News - October 1, 2008
Atherton: Ex-official seeks records on candidate, councilman, staff
by Andrea Gemmet
Atherton's former finance director John Johns is seeking an array of e-mails, memos and other documents in three California Public Records Act requests.
A the end of September, Mr. Johns filed requests for records on City Council candidate Elizabeth Lewis' home construction project, police department expense accounts, Councilman Charles Marsala's investigation of Mr. Johns, and all communications between the former police chief, former interim city manager, and two other town staffers — among other things.
It's the latest salvo in the municipal drama that started with the audits of Atherton's busy building department in 2006, and has been punctuated by lawsuits, civil grand jury investigations and the departure of high-level staff.
Mr. Johns alleges that his firing in October 2007 was in retaliation for digging up information on problems in the building department.
"What motivated me to file the ... request was that I felt Charles Marsala had made one statement too many that I consider to be derogatory in nature," Mr. Johns told The Almanac.
Mr. Johns took issue with Mr. Marsala's recent comments praising City Attorney Marc Hynes for "putting Mr. Johns on the defensive" by asking the San Mateo County District Attorney's Office to investigate Mr. Johns for allegedly using town time and resources for his outside consulting jobs.
The district attorney's office declined to press charges, but while the investigation was ongoing this spring, Mr. Johns was forced to withdraw his wrongful termination lawsuit or risk incriminating himself in the criminal investigation.
Mr. Johns re-filed the lawsuit in June, alleging that his civil rights were violated, but withdrew it in August.
"I would hope that Councilman Marsala learns to be more judicious with his comments to the press, and by doing so, he's less likely to jeopardize his own career," Mr. Johns said.
Mr. Marsala objected to Mr. Johns' claim that he launched his own investigation into Mr. Johns' conduct at the same time that the town was doing its personnel investigation.
"I don't know if I did an investigation. I requested his credit card charges, which we should be looking at anyway, and then some purchase orders," Mr. Marsala said. "I backed those up with a couple of e-mails. I didn't interview any people."
Mr. Marsala said he's concerned by the scope of Mr. Johns' records request, and questions how he knows of the existence of some of the documents he is requesting.
"I feel it's a ploy to have the town encumber a huge expense (filling the records request) in order to seek a settlement from us," Mr. Marsala said.
Ms. Lewis, the council candidate, said she was shocked to learn that permits and documents associated with the construction of her home were part of Mr. Johns' records request.
"I can only suspect that, in some way, he's trying to dig something up to discredit me or slander me, because I'm running for town council," she said.
Ms. Lewis said she was unaware of any problems regarding the tear-down of most of her old house at the corner of Alejandra and Emilie avenues.
"We built a house according to all zoning and building code regulations that the town of Atherton required us to," she said. "Mike Wasmann, who's now the head building official, was our regular inspector and he signed off on all the building permits."
Mr. Wasmann confirmed to The Almanac that he's unaware of any problems or questions regarding Ms. Lewis' building project. Calculating fees and checking for zoning issues would have been handled by then-building official Mike Hood, he said.
Mr. Johns said he discovered apparent discrepancies in the building department's electronic permit records, having to do with the permit extension, scope of the work and features of the residence.
"Perhaps these apparent anomalies are nothing more than harmless technical violations or shoddy record-keeping on the part of the Building Department," he said in an e-mail to Ms. Lewis that he forwarded to The Almanac.
It's not the first time the legality of completed home construction projects have been questioned. Similar allegations were made about remodeling projects done by council members Marsala and Jim Janz, and an anonymous letter to the Planning Commission in July 2007 made public the fact that a portion of former Councilman Alan Carlson's roof peak was 7 inches over the town's height limit.
Posted by Charles Marsala,
a resident of Atherton: West Atherton
on Oct 4, 2008 at 10:27 am
As a council member since 2002, I have a fiduciary responsibility to the residents of Atherton and a moral responsibility to provide them with transparency. As Mayor in 2006, I was aware of the undermining Finance Director John Johns was doing to the Building Official, Police Chief, and City Manager. I also became aware of incorrect financial practices that were in place, some I had voted for, believing the presentations I was given earlier. Others were discovered either by a staff member advising me of a problem or later validating if council direction was being followed.
The first to come to light was the Off-Haul Fee, presented to the council by John Johns in March 2005. In June 2006, shortly before he retired Building Official Mike Hood informed me he thought it was illegal and council should address it. In September 2006, council refunded all funds collected with interest.
Last year I was informed by Interim City Manager Wende Protzman, that the 2003 re-engineered Business License Fee designed by John Johns and approved by council is double-charging residents in certain areas. In other areas it is charging more than justified. The new Business License Fee has increased revenues by more than $150,000 a year. Soon the council will take action on this. Refunds are due to residents and those who paid for the Business License Fee Permits.
For the last four years, I have been on the Town Facilities sub-committee. As I began working on the financials for the Town Center Project, I remembered back in May 2000 that Mike Hood proposed to council that permit fees be increased from $110 per square foot to $250 per square foot. This was shortly after the second defeat of the Parcel Tax in March 2000. Council approved.
