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TO: BOARD OF SUPERVISORS IOC-02Contra
s.• / .•Sex',
FROM: 1999 INTERNAL OPERATIONS COMMITTEE _w
i of
DATE: December 13, 1999rA..__..
County
SUBJECT:
COUNTY POLICY ON PROVIDING POLICY OVERSIGHT TO DEPENDENT
SPECIAL DISTRICTS,
SPECIFIC REQUESTS)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. REQUEST the Auditor-Controller to include in his budget request for the
2000-2001 County budget sufficient additional funding to allow his Office to
do internal audits of several County Service Areas each year so the Board of
Supervisors can consider this request along with other priority requests for
funding.
2. URGE the County Administrator to continue doing performance
(management) audits of County Departments and programs, as he has been
doing for the past several years.
3. DIRECT the Public Works Director to identify which dependent special
districts or county service areas should be audited during the 2000-2001 fiscal
year based on size and complexity of their operations, budget and perceived
problems and REPORT that information to the Board of Supervisors and the
Auditor-Controller by March 1, 2000.
4. REMOVE this item as a referral to the 1999 Internal Operations Committee.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATO RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURES: YLE B. U LKEMA JOHN GIO A
ACTION OF BOARD ON January 25,2tlOO APPROVED A A ECOMMENDED _XX_ OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
XX UNANIMOUS(ABSENT - - ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED .Y8Tl' ary 25 + 2000
Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF
CO: County Administrator SUPERVISOR AND COUNTY ADMINiS RATOR
Auditor-Controller
Public Works Director
BY ,DEPUTY
�f�
IOC-02
BACKGROUND:
Our Committee has been concerned about the level of oversight which has been
provided to dependent special districts, county service areas (CSAs) and similar
bodies. We are aware of problems with some of these bodies and of problems they
have had with the County. We believe that it is essential that the Auditor-Controller
perform internal audits of the dependent special districts and CSAs on a regular
basis. We recognize that the Auditor-Controller cannot perform additional internal
audits without additional funds and staff.
We are, therefore, asking that he include in his budget request for the 2000-2001
fiscal year an item which reflects the amount that would be necessary in order to
conduct additional audits. We are also asking that the Public Works Director
prioritize the order in which these audits should be performed and provide that
information to the Board of Supervisors and the Auditor-Controller. Finally, we
appreciate the fact that the County Administrator has been performing performance
or management audits of departments and programs and are urging that he continue
to perform these kinds of audits.
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V/3-
PUBLIC WORKS DEPARTMENT
CONTRA COSTA COUNTY
DATE: December 9, 1999
TO: Claude L. Van Marter, Assistant County Administrato
FROM: J. Michael Walford, Public Works Director
SUBJECT: POLICY OVERSIGHT OF SPECIAL,DI CTS AND COUNTY SERVICE AREAS
Per your memo of October 14, 1999, the follo ng information is a proposal to address the issues
and concerns of the Internal Operations Committee:
Back rg aurid
The Internal Operations Committee of the Board of Supervisors has requested that staff develop a
clear process for addressing oversight of Special Districts and County Service Areas. One of the
committee's concerns was the need for periodic financial and performance audits. In examining
their concerns, there are several things to consider. Financial and performance audits achieve
separate but important goals. Financial audits report on the extent to which monies due to the district
were received by the district and were used as reported and in accordance with the applicable laws,
policies and agreements. Performance audits examine the goals stated and achieved in a given year.
Combining these two venues would seem to best address the expressed concerns of the committee.
In examining our existing practices, we consulted with Ken Corcoran, Auditor-Controller, on the
potential costs associated with performing separate audits on County Special Districts and County
Service Areas. Ken indicated that they only do financial audits and do not currently conduct
performance audits. He also indicated that special districts are already included in the County's
overall audit process to meet the legal requirement for public agencies. Without a chance to examine
the potential demand and priority of performing individual audits beyond what is required by law,
he was concerned that the increased workload would result in a trade-off with projects with higher
associated risk and exposure or would require additional resources to accomplish.
One of the concerns expressed at the committee meeting was the cost of performing in depth
financial audits and their burden on the relatively small budgets of many of the Special Districts and
Service Areas. At the request of the new Geologic Hazard Abatement District (CHAD) General
Manager, the Internal Audit Division is currently completing multi-year, detailed financial audits
of the Blackhawk and Canyon Lakes GHADs. The staff cost for preparation of these audits is
estimated to be$10,000. Although Blackhawk and Canyon Lakes have relatively large budgets and
complex programs, the audit costs to small special district budgets could be proportionately as
expensive. Other than General Fund revenues, there is no potential funding source available to
perform these audits and the special districts/service area would have to carry this load.
