Existing law establishes the Veterans Home of California system, comprised of subsidiary home locations including the Veterans Home of California, Yountville, in Napa County. Existing law requires all moneys received by a home, or by an officer of a home, to be paid to the administrator of the home, as specified. Existing law requires the administrator, on the 10th day of each month, to forward to the Treasurer all moneys in his or her possession for deposit in the General Fund, as specified. Existing law authorizes the Department of General Services to lease any real property held by the department for a veterans home, and requires all moneys received from a lease to be deposited into the General Fund to the credit of and in augmentation of the appropriation for the support of the veterans home system.

This bill would require the administrator of the Veterans Home of California, Yountville, to deposit all revenue generated from employee housing on the campus into a continuously appropriated fund maintained by the administrator for expenditure by the administrator for the maintenance, rehabilitation, and restoration of the Yountville campus. By authorizing the expenditure of these funds, this bill would make an appropriation.

Existing law establishes the Veterans Home of California system, comprised of subsidiary home locations including the Veterans Home of California, Yountville, in Napa County. Existing law requires all moneys received by a home, or by an officer of a home, to be paid to the administrator of the home, as specified. Existing law requires the administrator, on the 10th day of each month, to forward to the Treasurer all moneys in his or her possession for deposit in the General Fund, as specified.

This bill would require the administrator of the Veterans Home of California, Yountville, to deposit all revenue generated from employee housing on the campus into a continuously appropriated fund maintained by the administrator for expenditure by the administrator for the maintenance, rehabilitation, and restoration of the Yountville campus. By authorizing the expenditure of these funds, this bill would make an appropriation.

Date of Hearing: May 23, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2737

Author:(Aguiar-Curry) – As Amended Ver:April 16, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires all revenue generated from employee housing on the campus of the Yountville Veterans’ Home to be deposited into a continuously appropriated fund maintained by the home’s administrator for the maintenance, rehabilitation, and restoration of the Yountville campus.

FISCAL EFFECT:

Ongoing annual losses to the state General Fund of at least $156,000 in revenues that will instead be retained by the Yountville Veterans’ Home for exclusive use at the Yountville campus.

COMMENTS:

1. Purpose. This bill seeks to require that rental income generated by staff housing on the Yountville Veterans Home campus remains with the Yountville administrator for expenditure on the campus.
2. Background. The Veterans’ Home of California system, under the California Department of Veterans Affairs (CalVet), consists of eight home locations, including the Veterans’ Home of California, Yountville, in Napa County.

Existing law allows the Department of General Services (DGS) to lease real property held for a veterans’ home that is not otherwise needed directly by the home. The Yountville home is the only home within the veteran’s home system that has on-campus staff housing. There are 25 single-family units, six of which are uninhabitable and 19 of which are inhabitable but in various states of disrepair. The staff housing at Yountville is not leased by DGS, but rather is managed by the “State Owned Housing Manager” at Yountville and is handled as individual leases between each employee/resident and the state.

Staff housing at Yountville is the largest source of lease revenue at the campus, generating approximately $13,000 monthly, according to CalVet. Existing law requires proceeds from the rental of these units be deposited into the GF and augment the current appropriation in support of the veterans’ home system. According to CalVet, the maintenance and repair of staff housing draws from the overall budget.

This bill instead requires the revenue generated from employee housing at Yountville to be deposited into a fund maintained by the administrator of the home and available to the administrator for maintenance, rehabilitation and restoration of the Yountville campus. The bill does not require the funds to be used specifically on staff housing.

1. State audits. On May 16, 2018, the Joint Legislative Audit Committee approved a request by Senator Irwin for an audit of leases and other third-party uses of state property at CalVet veterans’ homes. The audit request noted that leases and other uses of state property for non-state uses have recently come under scrutiny. The audit request asked for information regarding how lease terms are negotiated, renewed, recommended, and approved how they are executed by lessees, how other third-party uses of state property at the homes are governed, if at all, and an evaluation of the information gathered to potentially inform legislative or regulatory change. CalVet’s leasing records indicate that as of November 2012, it had 38 active leases with other entities. Of these leases, 36 were at the Yountville Veterans Home, and 20 of these 36 leases were for employee housing.

In October 2013, the California State Auditor released an investigative report (i2011-0837) entitled, “Wastefulness, Failure to Comply With State Contracting Requirements, and Inexcusable Neglect of Duty.” The report revealed, among other findngs, that over a two-year period from January 2010 to December 2011, the Yountville Veterans Home administrator executed two contracts using MWR funds without consulting CalVet executive office officials, appropriate legal counsel, or residents of the home.

