Modoc County Daily News

2012-02-01T09:47:00.000-08:00

Balancing the County’s Budget Deficits

on the Backs of Children

By Ray A. March

Part 7

May 25, 2001
Prop. 10 Funds with County are Illegal

In the meantime, two days after her e-mail to Harbaugh, Michelson sent another e-mail to various members of the commission, including Supervisor Patricia Cantrall, informing them that she had met that morning with Walter Davis, branch manager of the Bank of America in Alturas.

The purpose of the meeting was to discuss the process of transferring the Prop. 10 Trust Fund from the control of the county auditor (Judi Stevens) and treasurer (Cheryl Knoch) to a commission-controlled trust fund account with the B of A.

“Davis explained to me that our money with the county is in a non liquid account and this is the reason the auditor (Judi Stevens) keeps telling us we can’t take our money out and the reason the county is earning 5.2 percent and we are only getting a proportionate share of that interest,” Michelson wrote the commissioners.

Wasting no words, Michelson informed the commissioners that it was illegal (she put “illegal” in bold face) “under the state commission’s guidelines for the Prop. 10 revenues and/or trust fund to be in a non liquid money market trust fund.”

“Prop. 10 revenues are to be in an interest bearing trust fund that is liquid, meaning that the commission has access to that fund at all times,” she wrote in the memo. “The state commission deposits the money with the county treasurer and once that money is recorded the commission has access to the total amount in that trust fund.” She described for the commissioners the simple procedure for making the transfer from the county to the Bank of America.

She then contradicted commissioner Carol Harbaugh who had maintained that an unnamed source at Bank of America said the Prop. 10 Trust Fund would have to be managed through the commercial division at the bank’s headquarters in San Francisco.

“Davis said our trust fund would be managed locally at the Alturas branch because headquarters deals with formal trusts,” Michelson wrote. “Those accounts are usually for large businesses…and the fees would eat up our trust fund.

“I’m sending this information beforehand so that the point does not have to be belabored at our next meeting and also to demonstrate how simple the process is,” she concluded. “Regardless, the way our money is being handled now is illegal.”

Michelson was doing advance homework for the commission, preparing it for what should be a routine banking procedure -- moving Prop. 10 Trust Funds from the control of the treasurer and auditor to an account in the commission’s name.

Next: Part 8
    The Children and Families Commission finds an excuse to get rid of Michelson. The excuse is called a “concept paper.”

2012-02-01T09:42:00.001-08:00

2012-02-01T09:25:00.000-08:00

Letter to the Editor
Short-Changing Veterans

Dear Editor,

As I followed your blog through the bureaucratic maize, deliberately tangled here and there like spider webs in order to protect someone while exposing others to face live rounds without a flack jacket, I am reminded of a "Sopranos" episode, played by the Muppets.

It would be great if there were a tracking device like your blog to follow money and other benefits allocated by Congress for crippled American veterans. Of the millions of dollars designated for homeless veterans, nothing gets to the veterans while bureaucrats take a vacation in Jamaica or Oaxaca and the office is being renovated in preparation for a favorite son to inherit.

The veterans shiver wet and cold, often dying of exposure, while the bureaucrats hurry out and establish a Swiss or off-shore bank account. Where does one file a complaint? Everyone in government wants to be in control of the money but nobody wants to be in charge of integrity.

Darryl Babe Wilson
Santa Cruz

2012-01-30T19:12:00.000-08:00

Editor's Note: For those visitors who have told us they are having a problem posting a comment, we've implemented an adjustment which hopefully will make it easier. Click on "Comment" under the Post you wish to comment on, and a full page will pop up where you can leave your comment.

2012-01-29T17:47:00.000-08:00

Balancing the County’s Budget Deficits

on the Backs of Children

By Ray A. March

Part 6

May 11, 2001
Harbaugh-Michelson Dispute

At Executive Director Donna Michelson’s request, apparently supported by the commission at its May 9 meeting, the state’s California Children and Families Commission agreed to discontinue a $5,816 monthly disbursement to the Modoc County Children and Families First Commission until advised to resume the payments, according to a letter signed by Joseph P. Munso, chief deputy director.

May 22, 2001

Sending copies to each member of the commission, Donna Michelson wrote John D. Abreu, a certified public account in Alturas, requesting a vast array of documents that substantiated his audit of the commission in 2000. Most of the documents she requested included balance sheets from the county auditor’s office, deposit receipts covering payments from the state to the county treasury and requests to withdraw warrants on the Prop.10 Trust Fund.

Apparently the reason for her request was disclosed in an e-mail sent three days later to Dr. Edward Richert, vice chair, in which Michelson said the information was needed for an accountant of Price Waterhouse “who possibly may be the one reviewing and setting up our books from the TA center.”

Michelson in an e-mail exchange later told the Modoc Independent News:

“Carol Harbaugh was having none of this. She unilaterally changed my employment contract and made me a county employee under her. Yet, she instructed Judi Stevens not to deduct the usual benefits for county employee’s health insurance and SDI (short term disability insurance).

“And she simultaneously told me I owed retroactively half of the deposits for social security, short term disability insurance and health care insurance that they failed to pay on my behalf. Then she filed her proposal with the auditor and the commission to be the agency that handles the trust fund for all incoming deposits for the commission while sitting as a member of the commission.”

May 23, 2001

Harbaugh’s move to reclassify Donna Michelson’s position as an employee of the Children and Families Commission to Harbaugh’s office was met with stiff resistance from Michelson.

In an e-mail addressed to Harbaugh at the Modoc County Office of Education, Michelson told Harbaugh a change in her status was inappropriate because she was not employed by a county department. And then she went straight to the point.

“It’s not entirely clear that you have authorization to issue a change of status since you alone are not my employer and there has been no authorization from the Prop. 10 commission to do,” Michelson informed Harbaugh.

Michelson acknowledged that, “The only problem I see at this point is reimbursing Mental Health for $5,200 for the month of January 2001.” Michelson was apparently an independent Mental Health contractor for one month.

“Judi Stevens paid me out of Mental Health’s professional fees account because Phil Smith was in Mexico for a month and he was the only authorized signature. Mike Maxwell said she (Stevens) should have come to him and he would have authorized writing the check from Prop. 10 account,” Michelson revealed in her e-mail to Harbaugh.

It’s not clear in the documents obtained by the Modoc Independent News that Harbaugh’s effort to reclassify
Michelson as an employee under her supervision was successful at the time, but the issue was revisited in September of 2001.

Next: Part 7
    Donna Michelson pays a visit to B of A.

2012-01-27T09:08:00.000-08:00

Balancing the County’s Budget Deficits

on the Backs of Children

By Ray A. March

Part 5

May 9, 2001
“Is The Money Just Not There?”

At 5 p.m. four members of the Children and Families Commission met at its 127 South Main Street offices in Alturas to consider a 12-item agenda that included two highly controversial subjects.

Attending this meeting were Donna Geldreich, Carol Harbaugh, Alice Lybarger, Dr. Edward Richert, vice chair; and Donna Michelson, executive director and the commission’s only staff member.

Absent were the commission’s chair Phillip Smith and Supervisor Patricia Cantrall. In existence for more than two years, the commission had yet to fill out its 9-member board as required by an amended Ordinance 321-A.

First of the two divisive agenda “action” items was a written report by Smith following the commission’s April 18 request for Auditor Judi Stevens’ documentation of funds in the treasury. According to minutes of the meeting, Smith stated in his report that all Prop. 10 Trust Fund monies were accounted for, but his report did not contain any written documentation from Stevens verifying his assurance that the funds were safe.

Consequently, Smith’s report was tabled on a motion by a cautious Harbaugh until a special meeting could be held on May 14 when it was expected Smith would be in attendance and provide documentation to support his report.

In the meantime, Michelson presented her own written report giving the commission various options to force the county to be accountable for Prop. 10 funds in the treasury. Her suggestion, according to the minutes of the May 9, 2001 meeting, was “to hire a contract auditor/accountant (outside the county) to review the auditor’s and /or county records for the commission as a preliminary step. This way resolution is in-house and eliminates unnecessary publicity.”

Apparently at this point in the meeting there was reference to a possible grand jury investigation because the minutes reflect that “Richert commented that seeking a grand jury investigation would be impractical and suing the county would tie up the funds indefinitely; therefore, going with an outside auditor/accountant seemed to be the reasonable way to go.”

Harbaugh declared that she intended to “independently” contact the state’s office of Children and Families Commission to see if they could be of assistance. She declined to answer when Michelson asked who she would contact at the state level.

The second controversial item on the agenda was a proposal by Michelson to open a Prop. 10 Trust Fund account with the Bank of America in Alturas.

Harbaugh quickly moved to forestall any discussion of a Bank of America account “until she had an opportunity to talk independently with certain unnamed persons at the state commission” and “the commissioners did not want to approve a motion to open a Prop. 10 Trust Fund account with Bank of America without first taking action on Chair Smith’s statement…” (regarding the status of the funds with the treasurer and auditor.)

It is here that differences of opinion between Harbaugh and Michelson become openly evident. First, Michelson reminded Harbaugh and the other commissioners that in order to protect Prop. 10 Trust Fund money they had previously agreed to establishing a separate account with Bank of America.

Then she recommended moving nearly $600,000 from the county treasury to the Bank of America “and that way the commission would know that at least that amount of money, according to Smith’s undocumented report, existed in fact and not just on paper.”

Harbaugh, in countering Michelson’s recommendation to transfer money out of the treasury, said “she had independently spoken with the county counsel and county auditor Stevens and they both said they don’t think its legal for the commission to withdraw their Trust Fund and put it in an outside bank account.”

That was enough to prompt Michelson into a strong and instructive reaction.

“How many times do we have to visit this issue,” she pointedly asked. “It’s not the county’s money! All that is legally required is for the state to initially deposit the Prop. 10 revenues into the county treasurer’s office, and if the commission wanted to they could withdraw that money once it had been deposited and recorded in the county treasurer’s records.

“The county treasurer’s office is a legal conduit so that the state will have accurate records for their annual audit. What the commission does once that money is deposited into the county treasury is entirely up to the Modoc commission.

“…Rather than the county always requesting the commission to produce written statements, which we have on several occasions, why doesn’t the county provide to the commission the written rules and regulations and/or documentation governing independent public entities that they are operating under so we can all be on the same page rather than the constant hearsay that it’s not legal and the commission in effect having no control over their own Trust Fund?”

Michelson did not stop with that, she went on to emphasize, according to the commission’s minutes that:

“The commission is separate and distinct from the county and Ordinance 321-A reaffirmed this fact.

“The commission is not a county department nor a county agency and the commission has no MOUs (memorandums of understanding) with the county in general nor any individual contracts with the county auditor, county counsel or the chief administrative officer (Mike Maxwell).

“The county counsel is the county’s attorney and not the commission’s.

“The commission has complete control over their trust fund and strategic plan, yet the commission is constantly confronted with the county telling them that the county has no liability towards the commission.

“The commission wishes not to do the payroll for the one employee of the commission.

“The commission is told by the county they can’t open an outside banking account yet this operating account is needed in order for the commission to cash checks to pay its employee and operate in a timely manner.

“The commission is told they can’t have access to their trust fund unless it’s on the county’s terms, yet the county auditor’s office continues to have complete control over the commission’s money. Why?

“Who is running this commission,” she asked. The minutes do not reflect an answer.

Directly addressing Harbaugh, but prefacing her remarks with “all due respect,” Michelson asked Harbaugh “what about respect for the power of the Prop. 10 board and its decisions? Doesn’t this board have any power? Don’t their actions mean anything?”

