2007-2008 San Bernardino County Grand Jury Final Report

Report on San Bernardino County Assessor Bill Postmus direct from the Grand Jury

AUDIT/FISCAL COMMITTEE

The Assessor Subcommittee performed a thorough review of the Assessor function. As
part of this process, 25 subpoenas were issued and 29 interviews were conducted. Thousands of documents were reviewed.
The Audit/Expense Subcommittee did extensive work in reviewing expenses and credit
cards. Many interviews were conducted and thousands of expense records were reviewed.
The committee wishes to thank the many dedicated county employees who aided in our
investigations. Their many hours of extra work are sincerely appreciated.
The following reports give a summary of our findings.

ASSESSOR
SAN BERNARDINO COUNTY TAX ASSESSOR FUNCTION
BACKGROUND
The current Assessor took office in January 2007. Before assuming the Assessors
position, while he was still Chairman of the Board of Supervisors, that body approved
several new positions for the Assessors Office and additional budget amounts to fund
them. The new positions included Communications Officer, Intergovernmental Relations
Officer, Two Special Assistants, Facilities/Safety Manager, Project Administrator,
Executive Secretary and Office Specialist.

According to the 2006-2007 San Bernardino County Final Budgets, The Board
approved an appropriation increase of $1,803,900 for 28.0 positions and their
corresponding services and support costs.

The final approved 2006-2007 San Bernardino County Budget and the 2007-2008
San Bernardino County Budget for the Assessors Office show the increases in salaries
and personnel for the Assessors Office:

Under the current Assessor, the Assessors office was reorganized to absorb a
portion of the newly created positions in a new administrative level called the “Executive Support Staff”. These positions were not found in the previous Assessors organization charts. The resulting structure is a two-tiered bureaucracy: The Operations staff, managed by a newly appointed Assistant Assessor with 200+ employees, that does the property valuation function, and the Executive Support staff, managed by a second newly appointed Assistant Assessor with 8+ employees that reports directly to the Assessor.

INVESTIGATION
The function of the Executive Support staff was the main focus of our investigation.
The Grand Jury interviewed 17 current employees and former employees of the Assessors Office, an Assessors Office consultant, and the current Assessor. The Grand Jury reviewed several thousand emails from the Assessors Office; Executive Support staff expense records; Executive Support staff weekly meeting minutes; Executive Support staff payroll records; educational reimbursement records for university attendance; a separation agreement between the former Assistant Assessor in charge of Operations and the Assessors Office; and Purchase order # Z3073, dated July 13, 2007 for consulting services.

The Grand Jury also reviewed San Bernardino County policies for Purchase Order
agreements; use of County email systems; separation agreements and tuition
reimbursement. Any references to “Assistant Assessor” within the report refers to
individuals originally appointed to those positions when the current Assessor was elected and does not refer to individuals who were subsequently appointed to the position of Assistant Assessor as the result of changes in office personnel.

FINDINGS
The reorganization of the Assessors Office created two distinct management
groups within the Assessors office. The Grand Jury found striking contrast in the level of management expertise, technical knowledge, and productive contributions to the duties and responsibilities between the two management groups. The Grand Jury found that these two management groups had very little interaction.

The Operations managers oversee the day-to-day operations of the Assessors
Office. These managers are currently career employees who provide departmental
competency and expertise. They have high levels of experience, training and education
and are indispensable to the everyday operations of the Assessors Office. These
managers report directly to the Assistant Assessor for Operations.

As part of the reorganization, the current Assessor reclassified key operational
management positions from “civil service protected” to “at-will.” Testimony from
Assessor’s employees indicated career employees may be reluctant to give up their civil service status for an “at will” political appointment. The reclassification of these top positions from “civil service protected” to “at will” threatens the professionalism and competency of those positions. These reclassifications could make these positions vulnerable to political cronyism or undue influence from administrative political
appointees.

The Executive Support staff was created when the current Assessor took office in
January 2007. In contrast to the Operations managers, the individuals appointed to the positions in the Executive Support staff lacked experience or training directly associated with assessor work. The lack of management and assessor function experience of the two Assistant Assessors originally appointed by the Assessor caused the Grand Jury great concern. According to the Revenue & Taxation Code, within 30 days of appointment,the Assistant Assessor must hold a valid temporary appraiser’s certificate issued by the Board of Equalization. A four-year college degree or a high school degree and relevantwork experience is a requirement for receiving a temporary appraiser’s certificate. The Assistant Assessor for Executive Support did not meet these requirements, but a waiver was obtained from the Board of Equalization.

Most of the Executive Support staff is made up of individuals with previous
associations with the Assessor when he was on the Board of Supervisors and/or was
Republican Central Committee Chairman.

In order to determine the purpose and work activities of the Executive Support
Staff, the Grand Jury elicited testimony from employees of the Assessors Office
regarding their own projects and their knowledge of tasks assigned to other employees.

The Grand Jury also reviewed the minutes from the weekly meetings held by the
Executive Support Staff. Based on this information, the Grand Jury determined that staff members used considerable time on planning and implementing such projects as
completing and publishing the annual Assessors Office report, creating website links, and planning outreach meetings. Such projects are at best “public image” work and
determined to be generally peripheral to the core activities of the Assessors Office. This assessment was confirmed by the testimony of individuals from the Assessors Office that the Executive Support Staff had little impact on the everyday operations of the office.

The increase in personnel and funding to staff the new bureaucracy group appears
unjustified based on the contribution of this group to the office in terms of expertise, education, training and work product. It is important to note the former Assessor did not have a two-tiered management staff. Under the previous assessor, the operations staff and two executive secretaries performed many of functions listed for the current Executive Support Staff.

