Fines for Illegal Water Diversion
Anyone who diverts surface water will want to attend an informational meeting about the new water diversion reporting fine structure, which is part of a comprehensive state-wide water package being administered by the California State Water Resources Control Board.
The Shasta, Modoc and Lassen County Farm Bureaus and Shasta/Trinity County Cooperative Extension are holding an informational meeting on Wednesday, May 12 at the Intermountain Fairgrounds in McArthur in George Ingram Hall from 7 p.m. to 9 p.m. Danny Merkley from the California Farm Bureau will discuss the regulations and their potential impact on irrigators. Larry Forero from Shasta/Trinity County Cooperative Extension will provide information on water measurement devices and techniques.
There has been a requirement to report in effect for several years with no penalties for failure to comply. Now however, Senate Bill 8 requires that all surface water diversions be reported with few exceptions. The new law makes significant changes to the water diversion and use reporting laws. With some exceptions, those who divert water after Jan. 1, 2009, are subject to new penalties for failure to report and reporting misstatements.
The new penalties include:
Failure to report: $1,000 and $500 per day for failure to correct after 30 days.
Accidental misstatements, including those caused by a broken water measuring device: $250 and $250 per day for failure to correct after 60 days.
Willful misstatements, including those caused by tampering with a water measuring device: $25,000 and $1,000 per day for failure to correct after 30 days.
Other violations: $500 and $250 per day for failure to correct after 30 days.
For more information, please call 224-4900 or go to http://ceshasta.ucdavis.edu and download a complete agenda.
To read the an article about this controversial subject go to http://www.cfbf.com/waterreporting
Thursday, May 6, 2010
Macsay’s Resolution to Cut Off MMC
Editor’s Note: We are publishing the proposed resolution offered by Supervisor Dan Macsay in the draft form as it was received by the Modoc Independent News. This resolution, which is scheduled to go before the Board of Supervisors May 11 as No. 9 on the agenda came with a memo from John Kenny, county counsel, to Rick Rudometkin, chief administrative officer, and stated in part:
“I believe the resolution is intended to be a statement of position,” Kenny wrote. “It actually does not accomplish much. As you know, there is a procedure that the county should go through if it wishes to close or diminish services to Modoc Medical Center. Those procedures may be academic if the county does not have the money to pay supplies, personnel and other expenses necessary to run a hospital.”
RESOLUTION NUMBER __________
RESOLUTION OF THE BOARD OF SUPERVISORS
OF THE COUNTY OF MODOC REGARDING HOSPITAL FUNDING
WHEREAS, Modoc Medical Center has in the past been a significant financial drain on the County's General Fund; and
WHEREAS, the County is experiencing significant cash flow and related financial problems that render the County unable to continue to provide funding for Modoc Medical Center; and
NOW THEREFORE BE IT RESOLVED, that the Board of Supervisors will look to Modoc Medical Center to operate on a break-even basis and will not and cannot provide additional funding for Modoc Medical Center.
My motivation to become a candidate for Supervisor in Surprise Valley is because the financial crisis the county is facing is unprecedented in Modoc County's history. This crisis in all likelihood will effect the quality of our lives for years to come.
Surprise Valley has been my home for a long time. It's where I invested my life. So instead of burying my head in the sand, and hoping the problem will just go away, I've chosen to get involved.
Since 1979 I've been in the ranching business east of Cedarville. Farming and ranching is not an easy way to make a living. So consequently, over the years I've learned to handle money with care, and to think realistically and resourcefully. I understand the essence of public service, and if elected I'll do my best to help Modoc County get back on its feet, and I'll try and re instill trust and confidence back into county government.
-- David Allan
(Paid Political Advertisement)
Wednesday, May 5, 2010
Delay in County Audit Raises Concerns
Modoc County is in survival limbo as of May 5 -- five days after the first round of auditing was to be completed and with no firm date announced for the audit’s release.
After an expected release date of April 30 by outside auditors, VTD of Rancho Cucamonga, not only has no date been formally set for when the Modoc County Board of Supervisors will actually see the audit for 2007-08, but no date has been set for the board’s officially accepting the first of two audits ordered by the State Controller’s Office, according to Richard Arrow, the board’s chief financial officer.