Continuing, she observed, “The commission is composed of six members and commissioner Harbaugh is but one member of the board. So, why does the county act as if commissioner Harbaugh and Chair Smith are the entire Prop. 10 board?”

“If the county is so sick of this commission, then why don’t they let us withdraw our money as it comes into the county treasury office and be about our business,” she asked. “Is the money just not there?”

Michelson’s final question was answered by Harbaugh who made a motion that was seconded by Lybarger to table the agenda item without further discussion until the return of Smith.

Not until early in 2009 -- seven years after Michelson asked where’s the money -- was it revealed that it was not in the treasury.

An estimated $20 million in state and federal funds in the treasury, as it was disclosed by then CAO Mark Charlton, had been misappropriated through a funneling system that benefited, among others, the Modoc Medical Center.

Less than nine months after Michelson argued her case for removing Prop. 10 Trust funds from the county treasury, the commission answered with her firing.

More on that.

Next: Part 6
    Modoc County Supt. of Schools Carol Harbaugh moves to stymie Donna Michelson.

2012-01-25T15:56:00.000-08:00

Balancing the County's Budget Deficits on the Backs of Children

By Ray A. March

Part 4

March 21, 2001
Stevens Fails to Show

    The all-important Ordinance 321-A was amended to reflect the fact that the commission operated as an “independent legal entity” separate and distinct from the County of Modoc.
    Consequently, according to records, the commission had no written contract for services with the county and the county had no liability to the commission. In effect, the commission had complete control over its Prop. 10 Trust Fund and its strategic plans.

April 18, 2001

    At a special meeting the commission’s board voted to request that Auditor Judi Stevens give it a written accounting of Prop. 10 monies deposited to the treasury.
    Stevens did not appear before the commission. Instead, her written account was presented to the commission at its May 9 meeting.


April 26, 2001

    Records indicate that while the state required that the Prop. 10 Trust Fund be a “liquid fund in an interest-bearing account at all times,” the commission actually voted to invest only 10 percent of the trust fund. This was also reflected in a budget meeting the year before.
    In less than two weeks following the previous April 18 meeting, the issue over the welfare of the Prop. 10 Trust Funds would reach a level of contention that would involve nearly every member of the commission for the rest of the year -- even as the Prop. 10’s governing body the commission made countless efforts to sidestep Executive Director Donna Michelson’s counsel.
    As we shall see on May 9, 2001.

Next: Part 5
    Prop. 10 Trust Funds accounted for, but are they really?

2012-01-23T10:46:00.003-08:00

2012-01-23T10:44:00.000-08:00

Balancing the County’s Budget Deficits on the Backs of Children

By Ray A. March

Part 3

First an overview of 2001

    As records show -- beginning with Steven’s memo of Jan. 8, -- the year 2001 would become an extremely contentious one for the Children and Families Commission.
    And it was all because of the commission’s resistance to move its Prop. 10 Trust Fund to an independent bank account outside the control of the county treasury and auditor’s office, as its executive director, Donna Michelson, had urged.
    Two “camps” quickly formed across from one another. One camp was the lone tent pitched by Michelson and the other was a fortified barracks housing the Children and Families Commission and its allies.
    Records indicate there were accusations that commissioner Carol Harbaugh “started playing up personality conflicts and making Michelson the target of the public and county agencies.”
    Another account that summer of 2001 pointed to alleged nepotism among county employees with lines connecting Kelly Crosby, Phillip Smith’s alternate, to her mother-in-law Kate Crosby “who does substantial business with Carol Harbaugh and Smith,” to Rick Crosby a mental health counselor employed by Smith who allegedly did not have the requisite credentials for the job.
    However, it appears Kate Crosby had resigned from the commission before her daughter-in-law became Smith’s alternate, according to documents.
    Harbaugh was also targeted in documents when she named Carol Callaghan that summer to be her alternate. “Carol Callaghan is married to Carol Harbaugh’s ex-son-in-law who is in law enforcement,” an unsigned memo states adding that Callaghan was executive director of TEACH, Inc., a non-profit under the control of Harbaugh.
    Documents also reveal a minor flap in which Supervisor Patricia Cantrall complained that Auditor Judi Stevens refused to reimburse her for mileage to an undated Prop. 10 meeting and the supervisor asked the commission to pay for her travel. It is not known what the commission decided to do with Cantrall’s request.

Next: Part 4
    The rest of 2001

2012-01-18T13:17:00.000-08:00

Balancing the County’s Budget Deficits

on the Backs of Children

By Ray A. March

Part 2

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.

2012-01-18T13:13:00.000-08:00

Letter to the Editor

In Defense of Libraries

Dear Editor,

I am concerned by the sad plight of the Modoc County Library reported in your columns and afraid that the chain of reactions they generated is harmful to the library at a time when it most needs our support. I also would like to make a correction in the article of January 5. As you stated, the predictions for the library’s running out of reserve funds at about this time were never a secret. While I was library director, 1993-1999, the Library Advisory Board and I made sure the Board of Supervisors and the community at large were aware of it, and we explored various solutions to a problem that is built in the Mello-Roos structure itself. This topic was never welcomed by the Supervisors nor the public but I did not lose my job because of it, I chose to relocate for personal reasons, several years into those discussions.

The solutions explored then to offset increased costs of operation, were no more palatable than they are today. Increase revenue? Nobody wants to hear about more taxes. Reduce costs? Nobody wants to see jobs lost, small branches’ hours cut, inter-library loans suspended, etc… We did our best to reduce expenses without hurting anyone. During my tenure and during Cheryl’s, a full-time position was cut when someone left it voluntarily. The remaining staff made do with less help and more volunteer contributions. We applied for grants to supplement the budget. The Friends of the Library chipped in with increasing devotion. And the Modoc County Library was consistently maintained as a top of the line operation and cultural center for the County. For its small size, it matches the service of any urban area and in some ways, surpasses it. It is run with great professionalism and is an asset for any prospective newcomer or investor in the area.

It is regrettable that an appeal was not made to the voters some years ago, before the general county debacle and the national economic crisis compounded the problem and made it a much bigger challenge. But would the voters have approved it then? Are they willing to put out just a few more dollars (perhaps as little as $25.00 instead of $18.00) to support an well-run institution that contributes to their community’s education and well-being, and does a great job with frugal means and the help of many generous volunteers? And isn’t it premature to post a referendum on Cheryl Baker’s resignation, before the informational meetings that will give her an opportunity to convey the facts to the public?

E-readers are nowhere near replacing libraries and librarians need an array of professional skills much wider than they used to. Your current library staff has those skills, acquired over many years of work and training. Modoc County residents, be proud of your library and whatever measure is agreed on to save it, preferably without any lay-off, please support it or you will lose one of your best treasures.

Godelieve Uyttenhove

Lakeview, Or.

2012-01-16T21:09:00.000-08:00

Balancing the County’s Budget Deficits

on the Backs of Children

by Ray A. March

Part 1

Adopting Ordinance 321-A

    Jan. 5, 1999

The Modoc County Board of Supervisors, chaired by Patricia Cantrall, unanimously adopted Ordinance 321-A formally organizing the Children and Families First Commission provided by law under California’s Prop. 10 Trust Fund.
    The ordinance authorized a seven-member commission board, later amended to nine members to include one member of the Board of Supervisors, the director of health services and the county superintendent of schools, or their designees, and six members appointed by the Board of Supervisors.
    The ordinance also specifically stated “the commission shall be a public entity separate and distinct from the county of Modoc. The county of Modoc shall have no responsibility whatsoever for any financial obligation or other liability of the commission.”
    The clause, clearly outlining the separateness between the county and the state-funded Children and Families First Commission, would eventually lead to the revelation that high-ranking county officials apparently had no intention of abiding by state law, or at the very least did not understand the law, especially when it came to funneling Prop. 10 Trust Fund money -- destined for the Children and Families First Commission -- through the county treasury and auditor’s office.
    As background to the issue of Modoc County’s misuse of Prop. 10 Trust Funds the state law governing Prop. 10 requires that “the moneys allocated and appropriated to county commission shall be deposited in each local Children and Families First Trust fund administered by each county commission, and shall be expended only for purpose authorized by this act and in accordance with the county strategic plan approved by each county commission.”
    The law also mandates that “no money in the California Children and Families First Trust Fund shall be used to supplant state or local general fund money for any purpose.”
    In effect, under law Prop. 10 funds are regularly provided to the county by the state. Once received by Modoc County the funds are required to be transferred and held in a separate account specifically and solely for the Children and Families Commission.
   For the last fiscal year 2010-11 the total Prop. 10 funds revenue received by the county and deposited in the treasury amounted to $434,458.91, according to Treasurer Cheryl Knoch. These Prop. 10 Trust Funds are at the center of the treasury misappropriation issue.
    This series will illustrate that contrary to law, Modoc County officials co-mingled these funds with the county's general fund -- as argued unsuccessfully by then-Executive Director Donna Michelson.

March 17, 2000

    More than a year after adoption of Ordinance 321-A the slow-grinding process of bureaucratic paperwork results in Donna Geldreich, commission member and director of Resource and Referral, a division of TEACH, Inc., sending a fax memo to Patti Houston, governmental affairs, California Children and Families Commission in Sacramento, affirming that language in the state law is acceptable.
    Geldreich also stated the commission was “a legal public entity separate from the county.”
    The stipulation that the Children and Families First Commission was to exist outside the authority -- and potential meddling of the county -- would remain at the center of arguments over where Prop. 10 money should be deposited -- either with the county or an outside independent bank.

Oct. 27, 2000

    Continuing with the establishment of the Children and Families First Commission as a legal entity, Executive Director Donna Michelson routinely filed a “statement of facts” with Bill Jones, Secretary of State, establishing Modoc County Children and Families Commission (the “First” in Children and Families First Commission had been deleted) as the legal name of a public agency and listed seven people as members of the commissions’ board.
    They were: Phillip J. Smith, chair; Dr. Edward P. Richert, vice chair; Patricia Cantrall, Kate Crosby, Carol J. Harbaugh, Alice Lybarger and Donna Geldreich.
    Nearly two years after its formation, the commission was still two members short of its state-mandated membership of nine.

Next: Part 2
    Debate over the placement of Prop. 10 Trust Funds begins to heat up.

