Saturday, June 19, 2010

Re Bail Out -- State Noncommittal


Only sketchy information is available following the meeting Wednesday between county officials and the state Treasurer’s Office, according to Supervisor Patricia Cantrall.

“I was told by Rick Rudometkin the state would get back to us in a week or so,” Cantrall told the Modoc Independent News.

The meeting was to convince the state to either loan the county an estimated $13 million or co-sign a loan agreement with CalPERS.

“Otherwise, I don’t know a thing,” Cantrall added.

There was an unconfirmed report that Rudometkin, Dan Macsay and Darcy Locken, who also attended the meeting with the state treasurer, intended to keep their report confidential until the Tuesday meeting o f the Board of Supervisors.
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Friday, June 18, 2010

Change in Rudometkin Duties Back on Agenda

The Modoc county Board of Supervisors faces one of its longest agendas in recent memory Tuesday when it convenes at the Sheriff’s Annex in Alturas.

In all there are 40 agenda items, plus 44 sub items and 9 closed employee evaluation sessions scheduled for the meeting that begins at 9 a.m.

The bulky agenda comes at a time when the board is under pressure from the State Controller’s Office and the public to resolve the replacement of at least $12.5 million to the county treasury after illegally misappropriating the money over the last 10 years.

And yet there are only three, possibly four, items on the agenda dealing the county’s fiscal crisis. They are:

Requests from Rick Rudometkin, chief administrative officer, to name him chief executive officer, a “budget modification” to move $170,000 in an “expenditure account,” a report on the meeting with the State Treasurer regarding the county’s request for a short-term loan and board approval of the preliminary 2010-11 budget.

It is not known if the board has actually held a budget study session prior to being asked by Rudometkin to approve the preliminary budget on Tuesday.

Thursday, June 17, 2010

Modoc Law: Leverage the State

On Wednesday morning, June 17, at least three Modoc County officials signed out a county-owned vehicle and headed for Sacramento.

They were Dan Macsay, chair of the Modoc County Board of Supervisors; Rick Rudometkin, chief administrative officer; and Darcy Locken, assistant chief administrative officer and auditor-elect.

Their mission is to convince the state treasurer to either loan them $13 million or co-sign papers saying the state will back them up if they have to go elsewhere for the money.

“Elsewhere” in the case the state declines to loan the county money on a short-term basis, is the California Public Employees Retirement System (CalPERS), California’s largest pension fund.

The purpose of the $13 million is keep the county afloat for an indeterminate amount of time and apparently to allow it to make payroll.

The day before the three officials departed for Sacramento it was revealed at the Board of Supervisors meeting that the $13 million loan may be the county’s last option in resolving its current fiscal crisis, if the board accepts a statement made by Ken Hedrick, the bond underwriter commissioned by the supervisors.

Locken explained that the money would be used as “a bridge loan” and would be paid back through the sale of revenue bonds. There was no explanation as to how the county would pay back both a $13 million short-term loan and a $15 million long-term bond sale, leaving the question, why would the state underwrite a $13 million bridge loan when there is no guarantee the county can sell the bonds to repay it?

Also not discussed in the brief time the subject came before the board was how the county intended to influence the state treasurer to loan it $13 million when the county is on the verge of going broke, is currently laying off employees and while not official, has committed its property as collateral to the bond sale.

While Macsay, Rudometkin and Lochen were non-committal at the board meeting, the Modoc Independent News has learned that they may use an unique method of leverage, according to a source with knowledge of the Sacramento visit to the treasurer‘s office.

The plan apparently goes like this:

The county officials hope the state can come forth with a precedent-setting $13 million loan or that CalPERS can be persuaded to come up with the money -- if the state co-signs and insures that Modoc County will make all the required loan payments.

“This sounds like a long shot,” according to the source. “Some claim the state has done this before, but not under these circumstances. So this is new territory. The county's additional strategy, and you can interpret this as you like, is to tell the state that if the state does not underwrite Modoc County, the state will then have to come and take over all the county-provided services.

“They, the county officials, hope that the prospect of the state taking over county services is so repugnant that the state will capitulate and underwrite the county and persuade CalPERS to loan the money.”

Both the county and the state are entering an uncharted area of fiscal bail out, according to the source.

