California Special District: Leadership by California Special Districts Association

California Volume 8, Issue 2, Mar - Apr 2013

Publication of the California Special Districts Association

In this Issue

Leadership

Presidentâ&#x20AC;&#x2122;s message [4] CSDA news [6] What CSDA is watching [10] Ask the experts [12]

Interview with Assembly Member Katcho Achadjian

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[Contents]

Volume 8, Issue 2 Mar - Apr 2013

Leadership: Interview with Assembly Member Katcho Achadjian

For your consideration: Thoughts on leadership

Printed on recycled paper.

Departments 6

CSDA News Take action, join districts across the state for SDLD; Local district association leaders invited to SDLD; Over 140 attend Board Secretary/Clerk Conference; Special district salary & benefits survey In Brief Fire district plans for training center; RPD hopes to revive local culture scene; Bridge capacity a concern; Sanitation district to install automated meters; Library district focuses on food; Measures to improve worker safety California Special District â&#x20AC;&#x201C; Mar-Apr 2013

Solutions & Innovations What skills are most important as a manager (And how do I develop them)? Community Connections Santa Clare County Open Space Authority: Creating a community vision for conservation Legal Brief Five topics public employers should address

SDLF Scholarship funds awarded to five individuals

Managing Risk Presumptive injuries

Money Matters Where is the fraud occurring in your district?

Whatâ&#x20AC;&#x2122;s So Special Library allows residents to check out their health

Officers Stanley Caldwell, President Mt. View Sanitary District Pete Kampa, Vice President Tuolumne Utilities District Noelle Mattock, Secretary El Dorado Hills Community Services District Ginger Root, Treasurer Country Club Sanitary District Jo MacKenzie, Past President Vista Irrigation District Stanley Caldwell Board President

Members of the Board Jim Acosta, Saticoy Sanitary District David Edwards, East Quincy Services District Steve Esselman, North of the River Municipal Water District Vince Ferrante, Moss Landing Harbor District Elaine Freeman, Rancho Simi Recreation & Park District William Nelson, Orange County Cemetery District Greg Orsini, McKinleyville Community Services District Steve Perez, Rosamond Community Services District Timothy Ruiz, P.E., East Niles Community Services District Phil Schoefer, Western Shasta Resource Conservation District Sherry Sterrett, Pleasant Hill Recreation and Park District Elaine Sullivan, Leucadia Wastwater District Kathy Tiegs, Cucamonga Valley Water District

CSDA Staff Neil McCormick, Executive Director Megan Hemming, Professional Development Director Cathrine Lemaire, Member Services Director Kyle Packham, Advocacy & Public Affairs Director Todd Winslow, Publications Director Emily Cha, Receptionist George Cordero, Legislative Intern Nicole Dunn, Editor Sharon Foster, Professional Development Assistant Ralph Heim, Legislative Representative Dorothy Holzem, Legislative Representative Jess Lima, Staff Assistant Christina Lokke, Legislative Representative Charlotte Lowe, Executive Assistant Jimmy MacDonald, Legislative Analyst Miryam M. Barajas, Public Affairs Specialist James Wilfong, Senior Designer Travis Wills, Member Services Coordinator Rick Wood, Finance Manager For editorial inquiries, contact Nicole Dunn at 877.924.2732 or nicoled@csda.net. For advertising inquiries, contact Diana Granger, Granger Marketing Works, at (530) 642-0111 or granger@cwo.com. 1112 I Street, Suite 200 Sacramento, CA 95814 t: 916.442.7887 f: 916.442.7889 toll-free: 877.924.2732 www.csda.net

president’s message

Thank you for your investment in CSDA

President of the CSDA Board of Directors, I want to take the opportunity to thank all of you for your membership in the California Special Districts Association. We say it often – and it holds true – that CSDA could not accomplish what it does without your continued support. Prior to my election to the CSDA Board over four years ago, I was involved with CSDA through participation in a number of committees. This experience showed me how valuable my input as a CSDA member and special district leader was to the success of the association. I want you to know CSDA values all of your voices, your input and your participation. Your district’s investment in CSDA is what allows us to provide special districts of all types and sizes across the state with the best level of service. The theme of this issue of California Special District is Leadership. It has been an honor being a part of the leadership of this association, serving as vice president last year and now president, and I look forward to working with the CSDA Board, staff, committees, and – of course – membership – to continue meeting our members’ needs.

A proud California Special Districts Alliance partner

CSDA knows that a leader never stops learning and has developed two events to help you in your leadership endeavors!

Keep an eye out for the General Manager Leadership Summit brochure to see the amazing speakers and workshops coming to Newport Beach this July! In this issue of California Special District are valuable articles from speakers at that event.

Take all of the prestigious Special District Leadership Academy courses in one period of time at one location! Read more about this event in CSDA News.

For complete program descriptions and information about registration and accommodations, visit the Education section of the CSDA website at www.csda.net or call CSDA at (877) 924-2732.

Professional Development Calendar

april S

April Apr

Apr

Special District Leadership Academy: Board’s Role in Human Resources, Sacramento Records Retention and Management - WEBINAR

Apr

Incident Writing: Just the Facts - WEBINAR

Apr

Accommodating Bad Behavior - WEBINAR

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May S

may May

Rules of Order and Facilitating Board Protocols - WEBINAR

May

Fraud Detection/Prevention for Special Districts - WEBINAR

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May

How to Assist the Board in Running an Effective Meeting WEBINAR

May

Special District Leadership Academy: Setting Direction/Community Leadership, Sacramento

May

Special Districts Legislative Days, Sacramento

May

Issues and Challenges Regarding Drugs and Alcohol in the Workplace - WEBINAR

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june June

June

Special District Leadership Academy: Board’s Role in Finance and Fiscal Accountability, Sacramento Required Sexual Harassment Prevention Training for Special Districts - WEBINAR Special District Leadership Academy: Board’s Role in Human Resources, San Diego

June

Special District Leadership Academy: Board’s Role in Finance and Fiscal Accountability, Monterey

June

Board Secretary/Clerk Foundations, Sacramento

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June

California Special District – Mar-Apr 2013

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CSDA NEWS Take Action, Join Special Districts Across the State Special Districts Legislative Days, May 13-14

Local Special District Association Leaders Invited to SDLD

Join special district officials in Sacramento to hear from and interact with statewide policymakers and legislators at Special Districts Legislative Days (SDLD). The two-day conference includes keynotes from California’s top elected officials, like State Controller John Chiang, private meetings with legislators, moderated panel discussions with the state’s leading experts, and issue-specific roundtable conversations covering the most pertinent issues facing each type of special district.

A Chapter Presidents Dinner is planned to help kick off this year’s Special Districts Legislative Days. Local special district association leaders are invited to join CSDA staff and consultants on Monday, March 13 for dinner, networking and a sneak preview of the event to come. Chapters formally affiliated with CSDA will be able to register their president for SDLD at no charge.

SPECIAL DISTRICTS

“Strength in Numbers: Adding Value to Communities” is the theme of SDLD 2013. Be part of advocacy efforts to protect special district finances. This year’s conference will focus on evolving threats to special district revenue, as well as emerging opportunities, including: • Changes to voter threshold on local revenue measures such as special taxes • Protection of existing property taxes and passthrough payments • New funding opportunities for “green” projects and programs • State Controller John Chiang’s latest financial auditing and compensation reporting regulations • Implementation of reforms to public employee pensions Private, pre-arranged legislative visits allow SDLD attendees to engage in a personal conversation with their legislators about the core services special districts provide and how each dollar invested in the district benefits shared constituents. Take this opportunity to give special districts a stronger voice together. Reserve your spot today at www.csda.net/sdld. For more information, please call CSDA at 877-924-2732. Don’t forget to spread the word! Let other special districts know about this exciting conference. Follow us on Twitter @specialdistrict for the latest updates on #SDLD2013.

Help CSDA spread word of the value of attending SDLD by joining SDLD’s Host Council. As a leader in your region, you have built close relationships with colleagues in the special district community. A phone call or email from you letting them know about SDLD will help make “Districts Stronger Together” through strong representation at the State Capitol. Contact Member Services to RSVP to the Chapter Presidents Dinner, to join the SDLD Host Council or for other information.

Now Released - 2012 Special District Administrative Salary & Benefits Survey After many hours of compiling, standardizing, analyzing and formatting data, CSDA’s 2012 Administrative Salary & Benefits Survey is complete. More than 380 districts of all types submitted data for this important research effort, providing a comprehensive look at salary, health insurance practices, retirement plans, vacation, sick leave and more. The final publication is designed to provide you with the information necessary to easily compare and evaluate the salary and benefits offered by your special district. Districts that completed and submitted a survey receive a significant discount on the publication. To place your order, please call the CSDA Member Services Department at 877.924.2732.

RECAP

BOARD SECRETARY/CLERK

Thank you to all of the 140 attendees! CSDA hopes to see you next year!

Over 140 Sharpen their Expertise at Board Secretary/Clerk Conference Congratulations to the over 140 Board Secretaries and Clerks who gathered in Anaheim on February 28 and March 1 for CSDA’s third annual Special District Board Secretary/Clerk Conference. The conference, cosponsored by Special District Risk Management Authority (SDRMA), was specifically designed for special districts. It included two full days of education on all major areas related to the many aspects of the Board Secretary/Clerk’s responsibilities. Attendees were able to participate in one of two educational tracks - one for first time attendees and one for returning attendees.

The attendees enjoyed a hosted reception sponsored by the California Special Districts Alliance, which gave them time to network with their peers. Attendees also participated in a lively luncheon keynote featuring everyone’s nerdy best friend, author Beth Ziesenis: “Upgrade to Free: Top Tech Tools for District Staff Today.” Conference attendees were able to learn about services provided by exhibitors including CPS HR Consulting, ECS Imaging, Incrementum, Meyers Nave and the Special District Leadership Foundation. Attendees also received a conference tote bag sponsored by

Meyers Nave. At the conclusion of the two-day conference, first time attendees were awarded a certificate of completion and returning attendees were awarded a certificate for participation in Advanced Coursework. Get Ready for Next Year! New and returning attendees will be welcome to attend the Special District Board Secretary/ Clerk Conference in northern California next year! The date of this popular event will be announced soon. The certificate program will be offered along with new workshops, important updates and networking. continued on page 8

Attendees were able to participate in one of two educational tracks - one for first time attendees and one for returning attendees.

California Special District – Mar-Apr 2013

CSDA News [continued] CSDA’s Special District Leadership Academy CSDA’s new Special District Leadership Academy Conference november 17-20, 2013 in napa Now you can complete all four modules of CSDA’s groundbreaking and curriculum-based continuing education program, the Special District Leadership Academy (SDLA), in just two and half days! Even better – do it in the beautiful Napa Valley, November 17-20, 2013. The four modules are: • Module #1: Governance Foundations • Module #2: Setting Direction/Community Leadership • Module #3: Board’s Role in Finance & Fiscal Accountability • Module #4: Board’s Role in Human Resources Previously these were only offered over four dates in four areas throughout the state. Now attendees can

spend two and a half days covering all of the critical aspects of their positions. New board members can receive immediate training in their position, newly elected board presidents will receive the training they need to lead effectively and experienced board members will be provided with information on current best practices and the key concerns facing special districts. Room reservations are now available at the Napa Valley Marriott Hotel & Spa by calling 800-228-9290 and asking for the CSDA Leadership Academy rate of $149 single/double plus tax. Room reservations are limited.