2012-01-12T18:36:00.000-08:00

Community Library Meetings

5 - 7 pm Tuesday, Jan 17

Cedarville Library

5 - 7 pm Wednesday, Jan 18

Lookout Library

5 - 7 pm Tuesday, Jan 24

Adin Library

5 - 7 pm Thursday, Jan 26

Alturas Library

Agenda for Community Library Meetings

Meeting called by: Modoc County Library Advisory Board (LAB), Friends of the Modoc County Library (FOL),
and Modoc County Librarian

Facilitator: Elizabeth Cavasso, Jeff Bullock or Mark Steffek

Notetaker: Carol Sharp

Attendees: Interested public, Modoc County Board of Supervisor Representatives (BOS)

5 pm - 5:10 pm Welcome - Facilitator
                        Introductions (Librarian, LAB, FOL, BOS)
                        Meeting purpose, ground rules

5:10 pm - 5:30 pm Overviews - Cheryl Baker, Librarian, Mark Steffek, LAB
                            Modoc County Library System

5:30 pm - 5:50 pm Questions and Answers Panel -Cheryl Baker, Mark Steffek, Glenn Lantz

5:50 pm - 6:10 pm Brainstorming Breakouts

6:10 pm - 6:30 pm   Group Report Outs

6:30 pm - 6:45 pm   Next Steps

6:55 pm                 Closing Comments and Adjourn

2012-01-10T20:37:00.000-08:00

Balancing the County’s Budget Deficits

on the Backs of Children
A Critical Study of the Children and Families Commission
and the Misappropriation of the Modoc County Treasury

By Ray A. March

Editor’s Note -- The following is a multi-part series exposing the gradual process --beginning in 1999 and continuing to this day -- in which the Modoc County Children and Families First Commission (now First 5) purposefully ignored warnings from its Executive Director Donna Michelson that state mandated Prop. 10 Trust Funds may be victim to misappropriation and they should be kept out of the hands of the county treasury and auditor’s office.
    In fact, Michelson’s suspicions of misappropriation were substantiated in early 2002 in documents that reveal Modoc County Treasurer Cheryl Knoch openly informed the commission that the treasury helps pay the balance of funds that run in the negative such as the hospital.
    And, even with the advice that retaining the funds in the treasury was illegal, Supervisor Patricia Cantrall, a member of the commission, pointedly ordained that the Prop. 10 Trust Funds should remain there.
    Equally damaging are further indications that then-county auditor Judi Stevens was apparently using Prop. 10 funds for uses other than they were intended -- still another implication that they were being misappropriated by the county.
    And, another member of the commission, Phillip Smith, actually instructed Michelson to find a way to subvert state law requiring that Prop. 10 Trust Funds be kept in an account separate from the county’s control.
    Not only did the commission of 1999 and for the next decade fail to follow Michelson’s advice, it also ignored the warnings of its outside auditors who to this day strongly suggest that Prop. 10 funds are in jeopardy if they remain in the county’s control and not in a separate outside bank account.
    The series is based on public records for the most part obtained by the Modoc Independent News under the California Public Records Act. They include minutes of various commission meetings, e-mail exchanges between Michelson and commission members, letters to top-ranking state officials and outside audit reports.
    There are written statements by Treasurer Cheryl Knoch, Auditor Judi Stevens, County Superintendent of Schools Carol Harbaugh, Supervisors Patricia Cantrall and Mike Dunn and Commission Chair Phillip J. Smith, who at the time was director of the Modoc County Department of Health Services.
    The original commission members were Smith, Cantrall, Harbaugh, Dr. Edward P. Richert, Modoc Medical Center; Kate Crosby, manager of CalWorks; Donna Geldreich, director of Resource and Referral, a division of TEACH, Inc.; and Alice Lybarger, director, Early Head Start.
    As the commission expanded its board membership others to join were Supervisor Mike Dunn, eventual chair; Tracey Cochran, paralegal in the county counsel’s office also eventual chair; Rusty DuVall, a private business owner whose name also appears on commission agendas as Rusty Cantrall; Carol Callahan of TEACH and Harbaugh‘s alternate; and Rosemary Nelson, a business consultant and apparently Michelson’s lone supporter on the commission.
    During the course of researching and investigating this story the Modoc Independent News was informed by First 5 that “Rusty Cantrall” was a secretarial typing error.
    Combined, the records are a startling history of officials who not only ignored repeated warning signs that it was illegal to leave Prop. 10 funds in the treasury, but were also unwilling to deal with an on-going treasury misappropriation that finally came to public light in 2009.
    Eventually, an orchestrated effort to discredit Michelson ended in her being fired during a 19-minute kangaroo court hearing at the Alturas City Hall on Jan. 30, 2002 -- just three years after the Board of Supervisors unanimously adopted the all-important Ordinance 321-A.

Next: Part 1
    Setting the Scene, Adoption of Ordinance 321-A

2012-01-09T17:32:00.000-08:00

"Balancing the County’s Budget Deficits
on the Backs of Children"

A Critical Study of the Children and Families Commission
and the Misappropriation of the
Modoc County Treasury

To our readers

On Wednesday, Jan. 11 we will begin a multi-part series titled "Balancing the County’s Budget Deficits on the Backs of Children," A Critical Study of the Children and Families Commission and the Misappropriation of the Modoc County Treasury.

Using documents obtained under the California Public Records Act, this series will expose the $20 million treasury misappropriation and those knowingly involved.

The series will run each Monday and Wednesday of the week to its conclusion.

Please pass the word to anyone you think may be interested in the on-going financial scandal of Modoc County.

Thanks, Ray

2012-01-08T19:43:00.000-08:00

Editorial

The Library Is The First, Who’s Next?

    Could the library debacle be the proverbial final straw?
    Or, is it just the first of a landslide of county departments and innumerable employees that will go under because directly or indirectly our elected and appointed leaders illegally took from Peter to illegally pay Paul?
    After the library comes the waste management department, which will run out of money next month, according the county‘s chief administrative officer Chester Robertson.
    And then what?
    After the waste management department comes the possibility that more full time employees from other departments will have to be laid off. That’s a dramatic move in itself, but consider this: laid off county employees have to be paid compensatory time.
    Where is this “comp” money going to come from?
    If the money is not on the county’s books and compensatory time cannot be paid, that is the same as not being able to make payroll. And, if the county can’t make payroll, it automatically goes into bankruptcy, or at the least insolvency.
    How soon will this happen?
    More than likely the plug will have to be pulled sooner than later. Right now, no one is willing to say when.
    We understand Robertson is creating a fund pool to cover the county’s posterior when it has to fire employees. The existence of this pool and how much it amounts to is something of a mystery.
    All we can ask is, “Couldn’t this all have been avoided?” The answer, of course, is yes.
    But about ten years ago our chosen officials took it upon themselves to pay debts with money that legally they did not have -- meaning they misappropriated millions of dollars from the treasury to cover bills that were piling up elsewhere.
    In effect, the library, along with other departments, was an early victim of its money being spent for purposes other than library costs. The library fell victim not only to the misappropriation scam but to the use of its reserve fund, as well.
    We are still waiting for someone to come forward and honestly say, “It’s my fault.”

Hoping for a Happy New Year?

    Then remember these dates:

    June 5 -- state and presidential primary
    Nov. 6 -- general election

    And, remember these names:

    Supervisor Patricia Cantrall
    Supervisor Loren “Shorty” Crabtree
    Supervisor Jeff Bullock

    If you truly want a happy new year and future (and let’s add to that a prosperous one for Modoc County), we suggest you seriously consider voting Cantrall, Crabtree and Bullock out of office -- that is if they decide to run for re-election.

                        -- Ray A. March

2012-01-05T11:10:00.000-08:00

Library and BOS Had Fair Warning

    The Modoc County Board of Supervisors cannot hide behind ignorance when it comes to the revelation that the library system is in financial trouble and facing drastic measures to stay open.
    In late 1997 a news article quoted then-Librarian Godelieve Uyttenhove prophetically predicting that once the library started drawing on its reserve funds it would run out of money by 2011.
    That is exactly what has happened.
    Curiously, this incriminating forecast was presented to the Board of Supervisors during its budget review sessions by current Librarian Cheryl Baker who succeeded Uyttenhove and who is responsible for the financial management of the library.
    “Various financial projections show that library expenses are rising due to inflation, while revenue is staying pretty constant at around $286,000 per year because the tax rate was set in the 1988 vote at the level of $18 per landowner,” the news article in the Modoc County Record stated.
    “The projections indicate that at some point in the next two years, expenses will outpace revenues. At that point, the library system would have to start dipping into its reserve fund,” the article continued, adding “the library reserve fund may well be the most misunderstood account in Modoc County. The myth has developed that it is an over whelming amount when in fact it is only around $300,000 - or just enough to fund the library for one year.”
    “If we do some minor adjustments now, we won’t have to do anything drastic in ten years,” Uyttenhove was quoted as saying back in late 1997.
    Instead of adjustments, the library has been running chronic deficits for many years, according to Chester Robertson, chief administrative officer.
    Uyttenhove emphasized at the time that there was no crisis calling for drastic action, but “that’s precisely the reason to start looking for new solutions now.”
    Fourteen years later the only “new solutions” apparent to the Board of Supervisors is the possibility of a ballot tax measure.
    Could it get worse?
    “The final solution, of course, is to cut services either through cutting staff, reducing hours, closing branches or just not buying new books,” the 1997 article stated.
    However, Uyttenhove points out that in 1988, the voters were promised a "full service library system" and maintenance of "existing services," according to the article.
    Uyttenhove ultimately lost her job for her frankness and joined a legion of others who bluntly told various Boards of Supervisors what they did not want to hear -- the list includes Donna Michelson, former executive director of the Children and Families Commission; Judi Johnson, director of the public health; and Mark Charlton, the chief administrative officer who exposed the treasury misappropriation nearly three years ago.

2012-01-03T10:27:00.000-08:00

Library Debacle
The Beginning of Accountability?

By Barbara March

    After years of county officials illegally misappropriating the treasury and an ensuing domino effect that has taken the county to the edge of insolvency, the first direct hit the people of Modoc County are feeling is the loss of their public library.
    The “debacle” in the words of county supervisor Dave Allan and the resulting debris -- fully supported by Librarian Cheryl Baker -- includes reducing hours and employee time at the Adin, Cedarville and Lookout branches, a vague notion to also reduce hours and staff at the main library in Alturas and the controversial firing of a full-time employee 18 months before retirement.
     In the wake of a 3-2 vote by the Board of Supervisors approving these fiscal measures on Dec. 13 two members of the library’s advisory board resigned saying Baker never showed them a detailed line item budget or told them in advance that an employee layoff was coming.
    The lack of financial information coming from Baker was standard procedure, according to Tom Romero who with Kathleen Fowler resigned from the advisory board.
    "The library advisory board never saw a line item budget,” said Romero who also serves on the City of Alturas Planning Commission. “Whenever a budget was passed there was never a beginning balance. We never got a budget that had a beginning or ending balance."
    Romero went on to delineate his reasons for resigning which include serious concerns about Brown Act violations, collective bargaining act violations and violations of the employee contract MOU.
    But he's most incensed about the layoff.
    "Laying off a full-time career employee is unconscionable,” Romero said. “In most cases you start with part-time first, then go up the food chain. You don't fire someone who's been a loyal county employee for years, two weeks before Christmas.
    "I just didn't get enough information (at the meeting) to go on," Romero added. "I did not go there expecting to fire someone. I'm outraged that they would fire a full-time county employee without considering other options. If we could have had a full budget in front of us we would have been able to consider different permutations. I'm a life-long supporter of the library, in Los Angeles, San Francisco, Chicago and here in Modoc County."
    The library advisory board vote was six to one. Romero was the one.
    The remaining library advisory board members are Mark Steffek, Terry Williams, Richard Mackey, Phyllis Martin and Matt McCandless.
    Asked about the firing of a long-time employee, Mark Steffek said, "this was not a decision that we came upon easily, especially at this time to year. It comes down to economic things, basically the library budget is not sufficient to continue operations and provide services."
    Steffek said the library board was working on proposals for cuts, including staff time at branches, and the need to eliminate a full time position. They were aware that Mello Roos funding was not sufficient to maintain services, and that tax delinquencies and the loss of teeter plan meant the library only gets tax revenue that's collected, but Steffek said "we were caught off guard" by Baker's recommendation that they fire a full-time employee prior to Christmas.
    "I suspect there could be other ways," Steffek said. He represents the Friends of the Library on the library advisory board and said the Friends have discussed whether they should concentrate on fund raising or on the more immediate need of keeping the library open and perhaps funding the staff person who has been laid off.
    "Laying off of a full time staff person is not something we wanted to do," he repeated and added, "this has to go through the union and the MOU with the county. I don't know how that's going to work out. I don't know the process and we received limited information from Cheryl Baker."
    Fueling the controversial handling of the library’s budget and employee management is the fact that Baker and Board of Supervisors have know of the impending financial crisis since 1997 when then-Librarian Godelieve Uyttenhove predicted that if the library drew from its reserve funds it would be broke by 2011.
    This 14-year-old prediction was supported by Chester Roberston, chief administrative officer, in his recent budget review which revealed that a decline in interest rates, a reduction in assessment revenue and the fact that the library has been running chronic deficits for many years, utilizing the fund balance available that had accumulated from a fixed assessment from 1987 have led to its near demise.
    Missing in the equation is the fact that neither the Board of supervisors or Baker, who replaced
Uyttenhove, took the forewarning seriously and saw that history was catching up to them.
    "Historically the library relied on interest from the fund balance available," Robertson wrote in his budget review to the Board of Supervisors, "but declining interest rates and deficit spending has decimated such revenue. These factors have led to a major revenue shortfall that must be addressed in fiscal year 2011-2012. There is no cash in the treasury to back up the library fund balance. Everyone in this county thinks they're entitled to general fund money, it's an entitlement mentality."
    Robertson went on to explain.
    "The library's projected cash balance was $2,800 at the end of the year. If costs and services are not drastically reduced or a revenue measure placed in front of the voters, then partial shutdown costs that would remain unfunded could adversely impact the county general fund in 2012-2013 and beyond."
    What he means is that it costs money to shut down a department, and pay employees for their compensated absences. And if the county cannot pay employees for their comp time upon termination that creates grounds for county bankruptcy.
    It now appears that community members who support the library are marshaling forces to forestall what seems inevitable. Robertson, faced with union ramifications regarding layoffs and cutting staff hours is advocating what he calls the "tough love" approach and says "the public should decide," referring to the possibility of a ballot measure to raise taxes to keep the library alive.
    The library will be holding public forum meetings in January in communities where branch libraries are impacted to discuss, "how we got into this position, to answer questions and brain storm solutions, " Steffek said.
    The only solution Supervisor Dave Allan sees is a ballot measure.
    "I don't see anyway of avoiding a ballot measure and asking the people for more money," said Allan, who along with Supervisor Patricia Cantrall, voted against Baker's request to terminate a full time library associate and part-time library assistant.
    "I voted against Cheryl Baker's proposals because it was really wrong to keep dipping into that reserve fund knowing the library was on a downhill slide," said Allan. "The library debacle was way before my time. I hope my no vote is the beginning of accountability."
    The following is tentative community library meeting schedule. Call Head Librarian Cheryl Baker at 233-6340 to confirm dates and times.

