Modoc-gate
County Ignores Proposal To
Save Taxpayers Millions
By Ray A. March
The attorney hired to advise Modoc County officials on how to avoid bankruptcy recently offered a strategy that could fix the problem of a misappropriated treasury and save taxpayers as much as $10 million.
Or did he?
Against a political background of suppressed information, doublespeak or no speak, there is a tangled web of what the attorney said, what he didn’t say or whether he said anything at all.
The Modoc Independent News has learned from reliable sources that Michael Sweet, a bankruptcy attorney retained during the Dan Macsay-led Board of Supervisors, proffered an opinion that the state of California could not legally or constitutionally demand the county to repay $13 million to the misappropriated treasury.
In Sweet’s view, apparently, the argument of legality and constitutionality could give the county leverage to negotiate the $13 million the state mandated be repaid to the treasury down to $3 million to $5 million.
This opinion, reportedly in memo form, was presented to CAO Chester Robertson, Auditor Darcy Locken, Treasurer Cheryl Knoch and Supervisors Dave Allan and Loren “Shorty” Crabtree in November.
All, with the exception of Crabtree who was sitting in for Supervisor Geri Byrne, are members of the subcommittee assigned the task of recommending to the full board methods for resolving the county’s fiscal crisis.
To the amazement of Locken and to the perplexity of Knoch the other subcommittee members are apparently in complete denial or are suffering a memory lapse as to what Sweet actually told them.
To tighten the lid on what transpires between the bankruptcy attorney and members of the subcommittee since the November meeting, the Board of Supervisors in February -- on Byrne’s recommendation -- voted to limit conference calls with Sweet.
The board’s move was supposedly to cut down on attorney expenses, but in effect acts as a monitoring devise that blocks Locken and Knoch -- both publicly-elected officials -- from contacting Sweet without prior approval of either Robertson or a majority vote of the board.
Did Sweet say what he reportedly said at the subcommittee meeting?
“I am unable to comment on this,” Sweet wrote in an e-mail response to the Modoc Independent News.
What did Robertson have to say about Sweet’s alleged opinion on how to leverage the state and potentially save the county millions of dollars?
“No comment,” Robertson said.
What about Allan, another member of the subcommittee present at the Sweet conference?
“I truly don't remember M. Sweet saying anything of that magnitude,” Allan wrote in an e-mail reply to a query from the Modoc Independent News. “If he had, doesn't it seem reasonable that we'd be on that thought like a duck on a June bug?”
And, Byrne?
“I have gone back over my notes from our conference calls and I do not see anything about this,” she wrote in an e-mail.
Crabtree, who was chair of the board at the time of the Sweet meeting, was not contacted for comment.
Yet, there is another side to the story, other memories and opinions from both Locken and Knoch.
Knoch:
“I can confirm with you that Michael Sweet did give the county financing group an opinion about negotiating a write-off/pay-off of the hospital debt,” Knoch wrote in an e-mail. “My belief is the opinion gave us a starting point to negotiate with the state agencies we owe restricted funds to. After we received the opinion, it was decided to not use or contact the attorney unless we have the CAO's or a majority of Board of Supervisors’ approval. So, needless to say, we are stuck in the mud on this issue.”
Locken:
“It’s true“ she said. “What the lawyer wanted to do is take it to the state to say you can’t force the county to use taxpayers’ dollars to pay back a debt. The whole thing is illegal, but if you question Chester he turns on you. He works for the Board of Supervisors and we were told not to speak with the attorney.”
Locken added:
“I don’t want to lose our negotiating position with the state, and I’m not saying this to embarrass the Board of Supervisors, they are doing that themselves. They need to be pressured by the public to do the right thing. The public needs to ask the Board of Supervisors to stand up and defend its position.”
Why the embargo on Sweet’s report? In answer, Knoch said there was a deal made and also a personality conflict involved.
“We all agreed to keep the information obtained in the meeting confidential until the county came up with an agreement on how to go forward with the plan based on the legal opinion,” Knoch admits.
“Do I know why this got stymied?” she continued. “Not exactly, just that the majority of the finance committee didn't want to go that route. I know that Chester didn't care for Michael Sweet and the advice he gave us.”
Knoch apparently was not in agreement with the majority of the subcommittee.
“My opinion is that if it opened the door for discussions with state agencies on debt repayment and/or forgiveness that we should take the advice and move forward with it,” she said.
As for the allegations pointed at Robertson? He did not come out from behind his “no comment” posture, but in his defense Allan did.
