The City of Hollister issues credit cards to 105 of 142 budgeted employees, and expenses on such charges totaled $794,681 for the 2014-15 fiscal year, according to records obtained by the Free Lance.
The city released the information—along with a list of employees receiving the Cal Cards and expense data for the five council members—in response to a California Open Records Act request from the newspaper.
The information released Friday from Director of Administrative Services Brett Miller also included the city’s existing policy on Cal Card issuance and use.
Miller in providing the amount of $794,681 spent on those credit cards during the last fiscal year ending June 30—the city’s total general fund budget is around $18 million—pointed out how those expenses include a 1 percent cash-back incentive as part of the Cal Card program employed by Hollister.
He said those expenditures are managed department by department—with senior officials signing off as part of the process—but not totaled anywhere in the broader city budget. The county, meanwhile, does not issue credit cards to staff members or elected officials, confirmed Sara Fontanos, a management analyst for San Benito County.
Of the 105 city employees now issued the cards, council members make up five of them. Just one council member, Mickie Luna, used her Cal Card last fiscal year.
Luna spent $246.07 on the city credit card, according to the provided records. Luna replied by email it was for the Wells Water Conference in Palm Springs on March 5-6. The expenses were for one night at the hotel, at $177.77, and gas for $68.30. She paid for meals and stayed with family a second night, she added.
Hollister’s broad use of the credit cards, meanwhile, could change soon.
Two weeks after the Free Lance filed an open records request for a plethora of data on city-issued credit cards used by employees, the agenda for Hollister’s council meeting Tuesday includes an item to consider an extensive update to the policy governing government workers’ credit card use. In response to the records request, Miller initially asked for the maximum allowable extension to Sept. 11 but then released the data Friday.
Council members at the 6:30 p.m. Tuesday meeting at Hollister City Hall, 375 Fifth St., are set to consider a resolution to approve a new credit card policy.
That policy update—the mayor told the Free Lance he supports increasing restrictions on credit card access—covers rules for who uses the Cal Cards, what they’re used for, and limits on individual expenditures capping out at $3,500.
Miller denied that the policy overhaul had anything to do with the Free Lance records request. The newspaper submitted a request under the California Open Records Act on Aug. 18. Public bodies are given 10 days to respond but can request a 14-day extension, which the city did.
“It was about time we needed to update this thing,” said Miller. “To me, it was outdated.”
The Free Lance records inquiry requested the city provide a total number of credit cards issued to employees, a list of expenses from the five council members who are among employees receiving credit cards, a total amount of expenses put on credit cards in the most recent fiscal year, and a document delineating all policies for credit card issuance and use.
Miller on Thursday confirmed that there is no current policy specifying exactly what positions are assigned cards, as department heads make those decisions, or how many cards are issued in each department and throughout the city. As for individual limits as they stand?
“Usually it’s $2,500 to $3,500 depending on what position,” Miller said, adding that department directors have higher limits.
Although Miller said he has wanted to update the policy for several years, he also defended the existing practice.
He contended that the practice offers more controls than other ways of accounting for expenses. Cal Cards have better security protections than traditional credit cards, he said, while an array of structured controls involve officials reviewing specific expenses put on the cards. Part of the reason for Tuesday’s consideration is because the city will receive new cards with more secure microprocessor chips installed, he said.
He also contended that only supervisors keep the credit cards on them, while other employees’ cards are kept in a safe and checked out.
“It doesn’t seem like there’s a better way of doing things,” Miller said.
The finance official asserted that cash reimbursements for employees who purchase items for the city are unfair because the workers have to wait for the money.
“It’s kind of gone away,” he said. “People don’t really do charges anymore.”
He said it’s been a common practice to hand out the multitude of credit cards “just in case they’re the ones that have to respond or do something.” Miller said an example is with an emergency or disaster when police officers might need to get something at Target. He also said it could come in handy if a city employee is on a work-related trip and may prefer buying “beef sticks and peanuts” instead of eating an expensed dinner.
With the city credit cards, Miller also stressed that department heads must approve all the spending, which other officials then review.
The city’s consideration of a credit card policy comes in an era with heightened scrutiny of public spending by government entities, especially following the City of Bell corruption scandal uncovered by the Los Angeles Times in 2010. The San Benito County community, too, has experienced its share of theft by officials in influential positions, with six high-profile embezzlement cases involving public unions or nonprofit organizations in the past six years.
In the City of Hollister, former sheriff’s candidate and police Sgt. Ray Wood in 2012 was sentenced to six months in county jail for embezzling $102,000 from the Hollister police union where he had been president of the organization.
“You’re trying to compare an organization that had no internal controls to an organization that has internal controls,” Miller said.
Still, Mayor Ignacio Velazquez said the city should limit the number of cards handed out.
“I personally think only department heads and those in emergency services should have the cards,” Velazquez said.
He doesn’t believe council members need them.
“I think we’re better off turning in our receipts,” he said. “I don’t think it’s a good idea for council members to have them.”
