Newest articles on The Sacramento Press tagged as "city attorneys office"

Development department audit raises questions

2010-10-07T00:26:55Z

An audit report stating that the city’s development department failed to collect more than $2.3 million in fees from developers raises a host of questions. The audit’s finding that city employees broke state and city laws makes the situation even more complex.

The audit, prepared by Sacramento firm Sjoberg Evashenk Consulting, Inc., investigated the department’s work from fiscal years 2007 through 2010.

“In summary, the weak system of internal controls allowed employees to disregard state and city building laws, codes, and regulations aimed at protecting the public’s health, safety, and general welfare,” the audit states.

Read the full audit report here.

The City Council is expected to discuss the audit’s findings on Oct. 12.

City Councilman Rob Fong said Wednesday that he will focus on obtaining the lost revenue to the city. The report’s findings are “outrageous and shocking and incredibly disappointing,” he said. “My priority is getting the money back.”

Interim City Manager Gus Vina on Wednesday answered a series of questions from reporters on issues relating to the $2.3 million in uncollected funds, violations of laws, the culture of the department and possible disciplinary actions.

Journalists from The Sacramento Press, Fox 40, KCRA, News 10, CBS 13 and Capital Public Radio posed the following questions to Vina at the Wednesday press conference.

Q: Do you find that these lapses were well-intentioned? Or, is there indication that there’s perhaps corruption involved?

Gus Vina: It’s difficult to answer that. Part of my job now is to look at some of the specific issues that the audit report has highlighted. I will need to dig a little further into that very question. We know at a minimum that because of the lack of rules and policies and the fact that the decision-making was being made at an extremely low level in the organization, we need to explore that very question.

Q: What is the likelihood that you’re going to get any of this $2.3 million back?

GV: We’re working with the city attorney’s office to answer that question. This is as fresh to us, really, as it is to you. So we need a little time to dissect it. But we are going to work with the attorney’s office on what can we do to go after some of the revenue that was not collected.

Q: As city manager, is it your hope that we might get some revenue as the result of this investigation?

GV: We will be as aggressive on that as the law allows.

Q: If the city had this $2 million, could any layoffs have been prevented in Fiscal year 09 or in FY 10/11?

GV: I suspect that we could have probably minimized some of the layoffs with the revenue having been collected. I think that what’s important to note is that when we look at staffing in Community Development, it’s not just the revenue that you look at ... it’s workload. The report spent some considerable amount of time looking at that workload. We’ve had over 70 percent decrease in some of our workload in Community Development. Obviously, this recession has had a profound impact on our business. And, so, we would have been in a declining mode in terms of our workforce two, three, four years, anyway.

Q: These lower level (employees) — why were they allowed to make these big decisions?

GV: Let’s talk about culture change for a minute. If you go back, say, three (or) four years, we brought in folks to Community Development to in fact look at the bureaucracy, and how difficult was it to work with the city on development projects. There was a lot of excitement created around a “Get the Customer to Success” theme, and looking at how we might streamline some of the processes. What this report is now pointing to, is that that probably went a little too far. The technology that was put in place ended up being too open to decision-making without policy in place. That’s the bridge now. We still want to provide good service to our developers. And we don’t need unnecessary red tape and bureaucracy. It needs to be streamlined. But the bridge to success here now is policy, training, and decisions that are consistent.

Q: Does this at all, in your mind, tarnish the legacy of Ray Kerridge? His big thing was “bring the customer to success” and make it easier to build and develop here.

GV: I respectfully am not going to comment on that. I’m not going to speculate on Ray Kerridge’s legacy, and I wish him well in Roseville.

Q: Will there be any disciplinary actions taken? And, if so, when...will the public learn about that?

GV: If, as I review the report, there’s a need to go down the disciplinary road, then I will certainly do that.

Q: Will that information be made public?

GV: Most of the time, personnel matters are not.

Q: The report though says flat-out that laws were broken.