“We know that with Chester there will not be a penny slipping through his fingers,” Allan said. “Sweet’s thought process coincides with administration. There are some strong parallels.”
And why did Sweet respond with “I am unable to comment on this?” Because he first contacted his clients -- members of the subcommittee -- apparently advising them that he did not think he should make a comment. This has been confirmed by both Byrne and Locken.
Knoch told Sweet she had no objection to Sweet making a comment. Locken wanted to know if the county was going to be billed for his time. And Byrne supported Sweet’s “no comment” position.
“He is the attorney and he knows what he should reply to and what he shouldn't so I agreed,” Byrne said.
It is not known why Robertson, who is generally affable and excessively wordy, would not comment at all.
Tightly wrapped in the county’s fiscal crisis package is Robertson’s most recent update of his fiscal restoration plan, which does not include Sweet’s strategy that the state cannot force the county to pay down the treasury debt.
Instead, Robertson continues to suggest that the county sell off some of its properties but with considerable reservations compared to an early version of the plan.
He acknowledges that the sale of some buildings may not be plausible, such as the Oak Street shop facility. The Belli Building poses higher long term costs. The 4th Street complex “would have varying impacts on different departments.” And the sale-lease back plan could lead to a questionable debt service burden.
Also yet to be resolved under the heading of “Mitigation of threats to Cash Flow” is the potential costly issue of “Compensated Absences Liability.”
Editor’s Note: This article first appeared in the March issue of the Modoc Independent News. In that article there was a typo in the line “…apparently advising them that he did not think he should not make a comment,” in effect a double negative based on “not.” We regret if this caused our readers confusion. The typo has been corrected in the Modoc Independent News blog version.
36 comments:
Fools! The option exists to negotiate our own way out of this mess, and Byrne, Allan, Cantrall and the demi-god CAO bury that chance from the taxpayers!?! They are not working on our behalf, they've been snowed by the financiers.
Snowed...maybe, but the fact that the Modoc County Record reported nothing on this option that the taxpayers should be able to consider is a telling one, in and of itself.
Why do some of the county officials and the Record newspaper want to keep the rest of us uninformed?
If they try to negotiate with the state there will be embarasing questions presented by the state and they will require answers before they will negotiate. There are too many cronies that don't want to answer questions.
If it is true that the state cannot force the repayment with taxpayer money, then what is the problem here. Let the administration go forward with their plan, and if the plan meets some of the needs, great! That is their job, to try to pay back what was miss-allocated. Is this blog becoming tabloid journalism? Sounds sensational enough...
They have meetings with profesionals trying to help us and they don't even have minutes or recordings of the meetings. Now they can't agree on what was said at the meetings. Why do they think minutes of these types of meetings are required and should be public? What are they hiding?
The county ignored warnings in the past about not spending restricted funds and got us all into debt without our knowledge or say-so, and now they ignore what seems a practical proposal to reduce that debt without our knowledge or say-so. The other bloggers are right about this information filtering that has been going on in this county and the lack of reporting in this weeks Modoc Record on these newest developments that might save the taxpayers in this county several million dollars lends credence to those opinions.
This budget committee is required by board policy to give monthly reports to the public at a BOS meeting.
Has there been any reports by this committee since its inception?
If so, when was the last one? If not, why not, and when is the next one?
The taxpaying public wants to know.
Come on gerri. Now that realy interesting subjects are being discussed here you are silent. What do you have to say about all of these meetings being a waste of time without any records kept. Is this Robertson's way of doing business - no records, no proof. Just what is your problem with being open with the public? We don't bite if you're open and honest.
10:44pm, Board policy actually says that these status reports “shall be made to the Board at each regular meeting.”
The BOS has 2 regular meetings each month. So, just exactly how many status reports at regular meetings have there been, and when was the last one given?
Ron, any ideas?
In answer to 10:44. I have been present when Robertson has given a report to the BOS but they are very vaguely worded and no info of what occurs at any of the meetings, only his summary. To give him some credit though, he has requested guidence from the BOS more than once but always got nothing.
Thanks Ron, but the point remains, this committee report should be done at every regular BOS meeting.
It should be a report that includes all of the members input and any votes taken or consensus reached and the reasons why each member reached that decision.
Other than by having the Auditor, Treasurer, (and Sheriff in his capacity as an elected official) speak at every BOS meeting regarding the budget process from which they have been unlawfully excluded, this is the only way to get all of the public information out to the public.
Heaven knows the Modoc Record hasn't been as helpful as it should be in this regard.
