew Missionary Baptist Church&rsquo;s private school based on padded enrollment numbers. The West Oakland K-12 school also has come <a href="" target="_blank">under fire</a> for making its students solicit money at BART stations and for the alleged physical abuse of students, which the school has denied.</p> <p>Oakland Unified is asking for more time to resolve the state&#39;s findings of noncompliance, said spokesman Troy Flint.</p> <p>&quot;Normally, you would have had a longer timeframe ... to make sure you have all your ducks in a row,&quot; Flint said. &quot;We didn&rsquo;t have that. Working in a more compressed timeframe was a challenge for us.&quot;</p> <div id="caw-inset-1-placeholder"></div> <p>School board member Noel Gallo, who has pushed for more oversight of the funding, said he will work to &quot;address publicly the corrections that we have made and be able to monitor that on an ongoing basis.&quot;&nbsp;</p> <p>School districts are allowed to use the federal money to pay private school teachers to provide services like additional tutoring, but the teachers must be independent of the private schools.</p> <p>The education department&#39;s review stated that Oakland Unified inappropriately paid $21,000 to a St. Andrew teacher who was not independent of the family-run school and that the district must &quot;recover&quot; those funds.&nbsp;</p> <p>If the district is at fault for the problem, Flint said, it will have to compensate the federal program with other district money.</p> <p>The report also cited the district for hiring the administrator of a Nation of Islam-affiliated K-12 school, Muhammad University of Islam, to provide services at her own school.</p> <p>Flint said the district has &quot;philosophical differences&quot; with the California Department of Education over its interpretation of the law.</p> <p>&quot;We had a differing interpretation, but obviously, we&rsquo;re compelled to follow the judgment of the CDE and we&rsquo;ll do that,&quot; he said. &quot;But we just want to make sure that we have clarity on what the parameters are.&quot;</p> <p>Some private schools have objected to the requirements now being enforced by state officials, he said.</p> <p>&quot;Because there&rsquo;s been more scrutiny as a result of the investigation related to St. Andrew, I guess they feel that some autonomy has been compromised,&quot; he said. &quot;The district, the state and the private schools need to reach a common understanding so that everyone can be satisfied that the law&#39;s being upheld.&quot;</p> <p>The state review also singled out $3,600 in inappropriate payments to Robert Lacy Jr., a St. Andrew teacher whose father runs the school and church. The district had paid Lacy $100 per hour to repair computers for student use in October 2011 and again in March of this year. The Department of Education&#39;s report directed the district to reimburse the federal program from another funding source.</p> <p>In earlier interviews with California Watch, several former students said Lacy would <a href="" target="_blank">hit, kick and throw things</a> at students and rarely let them use the computers. School officials have <a href="" target="_blank">denied</a> all allegations of abuse.</p> <p>Earlier this year, Oakland Unified decided to <a href="" target="_blank">cut off federal funds</a> to St. Andrew. After California Watch&#39;s investigation, the district determined that the school did inflate enrollment figures, which are used to allocate the funding.</p> <p>The district also added two staff members to oversee the funds and required more visits to private schools to better monitor the use of the money.</p> <p>&quot;I think that should address a lot of the concerns that the state has,&quot; Flint said. &quot;We can get beyond this and move our attention to our true emphasis, which is Oakland public school students.&quot;</p> K–12 Money and Politics Daily Report Education federal funding K-12 education Oakland Oakland Unified School District private schools School Alarm Fri, 21 Dec 2012 08:05:04 +0000 Will Evans 18760 at Emails reveal college officials knew they were overbilling state <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/erica-perez" title="View user profile." class="fn">Erica Perez</a></span> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/diploma money 02.jpg" title="" /> <span class="image-insert-photo-credit"><a class="image-insert-photo-credit-url" href="" target="_blank">pogonici/Shutterstock</a></span></p> <p>Newly released emails and documents show which current and former senior administrators at the College of the Desert were aware that the district&#39;s enrollment figures were inaccurate and the college was overbilling the state &ndash; a deception that will cost the district $5.26 million in repayments.