Failure of Transparency & Accountability: Why an Independent - - PowerPoint PPT Presentation

Media Briefing, April 3, 2012

Failure of Transparency & Accountability:

Why an Independent Audit is Needed in Escondido

ACLU’s PRA request asked for: Escondido sent:

All records from 1/1/06 to Present relating to grants from OTS for sobriety checkpoints.

Incomplete records (applications

• nly) regarding OTS grants.

All records relating to income or revenue generated as a result of OTS-funded activities.

No records detailing income/ revenue.

All records from 1/1/04 to Present relating to city’s determination of any fees charged to towing services.

One 2-page document on application fee. No documents on how fees charged are justified.

All records from 1/1/04 to Present relating to city’s establishment of its “Negligent Vehicle Impound Fee”

• r any other fees charged for related administrative

costs.

No documents justifying fees charged to vehicle owners.

All records from 1/1/06 to Present on whether the city should own, run or operate a towing service or facility.

No documents on City’s discussions to operate a tow service or facility.

Failure of Transparency: Documents (Not) Received X X X X X

State Grants Subsidize Impounds

13% 87%

Impounds (2009/10)

Checkpoint Impounds Non-Checkpoint Impounds

What Escondido says: "OTS (Office of

Traffic Safety) funding pays for officers'

• vertime and some specialized

equipment…" said Joyce Masterson, a spokeswoman for the city. “…it pays for the time of all the officers at a checkpoint and is unrelated to tows.”

North County Times, March 30, 2012.

The truth: In the one year of comparable

data we received (2009/10), Office of Traffic Safety funding paid Escondido for labor costs associated with 13% of impounds. These labor costs – as much as 80% of each impound (or $83,000) – were also paid for by tow fees and tow company contracts.

Escondido’s Labor Costs Per Tow Are Unusually High

5 15 Lieutenant time (mins/tow) Sergeant time (mins/tow) 2004/2007 2011

What Escondido says: “As far back as

2002, the police department was using the 187-minute number,” [Escondido spokesperson Joyce Masterson] said.

North County Times, March 30, 2012.

The truth:

(a) Escondido has produced no documents justifying its 187-minute per tow cost

• ther than an unsubstantiated narrative.

(b) The records we have show Escondido used much lower minutes per tow in prior years, e.g. Lieutenants at 1 min./tow in 2004 and 2007, but 5 mins./tow in 2011; Sergeants at 2 mins./tow in 2004 and 2007, but 15 mins. in 2011. (c) The lower total costs charged to tow companies indicate Escondido used much lower minutes per tow in prior years.

Escondido’s Figures Don’t Match

Escondido’s bookkeeping has significant discrepancies:

• Police Equipment and Costs are variously stated as $16.21

in the self-audit and both $15.10 and $20 in a 2011 projected tow program fiscal summary฀. Escondido used the highest figure--$20 per tow--to calculate what it charged to tow companies. ◊ ฀

More discrepancies…

• Revenue from Impound Fees Collected for 2010 is stated as $439,770 in the

self-audit and $550,000 in the budget report to the City Council*.

• Department Overhead is stated as 14.4% in the self-audit and 6.4% in the

fiscal summary฀. City overhead stated as 8.97% in the self-audit and 7.39% in the fiscal summary฀.

*“Annual Operating Budget, Fiscal Year 2010-2011.” City of Escondido. p.366 (“2009-10 Revised”). ◊“Direct Cost Fee Calculation, Average Cost to Impound Vehicle, FY 2011-12.” City of Escondido. Attachment 1. ฀ “FY2011-12 Projected Tow Program Fiscal Summary.” Escondido Police Department. p. 2, p. 3.

◊ ฀

Escondido is Overstating Arrests

What Escondido says: “In about 52% of

the impound instances, [Police Officer #1] takes driver into custody for some criminal violation.”

Escondido Self Audit, Attachment 2, March 30, 2012.

The truth: According to the impound records

(2008, 2009, 2010) provided to reporter John Carlos Frey by the Escondido Police Department, Escondido’s actual number of arrests at impounds is a fraction of what Escondido put into its cost estimate. This

• verstated estimate was used to calculate the

cost per tow and therefore infects its charges to vehicle owners and tow companies. In 2011 alone, Escondido billed tow companies $162,000 for arrests. 2008 2009 2010 542 604 602 2476 2206 1696 Actual per impound records Escondido's Cost Estimate

And As Previously Stated…

• The self-audit omits a non-refundable $2,500 per

application fee that each tow company pays to be considered for a tow contract with the City.

• The report fails to address that the number of

tows has decreased by about 40% since 2007, but the City’s fees to tow companies have at least

• doubled. The City does not account for why fees

have increased so dramatically to handle so many fewer tows.

Outstanding Legal Questions

• Is Escondido in violation of state law prohibiting cities from charging tow companies

more than actual expenses? State law prohibits a city from requiring a fee in connection with the award of a franchise for towing vehicles on behalf of that city in excess of “the amount necessary to reimburse the public entity for its actual and reasonable costs incurred in connection with the towing program.” (Veh. Code section 12110(b))

• Is Escondido in violation of state law prohibiting cities from charging vehicle owners

more than actual expenses? State law prohibits a city from charging a fee for release

• f impounded vehicles that is greater than “its administrative costs relating to the

removal, impound, storage, or release of the vehicles.” (Cal. Veh. Code 22850.5(a))

• Is Escondido in violation of its obligations under state grants to declare and roll

forward any excess revenue derived from its checkpoint program? The grants that Escondido received require that “activities that generate revenues as a result of NHTSA-OTS funding must be reported to OTS. Written notifications of the source and amounts of such income must be made to OTS at the earliest opportunity. A separate account must be maintained for the collection, expenditure, and disposition of program income. Program income generated shall be utilized to further the objectives

• f the grant or reduce current grant costs. Records shall be held for a period of three

years after the final reimbursement and close of the grant/contract.” (OTS Grant Program Manual, Exhibit 6A (34); see also 41 CFR 105-71.125)