State Parks Chief Resigns - Department Found Sitting on $54 Million Surplus

Ruth Coleman, FORMER (as of today) Director Of California's state park system

Ruth Coleman resigned this morning and her second in command has been fired. The Sacramento Bee first broke the story.

The inciting incident? The department has been sitting on nearly $54 million in surplus money for as long as 12 years. A rainy day fund, perhaps?

The moves come in the wake of a scandal, revealed by The Bee on Sunday, in which a deputy director at State Parks carried out a secret vacation buyout program for employees at headquarters last year. That buyout cost the state more than $271,000. The Bee submitted a Public Records Act request, started digging, and learned more gob smacking stuff.

John Laird, secretary of the state Natural Resources Agency, which oversees State Parks, told The Bee that investigations have been launched by both the Attorney General's office and the Department of Finance to figure out how -- and why -- the Department of Parks and Recreation squirreled away so much money for so long.

"Ruth has stepped up and taken personal responsibility," Laird said of Coleman, who is the longest-serving director in the 150-year history of the department. "It's an incredibly troubling discovery."

The surplus money consists of $20.3 million in the Parks and Recreation Fund, and $33.5 million in the Off Highway Vehicle Fund, which are the two primary operating funds at the agency. This money was not reported to either Finance or the State Controller's Office, in contrast to normal budgeting procedures.

Bear in mind that 70 state parks were set to close for the want of $22 million dollars over two fiscal years. A reminder: in late June, just ahead of the July 1st "deadline," the Department announced that 65 parks either have a deal, or one in the works, to avoid closure. The Governor also signed legislation that provides some money to give a little extra time to hash out those couple dozen deals still in the work.

hdpublicplaces-modMost of those closures did not happen because of near-heroic fundraising from non-profits across the state, but the money could also have prevented cutbacks in hours, staffing and services system wide.

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In an interview Friday morning with The Bee, Laird said the discovered funds are "one-time" money and it will be up to the Legislature to decide how to use it.

Update 12 p.m.: Paul Rogers covering the story

Update 12:15 p.m. Brown appoints interim director, launches investigation

The California Natural Resources Agency says Gov. Brown has appointed Undersecretary Janelle Beland as acting interim director of Parks. Also from the agency:

At the request of Governor Edmund G. Brown Jr., the state Attorney General’s Office is investigating the circumstances surrounding significant budgetary irregularities at the California Department of Parks and Recreation dating back to at least 2000. Governor Brown has also directed the state Department of Finance to conduct a comprehensive audit of Parks’ fiscal controls and the California Natural Resources Agency Secretary John Laird to conduct a sweeping review of Parks’ management.

A preliminary investigation into Parks’ finances has revealed that for at least 12 years the department underreported tens of millions of dollars to the state Department of Finance. As a result, the Department of Finance was not aware that the State Parks and Recreation Fund and the Off Highway Vehicle Fund held $20,378,000 and $33,492,000 respectively above their official, most recently reported balances. The underreporting occurred over the course of two prior gubernatorial administrations.

Update 12:45 p.m. Local park fundraisers speak out

Bob Patrie, who helped line up more than $1 millon in funding to keep Henry W. Coe State Park in Morgan Hill open, had this to say via email:

"These scandals within DPR won't make it any easier for us to raise additional donations to fund an endowment. I'm very disappointed with DPR leadership."

And from Bob Berman, VP of the Benicia State Parks Association:

"Well, needless to say I am both shocked and disappointed. If it turns out that this undercounting is true and deliberate, this likely will damage support and sympathy for state parks from members of the State Legislature and the public. This is especially true since so many of the 70 targeted State Parks have not closed because so many nonprofits (such as the Benicia State Parks Association) and their volunteers have stepped forward to keep the parks open."

Update 12:56 p.m. Jared Huffman comments

San Rafael State Assemblyman Jared Huffman tells KQED's Scott Shafer, the situation is “extremely troubling.”

“It’s very distressing. I think like everyone, when you hear this news, it just sort of makes you sick frankly, cause this is not way to manage the public’s money.”

But he said he applauds Gov. Brown’s leadership in immediately involving the Attorney General’s office.

Update 1:50 p.m. Coleman blames deputy

Ruth Coleman spoke to the Mercury News' Paul Rogers, and she's blaming the scandal on her former deputy, Manuel Lopez:

On Sunday, the Sacramento Bee reported that former deputy parks director Manuel Lopez had approved $271,000 in vacation buy backs for parks staffers without authorization. Coleman demoted Lopez in October and in May, he resigned under pressure.

On Friday, Coleman said that the $54 million in unreported money had been concealed by Lopez.

"It was part of his job," she said. "He did not elevate it to my attention."

She said she learned of the problem when Lopez's successor, Aaron Robertson, uncovered it as part of an investigation. Full article

Update 2:31 p.m. Interview with Coleman

The California Report's Scott Shafer talked to Ruth Coleman this afternoon. Coleman said again she didn’t know about the extra balance of funds. “Once I found out, we took action and we’re cleaning it up, and the administration is going to continue doing that, and I respect their ability to do so.”

She said she takes responsibility for the actions of her subordinates, and that she offered her resignation to the governor last night. “I just think that right now, the right [thing] is for me to move on, and take this one for the team.”

Coleman said the money isn’t going to solve the park’s ongoing financial issues, but it will help. “It’s important to remember that these funds are still there. They have not been taken from the taxpayers. They’re safe. They can be appropriated subject to the legislature. They should have been day-lighted to finance, but now that they are I think that it’s important to move on.”

When asked what her former underling, Lopez, who she says is responsible for concealing the funds, may have been thinking, Coleman said, "It's so hard to get inside somebody else's head." She said that she had heard from another person that Lopez' argument for hiding the funds was that they would have been appropriated for the state general fund anyway, but that the comment was only hearsay.

Update 3:18 p.m. Interview with Sierra Club California Director Kathryn Phillips

Governor Jerry Brown, she says, "has been signaling his disinterest with an interim person in the top post" of the Parks Department, referring to the fact Coleman is a holdover from the Schwarzenegger Administration. Phillips says the Governor needs to place somebody he trusts "inside the horseshoe," the California Highway Patrol-guarded section of the Capitol that houses the governor's offices.

And yes, the Sierra Club has a list of suggestions for the hiring committee. As well as a list of "the questions he needs to ask" candidates. "Trust us, Jerry! Trust us!" Phillips says, adding the problems in the Parks Department are "30 years old."

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What 30 year old problems? Systemic under-funding by the state; a massive deferred maintenance project pile up; as well as outmoded and inflexible operating procedures (Coleman referenced some of them herself in a recent Forum segment).