Grand jury again blasts Watsonville

Grand Jury foreman Jay Leite, foreground, addresses the media as the grand jury report is released Thursday. (Photo by Todd Guild).

WATSONVILLE — The City of Watsonville lacks a comprehensive, citywide cash handling policy, which at times creates an “unacceptable risk for misappropriation of funds,” according to a report released Thursday by the Santa Cruz County Grand Jury.

In its 2011-12 report, titled “The Power and Privilege of Transparency,” the grand jury also took the city to task for its controversial purchase in 2008 of a fire truck that was not delivered until 2011 and continued to be plagued by mechanical problems.

The grand jury also looked at the county’s programs for English learners, at procedures for identifying contaminated soil during the building permitting process and at the county’s jail and juvenile hall system.

It was not the first time Watsonville has been in the grand jury’s crosshairs. Last year, it also took a look at the city’s purchase of the fire truck.

But the city’s response to the 2010-11 report was lacking, the latest report said.

“While the prior grand jury’s report offered constructive recommendations, the city did not view them as such,” the report said. “Many of their responses were notably lengthy, bureaucratic and failed to substantively address the material in the report.”

The grand jury found that city administration’s response to requests for information about payments made to performers during the 2009 Strawberry Festival were “incomplete, inaccurate or not delivered in a timely manner.”

According to the report, a city council member at the Aug. 23, 2011 council meeting asked city staff to explain three payments from the city’s petty cash fund that totaled $22,950.

A council member made a similar request at the Nov. 8 2011 meeting, and council members further questioned city finance staff on Dec. 13.

Finally, a Jan. 5, 2012 report to the council explained the process used to pay vendors during the Strawberry Festival, five months after the initial request was made.

When asked for detailed information about the 2009 Strawberry festival, city administration at first told the grand jury that only budgets were available, but no supporting documentation. Upon further investigation, the jurors were told that in fact the information was available for previous festivals.

When the jurors asked Parks and Community Services Department staff for additional details about the Strawberry Festival, they were provided with a two-page draft that the grand jury said failed to address safeguards for cash handling.

Finally, the jurors asked city staff to provide details about cash handling policies citywide, and were given a one-page memorandum.

The length of time it tool to resolve the questions, and the lack of available information, prompted the grand jury to further probe the issue, according to the report.

“The events described above raised additional questions and led us to investigate the city’s overall cash handling policies and procedures,” the report stated.

Among other things, the jurors found that city staff cashed a check for $18,650 that was used to pay three bands in cash.

They also repeatedly asked the city to provide documentation of previous payments and a written description of the city’s cash handling protocol.

But the jurors received little of the requested documentation, the report said.

“The repeated efforts required to get basic information; and the surprising disparity between information asked for, initially provided, and ultimately discovered, painted a disturbing picture,” the report stated.

Watsonville City Manager Carlos Palacios agreed in part with the jury’s findings, and said that the city has already begun to update its policies and will have a procedure in place for this year’s Strawberry Festival.

“We do have procedures but I agree that they need to be documented in a more comprehensive fashion,” he said.

The grand jury also blasted the city for its use of Community Development Block Grant to purchase a fire truck in 2008 that was not delivered until 2011.

In 2008 the city eventually found a 1992 Pierce Lance truck, and wrote a check for $225,000 to a broker that would complete the deal.

While that process was underway, the city was hoping instead to purchase the 1999 KME, which was then owned by the City of Pasadena.

Pasadena, in the meantime, decided to sell the KME and purchase its own used fire truck from the City of Long Beach.

After what the 2010-11 Santa Cruz County Grand Jury report described as a “complicated series of events," the city finally purchased the KME.

But the time it took to get the truck, as well as discrepancies in the associated paperwork, raised concerns from community members and City Councilman Emilio Martinez, who at several points accused the city of wasting city resources.

The grand jury suggested that the city may have been in violation of a federal regulation requiring local governments receiving such grants to make the purchase in a timely manner.

As he has done in the past, Palacios defended the purchase of the truck.

“I do believe that at the end of the day it was a very good purchase for the city,” he said. “It is operational, it serves as a reserve engine and it did not cost the City of Watsonville one cent.”

But he agreed that the purchase might have gone more smoothly.

“I would like the purchase to have happened sooner, but it wasn’t possible because of the agencies involved and the complexity of the purchase,” he said.

Martinez, who has repeatedly grilled city staff over the purchase, and who said he has spent hours investigating the issue, said he is beginning to feel vindicated.

“Every time I asked questions about expenditures City Manager Carlos Palacios would find a way to either keep information from me, lie to me, and/or find a way to retaliate against me,” he wrote in an email.

After a grand jury report is released, the agencies in question typically have up to 90 days to respond. The responses usually contain several agreements and disagreements with the allegations. The agencies are not, however, bound by law to follow the recommendations.

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The grand jury report examined the county’s English language learner programs, and said that current procedures do not allow educators to adequately track students. Further, the jury found that parents often do not have an understanding of the available programs and that English learner programs are not readily available on school district websites.

An in-depth report on the English learner portion of the report will appear in an upcoming issue.

The Register-Pajaronian will also look into the grand jury’s report on Santa Cruz County’s jail system, and how it is affected by recent changes to the state’s prison system.

The grand jury report also found that the building departments of the County of Santa Cruz, and the cities of Watsonville, Capitola, Santa Cruz and Scotts Valley do not consistently communicate with Environmental Health Services to identify known soil contamination sites during the building permit application process.

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