During the investigation, the Grand Jury reviewed thousands of emails sent and
received in the County email system by the Executive Support staff members. There is
evidence from emails and testimony that the Executive Support Staff members have been
engaged in political activities for various national, state, and local political candidates during normal working hours.

Numerous emails were political in content. Examples of such content were
arranging of political meetings, solicitations for campaign contributions, instructions to move monies from one campaign fund to another, solicitation of political proxies, and activity on and discussions of a Republican Party website called redcounty.com.

A sampling of email received by the Assistant Assessor for the Executive Support Staff over a two-week period in the year 2008, on the county email system, revealed 91 emails sent by campaign organizations for national political candidates. The use of the county email system to send or receive messages with political content violates County Policy #14-01 on email use by county employees.

In July of 2007, the Assessors Office entered into an agreement, in the form of a
purchase order, for consulting services. According to San Bernardino County policy, a
purchase order of $50,000 or more must receive Board of Supervisors approval. The
valuation of the purchase order just below the amount requiring Board of Supervisors
review raised concerns that the Assessors Office intended to circumvent policy and avoid board review. The purchase order was originally valued at $49,992. This was later reduced to $49,200. By valuing the purchase order $800 below the value requiring Board of Supervisors review, the Assessors Office circumvented county policy in the hiring of the consultant.

When interviewed, the current Assessor could not explain how the original amount of $49,992 was determined or why the amount was later reduced to $49,200. The consultant was never asked to make a proposal specifying fees, hourly rates or projects. The Assessors Office did not solicit for consulting services through the Request for Proposal (RFP) process, which would have allowed for competitive bidding by qualified consultants.

The consultant was not required to provide detailed invoices to show work done
but was instructed to submit monthly invoices for $4100. Under the purchase order, the consultant was to provide the Assessors Office bi-weekly reports. The Grand Jury found no evidence that written reports were ever generated. The consultant was not on the distribution list for the “executive” staff’s weekly meetings, and did not regularly attend them. While in the Assessors employ, the consultant continued to perform political work for a number of Republican candidates in California. The most significant work produced by the consultant was assisting others in producing the annual Assessors Report, created a program to hand out certificates when the Assessor and taxpayer advocates attended events, and tracking all legislation that affected the Assessors Office.

The Grand Jury found very little results from this contract that benefited the Assessor’s function and that the work product failed to justify the cost of the contract.

Article 7 of the County Employee Exempt Compensation plan provides for two
educational benefits for exempt employees regarding tuition reimbursement. The first
benefit allows employees to be compensated up to $1,000 per fiscal year for tuition
expenses incurred for job-related education or career development. The second benefit
allows for department heads, within their discretion, to reimburse employees for expenses related to obtaining advance degrees which will advance the employee’s career in service to the county. Such advance degrees must be obtained outside regular work hours.

Pursuant to Article 7, the current Assessor used his discretion to reimburse the
tuition expense of the Assistant Assessor for Executive Support in the amount of $8,280. The reimbursement covered tuition for classes the employee attended while pursuing an undergraduate degree. The term “advance degree” is generally defined as degrees conferred upon the completion of a master’s or doctorate program, not a degree conferred upon completion of an undergraduate program. Furthermore, the total amount of tuition reimbursement far exceeded the amounts provided to other county employees.

The Assessors Office’s use of discretion to reimburse an employee in the amount
of $8,280 for undergraduate classes violated the spirit and intent of Article 7. Such
expenses related to classes taken for an undergraduate degree may only be reimbursed up to $1,000 per fiscal year and must be incurred for job-related education or career
development.

The Assessors Office also approved tuition reimbursement for another employee
for undergraduate classes. The reimbursement for this employee was limited to $1,000
per fiscal year. However, the reimbursed expenses were for history classes unrelated to the employee’s county job. The approval of reimbursement for classes not job related violated Article 7.

Review of this employee’s payroll and school records indicated that he was
allowed to use absence without pay and other leave time to facilitate his attendance at scheduled classes. The use of such leave time regularly reduced the employee’s work attendance to almost half a forty-hour work week. A review of the class schedule
indicated that these classes were scheduled during county work hours.

Although Article 7 only addresses the attendance of classes outside regular work
hours for advanced degrees, the intent of the policy is plain on its face and should have been applied to undergraduate degrees. The Assessors Office approval of extensive employee leave of absence for the purpose of class attendance during work hours was an abuse of managerial discretion.

The former Assistant Assessor for Operations resigned his position after a
disagreement with the Assessor. Soon after, the current assessor entered into a separation agreement that allowed the employee to be placed on a six-month paid administrative leave. This separation agreement, amounting to more than $63,000 plus benefits was agreed to by the Assessors Office for the employee after only 10 months of employment.

The interested parties of the separation agreement were unable to justify the contractual terms. The Grand Jury was unable find an instance in the County of a separation agreement longer than 4 months. The separation agreement was excessive for the time served in the position.

RECOMMENDATIONS

08-01 Review Executive Support staff requirements in the Assessors Office for
potential consolidation of positions to increase efficiency.
08-02 Reclassify Operations management positions to civil service protected.
08-03 Enact policy that requires competitive bidding for consulting services.
08-04 Revise the education reimbursement policy to limit discretionary
reimbursement for exempt employees. It is ambiguous and open to broad
interpretation. Require employees receiving tuition assistance while
working towards a college degree, guarantee the county that they will
remain in its employ for a fixed period after graduating.
08-05 Enact policies for separation agreements of County employees that link
the length of employment with terms of severance.
08-06 Require that County email system have automatic firewalls in place to
preclude all political email from being accessed on the County email
system and equipment.