Supervisors facing years of scrutiny over their handling of a discretionary fund have failed to adequately reform a spending practice involving hundreds of thousands of taxpayer dollars each year, according to a grand jury report released early last week.
The report, made public last Monday after a three-month investigation by the Marin County Civil Grand Jury, called for sweeping structural changes to the so-called Community Service Fund by the 2013-14 fiscal year.
In interviews with supervisors and county administrators, the 19-member panel uncovered a “number of troubling procedural and process issues” with the fund, including a “vague” review process and set of criteria to determine qualified applicants.
“The problem with it is the design,” Rich Treadgold, foreman of the grand jury, said of the fund.
The county assigns from its budget every year a large sum of money used by supervisors on a discretionary basis to help finance a range of organizations, such as civic groups and charities, within their individual districts.
Grant requests from organizations—mostly nonprofits—are reviewed by each of the five supervisors, who use what the report described as an “informal” set of criteria. Requests, if approved, are sent to a county administrator who determines whether to submit them to the board, which, “typically with little or no questioning,” decides whether to approve requests on a monthly basis, the report said.
“Supervisors should focus on either county-wide issues or district problems, rather than the nonprofits of their individual constituents,” the report said. According to the California constitution, the
responsibilities of supervisors do not extend beyond “passing laws, setting policies, adopting budgets and overseeing the various county departments.”
The report was not entirely condemning, however. It acknowledged the fund brings financial and other kinds of “value” to towns and cities across the county. And it cited responses from a survey of a group of recipients, all of whom indicated “substantial support” of a fund seen partly as a source of leverage to gain financial support from other donors.
But the “wide discretion” with which supervisors distribute grants has led Mr. Treadgold, along with other investigators, to view the fund more as an “insider organization” that lends itself to political patronage” than a competitive source of financial support.
Several applicants listed in the report received consecutive years of funding—contrary to guidelines established by the county’s administrative office.
In one instance, an unidentified supervisor “encouraged” an unnamed inter-county organization, to which the supervisor served as a board director, to apply for a grant. Mr. Treadgold said that supervisor, whose name he is required by law to withhold, no longer sits on the board.
The report comes as similar funds in cities and counties across the state are facing unrelenting criticism.
In Oakland, city officials have come under increasing pressure in recent months after a 2009 investigation by Alameda County’s grand jury to halt spending from a discretionary fund used to help finance events sponsored by the city.
Officials in San Bernardino and Riverside Counties, both bordering Los Angeles County, are set to close similar funds.
Only two other counties in the state—Los Angeles and Sacramento—still operate such programs, the report noted. Marin remains the only county in the Bay Area with a discretionary fund.
That fund, which was set up in the early 1990’s, has long been a lightning rod of controversy from critics who assert it is mishandled by supervisors seeking to burnish their political reputation.
Mounting controversy led to a grand jury investigation in 2001, when the panel uncovered limited records of grants and contractual agreements between supervisors and recipients—and the records that did exist were “so vague that they create the impression that they were written to avoid the appearance of funding prohibited gifts.”
Supervisors that year rejected nearly all of the recommendations by the grand jury, which requested a halt to spending if the board did not immediately take steps to “improve transparency” and “encourage greater public awareness” of the fund.
In the ensuing decade efforts to reform the fund started to take shape. In 2009, supervisors decided to display grant requests on its meeting agenda to try to draw public input. And administrators began requiring recipients to sign affidavits to ensure their grants were used for purposes stated in their applications.
But skepticism remained, as public concern grew over supervisors’ seemingly unrestricted spending of taxpayer dollars.
Shortly after their regular annual interview of supervisors in August, the current grand jury launched another investigation into grants issued in the past three fiscal years, over which supervisors have donated more than $1 million to about 300 organizations.
That includes nearly $245,000 in West Marin’s District Four, where Supervisor Steve Kinsey helped financed more than 50 projects, including student activities run by Tomales High School a farmers market offered by Marin Organic, both of which received funding in consecutive years.
Though it did not uncover evidence of “political abuse,” the report characterized the fund as an “unwise process for distributing taxpayer money” that can lead to an “unhealthy political atmosphere.”
It made about a dozen recommendations, including a limit on spending per grant, increased exposure of the program and consistent audits—the last of which was done nearly five years ago.
Investigators also requested supervisors limit their involvement with grant applications, instead handing over the review process to county administrators or public committees.
The report also called on the county to reallocate into its general budget unspent money that rolls over each year. The 2012-13 discretionary fund totals nearly $900,000, including about $530,000 in rollover funds. “There are many areas that could use that money,” like pension and other benefits, Mr. Treadgold said.
Supervisors are required by law to issue a written response to the grand jury by early spring. A decision to reform the fund could come as early as March, Supervisor Judy Arnold said, when the board may adopt a new system proposed by Ms. Arnold that would require nonprofits to seek approval of grants at budget meetings.
Ms. Arnold, who was elected board president early last week, taking over from Mr. Kinsey, assured the new system would preserve opportunities for funding for what she said are “incredibly worthy” organizations across the county.
To view the grand jury report, visit co.marin.ca.us/depts/GJ/main/cvgrjr/2012/Responses2012/index2012.cfm.