NORTH COUNTY TRANSIT DISTRICT 8lD Mlssian flvenue Ocaansitley CI 92054 (760) 966-6500 (760196?-2001 flax) IOMID OF IJIRECIORS liill Harn Supenrlsur. Euumy at San Diego Baud (hair Hark Padrard Caurcilrnemlm. City of Carlsbad Bond 'rite Ehrir Donald Ilasiar fin: D84 Mat Tony llran: City of Emlnilr: Ell Gallo my cat Esrandida Gary Fallen City at llteanida Rellocaa Jones Coundli'nem3ar, fill,' of Sm liartus lilika Nichols .lr':El'fl:i, Eily afSu|anuBaad1 Jahn J. Aglilera Eaundhrambc, Gly of Will: DIRECTOR llialihew ii. Tucker GENERAL COUNSEL tnri ll. 5' May 2, 2013 Mr. Tom Karlo General Manager, KPBS 5200 Campanile Drive San Diego, CA 92182 Dear Mr. Karlo, I am writing you to once again request that KPBS correct ongoing and additional factual errors contained in a series of news reports by investigative reporter Brad Racino of your news partnering agency, Investigative News Source. Specifically, NCTD requests the following corrections: . April 3, 2013- Funds Used for Buses--and Studies" In this article, Mr. Racino suggests that money was wrongfully diverted to pay for studies and accuses NCTD of "violating accounting principles." We have provided several factual sources of information to KPBS that proves this statement to be incorrect, including: The Federal Transit Administration (FTA 5307 funding guidelines, go to: 3561 .html. These guidelines allow for funding for preliminary design and planning for those CIP projects that result in a capital asset when completed. I refer you to the first section under eligibility that reads: "Eligible Activities- Eligible activities include planning, engineering design and evaluation of transit projects and other technical transportation-related I have included as an attachment to this communication, a letter from NCTD's independent auditor, Pun McGeadey, indicating that studies undertaken by NCTD are properly accounted for as operating expenditures, not capital expenditures in FY 2012 and FY 2011. During a May 1, 2013 interview Mr. Racino conducted with various NCTD managers, Mr.Tucker and Mr. Ryan Bailey, NCTD CFO, explained the difference between NCTD's list of projects to be funded in our annual budget documents under the heading of CIP, and the accounting treatment for such projects in the Comprehensive Annual Financial Report (CAFR). Contrary to the allegation of wrong doing by Mr. Racinio on behalf of KPBS, NCTD properly accounts for FTA eligible studies and planning projects as operating expenses rather than capital projects. This interview was recorded by Mr. Racino and NCTD. We are able to provide the full recording where this explanation was provided, should Mr. Racino's recording be unavailable. May 3, 2013 Page 2 of 3 The projects KPBS listed as being improperly treated are clearly properly accounted for. The implication by KPBS that NCTD is not following generally accepted accounting principles (GAAP) set by the Government Accounting Standards Board (GASB) is false. NCTD requests a retraction of this allegation and a public statement of the error in facts by KPBS. 2. May 2, 2013- "North County Rail and Bus Service Suffers without Contract Oversight" This article incorrectly states: "During his outsourcing, Tucker contracted out the maintenance of the SPRINTER vehicles to a private company,-which then subcontracted out to another private company." These contracts were authorized by the NCTD Board and entered into prior to Mr. Tucker being employed by the District in December 2008. The contract was entered into on May 8, 2006, and was executed by Karen King, Executive Director and Michael Cowett, General Counsel. NCTD requests that this incorrect information be identified as an error to the public and corrected. 3. May 2, 2013- "Transit Agency's Revolving Door Costs Big, Causes Turmoil" The chart entitled, Recruiting fees paid by is incorrect in the following instances: Johnny Dunning- As we stated in the May 1, 2013, interview with Mr. Racino, Mr. Dunning was an ancillary hire out of the one search for a Chief Operating Officer, Lane Fernandes. We did not pay any fees for hiring Mr. Dunning. We did not pay any additional fees for hiring the replacement for Mr. Fernandes. Laynie Weaver- was hired by NCTD as a result of an independent response by Ms. Weaver to a standard recruitment conducted by our human resources department. She is the Transit Safety and Emergency Preparedness Manager. NCTD did not pay any fees, nor was KL Executive Search involved. NCTD requests that this incorrect information be identified as an