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Dear friends of inewsource,

We pride ourselves on producing investigative journalism that has impact, and this week was extraordinary. As you’ll read below, some homeowners are getting significant tax refunds because of our reporting!

Thanks to your support, this kind of reporting — and these results — are possible. We are grateful.

Please spread the word! Forward this newsletter to a friend.

— Lorie Hearn, executive director, inewsource

What’s the buzz at inewsource

Prophetic words

It turns out former inewsource staffer Kevin Crowe was justifiably optimistic when the interactive map comparing Mello-Roos fees in San Diego County was about to be unveiled: “I think this is when tips are going to start coming for more interesting stories, when people see they’re paying X dollars when their neighbor is paying Y.”

He called it!

A neighborly North County homeowner who had studied the Mello-Roos map contacted us because his neighbor seemed to be overpaying Mello-Roos fees. Then inewsource’s Kelly Paice found another property that appeared to have unexpectedly high fees. She and investigative reporter Joanne Faryon were able to verify that homeowners for the two properties had been overcharged thousands of dollars. As we reported this morning on the radio and on the web, the city of San Diego is preparing to refund the money, with interest, and is examining the tax bills for more than 340 other properties in the suspect neighborhood.

Faryon said, “I think this is just the beginning. Cities and school districts have been collecting Mello-Roos payments for decades with few questions asked by media or anyone else. It’s rewarding to see our team’s efforts having such a direct public impact.”

Tune in to Evening Edition on KPBS tonight at 5 and 6:30 to see and hear Joanne talk about this investigation.

‘Accountability matters’

An audit commissioned by North County Transit District corroborates inewsource’s exposure of serious problems with the agency’s contract management, but the audit wasn’t presented to the district’s board of directors until recently, according to a report by inewsource’s Brad Racino.

The consulting firm SC&H flagged issues regarding contracts awarded without competitive bidding or adequate monitoring.

As Racino explained, that lack of oversight on contracts is especially problematic for an agency that in two years cut 80 percent of its staff and turned over that work to contractors.

Richard Katz, a board member for two large transportation agencies in Los Angeles and a former California State Assemblyman, spoke freely to Racino about his reactions to the audit report. Perhaps the most chilling was a single word: “frightening.”

Underground taxi permits take a toll

KPBS’s investigative reporter Amita Sharma partnered with inewsource’s data analyst Ryann Grochowski in exploring the highly profitable shadow market in taxi permits. In the two-part series that continued this morning on KPBS radio, Amita explained how the underground sale of the permits can exploit drivers, riders and taxpayers. The costly permits lead drivers to work dangerously long hours for low wages, force up fares and bypass taxes, her sources said.

Since the Metropolitan Transit System still hasn’t acted on a 2010 study pointing out problems with the current arrangement, Mayor Bob Filner wants the city to take over control of taxi permits.

Good reads close to home …

And justice for all?

Voice of San Diego continues its investigation into the binding arbitration agreements written into more and more contracts, including those for cell phones, car purchases and employment.

Keeping contract disputes out of court may sound like a reasonable cost-cutting idea, but reporter Will Carless pointed out one major downside: A 2008 suit in California against an arbitration company found that from Jan. 1, 2003, to March 31, 2007, arbitrators came out on the side of the corporations 99.8 percent of the time. As Carless explained, corporations pay for the arbitration and can stipulate which arbitration companies they’ll accept. Because transparency requirements for arbitration companies are widely ignored, it’s tough to tell how typical this is. The state Assembly Judiciary Committee is hoping to change that, according to the Voice of San Diego story.

Nonprofit news groups experience growing pains

Even though the number of small, modestly funded nonprofit news organizations such as inewsource has grown to 172 across the country in the last 25 years, most still worry about having enough business skills and resources to stay afloat for the long term.

More than half of the nonprofit news groups responding to a Pew Research Center cited business, marketing and fundraising as their greatest needs, while 39 percent put editorial needs at the top of their wish list. These nonprofits, located in all but nine states, range from the hyperlocal Aspen Journalism in the Public Interest, with a staff of one, plus free-lancers and collaborators at other organizations, to New York-based ProPublica, with a staff just over 50, and 100Reporters, which uses professional reporters to follow tips from “whistle-blowers and citizen journalists across the globe, to report on corruption in all its forms.”

Many groups like ours get along on large seed grants at first, but with a crew of just five or fewer, they have to struggle to find staff time to pursue more enduring revenue streams.

About a third of the organizations surveyed, including inewsource, have independent 501(c)(3) status, and most of these independent groups report having at least three main sources of income.

That means we’re not alone in our search for new ways to pay for the labor-intensive work of investigative news coverage.

The Pew study ended on a high note: More than 80 percent of the nonprofit news organizations are either “very confident” (26 percent) or “somewhat confident” (55 percent) that they’ll still be solvent five years from now.

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Lorie HearnCEO, Editor and Founder

Lorie Hearn is the chief executive officer and editor of inewsource. She is a lifelong news-aholic who started her reporting career writing her Girl Scout newsletter at age 12. High school and college were filled with school newspaper work, and after graduation, she worked as a reporter for newspapers...