“The auditors are diligently working on it. They are going through quality and control review,” explained Arrow, who confirmed that “no firm date” has been set for board review and approval.
The audit is critical in the Board of Supervisors’ plans for seeking long-term funding to replace the money it misappropriated from the treasury because the audit’s findings will influence Fitch Ratings, the agency that will set the county’s credit rating before it can seek $12.5 million or more in bond revenues.
Before Fitch can make a rating decision it first must receive the county “financials,” which are part of the audit. But because of the delay in releasing the audit, the county missed its April 30 time line date set by Arrow for sending the financial information to Fitch.
By state law, the county has until June 30 to balance its treasury.
The delay carries the potential signal that the results of the audit may be highly sensitive and possibly negative, requiring a top-level internal review by VTD before it’s released.
“It's hard to tell if there is something serious or just a slight delay while the partners in the firm take a quick look,” a reliable source with knowledge of the auditing process of the county told the Modoc Independent News.
“A serious problem would be highlighted in the management letter accompanying the audit," the source said. "Negative statements by VTD in the management letter will affect Fitch's rating. If Fitch gives the county a “BBB” rating, all is good. Anything lower is considered junk bond, and with Modoc County having no history of activity in the bond markets, it would be very difficult to sell even with high rates of return. If the audit doesn't show up in the next week, then it must be a very critical audit citing serious management problems.”
An audit by VTD of 2008-09, also ordered by the state, is currently underway, according to Arrow. The completion of that audit was expected by the end of May, but Arrow predicts it will now be released the first week of June.
Delays in both audits were caused by the county auditor’s historically poor record-keeping, according to statements made by both Auditor Alice Marrs and Asst. CAO Darcy Locken at Board of Supervisors' meetings.
-- Ray A. March
After an expected release date of April 30 by outside auditors, VTD of Rancho Cucamonga, not only has no date been formally set for when the Modoc County Board of Supervisors will actually see the audit for 2007-08, but no date has been set for the board’s officially accepting the first of two audits ordered by the State Controller’s Office, according to Richard Arrow, the board’s chief financial officer.
“The auditors are diligently working on it. They are going through quality and control review,” explained Arrow, who confirmed that “no firm date” has been set for board review and approval.
The audit is critical in the Board of Supervisors’ plans for seeking long-term funding to replace the money it misappropriated from the treasury because the audit’s findings will influence Fitch Ratings, the agency that will set the county’s credit rating before it can seek $12.5 million or more in bond revenues.
Before Fitch can make a rating decision it first must receive the county “financials,” which are part of the audit. But because of the delay in releasing the audit, the county missed its April 30 time line date set by Arrow for sending the financial information to Fitch.
By state law, the county has until June 30 to balance its treasury.
The delay carries the potential signal that the results of the audit may be highly sensitive and possibly negative, requiring a top-level internal review by VTD before it’s released.
“It's hard to tell if there is something serious or just a slight delay while the partners in the firm take a quick look,” a reliable source with knowledge of the auditing process of the county told the Modoc Independent News.
“A serious problem would be highlighted in the management letter accompanying the audit," the source said. "Negative statements by VTD in the management letter will affect Fitch's rating. If Fitch gives the county a “BBB” rating, all is good. Anything lower is considered junk bond, and with Modoc County having no history of activity in the bond markets, it would be very difficult to sell even with high rates of return. If the audit doesn't show up in the next week, then it must be a very critical audit citing serious management problems.”
An audit by VTD of 2008-09, also ordered by the state, is currently underway, according to Arrow. The completion of that audit was expected by the end of May, but Arrow predicts it will now be released the first week of June.
Delays in both audits were caused by the county auditor’s historically poor record-keeping, according to statements made by both Auditor Alice Marrs and Asst. CAO Darcy Locken at Board of Supervisors' meetings.
-- Ray A. March
Tuesday, May 4, 2010
Macsay Can’t Say
But Wait, There’s More
"I don’t know how to answer that question."