    Tuesday, Jan. 17, Cedarville library - 5 p.m.
    Wednesday, Jan. 18, Lookout library - 5 p.m.
    Tuesday, Jan. 24, Adin library - 5 p.m.
    Thursday Jan. 26, Alturas library - 5 p.m.

2012-01-01T10:11:00.001-08:00

Happy New Year!

The Editors

2011-12-24T15:37:00.000-08:00

Myth Buster - No Wolves in California - Yet

http://www.sacbee.com/2011/12/11/4114710/will-cry-of-the-wolf-return-to.html

2011-12-20T12:42:00.000-08:00

Modoc County - Could This Be You?

http://today.msnbc.msn.com/id/45585751/ns/today-today_people/t/pioneer-spirit-keeps-town-giving-ghost/#.TvDaWNRSRmw

2011-12-06T12:39:00.000-08:00

Editorial

Bored to Broke
The Continued Saga of Lost Money

We’ve just looked at the headlines from last year. (See article posted below)

Boring, we must admit, when the same old bell is rung nearly off its vertex time and again, but that’s what the culprits wish for.

Who? The culprits, the wrongdoers in taking millions from the pockets of the unsuspecting taxpayers and using the money to patch holes wherever they appeared in the county budget -- with disregard for the laws of this state.

The culprits wish for the story to go away, and to their thinking if it gets boring enough maybe the story will go away. In fact, in some quarters that’s exactly what has happened.

Not on this blog, however. Nor on the pages of the Modoc Independent News.

We have vowed in the past (could it be an annual vow) not to abandon our readers and their devotion to seeing justice done.

Just what kind of justice is acceptable?

We think there has to be a declaration by the county grand jury as to who is to blame for putting this county on the edge of bankruptcy if not insolvency. It’s time to move away from the dime, so to speak.

Call in a criminal grand jury. Put the arm on our district attorney and twist.

There has to be a payoff, call it a settlement, with the insurance companies over the $10 million performance bond claim that outright names the culprits. Money from that would be a minor atonement, but could keep the county ship afloat for awhile.

The Board of Supervisors should unite behind this, but don’t put any spare money you may have it.

There has to be at some point an effort by the county to start a treasury repayment plan -- as ordered by the state (but the state may have forgotten all this by now).

Make the drastic cuts that are necessary, even if it means laying off your cousin.

In the end there has to be something that signals or signifies an official acknowledgement of who the culprits are, so we can learn from their unconscionable errors and unforgiving arrogance and hire or elect no one in their image again. Ever.

2011-12-06T12:29:00.000-08:00

Looking Back at 2011

Modoc County’s Twisting Financial Saga

Editor’s Note: We think the headlines we ran during the last year in the Modoc Independent News speak clearly to the one major issue facing Modoc County -- and as yet resolved -- and that is the misappropriation of millions of dollars from the treasury.

January 2011
“I’d Rather Go Back to Vietnam”
In an anti-climatic but no less dramatic last fling at the public former Marine Dan Macsay and out-going supervisor steps down as chair of the Modoc County Board of Supervisors.

February 2011
“Auditors Make Their Report”
A state-order audit gives a guarded diagnosis of county’s fiscal health. Speaking in couched language auditors detour issue of misappropriation.

March 2011
“BOS Votes to Pursue Claim”
After months of hedging and haggling the Modoc County Board of Supervisors backed into voting unanimously to file a performance bond claim that names among others Cheryl Knoch, treasurer; Judi Stevens, auditor; and Mike Maxwell, chief administrative officer as responsible parties in misappropriation.

April 2011
“Not What Went Wrong, But Why?”
An analysis reveals that trusted leaders led the people astray in misusing treasury funds and than failed to stand accountable for their misdeed.

May 2011
“Power Plays, Theatrics Detour BOSA from Taking Right Path”
Game players on Board of Supervisors jockey for position as they drift toward naming a new chief administrative officer and send the old one back to his road job.

June 2011
“Alturas Supportive of Joint-Job Sharing”
A relative calm prevails for the moment as Alturas and the county momentarily enter the 21st century and try to mutually work out what’s financially best for them both.

July 2011
“Modoc County Ranks No. 1 in Federal Dollars Received”
Surprise, surprise. But Board of Supervisors, especially Patricia “This e is the Alamo” Cantrall, continues to bash both federal and state aid, saying who needs them?

August 2011
“Overdue Grand Jury Report May Surface Next Week”
Problems with formatting and editing blamed by court for grand jury report not being released on time.

September 2011
“Modoc County Grand Jury Report, An analysis”
Grand Jury says it has the goods on those culpable in misappropriating an estimated $20 million from the treasury the last decade, but is stopped short by the court and a reluctant DA.

October 2011
“Supes (Finally) Adopt Budget, Now What?”
Three months late in accepting a new budget for 2011-12, Modoc County Supervisors continues in its perilous skirting of insolvency.

November 2011
“If There is Light at the End of the Tunnel Someone is Going to Have to Turn it On.”
After more than a year and not much accomplished with its old fiscal plan, Modoc County works towards a new, revised fiscal restoration plan.

2011-12-06T11:56:00.000-08:00

2011-11-20T20:29:00.000-08:00

Final installment
Fiscal Restoration Plan continued

Summary:
    In summary it took many years for Modoc County to accrue the large negative fund balances in the hospital enterprise fund. The debt service required is substantially more than the county can afford in the best of times. The county is currently faced with a multitude of challenges that complicate any resolution to this process. Recognizing this, the county is implementing a multi-faceted solution simultaneously. This diversified approach will help mitigate the risks associated with delays or challenges in meeting any particular objective outlined above. Finally it is going to take the resolve of the board to educate all the stakeholders including financiers, underwriters, employees, taxpayers, insurance carriers, respective responsible parties, legal counsel, and state/federal regulators and creditor agencies that a collective and integrated solution involving all stakeholders is likely to be the only path forward.

Q. It appears, according to our reading of the plan that the county will be broke at the end of this fiscal year if any one of the following fails to materialize:
    1. It does not successfully sell fixed assets
    2. Bonds are not sold
    3. Performance claim goes unpaid

Robertson. The county will continue operations as long as we meet cash flow requirements and or there is regulatory intervention. All of the above objectives are intended to prevent this from happening. I would not go so far to say that we can’t meet our needs if any one of the above objectives is not met in its entirety. The plan has redundancy to ensure multiple objectives in the event one objective fails to fully materialize.

2011-11-18T16:49:00.000-08:00

Two-Year Anniversary

Dear Readers --

This month the Modoc County Daily News blog is two years old. Over the past two years we have regularly informed you on the latest developments surrounding the Modoc County financial scandal. Our coverage has been picked up by numerous publications including the Wall Street Journal and various newspapers some distance from Modoc County.

In those two years our “unique visitor” numbers (that’s you, our loyal readers) has topped the 110,000 mark. Thanks for your support and for sharing your views on what matters in Modoc County. Please assist us in our continuing efforts by subscribing to the Modoc County Daily News blog.

The Editors

2011-11-18T15:35:00.000-08:00

Mendocino County Re-financing Woes

http://www.ukiahdailyjournal.com/ci_19308533?IADID=Search-www.ukiahdailyjournal.com-www.ukiahdailyjournal.com

2011-11-16T18:11:00.000-08:00

2011-11-16T18:02:00.000-08:00

Part 6 of a Series
Fiscal Restoration Plan continued

Continued Monitoring of Cash Flow:

The county has a cash flow projection from April 2011 that was based on preliminary budget projections. During the budget process key large cash flow needs were identified to ensure the budget has a satisfactory plan in place to expenditure deadlines. The county administrative officer has identified that the county needs to generate cash of a minimum of $2.8 million through some form such as sale of fixed assets or partial financing by the beginning of FY 12/13.

The county through assistance of the Treasurer's Office is now in process of developing a detailed cash flow analysis based on the adopted budget that has been put in place.

Engage in Long Term Revenue Enhancement and Cost Saving Measures:

A) Reduce Duplication of Services and Cross Staffing:

As revenue levels decline, a look back in history is a good indicator of how to generate cost savings to meet mandated service requirements. In past decades the county engaged in cross staffing between neighboring counties, city, and other agencies. Staffing levels were reduced dramatically in 2009, and many departments have few staff other than a department head or elected official. Many department heads already manage consolidated departments; however, the opportunity still exists to find efficiencies. The county will continue to pursue opportunities to cross staff or reduce duplication of services where applicable. Working towards this objective, the county has already cross staffed three general fund department heads between a neighboring city or county.

B) Evaluate Use and Participation in Cost Saving and Revenue Sharing JPAs (joint powers authority):

The county cannot rely on population growth to supply its needs to support services and the estimated debt service levels in coming years. The census bureau statistics show little growth projection for Modoc. Therefore, in upcoming years the county will have to find additional measures to support budgetary needs. A key area that has been identified is participation and use of cost saving and revenue sharing JPAs. The county currently is involved with a number of non-profits to set a foundation for participation in future projects in order to sustain itself while meeting the needs of the public through its contribution.

Q. Regarding cash flow: It’s not clear what you mean by the reference to $2.8 million. What is that amount needed for?

Robertson. The restricted departments have funds with particular fund expenditure deadlines and/or mandates that must provide a continuation of a specified level of services. This is what the funds are needed to be in place to accomplish. For example the road department has voter approved Proposition 1B funds that must be expended prior to the end of fiscal year 12/13. The road department will need summer season to lay down asphalt. So in this example we have taken the deadline, backed out ample time for the department to fulfill its obligations through project implementation, and then budgeted to have the funds in place in time.

