The hub for veteran’s services in Gilroy is at risk of being shut down or taken over by the county as a result of a June 2012 Civil Grand Jury investigation that accused the organization of financial mismanagement and the improper ousting of a board member.
The South Santa Clara Veteran’s Memorial District, a 264-member club of ex-soldiers who gather for regular meetings and social events in a vintage building on Sixth and Eigleberry streets, is under fire from The Local Agency Formation Commission (LAFCO), the county agency that oversees the special district. As a response to the Grand Jury’s findings, LAFCO is in the middle of conducting its own review of the veteran’s district. This could possibly lead to county intervention or even a takeover.
“They’re trying to shut us down. They think we don’t do anything for veterans down here,” said Gabriel Perez, SSCVMD board president.
In a 10-page report, the Grand Jury slammed the Gilroy veteran’s group and determined that it is “significantly lacking in good governance and good business practices.”
The SSCVMD district receives about $100,000 annually from county property taxes to be used for various events and outreaches to local veterans, their families and the community at large.
“It’s not a huge amount, but whether they get $100,000 or $1, they have a huge responsibility,” said Gilroy’s Mayor Don Gage.
The Grand Jury investigation began after they received complaints that the veteran’s board violated the Brown Act in October 2011 by firing an elected board member without jumping through the proper hoops.
As the investigation unfolded, the Grand Jury also determined that the veteran’s board president used $8,000 for kitchen remodels without consulting the other four board members – an allegation that Perez insists isn’t true and has the signatures and receipts to prove it – and began to question the structure of the group’s governance and quality of service to the community.
“The Grand Jury’s investigation revealed that the district had no written bylaws, mission statement, or other written operating guidance documents,” the report reads. “Little outreach is performed to inform veterans in South County of the District’s services. Board members told the Grand Jury that they do not fully understand their ethical responsibilities or grasp the legal requirements applicable to the District.”
Perez responded to the Grand Jury’s letter in November 2012. He refuted some of their “misinformation” and also updated the panel on the district’s progress, which included the forming of a mission statement and following the Brown Act requirements.
“They slapped our hands, basically. We were not educated of our guidelines. I don’t think it’s being ignorant, it’s being uneducated. We want to do things par and course,” Perez insisted.
Perez said the board did not oust a board member in a “closed session,” as the Grand Jury indicates, but during the fourth regular meeting in a row that the board member was absent for. When the Grand Jury got involved, the board reinstated the member in question. Perez would not divulge who the almost-ousted member was, nor did the other board members.
“We were trying to set a standard that you can’t miss meetings,” Perez said. “We didn’t know the process we had to go through. We didn’t know that it was technically illegal.”
But LAFCO doesn’t see the alleged illegal activity from the veteran’s district as a technicality – and the livid LAFCO board is ready to take action, according to Gilroy’s Mayor Don Gage. On a recent 6-1 vote with District 1 Supervisor Mike Wasserman casting the lone dissenting voice, the LAFCO board voted to form a plan of action for the SSCVMD. What that action might be, board members won’t say – but by June, they will have settled on a plan.
The veteran’s district in Gilroy hosts a range of gatherings throughout the year including services on Memorial Day and a community breakfast on Veteran’s Day.
The Gilroy post also has an old-timey bar where ex-soldiers enjoy hanging out together. Other community clubs, such as the Boy Scouts, use the building’s facilities, and local Bingo players know the veteran’s hall as the place they play every Friday night.
In his response to the Grand Jury’s accusations, Perez attached a calendar of all the events the SSCVMD hosts annually.
“We serve disabled veterans, we provide housing, we help people with cancer, we send kids to Washington D.C. and Japan, we host community events, we help family members of veterans, we cook breakfasts, we do memorials. Those people will be turning around 180 degrees and saying ‘we’re sorry’ once they see everything we do,” he said.
The official language from LAFCO on the matter is pretty generic. In a letter to Grand Jury members in December, LAFCO board members write, “LAFCO is aware of the issues and concerns that the Civil Grand Jury has raised regarding the SSCVMD. LAFCO’s service review for the district will address these concerns to the extent feasible.”
Gilroy Councilwoman Cat Tucker, an alternate commissioner on the LAFCO board who alerted Gage to the issue in the first place, did not return phone calls. Gage said the LAFCO board is furious with the SSCVMD and is deciding what action to take.
“If they are violating the Brown Act, and aren’t doing the things prescribed, it’s serious. As a district, you have certain responsibilities you have to fulfill,” Gage said.
But he doesn’t believe the veterans are involved in any foul play.
“It wasn’t malicious, I can tell you that knowing the guys on the veteran’s board,” he said. “I just don’t think they realize what they have to do.”
Requirements for special districts include inviting the community to their board meetings, posting their meeting agendas and minutes for all to see, carrying out all their business in the public eye, and keeping their financial records open and transparent.
While Gage acknowledges that the veteran’s district has problems, he doesn’t think a county takeover is a good solution.
“I don’t think it would serve anybody to have the county take over the district. When you start having organizations that aren’t local, you start having problems because they don’t understand the local needs and issues,” he said. “I’m going to find out what is going on to see if there is a compromise we can make.”
What the Grand Jury is accusing the veterans district of:
– Attempting to illegally remove one board member
– Conducting an unlawful closed-session meeting on Oct. 16, 2011
– Violating requirements for approving construction contracts
– Failing to complete required biennial ethics training for all board members
– Failing to complete the Form 700 Statement of Economic Interest Form 700
Mike Wasserman
(408) 299-5001
mi************@bo*.org
Cat Tucker (Alternate member)
(408) 500-2523
ca********@ci.us
