Budget Cuts Needed to Pay Loan Debt

The Modoc County CAO’s office has calculated "cuts and revenue increases" for the 2010-2011 budget for each general fund county department.

These cuts or revenue increases are necessary to come up with the $1.5 million needed to service the debt the county will incur in restoring $12.7 million to the treasury.

This means that departments will either have to cut or increase revenue by a set amount compared to the 09/10 budget.

Departments hardest hit include the Modoc County Board of Supervisors whose yearly expense is $438,216 with no revenue. Their target number to cut is $57,478.84.

“The CAO’s office recognizes that meeting these goals will not be easy for any department,” said Assistant CAO Darcy Locken, “but the hope is that the departments will work together. I encouraged the department heads to collaborate, as some departments stated in the mid-year reviews that they will be able to exceed their goals.”

Among those departments hardest hit because they have little or no income stream are the Auditor’s office which has to cut $36,882.33, the Assessor at $63,658.99, and the District Attorney at $48,902.05. Buildings & Grounds has to cut $57,566.43, Planning Department must trim $17,323.21.

Several of these departments have already cut down to labor as their only expense. Locken’s office is interested in the bottom line and she hopes departments will cooperate and collaborate with each other and come up with creative solutions to meet their target numbers.

To arrive at the department target numbers, Locken first determined the percentage of the “General Fund Contribution” required by each department. She multiplied this percentage by each department’s 09/10 budgeted expenses to determine the amount they would be required to cut or increase revenues for 10/11.

This percentage calculation added up to less than $1 million. So five percent was added across the board to reach $1 million, still shy of the $1.5 million ultimate goal. Locken explained how the county will reach the final $1.5 million debt service amount.

“To reach the final $1.5 million goal there are "non-departmental" cuts or revenue increases that can meet the remaining $500,000 subject to the board of supervisors, and in some cases, bargaining unit, approval,” Locken said.

-- Barbara March

Virginia Pierce Invited to the White House

Virginia Pierce is a woman who knows her mind. As well she should, having flown aircraft during World War II

Anyone who attends board of supervisors' meetings knows Virginia. She has been a fixture there for years, knitting in hand. Virginia seldom speaks out, but has definite opinions.

The board of supervisors recognized Virginia Pierce this past Tuesday with a round of applause. She has been invited to a reception at the White House to honor "Women Airforce Service Pilots."

Congratulations Virginia!

Cantrall Looses Cool at SOH

The Modoc County Board of Supervisors meeting Feb. 23 was coming to another stressful close. People were getting up and leaving when Supervisor Patricia Cantrall gave her unexpected ultimatum.

“Don’t expect to count on me, Judy Mason,” she said.

And Cantrall waved a white piece of paper in her raised hand.

Outside the board room, Mason was puzzled when asked what Cantrall was referring to, and said she didn‘t know.

But inside, Cantrall was livid, and when asked why the out burst, she produced a copy of a letter addressed to District Attorney Gary Woolverton. The letter, dated Jan. 29, was a complaint from the Save Our Hospital committee (SOH), of which Mason is a member, alleging that the county is in violation of election laws.

The letter, first published on this blog Feb. 2, states in part:

“We request that you take appropriate legal action against the Modoc County elections official, board of supervisors and county counsel for violating California Election Code 9105 (a) and for the violation of civil rights of citizens in Modoc County who filed this request to circulate the proposed measure as of December 18, 2009.”

The crux of SOH’s complaint is that John Kenny, county legal counsel, has failed to comply with election laws by not preparing a neutral statement to appear on the ballot asking for the formation of a hospital district.

Kenny spent considerable time skirting the issue during the meeting, but did not explain his lack of response to the SOH’s request for the impartial statement. The question of non-compliance by the board and its legal counsel was not directly addressed by the board and went unresolved.

Cantrall’s ill humor was not because of the inaction by the board, but because she felt the SOH letter had “blindsided” her.

“After what I’ve done for them,” she said packing up her lap top. “I helped raise $2,000 for that committee and they do this,” she said pointing back to the letter.

“As far as I am concerned they can go to hell.” And she walked out.