error to the public and corrected. I have attached the Society of Professional Journalists Code of Ethics (Code), the basis for our requesting that KPBS correct the numerous reporting errors in this series of articles. To quote the Code, "Journalists are accountable to their readers, listeners, viewers and each other. Journalists - Clarify and explain news coverage and invite dialogue with the public over journalistic conduct. - Admit mistakes and correct them - Expose unethical practices of journalists and the news media. - Abide by the same high standards to which they hold others." May 3, 2013 Page 3 of 3 NCTD is asking KPBS to uphold the journalistic standards the public and the profession demands and publicly correct the record. Anything less than accountability is to acknowledge that ethical decision making is absent from the KPBS newsroom. I ask you to correct the record as soon as possible. I can be reached at 760-967-2817 and Sincerely, Deborah Castillo Manager of Marketing and Communications cc: Matthew 0. Tucker, Executive Director, NCTD Bill Horn, Supervisor County of San Diego, NCTD Chairman of the Board NCTD Board Members Elliot Hirshman, President, SDSU Attachments: Pun McGeadey letter of April 26, 2013 Capital Improvement Program (CIP) and Accounting Practices: NCTD in the News SPJ Code of Ethics TO AGENDA ITEM W2. 6265 Greenwich Drive Suite 220 San Diego, California 92122 Pho (853) 242 5100 - April 26, 2013 Board of Directors North County Transit District 810 Mission Avenue Oceanside, California 92054 We were engaged by the North County Transit District to provide professional auditing services for the year ended June 30, 2012 and our predecessor firm, Caporioci Larson, was engaged by NCTD to provide professional audit services for the year ended June 30, 2011. A Single Audit is required under OMB Circular A-133, Audits of States, Local governments, and Not--fbr- Profit Organizations, when a recipient has expended federal awards of $500,000 or more during the recipient' fiscal year. For the years ended June 30, 2012 and 2011, the total expenditures of federal awards amounted to $20,386,976 and $32,115,598, respectively, were expended and are reported in the Schedule of Expenditures of Federal Awards. We selected four (4) major programs totaling $20,010,000 for 2012 and three (3) major programs totaling $31,744,882 for 2011 in accordance with OMB Circular A-133 for compliance testing purposes. One project study related to Camp Pendleton, funded by U.S. Department of Transportation with grant numbers CA--90-Y632 and CA-90-Y874, was part of the Federal Transit Cluster totaling $17,309,042 and was reported in 2012 Schedule of Expenditures of Federal Awards. During the fiscal year ended June 30, 2012, total expenditures of federal awards for these two grants was $6,562,831, of which we tested $5,433,073 or 82.79% in our procedures. The study related to Camp Pendleton accounted for expenditures of $21,409 in fiscal year 2012. These expenditures related to this study were properly accounted for as operating expenditures. For the fiscal year ended June 30, 2011, there were no expenditures related to this study. Should you have any questions, please do not hesitate to contact me at (949) 777-8800. Thank you. Kenneth H. Pun, CPA, CGMA Engagement Partner 0m_u:m_ 3.3 23. zm<mw.:3Eo m> Ezam 25. mace: :mm_E. . 0: >31m_mo Q5 :2 moocmm 3m_2m:m:om 2.03 Em Em_.mc< Em mma 3o:m< Emm Em o:m mag cozm Em 95%. Em mo3m ofi 3o:m< Emm _.m_u_momQ m.Ea_mm. EUR3.03 5 _m m_mo Em." 3o:m< :m_um I so." Em I om_uE_.mm Em moEm_ 2 . zo._.U.m $333. om_o=m_ U_.o_.o2m mam no E:=o _o_.o_.m2m mam 9.0.62 3:302. 1 0 .. 3.1. rfimm . No.5 mEQ_mm mm _u3._mfl mmn_:mm_mn_ non Zn. 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N3 Emwm so 8 SE 283:.3 0o:o_:m_o:m . _m 3.985. 3 m:m:o_m_ . _m so mx_o__omU_m :25 no Esnm on I mE% mam .80 m3m__ 8 _3umo.. _nm_.m cox ow onmqmasc . zo._.U.m _m Um_m:nmn_ :om_u=m_ .2362 Emm $3 23. vnouomma No.3 _m an: =5 woman. com. 23 3 1 3 1 1 SOCIETY OF PROFESSIONAL JOUR Code of Ethics PREAMBLE SEEK TRUTH AND REPORT IT Journalists should be honest. fair and courageous in gathering. reporting and interpreting infonnation. Joumalists should: 1- Testthe aocuracyofinfonnation from all sources and ertercisecareto avoid inadvertent error. Deliberate distortion is never pennissible. Diligently seek out subjects of news stories to give them the opportunity to respond to allegations ofwrongdcing. n- Identify sources whenever feasible. The public is entitled to as much