Taxpayers pay the bills and pay the employees, and they deserve much better information than they have been getting from this budget committee.
Modoc taxpayers need to investigate this bankruptcy attorney and his firm, particularly regarding crisis management in public agencies.
Here are some of this firms qualifications:
Crisis Management
"Since public agencies undergoing financial duress are subject to intense scrutiny, we work hard to help our clients regain public confidence. By teaming with our Crisis Management Practice Group, we respond quickly to implement clear, straightforward public policies. Many of our clients have sought our services in this area, notably the City of Bell in the aftermath of a scandal in which top employees were receiving grossly inflated salaries and the City of San Bruno after a devastating and tragic pipeline explosion last year.
They do have a lot of experience that the taxpayers deserve to hear about and our CAO and some of the BOS is keeping us from hearing - especially regarding "implementing clear, straightforward public policies."
This last is something that this budget committee and the BOS have been sorely lacking.
Here is a link to this website:
http://www.meyersnave.com/publications/michael-sweet-joins-meyers-nave-and-launches-new-municipal-debt-restructuring-and-bankr
Who is leading the pack? Chester or the Board? Just because the CAO, who by the way has a rather large ego, doesn't care for the attorney, doesn't mean that you cut communication. Unless you really don't want a write off. Then the question is why don't you want a write off? The biggest problem that the Supervisors are facing right now is blindly following a CAO, that suffers zero liability at the end of the day, who is ill prepared to deal with a situation of this size. Chester's duty is to do what is best for this county as a whole, not just what is best for the select non general fund departments.
Did anyone notice Allan's agenda item to move the meeting to City Hall. What is that all about? Why would you move them other than if you don't want them recorded? That might be a good question to ask on Tuesday.
The BOS want to move meetings to the city hall. Why? Is that room equipped to record and broadcast meetings to the internet? If the internet broadcasts will end when moving there then we know why they want to move. It will be more difficult for the sheriff to attend also. I hate to be a skeptic but since the last election this BOS has taken too many moves toward public inaccessibility.
Silence is deafoning. Where oh where is a comment from supervisor byrne about the last couple of weeks of unusual events including moving meetings away from the sheriff's office after Supervisor Allan asked the sheriff to not attend meetings. They all seem committed to placing barriers to information. When they need to be more open they are digging the hole deeper.
Marijuana cultivation controls are going to be put in place this week by the BOS. The info is a bit misleading by stating twelve plants will be allowed. There is also a square footage restriction that reduces it to a maximum of three plants. When will these people quit trying to mislead us all? There is no way to grow twelve plants in less than 20 square feet.
Isn't this great! They have meetings with contracted professionals about a very complex problem and nobody keeps a detailed record of the discussion. Now they spend all of their time arguing about what was said. How smart dose one need to be to insist on accurate records? Audio recording devices are real cheap too.
10:05 AM, I share your disgust with the county and its misleading ways, but I am also disgusted with the Modoc Record, who thinks that the lead article should be marijuana and not county mismanagement. The Record also didn't have anything in its last paper about the bankruptcy attorney's proposal that could save us millions of dollars, so it looks like the Record is in the misleading by omission business right along with the county.
So who is lying here? Chester says no comment, so we at least know he isn’t lying, just keeping information from the public. So it’s either Byrne and Allan or Locken and Knoch.
Funny that Geri would claim not knowing about it by going over notes to a meeting she didn't even attend.
Byrne wasn't at the meeting in question, so obviously she wouldn't have notes of it - but she for d*mned sure should have heard about it from Allan, Crabtree, and Chester.
So who's lying?
I know what my choice is. What’s yours?
Cantrall seems to be the constant here; and the only thing that she and her cronies have proven is that when they work in the dark, all they end up doing is damage to our county economy.
Despite Rick's political eulogy of Cantrall in the paper last week, where he notes that Cantrall has been good for her district, that quality does not mean she has been an asset to the county as a whole.
In fact, all of the evidence suggests otherwise: that Cantrall was - and still remains - one of the biggest detriments to good county governance, and we now know that she was one of the largest contributors to our multi-million dollar debt problem.
What a great bunch we have running the county. They want to take away state fire protection, move meetings to a room without audio recording equipment, take away the ability to grow medical marijuana for those qualified patients, hold all budget meetings in secret and are afraid to offend the county CAO by getting advice from a real profesional. Let's not forget threats of physical violence (blow his head off) to control differing opinions. Gee, do I realy want to trust these people?