“The state may co-sign, but it’s questionable if it actually has the authority to do so,” the source explained. “But who is there to challenge the state, and if a challenge was made it would come too late to do anything about it and about all that would happen would be a slap on the state treasurer’s wrist. The county is grasping at strings.”

What Modoc County has not done so far, apparently, is to seek an outside legal opinion or advice from a fixed-rate, rather than a commission-paid, financial analyst who represents only the interests of the county.

Whether this was discussed by Macsay, Rudometkin and Locken on their drive to Sacramento yesterday is not known, but it’s a question that should be asked at the June 22 meeting of the Board of Supervisors.

“If the bond underwriter ever comes up with something, the county has to take a real close look at it,” the source advised. “There could be huge payments up front and the Board of Supervisors needs somebody smart and honest to look at this.”

-- Ray A. March

Wednesday, June 16, 2010

Push To Name Rudometkin CEO Stalls

On a 3-2 vote the Modoc County Board of Supervisors yesterday, June 15, agreed to adopt a list of covenants -- or strict oversight guidelines -- as a first step in improving its fiscal management practices and in preparation to seek $15 million in bond revenues.

The board excluded a proposal by Rick Rudometkin to change his position as chief administrative officer to chief executive officer after hearing arguments from the audience that such a move was illegal.

First to point out the illegality of the proposed change was Jim Halverson of Cedarville, who told the board during the public comment session, “You can’t do it without changing the law.”

Only after County Counsel John Kenny, who at first hedged on the job description change saying “CEO didn’t mean anything,” finally agreed that changing the job description “may require an ordinance code change by the Board of Supervisors.”

Normally, a CEO carries considerable power and authority that exceeds that of a CAO and the Board of Supervisors, including the firing of department heads.

Alan Hopkins of the Monday Night Group once again chastised the board for its failure to seek qualified candidates for the top county administrative positions, and urged the board “to go outside and get the strongest candidates.”

“You have not done that before,” Hopkins told the board, referring to the board’s hiring Rudometkin without reviewing any credentials qualifying him for the job. Rudometkin and the county are under pressure from the First Amendment Coalition to produce his professional credentials and have yet to do so.

Included in the covenants are the following requirements:

--The county must file within 180 days after the end of its fiscal year, its audit and update information on the county.

-- The county must file a notice within 10 days of any “material event” such as changing the CEO, CAO, auditor or treasurer and failure to make monthly lease payments to the trustee of the bonds.

In addition, the county will be required to follow “Government Accounting Standards Board” rules.

As for the proposed change in job classification from CAO to CEO, there was no discussion by the board as to advertising the position to a broad, outside candidate market.

Audits Release Now July 12

To the dismay of all , but surprise to none, it was learned at the Tuesday, June 15, meeting of the Board of Supervisors that the long-awaited state-ordered audits of Modoc County’s financial practices have been set back to July 12.

The reason, according to bond underwriter Ken Hedrick in his report to the board, was the auditors had not finished their work -- a rather obvious observation.

However, Auditor Alice Marrs told the Modoc Independent News that VTD, the outside auditing firm, wants a “trial balance, so we’re going back to make sure everything is correct.”

The setback in the release of the audits means the Board of Supervisors cannot go forward with its intention to sell bonds to replace the remaining $12.5 million in the misappropriated treasury for 30 to 60 days following the July 12 date, according to Hedrick.

The only surprise in Hedrick’s announcement of the delay was that it came from him instead of Modoc County officials, including Marrs, CAO Rick Rudometkin or Asst. CAO Darcy Locken.
Termination Notices Go Out Today

Seven county employees will receive layoff notices today, June 16, as the Modoc County Board of Supervisors continues to find ways to make payroll for those remaining on the job.

In making the proposed cuts to the board CAO Rick Rudometkin said he was taking a 10 percent reduction in his salary.

The board voted 4-1 in favor of the layoffs with Supervisor Shorty Crabtree the lone “no” vote.

The only department not effected in today’s employee cuts is the sheriff’s office where Sheriff-elect Mike Poindexter argued the board into agreeing to delaying any layoffs in his department for another week so he can review his budget and decide on how to restructure his staffing.

Poindexter is facing the probability of laying off nine employees. (See “Poindexter‘s Argument” posted below).