</p> <p>A recent <a href="" target="_blank">audit</a> by the state Fiscal Crisis &amp; Management Assistance Team characterized the overbilling as potential fraud, though it did not name names.</p> <p>Beginning in 2003-04, officials at the Palm Desert college used an inaccurate formula for counting enrollment that assumed most classes met for the exact number of hours listed in the catalog. By that calculation, every three-unit class provided 54 hours of instruction per semester.</p> <p>But in reality, many three-unit classes met for 52 or 53 hours per semester.</p> <p>The seemingly small discrepancy was significant because college districts receive the bulk of their state funding based on the number of instructional hours served. Applied over thousands of classes per year, the overbilling added up to millions of dollars that should have gone to other districts.</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>The California Community Colleges Chancellor&rsquo;s Office first found out about the overbilling in spring 2011 through an anonymous tip. This summer, the chancellor&rsquo;s office asked the Fiscal Crisis &amp; Management Assistance Team,&nbsp;a state-funded agency, to investigate.</p> <p>The fiscal team&#39;s review found &ldquo;sufficient evidence to demonstrate that financial statement fraud and mismanagement may have occurred,&quot; according to the Nov. 28&nbsp;<a href="" target="_blank">report</a>.</p> <p>In 2004, as the college was transitioning to a new software system for tracking data, a group of senior managers and staff made the decision to calculate enrollment based on the &ldquo;catalog hours&rdquo; instead of actual hours served.</p> <p>On March 8, 2004, former Interim Vice President of Administrative Services Jack Randall sent an <a href="" target="_blank">email</a> to Florante Roa, a supervisor in the information systems department, saying he had checked with Rocky Young, who was then a vice chancellor of the Los Angeles Community College District, and that Young had said it was acceptable to count all three-unit classes as 54 hours.</p> <p>Randall copied three other senior managers on the email: Interim Dean of Enrollment Services Carlene Gibson, Dean of Information Systems Bina Isaac and former Vice President of Instruction Gari Browning.</p> <p>Officials knew the move would inflate hours served. Roa sent an email that same week to Randall, Gibson, Isaac and Browning, saying Gibson had instructed staff to take all classes that met for 50, 51, 52, 53 or 54 hours and change them in the computer system to show they had met for 54 hours.</p> <p>The final decision to calculate hours this way was made at a March 25, 2004, meeting, according to a <a href="" target="_blank">memo</a> that shows Gibson, Browning and Randall in attendance, along with Roa and three other staff members.</p> <p>The memo was forwarded to two other managers: former Dean of Enrollment Services John Loera and former Vice President of Student Services Diane Ramirez.</p> <p>When a reporter read the March 8 email aloud to Randall, he said he recalled it. He said another college official &ndash; he could not remember who &ndash; had asked him to talk to Young, the Los Angeles college official, about whether it was possible to use catalog hours. But Randall said he was not responsible for making the decision to count hours that way.</p> <p>&ldquo;When they asked me how to do it, I said that&rsquo;s not how to do it,&rdquo; said Randall, who now is retired. &ldquo;I really don&rsquo;t even recall &hellip; the history of the thing. I do know that I didn&rsquo;t feel comfortable.&rdquo;</p> <p>Browning, who is now president of Ohlone College in Fremont, declined to comment because she said she had no detailed memory of the issue. She did not review the emails and said the audit agency had not contacted her.</p> <p>Loera also declined to comment. Neither Gibson nor Ramirez responded to requests for comment, and Isaac referred questions to college spokeswoman Pam Hunter.</p> <p>Hunter said college President Joel Kinnamon is doing an internal review based on the audit&#39;s findings.