District Snapshots

The Rancho Simi Recreation and Park District’s vehicle message “Parks Make Life Better” was loud and clear at the annual Simi Valley Days Parade. Volunteers walked the route passing out prizes to families while board members rode in golf carts, waving to the crowd and passing out prizes.

A watchful great horned owl, photographed in the parklands overseen by Livermore Area Recreation and Park District.

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California Special District – Mar-Apr 2013

What CSDA is watching CSDA has diligently reviewed more than 2,000 bills introduced to date in the 2013-2014 Legislative Session and identified over five hundred bills as having potential impacts to special districts. The following legislation offers an initial list of legislation that will be closely followed by CSDA’s advocacy team. To find a current comprehensive list of every bill CSDA tracks, download Legislative Committee documents, request a meeting with your legislators, and many other resources, visit www.csda.net and log in to the Legislative Access Services page, located under Legislative Resources. Assembly Bill 416 (Gordon) Local Emission Reduction Funding Creates the Local Emission Reduction Program and requires money to be available from the general fund to provide grants to special districts and other local agencies to develop and implement greenhouse gas (GHG) emission reduction projects. The program incentivizes local agencies to plan and implement GHG reduction efforts and recognizes the investment opportunities at the local level. CSDA Position: Support Assembly Bill 748 (Eggman) Judgment Interest Sets the judicial interest rate charged in judgments against local governments to the market rate, modeling federal law, and sets an upper limit of seven percent. The annual interest rate accruing on court awards is currently fixed at seven percent unless the Legislature sets an alternate rate, posing a significant cost to local government. CSDA Position: Support Assembly Bill 792 (Mullin) Brown Act Online Posting Requirements Sponsored by CSDA, addresses circumstances when a local agency loses website posting capability for reasons beyond that agency’s reasonable control, clarifying that in these situations a failure to post the agenda would not preclude a local agency from conducting the meeting or taking action on items of business. CSDA Position: Sponsor Assembly Bill 1212 (Levine) Public Contract Bids Prohibits bid specifications from requiring a bidder to provide submission of data substantiating a request for a substitution of “an equal” item prior to the bid or proposal submission deadline. CSDA Position: Oppose

Senate Bill 1 (Steinberg) Sustainable Communities Investment Authorities Authorizes the formation of Sustainable Communities Investment Authorities while protecting funding for core local services provided by special districts. Any division of property taxes away from local agencies would require the governing board of each participating agency to adopt a resolution, or “opt-in.” Special districts could collaborate with the authority via a joint powers agreement. CSDA Position: Support Senate Bill 33 (Wolk) Infrastructure Financing Districts Eliminates the requirement of voter approval for the creation of an infrastructure financing district (IFD) and for bond issuance, while any division of property taxes away from local agencies would require the governing board of each participating agency to adopt a resolution, or “opt-in.” Special districts could collaborate with the IFD via a joint powers agreement. CSDA Position: Support Senate Bill 626 (Beall) Workers’ Compensation Repeals key provisions of the recently enacted Senate Bill 863 (De Leon) workers’ compensation reform, including reducing autonomy of the Independent Medical Reviewers and allowing an increase in permanent disability ratings for psychological injuries that arise out of a physical injury. CSDA Position: Oppose Senate Constitutional Amendment 11 (Hancock). Voter Approval of Local Special Taxes Places on the ballot a constitutional amendment to lower the voter threshold for approval of local special tax measures from two-thirds to 55 percent. CSDA Position: Support

California Special District â&#x20AC;&#x201C; Mar-Apr 2013

Ask theExperts When are new board members subject to the Brown Act? What about other Acts (Conflict of Interest law, etc.) What are some best practices and pitfalls for newly electeds? First, the Brown Act (Govt. Code Section 54950 et seq.) itself answers the question of when a new board member becomes subject to the Brown Act’s provisions: “Any person elected to serve as a member of a legislative body who has not yet assumed the duties of office shall conform his or her conduct to the requirements of this chapter [the Brown Act] and shall be treated for purposes of enforcement of this chapter as if he or she has already assumed office.” The purpose of this section is to be sure a newly elected board member does not violate the Brown Act intentionally or inadvertently by doing district business outside a public meeting. The best practice is to follow the Brown Act as soon as you know you’ve been elected (well before certification of the election or swearing in). Don’t send an email to the rest of the board saying “Hi, I was just elected; let’s have coffee and decide what we want to do next year.” A lot of people will want to talk to you once you’re elected, so remember that decisions

Bythe

Numb3rs Percent of Americans ages 16 and older who say public libraries are important to their communities.

must be made transparently, at duly noticed meetings, after any public input. Second, the provisions (and penalties) of the Political Reform Act and Fair Political Practices Commission (FPPC) regulations apply at the time the official is sworn in. Although your first disclosure obligation under the Political Reform Act and FPPC regulations is to file a Form 700, your obligation to announce and abstain in the event of a conflict applies as you prepare for your first meeting, when you begin to “participate” in making decisions. Keep in mind that Govt. Code Section 1090 also applies, along with the Political Reform Act, when the newly elected official is sworn in. If you have had any economic relationship with another party to a contract with your district, raise the issue as you identify it and get advice from district counsel. Be careful with email. Although the Public Records Act has not yet been applied to private email, be sure that your emails about district business would stand up to public scrutiny. Therefore, consider the following as the best practice for a newly elected official to avoid pitfalls: • Read the Brown Act or summaries of it and apply the Brown Act the morning you wake up after your successful campaign. • Consider ethics training early; consult the FPPC website and use other resources such as CSDA. • Ask district staff or counsel for materials and don’t be afraid to ask any and all questions. Elizabeth Martyn, Lewis Brisbois Bisgaard & Smith (LBBS) martyn@lbbslaw.com; (909) 387-1130 www.lbbslaw.com Do you have a question for any of our CSDA “experts”? Send your question to Nicole Dunn, editor, at nicoled@csda.net.

MOVERS & SHAKERS

Karen Christensen

The James Irvine Foundation presented Karen Christensen, executive director of the Resource Conservation District of Santa Cruz County with its 2013 Leadership Award. The award, which is meant to showcase solutions that can be models to California’s pressing problems, honors her work on resource conservation efforts.

The Santa Clara Valley Water District Board of Directors has elected director Nai Hsueh to serve as Board Chair for 2013. Director Tony Estremera has been elected Vice Chair. Inland Empire Resource Conservation District announces Directors Terrie Andrews, Cheryl Avent and Alison Mathisen were each re-appointed to the district Board for another four year term. Newhall County Water District received the Distinguished Budget Presentation Award, the highest award offered by the Government Finance Officers Associations of the United States and Canada (GFOA), for its 2012-13 budget preparation. The award recognizes the district’s financial responsibility to its ratepayers. This is the fifth consecutive time the district has received the honor.

movers and shakers Does your district have an individual recently appointed as general manager or a top staff position? Have you recently elected a new board president? Have any district personnel been appointed to other community boards or positions? Email your district’s movers and shakers to Nicole Dunn, communication specialist, at Nicoled@csda.net and we will include them in our next issue!

Castaic Lake Water Agency was also honored with the prestigious Distinguished Budget Presentation Award. This is the agency’s seventh consecutive year receiving the award. Thomas P. Evans has been appointed to serve as President of the Western Municipal Water District Board of Directors. Evans has served on the board since 2007. After more than 36 years with the Chino Valley Fire District, John Ginn has retired. Ginn worked for the past six years with the district as chief. Placer County Water Agency (PCWA) recently honored two board members who left office after 20 years of combined public service. Lowell Jarvis leaves the PCWA Board after four elected terms and 16 years in office, and Ben Mavy leaves the Board after one four-year term of service. Mesa Water District’s Fred R. Bockmiller, Jr., P.E. has been re-elected as Board President and James R. Fisler has been re-elected as First Vice President of Mesa Water District. Newly elected to the district’s Board of Directors is Ethan Temianka, who replaces longtime district director Trudy Ohlig-Hall.

Bob Doyle

California Special District – Mar-Apr 2013

Bob Doyle, East Bay Regional Park District general manager, has received a five-year contract extension to continue running the district’s operations.

In Brief RPD Hopes to Rebuild Stage and Revive Local Culture Scene

Rancho Cucamonga Fire Protection District Plans for New Training Center Rancho Cucamonga Fire Protection District is at an exciting time, preparing for a longawaited new training center for its firefighters. The district has put out requests for proposals from five area architectural firms to design the center. Preliminary plans for the center include a five-story high tower and adjoining structures to simulate actual architectural features firefighters might encounter in the field. Other plans for the center include new classrooms. The district originally planned to build a training center in 1989 as part of its Jersey Station but when the station was completed in 1992, plans for the center were dropped. The district plans to have the new center up and running within five years.

Isla Vista Recreation and Park District is in the process of getting plans approved and raising money to rebuild a stage that burned down in 2012. The stage, at the district’s Anisq’Oyo Park, burned down after a homeless woman’s cigarette destroyed its wooden floorboards. “Anisq’Oyo Park has always been sort of the cultural center of Isla Vista, historically,” says district General Manager Rodney Gould. “Over the most recent years, it’s been neglected, and hasn’t been a very inviting place for the community. We’re going to rebuild (the stage), and instead of having a wooden top, we’re going to have a colored stamp concrete top. That’ll kind of make it bulletproof – no more fires.” The district also hopes to put a shell behind the stage in order to protect nearby businesses from getting direct noise from the stage. The rebuild is estimated to cost about $15,000. Part of the funding for the project will come from the district and much of it will be raised through community fundraisers. By rebuilding the stage, which has been used in the past for music festivals and Shakespeare in the Park, the district hopes to help revive the community’s cultural scene. “We hope to bring more theater back,” says Gould. “I think once it’s a more inviting area, people will want to use it for all kinds of things. We’re hoping to bring it back as the center of community activity.”

Bridge Capacity A Concern for Rural Fire Protection District The Valley Center Fire Protection District, out of concern for the safety of its personnel and equipment, has decided now is the time for area private property owners to verify the load capacity of their bridges and culverts. Many of the bridges are older and may not be able to handle the weight of district fire trucks and other emergency vehicles. “We want to ensure the safety of the equipment and the safety of the people involved, so we don’t lose a fire truck or injure a firefighter,” says Weaver Simonsen, chair of the fire district’s board of directors. “We will still respond (to emergency calls from those properties), but there may be a delay.” The district would like to receive verification that those structures can support a capacity of 75,000 pounds. Verification can be demonstrated in the form of a county permit from the time the bridge was built or, if no such permit is available, getting the bridge permitted. If a bridge or culvert can’t be permitted by the county, residents can obtain written verification of the elevated structure’s load from a licensed structural engineer.

