Editor's Note: This report showing Modoc County negative fund balances was provided to the Board of Supervisors by Treasurer Cheryl Knoch at the Jan. 12 board meeting.
negative 550 Hospital (12,629,513)
negative 501 Tax Fund (2,407,975)
negative 103 Calworks Fund (651,202)
negative 4644 Newell Water Project (455,853)
negative 4736 ERAF (ED Revnue Aug Fund) (396,907)
negative 4642 Newell 05-FWHG326 (45,892)
negative 375 TEACH, Inc (36,684)
negative 4775 Unapportioned Interest (11,249)
negative 135 Grant Funding (8,938)
negative 4615 P.A. Fund Sec 1464 (4,779)
negative 202 Bidwell Light (3,796)
negative 250 Modoc Co. Air Pollution (3,473)
negative 151 Fish and Game Fund (3,341)
negative 4600 Trial Ct. Trust CCP116.230 (3,010)
negative 4726 Recordr Revolvng T&A (1,724)
negative 4527 Admin Fees - VIC Restitn (1,491)
negative 4539 AB3000 (1,225)
negative 4738 DNA Addtl. GC76104.7 (535)
negative 4617 Restitution Fnd PC1203.04 (503)
negative 4604 Automation Fnd GC68090.8 (419)
negative 4727 Burial Permit Sec. 103692 (272)
negative 4608 P.A. Fish & Game PC 1464 (262)
negative 4536 Cert Marr Diss GC26832.1 (170)
negative 4624 Trial Court Trust Fund (108)
negative 4611 Trial Court Bail Deposit (43)
negative 4623 Traum Brain Inj PC1464 (B) (29)
negative 4542 Fmly Llw Trst GC 26832 (26)
negative 4529 Marriage Trust - Recorder (17)
negative Total $ (16,669,436)
positive Total $ 29,556,882
Grand Total $ 12,887,446
Thursday, January 14, 2010
Wednesday, January 13, 2010
FAQ
Editor's Note: These answers to frequently asked questions were released today by the Modoc County Incident Management Team and are published verbatim.
Frequently Asked Questions
What factors led to the Count’s cash deficit?
There were many factors, but the bottom-line is that cash balances within
the County Treasury were not reviewed and controlled over a period
of nearly 10 years.
What steps has the County taken to resolve the issues, such as
a. Budget cuts and cost savings -
Were done at the beginning of FY 09-10 to balance the current year budget including cash flows.
b. New policies –
Numerous policies and procedures have been put into place and will continue to be enacted including regular budget monitoring, warrant payable policies, prioritization and deferral of non-essential expenditures. The county financial audit will result in numerous additional policies and procedures in regards to accounting practices.
c. Financing –
Both short term and long term financings of county cash flows and remediation of deficit fund balances in the county treasury are underway.
What is the County’s cash deficit?
As of December 31st. the negative cash balances in the county hospital operating fund is $ 12,629,436
What happens if the treasury is not restored?
If the treasury is not restored by the amount of unauthorized negative cash balances, then the County assumes a risk of insolvency or not being able
to pay obligations such as payroll, vendor checks or any other payments for all county programs and services. There may be personal and professional liability assumed by elected officials and others due to violations of various statutes contained within the government code, penal code, and possible other code sections.
Is the hospital putting money into the County treasury? Yes. Do they have a payment plan? Yes, to the extent there is surplus cash at the end of every month.
It has been suggested that the County file for bankruptcy. What is your response to that?
We do not believe bankruptcy is a viable option. The “debt” is not to outside lenders, but to county programs and departments with restricted funding. Bankruptcy does not restore one cent to the county treasury or eliminate the requirement to finance the deficit. The process is very time consuming and expensive. A special master would be appointed to prioritize cash payments. A bankruptcy judge would not have the authority to usurp budgetary or governance decisions from the Board of Supervisors.
What is the next step?
We are proceeding down several concurrent tracks:
Finalize the short term financing line of credit.
Expedite the county financial and single audits for FY 2008-9 and 2009-10.
Proceed with putting the long term financing in place by March, 2010 in order to restore funds within the county treasury.
Start the FY 2009-10 midyear budget review as well as start preparing the FY 2010-11 budgets.
What cuts are going to happen next?