-- District 1 Supervisor Dan Macsay, when asked at the Surprise Valley candidates’ night what his role was in the misappropriation of an estimated $20 million from the county treasury.
While Supervisor Dan Macsay was in a quandary as to how to answer the question of his role in the Board of Supervisors’ illegal taking of money from the treasury in order to pay the bills of the debt-ridden Modoc Medical Center, he was quick to say the hospital should start paying its own way.
“I will introduce a resolution that no more funds go to the Modoc Medical Center,” Macsay revealed during the question and answer session of the May 2 candidates night in Cedarville. “The county will not fund anymore money to the hospital.”
That declaration, while yet to be brought before the board, was met with a range of reactions -- from optimism to skepticism, by Bob Duncan, recently officially appointed interim chief executive officer of MMC; Don Demsher, one of the leaders of the Monday night Group; and Judy Mason, a member of the Save Our Hospital Committee.
Duncan: “They (Board of Supervisors) don’t want the debt to increase any more. Macsay has made it clear that once we get some money aside that we work within it, so we don’t tap into the treasury. The county has to tell MMC that it has to operate within its own budget. It’s going to be tight, but the county has to secure itself financially. We talked about this, but I have not helped him draft the resolution. It has been brought up at finance committee meetings in the past.”
Demsher: “I guess we have to wait and see what the language of the resolution is and whether or not other board members will support it. Playing into this will be the August ballot measure and what impact the resolution will have on the outcome of that. We will just have to see. As for the legality of such a resolution, I defer that to county counsel.”
Mason: “We don’t have any control over what the Board of Supervisors does with one of its departments, but does that mean when Modoc Medical Center has a profitable month they keep the money or does it go into the black hole? There is a lot of detail in my mind that has to be clarified. The board can’t pony up any money because they don’t have it anyway.”
Macsay Criticizes CEO Duncan
At the May 4 meeting of the Board of Supervisors less than three days following his pronouncement that he wants to see the hospital cut lose from any county financial support -- although it is not clear just what the legalities of such a move are -- Macsay took a direct shot at Duncan’s job performance.
He said he could not support a contract naming Duncan official interim chief executive officer at MMC because Duncan was not aggressive enough.
“You need to take the bull by the horns,” Macsay said from his seat as chair of the board as Duncan sat in the front row of the audience. “You need to see the grave situation we are in. Compassion doesn’t equal up to revenue coming in.”
With that statement Macsay found himself on the receiving end of the entire board. The other four supervisors -- Patricia Cantrall, Shorty Crabtree, Dave Bradshaw and Jeff Bullock -- all came to Duncan’s defense and voted 4-1 in favor of giving Duncan a two-month contract.
Joining the supervisors in taking Duncan’s side was Rick Rudometkin, chief administrative officer, who said, “People have different styles of doing business. The contract is for two months and we need leadership in place,” adding that the county cannot afford to fund the hospital and Duncan is aware of that.
As Macsay was voting against the contract, he said he was not trying to belittle Duncan, and then he inexplicably lashed out at unidentified opponents saying in a brief moment of heat, “I look at things in a different way. I’m tired of people sitting out there and making comments on things when they have no basis of fact.”
The May 4 vote of the board, largely ignoring Macsay’s criticism of the MMC administration, sets up an interesting situation when Macsay’s resolution comes before the supervisors on May 11.
Will the majority of the board go along with Macsay in what appears to be a dramatic move to convince outside lenders that the county is shedding itself of the debt-ridden hospital, and therefore fund an estimated $12.5 million that must be repaid to the treasury?
-- Ray A. March
"I don’t know how to answer that question."
-- District 1 Supervisor Dan Macsay, when asked at the Surprise Valley candidates’ night what his role was in the misappropriation of an estimated $20 million from the county treasury.
While Supervisor Dan Macsay was in a quandary as to how to answer the question of his role in the Board of Supervisors’ illegal taking of money from the treasury in order to pay the bills of the debt-ridden Modoc Medical Center, he was quick to say the hospital should start paying its own way.