1. Previous Legislation: Senate Bill 543 (Wolk), Chapter 424, Statutes of 2016, centralized the receipt, management, and expenditure of Morale, Welfare and Recreation (MWR) funds, partially in response to the fact that Yountville had accumulated a site-specific MWR fund that was substantially greater than the other homes, but could not be spent elsewhere, and partially because of localized misuse of (Morale, Welfare, and Recreation (MWR)) funds on unauthorized projects.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2018

ASSEMBLY COMMITTEE ON VETERANS AFFAIRS

Jacqui Irwin, Chair

ABPCA Bill Id:AB 2737 (

Author:Aguiar-Curry) – As Introduced Ver:February 15, 2018

SUBJECT: Veterans’ homes: Yountville

SUMMARY: Requires all revenue generated from employee housing on the campus of the Yountville Veterans’ Home to be deposited into a continuously appropriated fund maintained by the home’s administrator for the maintenance, rehabilitation, and restoration of the Yountville campus.

EXISTING LAW:

1. Establishes the Veterans’ Home of California system, under the California Department of Veterans Affairs (CalVet), comprising eight home locations including the Veterans’ Home of California, Yountville, in Napa County;
2. Requires all moneys received by a home, or by an officer of a home, to be paid to the administrator of the home, as specified;
3. Requires the administrator, on the 10th day of each month, to forward to the Treasurer all moneys in his or her possession for deposit in the General Fund, as specified;
4. Authorizes the Department of General Services to lease any real property held by the department for a veterans’ home, and requires all moneys received from a lease to be deposited into the General Fund to the credit of and in augmentation of the appropriation for the support of the veterans’ home system.

FISCAL EFFECT: This bill has not been analyzed by a fiscal committee.

COMMENTS: The veterans’ home at Yountville was established in 1884 by veterans of the Mexican-American War and Union veterans of the American Civil War. The veterans’ organizations that maintained and operated the home, as the Veterans’ Home Association, were unable to continue after a loss of federal funding to privately-operated homes, and in order to keep it running sold it to the State of California in 1896 for $20, for continued use as “a home for aged and indigent United States ex-soldiers, sailors, and marines.”

The Yountville home is unique within the system in that it has on-campus staff housing. There are 25 single-family staff housing units at Yountville, of those 19 are considered inhabitable and 17 are occupied. Of the six that have been deemed uninhabitable, the reasons include earthquake damage, water damage, and asbestos disturbed during a remodel. According to CalVet, one was gutted in preparation for a training exercise by U.S. Navy Seabees, but that exercise was never carried out. Of the inhabitable units, one requires a complete replacement of its plumbing, which will also necessitate asbestos removal.

The law requires that proceeds from the rental of these units is reinvested into the home, but because of the way “home” is defined in the law, that means those funds are available for use within the entire eight-home system. According to CalVet, there is no specific budget for the maintenance and repair of staff housing; instead it draws from the overall budget.

Staff housing at Yountville is by some distance the largest source of lease revenue at the campus, generating approximately $13,000 monthly, according to CalVet. This bill does not take the more dramatic step of requiring all of that to be spent on the care and maintenance of staff housing; it requires only that it be spent on Yountville. It could be that those funds, or their equivalent, are being spent on the “maintenance, rehabilitation, and restoration” of Yountville, but a detailed accounting was not available in time for this analysis.

However, there is no question that buildings and facilities at Yountville have fallen into disrepair – not only staff housing, but also buildings that house veteran residents of the home. A report in 2016 by the Little Hoover Commission, Transforming the Yountville Veterans Home Campus, stated that during its first visit to Yountville the commission “learned that deferred maintenance and infrastructure neglect at Yountville has created an unsafe and undignified living environment for veterans.” The California Department of Veterans Affairs and the administration have acted, with plans to address the home’s failing infrastructure and the decline of its skilled nursing facility, housed in the historic Nelson M. Holderman Memorial Hospital. Two of the uninhabitable units were re-roofed, in order to prevent further damage, and there are plans to repair the earthquake-damaged home once federal funding has been secured.

According to the author: “AB 2737 is a common sense bill that returns the staff housing rent money to where it belongs – the Yountville Veterans Home. This will help us to start tackling the backlogged maintenance at the Home, and improve living conditions for our service members and staff.”

Previous Legislation: Senate Bill 543 (Wolk), Chapter 424, Statutes of 2016, centralized the receipt, management, and expenditure of Morale, Welfare and Recreation funds, partially in response to the fact that Yountville had accumulated a site-specific MWR fund that was substantially greater than the other homes, but could not be spent elsewhere, and partially because of localized misuse of MWR funds on unauthorized projects.

REGISTERED SUPPORT / OPPOSITION:

Support

Napa County Board of Supervisors

Opposition

None on file.

Analysis Prepared by: Christian Burkin / V.A. / (916) 319-3550