</p> <p>As early as June 2005, Roa and Matthew Breindel, then the coordinator of the college&rsquo;s institutional research department, <a href="" target="_blank">told</a> Loera, Isaac and outside attendance consultant John Mullen in emails that the enrollment accounting seemed to be <a href="" target="_blank">wrong</a>.</p> <p>In an August 2005 <a href="" target="_blank">email</a>, Isaac told then-President Maria Sheehan and then-Vice President of Administrative Services Jerry Patton that the new software system, Datatel, originally had been set up correctly to use actual hours but was manually overridden to use incorrect catalog hours. She said this was done under the direction of Randall&rsquo;s March 8 email.</p> <p>Randall disputed that characterization in an interview.</p> <p>&quot;The email I sent to them was not a direction,&quot; he said. &quot;It was just saying that&rsquo;s how they did it in L.A.&quot;</p> <p>Later in August 2005, Isaac <a href="" target="_blank">told</a> Patton that consultant Mullen had done a sample test to determine the extent of the problem with attendance accounting and found enrollment figures were overstated by 1 percent.</p> <p>In March 2006, even though Mullen knew the enrollment figures were not accurate, he gave Loera estimates for 2005-06, describing them in an <a href="" target="_blank">email</a> as &ldquo;good enough for government work.&rdquo; Loera forwarded the email to Patton, who submitted them to the chancellor&rsquo;s office.</p> <p>The following month, emails show Patton still was mulling over what to do about the overstated figures. In an April 27, 2006, <a href="" target="_blank">email</a>, Mullen told Isaac that he would &ldquo;continue the analysis&rdquo; so that &ldquo;Jerry and others can set our course on that item for this and subsequent years.&rdquo;</p> <p>The corrections still hadn&rsquo;t been made nearly three years later, in January 2009, when Patton &ndash; who had since been promoted to college president &ndash; sent an <a href="" target="_blank">email</a> to Loera stating that Loera&#39;s planned meeting with Mullen would be the perfect time to correct &ldquo;the Datatel problem of over-reporting (full-time equivalent students).&rdquo;</p> <p>Still, the problem did not get fixed. In June 2009, Patton sent an <a href="" target="_blank">email</a> to Ramirez, along with Vice President of Business Affairs Edwin Deas and Vice President of Academic Affairs Farley Herzek, in which he acknowledged that the enrollment counts had an error rate between 2 and 4 percent. He asked for an analysis showing the fiscal impact of correcting the problem.</p> <p>In July 2009, Patton <a href="" target="_blank">told</a> Deas, Herzek, Loera and Ramirez that the correction would not be made on the current enrollment report because doing so would cause auditors to question why the counts had changed from preliminary numbers submitted earlier. Patton said the college would instead submit accurate numbers after the end of the fiscal year.</p> <p>In response, Deas said: &ldquo;Makes sense although it does entail knowingly submitting incorrect information right now? Is that ok?&rdquo;</p> <p>Patton responded, &ldquo;Yes, as was the last 4-5 years.&rdquo;</p> <p>In June 2011, after the chancellor&rsquo;s office began asking questions about the improper enrollment figures, Patton sent an <a href="" target="_blank">email</a> to all employees blaming the problem on Datatel.</p> <p>Patton also noted that the college&rsquo;s auditors, Lund &amp; Guttry, had never caught the error. While the audits had noted other problems with the district&rsquo;s attendance accounting, such as missing class rosters from instructors, they never caught that the district was improperly boosting the number of hours that classes met each semester.</p> <p>At a board of trustees meeting last week, Kinnamon, the college&#39;s president, told trustees that there is no evidence anyone benefited financially from overstating the enrollment numbers, according to a district <a href="" target="_blank">news release</a>.</p> <p>He said a representative from the Fiscal Crisis &amp; Management Assistance Team would work with the district to validate the 2011-12 enrollment figures before the district submits them to the state chancellor&#39;s office. Also, an external forensic accountant will review all issues related to reporting the enrollment figures and will report to Kinnamon.