Sources: Contra Costa Times, Imperial Valley Press, San Jose Mercury News, The Acorn, The Daily News, U-T San Diego

Got news?

California Special District wants to hear about newsworthy people, projects, events and accomplishments in your district. To submit a news item for In Brief, contact Nicole Dunn at nicoled@csda.net or (877) 924-2732.

Sanitation District to Install Automated Meters Triunfo Sanitation District is preparing to install $2.5 million in automated water meters over the next five to 10 years. The district is working hard to improve its aging infrastructure and the automated meters are one piece of that plan. The district provides wastewater collection and treatment to more than 30,000 residents in its service area and delivers recycled water to select areas as well. Although installation of the automated meters is costly initially, the meters will eventually pay off. According to the district, $300,000 in revenue is lost each year due to the current, aging meters inaccurately reading low flows. In addition, the automated readers, which transmit customer water use digitally, will reduce labor costs by around $100,000. The district will be holding meetings as they continue to develop their capital improvement plan, which, in addition to the meters, will call for extensive upgrades to existing, aging infrastructure.

Library District Focuses on Food Santa Clara County Library District has launched a new district-wide initiative that strives to educate adults, teens and children about food, agriculture and healthy alternatives. The district wants to educate its residents on the variety of resources on healthy living that are available at the local libraries. According to district services manager, Patricia Lorenzo, “We want people to see that the library is a great place to get reliable and up-to-date information about healthy cooking and healthy eating and sustainable agriculture.” The “Focus on Food” initiative covers the span of a few months and includes workshops on gardening, growing plant life and sustainable farming. Professional chefs also participate in the program, speaking on how to cook, cooking for teens and learning the importance of what is on one’s plate. All programs are offered free to the public and the district will highlight related materials available for check-out, including cookbooks, food magazines and DVDs.

California Special District – Mar-Apr 2013

Conservation Measures to Improve Worker Safety Imperial Irrigation District officials are in the process of installing electronic monitoring devices and gate controls on its gravity-fed water delivery system. The upgrades are an attempt to make the system more efficient. “Eventually all zanjeros would have a computer in their vehicle. At the end of each lateral there would be a monitoring site that tells them how much water spills from the canal into the drain,” according to Water Department Manager Jesse Silva. A zanjero is an individual in charge of water distribution. Once these upgrades are complete, the district should be able to gauge the amount of water in its system more accurately, thus making water deliveries more accurate. The upgrades should also improve worker safety for the zanjeros; no longer would they need to drive around at night for those who work the late shift of the district’s round the clock team.

Long-Awaited Community Center Purchased for Discovery Bay After over 20 years of effort, Town of Discover Bay Community Services District finally has a community center. The district purchased over seven acres of land, which includes a swimming pool, tennis courts, basketball court, playground area and fitness equipment. The center previously served as the community’s athletic club. “It’s great to actually have it, so we can start offering different services,” says Board President Ray Tetreault. Those services include offering a location for various classes and social events, festivals, wedding bangquets and even Bingo games.

continued on page 34

Leadership

Interview with Assembly Member Katcho Achadjian Assembly Member Katcho Achadjian came to the Legislature with decades of leadership experience under his belt. He came to California in 1971 to complete his education and went on to form his own small business, which has now expanded to three locations. Prior to his election to the Legislature, Achadjian served for three terms as an elected member of the San Luis Obispo County Board of Supervisors. He served as Board Chairman in 2001 and again in 2006. Achadjian has also served on various commissions, including the California Coastal Commission, and was the founding chairman of the San Luis Obispo County First 5 Commission. Throughout his career, as a businessman and in public service, he was able to develop his skills as a leader. Assembly Member Achadjian now serves as chair of the Assembly Committee on Local Government. He is the only Republican legislator to serve as chair of a committee in the Assembly. California Special District asked the Assembly Member what he anticipates for the committee this session, what he sees coming for local government and what he believes constitutes an effective leader.

The theme of this issue of California Special District magazine is Leadership. What are the top three qualities you find important in an effective leader? I believe that experience, hard work, and honesty are the three most important characteristics of a good leader. The experience as a small business owner, as a local elected official, and as a family man provide me with the foundation that I need when faced with tough decisions. Additionally, I am grateful for the outstanding education that I received in community college (Cuesta College) and at Cal Poly San Luis Obispo. This education laid the foundation for my future successes. Hard work is a necessary prerequisite to success. As a leader, it is important for me to serve as an example and to show what can be gained through hard work and dedication.

Whether it’s education, public safety, healthcare or a variety of other issues, I truly believe that the more decisions that we can delegate to the local level, the better.

Lastly, I believe that acting with integrity and honesty is an absolutely fundamental characteristic for an effective leader. It would be difficult, if not impossible for me to do my job without the support of my family and trust of my constituents and legislative colleagues.

Would you mind sharing a bit about yourself and what inspired you to be a public servant? How have you mentored the next set of leaders? If you had told me twenty years ago that someday I would serve in the State Legislature, or any other elected office, I would have told you that you were crazy. Since graduating from Cal Poly, my focus had always been on growing my business, raising my family, and giving back to my community. However, after volunteering time and money to various local organizations and volunteering on a few political campaigns, I began to accept more leadership roles. When a seat on the board of supervisors opened up I was approached by several community leaders and asked to run for the seat. With my wife’s blessing I did just that. Twelve years later, after serving three terms and accomplishing many of my goals, I was ready to return full-time to the private sector. However, as fate would have it, that same year an Assembly seat in my home district became available. With the support of the community and my family, I made the decision to run and was successful. I am so grateful that the people of the Central Coast have entrusted me with this responsibility to represent them in the State Assembly. One of the many duties I face as a legislator is a responsibility to mentor future leaders. Whether it’s meeting with an ambitious high school student in my district office, hosting interns at my Capitol office, or

California Special District – Mar-Apr 2013

giving advice to newly elected local officials or legislators, I take great pleasure in providing guidance and advice to new leaders.

This year saw a big influx of incoming freshmen legislators. How has it been working with all of the newly elected? Any unique challenges? Opportunities? I feel like the new class of Legislators holds a lot of promise. I have had the opportunity to sit down with quite a few of the new members and have already developed a good working relationship with all of them. One of the great things about this class is the fact that there is the possibility that many of them can serve a full 12 years in the Assembly. I think that this has a real impact on how they approach their new roles as members of the Legislature. There seems to be less rush than when I first took office. The new members seem to realize that they have the time to settle in, learn the ropes, and study the issues before rushing to pursue policies that have not been well

thought out. It is my sincere hope that the change in term limits will lead to a more deliberative and responsible group of Legislators.

As Chair of the Assembly Committee on Local Government, what are some of your goals for the committee this year? The Local Government Committee has a proud history of bipartisan cooperation. This is a tradition that I plan to continue as Chair. On the policy front, I have always believed in empowering local government. I believe that local governments are better equipped to meet the needs of their constituents and should have the ability to do so with a minimum amount of interference from the State. It is my hope that the Committee will follow my lead and vote in accordance with that principle. continued on page 18

See Assembly Member Achadjian speak at CSDA’s Special Districts Legislative Days, May 14-15 in Sacramento!

SPECIAL DISTRICTS

May 14-15, 2013 • Sacramento Register at www.csda.net/sdld

Assembly Member Katcho Achadjian interview [continued] What do you see as being the top issues to face local government at the Capitol this year? Despite the recent uptick in the economy, many cities, counties, and special districts continue to struggle financially. Over the past several years local governments have struggled to provide vital services with reduced budgets. As a result, I expect that we may see efforts to identify new revenue streams for local governments. Obviously the loss of redevelopment has been a major issue for cities. I expect that this year we will see an attempt to create a new economic development tool for cities. Likewise, I expect that there may be an effort to reform and extend the life of the State’s enterprise zones.

What challenges do you face as the only Republican chair of an Assembly Committee? How do you meet those challenges? I don’t really see the fact that I am a Republican as a challenge, instead I view it as an opportunity to facilitate dialog and continue to foster bipartisan cooperation. Of course, unlike every other committee chairman, the majority of the members of the committee do not share my political party or ideology. That said, like myself, every member of the committee has local government experience, so I expect that there will be many issues where we agree and very few where we agree to disagree.

What efforts do you take in order to work in a non-partisan fashion on issues with members of the Legislature who belong to another party? I do not look at policy from a partisan perspective and do not base my votes on who the author of a particular bill is. Instead I try to take an objective look at each measure which involves doing extra research and asking a lot of questions. My colleagues on both sides of the aisle know that I always give each measure fair consideration and I am always willing to meet and discuss their legislation even in cases where we might not agree. Already, I have co-authored legislation with Democratic State Senator Bill Monning which serves the interest of our common constituents in San Luis Obispo County.

In his State of the State address, Governor Brown defined “subsidiary” as “the idea that a central authority should only perform those tasks which cannot be performed at a more immediate or local level.” CSDA likes to think of special districts as the “most local” form of government. How do you view special districts and local control? For me, this was the best part of the Governor’s State of the State speech. It really was music to my ears. Whether it’s education, public safety, healthcare or a variety of other issues, I truly believe that the more decisions that we can delegate to the local level, the better. Local elected officials are closer to the issues and know how to address them better than those of us up here in Sacramento. This is especially true of special districts, which serve specific local needs.

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Through education and professional development, CSDA is working proactively with its membership to take steps that promote transparency and accountability in an efficient and effective manner that makes sense at the local level. Do you see the state looking to impose more mandates in this area, or do you think a proactive, local approach is preferred? Local governments, including special districts already struggle to meet all the mandates imposed on them by Sacramento. For smaller entities, compliance with these mandates results in a serious financial burden, especially in cases where the process is abused. At this point, I do not see a need for additional state mandates and would much prefer to see local governments develop their own approaches to increase transparency and accountability rather than have them imposed by the State.

There are 78 healthcare districts in California, and a majority of critical access hospitals in our state are operated by healthcare districts, as a former board member of the Arroyo Grande Community Hospital and Chairman of San Luis Obispo’s French Hospital, do you have anything you’d like to share about the challenges facing healthcare in California and the role that healthcare districts can play in meeting those challenges? As California is moving toward full implementation of the Affordable Care Act, health coverage will be provided to millions more low-income residents so accessibility will continue to be an extremely important issue. While healthcare districts already provide a significant portion of the medical care to minority populations and the uninsured in medically underserved regions of the state, the role of healthcare districts will need to continue to evolve. Healthcare districts in California will not only be challenged by the issue of accessibility, but will continue to face fiscal challenges. I know from my work as a board member at Arroyo Grande Community Hospital and the French Hospital that some of the challenges healthcare districts are facing differ greatly depending on the geographic location, populations served, types of services provided, and types of revenue they receive.

