By John  Seiler

Our colleague Steven Greenhut writes today on Bloomberg about, “Scandals show California is broken, not broke.” An excerpt:

“Voters are accustomed to the scare tactics of tax-hungry politicians who warn of looming cuts in schools and public safety.

“But nothing gets people’s attention like closing parks. And in California, where the state beaches and mountain refuges are as beloved as the politicians are cynical, the strategy has exposed practices that border on the corrupt.

“It started in May 2011 when Governor Jerry Brown announced that “turbulent times” required the “unthinkable” — the shuttering of 70 parks to deal with the state’s enduring fiscal problems. Brown’s critics sensed that he found the proposed cuts to be quite “thinkable” — at least as a ploy to encourage Californians to loosen the grip on their wallets.” 

Read the rest here.

By John Hrabe

California’s Department of Parks and Recreation has been holding onto $54 million in surplus funds for the past decade. The agency didn’t bother to tell anyone at the state Department of Finance about their secret stash.

Oops.

Parks agency director, Ruth Coleman, resigned on Friday, but not before firing her second-in-command, Acting Chief Deputy Director Michael Harris. In May, former deputy parks director Manuel Lopez resigned after he approved $271,000 in secret vacation buybacks.

The scandal looks bad because it is bad. My CalWatchDog.com colleague Katy Grimes has uncovered that employees were “keying in the post-it notes amounts, which were used for the buyout requests to avoid a paper trail.” No government officials should hide information from auditors or mislead the public about anything– let alone something as important as its finances.

But, let’s not forget one important fact: the agency saved the money. Coleman confirms that “no taxpayer money is missing and that no funds were embezzled.” If that turns out to be true, there are far greater scandals occurring every day with government agencies that wastefully spend our money. And because those stories have become so commonplace, the public ignores them.

Steinberg: Ready to Spend the Surplus

State Senate President Pro Tem Darrell Steinberg, D-Sacramento, promised that the Legislature was ready to spend the money. “The Senate will also examine how to ensure that these found dollars can be used for the highest benefit for California’s taxpayers,” he said in a press release.

On the very same day, Steinberg was defending the legislature’s approval of $4.6 million in pay raises for its employees. “Steinberg’s chief assistant, Kathryn Dresslar, was among those who received pay raises, a 10 percent increase to $183,480 a year,” the Associated Press reported; 110 of the employees that received raises already make more than $100,000 per year. I reiterate: On the same day that Steinberg was criticizing the state parks department for saving $54 million in taxpayer funds, he was explaining why he gave out pay raises to state employees.

Does that make sense to anyone? The director who saved taxpayer money loses her job, and the politicians that approved extravagant pay raises for their staff now get to spend the windfall.

Oh, the lying and dishonesty, you say. The legislature’s track record of openness and public disclosure is no better than the parks department. Last year, the Legislature fought Assemblymember Anthony Portantino, D-La Cañada Flintridge, in his quest for full disclosure of the legislature’s spending records. At least, state parks lied about saving money.

Only in California is it scandalous when a government agency doesn’t spend taxpayer money. Think about that: It’d have been better politically if the agency had frivolously spent the money rather than secretly stockpile it. If the parks department had spent the money on executive pay raises or renovations of its mansions, there’d be no scandal. Coleman wouldn’t have resigned.

Motivation to Hide

So, why did the agency hide the money? The Mercury News reported, “One parks department official who requested anonymity said it appears there was an error in accounting formulas years ago, and that as the money accumulated in the funds, staff members did not want to admit the mistake, possibly for fear that the finance department would take the money away.”

Here’s the real scandal: every other state agency that spent surplus funds to prevent the money from returning to the general fund. Does anyone really believe that the state parks department was the only agency to have a surplus in the past decade?

Any California agency with surplus funds probably rushed to spend its budget before the end of the year.  That’s what happened in Missouri. Earlier this year, an audit revealed, “Some Missouri agencies rushed to spend money on items not immediately needed as their annual budgets drew to a close.”

Any state agency that wasn’t already engaging in this behavior will do so in the future. The parks department scandal, and its ensuing investigations, will encourage state agencies to squander funds at the end of the year.

State Parks Never Closed

Moreover, there were no harms to hiding the money. The department threatened budget cuts would close state parks, but that never panned out. According the Los Angeles Times, “Closures were averted because donors, nonprofits and other government agencies stepped forward with additional funding.” In other words, the people that enjoy state parks paid for the state parks. Park patrons, environmentalists and nonprofit groups should pay more for a government service from which they enjoy the greatest benefits.

In dire economic times, California’s poor, working class and unemployed can’t afford to take a weekend camping trip to a state park. Gov. Jerry Brown expects this group to pay more taxes to keep the state parks open. Proposition 30 raises the state sales tax by a quarter percent, a regressive tax on the poor and working class.

