Isla Vista Recreation and Park District

INTRODUCTION

The 1993-94 Grand Jury conducted an investigation into problems in Isla Vista, the results of which were published as "Public Safety in Isla Vista" in the Final Report of June 30, 1994. As an outgrowth of this investigation, the 1993-94 Grand Jury suggested that the 1994-95 Grand Jury might wish to look into the Isla Vista Recreation and Park District. Pursuant to Penal Code Sections 933.5 and 933.6, an investigation of the Isla Vista Park and Recreation District and the Isla Vista Public Improvement Corporation was initiated.

Isla Vista is an unincorporated area of Santa Barbara County approximately one square mile in size, and contains a population of 20,000 which fluctuates according to the University of California at Santa Barbara calendar. In 1971, a special district known as the Isla Vista Recreation and Park District (IVRPD) was formed. Subsequent to formation, the District has served many functions in the community and has provided a major platform for political activism.

In 1987, the IVRPD initiated proceedings to form a non-profit corporation for the purpose of securing financing for various District projects, later called the Isla Vista Public Improvement Corporation (IVPIC). This corporation has had a complicated relationship with the IVRPD which continues to this day.

The IVRPD presently has five bond issues as described in a table in Appendix 1. These were incurred from 1977 to 1992, and the outstanding principal debt as of June 30, 1994 was $3,165,000.

OBJECTIVE

The objective of this study was to examine operations and problems of the IVRPD and its relationship with the non-profit corporation (IVPIC), and make constructive recommendations where possible.

APPROACH

The Grand Jury held several interviews with past and present Board Members, the present General Manager and a former Assistant Manager of the IVRPD, and Trustees of IVPIC. Hundreds of documents relating to these two groups were reviewed, and consultations were held with the County's Auditor-Controller and County Counsel. Members of the Grand Jury took a "walking tour" of the Park District's properties, and discussed them in detail with the present General Manager.

Most of the interviews and data collection for this study were completed prior to the elections of November 1994, which placed new members on the IVRPD Board. None of these new members were interviewed for the purposes of this study.

OBSERVATIONS

Problems Arising From Philosophical Differences

Most witnesses interviewed by the Grand Jury described past operations and atmosphere within the IVRPD as filled with conflict and personal animosities among and between the Board Members and employees. Philosophical differences repeatedly escalated to personal conflicts which subsequently hindered decision making processes. These problems centered around the following issues:

1. Philosophical differences between strictly parks function supporters and those who prefer a broader governmental platform. Some examples of these are:

* Using the District as a forum for exploring issues such as drug use, international political involvements, and social change.

* Expanding the recreation programs of the District as opposed to simply operating and maintaining the parks.

* Minimizing costs to the landowners and taxpayers as opposed to obtaining the maximum amounts of services and benefits for the individuals who reside in the District.

2. Problems among and between the employees and the Board Members. Some examples of these are:

* Distrust between employees and Board members, especially after philosophical shifts subsequent to elections.

* Constant use of union grievances for almost every type of employee problem.

* Charges of sexual harassment and social ostracism involving employees and Board Members.

* Numerous Workman's Compensation payoffs. Attached to this report is a copy of "Workers Compensation Claims, Annual Loss" prepared by the IVRPD Manager which suggests the magnitude and growth of the compensation payments. Please refer to Appendix 2 in this report.

The evidence heard from witnesses in these matters was amply verified by copies of memos, grievances, meeting minutes and financial records. Documents from recent political campaigns for Board Membership also confirmed the level of conflict.

Isla Vista Public Improvement Corporation

In 1988, this non-profit corporation was formed by the IVRPD with the assistance of a private law office. A simplified explanation of the function of this organization is that a non-profit corporation serves as a medium to borrow money for the District. The District leases their land to the corporation, and the corporation then obtains financing for the District using the land as collateral, and leases the land back to the District until such time as the indebtedness is paid. The Grand Jury has been advised by County Counsel that this is not an unusual arrangement for public entities in California, and is perfectly legal.

The Trustees of the newly formed Isla Vista Public Improvement Corporation were acquaintances of the former General Manager of the IVRPD, and/or citizens concerned about the Isla Vista Recreation and Park District. The former General Manager and the IVRPD provided all of the services for the corporation, including noticing for the annual meeting, keeping records, and serving as their "agent" for legal responsibilities such as filing annual tax returns, the "Statement of Domestic Nonprofit Corporation," and replacing Trustees. The Trustees had virtually no responsibilities, were paid nothing, had no access to funds, and simply appeared once a year for a brief meeting when the IVRPD General Manager called them.