2011-11-14T19:19:00.000-08:00

Part 5 of a Series
Fiscal Restoration Plan continued

Performance Bond:

A fidelity bond claim has been filed by the county of Modoc. There was a period of little progress related to the claim, but the Board earlier this year chose to move forward with the filing. The claim was signed by the Chair of the Board of Supervisors on February 24, 2011. A loss has occurred, and processing of the claim continues to be ongoing. Lost interest, interest paid, and similar quantification of associated damages are yet to be documented and negotiated. This remedy is not incorporated into the budget, but it is anticipated that processing of the claim will play a role in restoration of the treasury.

Legal Remedy:

The county and its taxpayers have suffered a loss by having to pay to have re-audits conducted.These high costs had to be fronted by the county, and have played a significant role in reducing the ability of the county to move forward in restoration of the larger treasury issue. The county is in process of preparing to pursue legal remedy.

Negotiations for re-payment:

There is a possibility that the projected sale of fixed assets is not forthcoming at the full estimated levels and/or a partial financing is not feasible due to variables such as the larger investor market, interest rates, and the county's rating. The county is working to ensure that cash flow needs for mandated services and restricted fund expenditure deadlines are met.

There are funds that are restricted, but constitute local money rather than state, federal, or other outside creditor funds which do not have expenditure time lines. It may become necessary to enter into negotiations for repayment with regulators and creditors as part of the solution. In this regard the county has placed on retainer specialized legal counsel to provide sound advice and a plan to move forward. As of Oct. 25, 2011 a committee is in process of being appointed to work on this issue.

Q. Want can you tell me about the statement alluding to proceeding with legal measures to recoup outside auditor’s costs?

Robertson. At the last Board of Supervisors meeting at the end of closed session it was announced that action was taken directing the County Counsel to file notice with TCA partners.

Q. Can you be more specific on the section “negotiations for repayment?’ Just what does that paragraph mean?

Robertson. If debt service is not affordable, the county will have to enter into negotiations for extended repayment to the affected restricted departments. Many restricted funds have explicit time lines for expenditure under the government code. Additionally, there are various restricted funds that do not have expenditure time lines, but that are legally restricted under the government code.

2011-11-14T18:59:00.000-08:00

Modoc Makes the Wall Street Journal

http://online.wsj.com/article/SB10001424052970203503204577035931801712666.html?mod=googlenews_wsj

2011-11-10T18:32:00.000-08:00

Modoc National Forest to Dedicate New Interpretive Sites

The Highway 139 Auto Tour Route and the Howard’s Gulch Interpretive Site will be dedicated at a ceremony at the Modoc National Forest Supervisors Office in Alturas on Friday November 18^th at 2 p.m. Following the ceremony interested participants can join a group that will drive to the interpretive sites about 5 miles northwest of Canby.

At each site special interpretive signs called tactile bas-relief sculptures were designed to make information accessible to individuals of varying abilities. The interpretive sites offer many opportunities for individuals with disabilities.

Numerous partners helped make this project possible including the: Modoc National Forest Resource Advisory Committee, Alturas Chamber of Commerce, California Department of Fish and Game, Modoc County Economic Vitality Group, The River Center, Modoc County Early Headstart, Modoc County Special Quest, Far Northern Regional Center, Rowell Family Empowerment Center, Boy Scouts of America, the Klamath Bird Observatory, North Cal Neva Resource Conservation and Development Council, Cornell Lab of Ornithology and the National Wild Turkey Federation.

The Highway 139 Auto Tour Route illustrates the various phases of restoration work in the Howard’s Gulch area including stream bank stabilization and juniper removal to enhance aspen, oak and sage steppe habitats. Four stops on the tour provide opportunities for school groups, recreationists, and forest professionals to learn about the area using fully accessible interpretative panels

The second recreational site is located at Howard’s Gulch Campground and is site 15 on the Basin and Range Birding Trail which traverses portions of northern California and Southern Oregon. Panels at the campground provide information on the Basin and Range Birding Trail and the habitat needs of birds.

Please join the Modoc National Forest and its partners in celebrating this valuable project.

2011-11-10T16:44:00.000-08:00

Part 4 of a Series
Fiscal Restoration Plan continued
Mitigation of threats to Cash Flow:

A) Compensated Absences Liability:

The county has identified the increase in compensated absence liability as a threat to the treasury that must be mitigated. During the early phases of the fiscal crisis, the county had to engage in layoffs of many employees. It had to put restrictions in place on overtime and other near term cash expenditures, but in order to meet work load and mandates with limited staff there was an increase in comp time.

Comp time is a threat to the treasury in the event that a state or federal program is eliminated and any unfunded liability has to be paid out to workers in a lump sum. Similarly, a department has been identified that may have a demographic wave of retirees that could lead to an impact on cash flow.

In order to mitigate this, the county has incorporated designations in order to fund comp absence liability where appropriate and possible within FY11/12 adopted budget.

Furloughs have also been implemented by the adopted budget in multiple general fund departments, which are also intended to assist in reducing comp time liability in some general fund departments with larger outstanding comp time balances. Finally, the county intends to evaluate by use of a consultant the concept of utilizing a compensated absences liability fund which could be managed on an actuarial basis.

B) Mello Roos Library Deficits:

The Modoc County library has been impacted by a severe reduction in Mello-Roos assessment revenue due to non-payment by property owners of taxes. After the new hospital district formation, there has been a severe impact on secured property tax revenue, many absentee property owners are simply defaulting on their property tax bills. The county could not afford to front tax revenue so the board has authorized a resolution where the county no longer teeters.

This reduction in assessment revenue has adversely impacted the library. Second, the library has been running chronic deficits for many years, utilizing the fund balance available that had accumulated from a fixed assessment from 1987. Historically the library relied on interest from the fund balance available, but declining interest rates and deficit spending has decimated such revenue. These three factors have led to a major revenue shortfall that must be addressed in FY11/12.

The library projected cash balance is only $2800 at the end of the year. If costs and services are not drastically reduced or a revenue measure placed in front of the voters, then partial shutdown costs that would remain unfunded could adversely impact the county general fund in FY12/13 and beyond. Therefore a committee has been appointed by the Board of Supervisors in September 2011, and immediate action plan is being worked on.

C) Waste Management Enterprise Fund Deficits:

The Waste Management enterprise fund has been impacted by a severe reduction in special assessment tax revenue. After the new hospital district formation, there has been a severe impact on secured property tax revenue, many absentee property owners are simply defaulting on their property tax bills. The county could not afford to front tax revenue so the board has authorized a resolution where the county no longer teeters. This reduction in assessment revenue has adversely impacted the waste management enterprise fund. The enterprise fund has also seen an increase in costs, and reductions in other forms of revenue. The board has raised gate fees, and this has not filled the shortfalls. Under the current FY11/12 adopted budget, the waste management fund is projected to run out of money in early spring of 2012.

The county board made a difficult decision to not assist waste management fund with an infusion of funds from the general fund with no provision for repayment from the enterprise fund. The waste management fund also received severe cuts in certain expenditures, and still has a large deficit spending situation on a relative basis.
Services are mandated, and any corrective action through tipping fees, gate fees, or other
revenues will take time to collect. This poses a threat to cash flow of the general fund if and when the enterprise fund utilizes all of its fund balance available.

To address this issue a committee has been appointed by the Board of Supervisors in September 2011 and an immediate action plan is being worked on to resolve the issue.

D) Reduced Secured Tax from Property Taxpayer Non-Payment:

After the new hospital district formation, there has been a severe impact on secured property tax revenue, many absentee property owners are simply defaulting on their property tax bills.

The county could not afford to front tax revenue so the board has authorized a resolution where the county no longer teeters. This has lead to a reduction in interest and penalty revenue to the benefit of the general fund. Also, treasury participants such as the two entities listed above and special districts are having to draw down fund balances to make up for revenue shortfalls since they are no longer teetered. The reduction in secured tax revenue has adversely impacted the county general fund, and also late payments affect cash flow.

Given the financial situation, the reduction in property tax revenue could pose a serious threat to the viability of the county. This may not only compromise the ability to meet debt service, but the ability to fund essential services, and the viability of other treasury participants such as select special districts. Clearly, additional taxes have led in some respects to diminishing returns to many treasury participants. However, securing additional tax revenue to support historic tax revenue levels may be necessary. The county general fund is at a minimal staffing level that compromises the ability to meet state and federal mandates. Core general fund revenue from secured role, vehicle license fees, and sales taxes is near $5,000,000. Supporting a debt service and meeting such mandates will be difficult at best when declining tax revenue is taken into consideration.

Although extremely unpopular, it is recommended that the county evaluate pursuing either special tax or general tax initiatives via sales tax or other methods in order to supplant the declines in the secured roll and delinquency in property tax payments. Preliminary discussions have taken place, and more are expected to occur prior to ballot initiative filing.

E) Increase in Crime:

Crime has increased in Modoc County. A few years ago the County faced its first murder trial in many years. Now the county is facing multiple alleged murder cases coming in the pipeline. The county has seen a huge cost in processing crime cases, and indigent defense costs have risen dramatically. This poses a threat to cash flow. The county recently engaged in a contract for a fixed level of public defender services at a reduced cost compared to prior years. The county is evaluating improving measures to maximize recourse with defendants who have court orders to utilize county resources for defense. The situation is being monitored closely, and the county foresees that it may become necessary for the county to pursue special legislation in order to properly fund costs related to this rise in crime.

Q. Under “Mitigation of threats to cash flow” you refer to a department that may have a “demographic wave of retirees.” Which department is this and what is the impact on cash flow in terms of dollars?

Robertson. I would prefer not to answer this as to not cause disruption in the workplace for staff in the affected department with speculation about lots of people retiring. A retiree wave is not imminent, but must be planned for. There are things management can work to stagger retirements as well. However, if you utilize services of various county departments, next time feel free to look at the ages of the various staff members.

Q. Regarding the negative balance of the library, was this caused by the use of restricted funds in treasury?

Robertson. No. If anything, the larger county fiscal crisis led to restrictions on the library from spending at the expenditure levels as budgeted in order to support county cash flow needs through interfund borrowing. It could be presented that this probably led to slowing the decline of the library’s fund balance from the library’s deficit spending.

The three primary causes of the library’s deficits are as follows: A decrease in Mello-Roos assessment revenue due to recent increase in taxpayer delinquency rate. Chronic deficits for a number of years that have reduced the fund balance from a fixed assessment from the late 80’s with no provision for rising inflation. A decline in the previously generated interest from a once healthy fund balance.

Q. Can you explain one more time the “teeter” reference?

Robertson. Historically the county fronted (teetered if you will) all tax revenue to special districts, enterprise fund, and the Mello-Roos Library. The county absorbed the tax delinquencies and defaults. The county would then get the benefit of the interest, fines, and penalties revenue since the districts and others had already received their full amount of taxes. To fund this advance of funds, the county has to have adequate cash flow which it can no longer support with the high delinquency rates from taxpayers and the large hospital deficit balance in excess of $13 million. Without teetering the special districts, waste management, and the library only get the revenue of the actual tax revenue collected. This has led to major declines in what they have to operate from.

Q. Do you have an approximate dollar amount that can used in reference to the reduction in secured tax revenue?

Robertson. This fiscal year’s budget shows a reduction of $441,821 in secured tax revenue from last year’s budget to a budgeted level of $2,455,051. Remember this is only looking at the County’s portion of the decline. The AB-8 allocation factor only provides that a portion of secured property tax revenue goes to the county. The declines in the secured roll and the delinquency of payments will have an adverse impact on special districts, schools, and other agencies. This has big implications on the community at large.