“I will introduce a resolution that no more funds go to the Modoc Medical Center,” Macsay revealed during the question and answer session of the May 2 candidates night in Cedarville. “The county will not fund anymore money to the hospital.”
That declaration, while yet to be brought before the board, was met with a range of reactions -- from optimism to skepticism, by Bob Duncan, recently officially appointed interim chief executive officer of MMC; Don Demsher, one of the leaders of the Monday night Group; and Judy Mason, a member of the Save Our Hospital Committee.
Duncan: “They (Board of Supervisors) don’t want the debt to increase any more. Macsay has made it clear that once we get some money aside that we work within it, so we don’t tap into the treasury. The county has to tell MMC that it has to operate within its own budget. It’s going to be tight, but the county has to secure itself financially. We talked about this, but I have not helped him draft the resolution. It has been brought up at finance committee meetings in the past.”
Demsher: “I guess we have to wait and see what the language of the resolution is and whether or not other board members will support it. Playing into this will be the August ballot measure and what impact the resolution will have on the outcome of that. We will just have to see. As for the legality of such a resolution, I defer that to county counsel.”
Mason: “We don’t have any control over what the Board of Supervisors does with one of its departments, but does that mean when Modoc Medical Center has a profitable month they keep the money or does it go into the black hole? There is a lot of detail in my mind that has to be clarified. The board can’t pony up any money because they don’t have it anyway.”
* * *
BulletinMacsay Criticizes CEO Duncan
At the May 4 meeting of the Board of Supervisors less than three days following his pronouncement that he wants to see the hospital cut lose from any county financial support -- although it is not clear just what the legalities of such a move are -- Macsay took a direct shot at Duncan’s job performance.
He said he could not support a contract naming Duncan official interim chief executive officer at MMC because Duncan was not aggressive enough.
“You need to take the bull by the horns,” Macsay said from his seat as chair of the board as Duncan sat in the front row of the audience. “You need to see the grave situation we are in. Compassion doesn’t equal up to revenue coming in.”
With that statement Macsay found himself on the receiving end of the entire board. The other four supervisors -- Patricia Cantrall, Shorty Crabtree, Dave Bradshaw and Jeff Bullock -- all came to Duncan’s defense and voted 4-1 in favor of giving Duncan a two-month contract.
Joining the supervisors in taking Duncan’s side was Rick Rudometkin, chief administrative officer, who said, “People have different styles of doing business. The contract is for two months and we need leadership in place,” adding that the county cannot afford to fund the hospital and Duncan is aware of that.
As Macsay was voting against the contract, he said he was not trying to belittle Duncan, and then he inexplicably lashed out at unidentified opponents saying in a brief moment of heat, “I look at things in a different way. I’m tired of people sitting out there and making comments on things when they have no basis of fact.”
* * *
The May 4 vote of the board, largely ignoring Macsay’s criticism of the MMC administration, sets up an interesting situation when Macsay’s resolution comes before the supervisors on May 11.
Will the majority of the board go along with Macsay in what appears to be a dramatic move to convince outside lenders that the county is shedding itself of the debt-ridden hospital, and therefore fund an estimated $12.5 million that must be repaid to the treasury?
-- Ray A. March
Darcy Locken
In my opinion, our current Auditor's Department acts like a bookkeeping service, when they should be...well, auditing! As the Assistant County Administrative Officer, I have spent the past four months conducting an intensive audit of the county’s books. The lack of available, comprehensive financial information is staggering. The records that are available are inaccurate, inconsistent and haphazard. Taxpayers cannot afford to continue down this path, and risk more debt, and more limited services! The county needs an Auditor with training and experience in basic accounting principles. The Auditor should be proactive, both in safeguarding funds, and communicating with departments, outside agencies and other counties. The resources are infinite, but we have to have an Auditor who is able and willing to utilize those resources, train staff and do it the right way!