The public needs to demand to see a transcript of that meeting. If there isn't one, we need to know why. These secret meetings must end yesterday!! There should be no doubt now that they are holding secret meetings where records are not even kept and nobody can remember what was said by whom.
If the BOS and the CAO refuse to consider this route, then would they not be supporting the illegal route of making the taxpayers repay a debt that was illegal to start with? What might their liability be with that? Maybe this go-around they could all see a little jail time as they've been advised and are willfully ignoring sound advise towards a restructure. Can the taxpayers bring a lawsuit against the BOS and CAO directly if they choose to pursue further actions that are illegal? How do we get them stopped? This is all pretty frightening as these Supervisors are not listening, and the public is forced to stand by and watch as they cause further destruction to an already floundering County.
And Allan moving the meeting to City Hall? What is the purpose? I realize that the Sheriff might make them a little uncomfortable, but that is public office. Is it what is best for the County? Are they choosing to shut down all audio? Is there a rental price? Who will set up that room? Will they use City Police to bully the public? Curious that Chester who works for the City as well would prefer that the Board move to where he is most comfortable. This is wrong, every part of it is wrong. They have validated everything that the Sheriff and the Auditor said in their open letters in the past few weeks. The outlook is dim, and the best the the taxpayers can get is Allan's endorsement of Chester.
9:15 PM. You can be pretty certain that the decision to move has already been made. The only way to stop it is a large number of people attending Tuesday's meeting at 9:00 AM. New meeting times begin Tuesday at 9:00 AM because we're now on daylight saving time. Don't be late.
Sounds like a bunch of conspiracy theorists. Why are they moving the meetings, to keep us from hearing, because Chester likes it there, because the sky isn't really blue..Who cares, run for office and you can decide where to have a meeting. That is the least of our problems. I think the biggest problem is the elected officials bad mouthing each other on this blog. A united front might be better than all this bickering. It is embarassing and unprofessional.
Here we go again with somebody attacking the individual rather than the idea or information. "Shoot the messenger", "if you can do a better job, run for office". All phony ways to distract from the facts. This is what the guilty and friends do when they can't argue with the facts, they distract with B.S.
1:51 PM. I agree, the moving of the meeting may not seem important. It has little to do with the meeting place, and more to do with why would the Board waste their time entertaining an idea of moving when there are fiscal issues to deal with. If they were spending as much time dealing with negotiations and moving forward as they do commenting on here, writing letters to editors, and calling special meetings that aren't necessary, the County might be moving forward. Instead it's floating in a state of limbo with the board more concerned with where their meetings are held than fixing the problem. Don't shoot the messenger, take it up with David Allan.
The concealment of public knowledge is nothing less than lying by omission, and unless the taxpayers call the BOS and the Modoc Record newspaper on it, we will just keep getting more of it.
The BOS spends more time putting out fires than they do openly discussing the people's business, especially all of the options available to the taxpayers to solve our money problems which they created, not us.
This last issue where the CAO, the BOS, and almost certainly the Modoc Record concealed the advice from the bankruptcy lawyer - which may have the potential to save millions of taxpayer dollars, is just the latest episode of the cover-ups that go in this county.
Lies of Omission:
“To lie by omission is to remain silent and thereby withhold from someone else a vital piece (or pieces) of information. The silence is deceptive in that it gives a false impression to the person from whom the information was withheld. It subverts the truth; it is a way to manipulate someone into altering their behavior to suit the desire of the person who intentionally withheld the vital information; and, most importantly, it's a gross violation of another person's right of self-determination.”
Does anyone else think that this is exactly what our BOS and the newspaper are doing with the ongoing attempts to keep the truth from the Modoc taxpayers?
“Among other common lies, we have the silent lie -- the deception which one conveys by simply keeping still and concealing the truth. Many obstinate truth-mongers indulge in this dissipation, imagining that if they speak no lie, they lie not at all.”
Mark Twain, from his essay: "On the Decay of the Art of Lying"
Keeping ideas secret is a conflict of interest disguised as "working as a team."
Auditor Locken and Treasurer Knoch, as well as any elected BOS member, have an obligation to speak out on issues that they feel may provide an equitable solution to our debt dilemma.
As other posters have mentioned, this behavior of squashing other ideas is nothing more than lying (by omission) to the taxpayers by keeping things from them.
Auditor Locken and Treasurer Knoch are right to challenge this secrecy; not only because it is lying by not telling the taxpayers what actually is going on, but because even if this idea (or any other) turns out to be not the best solution for Modoc, it nonetheless needs to be examined by all concerned before being discarded.