When the former General Manager resigned after a change in membership and/or philosophy on the IVRPD Board of Directors in 1991, no designated person was in charge of managing IVPIC's affairs. In the interim, all three Trustees assumed that their terms had expired. None of the Trustees was aware of further responsibilities on their part, and assumed that someone else had taken over. As a result, they did not meet after 1991 through the end of 1994.

Examination of the Corporate Bylaws of IVPIC indicates that the power to confirm and seat new Trustees lies exclusively with the Board of Trustees. The Corporate Trustees have the responsibility to carry out measures that insure that IVPIC remains viable. One of the measures necessary to this viability is the proper emplacement of successive Trustees. Even though the Corporate bylaws may give a specific date for the end of a Trustee's term, "good faith" may require that a Trustee be held over to maintain the quorum required for the Board to conduct necessary business, including the emplacement of their successors. Since the Corporate bylaws state that the Trustees fill vacancies on the Board, a Trustee is held over to maintain quorum until the Board puts a successor in place. Thus, under the principle of "good faith", all Trustees are held over until they emplace their successors.

The Grand Jury was advised by its legal counsel that although the corporation appears to have few duties, it does have a historical relationship with the IVRPD. A viable corporation is required for Trustee changes, refinancing, and stability of the IVRPD's credit ratings.

DISCUSSION and CONCLUSIONS

Many of the problems involving the IVRPD are related to the nature of the community. There is a large turnover in population due to the movement of students attending the University of California at Santa Barbara which complicates the voting situation. Other special features of the District include a sizeable low-income population, overcrowding, and a significant number of non-English speaking residents. Very few of the landowners and property tax payers actually reside in the District and are often in conflict with the voting population which lives there and utilizes the services provided. This situation creates problems not readily amenable to recommendations from a Grand Jury.

The animosity and competition for seats on the Board of Directors of IVRPD has created an adversarial situation for both the Board and the District's employees. This has resulted in costly grievances, Workman's Compensation claims, and failures to provide and/or accept training conducive to management continuity. While compartmentalization of information may help eliminate confusion and help to streamline processes in other types of organizations, the District's and Corporation's roles as custodians of public property and trust necessitate adequate dissemination of information.

Both witness testimony and document examination suggest a lack of "good faith" between and among the Board and its employees for the past several years. The Grand Jury hopes that the recently elected IVRPD Board will be able to remedy this situation.

FINDINGS AND RECOMMENDATIONS

Finding #1: The IVRPD has been troubled by excessive internal strife between and among employees and the elected Board Members for the past several years. As a result, no secure management or employee relations structure exists and it appears that outside assistance may be necessary in order to improve District functioning.

Recommendation #1: The IVRPD should obtain the services of an outside consultant for a management audit to obtain guidance from a neutral party on handling the long-term management structure and employee problems. All feasible ideas from this audit should then be implemented.

Finding #2: It is in the best interests of the IVRPD to maintain an appropriate relationship, and encourage proper functioning of the IVPIC for the purposes of any needed transactions relating to the Certificates of Participation, selecting Trustees, refinancing, and maintaining the District's credit rating. Subsequent to the Grand Jury's investigation of this issue, the IVRPD Board and Trustees of IVPIC met on February 2, 1995, to resolve these problems. The Grand Jury commends both the IVRPD Board and the IVPIC Trustees for their recent efforts to clarify their relationship and create a stable base for IVPIC in Board Motion 950202-08.

Recommendation #2: The IVRPD and IVPIC must create and formalize a binding legal agreement between the two parties which specifies services that IVRPD will provide for IVPIC.

Finding #3: Confusion regarding the IVPIC's and IVRPD's financial arrangements is still present to varying degrees within the IVRPD management, the Board of Directors, and Trustee levels of those respective institutions.

Recommendation #3: The IVRPD Board Members, management staff, and IVPIC Trustees must take appropriate action to insure that they are always well informed regarding District matters, including the scope and concept of their financial arrangements and maintenance of proper records.

AFFECTED AGENCIES: (California Penal Code Section 933c requires that comments to Findings and Recommendations be made in writing within 60 days by all affected agencies except governing bodies, which are allowed 90 days).

1. The Isla Vista Recreation and Park District - response

2. The Isla Vista Public Improvement Corporation - response

APPENDIX 1

Graphic prepared by the Grand Jury from cited source

APPENDIX 2

Graphic prepared by the Grand Jury from cited source

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