There are 50 special districts within the legislative district you represent. Can you share some of your experience working with local districts to bring more resources and promote local programs and projects to shared constituents? As a county supervisor I have years of experience working closely with special districts and have firsthand experience with the good work that they do. Just like all governments, the success of a special district depends on the type of leaders that are elected to serve and the decisions that they make on behalf of their communities. As a supervisor, I knew that many of the important services that my constituents relied on were provided by special districts and not by the county. Therefore, it was imperative that I worked collaboratively with the leadership of special districts.

At CSDA’s upcoming Special Districts Legislative Days, where CSDA is pleased to have you speak, we’ll be focusing on special district revenues – threats to existing dollars and new opportunities for additional dollars. What do you see coming in 2013 that could possibly impact revenue to districts? Throughout the state, local governments continue to face a distressed fiscal situation and the decline in property taxes continues to challenge localities to “do more with less.” My number one goal in regards to funding for special districts will be to ensure that they continue to receive existing revenues. Locating new revenue sources will be a more difficult task. My hope is that by focusing on economic development and job creation, the Legislature can implement policies that will result in an increase in revenue from existing sources without implementing new taxes.

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For Your Consideration:

Robert Stevenson

Thoughts on Leadership

ne could say Robert Stevenson is an expert on leadership. He has interviewed over 10,000 employees, managers and senior executives in over 250 industries. With over two decades of business experience and years of extensive research on what it takes to successfully

lead organizations, Stevenson has developed a complete understanding of the issues leaders face running an organization. Stevenson considers leadership to be a process – not an event. One never stops learning or developing the skills and tools it takes to inspire and motivate employees to do their best.

There are many facets to being a successful leader. Employee engagement, appreciation and attentiveness are all important parts of leadership. Here, Stevenson has put together some of his top points on leadership for you to consider.

“Leader”…an Earned Title – Not Given Many people profess to have it - that leadership ability, but few people truly possess it. They read the books, listen to the tapes or DVDs, go to the seminars, and then pronounce themselves leaders. They use words like “empowerment,” “total quality management,” “excellence,” “vision,” “commitment,” and in the same breath, want to take the credit. As James O’Toole, a professor and leadership expert puts it, “Ninety-five percent of American managers today say the right thing. Five percent actually do it.” 20

I recently worked with an old friend who had chosen to go with a new company. Having worked with him several times before in other organizations, I had seen his management style in action. It was a sheer delight to watch him operate in a new company and see that he had already been awarded the title of leader by his staff. He is a man who respects, understands, directs, motivates, and helps everyone around him. A man who can be given a difficult task and accomplish it while at the same time caring for all employees and customers. Lao-Tzu, a revered philosopher of ancient China, left us with an excellent explanation of leadership. The superior leader gets things done with little motion. He imparts instructions not through many words but through a few deeds. He keeps informed about everything but interferes hardly at all. He is a catalyst, and though things would not get done as well if he weren’t there, when they succeed he takes no credit. And because he takes no credit, credit never leaves him. Managers who think they must make people feel stupid, insecure or scared to get things done will never become great leaders. It is not just how good employees perform when you are there, it is also that they perform well when you are not there. That is the true benchmark of a great leader. Great leaders see the potential in people and cultivate it; they build confidence – they don’t destroy it. Leadership is about helping others, teaching others, supporting others, giving credit to others – it’s about OTHERS – it’s not about you! Great leaders never look for fame, accolades or awards – they dwell on accomplishments and the rest follows. You will know you are a leader when you start making the people around you better.

California Special District – Mar-Apr 2013

We all want to feel appreciated not for just a job well done, but for showing up every day, for being on time, for being proactive, for lending a helping hand and for having a smile on our face.

The Power of Appreciation The pioneering psychologist and philosopher William James once said, “The deepest human need is the need to be appreciated.” The U.S. Department of Labor stated that 46 percent of the employees who voluntarily quit their jobs do so because they don’t feel appreciated. We all want to feel appreciated not for just a job well done, but for showing up every day, for being on time, for being proactive, for lending a helping hand and for having a smile on our face. It seems most managers today get so caught up in the day-to-day pressures of meeting quotas, goals and objectives, they forget to compliment, thank, and appreciate all the folks around them who make it possible for them to meet all those quotas, goals and objectives. It doesn’t cost a dime to appreciate an employee - but it costs a great deal of money not to. If a qualified employee leaves, you now have separation processing costs, hiring costs, training costs, lost productivity and possibly lost revenue. Keep Employees, Inc. (a leading employee retention consultancy) puts a dollar amount on the costs of losing a productive employee: For hourly employees For middle managers For top management

0.25 to 0.50 times their annual wages plus benefits 1.00 to 1.50 times their annual salary plus benefits 3.00 to 5.00 times their annual salary plus benefits continued on page 22

Leadership [continued from page 21] A recent Gallup poll of more than 1 million employed U.S. workers concluded that the number one reason people quit their jobs is a “bad boss” or immediate supervisor. Common “bad boss” behaviors (in case you need a reminder) are bullying, harassment, discrimination, and lack of respect. I would assert that a boss who made an effort to appreciate and compliment their employees would seldom, if ever, be ascribed with any of those oppressive behaviors. To me it is just plain bad business to lose an employee who is qualified, doing their job, and contributing to the company’s success, because you neglected to go out of your way to tell them they are doing a good job.

the effort of appreciating all those around you. If corporate and personal success interests you, start showing some interest and appreciation to your employees and associates. When you start showing people you care about them and appreciate their efforts, you will be amazed at the benefits it will bring. But understand one important point: This is no one-time affair. Done properly, it is a way of life!

The Contrarian A contrarian is a person who takes an opposing view, especially one who rejects the majority opinion. A contrarian can also serve as a very useful tool when it comes to making decisions. At every management meeting, I would suggest you assign at least one person to be The Contrarian, even if they agree with your idea, make them try to shoot holes in it, find fault, or consider alternatives. Challenges keep companies healthy. At the next meeting, pick someone else to serve in that post because people have a tendency to start disliking a person if they are always the one trying to shoot down ideas.

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Some managers / bosses / CEOs have instilled such an environment of fear that they seldom, if ever, have anyone question their ideas, policies, procedures, or methods. If no one is disagreeing, adding their two cents, or giving any “real” input at your meetings, you don’t need to have a meeting. You probably won’t be in business long either, if that’s the way you run a company. Here are two examples of things that should have been challenged: (Source: Great Government Goofs by Leland Gregory)

• One year, efficiency experts saved the Department of Defense (DOD) $27 million. The efficiency experts charged the DOD $150 million for their work. • The El Paso, Texas, City Council approved $112,000 to retain a private security firm – to guard the city’s police station. Someone should have stood up in those meetings and said – “Wait a minute…” “ We have better things to do with our money.” “This makes no sense.” “This is ridiculous.” “You’ve got to be kidding.” “Why?”

Once a decision is made, do everything you can to make it work, because only through a unified commitment can success be obtained.

explain and prove the idea. They welcome vigorous dialogue and debate. They see argument and disagreement as catalysts to better solutions. Once a decision is made, do everything you can to make it work, because only through a unified commitment can success be obtained.

P.R.O.U.D. There are a lot of great words in the English language that, for me, immediately get my attention when said. Words like guarantee, proven, freedom, trust, destiny and love. When you “guarantee” something or say you “trust” someone, you are making a powerful statement. You are putting your reputation on the line. Another word I really like is “proud.” It is defined as “satisfaction over something regarded as highly honorable or creditable to oneself...stately or distinguished, bold or fearless...to honor or distinguish a person or organization.” It conjures up statements like: Go out there and make us proud. You really did yourself proud. That was a proud moment for us. When you make people proud of what you did, then you did good! One of my clients has asked me to design a program around the corporate theme they implemented this year, which has been so successful they are carrying it over into next year. Their theme is based on the acronym P.R.O.U.D., which, for them, stands for: PERFORMANCE – RESULTS – OWNERSHIP – UNITY – DIFFERENCE continued on page 24

See Stevenson speak on “The Leadership Formula – It’s a PROCESS, Not an EVENT”

CSDA’s General Manager Leadership Summit • July 14-16 • Newport Beach

But, always remember, when it’s not their own money, attitudes are more accepting of stupid ideas. Personally, I will take one contrarian over a room full of “yes” people. At least the contrarian will force me to think. Never take offense from someone who is challenging your idea. Simple words like “why” and “what if” can save a company if asked at the right time. Great leaders see challenges as an invitation for the group to test, justify,

California Special District – Mar-Apr 2013

July 14-16 • Newport Beach

Leadership [continued from page 23] I asked them if I could share a little of their corporate philosophy with you because I personally think it is a fantastic word to base a professional culture around. They said, “Go right ahead; share it with anyone.” Their objective (I am paraphrasing) was stated: This year is all about showing pride in yourself, your job, your team and your company through positive actions and striving to excel in all you do – to THINK, FEEL and BE PROUD. Are you PROUD of the job you’ve done? Are you PROUD to be here? Did the experience make you PROUD? Does your team make you PROUD? They went on to state how to achieve PROUD. PERFORMANCE: Choose paths that generate positive outcomes – avoid paths of least resistance. RESULTS: Reach beyond ordinary results – refuse limitations.

OWNERSHIP: Own every opportunity; seize the smallest of opportunities – make them extraordinary. UNITY: Understand the big picture; genuinely support united goals and group success. DIFFERENCE: Dedicate to difference. Deny status quo, aim high and engage. They have banners, t-shirts, mega-phones, stickers and giant foam fingers imprinted with PROUD everywhere. The company also gives out monthly, quarterly and annual PROUD awards. They want their people to: THINK PROUD – it’s all about the attitude. FEEL PROUD – and show it in each task. BE PROUD – by owning your job and stamp your name all over it. Regardless if it is a corporate theme or just on a personal basis, I think it is critical to always deliver your best and accept nothing less. When you put pride in your work, you will always be PROUD of the results.

District Snapshots Pleasant Hill Recreation and Park District

The new Pleasant Hill Recreation and Park District Senior Center Grand Opening & Open House celebration was held on January 5. The event started with a ribbon cutting and the center officially opened its doors for business January 7!

California Special Districts Association Districts Stronger Together

A leadership conference for general managers and other management staff in special districts

July 14 - 16, 2013

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Hyatt Regency Newport Beach

NEW CONTENT FOR 2013! REGISTER NOW! California Special District â&#x20AC;&#x201C; Mar-Apr 2013

[Solutions & Innovations]

What skills are most important for a manager (and how do I develop them)? By Dr. Frank Benest, Senior Advisor, International City/County Management Association and Co-Chair, Cal-ICMA Coaching Program

The

one set of skills essential to serve as a chief executive in local government is leadership, or people skills. Most often people get promoted into supervision or low-level management because of their effective technical skills. However, managers most often fail because of their poor people skills, as opposed to poor analytical or technical competencies. In fact, a Harvard Business School study looked at manager failure and found that as much of 80 percent of senior manager failure resulted from poor people skills.