First and foremost, the county desperately needs solid accounting policies that are consistent with Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards. Second, county staff, including the Auditor's Department need to be trained on these policies, and in the principles and standards upon which they are based. Thirdly, the lines of communication with outside agencies, such as special districts and the schools, need to be reopened. These outside agencies currently have very little trust in the county's accounting methods (for good reason), and it is the Auditor's responsibility to earn back this trust. This can only happen if the Auditor elected has the ability to efficiently maintain accurate records, proactively track fund balances (that means no one gets to spend more cash than they have!) and provide assistance to other county staff in regards to proper accounting of program funds . If the Auditor is doing her job effectively and in accordance with the law, accounting principles and standards, then all funds within the treasury will be safe, and available for the intended uses.
Alice Marrs
As for the Auditor’s role in future years, statutorily speaking the Auditor is bound by the legal authority in the California Government Code, principally those sections beginning with 26880 and 26900. This role is to provide a broad range of financial auditing and accounting services to all Modoc County departments, agencies, and special districts whose funds are kept in the county treasury. On a day-to-day basis the county treasurer informs my office of the cash balance in the treasury.
Currently my staff and I then examine each department and special district to see if they have the funds in their account to cover any payables they are requesting. While this has proven to be a time consuming process, I felt it imperative to implement to our daily process so that the reporting of county cash flow issues will reflect accuracy. No matter what county department it is, once they have depleted their allotted funding, I have directed my staff to no longer pay any claims for payment made by that department. I believe this edict to be fair and necessary and, if implemented in the past, quite possibly the county may not be in the difficult financial situation they currently face. Also, because of the cuts that were made earlier in the year by the board and county departments, and the continued close monitoring of the cash flow by my department, the current “out of cash” date of February has been extended to July.
We have to be diligent and meticulous in monitoring all county expenditures for restricted and non-restricted funds. Continuing to use restricted funds puts those departments in jeopardy of receiving future funding and I will not allow it. I firmly believe that the using of funds from special districts is unacceptable and will not happen during my watch.
Communication is the key in keeping information flowing - not only from this office, but from the Board of Supervisors, the CAO, Modoc Medical Center and all county departments and special districts. My door is always open to anyone who has questions or comments regarding the operations of the Auditor’s office, or any of the other departments currently under my supervision. Please feel free to drop by or call me at 233-6207.
Today is National Teacher Day
| The Hand | ||||||||
| by Mary Ruefle | ||||||||
The teacher asks a question. You know the answer, you suspect you are the only one in the classroom who knows the answer, because the person in question is yourself, and on that you are the greatest living authority, but you don’t raise your hand. You raise the top of your desk and take out an apple. You look out the window. You don’t raise your hand and there is some essential beauty in your fingers, which aren’t even drumming, but lie flat and peaceful. The teacher repeats the question. Outside the window, on an overhanging branch, a robin is ruffling its feathers and spring is in the air. Reprinted from Poets.org | ||||||||
Monday, May 3, 2010
Ducking Duty With Chapter 9
Editor’s Note: The following article is reprinted with permission from the Los Angeles Business Journal. We believe the subject of bankruptcy and political responsibility, as discussed in this article, will be of interest to readers of the Modoc Daily News Blog.
Comment
By Charles Crumpley
Lots of businesses know about the magic of bankruptcy court. There, heavy debt can be lifted. Expensive leases can be undone. Burdensome contracts can be erased.
Indeed, a bankruptcy judge can make your bad decisions disappear like magic. You can get a do-over.
Businesses know this, which may explain why some business people, such as former L.A. Mayor Richard J. Riordan, are urging the city of Los Angeles to file for bankruptcy.
The real appeal of a Chapter 9 filing for Los Angeles is that a bankruptcy judge could make the tough decisions that the City Council and the mayor won't. A judge could declare it's do-over time, and make the city's burdens more or less disappear like magic.
Take pensions. They're generous and rising frighteningly fast. According to reports, the city will have to contribute $730 million next year to cover pension costs, up nearly 12 percent from this year's $653 million.
And they don't stop after that; projections put that figure at over $1 billion in a few years.
Those pensions need to be reined in for the city to get back on its financial feet. But the true problem isn't the pensions, per se. The true problem is the lack of political will to do anything about them, the lack of spine to defy the unions that put many of the city's elected people in office.
