The State Worker

Hot air balloons took off from California veterans home without state noticing, audit finds

A private golf course at the Yountville Veterans Home has allowed a hot air balloon company to launch flights from its grounds for years without drawing attention from state officials who manage the property, according to a January 2019 report from the California State Auditor. An employee from the auditor’s office took this photo, according to the report.
A private golf course at the Yountville Veterans Home has allowed a hot air balloon company to launch flights from its grounds for years without drawing attention from state officials who manage the property, according to a January 2019 report from the California State Auditor. An employee from the auditor’s office took this photo, according to the report. California State Auditor's Office

A Napa Valley veterans home once criticized for building an adventure park on its grounds has been allowing a golf course to offer hot air balloon rides for years without a lease permitting the rides, according to a state auditor’s report released Tuesday.

The report draws attention to a mix of leases that the California Department of Veterans Affairs allows at its marquee property in Napa County, which the state dedicated to veterans in 1884. The audit found that the department has mismanaged the leases, allowing some tenants to pay below-market rent and allowing inappropriate activities to operate there.

For instance, auditors found that Yountville Veterans Home failed to ensure about $610,000 in lease payments were set aside for veterans’ homes over the last three fiscal years. It also allowed a CalVet employee temporarily to pay below-market rent for a house on the property.

It’s the second time in six years that State Auditor Elaine Howle uncovered questionable activities at the veterans campus. In 2013, she found that CalVet wasted hundreds of thousands of dollars building an adventure park and operating a cafe and tavern.

The Yountville Veterans Home, called a “crumbling crown jewel” in a 2017 Little Hoover Commission report, houses about 1,000 military veterans. It has a long history of supporting community events in Napa, such as hosting a theater and youth baseball games. The state budget last year advanced a $300 million project that would give it a new skilled nursing and memory care facility.

In March, an Army veteran killed three caregivers at a nonprofit organization called the Pathway Home that had operated on the property. The Pathway Home is no longer a tenant at the Yountville Veterans Home.

Howle’s audit found that the 600-acre site’s managers charged low rents for tenants whose services are of questionable value for residents. The Lincoln Theater pays about $71,000 less than market value for rent each year yet doesn’t offer vets free or reduced tickets, the audit found.

The Napa Valley Museum offers free visits for vets but auditors questioned whether the benefit justifies an annual rent that is about $146,000 below market value, according to auditors’ estimates. Its rent is $7,348 a year.

Auditors questioned the value to retired seniors of Vintner’s Golf Course, which started offering hot air balloon rides after a local officials in Yountville approved them in 2009 without modifying the course’s lease, according to the audit. The deal allows up to 10 balloon launches each day, according to the audit.

Auditors found that CalVet headquarters didn’t find out about the balloon rides until 2016.

“We find CalVet headquarters’ lack of awareness puzzling, given the size and spectacle of the balloon launches,” auditors wrote in the report.

“Hot air balloon riding is an inherently risky activity where crashes can result in serious injury or death,” the report states. “The hot air balloon launches therefore create the risk of liability for the state, and we expected CalVet to have taken immediate action to stop the launches when it learned of them,” auditors wrote.

But the rides were allowed to continue.

The audit provides a breakdown of the $610,000 that should have been dedicated to veterans homes under state law.

Auditors estimate CalVet failed to collect about $101,000 in rent from the golf course, a convenience store and a barber shop on the site. The businesses are required to pay a portion of their rent as a percentage of sales. CalVet didn’t collect records to verify the companies were paying the right amounts from 2015 through 2018, and auditors found the rents fell short, according to the report.

CalVet deposited $391,000 in lease payments into the state general fund over the three-year period but didn’t notify the proper state agencies of the deposits, according to the audit. Consequently, CalVet couldn’t be sure the money went toward veterans homes as required. CalVet’s chief budget officer told auditors she didn’t know the law required the money to go to veterans homes, according to the report.

Yountville Mayor John Dunbar speaks to the media Saturday afternoon about the victims and suspect in the fatal Yountville shootings.

The Department of General Services was likewise supposed to deposit about $118,000 in lease payments to the general fund but instead put the money into a different fund, according to the report.

Assemblywoman Jacqui Irwin, D-Thousand Oaks, who is chairwoman of the Assembly Committee on Veterans Affairs, requested the audit last year.

“Through inattention and neglect, the residents of California’s veterans homes have been shortchanged in a process that has allowed these properties, which are supposed to be exclusively for the benefit of veterans, to be exploited,” Irwin said in a statement. “We need to ensure the homes are operated for the benefit of California’s veterans.”

Irwin called on CalVet Secretary Vito Imbasciani to take corrective action, and said she has introduced legislation to enable the Legislature to act.

State Sen. Bill Dodd, D-Napa, said the “Veterans Home in Yountville is a critical resource for veterans as well as the community. It is important that it is managed appropriately.”

CalVet agreed to work on adopting the audit’s recommendations.

“CalVet is committed to ensuring that our Veterans Homes continue to provide a home-like setting for our residents and will work to ensure that all activities, leases, and licensed events at the homes benefit our residents in the future,” CalVet spokeswoman Lindsey Sin said in an emailed statement.

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