Working for Sacramento's Utilities Department can be a family affair

City auditor’s investigation reveals concern over hiring practices, need for nepotism policy

To some, the city of Sacramento's Department of Utilities is starting to feel like a family business. And that isn't necessarily a good thing.

According to the City Auditor’s Office, there are upward of 40 utilities employees who “meet the department’s definition of a relative.” The statement comes from the auditor’s latest report covering complaints to its whistleblower hotline.

The Auditor's Office looked into an allegation that the Utilities Department was engaging in inappropriate hiring practices that created concerns of nepotism. The office substantiated the claim, and determined that there are at least 40—and possibly more—utilities employees who would get along just fine at a family barbecue.

That translates into approximately 8 percent of the staff in a department with 522.4 approved full-time equivalent positions as of last year.

As for what kind of risks are created when relatives work together, City Auditor Jorge Oseguera told SN&R there can be perceptions of unfairness, especially when it comes to promotions or disciplinary measures. “Preferential treatment and conflicts of interest are the two biggies,” he said.

Auditors didn’t look into whether the presence of relatives actually resulted in inappropriate favoritism, noting simply that the conditions were there. “We exposed what might need to be remedied,” Oseguera continued. “It’s a difficult thing to prove because what you’re getting at is intent. Oftentimes, that kind of preferential interference is not documented. … But the possibility is definitely there.”

The report recommends the implementation of a citywide nepotism policy, which doesn't presently exist.

But the Utilities Department does have a nepotism policy document in place—and has for years—due to similar concerns, Oseguera noted. “It appears that it wasn’t adhered to,” he said, though he couldn’t say whether there were more or fewer relatives working for the department than a decade ago.

Other departments weren’t evaluated, however, as the allegation only concerned the Utilities Department, which is responsible for managing the city’s water, sewage and storm drainage infrastructure, and operated a $109 million budget last year.

While such hiring practices may not be as big a deal in the private sector, Oseguera said government bodies have an obligation to operate beyond reproach. “In the public sector it’s a little more of a sensitive issue because we’re dealing with public dollars,” he said.

The office categorized the complaint as low priority, which refers to allegations that could cost the city less than $25,000 or isolated instances that lead to “limited gains” if corrected. The category also includes “allegations that lack credibility and evidence,” according to the report.

Oseguera presented his six-month summary of whistleblower investigations to the Sacramento City Council’s Budget and Audit Committee last Thursday afternoon.