Mr. Hood proposed that $146,000 annually of Building Department revenue go towards the Town's Administrative budget, for services rendered to support the Building Department. The Building Department had been relocated to trailers in 1998, he proposed that $200,000 a year be set aside for a permanent building.
During the next six years of his tenure with the town the Building Department had substantial surpluses. A surplus is defined as revenues minus expenditures.
Finance director John Johns placed these surpluses in the General Reserves, where they have grown with interest. It appears he did not deduct the $146,000 per year for Administrative overhead. Which reduces the net to $2,622,027.
As I have researched this situation. I have been advised that State Law prohibits a city or town from making a "profit" on Building Department operations and restricts how those funds can be used. With proper cost accounting the overhead might be greater than the $146,000 per year. However when I see the surplus of $1,235,903 for 2001 alone, I realize that a large amount of funds placed in the General Reserves since 2001 may be at risk as they come from the Building Department surpluses.
Whether or not this qualifies as and Investigation or just doing my council and committee assignment, identifying and solving the problem needs to happen.
John Johns' current Freedom of Information Request contains a binder I gave to the Interim Finance Manager in January of this year, more than five months after John Johns was placed on leave in August 2007. The binder contains John Johns credit card statements, three concerning purchase orders, and comments regarding requests by the City Manager for him to change days he was not in the Atherton Office to either vacation days or sick leave.
The compiling of this information resulted from a front page story in September 2007. Our auditors pointed to concerns with Atherton expense documentation. Although having been placed on Administrative leave prior to that meeting, John Johns contacted the press and pointed to three glasses of wine the Chief of Police had with meals while attending a conference. The wine turned out to be the dinner salads.
This distracted the press from what was on John Johns Atherton Credit Card: an Ipod, two cameras, multiple meals exceeding $50 with no documentation, flowers, internet dating services, subscriptions, and Commonwealth Club fees, to name a few. On at lease one occasion City Manager Jim Robinson had Mr. Johns reimburse the town.
I noticed an extra person in town hall and was told that John Johns had brought in his neighbor to do some work. This was done by issuing two purchase orders to his neighbor totaling over $20,000; any purchase order over $15,000 needs council approval. I received requests from residents to make the information public. I presented the binder to the Interim City Manager in January 2008. Some residents have asked for copies of the binder.
In April 2008, the GAO issued a report discussing Government credit card abuse with the same items as those found on John Johns' credit card. The council has asked to discuss improving financial controls at a future meeting.
The history of this ordeal:
In November 2005 John Johns went to City Manager Jim Robinson, concerned that it had been inappropriate for the Building Department to tell residents of the off-haul fee increase prior to the May 17, 2005 effective date. In December Mr. Johns proceeded to get into a shouting match at the Building Department on this issue, and filed a complaint with Jim Robinson.
In January 2006, Jim Robinson brought in a personal investigator who interviewed more than twenty people. After the investigation Jim Robinson was satisfied that Building Official Mike Hood had acted appropriately and resolved the matter. On June 28, 2006 John Johns undermined Jim Robinson, bypassed the full council, and went directly to the press at a meeting 48 hours before Mike Hood was to retire, claiming Mike Hood showed favoritism with the implementation of the Off-Haul Fee.
This became known as the Phase One Audit. A few weeks later John Johns would issue a Phase Two Audit. In August the full council voted in favor of a Phase Three Audit. At that point I felt a no vote, would indicate a lack of interest in transparency.
Based on information supplied solely by Mr. Johns to the Grand Jury, they issued a report in February 2007 that only 63 out of 189 building permits had been inspected by Menlo Fire for fire in Atherton. In fact, Menlo Fire reported they inspected 226 out of 257 permits and 100% of the applications since the sprinkler ordinance passage had been inspected for fire. The other permits had been deemed minor and had been inspected by the Atherton Building Dept.
The Council's response to the Grand Jury was termed "defiant". The Grand Jury called and requested on May 2, 2007 from Jim Robinson building permits on council members. On May 3, 2007; John Johns without Jim Robinson's approval sent an email to an outside attorney with information concerning those files. On May 8, 2007 John Johns forwarded to Jim Robinson a copy of the email, he had sent to the attorney. That day Jim Robinson retired. When I asked him why, he said "this is never going to end."
Starting in September 2006, John Johns would claim "Whistleblower" protection and threaten to sue the town whenever challenged by managers for not coming into work. John Johns sent an email to Jim Robinson discussing a situation regarding a challenge to John Johns' time card.
In mid August 2007, a female staff member came in crying about comments John Johns had made. Her son was in intensive care after being hit with a baseball. She reported that John Johns had remarked to her that he knew where there was a sale on baseball bats.
Interim City Manager Wende Protzman reviewed with the City Attorney what action should be taken. As this was not the first incident, she decided to place John Johns on leave and have an independent investigation done. Actions resulting from that investigation were deemed appropriate by The Almanac, in an editorial in November 2007.
John Johns currently has dismissed his case against the town with prejudice. Our town has faces many challenges: High Speed Rail, Environmental Awareness, Financial Stability, Recreation Resources, and Zoning and Quality of Life issues. The Council, Staff, and Committees are still addressing these while dealing with John Johns' claim.