-- Ray A. March

BOS Accepts Offer of Help

(Don Demsher and Alan Hopkins present their offer
to the Board of Supervisors.)

The Modoc County Board of Supervisors, with some debate and a candid confession of needing help, yesterday (Feb. 23) took the hand offered them by the “Monday Group” to look for alternatives in replacing an estimated $12.5 million to the treasury.

The vote was unanimous, but not without debate.

The supervisors, facing a deadline of June 30, are under pressure from the California State Controller’s Office to restore money to the treasury they illegally used in recent years to fund the debt-ridden Modoc Medical Center.

The establishment of the "Monday Group," a citizens’ ad hoc committee will give a more formal entrée for the public to participate in the process. The committee will make a report back to the board regarding these specific points:

1 .- The amount of restricted funds expended outside of their intended purpose.

2. - The funding sources which were used to cover general fund expenses.

3. - Federal and state funds, such as restricted grants for Mental Health and road uses, which were used in general fund expenditures.

4. - Any discussions held with federal and state officials regarding repayment which might be negotiated for approval by those agencies.

5.- Any plans that have been made to use hospital surplus funds in rebuilding the county general fund.

In addition, the citizens group will seek information on any financing alternatives that have been considered to close the general fund deficit, to include:

1. - Budget cuts.

2. - Short-term financing.

3. - Long-term financing (e.g. bonds).

4. - Development of repayment plans for restricted state and federal funds.

5. - Forgiveness of certain repayment obligations.

6. - Non-interest or low-interest loans from either federal or state sources.

At one point Alan Hopkins, representing the "Monday Group" along with Don Demsher, told the board that the public’s perception was “you are out there floundering on the issue.”

Supervisor Cantrall responded, “Yes, we’re floundering. We’ll accept any help we can get.”

Supervisor Jeff Bullock, while voting in favor of supporting a citizens’ ad hoc committee, was skeptical. “We’ve been discussing this for a long time. We have to June 30. This is too little, too late,” he said. “It’s not that we don’t want the help, but nobody stepped in to help in July when we needed the help.”

The next step for the Monday Group is to announce its membership, although its makeup is not subject to board approval.

Modoc-gate

Crabtree Critical of BOS "Threesome"


Supervisor Shorty Crabtree is a man of few words at board meetings. But when he speaks, his words are well chosen. This was particularly expressed when he recently voted against hiring Rick Rudometkin as the county’s chief administrative officer. Crabtree said, "I think you should go on down the road."

At the time, Crabtree was clearly frustrated with his colleagues, specially Patricia Cantrall, Dan Macsay and David Bradshaw. The Modoc Independent News asked Crabtree if he would expand on his views of the county’s financial crisis and how it is being handled.

Q. In your opinion what are Modoc County’s top priorities right now?

Crabtree: Modoc’s top priorities are to step back and realize that we are in a bad money crunch due to poor leadership and the misappropriation of funds for the past several years. We need to look deep into what is happening, tighten our belts and bring ourselves out of this predicament we are in.

Q. What is your long-term goal as a supervisor regarding issues facing the county? In other words what would you like to see accomplished during your term?

Crabtree: My long-term goal is to not have any business behind the scenes. Be honest and polite to the people when they come to the meetings. Work on solving our money problems without going into debt for 30 years, and make better decisions when hiring our department heads.

Q. What is your position on the proposed formation of a hospital district? Are you in favor or against a district, and why?

Crabtree: I want to make it perfectly clear that I am in favor of good medical care. I do not want to see the hospital close. I am opposed to the way the district was set up. We will let the people make the decision of a district or a county hospital.

Q. Should the hospital be used as part of the collateral necessary for a long term loan, or should it be left to a district, if a district were formed?

Crabtree: I am against any long-term loans.

Q. Would you consider asking that an independent study be initiated to weigh the pros and cons of these four options: 1. Continuing a county-owned hospital, 2. A hospital district, 3. Selling the hospital to a private buyer, 4. Closing the hospital?

Crabtree: I think every avenue has been looked at when it comes to the hospital. I still maintain that with good management, the hospital should stand on its own.