Departments and the number of employees to be cut in each are:

Buildings and Grounds: one full time person
Auditor: one full time person
Recorder: one full time person
Assessor: one full time person
Air Pollution: one full time person
District Attorney: one full time person
Planning: one half-time person and one full time position reduced to half time.

All layoffs are effective June 30, except the Sheriff’s Department, which will be July 7.

Poindexter's Argument

Editor’s Note: Sheriff-Elect Mike Poindexter made a statement to the Board of Supervisors at the June 15 board meeting. Excerpts are published below.

I am Mike Poindexter, your sheriff-elect . . . the proposed cuts on the agenda today will severely restrict any improvements and in fact (will) endanger the security of persons and property in Modoc County. . . . It is my understanding that after advising the county’s financial officers that they could make these proposed, drastic cuts in staff and still operate the Sheriff’s Office efficiently, the Sheriff and Under sheriff have tendered their resignations, leaving the task to the incoming administration. Therefore I feel I have the responsibility to advise you of the consequences.

To cut the Sheriff’s Office staff by nine employees will in all likelihood further diminish the effectiveness, response time and investigative ability to keep our citizens and visitors safe in their persons and property and leave the number one priority of the Sheriff’s Office, the jail, with inadequate security. . . . to ask that we cut nearly 50 percent of our working staff is asking for a myriad of liabilities.

First I wish to address the proposal by the prior administration to cut the entire jail/correction staff and replace them with patrol deputies. . . . Very few of the deputies are familiar with the responsibilities of a correctional officer and they will be required within one year to attend a 56 hour course in corrections to meet standards. It’s the law.

Secondly to lay off the only jail supervisor, the one person with the required training and experience to manage a jail under the codified laws of California is beyond foolish.

I wish to advise you that I believe the laying off of all correctional staff is a direct violation of the current memorandum of understanding. To my knowledge and according to the MOU, layoffs will be by seniority. . . .I can find no provisions to lay off staff by classification. If you agree to follow that path, I believe you will see several grievances and/or law suits for violating a contractual agreement. Refer to the Modoc County Memorandum of Understanding, (Deputy Sheriff’s Association) section 14.1 through 14.7.

Currently there are three correctional officers who possess the required training and ability to not only manage and run the jail, but two of those CO‘s are also cross-trained as dispatchers which the department already has a critical shortage of. The board should consider the liability of an under-trained and staffed county jail.

Also, to cut any resident deputy positions endangers the safety and security of citizens in the outlying areas of the county. All efforts should be made to alleviate cuts to those necessary positions.

There can be actions taken to cut staff who do not perform essential disciplines which are no longer needed due to the county’s emergency situation and budgetary cuts. I believe a numbers reduction in our current supervisory staff is one answer. . . .Those assets should be placed back into the patrol and or jail staff as line officers so as to assist those departments.

I respectfully request that I be allowed to submit my own proposed budget and strategy to the board and not be tasked with implementing a flawed plan submitted by others who will not be accountable for its result. I have plans to increase efficiency and service and to reduce unneeded expenditures, but to completely reduce your Sheriff’s Office to an ineffective organization will only increase the county’s liability and endanger the public. . . . Respectfully I submit that is why we are in the predicament we are in today.

-- Mike Poindexter, Sheriff-Elect

Tuesday, June 15, 2010

BOS Could Face Restraining Order

The Monday Night Group stepped forward at yesterday’s meeting (June 15) of the Modoc County Board of Supervisors and fired yet another salvo across the board’s bow.

This time the ad hoc committee said it would seek a restraining order against the board if it makes any move in cutting services in either the sheriff’s department or the Modoc Medical Center.

“Our intent is to restrain the county from doing two things,” Don Demsher told the Modoc Independent News after the meeting. “One is to prohibit the Board of Supervisors from making excessive cuts in law enforcement, and the other is stop any cost reductions at the hospital that would mean it could not function.”

He said a restraining order would force the board to have “some organization about this whole thing,” referring to the fiscal crisis the county is facing because of the board’s illegal misappropriation of funds from the treasury.

“We need to get people involved who know more about it,” Demsher said, repeating the Monday Night Group’s opposition to a bond sale to raise more than $12.5 million in order to replace the missing money.

Demsher’s threat of a restraining order followed another blistering attack on the board by Alan Hopkins, also a Monday Night Group member, who said his committee was concerned about the board’s lack of concern in using a bond underwriter whose firm, Finacorp,  recently folded.

