Balancing the County’s Budget Deficits
on the Backs of Children
By Ray A. March
Late 2000, early 2001
Prop. 10 Trust Fund Debate Heats Up
In November and December of 2000, after Executive Director Donna Michelson had systematically established that Prop. 10 funds were legally for the exclusive use of the Children and Families Commission and independent of Modoc County, Judi Stevens, then the elected county auditor, surfaced with her own interpretation of the law.
In a Jan. 8, 2001 memo to the commission Stevens said she “was not pleased with the information that Donna Michelson told the commission.” She made four points in her memo:
1. All departments have to do their own accounting.
2. The commission chose to have its money in the county treasury and had the Board of Supervisors establish a trust fund.
3. “…that the funds could not be removed from the county treasury, but if the commission removed the funds from the treasury, Stevens would have to “direct charge” the commission for the services of the county, pointing out that commission chair Phil Smith supported her position.
4. Recognizing that the commission was not under the direction of the Board of Supervisors, there would still be charges made to the commission “as long as the money is in the county treasury.”
As for Item 1 it appears Stevens was attempting to completely absolve herself of all responsibility although the auditor’s office is responsible for internal controls and accounting procedures of all departments and agencies who use its services, according to sources knowledgeable of the auditor‘s office.
The auditor’s office is also responsible to insure that each department knows how to reconcile its books with that of the auditor.
In regards to Item 2 there is argument that Stevens was not accurate in reporting back from the conference she referred to. The commission had the authority to do whatever it wanted, whenever it wanted.
Item 3 has to do with how the county calculates its overhead rates. Most counties in California use the same process as Modoc County, according to sources. It is complicated and convoluted. It also sets the rates based on previous year’s levels of service.
It was apparently up to the commission, which early on did not appear to agree with Michelson, to arrive at its own interpretation of Steven’s memo. Instead it stood firm and fell back on the politically-safe status quo -- no change is good change.
Next: Part 3
A detailed look at the year 2001 and how the Children and Families Commission doggedly worked not only to ignore Michelson’s advisements but ultimately to find a way to get rid of her without ever addressing the issue of removing Prop. 10 Trust funds from the county treasury.