So some business folks are thinking: Since L.A.'s union-dependent mayor and City Council aren't likely to get medieval on the unions' pensions, maybe a bankruptcy judge could do it for them, eh? That way, L.A. can get its do-over and the elected types can blame it on the judge. Problem solved.
But wait. Not so fast. Take a minute to consider a disturbing little case study.
The town of Vallejo, north of San Francisco, declared bankruptcy two years ago. Like Los Angeles and so many other California cities, it became a municipal basket case largely because it gave its unionized workers pay and pensions so astonishing the city eventually could not keep up.
A report by the Cato Institute in the fall pointed out that regular public employees in Vallejo can retire at 55 with 81 percent of their final year's pay guaranteed. It's even better for police and fire officials, who can retire at 50 with a pension that pays them 90 percent
of their final year's salary every year for life and for the lives of their spouses. Obviously, as time marches on and more employees retire, the cumulative load on the city's taxpayers gets heavier.
Making matters worse was the generous pay. Firefighters average $171,000 a year. Police captains earn $300,000 a year. That implies the captain could retire at 50 and get $270,000 a year for his life and for the life of his wife.
As you might expect, unions fought Vallejo's bankruptcy. Finally, the bankruptcy judge in the case last year held that the city could void its union contracts.
That's when the disturbing thing happened. You see, the city's elected officials still had to ask the judge to void the pension contracts. In other words, they still had to reach inside themselves and find the political will to defy the unions. That they could not do.
Steven Greenhut of the Pacific Research Institute in Sacramento, writing in the Wall Street Journal in March, said the Vallejo's workout plan in December called for cuts in services and some employee benefits, but it did not touch the pension contributions the city had to pay. Indeed, the city increased its pension contributions.
Wrote Greenhut: "Other cities will now find it harder to use the threat of bankruptcy (or bankruptcy itself) to get unions to agree to rein in pension costs."
Bankruptcy can wipe away problems like magic. But the true problem is not the burdensome contracts or runaway pension expenses. The true problem is the lack of political will to confront the unions.
Bankruptcy won't give L.A.'s elected leaders the spine to confront them. And until they get the spine, bankruptcy is no solution for Los Angeles.
-- Charles Crumpley is editor of the Business Journal.
He can be reached at ccrumpley@labusinessjournal.com.
Comment
By Charles Crumpley
Lots of businesses know about the magic of bankruptcy court. There, heavy debt can be lifted. Expensive leases can be undone. Burdensome contracts can be erased.
Indeed, a bankruptcy judge can make your bad decisions disappear like magic. You can get a do-over.
Businesses know this, which may explain why some business people, such as former L.A. Mayor Richard J. Riordan, are urging the city of Los Angeles to file for bankruptcy.
The real appeal of a Chapter 9 filing for Los Angeles is that a bankruptcy judge could make the tough decisions that the City Council and the mayor won't. A judge could declare it's do-over time, and make the city's burdens more or less disappear like magic.
Take pensions. They're generous and rising frighteningly fast. According to reports, the city will have to contribute $730 million next year to cover pension costs, up nearly 12 percent from this year's $653 million.
And they don't stop after that; projections put that figure at over $1 billion in a few years.
Those pensions need to be reined in for the city to get back on its financial feet. But the true problem isn't the pensions, per se. The true problem is the lack of political will to do anything about them, the lack of spine to defy the unions that put many of the city's elected people in office.
So some business folks are thinking: Since L.A.'s union-dependent mayor and City Council aren't likely to get medieval on the unions' pensions, maybe a bankruptcy judge could do it for them, eh? That way, L.A. can get its do-over and the elected types can blame it on the judge. Problem solved.
But wait. Not so fast. Take a minute to consider a disturbing little case study.
The town of Vallejo, north of San Francisco, declared bankruptcy two years ago. Like Los Angeles and so many other California cities, it became a municipal basket case largely because it gave its unionized workers pay and pensions so astonishing the city eventually could not keep up.