</p> Higher Ed Money and Politics Daily Report california community colleges college college enrollment community colleges state chancellor's office Tue, 18 Dec 2012 08:05:03 +0000 Erica Perez 18753 at Nonprofits seek influence with political giving <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/amy-julia-harris" title="View user profile." class="fn">Amy Julia Harris</a></span> </div> </div> </div> <div class="field field-type-text field-field-updates"> <div class="field-items"> <div class="field-item odd"> <p><em>UPDATE, Dec. 13, 2012: This story updates to add a comment from the executive director of the nonprofit San Francisco Food Bank.</em></p> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/money in hands 02.jpg" title="" /> <span class="image-insert-photo-credit"><a class="image-insert-photo-credit-url" href="http:&#47;&#47;&#119;&#119;&#119;&#46;&#102;&#108;&#105;&#99;&#107;&#114;&#46;&#99;&#111;&#109;&#47;&#112;&#104;&#111;&#116;&#111;&#115;&#47;&#54;&#56;&#55;&#53;&#49;&#57;&#49;&#53;&#64;&#78;&#48;&#53;/6848823919/" target="_blank"></a></span></p> <p>As executive director of the&nbsp;<a _mce_href="" href="">Friends of the San Francisco Public Library</a>, Scott Staub raises money to give to the city&rsquo;s libraries. In his spare time, he raises money to give to politicians.</p> <p>Staub heads a political action committee that is attempting to increase the political clout of the nonprofit sector in federal elections. Most of the committee&rsquo;s members are affiliated with charitable organizations.</p> <p>&ldquo;We want to be a political player in a positive way,&rdquo; said Staub, chairman of the&nbsp;<a _mce_href="" href="">Association of Fundraising Professionals</a>&nbsp;PAC, an umbrella organization for charitable fundraisers. &ldquo;There are lots of interest groups, and we decided we needed to have a greater voice for philanthropy.&rdquo;</p> <p>The PAC was formed about a decade ago and since then&nbsp;<a _mce_href="" href="">has contributed $68,000 to politicians who support pro-charity causes</a>, especially maintaining the charitable tax deduction.</p> <p>Charities are prohibited from donating to political campaigns as a condition of their tax-exempt status. But their politically free cousins, PACs, do not face the same restrictions.</p> <p>The idea of donating money to candidates has been slow to catch on among nonprofit leaders, who typically eschew partisan political activity.</p> <p>But that&rsquo;s starting to change.</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>Robert Egger, a longtime nonprofit advocate, started a second PAC,&nbsp;<a _mce_href="" href="">CForward</a>, in January. Like the fundraisers&rsquo; PAC, CForward only supports candidates who back the nonprofits&rsquo; agenda.</p> <p>&ldquo;Nonprofits represent the biggest unsolicited special interest group in America,&rdquo; said Egger, who also runs a nonprofit community kitchen in Washington, D.C. &ldquo;Most candidates are burdened by the idea that dot-com drives the economy while dot-org does good deeds.&rdquo;</p> <p>Just look at politics in the San Francisco area, home to one of the largest nonprofit economies in the nation, Egger said. In 2012, there were more than 41,000 registered nonprofits in the Bay Area, according to the Urban Institute. There are 1.63 million tax-exempt organizations in the U.S.</p> <p>&ldquo;Candidates can tell you how many manufacturing jobs are in their area,&rdquo; Egger said. &ldquo;But can they tell you how many nonprofits there are in their district? No way. I found that astounding. But that&rsquo;s the status quo of politics.&rdquo;</p> <p>According to&nbsp;<a _mce_href="" href="">a survey of 1,500 nonprofit leaders this month [PDF]</a>&nbsp;by Johns Hopkins University, &ldquo;nonprofit organizations are under assault today as perhaps never before.&rdquo; More than half the groups surveyed said government officials did not appreciate how the nonprofit sector works and are proposing policies that hurt charities.&nbsp;</p> <p>&ldquo;The usual pattern in the U.S. is for groups to start lobbying when they feel that they are under attack,&rdquo; said Bruce E. Cain, professor of political science at Stanford University. &ldquo;The current climate is very volatile for nonprofits. They were hit hard by the stock market problems in 2008, and now the threat of charitable deduction limits has to be freaking them out.&rdquo;</p> <p>It is.</p> <p>Both Republicans and Democrats have proposed plans to increase revenue by limiting tax deductions that make it easier for the wealthiest Americans to donate to charity. The White House has proposed limiting charitable deductions to 28 percent for families that earn more than $250,000 a year. Last week, House Speaker John Boehner said he would be willing to limit itemized deductions, which could include charitable donations.