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Matthew Hedger
06/26/2014 11:15 AM

By Matthew Hedger


The 2013-14 Grand Jury says Amador County officials must not have done the math when they agreed to the lease agreement for the Health and Human Services Building, in Sutter Creek.

In their report released this week, the G.J. said the $1.4 million annual cost of the lease to the county caused them to research the situation, where they “found flaws with literally every aspect of the lease negotiation process.”

From the report: “Over the course of the investigation, the Grand Jury discovered there are no written policies and procedures in place to direct staff in acquiring property either by lease or by purchase. Additionally, the team that the BOS assembled to negotiate the lease was not experienced in space needs or building designs. Staff, as well as BOS members, apparently never personally read or analyzed the lease documents. Simple math would have identified the excessive costs associated with the lease.

“In the original lease, the County agreed to pay $2.43 per square foot which was significantly higher than the next highest commercial lease in the county at $1.70 per square foot, and approximately twice the going rate for commercial lease space. There was no apparent reason to renegotiate the lease in 2008.

“In short, the County went from a bad lease to a horrible one.

“The lease rate —$2.43 per square foot — stayed the same. An out-clause allows the County, under certain circumstances, to terminate the lease. But the county-out-clause was removed and the lease extended by 5 years. “Clearly, neither the BOS nor County Administration did the math, because the effect of removing the out-clause and extending the lease added $7,144,200 to the total cost of the lease. This conclusion was corroborated by all county officials and current and former county employees interviewed. The 2008 lease is a legal and binding document with no provisions for renegotiation or termination.

“The County received $400,000 cash from the building owner in exchange for these concessions. The purpose of the $400,000 was never clearly identified but was apparently a fix for a significant shortfall in the HHS budgets. It is interesting to note that the person requesting the space also became the lead negotiator for the HHS lease and project manager for the building design.

“Assuming $7.14 million in future indebtedness for $400,000 cash in hand is a very bad deal. This report will detail the negotiations of both leases identifying what the County gained and what it lost at each step. The report will also identify how staff work was conducted and how members of the BOS used or misused the information provided by staff.”

No names were released in the Grand Jury report, and accompanying lease documents have signatures and other identifying markers and addresses redacted.

School Board violated Brown Act

In a scathing report, the Amador County Grand Jury has found that at least one school board trustee violated enough bylaws that the remainder of the board held secret meetings and violated the Brown Act in an effort to censure the violator.

The Grand Jury declined to name the person in their report.

The allegations made by the G.J. include: “An elected trustee actually injected himself or herself into a District staff work situation that impeded the District staff from performing job duties without distraction or interference when staff needed to focus on the safety of the students,” and “An elected trustee actively opposed and blocked a Board investigation into the miscon

duct discussed at a Board meeting in June 2013 …”

Grand Jurors who conducted interviews with trustees reported they found “several areas of Brown Act violations,” which included meetings held by a majority of the Board to discuss and determine action to be taken regarding trustee censures, and a conference attended by a majority of the Board, “where discussions were held with legal presenters regarding censure of trustees.”

The Grand Jury said it found no written record of the meetings being publicly noticed or agendized — violations of the Ralph M. Brown Act, which calls for public agencies to conduct and deliberate their business in an open forum before the public.

Until 2010, the Amador County Unified School District board was comprised of seven trustees elected by county voters. In Dec. 2010, only five of the trustees were attending meetings, and in Jan. 2011, the board began the public hearing process to discuss reorganization and perhaps reduce the number of trustees. The Grand Jury said it found no public comment was offered at that time.

In Feb. 2012, legal counsel helped ACUSD to reform trustee representation to conform with Amador County’s five supervisorial districts, to become effective with the 2014 elections.

During their investigation, the G.J. said it also found that although the board is governed by an “extensive” list of bylaws, newly elected trustee training is “inconsistent,” and some of the bylaws themselves are vague.

“While the bylaws regarding standards and ethical conduct are clear, the consequences of violating the standards are not.”

A link to the entire 187-page 2013-14 Grand Jury Report is online, at ledger-dispatch.com.

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