Five years ago, the Cal-ICMA Coaching Program surveyed up-andcoming talent in local government. When asked “what skills do you need to acquire in order to advance into management?,” most aspiring managers responded that they needed technical skills, such as budgeting, HR, project administration, IT, and other hard skills. However, when the coaching program surveyed city and county managers and department directors, they strongly indicated that aspiring managers needed soft skills, including skills in team leadership, team-building, conflict resolution, listening, communication, supervision, and other people leadership skills. For the senior managers, it was the soft skills that created the hard results.

See Benest speak on “Surviving the Retirement Wave – 10 Lessons in Growing Our Successors”

CSDA’s General Manager Leadership Summit • July 14-16 • Newport Beach

July 14-16 • Newport Beach

For the top executive, what does leadership really look like in practice? From my perspective, executive leadership is a set of roles to be played at different times depending on the needs of the organization and the community. These leadership roles include: Convener and Conversation Starter. Leaders must convene and engage employees and community members so that they take an active role in conversations about the present and future of their organization or community. These venues could include small, intimate opportunities, such as “coffee with the chief executive” on designated mornings in the cafeteria, as well as more formal group meetings or workshops with employees and community members. In a very real sense, leadership is about conversations. Translator. Leaders need to translate the challenges, difficulties, opportunities and the nature of the work so employees perceive meaning. By helping employees sense they are making a difference in the lives of others, building community and saving the planet, leaders become “meaning translators.” Dream Maker. Individuals, organizations, and communities all require dreams and must participate in the hard work to achieve those aspirations if they are to do great things and become fulfilled. Therefore, leaders must engage others in discussing their own dreams and those they hold for the

Share your Solutions & Innovations Do you have a new program, process or facility that increases efficiency, reduces costs, improves service or otherwise helps make your community a better place to live? California Special District wants to know about it! Contact Nicole Dunn at nicoled@csda.net or (877) 924-2732.

organization or the community. Of course, leaders must then work with all to translate those dreams into plans and actions. Journey Leader. A great organization is characterized by employees who commit to the general enterprise, key initiatives, and each other. Employees cannot be ordered to commit. Managerial authority is impotent. As Charles Lauer has stated, “leaders cannot force people to follow—they invite them on a journey.” Therefore, leaders must articulate the nature of the journey, excite people about the opportunity and challenge, and then invite people to join them. Follower. Great leaders are great followers. If leaders engage employees and community members in the big issues of the day, they must be open to following the values, ideas, and needs articulated by others. To be a great follower, leaders must demonstrate a certain humility and vulnerability in addition to any traditional toughness and forcefulness. Cheerleader. Leaders cheer on project teams even when not leading the effort. An effective leader provides encouragement, resources, and other support so that employees and community partners can achieve their hopes, dreams, and plans.

Make the Special District Administrator Certification a Part of Your Commitment to Strong Leadership

The Special District Administrator Certification is a voluntary designation, granted through the Special District Leadership Foundation (SDLF), sought by individuals who strive to be the best. This certification helps document and recognize a general manager’s knowledge, skills and capabilities as a special district administrator.

Party Host. We in local government do not know how to have fun in the workplace. In our party host role, we can organize coffee and bagel breaks, tail-gate pizza parties, or ice cream socials in order to recognize people, show our appreciation, and especially celebrate our successes. I call it “purposeful partying.” Partying with a purpose helps create a more vital and committed team.

Certification programs are a way for professionals within a field to affirm—to their customers, to their board of directors, and to themselves—that they are competent and experienced in their profession. Demonstrate your commitment to leadership by pursuing this certification and becoming recognized as a Special District Administrator!

So, as a manager, how can you develop leadership skills? You can learn leadership skills by engaging in leadership work regardless of your formal position in the organization. You learn leadership by doing.

For more information on how to become a certified Special District Administrator, visit www.sdlf.org or call SDLF at 916-231-2939.

First, you can exert leadership skills by asking to join or volunteering to participate on project teams in your local organization or community or through your church, a nonprofit or professional association. Leadership is a social activity, so you need to engage yourself with others. Second, you can ask questions to employee or community partners and engage them in conversations about the following: • What are our hopes and vision for this effort or project? • Why is this project important to us and others? • What do we want to achieve? • Who else needs to be part of the conversation? continued on page 46

California Special District – Mar-Apr 2013

[Community Connections]

Santa Clara County Open Space Authority: Creating a community vision for conservation By Andrea Mackenzie, General Manager

The

Santa Clara County Open Space Authority (Authority) is celebrating its 20th anniversary year throughout 2013. It promises to be a year of community celebrations and special events as well as a time of reflection and visioning for the future. A critical undertaking for this 20th anniversary year is the creation of the Authority’s Conservation Vision and Strategic Implementation Plan, which will establish goals, provide guideposts and offer inspiration as we embark upon the next 30 years. The Vision and Plan will help define what it means to be a 21st Century special district focused on land conservation and stewardship. Both will prove useful tools as the Authority navigates shrinking public budgets and dramatic economic and political shifts, while responding to the needs and interests of a growing and diverse public. The Authority’s Conservation Vision and Strategic Implementation Plan are science-based and communityinformed and will identify the highest priority areas for land protection in Santa Clara County. They will serve as the Authority’s strategic business plan and the foundation for annual work programs and budgets. In developing and implementing the Vision and Plan, the Authority will enhance its efficiency and effectiveness and build additional capacity to deliver specific conservation, land management and environmental education services. The scope of the Conservation Vision is far-reaching and encompasses agriculture and working lands, recreation and livable communities, water resources, climate change, wildlife habitat and biodiversity. Departing from the common assumption that nature’s benefits are “free,” the plan will contain an ecosystem services analysis that measures the financial value of nature’s benefits resulting from land conservation investments, e.g. protection of clean, reliable drinking water supplies, protection from catastrophic floods and storms, local food production and climate change resiliency. Applying the concept of “return on investment” is relatively new in the conservation field, and will serve to demonstrate the value of conservation investments to infrastructure and basic needs and services such as public safety, food supply, heating and cooling energy efficiency, as well as financial returns from tourism and public recreation.

Photo credit: Stephen Joseph

Integral to the Conservation Vision and Plan is an extensive community outreach process to engage, inform and inspire key stakeholder groups. By initiating a community-wide participatory planning process, the Authority is squarely at the intersection of government agencies, elected officials, nonprofit organizations and private companies in the pivotal role of convener and facilitator. A valuable outcome has been the establishment of a strong network of relationships and shared interests that could lead to strategic collaboration on future projects and financing. The initial outreach phase has included a large public workshop and extensive direct stakeholder interviews. Preliminary findings indicate a broad emphasis on the value of regional conservation planning and prioritization, interagency collaboration and data analysis and sharing. The findings from the stakeholder interviews also suggest a regional scope for the Open Space Authority whereby the Authority establishes best practices for conservation and serves as a “unifier” for geographic and discipline-specific goals leading to realization of a coordinated strategic vision on a regional level.

Share your community connections Is your district interacting with the community in a new and original way? California Special District wants to know about it! Contact Nicole Dunn at nicoled@csda.net or (877) 924-2732.

Equally important to the success of the Conservation Vision outreach is engagement with constituents, which include 1.3 million residents in the Authority’s jurisdiction. The results of public polling showed that while the majority of county residents are concerned about the environment, many are not knowledgeable about the Open Space Authority and its role. Thus, the outreach for the Conservation Vision presents the opportunity to engage as well as inform county residents about the value of land conservation and the role the Authority plays. Taking into account a technology-focused culture and the need to reach people where they are at, Authority staff and consultants created www.CVW3.org – Conservation Vision: Water, Wildlife and Working Lands – an online public forum that allows people to sign in anywhere, anytime from their mobile devices or computers. The platform host is MindMixer, an online community engagement technology that provides site hosting and moderation, data analysis and a personalized engagement platform. The site is easily navigable, visually appealing with numerous photos and area maps and offers many avenues for input and discussion. The public forum launched in December 2012 in conjunction with a large public workshop. In the next phase, the goal is to increase participation through focused outreach in the Authority’s seven geographic districts each with about 180,000 residents. Staff will work through nonprofit, business and community leaders within these districts to reach residents and attend neighborhood and community events to promote participation on the public forum website. A committed coalition of business and community leaders, elected officials and environmental activists spearheaded the creation of the Open Space Authority 20 years ago. In the midst of explosive growth of industry and housing construction, this coalition was committed to balancing urban growth with open space lands and protecting the many environmental treasures of the Santa Clara Valley. Today we anticipate a 23 percent increase in population growth in coming decades, coupled with a chronic housing shortage. Again, the county faces an urgent need to balance growth and preserve the highest priority land and ecosystems. By hearkening back to our roots and employing a community-wide planning process, we are setting the stage for enhanced collaboration and

California Special District – Mar-Apr 2013

efficiencies among the public and private sectors. Through community outreach and engagement, we are working to create knowledgeable advocates for open space lands and an informed constituency that understands the positive impact of land conservation on their everyday quality of life. In 2013, the Santa Clara County Open Space Authority celebrates its 20th Anniversary and a legacy of open space preservation. The Authority protects water quality, iconic landscapes, family farms and provides outdoor recreation in order to provide a good quality of life, support the local economy and make the Santa Clara Valley a vibrant, healthy place to live and work.

Legal Brief Five Topics Public Employers Should Address By Mark Meyerhoff, Liebert Cassidy Whitmore

This is a good time for personnel and human resources directors, managers and analysts to resolve to make their agencies an even better place to work and to reduce risk. Here are five important topics for public employers to consider adopting. 1. Get to Know PEPRA The California Public Employees’ Pension Reform Act of 2013 (PEPRA) went into effect at the beginning of the year. This new law reforms the retirement systems of most public employers. While portions of PEPRA apply to current employees, a majority of this new legislation applies to those who are “new members.” PEPRA sets forth new requirements for “new members” regarding retirement formulas, employee contributions, final compensation, and pensionable compensation. It also changes the playing field as to air time, post-retirement work restrictions, supplemental benefit plans and health insurance vesting. If your agency has not taken steps to learn PEPRA yet, resolve to get to know this new law now.

2. Review and Update Personnel Rules, Policies and Regulations

Bythe

In the last few years, there have been many changes to federal and state employment laws. These changes cover a wide variety of areas and include both new laws and amendments to existing ones. For example, the California Fair Employment and Housing Act was amended in each of the last two years to include genetic information and gender expression as protected classifications. Also, the California Fair Employment and Housing Commission issued new pregnancy disability regulations that went into effect at the end of 2012. These are only two of dozens of newly adopted or amended employment laws. Yet, despite these changes, many public employers have not updated their personnel rules, policies or regulations to reflect them. Public employers are encouraged to audit their policies to ensure that they reflect current law and to reduce the risk of liability.

Numb3rs Percent of local water reliability achieved by Mesa Water District, with its new improved Mesa Water Reliability Facility.

