Part two in a Guardian series
Click here for part one
› gwschulz@sfbg.com
David Duer is proud of the volunteer work he’s done with the West Contra Costa Unified School District. He graduated from the area’s school system, as did his kids.
So despite what was sure to be a burdensome responsibility with no pay, Duer, a development director for the UC Berkeley Library, accepted the chance to serve on a committee formed under a state mandate to monitor how the district spent $850 million in bond money authorized by voters in three elections since 2000.
"There are schools all over the district that have been renovated," Duer beams today.
The committee initially proposed meeting every quarter but soon realized that wouldn’t be nearly enough to do the job right and chose to meet monthly instead. Since 2003 it has received full-blown management audits of the school system’s performance every year, with biannual updates from independent professionals not beholden to district bureaucrats.
The story of San Francisco’s Community College District could not be more different.
The oversight committee that’s charged with monitoring $560 million in bond spending has never seen an expansive performance audit, just basic financial reports that show community college officials here seem to be obeying their most fundamental fiduciary duties. The panel meets three times a year for more than an hour and a half each time, and for three years it didn’t even report to the public on City College’s handling of the money, which it’s required to do annually by the state’s Education Code.
The community college committee is hardly made of Rotary volunteers and bored retirees: the list includes San Francisco treasurer José Cisneros and former San Francisco Chronicle publisher Steve Falk, now head of the local Chamber of Commerce.
But even members say the panel has fallen down on the job — and that City College officials are freely shifting around the taxpayers’ cash with little or no accountability.
The mostly decipherable performance reports that West Contra Costa citizens receive, though lengthy, track all of that district’s bond expenditures and give the area’s oversight committee of taxpayers a vivid portrait of how well the school system and its administrators are managing hundreds of millions of dollars in building improvements. Any wonkish jargon in the reports that might mystify the committee is translated in "frank" terms by the outside inspectors, Duer says, without interference from school officials.
If a contractor were to double-bill the district or demand too much in change orders after promising completion within a set price range, Duer and his colleagues would know about it, and they could make suggestions on how to fix it. If the district was doing a stellar job, that would be clear too.
"I don’t see these performance audits as punitive," Duer said. "I see them as a confirmation that the process and systems in place are working."
MORE MONEY PROBLEMS
The Guardian reported last week ("The City College Shell Game," 7/4/07) that City College’s bond projects are running an astounding $225 million over budget. As a result, school officials have returned to the Board of Trustees five times in recent years to request that a total of $130 million be reallocated from one project to another to cover the overruns, leaving some projects promised to voters with little or no funding at all. We reported on a number of examples last week, but there are plenty more:
•<\!s> The construction of a new Mission campus was supposed to begin in 2002 but didn’t get under way until well into 2005. The project is now $30 million over budget, an increase of 50 percent, and the school recently requested another $6 million diversion from other bond projects. City College originally planned to build the campus where a shuttered theater currently stands on Mission Street but later moved the site to avoid a showdown with preservationists.
•<\!s> Since 1997, City College has asked voters for a total of $61 million to renovate and remodel existing buildings and meet Americans with Disabilities Act requirements. In November 2005 it asked voters for $35 million to perform such work, but just weeks after the election, $20 million of the money was reallocated to a planned Chinatown–<\d>North Beach campus that’s now running $50 million over budget, an increase of 60 percent. That project’s ever-changing design has been heatedly challenged by everyone from the Chronicle‘s editorial board to Sup. Aaron Peskin to state senator Leland Yee.
•<\!s> Two projects for which voters authorized a combined $71 million won’t see the light of day unless the college returns to the ballot a fourth time, which school officials have discussed. The projects — a biotech learning center and a one-stop administrative shop for new students — have been drained of $42 million to save the Mission campus and an overdue Performing Arts Center, which will cost $75 million more than expected, an increase of 152 percent.
HUNTING AND PECKING
All of this irks Mara Kopp, who was appointed to City College’s oversight committee in late 2005 as a representative of the San Francisco Taxpayers Association. She’s complained openly that the school long ago should have hired auditors for the kind of far-reaching work West Contra Costa gets.
