Incredibly, SB633 was passed unanimously by the California State Senate on January 24, with our State Senator Fran Pavley voting in support of the bill. However, it died recently in the State Assembly, after extreme pressure from lobbyists for various environmental groups, with Assembly candidate Betsy Butler voting to kill it.
SB 633 would have given the California Department of Finance (DOF) the authority to issue a corrective action plan regarding the allocation of state bond funds, such as the Prop 50 bond funds used to finance the destruction of the Malibu Lagoon, if it determines that the bond funds have been misspent by a state agency or entity. The bill also would have authorized the DOF to issue a "cease and desist'" order on the allocation of bond funds until the corrective action plan has been implemented.
During the hearings on SB633, Prop 50 bond money was specifically called out as a prime example of the abuses which necessitated giving the DOF more teeth to deal with such abuses. At present, the DOF can merely offer suggestions to the offending state agency or entity, but the agency or entity can respond by saying in effect: "Thank you very much for your input; we will try to do better," or "We disagree with your comments and plan to ignore them."
The DOF has specifically found the the agencies spending the Prop 50 money used to finance the Lagoon "restoration" work had the following deficiencies:
- There were "no written policies and procedures for administrative and project management processes."
- "The contract with the chief project consultant could not be located."
- "Unsigned contracts may not be valid and legally enforceable. Without an executed contract there is no assurance work is performed within cost and in accordance with the understanding between the contracting parties."
- "A contract [was] paid for communication charges not included in the consultant contract."
- "The [Resource Conservation] District [of the Santa Monica Mountains] could not provide the basis for the 10 percent administrative overhead charged under the grant agreement…the grantee should be able to substantiate the rate as reasonable…the district may be overcharging administrative overhead."
- A March, 2010 DOF audit noted that although project documentation for the initial $300,000 in funding for the Lagoon project was adequate, "the project manager was unable to provide adequate documentation for the project's eight amendments that modified the scope of the project and increased total funding from $300,000 to $925,000", since "they included only lump sum amounts with little to no justification for the 208 percent funding increase."
- Also, "the project manager was not in charge during the amendment approvals."
At a time when the State of California is seriously in debt, the waste and mismanagement regarding the Lagoon "restoration" project is especially unwelcome, and there are many other horror stories regarding the use of the various Prop 50 and other bond moneys being spent on environmental projects around the state.
The Prop 50 bond funds totaled $3.44 billion after it was passed in 2002. This huge pot of money is not part of the general fund that is used to pay the regular annual expenses of the State of California, but can only be used for the specific uses set forth in the initiatives that resulted in the creation of the bonds.
That has allowed a number of public and quasi-public environmental groups in California to set up a lobbying network to get access to these funds by creating environmental projects that fit the profile of projects deemed worthy of the bond money in the pot. owever, a number of these organizations have not set up adequate infrastructure to manage the project money they receive, and this has led to waste and mismanagement.
SB633 was introduced in the State Senate and was passed unanimously there to deal with this waste and mismanagement in a meaningful way. When it was referred to the Assembly Committee on which Betsy Butler sits, the lobbyists sprang into action and killed it, with Butler voting to kill it. You would think that someone who seeks to represent Malibu in the Assembly in the future would be interested in helping to cure the waste and mismanagement which has become evident in the way the funds used to implement the Malibu Lagoon "restoration" project have been spent to date. However, apparently Betsy is more interested in representing Sacramento in Malibu than representing Malibu in Sacramento.