3. Conduct an FLSA Audit Wage and hour litigation continues to thrive in California. In addition, a search of the U.S. Department of Labor’s (“DOL”) Enforcement Database shows that the agency has investigated

thousands of employers in the last five years for potential violations of the Fair Labor Standards Act (“FLSA”), including many California public agencies. Because of these risks, public employers are encouraged to conduct an FLSA audit. The audit is the only reliable means an employer has to determine whether it is complying with the FLSA’s many requirements and regulations. For example, is your agency classifying employees as non-exempt from overtime based upon FLSA standards? It is only through an in-depth investigation into an employer’s time keeping and compensation practices, and an analysis of how those particular practices measure up to FLSA requirements, that an employer can be fully assured of its compliance with the FLSA.

It is only through an in-depth investigation into an employer’s time keeping and compensation practices, and an analysis of how those particular practices measure up to FLSA requirements, that an employer can be fully assured of its compliance with the FLSA. 4. Learn About the Affordable Care Act The federal Patient Protection and Affordable Care Act (“ACA”) is being rolled out over several years. For instance, the ACA eliminated reimbursement for over-thecounter drugs from health savings accounts in 2011. The following year, ACA required employers to list certain health cost related information on W-2 forms and to provide employees with a summary of benefits and coverage. This year the health savings account maximum contribution was lowered to $2,500. Finally, employers will start to see

California Special District – Mar-Apr 2013

the implementation of health care exchanges this year. These exchanges are a key component of the ACA and are required to be operational by January 1, 2014. Since key portions of the ACA have not taken effect yet, there is still time for employers to understand their obligations under this new law.

5. Understand Technology’s Impact on Work Every year brings new and exciting advances in technology. These advancements have changed the way work is performed. It has made employees more efficient, allowed them to work outside of the office, and to communicate with one another anywhere and at any time. However, the use of these tools also has significant employment implications. Giving non-exempt employees access to emails or remote computer access creates potential problems for employers under the FLSA. Because the time spent checking emails and/or working could be considered hours worked, employees who engage in these activities outside of their regular work hours could have a claim against their employers for unpaid wages. In addition, the use of social media by employees to discuss work-related matters can implicate privacy, free speech and disciplinary issues. Addressing these five topics will go a long way to strengthen your agency and help reduce the risk of lawsuits. If your agency needs help with implementing these resolutions, Liebert Cassidy Whitmore’s offices are ready to assist.

For more than 30 years, we have been leading California Special Districts through their legal challenges in all aspects of Labor & Employment law and Business & Facilities. For more information, please visit

www.lcwlegal.com CalPublicAgencyLaborEmploymentBlog.com | @LCWLegal Los Angeles | San Francisco | Fresno | San Diego

Scholarship awarded to five individuals The Special District Leadership Foundation (SDLF) recently awarded five scholarships to newly elected board members of special districts with budgets of less than $1 million. The SDLF 2013 Dr. James Kohnen Scholarship covers registration fees for all four modules of the Special District Leadership Academy. Applicants needed to submit an application and a short response to the following questions: • Why did you seek office with a special district? • What do you see as your role as a board member? Applications were reviewed by a three-member panel of the SDLF board and scholarships have been awarded to: • Kimberly Main, Director, Boulder Creek Recreation and Park District • Lee Mason, Board Member, Ambrose Recreation and Park District • Emmanuel Ogunleye, Director, Los Medanos Community Healthcare District

CSDA Appointees

Stanley Caldwell, Mt. View Sanitary District Jo MacKenzie, Vista Irrigation District Sherry Sterrett, Pleasant Hill Recreation & Park District

SDRMA Appointees Special District Leadership Foundation 1112 I Street, Suite 200 Sacramento, CA 95814 www.sdlf.org

Staff

• Kim Gallagher, Director, Colusa County Resource Conservation District • Christopher Reams, Director, Foresthill Fire Protection District David Aranda, SDLF Board President noted, “I am pleased that the Special District Leadership Foundation was able to award these scholarship funds that were raised at the recent “Taste of the City” event during the CSDA Annual Conference & Exhibitor Showcase. Part of the mission of SDLF is providing a comprehensive program for the continuing education of special district officials and employees.” The three member scholarship review committee also voted at their February meeting to waive application fees for any newly completed District of Distinction applications received in 2013. The District of Distinction Accreditation showcases a district’s commitment to excellence, particularly in the areas of prudent financial practices, transparency, and governance. For more information on all of the programs offered through the Special District Leadership Foundation visit www.sdlf.org.

Neil McCormick, Administrator Megan Hemming, Program Manager Charlotte Lowe, Program Assistant Rick Wood, Finance Manager

David Aranda, SDA, North of the River Municipal Water District Muril Clift, Cambria Community Services District Jean Bracy, SDA, Mojave Desert Air Quality Management District

Public Member Appointees

Katie Kolitsos, Chief Consultant, Assembly Local Government Committee April Manatt, April Manatt Consulting Geoffrey Neill, California State Association of Counties

Special District Leadership Foundation Programs promoting good governance.

SHOWCASE YOUR DISTRICTâ&#x20AC;&#x2122;S COMMITMENT TO TRANSPARENCY

District Transparency Certificate of Excellence

The District Transparency Certificate of Excellence is a standalone program of SDLF and made available to districts that apply and meet certain requirements. It is also a required component of the District of Distinction Accreditation. This program was created in an effort to promote transparency in the operations and governance of specials districts to the public and to provide special districts with an opportunity to showcase their efforts in transparency.

For more information and an application, visit www.sdlf.org or call 916.231.2939.

Get your district certificate today!

Are you up for the Challenge? Prove your commitment to transparency

SDLF is supported by

The Special District Leadership Foundation (SDLF) is a an independent, non-profit organization formed to promote good governance and best practices among Californiaâ&#x20AC;&#x2122;s special districts through certification, accreditation and other recognition programs.The SDLF and its activities are supported through the California Special Districts Association and Special District Risk Management Authority.

In Briefs [continued from page 15] and provide monetary prizes to the winners ranging from $150 to $400, depending on the level – junior or senior – and whether they placed first or second. In addition, the winners’ teachers each received $100, a small way to thank them for encouraging their students to investigate science and engineering.

Water and Wastewater Agencies Team Up, Offer Special Water Awards To encourage students to pursue science and engineering in the water, wastewater and recycled water fields, ten Alameda County and eleven Contra Costa County water and wastewater agencies combined efforts for the first time this year and created the regional Excellence in Water Research Awards at their respective county’s Intel-affiliated science and engineering fair. In both counties, each agency contributed $300, generating enough funds to donate $1,000 to each fair

The ten agencies that participated in the Alameda County regional water awards were: Alameda County Water District, California Water Service Company – Livermore District, Castro Valley Sanitary District, City of Hayward, City of Livermore, City of Pleasanton, Dublin San Ramon Services District (DSRSD), East Bay Municipal Utility District (EBMUD), Union Sanitary District and Zone 7 Water Agency. The eleven agencies that participated in the Contra Costa County regional water awards included: Central Contra Costa Sanitary District, Contra Costa Water District, Delta Diablo Sanitation District, Dublin San Ramon Services District, East Bay Municipal Utility District, Golden State Water Company, Ironhouse Sanitary District, Mt. View Sanitary District, City of Pittsburg, Rodeo Sanitary District, and West County Wastewater District.

CSDA’s Business Affiliates CSDA gratefully relies on the generous support of all Business Affiliates

Gold level

CSDA Finance Corporation www.csdafinance.net Enterprise Networking Solutions, Inc. www.ens-inc.com Meyers Nave www.meyersnave.com Special District Risk Management Authority www.sdrma.org

Burke, Williams & Sorensen, LLP www.bwslaw.com California CAD Solutions, Inc. www.calcad.com CPS HR Consulting www.cps.ca.gov HdL Coren & Cone www.hdlcompanies.com PARS www.pars.org

Diamond level

For more information about all CSDA Business Affiliates, see the Buyer’s Guide at www.csda.net. To learn more about becoming a CSDA Business Affiliate or participating at a higher level, contact our office at 877.924.2732.

A special thank you to:

California Special Districts Alliance Bringing the best in resources, products and services to all special districts.

Services & Benefits

Coverage protection

Financing

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• Property/Liability

• Infrastructure Improvements

• Education

• Workers’ Compensation

• Buildings, Land & Equipment

• Cost Saving Programs

• Health Benefits

• Refinancing

877.924.2732

800.537.7790

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www.csda.net

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anaging Risk

Presumptive injuries SDRMA currently provides Workers’ Compensation coverage for 390 Members, representing over 10,000 employees throughout California. Under California Labor Code, an employer is liable for the payment of medical treatment and disability benefits for employee injuries that “arise out of or in the course of employment,” sometimes referred to as AOE/COE (Arising Out of Employment/Course of Employment). For some claims an employer may dispute the cause of the injury to determine if the injury was AOE/COE. For designated safety personnel (police, fire fighters, and deputy sheriffs) some specific type of injuries are “presumed” to have arisen out of or in the course of employment. These type of work related injuries are known as Presumptive Injuries. What are presumptive injuries? Presumptive injuries are injuries enumerated in California State Labor Codes §3212 through §3213 that are presumed by statue to be industrially related (caused by work). Presumptive injuries can be “controverted,” or disputed by medical evidence, but this approach shifts the burden of proof to the employer. Most presumptive injuries have eligibility requirements, which can lessen their application. All presumptive injuries, with the exception of methicillin-resistant staphylococcus aureus (MRSA) and cancer, have an extension, or statute of limitations, for filing the claim that runs for a period of three calendar months for each full year of requisite service, not to exceed 60 months following termination of employment. The extension for methicillin-resistant staphylococcus aureus runs for up to 90 days from the last date of employment. On January 1, 2011, The William Dallas Jones Cancer Presumption Act of 2010 went into effect, extending the cancer statute of

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limitation to three calendar months for each full year of requisite service, not to exceed 120 months. Presumption Injuries Include: • Hernia, heart trouble and pneumonia • Cancer, if the member demonstrates that he/she is exposed to a known carcinogen, for peace officers and firefighters • Tuberculosis • Blood-borne infectious disease, including HIV, hepatitis, and MRSA • Exposure to biochemical substances. Biochemical is defined as “any biological or chemical agent that may be used as a weapon of mass destruction.” • Meningitis for peace officers, probation officers, district attorney investigators and firefighters. • Skin cancer • Lyme disease • Lower back impairment from wearing a “duty belt.”

Officers

David Aranda, President, North of the River Municipal Water District Jerry Ledbetter, Vice President, Alameda County Water District Muril Clift, Secretary, Cambria Community Services District Special District Risk Management Authority 1112 I Street, Suite 300 Sacramento, CA 95814 tel: 800.537.7790 www.sdrma.org

Members of the Board

Jean Bracy, Mojave Desert Air Quality Management District Terry Burkhart, Bighorn-Desert View Water Agency Ed Gray, Chino Valley Independent Fire District Sandy Raffleson, Herlong Public Utility District

Who Can Claim a Presumptive Injury? In general, regular active police officers, firefighters, sheriffs, District Attorney Investigators, California Highway Patrol Officers, and others specified by statutes are considered a safety officer for purposes of being eligible for a presumptive injury. State and local lifeguards who have been employed for more than three calendar months in a calendar year are eligible for the skin cancer presumption.