</p> <p>&ldquo;When (the government) looks to make cuts and get new sources of revenue, charities, because of their tax-exempt status, always become an easy target,&rdquo; Staub&nbsp;said.</p> <p>This year, the fundraisers&rsquo; PAC supported candidates who oppose any cap on charitable deductions. In 2012, the PAC contributed $23,500 to six members of the House and four members of the Senate who sat on key committees.</p> <p>CForward has not yet donated to candidates but endorsed eight politicians for city, state and federal seats across the country, including Sean Sullivan, a Democrat who ran unsuccessfully&nbsp;for Oakland City Council and advocated greater involvement by nonprofit groups in the city.</p> <p>Not everyone in the nonprofit world likes the idea of mixing politics and philanthropy. Most advocates want to focus on their specific missions, such as eliminating poverty or feeding the hungry, not on campaign politics.</p> <p>&quot;The concern that I have is whether we could ever mobilize enough money to really make a difference,&quot; said Paul Ash, executive director of the nonprofit San Francisco Food Bank. &quot;Once you start talking about donating to federal politicians, that&rsquo;s a huge amount of money. I would be inclined to use the money slightly differently.&quot;</p> <p>Staub says that while his PAC&rsquo;s contributions are nothing compared to super PACs that pour millions into elections, having money in the game gets politicians&rsquo; attention.</p> <p>&ldquo;It&rsquo;s not pay-for-play,&rdquo; Staub said. &ldquo;But when you&rsquo;re a financial supporter, it does seem to be an easier opportunity to have meetings with lawmakers to present our perspective on charitable legislation.&rdquo;</p> Money and Politics Daily Report charity nonprofits PAC political money Thu, 13 Dec 2012 08:05:02 +0000 Amy Julia Harris 18745 at Defense contractors fear fiscal cliff spending cuts will strike bone <div class="field field-type-userreference field-field-authors"> <div class="field-items"> <div class="field-item odd"> <span class="author vcard"><a href="/user/gw-schulz" title="View user profile." class="fn">G.W. Schulz</a></span> </div> </div> </div> <p class="image-insert" style="width: 304px;"><img alt="" class="imagecache-image-insert" src="/files/imagecache/image-insert/militaryplane.jpg" title="" /> <span class="image-insert-photo-credit"><a class="image-insert-photo-credit-url" href="" target="_blank">The 621st Contingency Response Wing/Flickr</a></span></p> <p>An estimated 1 in 4 jobs in San Diego County are tied to the military sector, and $32 billion in defense-related activities is linked to that area alone, more than the entire economic output of Panama. &nbsp;</p> <p>So what happens if tens of billions of dollars in defense spending is suddenly yanked? Defense contractors and other employers are worrying aloud about the answer as Congress and President Barack Obama quarrel over tax increases and budget cuts and the country edges closer to the so-called fiscal cliff.</p> <p>The bureaucratic term for this doomsday scenario is sequestration, and while many have expected a smaller military, more profound downsizing has a lot of people nervous in California and elsewhere.</p> <p>&ldquo;The damage is already starting to happen,&rdquo; said Chad Moutray, chief economist for the National Association of Manufacturers. &ldquo;Many of our members are already seeing a slowdown in their sales, hiring and investment.&rdquo;</p> <p>Deep spending reductions were proposed last year as a way to force lawmakers and the president to address the federal government&rsquo;s outsized budget deficit. If Congress and the White House take no action by Jan. 2, $500 billion in Defense Department cuts will automatically kick in over the next 10 years, with $55 billion of it expected in the first year.</p> <div id="caw-inset-1-placeholder">&nbsp;</div> <p>The deadline that now looms has become part of a larger debate about defense spending. Obama&nbsp;already&nbsp;was eyeing $487 billion in cuts over the coming decade, and even some Republicans who have traditionally shielded the military&rsquo;s bloat now say the Pentagon is due for a diet.</p> <p>How the economy will react isn&rsquo;t clear.