2011-11-04T09:27:00.000-07:00

County Finally Files Lawsuit Against TCA
Wants Records Kept From Public Eye

Editor’s Note Update: We neglected in the original filing of this story to note that the decision to file suit against TCA was made by the Modoc County Board of Supervisors Oct. 25 in closed session and announced publicly at the end of that session.

Nearly two years after the State Controller’s Office (SCO) declared Modoc County’s audit for the fiscal year ending June 30, 2008 failed to meet government auditing standards -- a decision that led to hiring new auditors at a cost of nearly $1 million -- a lawsuit has been filed in Superior Court seeking damages against TCA Partners of Fresno.

In its complaint filed by John Kenny, county counsel, Modoc County is asking for damages in excess of $25,000, but seeks unknown damages stemming from alleged breach of contract, fraud and negligent misrepresentation.

The legal action, filed Oct. 28, comes within days of the statue of limitations expiring, which would have prevented the Board of Supervisors from any legal avenue of recovering fees paid to TCA, a source who would not speak publicly told the Modoc County Daily News.

In finding that the TCA audit did not meet government standards, the SCO ordered Modoc County to have its books for 2008 re-audited. “TCA Partners received a copy of the State Controller’s Office report and agreed to correct its deficiencies, which was never done,” the lawsuit alleges.

However, the suit states that “County of Modoc hereby requests the clerk of the court not make available to the public records and documents in this action pursuant to Code of Civil Procedure section 482.050(a).

That section of the Code of Civil Procedure states:

“(a)If the plaintiff so requests in writing at the time he files his complaint, the clerk of the court with whom the complaint is filed shall not make available to the public the records and documents in such action before either (1)30 days after the filing of the complaint or (2)the filing pursuant to this title of the return of service of the notice of hearing and any temporary protective order, or of the writ of attachment if issued without notice, whichever event occurs first.”

Kenny did not immediately respond to an e-mail query seeking comment on why he asked that a lawsuit in the interests of the Modoc County and its taxpayers be kept from the public.

2011-11-03T18:54:00.000-07:00

Part 3 of a Series
Fiscal Restoration Plan continued
Securitization of County Assets:

The original plan called for a full securitization. In the previous year the budgeted set aside for debt service was $1,500,000. The county was not able to set aside the full $1,500,000 in FY 10/11. The figure was slightly in excess of $900,000. Further the county had to finance outlays for audit costs in the previous fiscal year. After a rigorous budget process for FY11/12, it again appears that the county can support a debt service level in the order of $800,000 to just under a million.

In order to meet this objective to securitize assets, the county has retained an underwriter and bond counsel. The county has a draft Preliminary Private Placement Memorandum Dated May 10, 2011. This document outlines terms for securitization of county assets. The county also has been provided an "Estimated Debt Service Chart for Modoc County (1)." The original proposed par amount of the bond proceeds was $15,000,000 in order to finance underwriting and issuance costs, a debt service reserve fund, and available proceeds in order to restore the treasury. Review of this chart indicates that financing is not available for the $15,000,000 par amount if interest rates exceed 7%. Current quoted rates to the county exceed 7% total interest charge. Additionally, previous fiscal year's set aside and this year's budget indicate the county general fund can support debt service below $1,000,000, and practically in the $800,000-$950,000 range. If the par amount of the bonds can be reduced to a level where such annual debt service levels is attainable, then a financing may be possible.

The current FY11/12 adopted budget shows proceeds from a partial financing for the treasury based on this chart. In order to reduce the PAR amount of the bonds, the financing assumes that the county saves the debt service reserve fund amount in FY11/12 rather than incorporating this into the PAR amount of the bonds. Similarly, the financing assumes a sale of fixed assets as described above. Since the PAR value of the bonds is reduced by these two measures in the budget, there is a commensurate reduction in the required Debt Service Reserve Fund amount. The estimated amount would be $1,050,000 rather than the previous $1,500,000. This amount is indicated within the FY11/12 budget as a designation under non-general fund expenditures.

In order to fund this designation for debt service reserve fund, the county will have to utilize an approximately $800,000 net increase in general fund balance available and deficit spend some of the existing general fund balance which was saved in FY10/11.

The budget assumes a financing in the late spring near the end of the fiscal year. Currently the county is in a dry period. Secondly, if a financing were to occur prior to saving the debt service reserve fund designation, the PAR value of the bonds would require inclusion of the set aside amount to ensure sufficient Fund Balance Available in the treasury for financing needs. This would lead to annual debt service beyond what the county can afford. Similarly, a financing early in the fiscal year would require inclusion within the budget of the first installment of semiannual interest which would lead to an imbalanced budget.

Finally, the county will continue to evaluate and pursue options that will reduce the cost of securitizing county assets. Options being evaluated beyond the draft preliminary private placement memorandum terms include use of a bond ladder, utilization of a syndicate or individual banks as underwriters for a portion or all of the amount, use of a mixed offering such as incorporating both a taxable and non-taxable transaction, and utilization of a large co-signer in order to reduce interest costs so the county can support the debt service.

Also as the county moves closer to a securitization, closure of outstanding audits and continued improvement by the county staff to meet audit findings will continue to be relevant for engaging in such a transaction.

2011-11-03T14:08:00.000-07:00

Occupy Modoc?

http://www.foreignaffairs.com/articles/136399/michael-hardt-and-antonio-negri/the-fight-for-real-democracy-at-the-heart-of-occupy-wall-street?page=show

2011-11-03T09:11:00.000-07:00

Vallejo's Bankruptcy Over

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/01/BARI1LPAHN.DTL#ixzz1ccZQnnSm

2011-11-02T21:16:00.000-07:00

Bulletin
    Rudometkin Resigns

Rick Rudometkin, director of public works and transportation but more recognizable as the controversial chief administrative officer for Modoc County following the disclosure that millions of dollars had been illegally withdrawn from the treasury, has resigned his position.

His resignation, submitted to Modoc County Board of Supervisors Chair Loren “Shorty” Crabtree on Nov. 1, was confirmed by his replacement Chester Robertson. No details explaining the resignation were available, and Rudometkin did not immediately respond to an e-mail media query.

His final day will be Dec. 30, according to Robertson.

Rudometkin, generally considered a temporary fix replaced Mark Charlton who was pushed out after he disclosed that an estimated $20 million had been misappropriated from the treasury.

In Charlton’s wake and supported by Supervisor Patricia Cantrall, Rudometkin even though he did not have minimum qualifications to hold the county’s top administrative job, was hastily hired by the Dan Macsay-led Board of Supervisors.

Last May as it became apparent that Robertson was to be Rudometkin’s replacement or superior, Rudometkin resigned the CAO position and in June returned to the public works department.

2011-11-02T19:05:00.000-07:00

Fiscal Restoration Plan

Part 2 of a Series

Sale of Fixed Assets:

The FY11/12 Modoc County adopted budget was approved on Sept. 30, 2011. This budget includes an estimated sale of fixed assets in the amount of $3,448,083. It is necessary to move forward with alternatives such as sale of fixed assets because the county cannot support debt service of a full restoration of treasury through Certificates of Participation. A budgeted sale of affixed assets is anticipated to reduce the total par value of the Certificates of Participation to a level of annual debt service that the county general fund can support. In addition to assisting in the reduction of the PAR amount of the bond proceeds, the sale affixed assets will serve as an essential measure to ensure a back-up plan to finance cash flow needs.

The county has identified essential cash flow needs that require attention prior to moving into the FY 12/13 budget year in order to meet deadlines correlated with restricted funds. Provided the high estimates and uncertainty of a partial financing through Certificates of Participation and combined with the unapproved status of county audits, the county must ensure alternative measures are in place to support cash flow needs of FY12/13.

The concept of selling buildings in such short order by the end of the fiscal year is an aggressive schedule; however, there is a ready market for facilities with secure government leases given the current adverse climate for commercial real estate. The budget incorporates professional and specialized budget capacity in order to conduct necessary work such as appraisals, pest reports, toxic reports, and legal assistance for negotiation of capital leases. The current revenue estimates in the budget were arrived at by utilizing 70% of replacement value until such appraisals can be conducted. The facilities include buildings that are currently not on the list, or at the end of the list that has been indicated for utilization in the draft Private Placement Memorandum.

2011-11-02T19:01:00.000-07:00

CGJA’s Response to DA Brooke’s Silence
Editor’s Note: In the October issue of the Modoc Independent News we ran a front page article about District Attorney Christopher Brooke’s silence when asked by the Modoc County Grand Jury to begin an investigation of the treasury misappropriation.

Readers will recall the Wes Cook grand jury told Brooke in a letter dated June 8 that they had enough information to proceed with the investigation. To our knowledge Brooke has not responded to the grand jury’s request.

To pursue the matter further the Modoc Independent News asked the California Grand Jury Association (CGJA) what recourse the Modoc County Grand Jury or the general public had in dealing with a recalcitrant district attorney.

The following is the CGJA’s reply.

“You specifically ask what recourse the public and the press have in making the district attorney accountable for the situation you described. As a support organization for grand juries in California, it is beyond our purview to opine on what the public or press could do in these circumstances. However, we can tell you based on our experience with grand jury law in California what the law provides a grand jury can do.

“First of all, the law does not provide for a grand jury communicating with the public by an “open letter.” A grand jury communicates by its final report containing findings and recommendations.

“A current or a subsequent grand jury can under the California Penal Code institute an investigation of its own of any local public official’s conduct and make findings and recommendations in its final report of that investigation. In such circumstances, the public official is compelled by law to make a written response to the presiding judge of the superior court.

“However, there is no obligation for a public official to make a response to an “open letter.” Nor does the law authorize a judge to conduct an investigation of misconduct or control a district attorney’s prosecutorial discretion.

“We want it to be clear that we are neither commenting on the substance of the situation you described nor what the grand jury should do in the situation. We hope the foregoing is helpful.”

Editor’s addendum: The CGJA’s opinion was written by William E. Trautman, chair of the association’s legislative affairs committee. It should be noted that a misunderstanding may have occurred. The Modoc County Grand Jury did not write an “open letter” to DA Brooke. It wrote a private letter to Brooke which was obtained by the Modoc Independent News.

2011-11-01T17:56:00.000-07:00

Fiscal Restoration Plan for Modoc County
Adopted by Board of Supervisors Oct. 25, 2011

Editor’s Note: The following is the word-for-word fiscal restoration plan adopted by the Modoc County Board of Supervisors. We have reformatted some paragraphs to meet newspaper style and facilitate ease of reading.

It is our intention to run this fiscal plan as a series, breaking it down by subject to allow our readers to comment on each segment of the series. As you will see in reading the series we have added questions and answers (Q&A with CAO Chester Robertson) in an effort to clarify statements that otherwise might be either vague or incomplete as it applies to each topic.

The Q&A will be in italics to set it apart from the general text of the fiscal plan at the end of each series.

Part 1 of a Series
Fiscal Restoration Plan

Background:

This plan is intended as an update to the "Assessment and Strategic Plan Relative to County of Modoc Financial Condition" as outlined in a letter to the State Controller's Office dated April 13, 2010. The current plan to address the treasury deficit was submitted to the State Controller's Office in a letter, dated April 13, 2010. The letter was reviewed and approved by the Board of Supervisors on April 13, 2010.