Burden of Proof By statute, presumptive injuries are presumed to be industrially-related; therefore, the injured worker’s burden of proof is typically to prove the diagnosis and a timely manifestation of the disease or injury. This shifts the burden of proof to the employer, which means the employer must obtain substantial medical evidence that the injury or diagnosis was caused by something outside of employment or prove that the injured worker did not meet the presumptive eligibility requirements. Investigation SDRMA has a duty to investigate these – and all – claims thoroughly to ensure that we are providing appropriate medical and benefits payments. The investigation will include, but is not limited to: • Obtaining a call log to show a record of exposure to known carcinogens; • Taking statements and or depositions in order to determine when the injury manifested itself and in order to obtain an accurate medical history so we can subpoena any relevant and necessary records; • Reviewing Material Safety Data Sheets (MSDSs); and • Scheduling a medical evaluation by a qualified medical examiner.

California Special District – Mar-Apr 2013

Consultants

Lauren Brant, Public Financial Management Ann Siprelle, Best Best & Krieger, LLP David McMurchie, McMurchie Law John Alltop, Bickmore Risk Services & Consulting Charice Huntley, River City Bank James Marta, CPA, Auditor Karl Snearer, Apex Insurance Agency Doug Wozniak, Alliant Insurance Services, Inc.

SDRMA Staff

Gregory S. Hall, ARM, Chief Executive Officer C. Paul Frydendal, CPA, Chief Financial Officer Dennis Timoney, ARM, Chief Risk Officer Barbara Tyler, CCLA, Claims/Loss Prevention Manager Nicole Rushing, Finance Manager Ellen Doughty, Manager of Member Services Karen Lafferty, AIC, Senior Claims Examiner Shawn Vang, Accounting Technician Wendy Tucker, Member Services Specialist II Alana Batzianis, Health Benefits Specialist Rachel Saldana, Administrative Assistant

If other avenues of investigation become apparent, we will pursue those until we are satisfied that we understand all the circumstances of the claim. That said, we also understand that we must balance the responsibility of a good faith investigation with the constraints of public entity budgets and strive to accelerate AOE/COE determination at every opportunity. Disputing Presumptions with Medical Evidence Because medical evidence can play a crucial role in disputing a claim, our adjusters take the time to learn about the disease. They will also obtain prior medical records, and any medical and scientific studies related to the disease. This includes writing to the physician and questioning whether the disease is industrially-related based on the information gathered. Although it is difficult to overcome the presumption, scientific studies and medical information can help to rebut the presumption. In particular, in the case of cancer, it is helpful if the adjuster can show that the site of where the cancer manifested itself was not a place the injured worker encountered in the course of work or that the type of cancer could not have been caused by the types of carcinogens the injured worker was exposed to while at work. Apportionment Apportionment is the splitting up of permanent disability between industrial causation and non-industrial causation to ensure the employer is only liable for disability sustained while the employee was employed by them. Apportionment can be addressed in two ways: based on the medical opinion of a physician or based on a prior award of permanent disability. In 2006, the State Legislature amended Labor Code §4663 to explicitly exclude the application of apportionment to a preexisting disability or condition for presumptive injuries. While apportionment may not apply under Labor Code §4663, we can attempt to utilize Labor Code §4664 to factor in and receive credit for any prior awards for injury to the same body part. Although this will not limit the employer’s obligation to provide lifetime medical treatment, it will mitigate the amount paid for permanent disability. Please contact SDRMA Chief Risk Officer Dennis Timoney at dtimoney@sdrma.org or 800-537-7790 if you have any questions regarding this article.

Money Matters Where is the fraud occurring in your district? By David Becker, CPA, James Marta & Company

That’s right, I said where, not if. Fraud in special districts is no laughing matter as we are all susceptible to some degree. I’d be willing to bet that someone at your district has taken home a few small office supplies over the years. The theft of a few pens or a ream of paper now and then may account for a lot of the losses on a broad scale, but the misappropriation of cash by employees through various forms of embezzlement or theft, or the misappropriation of substantial non-cash assets through theft of inventory, supplies or equipment can be disastrous, especially for a governmental entity. There are various types of fraud including corruption, asset misappropriation and financial statement fraud. Any one or all of these can hit your special district hard.

Who commits fraud? Approximately 95 percent of white collar criminals have no previous criminal record. In fact, the higher the monetary value of the economic crime, the less likely it is that the perpetrator will have a previous criminal record. Fraud committed by executives was more than three times as costly as fraud committed by managers, and more than nine times as costly as employee fraud. Unfortunately, one of the more likely employees to commit fraud tends to be your most trusted employee.

Impact of Fraud The impact of fraud is incredible. According to the U.S. Department of Commerce, employee theft costs US business nearly a billion dollars per week, over $40 billion dollars. Not to mention the impact on public and political trust.

Understanding Fraud To fight fraud one must not only realize that it occurs, but also how and why it occurs. Several decades ago, after considerable research, Donald R. Cressey, a wellknown criminologist, developed the Fraud Triangle. Essentially, the three elements of the Fraud Triangle are: Opportunity, Incentive and Rationalization (sometimes

CSDA F C

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called justification or attitude). For fraud to occur, all three elements must be present. If one is talking about theft, there must be something to steal and a way to steal it. Anything of value is something to steal. Any weakness in a system—for example, lack of oversight—is a way to steal. Of the three elements of the Fraud Triangle, opportunity is often hard to spot, but fairly easy to control through organizational or procedural changes. Incentive in this case is another way of saying motivation. What is it in one’s life that drives one to commit fraud? Incentive sometimes involves personal situations that create a demand for more money; such situations might include vices like drug use or gambling or merely life events like a spouse losing a job. At other times, pressure arises from problems on the job; unrealistic performance targets may provide the motive to perpetrate fraud. Finally, there are two aspects to rationalization: One, the fraudster must conclude that the gain to be realized from a fraudulent activity outweighs the possibility for detection. Two, the fraudster needs to justify the fraud. Justification can be related to job dissatisfaction or perceived entitlement, or a current intent to make the victim whole sometime in the future, or saving one’s family, possessions or status.

Your Annual Audit One common mistake made by special districts is assuming that having annual external audits means there must be no fraud. Unfortunately that is not the case. While an audit tries to identify significant risk within an organization, it cannot be relied upon to identify all risk.

Officers

Jo MacKenzie, President, Vista Irrigation District James Acosta, Vice President, Saticoy Sanitary District Stephen Kozak, Secretary, Municipal Water District of Orange County

CSDA F C

CSDA Finance Corporation 1112 I Street, Suite 200 Sacramento, CA 95814 tel: 877.924.CSDA www.csdafinance.net

Consultants

David McMurchie, McMurchie Law Josephine Libunao, BNY Mellon Trust Co., NA William Morton, Municipal Finance Corporation Saul Rosenbaum, Prager & Co., LLC Jeff Stava, Nossaman, LLP

CSDAFC Staff

Neil McCormick, Administrator Cathrine Lemaire, Program Manager Charlotte Lowe, Executive Assistant Rick Wood, Finance Manager

Members of the Board

Scott Dowell, Chico Area Recreation and Park District Paul Hughes, South Tahoe Public Utilities District Larry Peterson, Rancho Simi Recreation and Park District

In many cases an employee, usually a trusted employee with long tenure, will find a way to siphon off cash that has been received, but never been logged into the books, and never deposited. Sometimes elaborate schemes of dual receipts or counterfeit receipt books are used, other times receipts are never given. No district should feel that an annual audit guarantees against internal theft, embezzlement or other forms of fraud.

Fraud Risk Auditors generally recognize three categories of risk: inherent risk, control risk, and detection risk. When dealing with fraud, these categories may apply to the entire array of fraud that may be perpetrated against an entity, including the risks involving a material misstatement of an entity’s financial statements. In the governmental environment, however, any ill-gotten gains are typically not the product of financial statement fraud. The rare occurrences of financial statement fraud in government tend to be one method of hiding a fraudulent activity such as asset misappropriation. Inherent risk is directly related to the nature of the underlying process, asset or organization to which the risk applies. A process or organizational structure that is very complex, inherently exhibits a higher exposure to risk of fraud than a simple organization. Certain assets, such as cash, are more susceptible to inherent risk than others, like computers. Control risk is related to the effectiveness of a district’s internal control structure and the policies and procedures that support that structure. An effective internal control structure reduces control risk; an ineffective internal

control structure increases control risk. Control risk is, to a great extent, the product of district management and its internal environment, which, in turn, may be influenced by history, goals and ethical standards. If and when an error or fraud occurs, detection risk is the measure of how likely and how quickly the event can and will be uncovered. Detection risk is affected by both the internal and the external conditions. Relatively small violations may not readily yield themselves to discovery. Inadequate review of results or reports increases detection risk as does the lack of oversight or regulation. Detection risk may also be increased by the lack of expertise, experience or relevant training of management or staff.

Red Flags Often times, there are red flag indicators that tell us something isn’t right, but we tend to disregard them as insignificant. Employee red flags include employee lifestyle changes: expensive cars, jewelry, homes, clothes; significant personal debt and credit problems; behavioral changes: these may be an indication of drugs, alcohol, gambling; refusal to take vacation or sick leave; reluctance to provide information to management or the auditors; engaging in frequent disputes with the auditors; accounting personnel are lax or inexperienced in their duties; unexpected overdrafts or declines in cash balances; employee is easily annoyed at reasonable questioning; providing unreasonable responses to questions; rewriting records under the guise of neatness in presentation or even working on weekends to get ahead. continued on page 40

California Special District – Mar-Apr 2013

Specializing in Special District Financing Is your district looking for costeffective financing solutions? The CSDA Finance Corporation has facilitated nearly $1 billion in financing for capital improvement projects, land and equipment purchases, and refinancing of prior debt. Financings closed in the past month include: Saratoga Fire Protection District Refinancing of prior debt $2,100,000 Twain Harte Community Services District Fire truck purchase $363,732 Access to tax-exempt financing is a CSDA member benefit. For a no-obligation quote contact Program Manager Cathrine Lemaire at 916.442.7887 or visit www.csdafinance.net.

Want to learn even more about Fraud Prevention? Register for the upcoming “Fraud Detection/Prevention for Special Districts” webinar on May 8!