information as possible on sources' reliability. I Always question sources' motives before promising anonymity. Clarify conditions attached to any promise made in exchange for infonnation. Keep promises. I Make certain that headlines, news teases and promotional material, photos, video, audio, g1'aphics, sound bites and quotations do not misrepresent. They should not oversimplify or highlight incidents out of context Never distort the content of news photos or video. Image enhancement for technical clarity is always permissible. Label montages and photo illustrations. in Avoid misleading re-enactmenu or staged news events. If re-enactment is nemary to tell a story, label it. I- Avoid undercover or other suneptitious methods of gathering information except when traditional open methods will not yield information vital to the public. Use of such methods should be explained as part of the story. Never plagiarize. Tell the storyof thediversity and magnitude of the human experience boldly, evenwhenitisunpopulartodoso. in Examine their own cultural values and avoid imposing those values on others. I- Avoid stereotyping by race, gender; age, religion, etlmiclty, geography, sexual orientation, disability, physical appearance or social status. Support the open exchange of views, even views they find repugnant. I Give voice to the voiceless; oificial and unofficial sources of information can be equally valid. 1- Distinguish between advocacy and news reporting. Analysis and commentary should be labeled and not misrepresent fact or context Distinguish news from advertising and shun hybrids that blur the lines between the two. Recognize a special obligation to ensure that the public's business is conducted The SPJ Code of Ethics is voluntarily embraced by thousands otjcumalists. regardless of MINIMIZE HARM Ethical iournalists treat sources. subjects and colleagues as human beings deserving of respect Journalists should: Show compassion for those who may be affected adversely by news coverage. Use special sensltivitywhen dealing with children and inexperienced source or subjects. Be sensitive when seeking or using interviews or photographs of those affected by tragedy or grief: Recognize that gathering and reporting information maycause harm or discom- fort Pursuit of the news is not a license for arrogance. Iv Recognize that private people have a greater right to control information about themselves than do public officlals and others who seek power; influence or atten- tion. Only an overriding public need can justify intrusion into anyone's privacy. Show good taste. Avoid pandering to lurid curiosity. Be cautious about identifying juvenile suspects or victims of sex crimes. Be judicious about naming criminal suspects before the formal filing of charges. Balance a criminal suspects fair trial rights with the public's right to be informed. ACT INDEPENDENTLY Joomalists should he tree of obligation to any interest other than the |Iuh|ie's right to know. Journalists should: Avoid conflicts of interest, ml or perceived. Remain free of associations and activities that may compromise integrity or damage credibility. Refuse gifts, favors, fees, free travel and special treatment, and shun secondary employment, political involvement, public office and service in community organizations if they compromise joumalistic integrity. Disclose unavoidable conflicts. Be vigilant and courageous about holding those with power accountable. Dyfavorcd to influence news coverage. Bewaryof sources offering information forfavors or money; avoid biddingfornews. BE ACCOUNTABLE Journalists are accountable to their readers, listeners, viewers and each other. Journalists should: n~ Clarify and explain news coverage and invite dialogue with the public over journalistic conduct. Encourage the public to voice grievances against the news media. Admit mistakes and correct them or Expose unethical practices of journalists and the news media others. place or platform. and is widely used in newsrooms and classrooms as a guide for ethical behavior The code is intended not as a set of "rules" but as a resource for ethical decision-makingunder the First Amendment legally enforceable. The present version of the code was adopted by the 1996 SPJ National Convention, after months of study and debate among the Society's members. Sigma Delta [this first Code of Ethics was borrowed from the American Society of Newspaper Editors in 1925. In 19?3, Sigma Delta Chi wrote its own code. which was revised in 1934, 198? and 1996.