Proof positive that rules of court are worthless at the AOC

Posted on December 7, 2015

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(Disclaimer: JCW is responsible for the title of this communique, not the ACJ)

A month ago, Administrative Director Martin Hoshino announced his “final decision” to keep the bulk of the AOC’s operations in San Francisco rather than move the entire outfit to Sacramento.  That decision flies in the face of the recommendations made by the Chief Justice’s Strategic Evaluation Committee in 2012 and by our highly regarded state auditor, Elaine Howle, earlier this year.

Last week, apparently in response to repeated inquiries from Alliance director Kevin McCormick, the AOC quietly posted a 424-page report from an outside consultant.  The report lays out six possible configurations involving the San Francisco, Sacramento, and Burbank offices and predicts the costs over ten years associated with each scenario.  The link to that report is buried deep within the AOC website.  We bring it to you here.

We strongly disagree with this decision.  You don’t need to be an accountant to grasp that moving to Sacramento from San Francisco—the most expensive city in the state in which to do business—would save the taxpayers a lot of money.  It’s what the SEC and the State Auditor expressly told us to do, and it makes sense politically.  More specifically, we’ve got problems with many of the assumptions made by the report’s authors.  For starters, the report compares taxpayer-subsidized rent in San Francisco—the reduced costs that will follow once lease revenue bonds are paid off in 2012—to fair market rent in Sacramento, assuming no other business or state agency would pay market rates to take over all of the AOC’s palace on Golden Gate Avenue.  It’s like suggesting that you shouldn’t sell your house until you’ve paid off your mortgage.  The authors also make the questionable assumption that moving the AOC would require the construction of a brand-new building to house 791 employees.  We doubt whether the AOC should have a staff nearly that big, and whether that staff requires a custom-built office complex.

But whether or not you agree with the decision, there’s still a big issue: It isn’t Mr. Hoshino’s call to make.  It’s the Council’s.

Under the California Rules of Court, Rule 10.101, Mr. Hoshino’s duty as Administrative Director of the Courts is to “implement the directives of the Judicial Council.”  This rule was enacted in its current form in July 2015 in response to the finding of the California State Auditor that the Council “did not adequately oversee the AOC in managing the judicial branch budget, which allowed the AOC to engage in questionable compensation and business practices.”  You will recall that the half-billion dollar disaster that was CCMS was initiated without a vote of the Judicial Council.  Now a decision that involves hundreds of millions of dollars of branch funding has been made by an Administrative Director without the authority to make the decision.  Apparently, once the Chief Justice announced her opposition to relocating the AOC four years ago, Mr. Hoshino never saw a need to involve the Council any further in the discussion.

The Council doesn’t seem to feel the need to weigh in on the matter either.  Last week, the Executive and Planning Committee of the Council met to determine the agenda for this week’s Judicial Council meeting.  Mr. Hoshino’s “final decision” not to move from San Francisco was never discussed.  But item 15-446 entitled, “Judicial Council Facilities Update,” just appeared on the agenda.  The agenda states further, “No Action Required. There are no materials for this item.”  Does the Council truly believe that “no action” is required on their part, that they need not even bother reviewing the flawed 424-page report commissioned to justify the stubborn decision to stay in San Francisco?

Even the AOC’s own report indicates that Mr. Hoshino was never given the authority to decide this issue.  The Judicial Council directed the Administrative Director of the Courts, as part of the Council’s long-term strategic planning, to evaluatethe location of the AOC main offices based on “a cost-benefit analysis and other considerations.  (Judicial Council Directive 48, emphasis added.)  So perhaps the Council can now explain why renaming the AOC and amending a Rule of Court to make it clear that the Council is in charge of its administrative staff has failed to keep the AOC tail from wagging the Judicial Council dog.  The AOC is still the AOC, and it continues to waste taxpayer money without oversight while the Judicial Council gives out awards.

Those who need our courts deserve better.  They deserve a Judicial Council comprised of individuals elected by and accountable to their peers.  They deserve leaders who will take an objective look at how to save taxpayers hundreds of millions of dollars.  What they have gotten instead are empty promises of increased transparency and fiscal oversight, while a bloated and unaccountable bureaucracy continues to run amok.  We all deserve better.

Directors, Alliance of California Judges