By all means, investigate state parks, and keep reading Katy Grimes’ great work on the topic. But maybe, just maybe, politicians should be more outraged by the government agencies and departments that are wasting money every day, not the one agency that secretly hid their surplus from the free-spending state Legislature.

Scandals Hidden in Plain Sight

Every day, stories are hidden in plain sight. Take press coverage from this Saturday, the day that the state parks scandal broke, when there were no fewer than a dozen links to the story. On the same day, there were plenty of stories that demonstrate government waste and fiscal mismanagement by agencies that mislead the public.

Let’s start with California’s high-speed rail boondoggle. The California High-Speed Rail Authority has found no shortage of ways to waste taxpayer money. The agency initially spent $9 million on an outreach contract with Ogilvy Public Relations Worldwide to use tax dollars to influence public opinion of the project. The agency rejected French rail company SNCF proposal to “identify a profitable route, hold down building costs, develop realistic ridership forecasts and attract private investors.”

Time and time again, the agency has lied to the public about the project’s cost, ridership estimates and economic benefits. Last year, the San Jose Mercury News debunked the agency’s bogus claim that the project would create a million jobs. Of course, that’s wasteful spending and misinformation that even high-speed rail proponents can’t dispute. Most Californians don’t understand why the state is spending $8 billion on “a train to nowhere” as it cuts school funding.

Next up, the ongoing municipal bankruptcy scandals. CalWatchDog.com contributor Steven Greenhut’s Saturday column focused on the $220 million of debt that has been racked up by the City of San Bernardino. City attorney James Penman initially claimed that city officials were provided false and misleading budget documents.

Wasteful Spending Across the State

Sacramento Valley: In Saturday’s edition of the Sacramento Bee, there’s a story about the renovation of the Hotel Berry. Buried in the story, “The Sacramento Housing and Redevelopment Agency contributed $10.1 million to the Hotel Berry renovation.” That’s money straight from government coffers that goes into the pockets of wealthy developers. Crony capitalism at its worst. Sacramento’s redevelopment experts are the same group that approved a $6 million subsidy of the infamous “mermaid bar,” while illegitimately seizing the property of Moe Mohanna.

Earlier this year, prior to their demise, redevelopment agencies rushed to approve billions of dollars in wasteful spending in order to use up the money before the state could get its hand on it. The Orange County Register’s Teri Sforza reported that Orange County alone spent $1.85 billion in government funds.

Bay Area: Zusha Elinson of the Bay Citizen has a piece in Saturday’s San Francisco Chronicle about thousands of dollars in bonuses fraudulently awarded to San Francisco Municipal Transportation Agency officials. “Muni paid thousands of dollars in bonuses to top executives for meeting or exceeding on-time performance goals, even as the agency inflated its on-time rates by as much as 18 percent,” she writes.

There are dozens of stories like this one each month, and hundreds more that go unreported. A few weeks ago, the San Mateo County violated the county’s pay restrictions in order to hand out a pay raise. “The San Mateo County Board of Supervisors unanimously authorized the new head of the county’s employee retirement system to make 5 percent more than the maximum annual pay of $183,600 for his position,” the Mercury News reported. This is a routine practice by local government agencies, especially cities and schools districts.

Orange County: Head down to Orange County, where former CalOptima Chairman Ed Kacic is accused of steering government contracts worth “millions of dollars to a private foundation that he heads.” OC Supervisor Janet Nguyen told the Register, “When you start an investigation, you start discovering things that you never knew.” Nguyen told the Register that there are more than 3,000 emails to review.

In California, government secrecy and deception are standard operating procedures. Usually, it’s to cover up reckless spending, not a $54 million surplus.

By Joseph Perkins

A pair of Northern California lawmakers unveiled a proposal this week to avert the scheduled July 1 closure of 70 state’s 278 parks, casualties of last year’s budget-cutting by the Legislature.

“The notion of closing 70 parks is ill-conceived,” said state Sen. Joe Simitian, D-Palo Alto. “The state has never closed a state park, not even during the Great Depression,” said state Sen. Noreen Evans, D-Santa Rosa.

The lawmakers say their so-called “Sustainable Parks Proposal” would keep the gates open at up to 50 of the parks this year — those that have not already been spared by takeover by the U.S. Forest Service, transfer to a non-profit organization or funding by a wealthy donor.

To pay for their proposal, which was heard Wednesday by a Senate budget subcommittee, Simitian and Evans propose to tap the state’s Clean Water Revolving Loan Fund, Motor Vehicle Account and Local Assistance Fund, none of which are supposed to be used for parks.

But there’s a better way for lawmakers to save the parks without robbing Peter to pay Paul: Privatize them.

Just last month, the state Legislative Analyst’s Office issued a report in which it recommended that private for-profit companies be allowed to operate at least some state parks.

