Sacramento --

The California commission in charge of leases on state lands has failed to collect millions of dollars in payments, an audit released Tuesday has found.

The audit of the State Lands Commission, conducted by State Auditor Elaine Howle, found that the commission has not evicted businesses that have failed to pay rent for many years and is slow to reappraise the value of leased land that could lead to higher payments to the state.

One Bay Area business, Crockett Marine Service in Contra Costa County, has not paid rent to the state since 1989 and owes $662,000, including penalties and interest, the auditor found. Nine other businesses have not paid rent for many years as well.

The audit was a sampling of 35 leases overseen by the commission and in those Howle found about $8.2 million in uncollected revenue. The Lands Commission oversees about 1,000 leases that require businesses or other entities to pay rent to the state, along with 3,200 leases that don't generate revenue.

'Missed opportunities'

"The report concludes the commission has not always managed its more than 4,000 leases in the state's best interest with the result that it has missed opportunities to generate millions of dollars in revenues for the state's general fund," Howle wrote in a letter Tuesday to Gov. Jerry Brown and legislative leaders that accompanied the audit.

In the 35 leases sampled, the auditor found a total of $1.6 million in delinquent payments, about $270,000 in potential increases from expired leases and about $6.3 million worth of potential increases in rent for current leases.

The State Lands Commission oversees about 4.5 million acres in California, including rivers, lakes and coastline. It also is responsible for school land. Most of the money generated by leases - a total of more than $400 million last year that went to the state's general fund - came from royalties on oil taken from the ground.

Curtis Fossum, the executive officer for the commission, acknowledged that the entity has some "legitimate shortcomings," but said the auditor's sample of leases that were examined did not reflect the bulk of the commission's work.

'Staff has shrunk'

"The examples they used I think oversimplify the situations involved," he said. Fossum also noted a significant decline in staff whose salaries are paid by the general fund has shrunk from 242 in 1990 to 63 today. "Our staff has shrunk to the point where it's very hard to keep up with all the leases," he said.

Howle noted that the commission has not done any analysis of workload and staffing needs and has not requested additional positions for oversight of the leases. She made a number of recommendations of procedures the commission should implement, and Fossum said he agreed with those and that they would be enacted.

The State Lands Commission is controlled by three officials, Lt. Gov. Gavin Newsom, Controller John Chiang and Department of Finance Director Ana Matosantos.

Fossum conceded that in the case of Crockett Marine Service, which does boat repair, "We don't really know what happened with this one." A division of the commission had determined in 1998 - nine years after the business stopped paying rent - that it had no justifiable reason to do so, but little action was taken, the audit found.

Also in the course of the audit, officials determined that the business was actually subleasing the land to the Nantucket restaurant. According to business records, the marine service and restaurant are owned by the same person, Ken Carver.

The situation was turned over to the attorney general's office, which filed court papers last week in the matter.

Reached by telephone, Carver's wife declined to comment on the situation, though she said her husband was very ill and was suffering from significant memory loss.

'Pretty eye-opening'

Former Sen. Dave Cogdill, a Modesto Republican who is now assessor in Stanislaus County, said that situation and the others uncovered by the auditor reflected his concerns in requesting the audit while he was in office at the Capitol last year.

"It's pretty eye-opening what she found," Cogdill said, adding later, "To a certain extent it's worse than we thought."