Page 2
December 7, 1999
Recommendation:
The Flood Control District is currently updating its five-year plan. As part of this process, we are
changing the format of the plan so that it provides a clear description of the District's goals and
objectives for the first year, as well as our mission and vision for the five-year period. In order to
improve the Internal Operations Committee oversight of the Flood Control District,we propose to
meet with the committee each year. Between October and December of each year,we would review
our one-year plan, as contained in the Program Budget. This will be an opportunity for the
committee to gain an understanding of our goals and objectives for the coming fiscal year and
provide input. This will also be an opportunity for the committee to discuss our mission and vision,
and suggest other areas where we may focus our attention to better serve our customers. These
regular meetings with the Internal Operations Committee would be an opportunity to review the
performance of the Flood Control District and suggest how we could further improve our operation.
In parallel with the Flood Control District's recommendation,the remaining Special Districts/Service
Areas would prepare five-year plans. Elements of these plans would include budget information like
revenue, routine operating costs, capital funds available; and performance information like project
goals, accomplishments, driving forces, and community wants/needs.
With the exception of the Flood Control District, none of the special districts currently have five-
year plans. I am proposing that five year plans for the GHADs, sanitary districts,water districts and
the lighting district be presented in the fall of 2000 and the remaining special districts including
landscaping, parks and recreation be presented to the internal operations committee in the fall of
2001. This would provide ample opportunity for the communities with interests in these elements
to participate in the planning process. Subsequently, a yearly report will be provided to the internal
operations committee, and the five-year plans will be updated every two years.
In addition, I have reassigned department staff during the course of the year to more effectively
address fiscal,operational and community issues. I think these changes combined with the proposed
five-year plans and existing financial audits will streamline Special District's services to the
satisfaction of the Board of Supervisors and the Contra Costa community as a whole.
ivM/SE:gpp:mw:df
G:\GrpData\SpDist\Skip\policy oversight.doc
cc: M.Shin,Administration
R.M.Avalon,Administration
H.Ballenger,Engineering Services
D.Eckerson,Flood Control
M.Morton,Engineering Services
S.Epperly,Engineering Services
OFFICE OF THE COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building
651 Pine Street, 11th Floor
Martinez, CA 94553
DATE: October 14, 1999
TO: J. Michael Walford, Public Works Director
Scott Tandy, Chief As istant County Administrator
FROM: Claude L. Van MatHE
stant County Administrator
SUBJECT: DIRECTION FROMTERNAL OPERATIONS COMMITTEE
REGARDING OVERSIGHT OF SPECIAL DISTRICTS, COUNTY
SERVICE AREAS, AND SIMILAR BODIES
According to my notes, the Internal Operations Committee made the following
requests of you in relation to refining Scott's memo dated August 19, 1999 [sic]
on Policy Oversight of Special Districts and County Service Areas (GSA's). The
Committee would like a clear process for addressing the oversight of these
special districts and CSA's. The policy should include the following:
1. Plans to audit each district and CSA every two years, and a priority listing
of the order in which they will be audited.
2. Strategies for improving oversight of the districts and CSA's.
3. A plan for achieving better accounting which will identify funds which have
been loaned between districts and CSA's and transfers which have been
made. This plan should clearly identify which actions currently require
Board approval and which do not.
4. A procedure for expending park dedication revenue. It is my understanding
that such a written policy exists but has never been presented to the Board
for approval.
5. You were asked to report back to the Committee on December 13, 1999 on
points 1, 2 and 3. Please have your written report forwarded to this office
by Wednesday, December g, 1999 so we can include it in the Committee's
packet for their December 13, 1999 meeting.
On the park dedication procedure, you were asked to report to the Committee on
November 8, 1999. Please have your written report forwarded to this office by
Wednesday, November 3, 1999 so we can include it in the Committee's packet
for their November 8, 1559 meeting.
CLVM:cbp
v121110.05.99
cc: Supervisor Gayle B. Uilkema
Supervisor John Gioia
Kenneth J. Corcoran, Auditor-Controller
Dennis Barry, Community Development Director
Victor J. Westman, County Counsel
Julie Enea, Senior Deputy County Administrator
John Gregory, Deputy County Administrator
OFF/CE OF THE COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building
551 line Street, IIth Floor
Martinez, CA 94553
DATE: August 19, 1999
TO: INTERNAL OPERATIONS COMMITTEE
Supervisor Gayle B. Uilkema, Chair
Supervisor John Gioia, Member
FROM-
Cott Tandy, Chief Assistant County Administrator
SUBJECT: policy Oversight of Special Districts and County Service Areae
Recommendation:
1) Acknowledge that on August 10, 1999, the Board of Supervisors utilized a portion
of one-time State revenue to address the deficits in Police Service Districts (P-8);
Recreation Service Areas (R-10, Rodeo and LL-2, Bay Point); Flood Control
Drainage Areas; and Maintenance Areas (M-25 and M-26).
