Air quality district’s bloated salaries

November 14, 2011

(Editor’s note: This is the first in a multi-part series about questionable activities of the San Luis Obispo County Air Quality Control District.)

By KAREN VELIE

They set hefty salaries for themselves and went looking for the money to meet the payroll.

It’s not the city of Bell.

This time it is the San Luis Obispo Air Pollution Control District. And a review of both the salaries decisions and fees and fines it levies, shows that the salaries make up the bulk of the district’s budget.

District expenditures have grown from $2,438,146 during the 2001-2002 fiscal year to a budget of $4,156,766 for the current fiscal year.

Some 75 percent of the agency’s expenditures are for employee costs, according to the district’s expenditure report.

Of the district’s 21 full-time employees, in salaries benefits and “fringes,” 19 run over $100,000 a year.

Top earner, Executive Director Larry Allen, costs $240,119 a year, according, to the district’s fiscal year 2011/2012 salary projections.

This was before the board voted in 2010 to increase Allen’s salary 17 percent over the next three years.

The salary decision is one that former air quality district board member Assemblyman Katcho Achadjian doesn’t agree with, he said.

“I think with this economy, anyone getting a raise beyond the cost of living should be questioned,” Achadjian said.

The agency tasked with protecting air quality is an unusual form of government in that it primarily subsists on fees and fines that its board has the power to create.

Many of the district’s permit fees have no impact on air quality, according to staff reports.

During air quality district board meetings, Executive Director Larry Allen has repeatedly asked the air quality board to approve new fees saying that the agency needs to make up for about $300,000 in yearly permit fees from the Morro Bay Power Plant. The plant is slated to close in the next few years.

Allen told CalCoastNews the air quality district does not need to raise fees to pay for salaries and regular trips to luxury destinations.

“We are not the city of Vernon,” Allen said.

The city of Vernon has a population of only 112, though many businesses thrive in the city. Several of its former  highly paid public officials who had also spent lavishly on travel and other perks were arrested for conflicts of interest, voter fraud and misappropriation of public funds.

In 2008, the board approved the adoption of fees to monitor fermentation of wines at local wineries even though the staff report said doing so would have no effect on air quality.

The air quality board is comprised of all five county supervisors and a council person from each of the county’s seven cities. While former mayor of Atascadero Mike Brennler sat on the air quality district board he questioned the board’s decision to back the winery fees.

“I felt very uncomfortable with the winery fees,” Brennler said. “What bothered me the most was when one board member referred to a winery owner as a polluter.”

During the first year the the district enacted the winery permit fee, the district netted $107,222 from the fee, according to air quality board records.

After approval by the board, new rules are sent to both the state and the Environmental Protection Agency for approval. After approval, the district board than votes to approve a fee schedule brought forward by air quality district employees who benefit directly from higher fees.

For example, after the state passed laws requiring smog testing and record keeping for off-road diesel engines such as those used in construction equipment and generators, the board voted to approve fees the air quality district created to charge for their inspections of the engines.

In Oct. 2010, the air quality district charged Cal Poly $13,215 for the re-inspection of a Caterpillar tractor, according to the Cal Poly district file.

However, according to Proposition 26 which was passed in 2010, if charges for permits and fees, inspections, and administrative enforcement are not reasonable the fees need to be approved by a two-thirds vote by both houses of the California Legislature.

Each year, the air quality district board votes to approve a legislative platform written by Allen that includes wording to, “Oppose legislation to remove district discretion or expenditure of penalty revenue.”

During last year’s vote in closed session to increase Allen’s salary and approve a new three-year contract, the board was informed Allen had not been given a raise in years and also that he was underpaid when compared to his constituents, several board members told CalCoastNews.

The board, however, was kept in the dark about Allen and the rest of the air quality district staff’s salary amounts, several board members told CalCoastNews. In addition, the vote accounting was never made public.

The air quality district board’s approval in closed session violated Government Code 54957.6 which says, “Closed sessions held pursuant to this section shall not include final action on the proposed compensation of one or more unrepresented employees,” CalAware attorney Terry Francke said.

“Compensation can neither be discussed nor acted upon in a closed session listed on the agenda as dealing with performance evaluation,” Francke said. “Clearly the vote should have been public (54957.1(a).), and not just reported; final action to approve compensation of an unrepresented employee must be in open session.”

About 54 percent of the agency’s revenues are made through permits and fees from primarily businesses and other government agencies including local schools. Another 32 percent is garnered through state and federal aid, DMV fees and property taxes.

Only 0.6 percent of the agency’s operating capital comes from settlements for failure to comply with air quality rules, according to the district’s 2011/2012 budget.

It is difficult to determine exactly where the funds are being spent because the agency refuses to comply with the California Public Record’s Act. Instead, it has created its own rules regarding records requests.

Allen told CalCoastNews that the district’s attorney Ray Biering says they do not have to follow California records request laws that do not agree with air quality district created rules.

For example, the agency refuses to allow the public to see its itemized expenditures, a record that is required to be available to the public. Kevin Kaizuka, the APCD’s fiscal services manager said they do not have it in paper form and do not have the funds to make it available.

As for other records requests that they have agreed to comply with, they charge 20 cents a page, require requests in writing, and payment up front, all of which are violations of California’s Public Records Act. Many records received by CalCoastNews have been incomplete or incorrect.

The county air quality district charges similar page rates to other air districts, Allen said. He contends that records requests interfere with doing business.

“They charge 20 cents a page at the APCD in Santa Barbara so we can charge the same,” Allen said. “We have real work that this is keeping us from doing.”

An inspection of several air quality district files demonstrates how the agency oversees businesses and government entities they regulate.

For example, during an inspection of the Circle K in Atascadero on Morro Road, the air quality district found four record keeping errors. All of which related to one section of the log book being in the wrong place – a missing alarm log section, no alarm log sample form, no instruction for filling out the alarm log, and no information on where the alarm log was posted, according to air quality district records.

The district is permitted to charge $1,000 per day for each infraction regardless of whether it is a record keeping error or actual release of a pollutant. In the case of the North County Circle K store’s record keeping errors, the charges originally amounted to fines of $4,000 per day for a total of $88,000.

When Circle K corporate representative Joel Lundquist asked for an explanation of how the penalty was assessed, the air quality district sent back a letter increasing the penalty.

“You asked how the penalty amount was obtained,” the air quality district letter said.

Air quality staff said they made an error in computing the penalty.

“The $88,000 maximum penalty erroneously stated in our April 7, 2011 mutual settlement letter has been corrected to $232,000 as shown below,” the letter said

A different version of the letter put the total much higher.

“The correct total penalty is $340,000 not $88,000 as we erroneously stated in our April 7, 2011 mutual settlement letter,” one draft says.

As is generally the case for the agency, the air quality district letter allowed Circle K a massively discounted settlement if they agreed to pay the district within two weeks. Circle K officials complied and sent the air quality district a check for $7,800 for having the store’s alarm log section in the wrong place.

Several former board members want the district to give warnings first before sending businesses and government agencies notices of violation, Achadjian said.

“The beauty of a warning is it builds trust,” Achadjian said. “We have to do better so we know we have a trustworthy government. I do not want these guys to color the rest of the government we deal with.”