Posted by john p johns,
a resident of another community
on Oct 7, 2008 at 8:52 am
Sorry Charlie, you've got it all wrong.
Here's a letter I sent to you and your colleagues on the City Council
October 7, 2008
Mayor Jim Janz
Mayor, Town of Atherton
91 Ashfield Road
Atherton, CA 94027
Dear Mayor Janz:
In your capacity as Mayor of the Town of Atherton, I would respectfully suggest that you consider urging Mr. Marsala to be more deliberate in his statements to the news media.
Certainly Mr. Marsala has a first amendment right to freedom of speech. However, it also stands to reason that, as a member of the City Council Mr. Marsala has an obligation to the Town of Atherton to exercise this right in a way that does not place the Town of Atherton in further jeopardy of financial loss from civil litigation.
To that point I would like to call your attention to certain statements that are inflammatory, and either without any basis in fact or contrary to information contained within documentation that is in the hands of Mr. Marsala .
These statements (with emphasis added in italics to certain portions thereof) are extracted verbatim below along with my responses thereto:
"Based on information supplied solely by Mr. Johns to the Grand Jury, they issued a report in February 2007 that only 63 out of 189 building permits had been inspected by Menlo Fire for fire in Atherton. In fact, Menlo Fire reported they inspected 226 out of 257 permits and 100% of the applications since the sprinkler ordinance passage had been inspected for fire. The other permits had been deemed minor and had been inspected by the Atherton Building Dept."
In reflecting upon the above proclamation by the former Mayor, one may ask how Mr. Marsala derived this information. Did he consult with members of the Grand Jury and if so has he violated the sanctity of the Grand Jury's confidentiality? I would hope not because it is my understanding that if such were the case, Councilman Marsala could be found guilty of having violated or having conspired to violate California Penal Code Section 924.
"During the next six years of his tenure with the town the Building Department had substantial surpluses. A surplus is defined as revenues minus expenditures….. Finance director John Johns placed these surpluses in the General Reserves, where they have grown with interest. It appears he did not deduct the $146,000 per year for Administrative overhead. Which reduces the net to $2,622,027.
As I have researched this situation. I have been advised that State Law prohibits a city or town from making a "profit" on Building Department operations and restricts how those funds can be used. With proper cost accounting the overhead might be greater than the $146,000 per year. However when I see the surplus of $1,235,903 for 2001 alone, I realize that a large amount of funds placed in the General Reserves since 2001 may be at risk as they come from the Building Department surpluses."
One might ask whether Councilman Marsala, in conducting his research, reviewed the journal entries to account for Building Department proceeds, notably a journal entry prepared at the end of each year wherein the revenues in excess of direct and indirect building Department costs were placed in a reserve for future building inspection.
One might also inquire as to whether Mr. Marsala consulted with the Town's financial auditors as to whether the accounting treatment for Building Department proceeds was correct. Presumably the accounting treatment was correct or the Town's independent auditors would have recommended an adjusting entry. For the above reasons, Mr. Marsala should consider sticking to his chosen occupation as a tool salesman, rather than second guessing the judgment of certified public accountants.
"In January 2006, Jim Robinson brought in a personal investigator who interviewed more than twenty people. After the investigation Jim Robinson was satisfied that Building Official Mike Hood had acted appropriately and resolved the matter. On June 28, 2006 John Johns undermined Jim Robinson, bypassed the full council, and went directly to the press at a meeting 48 hours before Mike Hood was to retire, claiming Mike Hood showed favoritism with the implementation of the Off-Haul Fee."
Councilman Marsala suggests that Mr. Robinson appeared to have been satisfied that Building Official Mike Hood had acted appropriately with respect to road impact fees. If such were the case, one might inquire as to why Mr. Robinson directed me to perform a Phase II audit of the Building Department after having completed Phase I. Additionally, since Mr. Marsala has been provided with unrestricted access to my e-mails, he undoubtedly came across an e-mail from Mr. Robinson directing staff of the Building Department to give the Finance Department its full cooperation as it conducted the Phase II audit.
Councilman Marsala also appears to forget that a former building department employee who in her own words is currently "selling stamps at the post office" made public a letter of reprimand issued by the City Manager as a result of Lance Bayer's personnel investigation for "undermining the road impact fee".
Finally, Mr. Marsala seems to be unaware of Mr. Robinson's response when I brought the fee collection problems to his attention in late 2005 to wit:
"If there is a cancer in the organization, we need to cut it out".
These are but a few errors, omissions of fact and misrepresentations by Councilman Marsala. With such a reckless disregard for the truth, one might ask a question that is more than just rhetorical:
Does Mr. Marsala have the judgment and temperament to serve effectively on the City Council?
Sure it may be a full two years before Mr. Marsala's term expires, but perhaps now is the time for the voters of Atherton to begin contemplating such matters.
John P. Johns CPA
Cc: Ms. Andrea Gemmet, Almanac News
Each member of the City Council
Mr. Jerry Gruber, City Manager
Ms. Kathi Hamilton, Interim City Clerk