The elected offices of Auditor, Treasurer, Sheriff, District Attorney etc. are meant to be the checks and balances in order to keep one arm of the government (the BOS) from steam-rolling the others (the Auditor, Treasurer, Sheriff, etc.) and therefore to keep everyone involved from bamboozling the taxpayers.
From the taxpayer’s perspective, it is horrifying to watch this circus of deception being repeated, over and over, right before our very eyes.
2:23 PM, CAO Robertson may not be lying by commission (telling a lie) but nonetheless if he lies by omission (withholding the truth) it is still intentional deception, and both reap the same consequences: poor results for the taxpayers.
Did anyone listen to the BOS meeting today? Has anyone noticed that Chester spends allot of time talking, but never really says anything?
The question again is why isn't anything being done? The County is apparently in a position to negotiate with the State. Cantrall made a comment about the attorney that the BOS doesn't want the Treasurer to talk to, stating that they were communicating, Cheryl just didn't know about it. WHAT???? Doesn't that confirm everything that they've been saying (Sheriff & Auditor) secret meetings without the Treasurer and Auditor involved. The County needs to get on with it. Their biggest priority now is getting on with how to cure this debt issue. Does Chester not know how to do it? They have this big lawyer that Chester can't seem to get along with, so they do nothing. Who cares if Chester can get along with him. Chester needs to grow up and act in a manner that is professional and get over it. He's not paid to have personality conflicts with other professionals. He is always the common denominator to every problem over the past few months. Everyone wants to blame the Auditor, the Sheriff, the Treasurer, but they don't want to hold the hired man (Chester) accountable.
Instead they are focused on where to have their meetings. Wasn't it just a year ago that the City was bad mouthing the County and vise versa on the 911 issue. Now the County is going to pay to move the audio system to City Hall. Who benefits with that? And won't that cost the County more? Then the Clerk stated that they were going to get a dedicated DSL connection. Now it's going to cost an estimated 700 to 800 more a year for that connection. How does this make sense? And what happens when the City gets mad at the County again when the County refuses to give the City a free ride on something? They kick the County out, and there is this big expense that went into moving it to a location that they don't own. How does that make any sense? That any effort is even going towards this is ridiculous. Then Sharon Crabtree spills the real story that it's more secure for their closed session meetings. WOW....is she stating the the Sheriff's Office is not secure? June somebody spoke about what a nasty little room the Sheriff's Annex is....so I take it "June" is the one complaining, and the one that wants the meetings moved. The County conducting County business at City Hall is stupid. Find a place that the County owns, spend the money there and call it good. My gosh, there is all that stuff up in the old board room, can't they move that? At least try to utilize some of what they have.
10:11 PM, June may think there is a security problem for closed session meetings and I believe she is correct but it is not the location, it is loose lips. Some people just cannot keep a secret and you have one on the BOS.
Geri Byrne has just confirmed in an out of state newspaper that Modoc taxpayers will be forced by the Modoc BOS to borrow more money.
In the March 17 Klamath Falls Herald and News, Byrne states unequivocally, "Given these more affordable rates, a partial financing to meet cash flow needs undoubtedly will be part of the solution."
How easy it is for elected officials like Byrne to not only not have this dialog out in the open in her own community with all of the elected officials and taxpayers concerned, but to also take a jab at people within the community that disagree on the facts.
It is unconscionable that as a Modoc County taxpayer I learn in an out of state publication that my local representative, who is unable to work effectively with other elected officials or to communicate honestly with the taxpayers she represents has just now placed me even deeper in debt.
The link to Byrne's arrogant side-step of our own local political process can be found here:
http://www.heraldandnews.com/viewpoints/columns/article_8651a014-7084-11e1-ad74-001871e3ce6c.html#user-comment-area
Since Byrne is so certain, there must have been another of the super secret meetings where they decided this. This is probably coming from CAO Robertson because he lacks the imagination or experience to handle this problem and has too many friends and relatives and in-laws working for the county and city. He has too many social and family obligations to be effective. Chester would have us borrow money to maintain the wages of the overpaid relatives and friends. There is just no way he can be objective about how to spend our money. How can anyone cut off money to mother-in-law and still go to thanksgiving dinner there?
How can they be considering borrowing? How do they expect to pay the loan – another tax! The previous officials gave away the store and sold the farm to perpetuate high wages for friends. We should cut off those high wages and departments that we cannot pay for.
“We know that with Chester there will not be a penny slipping through his fingers,” Allan said.
Except for the $11,000 plus he dropped on a copier.
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