BOS Uncertain, Fails To Act
On Performance Bond Claim

An uncertain Modoc County Board of Supervisors faced with making a decision at its Dec. 7 meeting about whether it should act on a performance bond claim that could indict county officials in the misappropriation of nearly $20 million from the treasury decided to do nothing.

Before the board for the second time in a month was a request from CAO Rick Rudometkin asking the supervisors to either vote for moving forward with the claim or stopping it from going to the county’s insurance carrier.

At the board’s Nov. 9 meeting Rudometkin said the claim, seeking $10 million in damages, had “questionable validity” and that the county should not pursue it. At that time it was not clear if Rudometkin was actually familiar with the contents of the claim.

The claim seeks damages against county officials who are bonded, including the Board of Supervisors, various elected officials, some department heads and former CAO Mike Maxwell, in order to recover money misappropriated from the treasury.

At the Nov. 9 meeting the board tabled discussion of the claim indefinitely after Chair Dan Macsay said he questioned the validity of various sources, including the Modoc County Daily News Blog, that District Attorney Gary Woolverton relied on in an investigation that supported the filing of a claim against the county.

On Dec. 7 the board failed to deal with the performance bond claim when none of the supervisors would make a motion to bring it up for discussion. In effect, taking no action kept the claim alive, but the supervisors, confused by their non-action, decided later to ask the opinion of County Counsel John Kenny.

Some supervisors apparently thought they had blocked the claim from going to the insurance carrier by not acting. In fact, the claim is still alive and in the hands of Woolverton, who can still take it to the Attorney General’s Office.

Supervisor Shorty Crabtree sought to have the claim removed from the agenda, stressing that it was supposed to be reviewed first by Kenny and then discussed in a closed board session.

Macsay took that opportunity to discredit Woolverton, who was not present at the meeting.

“The DA has not done a darn thing on it,” Macsay said. “We gave them a prescribed time to come up with it, but it’s dead, over and done with, and whatever he came up (with) we can throw in the trash can.”

Kenny’s opinion is expected to be presented publicly to the board at its Dec. 14 meeting.

See “Macsay Questions Sources: BOS Stops Insurance Claim,” Nov. 9, 2010, Modoc County Daily News Blog.

Macsay Critical of Auditor Locken
Says Office Should Be Abolished

An embattled out-going Modoc County Supervisor Dan Macsay of Surprise Valley will be leaving office at the end of December, but not without a parting shot at the auditor’s office.

In an e-mail exchange obtained by the Modoc County Daily News Blog, Macsay called Auditor Darcy Locken’s office staff “worker bee’s” and that the elected position of county auditor should be abolished.

“I would like to see the county go to an at-will-employee as county auditor who has the credentials and background to do the job required,” Macsay wrote in an e-mail to Tom Boxler, a member of the Monday Night Group.

“As long as we keep electing unqualified individuals I see the same problem arising down the road,” Macsay said.

The e-mail was written the evening of Dec. 7 in response to Boxler’s objection to the Board of Supervisors hiring an outside auditor without first going out to bid.

The e-mail message is reprinted here with Locken’s response following. Portions of Macsay’s message to Boxler are included in the “BOS Hires Outside Auditor At $250,000.”

“… I personally feel uncomfortable bringing in a new auditor because of our change of auditors. While I feel Darcy can do the job given time she has a lot to learn and VTD has been patient with her and has helped her tremendously. Her staff are nothing more than worker bee's and they fall short in that description at times.

“Not that they can't do the job but they need training on how and what to do the right way. Darcy stepped into a hornets nest and it will take her time to come up to speed and bring her staff along with her at the same pace.

“I do believe that changing auditors at this stage of the game will only make matters worse. The delivery of the audits is not VTD's fault. Like a computer garbage in garbage out. I was at the meetings when VTD was ready to walk out because they were sitting around waiting to get the required items to go to work with.

“They felt they were wasting county money and they were because the auditor couldn't produce material when VTD asked. The auditors office was a real cluster and I cannot understand why the past outside auditors didn't do a thing about it. Talk about wasting taxpayers money!

“Darcy has admitted that another reason that it is taking so long is that she has been slow in getting things back to VTD.

“On a side note I would like to see the county go to an at-will-employee as county auditor who has the credentials and background to do the job required. As long as we keep electing unqualified individuals I see the same problem arising down the road.

“The problem is getting the voters to buy into it. They want cheap labor and that is what they get. As you stated 'it takes a new competent auditor to take the “comfort” relationship away from staff and shed their new light on the situation.' I don’t think we have gotten there yet.”

Locken, when reached at her office, declined to respond to Macsay’s criticisms of her, but did defend her office staff and Vavrinek, Trine, Day & Co. (VTD) auditing firm.

“My only comment is wow,” Locken said. “He’s entitled to his opinion.” And then she continued.

“The part that bothers me is where he is critical of VTD. There was no point where they threatened to walk out. They said, ‘If you need time we can go back and work on other projects until you need us. Call us if you need help.’ They’ve been very careful to help us as much as they can and still be independent. They have been awesome. And he’s wrong about my staff.”

As chair of the Board of Supervisors Macsay has been under pressure from the state to lead the county into solvency after it was revealed an estimated $20 million had been misappropriated from the treasury. To date he has not been successful in meeting a mandate from the State Controller’s Office to replace the money.