GV: What you need to look at, is why were laws broken? And what I’ve read so far in the report is that it speaks to lack of policy that led to decisions that were inconsistent with the law. So, motivation is important. And that’s what we need to find out next — what was the motivation?

Q: Is it your opinion that the city attorney should look at these findings to see if any criminal charges should be brought?

GV: I will be working closely with the city attorney’s office and Labor Relations office as necessary.

Q: What does that mean?

GV: That means I don’t know enough to tell you whether there’s criminal charges or not. I would be speculating and I’m not going to speculate.

Q: When a low-level employee doesn’t comply with the law, how do you figure out if it’s their fault, or it’s the culture of the department and the fault of someone higher up? Or both?

GV: That’s exactly my next step: What was violated, what were the reasons and at what level? And the report has been pretty clear that decisions were being made at a low level due to lack of policy and procedures in place.

Photo: Vina and Councilwoman Lauren Hammond at the July 13 City Council meeting.

Photo by Brandon Darnell.

Kathleen Haley is a staff reporter for The Sacramento Press.

Railyards developer pays back taxes

2010-04-10T04:50:55Z

The developer of the downtown Railyards paid Sacramento County about $218,000 in current and back taxes and penalties Friday, said Suheil Totah, vice president of Thomas Enterprises.

Funds were sent from the company's Atlanta headquarters to the county's assessor office via overnight mail, Totah said.

But Thomas Enterprises did not pay the property taxes in time to prevent city officials from publicly criticizing the company earlier Friday.

The city had moved to cut off state grant payments to the company, according to an April 9 letter from city officials to the state’s housing and development department.

A letter from Assistant City Manager John Dangberg said that as long as the taxes were unpaid, Sacramento would not sign off on funds to Thomas Enterprises from a $17 million state grant.

The company owed as much as $114,000 in back taxes that were not paid in December, according to the letter.

Now, Senior Deputy City Attorney Sheryl Patterson said Sacramento will be "back in business" with Thomas Enterprises after the city verifies Monday that the company has paid its taxes.

City Councilman Kevin McCarty held a press conference Friday morning to announce that if the company did not pay its taxes, the city should try to block as much as $47 million in state funding to the Railyards.

But Patterson said the city did not have the authority to block payments on amounts other than the $17 million from the grant.

The city could have written a letter asking the state’s Housing and Community Development Department to stop payments on additional state funds for the Railyards, she added.

Photo by Sacramento Press Staff Reporter Suzanne Hurt.

Kathleen Haley is a staff reporter for The Sacramento Press.

City keeps quiet on claims of quid pro quo at department

2010-04-06T03:41:12Z

The city attorney’s office is not providing information on how the city will respond to claims of potential quid pro quo in the development department.

Allegations of possible quid pro quo at the Community Development Department were mentioned in a Jan. 26 report from the offices of the city attorney and the city manager.

But it’s unknown when an investigation into the allegations may begin.

In a Monday e-mail response to questions from The Sacramento Press, City Attorney Eileen Teichert referred to the claims of possible quid pro quo as a “personnel issue.” She indicated in her response that some information about the issue may eventually become public depending on whether the city takes disciplinary actions.

Questions for the city attorney

The Sacramento Press asked Teichert the following questions in an April 2 e-mail:

Which body will investigate that issue (the potential quid pro quo)? When will the investigation (of) this issue begin? Will information from the investigation be made public? If not, why?

Teichert’s response

Teichert responded to the above questions in an April 5 e-mail:

"Pursuant to Council direction all matters meriting further audit or investigation, that did not involve personnel issues, were provided to the City Council. I understand that the third-party auditing firm (yet to be selected) will be tasked with looking at these matters provided to the City Council. The timing for such audit is unknown and the results will be public.

"As for personnel issues, the City cannot divulge information regarding any such investigation, as to do so would compromise the investigation and would infringe on the subject's rights of privacy. At such time as the investigation is complete and if findings are made resulting in discipline, the nature of the discipline and a description of the basis for imposing the discipline will be make public."