Mid-year budget reviews will be aimed at ensuring that reserves are sufficient to support the financial and single audits for FY 07-08 as well as developing the plan for long term financing.
Frequently Asked Questions
What factors led to the Count’s cash deficit?
There were many factors, but the bottom-line is that cash balances within
the County Treasury were not reviewed and controlled over a period
of nearly 10 years.
What steps has the County taken to resolve the issues, such as
a. Budget cuts and cost savings -
Were done at the beginning of FY 09-10 to balance the current year budget including cash flows.
b. New policies –
Numerous policies and procedures have been put into place and will continue to be enacted including regular budget monitoring, warrant payable policies, prioritization and deferral of non-essential expenditures. The county financial audit will result in numerous additional policies and procedures in regards to accounting practices.
c. Financing –
Both short term and long term financings of county cash flows and remediation of deficit fund balances in the county treasury are underway.
What is the County’s cash deficit?
As of December 31st. the negative cash balances in the county hospital operating fund is $ 12,629,436
What happens if the treasury is not restored?
If the treasury is not restored by the amount of unauthorized negative cash balances, then the County assumes a risk of insolvency or not being able
to pay obligations such as payroll, vendor checks or any other payments for all county programs and services. There may be personal and professional liability assumed by elected officials and others due to violations of various statutes contained within the government code, penal code, and possible other code sections.
Is the hospital putting money into the County treasury? Yes. Do they have a payment plan? Yes, to the extent there is surplus cash at the end of every month.
It has been suggested that the County file for bankruptcy. What is your response to that?
We do not believe bankruptcy is a viable option. The “debt” is not to outside lenders, but to county programs and departments with restricted funding. Bankruptcy does not restore one cent to the county treasury or eliminate the requirement to finance the deficit. The process is very time consuming and expensive. A special master would be appointed to prioritize cash payments. A bankruptcy judge would not have the authority to usurp budgetary or governance decisions from the Board of Supervisors.
What is the next step?
We are proceeding down several concurrent tracks:
Finalize the short term financing line of credit.
Expedite the county financial and single audits for FY 2008-9 and 2009-10.
Proceed with putting the long term financing in place by March, 2010 in order to restore funds within the county treasury.
Start the FY 2009-10 midyear budget review as well as start preparing the FY 2010-11 budgets.
What cuts are going to happen next?
Mid-year budget reviews will be aimed at ensuring that reserves are sufficient to support the financial and single audits for FY 07-08 as well as developing the plan for long term financing.
ICS Update
Editor's Note: This update from the Modoc County Incident Management Team is published verbatim.
Modoc County Fiscal RestorationUpdate Date: 01/11/10
The Incident Management Team continues to move forward. Mid-year budget reviews will be taking place to make decisions that will save additional County dollars.
Operational Period Accomplishments 12/14/09-01/11/10
Information has been collected by the Department Revenue and Saving Group. A savings of $1.5 million has been identified with potential ideas going to the Board of Supervisors. The CAO’s office will be meeting with Department Heads to do a mid-year review of budgets by the end of January, beginning of February.
The terms of the Short Term Loan proposal has been approved and is waiting for finalization and signatures from the Board of Supervisors. The Short Term financing is in the form of a line of credit.
The 07-08 audit is on time and scheduled to be completed in mid-February. The 08-09 audit should still be completed by mid-March.
Supervisor Dan Macsay, Richard Arrow, and Rick Rudimetkin met with Senator Cox and Assemblyman Nielson in Sacramento. They indicated they are willing to assist Modoc County during this time. The State Controllers Office also stresses the need for restoration of the treasury as soon as possible. The State Controllers office has extended support to help expedite payments and reimbursements on a case by case basis.
Diane Fogle, Dan Macsay, and Kim Hunter, Modoc County Liaison Team will be attending a City Council meeting 1/12/2010. The City and County continue to work together on topics to assist the County.
To dispel any misinformation, MMC is not closing. The current cash deficit within the Modoc Medical Center Hospital fund as of December 31st is $12,629,436.
Modoc County Fiscal RestorationUpdate Date: 01/11/10
The Incident Management Team continues to move forward. Mid-year budget reviews will be taking place to make decisions that will save additional County dollars.