The letter states that the county is "pursuing a plan to issue Certificates of Participation ... If the county is unable to sell the full amount of Certificates of Participation we will notify your office. Other possible options will be considered such as a partial re-funding of the treasury by a lesser amount of bond proceeds. We would consider other pay-down plans that your office, other state and federal agencies, and other county treasury participants could form an agreement on terms, conditions, and amounts. Also, we would consider the potential of drafting special legislation to allow Modoc County Treasury cash deficits until repayment of cash deficits is accomplished."

Approximately 19 months have transpired since this letter was approved and sent to the controller's office. To date the county still is in the process of approval of its audits, and a financing through securitization of county assets has not occurred to address the treasury deficit. The county has worked towards meeting this goal, and in the process it has been found that a full financing with its associated levels of debt service is not sustainable.

There have been additional pressures placed upon the county due to the economy such as declines in tax revenue, increases in interest costs, challenges of the reduced staffing levels, and costs associated with meeting audit requirements. The county continues to have a hospital fund in which there is projected approximate $13,500,000 negative balance. A hospital district was voted in by the voters, and the terms of that vote leave the county with this negative balance. The hospital facilities were transferred to the district.

It is often stated that the simplest solution to a complex problem is a complex solution. The following is a list of objectives in order to continue further progress on the goal to restore the Modoc County treasury. This list lays out a complex multifaceted approach to restoration of the treasury.

In order to meet the objectives outlined below the county is reliant upon both revenue enhancements and cost reductions in an environment that challenges the county with many revenue declines and cost increases. This multifaceted approach to restore the treasury relies heavily on a partial financing preceded by the sale affixed assets. To assist in reducing the par value of the financing; it will necessitate not only the sale of affixed assets, but diligent pursuit of the supporting objectives following these two primary goals.

Q. Does this plan include taxes as a way to raise revenue?

Robertson. The “Fiscal Restoration Plan” doesn't pre-suppose new taxes. Instead it says methods of voter-initiated taxation will have to be evaluated. This is because absentee-owner tax payers are defaulting on their property taxes. We have to figure out a way to bring tax revenues back to historic levels, in other words, back to where they were before these defaults.

Q. Has this plan been sent to the SCO? If so when. If not, when?

Robertson. The plan has not been sent to the SCO. Elements of the plan have been discussed with affected stakeholders, and still in that process before distribution to the SCO.

Q. Does the county need a stamp of SCO approval to proceed with the plan? If so, have you any idea of when the SCO will respond?

Robertson. It is a wise courtesy to provide the plan, and the original plan submitted states that the county would provide an update if a full financing did not occur. The SCO office’s responsibility is to ensure compliance with certain elements of the Government Code, not governance of counties and cities. Therefore, I would not expect a response unless there are particular elements they feel violate the government code.

Q. Do you have any idea of when the SCO is going to act on the state-ordered audits?

Robertson. I do not have any information regarding timelines in this regard. You may want to contact the County Auditor's Office to see if she has any recent correspondence in this matter.

2011-11-01T17:46:00.000-07:00

More on Montebello and the State Controller

http://latimesblogs.latimes.com/lanow/2011/11/audit-slams-montebello-for-self-dealing-misused-funds.html

2011-11-01T12:44:00.000-07:00

2011-11-01T12:39:00.000-07:00

Modoc National Forest Sponsors “A Gathering of Veterans”

“A Gathering of Veterans” will be held on Thursday November 10^th at 11 a.m. at the Veterans Hall in Alturas. The event will celebrate the contributions and sacrifices of local veterans and their families to our freedom. The celebration will be sponsored by the Modoc National Forest with support from Post 3327 of the Veterans of Foreign Wars.

The public is invited to join us in honoring veterans from our community including those who work for the U.S. Forest Service. Speakers will include Kimberly Anderson, Forest Supervisor of the Modoc National Forest and Harry Hitchings from the Modoc County Veterans Services Office, among others. A social time will follow the ceremonies.

2011-10-29T12:46:00.000-07:00

A Solution to Modoc's Waste Management Crisis?

http://www.guardian.co.uk/environment/2010/oct/01/french-recycling-horse-and-cart

2011-10-26T10:12:00.000-07:00

Will the Modoc District Fair Survive California's Budget Cuts?

Join Fair Manager Dannette DePaul at the October meeting of the Surprise Valley Grange for an informal conversation about the future prospects for our Fair.

Your ideas and suggestions are welcome.

6 p.m., Thursday, Oct 27
Cedarville Senior Center, Main St. Cedarville

Please bring a finger-food snack to share
FREE - Public is Welcome to Attend

Grange business meeting to follow.

2011-10-24T18:19:00.000-07:00

Fresno's Credit Rating Drops

Moody's report offered the city a road map to improved credit ratings. In the opinion of analysts at Moody's, the city needs to improve its reserves, structural operating procedures, liquidity, and reduce its dependence on subsidies.
--Publicceo.com

http://publicceo.com/index.php?option=com_content&view=article&id=3456:city-of-fresno-takes-another-credit-rating-hit&catid=151:local-governments-publicceo-exclusive&Itemid=20

2011-10-23T20:40:00.000-07:00

Where Does Senator Nielsen Live?

http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2011%2F10%2F22%2FBA081LKU5L.DTL

Hospital Employees Give Up PERS

2011-10-20T17:07:00.000-07:00

2011-10-19T21:14:00.000-07:00

Night Vision

Editor's Note: For those readers who follow Brian Cain's column Night Vision in the Modoc Indepdent News, here's an update from Brian about the Oroinids meteor shower that is coming this Friday and Saturday and a link from the LA Times.

The moon will be a little bit of a problem, but it doesn't rise till a few hours after midnight. If you start looking around midnight you might get lucky. The shower produces up to 20 meteors per hour.

-- Brian Cain

http://latimesblogs.latimes.com/nationnow/2011/10/meteor-shower-alert-2011-orionids-are-on-their-way.html

2011-10-18T11:01:00.000-07:00

Corner Post

by Missy Merrill Davies

Editor's Note: This column originally appeared in the October, 2011 issue of the Modoc Independent News.

I am continuously amazed at the changing vernacular in agriculture. Methods which producers have been practicing for decades are being labeled differently depending on the trend. Similar to the recent push for organic and natural products which may have been viewed as lazy, cheap, or rawhiding (least amount of inputs possible) in the 1970’s; but is now a marketing opportunity.

The most recent phrase is “ecosystem services.” A combination of sustainable practices, land stewardship, and plain, old common sense created this buzz phrase. Ecosystem services are currently being evaluated to determine their value.

Proper livestock grazing goes hand-in-hand with many of the methods used to provide ecosystem services. Managed livestock have the ability to positively manipulate range lands with less fossil fuels than other methods employed such as fire or mowing. If and when a value is placed on these services it may be a boon to ranchers in the area.

Modoc County is rife with opportunity to provide or continue providing ecosystem services, many of which offer green instead of gray (think cement) possibilities for end users. These services include wildlife habitat, water quality, and carbon.

The benefits of grazing to wildlife have been documented time and time again. Cattle and sheep are both ruminants, meaning they have the ability to break down cellulose for uses beyond fiber in the diet. Antelope, deer, and elk are also ruminants but prefer browse (shrubs) species over grass especially in late summer when grasses tend to become wolfy or decadent. Through grazing livestock wolfy vegetation is reduced allowing wildlife more access to green material, especially important for small birds and mammals.

The Pit River is the head of the Sacramento Watershed, supplying water to many in the Central Valley. Again, properly managed livestock grazing can be manipulated to improve the water quality and reduce the need of gray structures such as water treatment facilities. This is possible through buffer strips, upland biodiversity improvements, and riparian pastures.

Carbon sequestration is the latest in environmental verbiage. It is the act of taking carbon dioxide, considered a greenhouse gas, from the air and storing the carbon. Plants are great at carbon sequestration. However, for many plant species, some form of disturbance is necessary to improve plant and stand vigor.

Proper grazing is one of those disturbances. Plants use carbon dioxide to produce carbohydrates for structure within the plant, in turn; animals eat those plants thus turning it into something humans can use. Additionally, animals trample some plants, returning the carbon into the soil as organic matter.

Conversely, it has been suggested if practices such as grazing and even crop production are abandoned the soil becomes a net producer of greenhouse gases due to burning and rotting and thus releasing carbon back into the atmosphere.

The environmental services provided by livestock producers are continually becoming more apparent to some, especially now that it has a name. Proving once again, ranchers are the original environmentalists.

2011-10-14T13:33:00.000-07:00

Wild Horse Roundup Commences Saturday

http://www.sacbee.com/2011/10/14/3979706/wild-horse-roundup-begins-saturday.html

2011-10-10T18:37:00.000-07:00

Schools Use Savings During Cash Flow Crisis

Editor’s Note: “Why are the schools withdrawing their funds from the County Treasury?” This was a question recently posted to the Modoc County Daily News blog. We asked Modoc County Supt. of Schools Gary Jones to respond. The following is his statement:

When a school district or county office of education makes a statement about negative cash flow in their General Fund and the necessity to transfer “restricted” funds into the General Fund to meet their obligations, they are simply managing their available assets in a prudent manner.

A General Fund that will not have enough cash to cover expenses requires an infusion of cash. Since the school districts and county office of education have saved money, they have the ability to transfer cash from their savings to cover any cash shortfalls in their General Funds.

The schools’ cash reserves and investments are typically accounted for in separate funds (Fund 17 or Fund 40) that are designated as “restricted.” Restricted, in this case, means they are not used until there is a specific and approved need.

These fiscal activities, on the part of the schools, do not involve the county government’s budget or the county government’s cash. The school districts and county office of education have a separate bank account and separate investments within the county treasury, separate from the county government. Also, the schools have cash investments outside of the county treasury.

It is important to note that our schools are not receiving all the cash that is due to them from the state. The state will owe our local schools somewhere between 32%-46% of their State Aid next year for this current year of operation. Consequently, cash is a huge issue for school districts and county offices of education in California.

The state is using money owed to the schools to finance other departments of the state government. The state is “borrowing” restricted funds (school money) to fund their General Fund obligations. The state has no reserves—no savings. The state has increasingly large debts. So, they take what they can, from wherever they can, and promise to pay back the restricted funds (school money) in the future, when they can borrow more (pass a bond) or raise taxes.

The schools still have cash in reserve because well-managed agencies and businesses “squirrel away” (save) in good times and deficit spend in bad times from their savings. Obviously, some never learned the principle of saving for a rainy day or reducing spending when income is reduced. The level of savings and the difficulty in maintaining decent reserves on the part of the schools prior to and during such a difficult time was wise and highly commendable.

-- Modoc County Supt. Of Schools Gary Jones

2011-10-10T13:16:00.000-07:00

*Definitions of A Failing Government

Dysfunctional
    -- Not performing as expected: failing to perform an expected function
a dysfunctional bureaucracy.
    -- A consequence of a social practice or behavior pattern that undermines the stability of a social system.
Hamstring
    -- To thwart somebody or something: to make somebody or something powerless or ineffective.
Ineptness
    -- Unable to handle job: lacking the competence or skill for a particular task.
Lemon
    -- Defective product: something that is defective or disappointing.
Jungle
    -- Complex matter: a frustratingly or impenetrably complex system.
                        *Sources cited upon request

Take your pick. Any definition of the commonly used adjectives and nouns used in describing our Modoc County political system leads us to the same conclusion: The system is a lemon.

Who comes to mind in our narrow, local political arena when we read, for example, the meaning of the word “dysfunctional,” especially as it applies to the failure to meet our expectations therefore resulting in undermining the stability of our social system? (The italics are ours).

That’s easy, you say. And you are right.

Picture a governmental family tree. At the top is the Board of Supervisors and the threesome of Crabtree, Cantrall and Bullock.