Making sense of CDD investigations

The possible quid pro quo is among several issues that may affect the department, according to the Jan. 26 report.

The city has taken a variety of responses to numerous issues at the department. It may be helpful to break down recent city actions to understand the issues.

To begin with, a city employee last year gave permits to K. Hovnanian Homes to build in a Natomas flood area, according to a Dec. 15 letter Teichert’s office sent to the Federal Emergency Management Agency. Teichert’s office and Renee Sloan Holtzman Sakai, an outside law firm, investigated that issue. City officials have admitted that the employee’s decision broke FEMA rules.

Then, several more issues were mentioned in the Jan. 26 report on the Teichert and Renee Sloan investigation of the building permits problem. These issues included the possible quid pro quo, claims of unpaid development fees and problems with the department’s culture, among other concerns.

City officials released a 2,529-page document on the issues March 25. A third-party auditor will investigate the issues in the document, according to City Auditor Jorge Oseguera.

But the status of the possible quid pro quo concern remains unclear. Teichert’s e-mail to The Sacramento Press indicates that many details surrounding that issue will not be made public.

At a Jan. 26 City Council meeting, Assistant City Manager John Dangberg and Courtney McAlister, an attorney for K. Hovnanian Homes, both said there was no quid pro quo between Hovnanian Homes and the city.

Kathleen Haley is a staff reporter for The Sacramento Press.

Attorney issues 2,529-page document on development department issues

2010-03-26T05:10:22Z

A series of issues at the city’s Community Development Department — including the noncollection, waiver, underassessment and deferral of fees charged to developers — are presented in a 2,529-page document the city attorney’s office released Thursday.

The document is an offshoot from a separate investigation by City Attorney Eileen Teichert’s office and the law firm Renee Sloan Holtzman Sakai.

In that investigation, Teichert and Renee Sloan examined city building permits that were approved last year for a flood zone in Natomas. As they investigated that issue, they discovered other issues at the department. These issues are the subject of the lengthy document released Thursday.

City officials made the document available to the media in the form of a compact disc Thursday. In a written statement to the media, Teichert clarifies that the document presents information on the new issues, but her office has not investigated them.

"The records relate to 16 development projects that witnesses in the Natomas Central investigation brought to the attention of the city attorney’s office as having issues meriting further review," Teichert wrote. "These records were provided to the city attorney’s office during the investigation or previously by CDD and other city staff.

"The city attorney’s office has neither investigated any of the issues nor independently gathered records regarding these projects, except to download certain records from the CDD building permit database Accela."

The document claims that fee issues surround development projects including the Towers on Capitol Mall, a mixed-use project; A-1 U-Stor on Stockton Blvd., a self-storage project; Le Rivage Hotel on Riverside Blvd.; a Sonic drive-through and TGI Friday’s restaurant on North Freeway Blvd; the Natomas Landing project in North Natomas; and the Villa Terrassa housing development at Abramo Walk and Monaldo Walk.

The document also describes other concerns at the department aside from fee-related issues. Among other issues, the non-fee related concerns involve the culture of the department, a possible violation of the California Environmental Quality Act, claims that development projects began before completion of city procedures and possible violations of planning rules.

A third-party auditor is expected to investigate the issues in the document.

The Sacramento Press is planning further coverage of the issues discussed in the document. In addition, staffers with The Sacramento Press are examining methods of uploading the 2,529-page file to make it available on the website.

Kathleen Haley is a staff reporter for The Sacramento Press.

City staff seek building code changes

2009-11-10T05:27:54Z

The Sacramento City Council soon may be asked to amend city code to legalize a longtime practice that helped bring about the suspension of the Facilities Permit Program.

In the next few weeks, city staff want to ask the council to allow FPP construction projects to start before building permits are issued — as long as a business has a written start-work authorization from the building division, said David Kwong, the city's Planning Division director.