Operational Period Accomplishments 12/14/09-01/11/10
Information has been collected by the Department Revenue and Saving Group. A savings of $1.5 million has been identified with potential ideas going to the Board of Supervisors. The CAO’s office will be meeting with Department Heads to do a mid-year review of budgets by the end of January, beginning of February.
The terms of the Short Term Loan proposal has been approved and is waiting for finalization and signatures from the Board of Supervisors. The Short Term financing is in the form of a line of credit.
The 07-08 audit is on time and scheduled to be completed in mid-February. The 08-09 audit should still be completed by mid-March.
Supervisor Dan Macsay, Richard Arrow, and Rick Rudimetkin met with Senator Cox and Assemblyman Nielson in Sacramento. They indicated they are willing to assist Modoc County during this time. The State Controllers Office also stresses the need for restoration of the treasury as soon as possible. The State Controllers office has extended support to help expedite payments and reimbursements on a case by case basis.
Diane Fogle, Dan Macsay, and Kim Hunter, Modoc County Liaison Team will be attending a City Council meeting 1/12/2010. The City and County continue to work together on topics to assist the County.
To dispel any misinformation, MMC is not closing. The current cash deficit within the Modoc Medical Center Hospital fund as of December 31st is $12,629,436.
Tuesday, January 12, 2010
Modoc-gate
State Willing to Help, But Takes Hard Line
Modoc County representatives returned from their Sacramento lobbying trip last week with a hard line message from the state: Restore the $12.6 million the board of supervisors misappropriated from the treasury as soon as possible.
Underlying that mandate was the potential liability each of the supervisors as individuals could face, in addition to the county government being liable.
`
At the same time the State Controller’s Office indicated it will help in expediting cash flows from state agencies if the process is conducted through the controller’s accounting division.
Hanging over the collective head of the board of supervisors is the state’s repeated message that the longer the county takes in replacing the money it took from the treasury without authorization the greater the risk of liability.
“The Controller indicated that the longer it took to complete the repayment of negative balances within the treasury, the more risk that county officials and the county would be exposed to,” Richard Arrow, the county‘s independent financial advisor said following the Jan. 12 board meeting.
“This is because the Controller indicated that negative fund balances within the treasury are illegal,” Arrow explained. “There are a number of statutes within the government and other code sections that are involved.”
In reporting on the lobbing effort and the state’s response Arrow added, “They want us to do the right thing.”
The board received two reports, one from Interim CAO Rick Rudometkin and the other from Arrow, without comment or questions from any of the five supervisors.
Rudometkin’s report on the all important lobbying trip to Sacramento lasted two minutes and Arrow’s presentation lasted 11 minutes, including Dan Macsay and Patricia Cantralls' digression on the subject of the State Fish & Game’s failure to make “in lieu of taxes” payments to the county.
Between the two reports the board devoted a total of 13 minutes to the most important issue the county is facing, and that is returning $12.6 million of misappropriated money to the treasury.
To put this in perspective: the board met for a total of 2 hours and 24 minutes and spent nearly 30 minutes of that time, on a relatively moot matter of funding a county trapper to keep the coyote population down, compared to the total of 13 minutes its gave to the county‘s fiscal crisis.
Rudometkin also told the board his Incident Command System (ICS) team is “working on a plan of attack” and will “probably be coming to board in a couple of weeks with hard facts and issues for the board to consider.”
Macsay, the third member of the lobbying contingent, made only a brief statement on his participation saying, “Everyone was extremely cooperative. They are willing to work with us. They fully understood our compassion.”
-- Ray A. March
Modoc County representatives returned from their Sacramento lobbying trip last week with a hard line message from the state: Restore the $12.6 million the board of supervisors misappropriated from the treasury as soon as possible.
Underlying that mandate was the potential liability each of the supervisors as individuals could face, in addition to the county government being liable.
`
At the same time the State Controller’s Office indicated it will help in expediting cash flows from state agencies if the process is conducted through the controller’s accounting division.
Hanging over the collective head of the board of supervisors is the state’s repeated message that the longer the county takes in replacing the money it took from the treasury without authorization the greater the risk of liability.
“The Controller indicated that the longer it took to complete the repayment of negative balances within the treasury, the more risk that county officials and the county would be exposed to,” Richard Arrow, the county‘s independent financial advisor said following the Jan. 12 board meeting.