Money matters [continued from page 39] Preventing Fraud

3. Account reconciliations. Not only should receipts be reconciled with deposits, for example, but such So what can a district do to prevent fraud? There are a variety reconciliations should be regularly reviewed by someone of things that need to be considered and the following items are in higher authority than the ones making the records certainly not all inclusive, but tend to be some of the and doing the reconciliations. It may be reviewed by more common issues in special districts. a finance manager, or the general manager, or even by 1. First and foremost is implementing a culture that a board member if necessary. Bank statements should embraces sound ethical behavior. This culture starts always be opened and reviewed by someone other than with a clear mission statement supported fully by the the person preparing the bank reconciliation to look for Board of Directors and management through their actions. unusual transactions or checks. A key to success in avoiding embarrassing losses is in 4. Journal entries are the best way for a fraudster to creating an attitude and culture of ethical behavior, and a cover their tracks. In most special districts, there is clear understanding among board, management, and all no one other than the accountant who can create or employees, that such behavior is not acceptable, and will even understand certain journal entries. It is imperative not be tolerated. You can raise the awareness of everyone involved in the organization through departmental meetings, that journal entries be reviewed and understood by someone in the organization other than the person appropriate training and providing a forum for people to who originated the entry. In some cases, a board find and report fraud. A fraud hotline can be a valuable and inexpensive tool that allows people to report suspected fraud. member review may be necessary. 2. Segregation of duties. When it comes to handling money, 5. A significant number of small to medium size special districts use accounting software that has minimal the person who receives the funds should be different than or no safeguards other than password protected the person making the deposit. In small districts with a entry. If fact, many of these software programs allow limited number of staff, it is not always easy to accomplish, backdating or forward dating of documents, or issuing but even if the board secretary or board chairman has to receipts, checks, or deposits with the same number. perform part of the operation, it should be considered. In This type of access is just as susceptible to significant a utility district where large numbers of checks arrive in errors as it is to fraud. Districts should consider the mail on a regular basis, it may be worth considering investing in more robust systems that limit access and setting up a “lock box” with a local bank, where the mailed entries that can be manipulated. checks can go, to be opened and the money accounted 6. One of the more common control deficiencies is for and deposited before the envelope is ever touched by the use of signature stamps. Signature stamps tend to an employee. If a district is too small to apply adequate be used when the authorized signor is frequently out safeguards, it might consider outsourcing some of the key of the office and the stamp is left under the control financial functions. In many cases, a bookkeeping service of another administrative person who is usually given and a payroll service can be retained for less cost than it can permission to stamp checks on the signer’s behalf when be done for internally, and it may free up an employee for they are out. Get rid of the stamp immediately and other tasks.

The use of purchasing cards as a payment tool for private companies, government agencies and other organizations is increasing rapidly. In addition to the gains in efficiency and financial rebates, users recognize the value of the fraud and misuse protection tools that come with purchasing card programs. Studies show the losses associated with purchasing card fraud and employee misrepresentation are relatively insignificant, accounting for approximately $70 loss for every $1 million of card spend.

Purchasing Card Programs Can Offer Safe-Guards Against Fraud

The most popular and effective risk management activities include: • Maintaining documented policies regarding receipt retention • Engaging in formal audit and review of purchasing card spending process • Tracking and resolving disputed transactions CSDA, in partnership with Bank of the West, offers a District Purchasing Card program to all members (subject to credit approval). It features controls to help prevent fraud and misuse, such as individual cardholder credit limits and online transaction monitoring. In addition, the program’s Fraud Protection feature protects the district in the event of cardholder abuse. Visit www.csda.net/card to learn more.

have an additional authorized signer such as the board treasurer who can be available in the original signer’s absence. This provides accountability for the actual person signing the check. 7. Payroll often represents a significant portion of a district’s expenses and also poses a great risk. A manager, outside the payroll process should check on payroll calculations before payroll is distributed. The amount of salary or wages due to each employee should be clearly documented in personnel files. In a recent audit, we requested that paychecks at a city be picked up by the employees instead of using direct deposit. At the end of the day over 100 checks were not picked because these people were no longer employees of the city and should have been removed from the payroll system. Part-time and seasonal employees pose a great risk as well since most managers are not familiar with all of these employees and it is an opportunity to create a fictitious employee. 8. Paid Time Off (PTO) is also subject to abuse if there are not adequate procedures in place to authorize, monitor and report employee time off. Many times employees will take vacation or sick leave without reporting the time to the supervisor or even the supervisor not reporting the PTO. Employees in key financial or accounting positions should be required to take periodic vacation each year. When such employees are reluctant to take vacation, it may be that they are simply dedicated and don’t feel that they can be away, but on the other hand, they may be concerned that if someone else fills in to do their job, their scheme may be discovered. A fresh set of eyes can be an excellent tool. 9. As your external auditors do, you should regularly perform an internal risk assessment to determine where, when and how fraud can occur in your organization. Challenge yourself and your key employees to think how internal controls can be circumvented, may not be appropriate or do not even exist. Then develop appropriate policies and procedures to mitigate the risks identified. There are tools out there that can help with this process (see resources section of this article).

California Special District – Mar-Apr 2013

When Fraud is Discovered

Last, but certainly not least, the district should develop a fraud response plan. How many of you have even thought about what you would do if you discovered an employee who was stealing from your district. Do you immediately talk to the employee, fire the employee, call the police, contact your auditor? The incident must be investigated, and the facts determined. It is important that you gather just the facts and avoid speculation to avoid potential legal issues. Determining the facts, including the actual amounts of the loss and how it occurred can often take a significant amount of time. Consult with your attorney about what you can and should do about the employee(s). What can be done immediately to preserve evidence, or possibly to recover lost funds? You should also discuss with your auditor to determine how this will impact the audit and if they can provide assistance in the investigation. Communicate with your board to ensure everyone understands what is going on and there are no surprises. Get prepared immediately to deal with the public and the press. Your district should have a designated spokesperson anyway, and you should make a clear and forthright statement as soon as possible. The press is generally willing to work with you if they think you are leveling with them and that you are moving aggressively to deal with the situation.

Resources

Where should you begin? There are a variety of resources available to you, many of which are available on the internet. However, I would contact your auditor first to see what resources they may have to assist you in this process. The two most useful sources I have utilized are: 1. The Association of Government Accountants offers a fraud prevention tool kit online at: http://www2.agacgfm.org/tools/FraudPrevention/Default.aspx 2. The Association of Certified Fraud Examiners also has a wealth of information on their website at: http://www.acfe.com/.

Conclusion

Don’t become complacent in thinking that fraud could not occur in your district. In this economy, it is out there. Is it just paper clips gone missing or will it cause you to go bankrupt? Don’t wait to find out. Every special district needs to be proactive in their effort to prevent fraud.

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[What’s so special]

Library allows residents to check out their health Grossmont Healthcare District

Kathy Quinn, , library director ck ri er William C. H lth ea H Community Care Library

Grossmont Healthcare District operates to provide the best possible medical care to its community of over half a million residents. Over 10 years ago, the district decided they could provide another level of care to the public in the form of a consumer health library – the William C. Herrick Community Health Care Library. Should constituents want to gain a better understanding of their medical conditions, not only would they have access to speak to their medical professional, but they could use the library to research any questions they may have. The library is open to the general public and offers not only resources in the form of publications, but internet access and health-related workshops. California Special District asked the library’s director, Kathy Quinn, to explain what the library offers the community and why Grossmont Healthcare District decided it was important to form in the first place. What is the Dr. William C. Herrick Community Health Care Library? What is its purpose? The Herrick Library is a comprehensive consumer health library that is free, open to the public, and accessible via the Internet. The purpose of the library is to meet the health information needs of Grossmont Healthcare District residents and others. Many hospitals have patient information centers, but the Herrick Library is different because it is not inside the hospital and is open to the general public.

Grossmont Healthcare District Established: 1952 Size: 750 square miles Population: over 500,000

Budget: $21,779,000 Location: La Mesa, CA (East County Region of San Diego) Website: www.grossmonthealthcare.org and www.herricklibrary.org

What are the services provided by the library?

What inspired the district to form the library?

The library provides a wide variety of services, including: • Comprehensive website with links to reliable health websites, health services, and local health resources. • Reference and research services to assist patrons with finding current, reliable, and authoritative health information. • 10 public computers with free highspeed Internet access. • Access to several subscription databases for articles, dictionaries, encyclopedias, and evidence-based assessment of complementary and alternative medicine. • Collection of approximately 2,000 items, including books, DVDs, CDs, magazines, newspapers, journals, pamphlets, brochures, and anatomical charts and models. • Free monthly Senior Discussion Group featuring a speaker on a health or wellness topic. • Free wireless (wifi). • Historical medical memorabilia displays. • Exhibits from local artists. • Two meeting rooms and two study rooms.

In the late 1990s, the District Board of Directors proposed the idea of a health library as a resource of information for the residents of the area, as they recognized that regular public libraries don’t typically specialize in community health resources, while hospital-based medical libraries are often geared to physicians and health care workers. Ultimately, the library building was included in the district’s plans for new administrative offices and a conference center. The Herrick Library opened in May 2002.

Who can access the library? What is the cost? Everyone is welcome to use the Herrick Library. There is no cost to the library patrons, except for fees for printing/ photocopying and fines for overdue items. The Herrick Library issues its own library card (not connected to the San Diego County public libraries), which enables patrons to checkout materials for use at home. The cards are issued to Grossmont Healthcare District residents as well as those who work, attend school, or have health-related ties to the district.

California Special District – Mar-Apr 2013

The library is named after Dr. William Herrick. Who was Dr. Herrick? The late Dr. William C. Herrick served as a member of the Grossmont Healthcare District board of directors from November 1994 until the time of his death in March 1998. Dr. Herrick devoted his life to the improvement of the Grossmont Healthcare District and to the health of residents of San Diego’s East County. He was the director of the Pathology Department at Grossmont Hospital from 1961 to 1996. In recognition of his dedication to excellence in medicine, he received the Grossmont Hospital Distinguished Service Award.

What are common ways the community utilizes the library? The majority of the patrons come to the library to use the computers. While some are looking up health information, many are using the computers for email, job applications, or writing papers for school. Often, our regular patrons eventually need some health information, or they will refer a family member or friend who needs health information to us. Nonprofit organizations use our free meeting rooms, including a cancer support group, hospice workers, and two recovery groups.

People regularly come to the library saying some variation of “My doctor told me I have [fill in the blank], but s/he didn’t have time to explain it, or “I don’t understand what that is.” We encourage the patron to call their doctor or schedule a follow-up visit, and in the meantime we guide them to appropriate information about their condition, disease, or treatment. People are very interested in free brochures and pamphlets on various medical conditions, as well as information on local support services. In 2012, an average of 850 people used the library every month, for a total of over 10,000 visits.

How is the library funded? The Herrick Library is fully funded by the Grossmont Healthcare District. The library’s annual operating budget is approximately $353,000, or just under two percent of the entire district budget.

What are other ways your district works to educate the public on health? The district sponsors and/or participates in local health fairs sponsored by nonprofit organizations or local government agencies. The library director gives presentations to small groups to educate them about doing health research on the Internet.

How does the library help to fulfill your district’s mission? The district’s mission is to help our community address its unmet health care needs. Assisting our community with reliable, authoritative, and up-to-date health and medical information is an integral part of that mission.

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