"If we received ongoing management reports, then we’d have something of substance," Kopp said. "We wouldn’t have to hunt and peck in a kind of naive, elementary way."
She is all but alone in her criticism, however, save for a small group of allies including former committee member John Rizzo and Milton Marks, one of the few voices on the independently elected Board of Trustees willing to apply tough scrutiny to Chancellor Phil Day’s office at board meetings. Green Party pol Rizzo recently became a trustee after closely beating longtime incumbent Johnnie Carter in the November 2006 board race.
Day has long argued that the school’s attorneys don’t believe such audits are required under Proposition 39, a 2000 state ballot measure that lowered the threshold for passing local school bonds. Prop. 39 required the formation of local citizens’ bond oversight committees.
Marks has questioned the strength of City College’s oversight committee and the lack of performance audits since at least 2005, but not until earlier this year were he and Rizzo able to force a resolution demanding the inspections, and now Day claims to welcome a management review. The school will bid out its first audit soon.
"The bottom line is, a performance audit as opposed to a financial audit would determine whether or not funds are being expended in the most efficient, effective, and economical manner instead of just adding up these funds and saying, ‘Here’s how much we expended and for what,’<\!s>" said Harvey Rose, a respected local auditor who’s reviewed city agencies and analyzed San Francisco’s annual budget for 35 years.
West Contra Costa concluded that Prop. 39 does require extensive managements audits. The committee even decided to include a $150 million bond election in 2000 in the scope of its work, although that wasn’t required, to ensure all the money was still being spent efficiently.
Duer said it doesn’t matter to him what the letter of the law requires. "It was always assumed with our work that this is something we had to have," he said.
The Los Angeles Community College District made the same assumption. Other districts statewide, however, appear to have interpreted Prop. 39 the same way City College has. And the Attorney General’s Office has never issued an opinion clarifying the matter.
Meanwhile, City College officials blame the millions of dollars in outsize project costs on inflation, a globally increased demand for steel and concrete, and slow-moving state regulators who must approve architectural designs.
"I understand both the college as well as the community would like to see us complete every single project we’ve proposed," Vice Chancellor Peter Goldstein told us recently. "We absolutely share that desire. The reality of cost increases has forced us to go back and look at our resources and reallocate in order to keep major projects going forward."
But Kopp and company argue that much earlier performance inspections would have revealed to the oversight committee and trustees where the increase in expenses came from with absolute certainty. That way, no one would have to rely exclusively on the glitzy project presentations made by Day and Goldstein that are often little more than slide shows with quotes from prominent business journals decrying the rising cost of construction materials. Trustee Marks has moaned repeatedly at board meetings that he doesn’t feel informed enough to vote on major reallocations, and his constant questions haven’t always made him popular.
"I think there’s this feeling that the board should not be adversarial," Marks said. "But I think by the nature of how things are set up, we have to be…. We have to look out for the best interests of the public at large."
Not everything’s rosy in West Contra Costa, of course. Anton Jungherr, a former San Francisco Unified School District official, sat on the West Contra Costa oversight committee for four years and fumed in an interview that the district didn’t take seriously the committee’s regular recommendations. He wants to form a statewide association of oversight committees to arm citizens with the information they need to track bond expenditures.
"There are legitimate reasons for change orders, but you have to analyze them and understand what the reasons are and then take the appropriate oversight action," Jungherr said.
But cost overruns in West Contra Costa still pale when compared with those at City College. Jungherr said that district has experienced about $100 million in unexpected costs on $850 million in projects undertaken since 2000, substantially less than what City College faces despite hundreds of millions of dollars more in bond projects.
Kopp still hopes City College’s oversight committee will build more muscle.
"If they were to show us documents they used themselves in monitoring all these things, that could substitute as long as the information was relevant and honest," Kopp said. "But it’s really been quite shallow all along."<\!s>*