2) Acknowledge that the Director of Public Works has restructured and reassigned
staff in order to more effectively administer support services; control costs; and
communicate with citizens groups involved with special districts and county service
areas managed by the department.
3) Direct the County Administrator to continue providing assistance and analytical
support as needed to the Department of Public Works to assure special districts and
service areas do not engage in deficit spending patterns.
4) Authorize the Internal Operations Committee to continue providing policy oversight
for County Special Districts and Service Areas.
Background:
Increased attention and oversight of special districts and service areas began in August
1998 as a result of Supervisor Uilkema's concern when the Board of Supervisors adopted
the FY 98-99 County Budget. During the course of the fiscal year, the County
Administrator worked closely with the Public Works Department to resolve fiscal and
operational issues related to districts and county services.
The Director of Public Works reassigned department staff during the course of the year to
more effectively deal with fiscal, operation and community issues.
Finally, the Board of Supervisors on August 10, 1999, appropriated $393,235 from one-
time State revenue to offset existing deficits in Police Service Districts, Recreation Service
Areas, Flood Control and (Maintenance Areas,with the understanding that both the County
Administrator and Director of Public Works would continue to effectively manage their
entities and identify problems as early as possible to avoid the deficit situation faced last
year.
ST/amb
tardy-lo Item 10-7
PUBLIC WORKS DEPARTMENT
Contra Costa County
DATE: Au t 4f 1999
T RA 0O'+ `A l u....,
TO: Phil Batchelor, County Administrator CEED
FROM: 3. Michael Watford, Public Works Directory 1999
SUB]ECT: Mood Control District Budget Hearings ��%
CQUNT`Y"ADMINISTRATCR
During the budget hearings for the Flood Control District and other Special Districts, the
Board raised several issues. The Board was interested in which drainage areas and
drainage zones were currently in deficit, what was staffs recommendation for eliminating
the deficit and what opportunities were there for improving services in the District.
I have approached this from two perspectives. One is a list of areas where we could
improve service with additional funding, and the other is a list of recommendations for
improving the financial status of the District. I have also included an analysis of the list of
fund balances your office received from the Auditor Controller showing deficits for several
of the Flood Control District entities.
1. Opportunities for Improved Service
a. Assistance to Creekside Property Owners
The Flood Control District is currently in discussion with the Urban Creeks
Council to develop a partnership program that would assist property owners
that front on creeks in the unincorporated County. The assistance would be
In the way of advice and education on what is the proper method of repairing
creek bank failures, what can be done to prevent creek bank failures and
what options are available for protecting the creek and their private property.
The Clean Water urogram will fund $95,000 of the partnership project with
the Urban Creeks Council. The Clean Water funds cannot be used for capital
Improvements, such as creek bank repairs, but can be used to hold
neighborhood workshops and to educate and advise people of the proper
way of repairing creek banks and the options they have to maintain their
creekside property. If the County added an additional $95,000 toward
improvement costs, then the program would allow for education and
construction of the needed improvements for property owners In Contra
Costa County. Although creekside property owners in the unincorporated
1
county would be the direct recipients of assistance from the program,
everyone in the county would benefit by having more stable creek systems
and more awareness through neighborhood educational workshops.
Estimated cost is $95,000.
b. Pinole Creek
Pinole Creek activities are funded through Drainage Zone 9. Pinole Creek
Zone 9 was one of the unfortunate watersheds that ended up with a zero tax
rate after Proposition 13. As a result, there is no funding for maintenance of
the flood control facilities in Pinole Creek. Mitch Avalon has met with the City
Manager and City Engineer to discuss the issue and they seem open to
coming up with a long term resolution to the maintenance funding. This will
take some time and It would be beneficial if the County extended some seed
money to the program to show the County's interest in working with the City
to ensure a long term solution. Estimated cost $25,000.
