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The Marin County “Community Service Contracts” Program - Investigative Report - PART II

This is PART II of a four part series (click here to read Part I) based on Community Venture Partners' detailed, 14 month investigation into Marin County's Community Service Contracts program. The information presented is interdependent, so reading each Part in numerical order is recommended. Exhibits referenced in footnotes can be found in Appendix A - Exhibits. This series raises a number of legal and ethical questions that will be discussed in a follow up article.


THE COUNTY’S INCOMPREHENSIBLE COMMUNITY SERVICE CONTRACTS FUNDING PROCESS

In the normal course of the business of contracting for services with private, third-party providers, public agencies and their boards (not the recipients) determine what and if services are needed, and the scope of those services. They then solicit bids from service providers using Requests for Proposals or other forms of public notice, in order to ensure competitive pricing and the best outcome for the public. Finally, they select suitable consultants or contractors based on published, predetermined criteria and guidelines.

Similarly, in the nonprofit world of grant-giving, nonprofit foundation boards and administrators are responsible for setting their public policy goals and areas of interest they wish to fund. Based on those, they describe the types of recipients/organizations/initiatives eligible to apply for funding in accordance with pre-set guidelines for applicants to follow. This is followed by an application vetting process based on those guidelines, which results in an announcement of selected grantees. In its own way, this is also a competitive process.

In conducting the business of what the County of Marin calls its “Community Services Contracts” program, the County has not adhered to anything even close to either of these widely accepted practices. Not only are the funds being distributed as ‘payments on contracts’ clearly charitable grants, but they are being given out under the most liberal terms possible.

The terms “contract” and “grant” are used interchangeably

The entire application and selection processes for community service contracts that Marin County has used for more than 15 years to solicit and select recipients, is more akin to what one might see in a private, closely-held, for-profit corporation. However, even in that instance, accounting for charitable grant’s expenditures (gifts) as “contracts for services” would be highly irregular and violate accepted accounting rules and IRS regulations.

Unlike the normal contractual methodologies described above, the County’s process to determine the scope of services needed, the timing and submission of proposals, and even the amount of the contract’s payment for the work appear to be entirely driven by the recipients of those contracts. The recipients of the funds even determine the form of the application submitted for funding.[1] We find this to be remarkable since even the much-maligned Community Service “Slush Fund” now has an application form and guidelines that are posted online.

County Administrator, Matthew Hymel, has confirmed to us in writing that the application, selection and funding process of the Marin County community service contracts program is completely discretionary[2] on his part, up to but not exceeding a $50,000 funding limit, and is discretionary above that limit by the Board of Supervisors. This means that for the past two decades the County Administrator has needed only to prepare a letter of recommendation to the Board of Supervisors, to approve these contracts, as an item on the consent calendar, i.e., without being an agendized topic of discussion at a public hearing.

For all practical purposes, this system is the equivalent of “write your own check” for nonprofits if they can curry favor with County Supervisors or county staff members.

While it may be perfectly legitimate for a County Administrator to have the discretion to enter into agreements for essential services (e.g., maintenance, security, parking, etc.) and to do so even without Board approval, within certain monetary limits[3], the transactions we investigated do not fall under those categories of services.

The ‘work’ that is described in these ‘contracts for community services’ is, in almost all cases, clearly “charitable” in nature or some form of political advocacy, and payment for “services” that the recipient organizations would be or have already been doing without the County’s financial support. The ‘services’ rendered are typically performed with little or no oversight by the County after the letting of the contract and 100 percent payment in advance of doing the ‘work.’

Of equally great concern is that the County’s record-keeping and accounting for these expenditures is highly irregular and, in many instances incomplete, with years of data missing. In addition, the accounting for tens of millions of dollars that the County has paid out over the past 15 years has been lumped together, without any breakdowns, details or other explanations in the Marin County Annual Budget under “Community Services,” leaving no way for anyone to decipher which organization received funding, for what, or in what amounts.

