BY DAVE PRICE
Daily Post Editor
Stephanie Griffin, who was an accounting assistant at the East Palo Alto Sanitary District for 10 years, has performed a valuable public service by suing the district over her firing last September.
Her lawsuit, filed by attorney Charles Katz and Elladene Lee Katz of Millbrae on Tuesday (June 6, 2017) in San Mateo County Superior Court, alleges she was wrongfully fired on grounds that include age discrimination (she’s 41) and retaliation. A court will determine the validity of her claims.
But what she does in this lawsuit is raise the important issue of how little-noticed special districts handle the public’s money.
Griffin claims she was fired in retaliation for questioning inappropriate spending by the district’s interim general manager, Karen Maxey, and members of the district’s elected board.
District run like a ‘private club’
“Maxey and others have conducted business of defendant district as if it were a private club,” Griffin’s suit said. “Private caterers and expense accounts were paid on behalf of board members and management without regard to the fact that these were public funds to be used for the best interest and business of defendant district.”
Among the allegations Griffin makes:
• Maxey bought a $2,436 laptop that was for her personal use;
• That Maxey repeatedly charged fill-ups at $99 each to the district (she must have a big gas tank);
• That the district was spending $1,750 a month on catering, and that they got so much food, board members were taking much of it home.
• In just one day, Maxey charged nearly $275 in food expenses to the district for meals from Waiters on Wheels and the Cheesecake Factory in Palo Alto.
Griffin said that when she questioned these expenses, Maxey used “vulgar and inappropriate language,” harassed her and made false allegations against her.
The Post tried to get Maxey’s side of the story, but she didn’t return our phone calls.
Warning from the grand jury
The circumstances that allowed these alleged abuses to take place were predicted by the San Mateo County Civil Grand Jury in a June 29, 2016, report titled “San Mateo County’s Cottage Industry of Sanitary Districts.”
First, a word about grand juries. There are two types of grand juries in California. A criminal grand jury brings indictments against people suspected of serious crimes. A civil grand jury is a panel of 19 citizens impaneled annually by a judge that investigates government operations. They produce reports based on research and interviews. It was the civil grand jury that delved into the little-noticed sewer districts in our area.
In San Mateo County, 45 agencies are involved in sewage collection and treatment, including six independent districts, each with their own elected board. The six are: Bayshore Sanitary District, East Palo Alto Sanitary District, Granada Community Services District, Montara Water and Sanitary District, Westborough Water District and West Bay Sanitary District.
You should know if you’re served by one of these six districts. You get bills from them and their name will appear on the bottom right hand portion of your secured tax bill under the title “taxing agency.” Yes, they get both money from fees and a slice of your property tax.
“Although the board members of each of the six independent sanitary districts are theoretically accountable to the voters who elect them, in reality, the districts operate with virtually no public oversight and the ‘elections’ are nominal at best,” the grand jury said in its report. “Information about the districts is incomplete, and the cost of service is obscured by the way it is calculated and billed. Their elected boards do little to enhance accountability due to the electoral benefit of incumbency. Most elections are not even contested. When they are, voter turnout is low. It is questionable whether most County residents are able to identify their sewer system provider.”
The EPA Sanitary District hasn’t had a contested board election since 2013.
In that election, the turnout was astonishingly low. For a district with 29,000 residents, incumbents Dennis Scherzer and Joan Sykes-Miessi were re-elected with 499 and 466 votes respectively. A third candidate, who lost, Edrick Haggans got 236 votes. In 2009, the same three candidates ran, and Scherzer and Sykes-Miessi each got 390 votes while Haggans received 369.
These figures suggest that about 2% of the residents in the district voted in the board election. Granted, the number of registered voters is smaller than the population because not everybody is eligible to vote. Some people can’t vote because they’re underage, they’re not a citizen or were convicted of a felony. Still, 2% is a terrible participation rate in a democracy.
Pay and health benefits
EPA Sanitary’s five elected board members, who attend monthly meetings, are well compensated compared to the other five independent sewer districts, the grand jury found. They receive just over $18,000 a year, 64% higher than the next highest district, plus health, dental and vision coverage.
West Bay was second in compensation at $11,000 per director. None of the other five offered health insurance, though Bayshore paid for dental coverage and life insurance.
“These benefits are generous given the very occasional responsibilities of board members,” the grand jury remarked.
The civil grand jury reached several conclusions:
• Sewer rates in these districts were higher than those charged by San Francisco or San Jose’s sewer districts. EPA Sanitary’s rates have increased 119% between 2010 and 2016, according to the civil grand jury.
• Public information about such items as board meeting minutes, rate histories or management plans was hard to get or simply unavailable;
• Of the six independent districts, only West Bay (which serves Menlo Park, Atherton, Portola Valley and unincorporated areas) was using “performance metrics” to measure things like line blockages and leakage;
• Property taxes for these districts should be phased out and they should operate entirely on fees for service and connection charges;
• That it would make sense to consolidate the six independent districts into one entity in order to reduce overhead and redundancy.
And, in a statement foreshadowing Griffin’s lawsuit, the civil grand jury said it found “many opportunities for overspending” when reviewing the books of the sewer districts.
EPA Sanitary, in a Sept. 27, 2016, response to the civil grand jury, emphasized that its books were audited by an outside firm and “all audits in the last decade have been stellar.” A few months after EPA Sanitary issued that response, its auditor completed the certified annual financial report for the 2015-16 fiscal year and raised red flags over employees’ use of district credit cards.
“The use of district credit cards presents a higher risk of misappropriation than normal disbursement procedures … Employees should not use the credit card to circumvent the normal purchasing process,” the auditor wrote.
That’s exactly what Griffin claims her boss was doing, and when she questioned it, she was fired.
I hope Griffin’s lawsuit results in more scrutiny of the EPA Sanitary District and prompts the community to take a fresh look at the civil grand jury’s report.
Editor Dave Price’s column appears on Mondays. His email address is firstname.lastname@example.org.