</p> <p>Marc King, president of Ceradyne Armor Systems Inc., based in Costa Mesa, Calif., said contractors are used to some amount of volatility in defense spending, and they prepare for it as much as possible even without the potential for sequestration. Recently acquired by 3M Co., Ceradyne employs 150 people in California to produce armor for vehicles, aircraft and combat troops.</p> <p>Once Ceradyne adjusts its manufacturing process to support solar-panel production, windmills and oil-drilling parts, returning to meet sudden Defense Department demand for more armor is no easy task.</p> <p>&ldquo;It&rsquo;s a very long process, because right now there&rsquo;s a supply chain in place that supports all of this,&rdquo; King said. &ldquo;Once you stop manufacturing, that supply chain eventually dries up. &hellip; You just can&rsquo;t make chicken salad out of chicken feathers.&rdquo;</p> <p>California is among states that could suffer most if sequestration cuts do kick in, Moutray said.</p> <p>Today, tens of billions of dollars in contract transactions are signed each year by the Defense Department for work done in California. Although government contracting provides only a rough portrait,&nbsp;<a data-cke-saved-href="" href="">available public data</a>&nbsp;show $40 billion in such transactions inked during the 2011 fiscal year.</p> <p>Claude Chafin, a spokesman for the Republican majority of the House Armed Services Committee, said the consequences of cuts aren&rsquo;t just financial. Personnel is always a top expense, and if service members are shed in exchange for Pentagon savings, that could lead to a loss of institutional knowledge.</p> <p>&ldquo;There is a wealth of experience that we&rsquo;re going to need in the generation ahead that we run a very real risk of losing completely,&rdquo; Chafin said. &ldquo;People who are the good captains and majors today, we need to be our future generals and admirals.&rdquo;</p> <p>Longtime critics of federal largesse, on the other hand, have embraced the opportunity to condemn decades of hefty defense spending. Republican Sen. Tom Coburn of Oklahoma told reporters on Nov. 15 that his own party had a &ldquo;blind eye&rdquo; when it came to defense expenditures and was unwilling to include security spending in rhetoric about the need for smaller government.</p> <p>Coburn&rsquo;s office released a report arguing a swollen Defense Department had taken on too many costs and initiatives that had nothing to do with national security.</p> <p>&ldquo;Our generals tell us the greater threat to our nation is not any foreign power. It&rsquo;s not the Middle East; it&rsquo;s not al-Qaida. It&rsquo;s our debt,&rdquo; he said. &ldquo;So everything has to be on the table.&rdquo;</p> <p>While the defense sector contends it&rsquo;s already being cut to the bone, the report points to more than 100 renewable energy initiatives launched by the Defense Department during 2010, more than any other federal agency, including the Environmental Protection Agency and the Department of Energy.</p> <p>&ldquo;This mission creep has essentially transformed the Department of Defense into the Department of Everything,&rdquo; the report derides.</p> <p>Lynn Reaser, chief economist at Point Loma Nazarene University&rsquo;s Fermanian Business and Economic Institute in San Diego, acknowledges that there&rsquo;s no doubt the wars in Iraq and Afghanistan will wind down, so it follows that defense spending also will drop. But additional politically charged cuts occurring across the board are too haphazard of an approach for slimming down the Pentagon&rsquo;s waistline, she said.</p> <p>A June&nbsp;<a data-cke-saved-href="" href="">report</a>&nbsp;from the institute concluded that San Diego may fare better than other regions, partly due to the presence of special operations forces and new technologies like unmanned aircraft, plus a shift in the Navy&rsquo;s attention to the Asia Pacific. But defense programs, the report said, would still &ldquo;face havoc&rdquo; under sequestration.</p> <p>&ldquo;You cannot cut one ship by 10 percent, so you either forgo the total ship spending or you fund the ship and have to make major cuts in other areas,&rdquo; Reaser said. &ldquo;The Budget Control Act was passed in 2011 with the consequences intended to be so severe and so unreasonable that they would never be allowed to happen. This was supposed to have been solved by the end of 2011.&rdquo;</p> Money and Politics Daily Report budget cuts defense contracts Defense Department military Wed, 12 Dec 2012 08:05:02 +0000 G.W. Schulz 18743 at