-- Ray A. March

BOS Hires Outside Auditor at $250,000
Rejects Citizen-Based Arguments

Turning a deaf ear once again to advice from members of the Monday Night Group, the Modoc County Board of Supervisors unanimously agreed Dec. 7 to pay a minimum of $250,000 to Vavrinek, Trine, Day & Co. (VTD) to audit the county’s 2009-10 financial records.

The decision to hire VTD, the same firm that has been auditing the county’s books -- at an estimated fee of $750,000 -- for more than a year because of a state order, came after an exchange of opinions that included e-mail messages between Dan Macsay, chair of the board, and Tom Boxler, a Monday Night Group member. (See separate story “Macsay Critical of Locken”).

The contract agreed to by the Board of Supervisors was not negotiated by the county.

At the board’s meeting the citizen-based Monday Night Group, represented by Don Demsher and Alan Hopkins, argued unsuccessfully that the board should go through a process called “Request for Proposal (RFP),” a common practice normally used in seeking job bids in order to keep hiring at a competitive and cost-effective level.

But in an e-mail message to Macsay, Boxler, who is a certified public accountant and member of the Monday Night Group, took an even stronger stance, also to no avail.

“I strongly oppose the award of this audit to the same firm that has not as yet delivered the audits of ‘08 and ‘09,” Boxler wrote Macsay in an e-mail dated Dec. 6, the evening before the board decided to hire VTD.

“Single source contracts whether they be for this audit or other major county projects are unfair to the taxpayers who expect to get the most 'bang for their buck,'” Boxler continued.

“The argument that the firm should be awarded the audit without seeking competitive proposals due to their knowledge of existing conditions is invalid. Why? (Because) it takes a new, competent auditor to take the 'comfort' relationship away from staff and shed their new light on the situation.

“It is most common that California counties rotate their auditors every two years. Please put this audit out for RFP and save the taxpayers of Modoc County the money that they deserve,” Boxler concluded.

Macsay did not respond to Boxler until the evening of Dec. 7 -- after the vote was taken.

“It is most common that California counties rotate their auditors every two years,” Macsay began his reply, which was shared by Boxler with the Modoc County Daily News Blog.

“I agree and that is what we are doing. This will be the second year for VTD. In the past we have had a new auditor every two years. In my eight years on the board this is the fifth auditor,” Macsay wrote, ignoring that VTD is in the process of auditing two years worth of county books and not one year.

“Aside from the reasons given I personally feel uncomfortable bringing in a new auditor because of our change of auditors,” Macsay continued, referring to county auditor Darcy Locken. “While I feel Darcy can do the job given time she has a lot to learn…”

Locken, formerly assistant chief administrative officer under Mark Charlton, was elected county auditor in June but took office early when defeated incumbent Alice Marrs resigned.

At the board meeting both Macsay and Locken argued that hiring VTD without going out to bid would save the county money because, as Locken said, “They have the specific experience, the qualifications that nobody else does so the county doesn’t have to go out to a new auditor.”

“You know what happened in the past,” Locken told the board, apparently referring to previous audits that were rejected by the State Controller’s Office. “I don’t have to explain to a new set of auditors. That’s a variable in your costs. If I thought it could be done cheaper I would tell you. I have no attachment to VTD.”

Demsher, in reaction to the board’s vote for VTD, was philosophical.

“It’s a done deal,” he said following the meeting. “What we wanted them to do was get a RFP and get other firms to make presentations. They are concerned about continuity, I understand that, but the audits have been slogging away for more than a year now. On the other hand a new auditor may have a better idea and it might have been cheaper too. But, it’s done.”

Modoc National Forest Forest

Temporarily Closed to Fuelwood Gathering
 
The Modoc National Forest is temporarily closed to fuelwood gathering. This closure is based on the recent snow and rains that have made many of the Forest roads impassable. As conditions warrant the Forest or a portion of the Forest may be reopened. For more information please contact the Modoc National Forest Supervisor’s Office at (530) 233-5811

Budget Insights
Re Bond Sale


Editor’s Note: We may be the only ones confused over the “role” the proposed sale of bonds or certificates of participation plays in the county budget now being reviewed by the Board of Supervisors, so we asked Auditor Darcy Locken if she could shed some light for us and the following is her reply.

“The budget is balanced within the year. What you're looking for is what balances the $13 million liability that the hospital starts the year with. Prior year liabilities are not shown in the revenue/expenditure budget, which is what we took to the board.

“The $13 million deficit works out to be a negative fund balance for the hospital as of 7/1/10. The loan that will hopefully close that gap is an "accounts receivable" amount, not a revenue for the current year.

“We don't budget for accounts receivable because they are budgeted in a prior year. The loan amount was included in the 2009/10 budget, and it's still outstanding because obviously we didn't receive it in 2009/10. So, that AR amount cancels out the liability in terms of the budget.

“Now, if we don't get the loan, then yes, the budget will be out of balance because we'll no longer have an accounts receivable amount to zero-out the liability.”

Modoc County Salary Info
Now On State’s Website


Modoc County is now in compliance with an order from the State Controller’s Office to publicly post its salary and compensation information on the state’s new “Local Government Compensation Reports” website.

The website is http://lgcr.sco.ca.gov. The new website comes in the wake of the Bell, California salary scandal, according to the SCO.

Also on the website is salary information for Alturas.

The site is a intended to provide a city-by-city and county-by-county data base so that the public can compare salaries and compensation packages with other cities of a like size in population.

For previous Modoc County Daily News Blog coverage of this subject please see “More Info On SCO Website” (Oct. 28, 2010) and “Modoc Co. Fails to Meet SCO Order” (Oct. 26, 2010).