State Audit Request
of
Jose Evergreen Community College District (SJECCD)

(Proposed)


Backgound
The San Jose Evergreen Community College District (SJECCD) has stated that the land of Evergreen Valley College can be used for non-educational purposes regardless of whether the land was purchased with voter approved bondsNote 1.  It is believed that public lands purchased with voter approved bond funds must be used within the purpose(s) as approved by the voters.

SJECCD staff have also disclosed the systematic conversion of voter approved bond funds to general revenue by purchasing assets, selling or leasing the assets and then using the derived proceeds as general revenue.  SJECCD asserts that elected officials may re-characterize the use of land/assets purchased with voter approved bonds for purposes different than as the voters approvedNote 2.  SJECCD has not been keeping records of the public funding sources used to purchase fixed assets.Note 3.

It is believed that agencies converting voter approved bond assets into general revenue are misusing bond funds as voters have intended.  It is believed that elected governing bodies, such as the California State Legislature and SJECCD, do not have the legal authority to nullify bond fund use requirements written on ballot measures as approved by the voters.

State Audit Request
It is requested that the State auditor:

1) determine whether public assets purchased with voter approved public bonds must be used within the bond purpose(s) as approved by voters.  If there is such requirement,

1a) determine whether SJECCD is properly keeping records of all assets purchased with voter approved bond funds sufficient to determine compliance.
1b) determine whether the State is properly keeping records of the distribution of State voter approved education bond funds to recipient SJECCD and monitoring sufficient to determine compliance.
1c) determine whether SJECCD has been compliant in leasing Evergreen Valley College land for private commercial income and the selling of Milpitas Community College land.
2) determine whether the proceeds from the sale or lease of assets purchased with voter approved public bonds continue to be restricted to the original bond purpose(s) as approved by voters or may be used by SJECCD as general revenue.  If the derived proceeds continue to be restricted to the original bond purpose(s),

2a) determine whether SJECCD is properly keeping records of all proceeds derived from assets purchased with voter approved bond funds sufficient to determine compliance.
2b) determine whether SJECCD has been compliant in using the proceeds derived from assets purchased with voter approved bond funds including, but not limited to, the current leasing of Evergreen Valley College land and the sale of Milpitas Community College land.



References
Note 1:

See Video snippet of SJECCD explaining to the City of San Jose Council - 2 Min. duration.  Starting at 1:40.
      http://evergreenfriends.org/common/sjeccd_testify_san_jose_city_council.ogv

See SJECCD Minutes from 1967 showing State funds being used to purchase Evergreen Valley College and Milpitas Community College land.
      http://evergreenfriends.org/common/SJECCD_minutes_EVC_land_purchase_1967.pdf

Note 2:

Question posed to SJECCD Staff:

"What happens to revenue that is generated by bond assets?" (lease or sale)

Answer:

"Income generated from bond assets is not restricted in use."

See SJECCD CBOC 9/29/2015 meeting minutes page 5 (item 3). http://evergreenfriends.org/common/2015-0929-CBOC-Meeting-Minutes.pdf
Note 3:

See SJECCD PRA response dated 1/20/2015. http://evergreenfriends.org/common/CPRA_12-22-2014_SJECCD.pdf