Finally, there is significant evidence that both the County and the recipients have always understood these funds to be “grants” and “contributions” by the County to the recipients, regardless of the indefensible paper trail created to make them appear to be contracts for services. However, since 2016, when the public began to question the County’s practices, the County has made a calculated public relations effort to affirm the legitimacy of these gifts as being payments for contracted services, notwithstanding all the points of fact made in this Report, which explain why they cannot be credibly classified as “contracts.”

The line between what are actually grants and what are actually contracts is blurred further by the fact that the accounting under the budget category of ‘community service contracts’ also contains payments to “sponsor” nonprofit events,[4] expense reimbursements, and even some legitimate contracts to agency service providers.[5] In short, the County’s accounting system is a mess and fails to make proper distinctions and comingles funds in violation of acceptable accounting standards.

The atypical case of MCBC

As noted above, our investigation began with bicycle advocacy groups in Marin, of which the Marin County Bicycle Coalition (“MCBC”) is the largest and most involved in county affairs. The relationship between MCBC and Marin County is unlike that of any other nonprofit organization funded through the community service contracts program.

In all the other instances we were able to review from the documents we received, the day to day work undertaken by the recipients of community service contracts was “arms-length” and generally performed independent of Marin County agency involvement. In addition, the services provided by the majority of recipients were related to their demonstrable expertise, which qualified them to provide services that were for politically neutral purposes. In other words, they were not political advocacy organizations.

Examples of these recipient organizations would include The California Film Institute, which runs the Rafael Theater and the Mill Valley Film Festival, Wildcare, which works in the area of animal rescue, The Marin Mammal Center, the Mountain Play Association, Marin Organic, the Marin Economic Forum, Marin Civic Center Art, Marin State Parks, the Human Rights Commission, and many others.

However, the service contracts between Marin County and the Marin Bicycle Coalition are an exception. MCBC’s efforts have been extensively inter-twined with county programs, public policy decisions and how the County sets its funding priorities. Because of this, we are concerned that this special relationship, which County Supervisors encouraged, may have had an undue influence on public policy that has impacted all Marin County residents. MCBC has been under contract for almost 20 years as a consultant and inter-agency liaison in the County to:

improve local transportation facilities resulting in the reduction of congestion, greenhouse gas emissions and other air/water pollution, increasing mobility, improving health, and maximizing efficient use of the current roadway network.

assist in the design of bicycle and pedestrian facilities; serve on Technical Advisory Committees for County infrastructure projects; and comment on technical documents to ensure implementation of safe and functional designs for bicyclists and pedestrians.

identify grant opportunities for the County to pursue the fund pedestrian and bicycle projects; generate data for use in grant applications; assist the County in writing grant applications; and write letters of support for capital grant projects.

There are several serious concerns about this.First, whether one is talking about hydrology, biology, traffic, housing, medicine or any other area of expertise, a ‘consultant’ or ‘advisor’ to a public agency must first and foremost be politically neutral in order to ensure that they bring an unbiased view to their recommendations and reports. This is what differentiates an ‘advisor’ from a ‘stakeholder.’ Secondly, a consultant must have demonstrable expertise in the area of their specialty for which they are being paid.

MCBC fails both of these tests.

Whereas it is unarguable that the California Film Institute, the Marin Mammal Center, and the Mountain Plan are not political advocacy endeavors, the Marin County Bicycle Coalition is not a politically neutral entity. It is by its own admission and federal nonprofit mission statement clearly an advocacy organization. Its bias is, in fact, the fundamental basis of its existence: to advocate for bicycle use[6]. This stands in stark contrast to the other funded groups that are presenting films or caring for animals or putting on plays. Yet, even in those instances, none of those groups have been contractually engaged to act as ‘advisors’ or ‘consultants’ to the County on public policy matters. Their work pretty much stands alone, which is not the case with MCBC.

Certainly, MCBC has every right to be an advocacy organization and to voice and lobby for their positions. That is not at issue. However, because they are a political advocacy organization, on this basis alone, MCBC should be disqualified to act as a consultant on public policy decisions about the use of public open space and the expenditure of taxpayer funds. In other words, it’s fine for them to advocate for what they want, just not on the taxpayer’s dime.