2. Recommendations for Fiscal Improvements
The following are several recommendations to improve the fiscal status of the Flood
Control District and its 65 drainage areas, drainage zones and maintenance districts.
a. Update Drainage Fees
Last year we updated fees In eight drainage areas. This fiscal year we plan
to adjust the fees in ten additional drainage areas. The drainage area with
the largest deficit, Drainage Area 30A, was updated last year to include a
cost component for paying off anticipated future debt over the next fifteen
years. In addition, all updated drainage fees now include an automatic
escalation factor.
b. Collecting Current Fees
The Finance Committee recently approved a proposal by staff to collect the
drainage fee amount in effect when the fees are collected. We had
historically been collecting the drainage fee In effect at the time a tentative
map was vested. This will Increase our revenue from drainage area fees.
C. Increase Grant Writing
In the past, we have written very few grants. This year we wrote three
grants for State funding; one for Strentzel Lane, one for Wildcat Creek and
one for East Antioch Creek. We recently heard that we did not make the final
cut for the East Antioch Creek project, but the other two are still pending. We
intend to further Increase our grant writing opportunities this year.
d. Ensure Payment of Drainage Fees within City Boundaries
The District Is currently losing drainage area fees for projects developed In
2
the cities where the city neglects to collect the drainage area fees. We will
be working closely with the cities this year to remind them of the need to
collect drainage area fees and the benefits derived from the infrastructure
paid for by the fees.
e. State's Subvention Monies
The State has owed the Flood Control District State subvention monies since
1993. A partial payment was made last year, but the State still owed the
District $1.6 million. It appears that the current State budget includes
another partial payment of$375,009, of the State's subvention monies owed
the District.
f. Sale of Assets
The District has assets in the form of real estate that could be sold to
generate revenue. Staff is currently compiling a list of county owned property
and evaluating which parcels could be sold.
g. Loan Payoffs
Many of the drainage areas that are In a deficit have borrowed funds from
the revolving fund to build infrastructure. These loans will be paid back
through collection of drainage fees in the future. in the long term, the loans
will be paid off and the deficit eliminated.
3. Auditor Controller Deficits Spread Sheet
Your office received a spreadsheet from the Auditor Controller dated July 27, 1999 that
showed a list of special district funds that had a deficit fund balance. The spread sheet
included 16 Flood Control funds. We have reviewed the Flood Control funds listed and can
offer the following information.
a. Fund 2521 Flood Control Zone 1 - Marsh Creek
The current deficit of$40,101.32 will be reduced to zero after the year end closing
journals, which will include revolving fund loan repayments.
b. Fund 2522 Flood Control Zone 2 - Kellogg Creek
A transfer of monies from fund to 2517 will result in a zero fund balance at year
end.
c. Fund 2526 Flood Control Zone 6 A
A transfer of monies from fund 2517 will result in a zero fund balance at year end.
d. Fund 2528 Flood Control Zone 12 Antioch Creek
We have completed a journal transfer of this fund balance to Drainage Area 56
resulting in a zero fund balance.
e. Fund 2530 Flood Control Zone 8
Transfer of monies from Fund 2531 and Fund 2517 will result in a zero fund balance
at year end.
f. Fund 2532 Flood Control Zone 9 - Pinole Creek
3
There is no revenue source for Flood Control Zone 9. Staff has been and will be
working with the city of Pinole to develop a long term strategy for funding the
maintenance of Flood Control facilities in the Pinole Creek Watershed.
g. Fund 2550 Drainage Area 290
Transfer of monies from Fund 2517 will result in a zero fund balance at year end.
h. Fund 2551 Drainage Area 300
A transfer of monies from Fund 2517 will result in a zero fund balance at year end.
L Fund 2557 Drainage Area 30A
The fund balance will be carried over to next year and will await the payment of
drainage area fees as development occurs to pay off the debt in the drainage area.
j. Fund 2561 Drainage Area 33C, Fund 2569 Drainage Area 29H, Fund 2570 Drainage
Area 291, Fund 2573 Drainage 48D, Fund 2574 Drainage Area 48B, Fund 2564
Drainage 52D and Fund 2592 Drainage Area 107.
The fund balance for these drainage areas will be carried over to next year to await
collection of drainage area fees from development to pay off the debt In the
drainage area.
As your staff mentioned at the Board hearings for the Flood Control District last Tuesday,
the budget numbers presented to the Board were preliminary numbers. These budget
numbers will change as the year end financial fund corrections are made. As you can see
from the above analysis of the Auditor Controllers spread sheet, several of the Flood
Control drainage areas and zones will be changed to a zero deficit by years end due to
transfer of monies from other drainage areas or zones. Most of the monies being
transferred are coming from Fund 2517, which is the County's Clean Water fund. Attached
for your reference is a copy of the spread sheet from the Auditor Controller.