A report by the Cato Institute in the fall pointed out that regular public employees in Vallejo can retire at 55 with 81 percent of their final year's pay guaranteed. It's even better for police and fire officials, who can retire at 50 with a pension that pays them 90 percent
of their final year's salary every year for life and for the lives of their spouses. Obviously, as time marches on and more employees retire, the cumulative load on the city's taxpayers gets heavier.
Making matters worse was the generous pay. Firefighters average $171,000 a year. Police captains earn $300,000 a year. That implies the captain could retire at 50 and get $270,000 a year for his life and for the life of his wife.
As you might expect, unions fought Vallejo's bankruptcy. Finally, the bankruptcy judge in the case last year held that the city could void its union contracts.
That's when the disturbing thing happened. You see, the city's elected officials still had to ask the judge to void the pension contracts. In other words, they still had to reach inside themselves and find the political will to defy the unions. That they could not do.
Steven Greenhut of the Pacific Research Institute in Sacramento, writing in the Wall Street Journal in March, said the Vallejo's workout plan in December called for cuts in services and some employee benefits, but it did not touch the pension contributions the city had to pay. Indeed, the city increased its pension contributions.
Wrote Greenhut: "Other cities will now find it harder to use the threat of bankruptcy (or bankruptcy itself) to get unions to agree to rein in pension costs."
Bankruptcy can wipe away problems like magic. But the true problem is not the burdensome contracts or runaway pension expenses. The true problem is the lack of political will to confront the unions.
Bankruptcy won't give L.A.'s elected leaders the spine to confront them. And until they get the spine, bankruptcy is no solution for Los Angeles.
-- Charles Crumpley is editor of the Business Journal.
He can be reached at ccrumpley@labusinessjournal.com.
Sunday, May 2, 2010
An Analysis
Is BOS Jumping Long-Term Ship?
Almost casually, if not imperceptibly, members of the Modoc County Board of Supervisors and its chief administrative officer are showing signs that they are losing confidence in their determination to obtain long-term financing in order to bring the treasury back to balance.
While the board has not officially placed the controversial subject of 15-year bond revenue sales on its official agenda as a way to publicly air its concerns for getting $12.5 million by the end of June, it has strongly indicated a change in course is underway.
First indication of this was April 27 when Chair Dan Macsay, who is seeking re-election, argued successfully that he should be the board’s liaison to the Monday Night Group -- a clear sign, although characterized as being made in “panic,” that he is coming around to the ad hoc committee’s firm position that optional means of funding must be pursued.
At the same time Rick Rudometkin, chief administrative officer, echoed there is a question that the long-term bond revenue will actually happen. In fact, he publicly decreed at the April 27 meeting it had a 50-50 chance of coming through. He did not elaborate.
Macsay, at the April 27 board meeting, said he agreed.
As did Supervisor Patricia Cantrall who said, “We should have been looking for alternative funding all along.”
But the question remains: What information do they have for their opinion and why have they not shared that information with the public?
Don Demsher, a member of the Monday Night Group, is looking for the answer.
“We don’t have any specific information,” Demsher recently told the Modoc Independent News. “Frankly, we have no information at all about that. We think the comments made by county officials that maybe the whole plan will not materialize in a way they hoped or believed it would, that they, the county officials, may have gone from being reasonably certain of getting the bonds to now being doubtful.”
Richard Arrow, chief financial office for Modoc County and the one reliable county source who would know why there is doubt being cast by Macsay, Cantrall and Rudometkin, said he did not know the answer.
“I do not know where the ‘50/50’ came from,” Arrow said by e-mail from his home in Rocklin. “It is my opinion that the county will have the ability to do a financing whether or not a rating is assigned. The main difference will be the cost. If an investment grade rating is obtained, then it is anticipated that the cost will be at approximately six percent. If no rating is obtained, then it would be more costly, in a range from nine to 12 percent.”
Rudometkin, who was vocal in his opinion at the April 27 board meeting, did not respond to an e-mail message asking for comment.
Demsher, on the other hand, expressed his concern for the county’s ability to raise $12.5 million or more through bond revenues.
“We just think that based on what we do know, such as bond rating and lending, that finances are not easy to get right now,” he said. “People are very cautious.”