The LAO estimated that privatization would yield the state government annual savings in the low tens of millions of dollars. Another dividend, the report noted, is that private companies would procure new equipment and implement new projects more quickly than the state.

That matters not to Sens. Simitian and Evans. They continue to press ahead with their “Sustainable Parks” plan, which would have the budget-constrained state government continue to spend money it doesn’t have to maintain operations at all 278 state parks.

“Once you privatize a park,” said Evans, in remarks published in the Huffington Post, “you change the essential mission of the park. It becomes about making a profit.”

But the state Department of Parks and Recreation, itself, sees things differently.

“There are private companies in the Parks and Rec business that do it well,” DPR Deputy Director Roy Stearns told the Post. “People shouldn’t see private enterprise as a dirty word.”

In fact, DPR currently has about 200 concession contracts with private corporations, partnerships, associations and individuals that generate $12.5 million a year in state revenue.

The contractors provide a range of park amenities, including food service, recreational gear rentals, retail shopping, golf courses, marinas and lodging.

The state park system’s 70 million annual visitors are quite pleased with the quality and price of services and amenities provided by private concessionaires. There’s little reason to think they would be any less pleased if they visited state parks fully operated by private sector.

For a state that prides itself on innovation and alternative ideas, California remains stuck in a rut of outdated thinking when it comes to providing government services. But, thanks to budget cutbacks, California officials might be open to some original thinking, as they wrestle with ways to keep open 70 state parks that have been targeted for closure. California’s state government controls 278 parks, with 1.3 million acres of land. While many are run-of-the-mill facilities, others possess magnificent resources. It’s no wonder that many people are upset at the prospect of halting public access to these places.

The governor has proposed cutting $22 million from the park budget to help close the state’s budget deficit. The parks on the list would be shuttered by July. The closure announcement last year has resulted in much weeping and gnashing of teeth, as this January statement from the California State Parks Foundation makes clear:

“This cut goes too far and must be stopped. It is also a distraction from the fact that the state is in the process, right now, of walking away from 70 parks that it is responsible for stewarding and protecting for all Californians.” The foundation slammed the governor for “going where no governor has gone before.”

The governor is threatening to inflict as much pain on Californians as possible so that they get behind his goal of raising taxes. His message: Everything is cut to the bone, and if you don’t vote to raise taxes, we’re closing your favorite parks and slashing other services.

But an encouraging thing is happening: Foundations, local governments and private operators are stepping to the plate and coming up with ways to keep these parks open. That’s what happens with services that the public really wants — individuals will figure out ways to provide them once the government gets out of the way.

The California Department of Parks and Recreation “is looking seriously at finding people and groups to take over the operation — or at least the funding — of parks slated for closure,” the Modesto Bee reported recently. “The agency will hold workshops in five cities … to teach people how they might be able to swing an operating agreement for one of the 70 parks on the chopping block.”

Saving Parks

Despite some hysteria, 10 parks have already been dropped from the closure list after local cities have taken them over, or after new parking fees and concession deals were announced. Wealthy donors saved one park in the Bay Area. A nonprofit group, for instance, will keep the historic governor’s mansion in Sacramento open for tours. This is why budget cuts often are good news — they provide opportunities for creative solutions that evade the same old calls for tax hikes.

Consider, also, that the parks budget situation isn’t as bad as it might seem. According to a new report from the independent Legislative Analyst’s Office:

“The level of funding proposed by the governor for 2012-13 is generally consistent with the levels provided during the past decade.

“With the exception of 2011–12, when a large amount of bond funds were provided to the parks on a one-time basis, funding for the parks has remained relatively flat since 2006-07.”

That hardly is a crisis. But government agencies spend one-time funds as if they are permanent revenue streams, then complain about harsh cutbacks rather than managing their budgets responsibly.

Government runs things in a manner typified by the Department of Motor Vehicles. The park system is no different, as government fee structures and spending priorities often are unrelated to market forces or consumer preferences. A privately operated park would never provide its lifeguards more than $200,000 a year in total compensation, as is occurring on some public beaches in Orange County.

Privatization

“Of course, these budgetary problems could be avoided if the state parks were operated by private owners,” Nick Sabilla wrote in Reason magazine.

“Owners could charge visitors a reasonable price to enjoy the parks, which would incentivize conservation and quality service.” Private operators already provide concessions and other services at government-owned parks. I once worked for a private contractor that operated a U.S. Air Force base, so this isn’t some radical, untried notion.

Private operators would follow the directives of the Legislature, and merely operate state-run resources — they wouldn’t be selling off parcels or opening new gold mines, as some people have claimed.