RMA:d
g.admIn\mltchlfcbudget
4
AUG-04-1999 11:39 CCC ADMINISTRATION OFFICE 1 510 646 1353 P.02/02
Fund Balance Deficits (as of 7/27/99)(see Note) per Auditor-Controller
Fund# Name Deficit
2018 Crinda Fire District $1,957.00
2363 Co. Sanitation District#3 $83.82
2393 Co. Sanitation #19 Byron $10,160.02
2471 CSA,M-26 $4,041.07
2498 Service Area M-25 Knightsen $20,248.02
2521 Flood Control 21 Marsh Creek $40,101.32
2522 Flood Control 22 Keller Creek $76,079.70
2526 Flood Contral 2 6A $32,780.86
2528 Flood Control Water Cons Zone 12 $1,569.93
2530 Flood Control 28 $36,189.93
2532 Flood Control 29 $11,477.49
2550 Flood Control Drain Area 290 $31,281.77
. 2551 Flood Control Drain Area 300 $6,855.29
2557 Flood Control Drainage 30A $31,717.42
2561 Flood Control Drainage $1,485.06
2569 Flood Control Drainage 29H $16,437.06
2570 Flood Control Drainage 29J $5,017.71
2573 Flood Control Drainage 48D $1,633.99
2574 Flood Control Drainage 48B $18,273.60
2584 Flood Control Drainage 52D $33,882.41
2592 Flood Control Drainage Area 107 $7,605.83
2622 Svc Area P6 Zone 1803 $350.00
2623 Svc Area P6 Zone 1700 $3,000.00
2624 Svc Area P6 Zone 2000 $800.00
2625 Svc Area P6 Zone 126 $350.00
2626 Svc Area P6 Zone 1505 $350.00
2627 Svc Area P6 Zone 1506 $350.00
2628 Svc Area P6 Zone 1001 $250.00
2630 Svc Area P6 Zone 1607 $250.00
2631 Svc Area P6 Zone 1504 $250.00
2636 Svc Area P6 Zone 1503 $250.00
2673 Svc Area P6 Zone P7-114 $980.00
2675 Svc Area P6 Zone 2700 $196.00
2682 Svc Area P6 Zone 1600 $58.12
2689 Svc Area P6 Zone 1601 $58.12
2690 Svc Area P6 Zone 2300 $450.12
2692 Svc Area P6 Zone 122 $62.12
2696 Svc Area P6 Zone 2701 $460.45
2751 Svc Area R-4 Moraga $143.99
2760 Svc Area R-10 Rodeo $3,786.00 $401,274.22
Note: Does not reflect final year-end fund balance because additional entries for revenue
and expenditures continue to be made.
TOTAL P.O2
e7
OFFICE OF THE COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building
651 Pine Street, 11th Floor
Martinez, CA 94553
DATE: July 29, 1999
TO: Skip Epperly, County Service Area Coordinator
Public Works Depart ent
FROM: Claude L. Van Mart sistant County Administrator
SUBJECT: REQUEST FROM THE INTERNAL OPERATIONS COMMITTEE FOR
INFORMATION REGARDING THE COUNTY'S OVERSIGHT OF
DEPENDENT SPECIAL DISTRICTS, COUNTY SERVICE AREAS
AND SIMILAR JURISDICTIONS
The Internal Operations Committee has on referral to it the issue of what oversight
the County provides to dependent special districts,county service areas and similar
jurisdictions like landscape and lighting districts, etc. The Internal Operations
Committee would like to meet with you or other appropriate Public Works staff on
this subject as follows.
Monday, October 11, 1999
2.00 P.M.
Room 105, County Administration Building
In preparation for this meeting would you please provide me with answers to the
following questions:
1. Please provide me with a listing of the dependent special districts, county
service areas and other similar jurisdictions for which the Public Works
Department provides coordination and/or oversight. This should include the
name of the jurisdiction, the area of the County it serves and its purpose.
2. How is each jurisdiction funded (what is the source of its revenue)?
C' '/7
3. When was an audit of each jurisdiction's financial records last completed and
for what period of time?
4. What individual or group is responsible for establishing policy and for
providing management oversight for each jurisdiction, i.e.,who decides what
projects will be undertaken and who insures that each project is completed
on time and within budget?
5. What other comments do you have regarding the County's oversight of
dependent special districts, county service areas and other similar
jurisdictions?
I will need your written report on this subject by Wednesday, October 6, 1999 so
we can include it in the Committee's packet for their October 11, 1999 meeting.
CLVM:amb
Van07-18-99
cc: Supervisor Gayle B. Uilkema
Supervisor John Gioia
J. Michael Walford, Public Works director
Victor J. Westman, County Counsel
Kenneth J. Corcoran, Auditor-Controller
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