“This is because the Controller indicated that negative fund balances within the treasury are illegal,” Arrow explained. “There are a number of statutes within the government and other code sections that are involved.”
In reporting on the lobbing effort and the state’s response Arrow added, “They want us to do the right thing.”
The board received two reports, one from Interim CAO Rick Rudometkin and the other from Arrow, without comment or questions from any of the five supervisors.
Rudometkin’s report on the all important lobbying trip to Sacramento lasted two minutes and Arrow’s presentation lasted 11 minutes, including Dan Macsay and Patricia Cantralls' digression on the subject of the State Fish & Game’s failure to make “in lieu of taxes” payments to the county.
Between the two reports the board devoted a total of 13 minutes to the most important issue the county is facing, and that is returning $12.6 million of misappropriated money to the treasury.
To put this in perspective: the board met for a total of 2 hours and 24 minutes and spent nearly 30 minutes of that time, on a relatively moot matter of funding a county trapper to keep the coyote population down, compared to the total of 13 minutes its gave to the county‘s fiscal crisis.
Rudometkin also told the board his Incident Command System (ICS) team is “working on a plan of attack” and will “probably be coming to board in a couple of weeks with hard facts and issues for the board to consider.”
Macsay, the third member of the lobbying contingent, made only a brief statement on his participation saying, “Everyone was extremely cooperative. They are willing to work with us. They fully understood our compassion.”
-- Ray A. March
Are You Interested?
In the Future of Modoc County?
The North Cal-Neva Resource Conservation and Development Council (RC&D) is hosting a forum focused on listening to local recommendations.
WHEN: Thursday, Jan. 21, 10 a.m.
WHERE: Alturas City Hall - 200 North St.
WHO: The North Cal-Neva RC&D in partnership with USDA Natural Resources Conversation Service Rural Development, the City of Alturas, Modoc County and the Alliance for Workforce Development will moderate the forum.
Bring your ideas and comments to address the following questions:
Contact: Mark Steffek, coordinator 530-233-8868
MARK.STEFFEK@CA.USDA.GOV
Stacey Hafen, director of administrative services 530-233-8871
STACEY.HAFEN@CA.USDA.GOV
In the Future of Modoc County?
The North Cal-Neva Resource Conservation and Development Council (RC&D) is hosting a forum focused on listening to local recommendations.
WHEN: Thursday, Jan. 21, 10 a.m.
WHERE: Alturas City Hall - 200 North St.
WHO: The North Cal-Neva RC&D in partnership with USDA Natural Resources Conversation Service Rural Development, the City of Alturas, Modoc County and the Alliance for Workforce Development will moderate the forum.
Bring your ideas and comments to address the following questions:
- What are the opportunities for growth in Modoc County?
- What do you see as jobs of the future?
- What are the obstacles to job creation in Modoc County?
- Are there specific changes to federal government (USDA) rural programs and regulations that could positively impact development of businesses in Modoc County or that would strengthen current businesses?
- What innovative ideas should the federal government (USDA) consider to increase economic opportunities in Modoc County?
Contact: Mark Steffek, coordinator 530-233-8868
MARK.STEFFEK@CA.USDA.GOV
Stacey Hafen, director of administrative services 530-233-8871
STACEY.HAFEN@CA.USDA.GOV
Monday, January 11, 2010
Opportunity Scholarship
The Opportunity Scholarship Fund at the Shasta Regional Community Foundation is now accepting applications for 2010. Through this fund three graduating high school seniors will be selected to receive a scholarship of up to $10,000 for the first four years of college. Seniors from Lassen, Modoc, Plumas, Shasta, Siskiyou, Tehama and Trinity Counties are invited to apply. The deadline is March 31, 2010.
To be eligible for this scholarship the student must attend a Cash for College workshop in January or February, must be eligible for Cal Grant funding and must have submitted a FAFSA.
For more details see the scholarship application at www.shastarcf.org or www.mycollegequest.org. Call Juliette Read with the Community Foundation at 530-244-1219 with questions.
To be eligible for this scholarship the student must attend a Cash for College workshop in January or February, must be eligible for Cal Grant funding and must have submitted a FAFSA.