In addition, unlike many other community service contract recipients (the Marin Housing Authority, the Schurig Center for Brain Injury Recovery, Homeward Bound, Marin Economic Forum, etc.), MCBC has little demonstrable expertise in the majority of the “services” described in their agreements. Although the Executive Director and Policy and Planning Director of MCBC both have experience and educational background in planning, neither are practicing, licensed professionals (nor is anyone else at MCBC) in engineering, science, architecture, landscape design, horticulture, ecology, biology, or other professional disciplines.

Whereas, recipients such as Wildcare, the Marin City Health and Wellness Center, and The Marin Mammal Center, for example, are staffed with veterinarians and medical doctors and other degree and license holding individuals, who provide direct, qualified professional expertise, MCBC’s member’s main qualifications appear limited to advocating for bicycle use or holding meetings and events about increasing bicycle use. And even if this were not the case, many other individuals and organizations could bid for and perform their role if given a competitive chance.

It is simply irresponsible for the County to “hire” MCBC as their consultants about reducing “greenhouse gases” or “air and water pollution” or “infrastructure design,” or even “grant-writing,” as their contracts with the County state. There are literally hundreds of other, more qualified professionals in each of those areas, for the County to choose from, who would likely be extremely interesting in submitting proposals, except for the fact that the County does not in any way publicly solicit for such proposals or otherwise provide any type of public notice that such ‘contractual’ opportunities exist.

This is not a distinction without a difference or an academic discussion. The findings of our investigation suggest that the nature of the interactions between MCBC and county staff have at times become so intermingled that it is often difficult to determine who is in charge of setting meeting agendas or determining which programs to pursue.

Again, this is not suggesting that MCBC is at fault, though there is little doubt they have either been complicit or woefully ignorant about the difference between grants and contracts. However, they do not pretend to be offering licensed, professional services of any kind on the website or in their literature. They are clear that their organization’s role is advocacy and public education. But it’s not MCBC’s responsibility to its members to ‘self-limit’ its advocacy, in fact, just the opposite.

Any fault in all this must fall squarely on the shoulders of the Marin County Supervisors and the County’s senior staff.

However, by allowing this breakdown of any line between MCBC’s biased ‘advisory’ role and County’s policy decision-making processes, as evidenced in the documents and emails we’ve reviewed, the County’s negligence has had real-world consequences, particularly as it relates the management of our open space.

For example, MCBC was apparently paid to consult on and help write the Marin County Open Space Roads and Trails Management Plan (the “RTMP”) and, in particular, on its submission “scoring” system to be used to vet publicly submitted project proposals. It is therefore curious that in the case of the proposals submitted for the Bob Middagh Trail in the Alto Bowl Preserve, the only proposal that “scored” for consideration -- out of the five submitted -- was the one submitted by MCBC.

Our findings are supported by the documents and records referenced herein and provided as Exhibits in APPENDIX A: Exhibits


[1] Matthew Hymel, the Marin County Administrator, has confirmed that the County has no set application form for community service contractors to use to apply or submit proposals.

[2] Confirmed to CVP by Matthew Hymel.

[3] Per Matthew Hymel, the Marin County Administrator currently has discretion up to $50,000 in a single year.

[4] Exhibit 18 01 25 18 MCHWC Event Sponsorship

[5] Exhibit 18 01 25 18 MCHWC Event Sponsorship, Exhibit 18 09 21 18 Sustainable Marin Event, Exhibit 18 12 19 18 MEF Event, Exhibit 1810 08 18 Canal Welcome Event

[6] The MCBC website notes, “Advocacy brings cyclist’s collective voice to life. We advocate vigorously for increased bicycle and pedestrian funding, interconnected routes, and policies to enable a great ride.”


CLICK HERE TO READ PART I

CLICK HERE TO READ PART III

CLICK HERE TO READ PART IV


Bob Silvestri is a Mill Valley resident and the founder and president of Community Venture Partners, a 501(c)(3) nonprofit community organization funded only by individuals in Marin and the San Francisco Bay Area.