.Grand Jury Criticizes Oakland for Failing to Recover Revenues; Questions Charter Schools

A new Alameda County Grand Jury report is questioning whether the City of Oakland and its police department are receiving all the revenue they’re due from a long-term towing contract. In addition, the report also said the Oakland Fire Department failed to recoup more than $1.4 million in fire inspection fees due to a faulty billing and records system and understaffing.
The annual grand jury report released Monday includes several investigations that focused on the City of Oakland’s inability to conduct proper oversight of fiscal issues. Another investigation also faulted the struggling Oakland Unified School District for shoddy record keeping that inhibits it from conducting timely and accurate audits. The school district has been in state receivership for more than a decade following an emergency $100 million loan in 2003. The grand jury also questioned the negative effects of Oakland’s large number of charter schools on OUSD’s ability to receive adequate state funding for its public school students.

Alameda County grand jurors have routinely slammed Oakland city government for lax oversight in recent years, including harsh criticism of the city’s criminal investigation labs and an inability by the Oakland City Council to police itself regarding non-interference rules.

A roster of 21 county residents making up this year’s civil grand jury found that numerous city and OPD departments administer the city’s towing contract with B&B Vehicle Processing, but provide little oversight of the contract, forcing residents to travel to multiple locations to deal with the towing of their vehicles. “Because the supervision of the contract is fragmented, the Grand Jury had difficulty discovering who (if anyone) asserted supervision over a number of contract provisions,” according to the report. In years past, Oakland typically towed around 10,000 vehicles annually, bringing in $1 million.

As a result, the grand jury learned of a discrepancy involving 714 towed vehicles — between the number reported by OPD and those reported by B&B Vehicle Processing. The city also has never audited B&B’s books.

“After the city negotiated a new contract with meaningful oversight provisions over a decade ago, the city has done little to implement any of the improvements and has failed to show that it can even account for the money it is due under the contract,” the report concluded. “The city’s lax record keeping and insufficient employee training, along with its fragmented management of the program, can lead to public frustration.”

Another grand jury investigation slammed the Oakland Fire Department for failing to adequately bill and collect fees for commercial fire and vegetation management inspections while leaving more than $1.4 million in potential revenue on the table. “This has not only cost taxpayers in lost revenue, but it has also reduced the effectiveness of the fire department’s ability to provide fire prevention services,” concluded the grand jury.

Annually, the OFD conducts 8,000 commercial inspections and typically charges property owners a standard one-hour fee of $158. However, it deferred billing in fiscal year 2010-11 to the next fiscal year following a transition to a new database, the grand jury found. The next year, OFD billed a combined $1.2 million in fees, but managed to recover just 43 percent of the total, said the grand jury. In 2012-13 OFD’s success rate was only slightly better, recovering just half of $512,000 in fees. Furthermore, OFD did not have any staff trained to file liens against property owners, despite testimony from other jurisdictions who reported little knowledge is required before a staff member can successfully place a lien against a delinquent property owner. In fact, liens are a highly effective tool in bringing collection rates to nearly 100 percent, the grand jury found. Similar to findings last fall from the Oakland City Auditor’s office, the grand jury said no property owners were billed in 2011-12 following vegetation management inspections. Last year, OFD collected just six percent of over $130,000 in fees.

The grand jury also questioned the Oakland Unified School District’s ability to report accurate records for state auditors, while suggesting it should consider consolidating the number of schools because of low enrollment. “Year after year, the district has repeated errors that continue to threaten the education of its students,” said the grand jury. “While progress seems to have been made with the required audits, the students of OUSD will continue to suffer until OUSD gets its financial house in order.”

The report criticizes OUSD for failing to properly account for the Average Daily Attendance (ADA) used by the state to fund school districts. Oakland teachers are also severely underpaid — on average they make nearly $14,000 less than others across the state, the grand jury found, a fact that further compounds the district’s academic performance issues. In addition, 12 percent of Oakland teachers are new, a figure three times higher than other school districts.

Greater infrastructure costs could also be avoided by considering consolidation of some of Oakland’s schools, recommended the grand jury. Despite dwindling enrollment since the 1980s, said the report, the number of schools have risen from 60 to 86. “Similarly, OUSD faces the problem of many under-enrolled classes wherein one teacher may be instructing a classroom with 10-15 empty seats,” said the report. “The district estimates that the students in these under-enrolled classes cost OUSD one-third more to educate.” In addition, the large number of charter schools in Oakland is also exacerbating the school district’s problems. No other district has a higher percentage of charter schools than Oakland and the loss of students to them limits OUSD’s ability to draw funding from the state. The grand jury also urged future grand juries to again pursue the impact of charter schools in Oakland.

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