For more details see the scholarship application at www.shastarcf.org or www.mycollegequest.org. Call Juliette Read with the Community Foundation at 530-244-1219 with questions.
Quotes to Remember
“I’ve decided to take a wait and see approach. I hope this group gets involved in helping to solve county issues. But right now they’re divided between federal, state and local concerns.”
-- Doug Knox, known locally as the moving force behind the “Fix It First” campaign, was among 75 people who attended the Dec. 10 meeting of the Tea Party held at the Veteran’s Hall in Alturas.
-- Doug Knox, known locally as the moving force behind the “Fix It First” campaign, was among 75 people who attended the Dec. 10 meeting of the Tea Party held at the Veteran’s Hall in Alturas.
Sunday, January 10, 2010
Modoc-gate
Save Our Hospital Roadblocks Continue
The Modoc County Board of Supervisors was on the California Secretary of State’s radar this past week.
The Save Our Hospital Committee filed an “intention to circulate a petition” with Modoc County Registrar of Voters Tracey Sides. This document is the first step in the process of putting an initiative on the ballot for a vote to create a hospital district.
The election code requires that the “intention to circulate a petition” be reviewed by county counsel and returned to the proponents through the elections office within 15 days of filing. The elections office did not submit the paperwork in a timely manner to Modoc county counsel John Kinney according to Lau Miller, Save Our Hospital spokesperson. The paperwork was not returned to the Save Our Hospital Committee within the required 15 days, meaning the elections office was out of compliance.
The Modoc Independent News asked Sides what accounted for the delay. County auditor Alice Marrs replied on behalf of Sides, “We don’t know. We’ve re-sent the paperwork to the lawyer,” she said.
After learning of the delay Miller telephoned the California Secretary of State.
“We’ve encountered roadblocks from the Board of Supervisors throughout this process. I asked the Secretary of State what our next step should be. Her office said the Board of Supervisors is responsible for insuring the compliance of the elections department. Her office also said that if the elections department did not comply, the Secretary of State’s office would intervene.”
Supervisors Pat Cantrall and Jeff Bullock attended the Save Our Hospital Committee meeting on Thursday, Jan 7, according to Miller, with the intention of delivering a letter to the committee chastising them for harassing the elections officer and her staff. After Miller shared the Secretary of State’s message, Cantrall said she would see to it that the paperwork be returned to the Save Our Hospital Committee by Tuesday, Jan. 12.
Miller told the Modoc Independent that the Save Our Hospital Committee has opened an office at 333 N. Main St. in Alturas in space donated by Dick Steyer.
The Modoc County Board of Supervisors was on the California Secretary of State’s radar this past week.
The Save Our Hospital Committee filed an “intention to circulate a petition” with Modoc County Registrar of Voters Tracey Sides. This document is the first step in the process of putting an initiative on the ballot for a vote to create a hospital district.
The election code requires that the “intention to circulate a petition” be reviewed by county counsel and returned to the proponents through the elections office within 15 days of filing. The elections office did not submit the paperwork in a timely manner to Modoc county counsel John Kinney according to Lau Miller, Save Our Hospital spokesperson. The paperwork was not returned to the Save Our Hospital Committee within the required 15 days, meaning the elections office was out of compliance.
The Modoc Independent News asked Sides what accounted for the delay. County auditor Alice Marrs replied on behalf of Sides, “We don’t know. We’ve re-sent the paperwork to the lawyer,” she said.
After learning of the delay Miller telephoned the California Secretary of State.
“We’ve encountered roadblocks from the Board of Supervisors throughout this process. I asked the Secretary of State what our next step should be. Her office said the Board of Supervisors is responsible for insuring the compliance of the elections department. Her office also said that if the elections department did not comply, the Secretary of State’s office would intervene.”
Supervisors Pat Cantrall and Jeff Bullock attended the Save Our Hospital Committee meeting on Thursday, Jan 7, according to Miller, with the intention of delivering a letter to the committee chastising them for harassing the elections officer and her staff. After Miller shared the Secretary of State’s message, Cantrall said she would see to it that the paperwork be returned to the Save Our Hospital Committee by Tuesday, Jan. 12.
Miller told the Modoc Independent that the Save Our Hospital Committee has opened an office at 333 N. Main St. in Alturas in space donated by Dick Steyer.
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