The management audit division presented a countywide utilities audit to the Finance and Government Operations Committee on Oct. 23, 2025, identifying six areas of concern and recommending changes to reduce costs and operational risk.

Cheryl Solov, the management audit manager, told the committee auditors found inefficient utility‑bill handling at Santa Clara Valley Healthcare that led to repeated threats of shutoffs by PG&E and an absence of a single utility manager to ensure optimal rates and account consolidation. The audit recommended consolidating multiple utility accounts into one account per hospital and a consolidated account for clinics, moving to paperless billing, and filling a funded utility‑manager position that the hospital system had left vacant for financial reasons.

On county sustainability efforts, auditors concluded the County Facilities Sustainability Group was spending time on low‑value tasks — for example, coordinating electric‑vehicle port repairs — that limited its ability to advance countywide sustainability goals. Staff agreed to alternative approaches to integrate sustainability into projects and plans.

The audit also examined solar energy bond projects built in 2017–2018 and found five of six sites produced less energy and savings than projected, creating more reliance on the general fund to repay bonds. The auditors estimated unreimbursed debt‑service payments of more than $5 million as of fiscal year 2022–23. County staff told the committee that security and cleaning practices at several remote arrays have been strengthened and that cleaning frequency has been increased to twice a year; recent fencing and security deployments were reported at vulnerable sites such as Hellyer.

Following the September 2022 PG&E outage, county continuity‑of‑operations assessments recommended about $300 million in infrastructure upgrades; auditors said short‑ and long‑term plans and funding sources were not sufficiently developed. The audit recommended that the board not approve funding for large upgrades without sound short‑ and long‑term plans; county staff said they agreed and will integrate plans into capital planning processes.

Other findings: the general fund had been paying roughly $1 million a year for utilities at three facilities entirely occupied by SCVH; flow‑through via the cost plan added approximately $100,000 per year in overhead to the hospital system. Auditors also found that county utility budgets were lagging actual expenditures; for example, hospital utility costs totaled about $24 million in FY 2022–23.

Department and facilities staff responding to the audit said they are increasing solar‑array maintenance, deploying new site security, consolidating electronic billing and considering more CPUC rate‑intervention work. Jeff Draper (Facilities & Fleet) said the county will increase cleaning and maintenance and that some apparent shortfalls reflected bond‑timing and construction sequencing rather than permanent failure: “Those solar panels will produce well beyond the bond period, and you will get your money back and more over time.”

Vinod Sharma, chief financial officer for the health and hospital system, said the hospitals are consolidating bills where practical and balancing consolidation with the need to track site‑level budgets. The county also reported savings identified by third‑party procurement analyses (Procure America) and by prior work with TSS.

The committee voted to receive the audit and asked administration to return with a six‑month status report on progress implementing the auditor’s recommendations, including areas where the administration does not plan to implement recommendations and where alternate proposals are proposed.

Committee action: motion to receive the audit and request a six‑month follow‑up passed on the committee record.

The administration and the audit team will present implementation progress, updated financial estimates and any formal disagreements or alternatives to the auditor’s recommendations at the follow‑up briefing.