Demsher, who said it may be too late for the Board of Supervisors to pursue a complex funding package, was critical of Supervisor Jeff Bullock.
“Bullock was appointed to get a committee together last fall,” Demsher said. “A finance committee to look for funding. He didn’t put a committee together as far as we can tell, as to what they realistically can do, and by January there was still no public input or any serous discussion by the board. They alluded to it, but no real discussion on how that process was going along -- until the bond counsel showed up -- now it’s crunch time.
“The Monday Night Group has talked about what the odds are all along,” Demsher continued. “We didn’t think the chances were great anyway. They should put option ‘B’ on a parallel course with option ‘A.’ They need to pursue every avenue they can,” he said referring to the county’s long-term loan commitment and to the ad hoc’s suggestions for special legislation and negotiating the county’s debt with its creditors.
-- Ray A. March
Is BOS Jumping Long-Term Ship?
Almost casually, if not imperceptibly, members of the Modoc County Board of Supervisors and its chief administrative officer are showing signs that they are losing confidence in their determination to obtain long-term financing in order to bring the treasury back to balance.
While the board has not officially placed the controversial subject of 15-year bond revenue sales on its official agenda as a way to publicly air its concerns for getting $12.5 million by the end of June, it has strongly indicated a change in course is underway.
First indication of this was April 27 when Chair Dan Macsay, who is seeking re-election, argued successfully that he should be the board’s liaison to the Monday Night Group -- a clear sign, although characterized as being made in “panic,” that he is coming around to the ad hoc committee’s firm position that optional means of funding must be pursued.
At the same time Rick Rudometkin, chief administrative officer, echoed there is a question that the long-term bond revenue will actually happen. In fact, he publicly decreed at the April 27 meeting it had a 50-50 chance of coming through. He did not elaborate.
Macsay, at the April 27 board meeting, said he agreed.
As did Supervisor Patricia Cantrall who said, “We should have been looking for alternative funding all along.”
But the question remains: What information do they have for their opinion and why have they not shared that information with the public?
Don Demsher, a member of the Monday Night Group, is looking for the answer.
“We don’t have any specific information,” Demsher recently told the Modoc Independent News. “Frankly, we have no information at all about that. We think the comments made by county officials that maybe the whole plan will not materialize in a way they hoped or believed it would, that they, the county officials, may have gone from being reasonably certain of getting the bonds to now being doubtful.”
Richard Arrow, chief financial office for Modoc County and the one reliable county source who would know why there is doubt being cast by Macsay, Cantrall and Rudometkin, said he did not know the answer.
“I do not know where the ‘50/50’ came from,” Arrow said by e-mail from his home in Rocklin. “It is my opinion that the county will have the ability to do a financing whether or not a rating is assigned. The main difference will be the cost. If an investment grade rating is obtained, then it is anticipated that the cost will be at approximately six percent. If no rating is obtained, then it would be more costly, in a range from nine to 12 percent.”
Rudometkin, who was vocal in his opinion at the April 27 board meeting, did not respond to an e-mail message asking for comment.
Demsher, on the other hand, expressed his concern for the county’s ability to raise $12.5 million or more through bond revenues.
“We just think that based on what we do know, such as bond rating and lending, that finances are not easy to get right now,” he said. “People are very cautious.”
Demsher, who said it may be too late for the Board of Supervisors to pursue a complex funding package, was critical of Supervisor Jeff Bullock.
“Bullock was appointed to get a committee together last fall,” Demsher said. “A finance committee to look for funding. He didn’t put a committee together as far as we can tell, as to what they realistically can do, and by January there was still no public input or any serous discussion by the board. They alluded to it, but no real discussion on how that process was going along -- until the bond counsel showed up -- now it’s crunch time.
“The Monday Night Group has talked about what the odds are all along,” Demsher continued. “We didn’t think the chances were great anyway. They should put option ‘B’ on a parallel course with option ‘A.’ They need to pursue every avenue they can,” he said referring to the county’s long-term loan commitment and to the ad hoc’s suggestions for special legislation and negotiating the county’s debt with its creditors.
-- Ray A. March
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