Staff is working with the city attorney's office to learn if the practice and the building code amendment would be legal, Kwong said.

"What I'd like to do is vet that form with the city attorney's office, make some tweaks and take that to the council," said Kwong, who is also serving as head of the Community Development Department, which oversees the planning and building permits divisions.

The department's director, Bill Thomas, and department supervisor Dan Waters, son of Councilman Robbie Waters, are on paid leave while the Federal Emergency Management Agency, the city and an outside law firm hired by the city look into the department and home building permits approved for the Natomas flood zone despite a ban.

The FPP is intended to speed approval for tenant improvements or renovation of commercial and industrial buildings involving businesses that already have established relationships with the city, Kwong said. If the change were approved, the FPP could resume within about two months, he added.

The city suspended the FPP on Oct. 27 after questions about the program arose in relation to the Nestlé Waters North America water-bottling plant. A stop-work order had been posted on the plant's door Oct. 23 while Councilman Kevin McCarty and other city officials inquired into plant construction.

That's when city officials learned that Nestlé and contractors had begun the first phase of construction work without a formal building permit or start-work authorization. A building inspector who coordinates the FPP had given verbal approval only.

A Nestlé official said at the time that the company had complied with the city's building laws.

The city attorney's office, led by Eileen Teichert, determined the practice was not legal, and that allowing construction to start without a building permit violates city and state codes, Kwong said.

Teichert was out of town and not available to comment.

The use of start-work authorizations rather than building permits for some commercial construction predates the FPP in Sacramento.

"We found there was a common practice dating back to 1992 or 1995," Kwong said. "It seemed like an acceptable practice for 14 years, and they went forward with that."

The practice is used in other cities and was incorporated into the FPP when that program was brought to Sacramento from Portland about four years ago, said Kwong. "It's not something we invented," he said.

As planning division director for four and a half years, Kwong was not involved in building services until three weeks ago.

Sacramento City Manager Ray Kerridge, hired in 2004 as an assistant city manager in charge of development, brought Thomas with him from Portland after developers criticized Sacramento's development application and building permit processes as laborious and confusing.

The two have developed programs to speed the application process and encourage development in Sacramento.

Kerridge began his career in Portland as a building inspector in 1979. After becoming manager of commercial inspections, he developed Portland's Facilities Permit Program and the Commercial Combination Inspection Program.

Portland's FPP was designed to match one building inspection team with a building or group of buildings. That team would do all plan review, permitting and inspections of interior tenant improvements to speed improvements or renovations. Phoenix was the only other city in the country known to have a similar program when Portland's began in 1998.

In Sacramento, an inspection team may be replaced by one building inspector certified in several areas, Kwong said.

According to the city of Sacramento's website, "The FPP facilitates a rapid approval process for tenant alterations and improvements of commercial and industrial facilities, (including) minor tenant improvements, including maintenance, repair and minor alterations; and major interior tenant improvements and remodels. This includes tenant improvements to new and existing structures.

"The FPP is available to owners of commercial and industrial buildings, building management companies, and/or their tenants. The program best serves customers who have on-going interior tenant improvements and where facility maintenance, upgrade and renovation is frequent. A good example is a large shopping center with multiple tenants."

As a newcomer to Sacramento, Nestlé would not fit the program. However, Buzz Oates Real Estate Co., which is leasing the warehouse to Nestlé, or Panattoni Construction, which is overseeing the work, would fit the program as established customers, Kwong said.

Nestlé is the building permit applicant. Panattoni received a start-work authorization for the plant renovation's second phase on Oct. 7.

This is the first time the City Council has been asked to weigh in on the FPP.

State building codes must be reviewed to see if FPP practices would be in violation, or to align new city code with the state. City staff also will look for precedents in other cities and counties that use the start-work authorization form, Kwong said.

Suzanne Hurt is a staff reporter for The Sacramento Press.