Calling “the whole bond issue a sham,” Hopkins said the board was in violation of the law because it continues to use money from the treasury. “I was flabbergasted, the board didn’t bat an eye” at the news that Ken Hedrick, the bond underwriter was without a job.

Hopkins strongly urged the supervisors to check Hedrick’s professional background.

Janie Erkiaga, speaking from the audience, said she agreed with the Monday Night Group’s position on bankruptcy and then called for Supervisors Dan Macsay and Dave Bradshaw to step down “as lame ducks” and let the newly elected supervisors take over.

As for the bond underwriters, Erikiaga was even more blunt.

“The bond underwriters should pack their bags and leave town,” she told the board.

Monday, June 14, 2010

“Musical Chairs” Job Jumping

In the wake of the June 8 elections and the announcement that at least 15 county employees will be losing their jobs, there has been a round of “musical chairs” job jumping.

Most significant of the job jumping is what would appear to be a routine matter on the Modoc County Board of Supervisors agenda for Tuesday, June 15.

The item is a recommendation to change the job title of chief administrative officer to chief executive officer, a position held by Rick Rudometkin, who has yet to produce his credentials that he is qualified for either job.

The switch in titles potentially carries considerable power outside the board’s authority and is part of a proposal to adopt various covenants attached to a bond revenue sale the supervisors are considering.

The musical chairs job jumping started with the resignation of Auditor Alice Marrs. That set in motion a plan to replace her with Auditor-elect Darcy Locken, which must be approved by the board.

Also to be approved is the appointment of Pam Randall, Marrs assistant, as interim county financial officer and assistant chief executive officer. Both the Locken and Randall appointments are on Tuesday’s June 15, board agenda.

What’s not on the agenda are various shifts in job assignments in the county building department and sheriff’s department.

Sheriff Mark Gentry has announced he will retire June 30, leaving his job open to Sheriff-elect Mike Poindexter. Undersheriff Gary Palmer is reportedly moving to the social services department as a supervising investigator. His position will go before the board for approval at its June 22 meeting.

Wade Teusher, building department head, has reportedly been reassigned to a county roads department position which falls under the protected restricted funds category -- as does Palmer’s new position. Dominic Budmark has replaced Teuscher. Rick Hironymous is now “building official.” A request by the Modoc Independent News for confirmation of these new job positions has been sent to Rudometkin for comment.

At the sheriff’s department, Poindexter has confirmed he will take over July 1 and will forego a salary for about three months while he studies next year’s budget and the restructuring of the department in order to save jobs that could be lost -- including a patrol deputy, jailer or dispatcher.

-- Ray A. March
It’s Official: AG Asked to Investigate BOS

The Monday Night Group has asked the Attorney General’s Office to immediately investigate the Modoc County Board of Supervisors’ misappropriation of money from the treasury.

“It is apparent…that the Modoc County Board of Supervisors and other responsible officials are unwilling to govern the county in compliance with state law,” the Monday Night Group wrote the AG in a letter mailed Friday, June 11, with a copy to the State Controller’s Office.

In asking the AG to immediately begin “an investigation of the county’s current and past misappropriation of dedicated taxpayer funds and prosecute those county officials responsible,” the ad hoc committee was critical of both the Board of Supervisors and Gary Woolverton, Modoc County district attorney.

“The current district attorney has initiated no criminal investigation nor, to the best of our knowledge, has he forwarded a complaint to the Attorney General,” the Monday Night Group charged in its letter to the AG. “Additionally, we do not believe the county has the ability to conduct a proper investigation or prosecution.”

Monday Night Group alleged that the Board of Supervisors continues to misappropriate funds from the treasury in violation of state law.

“The Board of Supervisors has not reduced general fund expenditures to bring them into balance with revenues, but rather has significantly increased spending in various categories and, as in the past, has apparently financed those increases by doing the very thing Controller (John) Chiang advised them in July 2009 that they could not do without violating the law,” the letter states.

The Monday Night Group in urging an AG investigation of the misappropriation predicted that “unless the Attorney General takes immediate action, millions of dollars of taxpayer funds will continue to be misappropriated by the Modoc County Board of Supervisors and the county’s financial health will continue to be at risk.”

The letter was signed by a number of members of the Monday Night Group.
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To Be Continued