Despite a campaign by the Sacramento Bee and others to shame Californians into supporting a park bond (Proposition 21) in 2010, voters were wise enough to say no. The Bee even featured front-page news stories warning of a park crime wave, which amounted to little more than an increase in the number of violations park rangers had issued for beer drinking and trespassing.

Californians should likewise resist the new scare campaigns. For instance, in a January column in the Bee, writer Susan Sward argued that potential park closings say something dark about our moral values: “My visit to the Redwood Campground — now in its early stage of decay — told me that when shuttered parks are left untended, soon enough the structures defining those parks will rot, and there will be nothing at those sites to tell aliens that this was a society that valued nature and spent millions providing parks for its people.”

But these parks are not going to rot. I question what our current system says about our values. If Californians claim to care so much about their beautiful parklands and landscapes, why do we allow them to be under the monopoly control of a government that is incapable of doing practically anything well?

– Steven Greenhut

It was an unseasonably cool and rainy Sunday afternoon, and there were about two dozen of us standing under the entry porch of the Governor’s Mansion on Sunday. Usually just two or three tourists show up these days, and the tour guide couldn’t believe the size of the crowd. “Is this how it’s going to be all summer?” the guide asked us.

The reason for the sudden crowd was obvious. The mansion, located at 16^th and I streets and used for about 64 years from governors George Pardee to Ronald Reagan, appeared on last week’s new list of 70 state parks and historic buildings that will have to close some time in the near future because of budget cuts. The closings, which constitute a quarter of the state’s 278 parks, will save an estimated $11 million in the fiscal year 2011-12, and another $22 million in 2012-13.

Indeed, as we walked through the old Governor’s Mansion — derided as a “firetrap” by Nancy Reagan, who lived there with her husband just three months before finding more modern lodgings — we found that much of it was never opened to the public in the first place. Though equipped with a full basement and five above-ground floors (the highest being a small room), just two floors are open to public visits. The third floor ballrooms and billiards room remain completely empty, still awaiting restoration despite the fact that the mansion has been part of the state parks department since the Reagans vacated the building in 1967.

Other Closings

As for the other parks slated for closure, the parks department released a substantial list. The early state capitol building in Benicia made the list, as did the mansions of former Gov. Leland Stanford and Pio Pico, the last Mexican governor of California. The eerie Mono Lake Tufa State Nature Reserve is on the list, as are the gorgeous Redwood forests at Hendy Woods in Mendocino and Grizzly Creek Woods near Eureka. Even the old Shasta ghost town made the list.

Of course, closing state parks is not exactly a new threat. In 2009, then-Gov. Arnold “The Lovenator” Schwarzenegger proposed closing an astonishing 220 parks to save money. That threat disappeared when a budget deal laden with gimmicks finally passed.

Indeed, our guide acted as though the latest announcement was no different than those given fairly regularly over the last few years. “We have no idea when they would close us,” the guide told us. “They said we’d be closed last year, and we’re still here.”

That this would be a threat to rally Democrats against the anti-tax Republicans seems pretty clear from the Parks and Recreation Department’s May 13 press release announcing the closures. The money quote comes from John Laird, the State Resources Agency Secretary: “Hopefully, Republicans in the legislature will agree to allow California voters to decide whether we extend currently existing taxes or make deeper cuts to our parks.”

Nothing galvanizes the left like a frontal assault on parks and historic buildings. They are sacred places, shrines to either history or nature that must be protected at all costs. Indeed, Democrats in the Senate have already killed Republican proposals to keep the parks open — simply because they won’t play ball on taxes.

But the ironic thing here is that closing parks is totally unnecessary and, in fact, rather stupid. That’s because non-profit organizations are completely capable of running historic sites and parks.

For instance, there’s the aircraft carrier USS Hornet in Alameda. Though unquestionably a historic location — the ship recovered the Apollo 11 command module after it’s 1969 trip to the moon — it is today run as a museum by the non-profit Aircraft Carrier Hornet Foundation.

Ironically, it was Schwarzenegger who put this into practice last summer, though with typically feckless results. Seeking to augment the finances of struggling Fort Ross State Historic Park — the location of an early Russian trading post — Schwarzenegger signed a deal with the new non-profit Renova Fort Ross Foundation. This would have been great, except that the parks department failed to realize they were signing on with a Russian company under fire for disclosure law violations in Switzerland.

Due Diligence

Fort Ross was the right idea, but the state needs to do far more due diligence on their potential non-profit partners. The state seems to understand this, and parks officials noted the possibilities of non-profits taking over state parks in the May 13 statement.

“With this announcement, we can begin to seek additional partnership agreements to keep open as many parks as possible,” said State Parks Department head Ruth Coleman. “We already have 32 operating agreements with our partners — cities, counties and non-profits — to operate state parks, and will be working statewide to expand that successful template.”

That’s great, but why didn’t the state just do that to begin with?

— Anthony Pignataro