Q. What, in your opinion, is the board doing to eventually replace the money in the treasury?

Crabtree: I do not know what the board is doing to replace the money in the treasury. It seems like there are three members on the board who seem to have some plan that they haven’t let the rest of the board members and the public know about. I have yet to hear what our $150,000 CAO/Director of Transportation is doing to solve our problems. What he is doing behind the scenes has not been told to all of the board of supervisors. I guess that is why myself and Jeff Bullock voted no on his demands. The other three supervisors keep hiring these high-priced positions to people that have no vested interest in our community and when their contracts are up, they will be down the road leaving us holding the bag.

Q. What is the board currently not doing that potentially could replace the money in the treasury? In other words, is there something else it can do?


Crabtree: The board is currently not listening to the people.

Q. How important is it to replace the money to the treasury?

Crabtree: It is extremely important to replace that money.

Q. Would you support town hall meetings moderated by a neutral party at which the public can ask questions of the three members of the board of supervisors who were present when the money was misappropriated?

Crabtree: I am very much in favor of town hall meetings because I am interested in what the people have to say, but I doubt very much that you could get all of the supervisors to attend and answer questions. I suggest you come to the board of supervisors meetings.

Q. One of the most frequent comments we see on the Modoc Independent Daily News Blog is the criticism of the board’s unwillingness to be accountable for the misappropriation. Obviously this pertains to Cantrall, Bradshaw and Macsay. Are these criticisms justified? If so, why? If not, why?

Crabtree: I am so disappointed with them that I don’t know what to do anymore. Come to board of supervisors’ meetings. We have to get the people started coming to those meetings.

Q. Is it a good idea for the county to use its buildings for collateral for a long term loan?

Crabtree: Again, I say I am against any long or short-term loans. I do not feel that borrowing money is the way to go to get yourself out of debt.

Q. Wouldn’t it benefit future supervisors from making the same or similar mistake to understand how and why the misappropriation happened? Would you agree?

Crabtree: Absolutely. Your board of supervisors is only as good as the people they hire. When you hire unqualified people, you are bound to get into some kind of trouble.

County's Collateral Shrinking

The collateral foundation being laid by the Modoc County Board of Supervisors in an attempt to acquire $12.5 million in long-term loans is shrinking.

Among county-owned buildings recently listed as potential collateral for bond sales in order to replace money taken illegally by county officials from the treasury, was the Robert A. Barclay Justice Center.

But that building, insured at $1.3 million, was transferred Dec. 22, 2009 to the state.

Scratch the justice center from the list. Also removed, apparently voluntarily by the supervisors, is the Modoc Medical Center, with an insured value of $5 million.

What started originally as a plan by the supervisors to use an estimated $35 million in county-owned buildings as collateral, is now some where below $30 million.

Puzzling is the information that while the larger more modern justice center has an insured value of $1.3 million, the library building has an insured valued of $1.1 million, according to figures released by the county.

If there is a plus side to the ledger, it is that the buildings were all appraised for insured value as of August 2009, according to Richard Arrow, Modoc County CFO.

Editorial

Getting Past Modoc-gate

If you want to show your concern for the economic future of Modoc County attend this Tuesday’s board of supervisor’s meeting.

The agenda for Tuesday, Feb. 23 includes this item, “CONSIDERATION/ACTION: Establishment of Citizen’s Committee for input into need for Modoc County Financial Restructuring in 2009- 2010. (Alan Hopkins & Don Demsher)”

A volunteer citizen’s group, represented by Hopkins and Demsher and known as the “Monday Group,” is offering the board help. Made up of county leaders and business people, the “Monday Group” is presenting an opportunity to the board to accept community involvement.

This is a chance for the board to show its willingness to cooperate and collaborate with the community on resolving the county’s fiscal crisis and move toward to a brighter future.

We also hope the “Monday Group” will represent the interests of all Modoc County citizens. It may be premature, because this will be their first public appearance, but to get things off on the right foot, we believe the “Monday Group” must make it clear to the community from the outset what their purpose is and who they represent.

Open government applies to all. Closed session politics and the blame game must become a thing of the past.

Change for the good can only come when we have leaders who recognize a problem before it’s too late. In this case, it’s never too late for the supervisors to take the hand that is being extended to them.

-- Barbara March