Next in line and clinging to a limb tight to the trunk, so to speak, is the board’s talented and capable Chief Administrative Officer Chester Robertson.

Why is Robertson clinging to a limb? Because he is hamstrung by the ineptness of the board’s threesome.

No matter how intelligent and able a person may be, he is only as effective as the most ignorant incapable member of his political family because that branch of the family holds the “budget card.”

The budget card is used in the same way that our parents withheld our allowance if we didn’t toe the line. Another way to look at this is to picture the governmental family tree as a U.S. dollar sign.

Now, branch off to the right or left of the family tree trunk (it doesn’t matter which way you branch off). There you will find the cousins of our courts, the judges, district attorney and grand jury.

This is an interesting part of the family tree because it is here that the branches get thicker and entwined -- like a jungle -- as if all branches lead to all branches lead to all branches. Well, you get the point.

It is at this level in the family tree that decisions are tough to make, the relationships are that thick. Just ask our indecisive DA Christopher Brooke, who has been asked by the grand jury to conduct a formal investigation of the $20 million treasury raid.

In May of 2010 -- yes -- when Brooke was running for district attorney we asked him this question: “If elected, will you initiate your own investigation into the illegal misappropriation of county funds and seek prosecution if the investigation warrants it?"

This was Brooke’s answer, and we quote: “If, as district attorney, I become aware of meritorious allegations of misconduct by any public official, I will use all available resources to ensure that a thorough, fair and complete investigation is conducted. If such an investigation produces evidence of misconduct, all individuals involved will be prosecuted.”

This takes us to the grand jury who explicitly made Brooke aware that a criminal investigation of the misappropriation was warranted because, as it stated in a letter of last June to him, the grand jury had enough information to hold an investigation. Our last DA dodged this one saying the Board of Supervisors held the purse strings to his weekly allowance.

Hello. Anybody know where DA Brooke has been the last four months? Out to lunch, you snicker. Last year’s grand jury is still waiting for a reply to its letter of June 8. (See B1).

Covering itself, the grand jury also wrote letters to the California Attorney General and Superior Court Judge Francis Barclay. Only Barclay has replied saying his hands are tied.

So, we ask you, if there were fruit at the top of this governmental family tree, would you risk climbing it for fear that it may be a lemon?

                                -- Ray A. March

2011-10-10T13:02:00.000-07:00

Dear City of Montebello We’d Like
to Introduce You to the County of Modoc

Editor's Note: The following is a reprint of an article appearing in the October issue of the Modoc Independent News. There is also a link on the Modoc County Daily News blog to the original Los Angeles Times piece.
The city of Montebello misspent more than $31 million over five years through questionable expenditures, loans and fund transfers, according to two audits released by state Controller John Chiang, the Los Angeles Times recently reported.

The $31 million in misspent funds is a reminder of the estimated $20 million that Modoc County officials misappropriated from their treasury over a period of eight to ten years going back to about 2000.

Both the city of Montebello and Modoc County are under order of Controller Chiang to repay their depleted treasuries. Modoc County has failed to repay its treasury since the order was issued in late 2009.

In something of a confusing or contradictory statement Chiang announced that Montebello "at the expense of local job development, street repair and schools, made it a habit to tap legally restricted funds to cover its budget and cash shortfalls. It appears the city moved money wherever it wanted, whenever it wanted, regardless of the law."

Modoc County, as substantiated by recent grand jury findings illegally moved funds from the treasury to ostensibly cover ever-increasing debts at the Modoc Medical Center, which was a county-owned hospital until recently.

The controller’s office has tacitly approved Modoc County’s continued use of restricted treasury funds under the Auerbach vs. Los Angeles Board of Supervisors court decision although there is a questionable appeal section to that ruling.

Controller audits of Montebello come as city officials are frantically trying to seek a loan so the city won't run out of cash this fall, according the Los Angeles Times article. In the last year, the city has been investigated by the L.A. County district attorney's office and the federal government, the news article reported.

The last Modoc County grand jury asked the state attorney general’s office, county DA Christopher Brooke and Superior Court Judge Francis Barclay to initiate a criminal investigation of the treasury misappropriation.

Barclay declined to do so, Brooke has not responded to the grand jury’s request made four months ago, nor has the state attorney general.

The audits of Montebello’s redevelopment agency and use of gas tax funds from 2005 to 2010 also found that officials spent money intended for alleviating blight and promoting jobs on questionable expenses such as fancy dinners in Las Vegas for the city manager and embroidered polo shirts and golf tournament registrations.

2011-10-05T15:03:00.000-07:00

Update on Timber Receipts

Editor's Note: The following article on the future of the Secure Rural Schools Act includes quotes by Sean Curtis, Modoc County resource advisor.

http://agalert.com/story/?id=3452

2011-10-04T20:35:00.000-07:00

District Attorney Christopher Brooke

Modoc-gate
DA Brooke Silent on Treasury Investigation

It’s been four months since the Modoc County grand jury sent a formal letter to District Attorney Christopher Brooke requesting that he conduct a criminal investigation of the $20 million treasury misappropriation -- and he has not responded.

“There’s a lot of frustration,” admitted former grand jury foreperson Wes Cook of Surprise Valley. “If the state constitution said we didn’t have to have a grand jury there wouldn’t be one in this county. The officials don’t want to have anything to do with the grand jury.”

The grand jury not only asked Brooke to initiate an investigation of the misappropriation and the county officers linked to it, the jury also made the same request of Superior Court Judge Francis Barclay and State Attorney General Kamala D. Harris -- each in early June.

Only Barclay has answered with a letter rationalizing that there was no logic in his impaneling a criminal grand jury to pursue the illegal misappropriation unless there was a prosecutor to investigate the charges.

Which brings the grand jury back to Brooke, who is not saying anything publicly.

Frequent messages left with his office for the last month have not been returned nor has a lengthy media query filed by e-mail been answered by Brooke other than a staff member explaining that Brooke -- at one point -- was trying a murder case, which he ultimately lost.

Brooke’s silence and apparent refusal to say publicly whether he intends to investigate the single largest financial scandal in Modoc County’s history does not support a campaign promise he made back in May of last year.

At that time Brooke, a candidate for the district attorney’s seat, was asked by the Modoc Independent News if he would initiate his own investigation into the county officials’ illegal misappropriation of funds and seek prosecution if the investigation warranted it?

Brooke replied, “If, as district attorney, I become aware of meritorious allegations of misconduct by any public official, I will use all available resources to ensure that a thorough, fair and complete investigation is conducted. If such an investigation produces evidence of misconduct, all individuals involved will be prosecuted.”

Brooke apparently overlooked or forgot that campaign promise, so the Modoc Independent News asked officers of the California Grand Jury Association (CGJA), which trained the last two Modoc County grand juries, what recourse does the public have in holding Brooke to his campaign promise and also make him accountable to the grand jury.

“My initial thought is that if last year's grand jury had written a more specific report and had made a recommendation that the district attorney pursue this action, then at least he would have been required to respond,” explained a spokeswoman for the CGJA.

Cook argues:

“We did those letters because we wanted them to go out and not be edited by anybody,” Cook explained. “They were not to be seen by anybody until after they were mailed. We did not think about using state statues as references, I don’t know how you would do that. We wanted them in the grand jury report but Judge Barclay said no.”

On Sept. 24 the CGJA representative said she would refer the matter to the CGJA’s legislative affairs committee for an opinion. There has been no word from that committee as yet.

2011-10-03T18:46:00.000-07:00

Analysis

Supes (Finally) Adopt Budget, Now What?

The Modoc County Board of Supervisors last Friday unanimously adopted a $67.8 million budget for the current fiscal year.

The budget approval, three months late in arriving but legal under state law, was unanimous. In better economic times this would be cause for jubilation, but these are not better times.

For starters, the county has been skirting insolvency for nearly two years because it has been taking restricted funds from its depleted treasury under the sketchy reasoning of a court decision called Auerbach vs. Los Angeles Board of Supervisors.

There is an argument that the county is wrongly applying the Auerbach decision because there is an appeal addendum to the decision that no one, apparently, in county officialdom has read.

If Auerbach is wrongly applied, the withdrawal of treasury funds could collapse at any time, leaving the county with no source of cash flow. If the Modoc County application of Auerbach were correct, no county in California, including Modoc, would need to issue any bonds.

And if the Auerbach application is correct, why doesn't Los Angeles County, or any other county, do the same as Modoc County -- and draw non-guarded funds from their treasuries? Apparently, they do not. In other words, Modoc County is taking a major risk and it can’t count on the state to bail it out.

In fact, there is an unconfirmed report that the Board of Supervisors has been told it needs to move quickly to implement a plan for repaying the treasury because there is a growing movement by other counties to compel the State Controller’s Office, State Treasury and Attorney General to force Modoc County to fix its financing problems.

As for the issuance of bonds, while once thought dead and buried, it is now being revived but possibly smaller in scale. Still, any sale will result in not only an annual debt service to be paid by the county, but a tax increase in some form.

Unhappy taxpayers can look to the county officials who took monies from the treasury for nearly 10 years for answers as to why the county is flat broke and looking for an angel.

One short-term solution to negative cash flow the county is seriously considering is the sale of property. The Belli Building on Main Street and the so-called Fourth Street Complex are likely candidates for the auction block. Which begs the question, if the county sells off prime property what will it have left to use as collateral for a bond sale?

These questions and many others have been asked but so far no county official has either had the time or the willingness to answer them.

What else?

Property tax revenues are down. Property owners are not paying their tax bills, and there has been a reduction of assessed values.

The county library system is in jeopardy of running out of funds early next year.

The waste management enterprise fund is projected to require an infusion of funds within this fiscal year to continue operation. CAO Chester Robertson confirms, “We are taking a drastic approach to waste management and roads and the county has to take immediate action.”

The hospital debt is acknowledged at $13,061,628 as of Aug. 30, 2011. Now, however, the hospital is off the county books and the county is still taking restricted funds, to the tune of $1,870,301 also as of Aug. 30, according to figures provided by Auditor Darcy Locken.

If this were one of those old-time Saturday matinee series we would be left sitting on the edge of our theater seats asking questions like: Will the Board of Supervisors be able to sell off county properties in time to save us from financial ruin? What will they do to save the library and waste management services? Will the Auerbach decision collapse around them?

Which brings us to the question of hindsight, so we asked CAO Robertson if the county did not have access to the treasury what would be its financial condition today?

“Probably much better than it is now,” he answered. “Had they not had access to the treasury in the past, the county would have been required to make extremely hard decisions that were deferred to the county officials working on the financial issues we face today.”
.
                -- Ray A. March

2011-09-29T11:15:00.000-07:00

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call 530/ 279-2099 or e-mail bmarch@frontiernet.net.

2011-09-22T16:19:00.000-07:00

Montebello's Misappropriation

Editor's Note: Modoc County is not the only municipal entity in California to tap restricted funds in its treasury, but it may be the only county still operating under the radar of the state Controller's Office. See link below for details.

http://latimesblogs.latimes.com/lanow/2011/09/montebello-misspent-31-million-audit-finds.html

2011-09-06T19:33:00.000-07:00

County Still In Pursuit

Of $12.5 Million Claim

County officials pursuing a $12.5 million performance bond to recover losses in the misappropriation of the treasury are in the process of providing information to the insurance carrier in the first step towards a possible settlement.

That is the report from Chester Robertson, recently appointed Modoc County chief administrative officer. “The administrative office had a meeting with the insurance broker, and we have worked to set a meeting with a claims specialist with the broker to discuss processing of the claim,” Robertson told the Modoc County Daily News.

The claim against various county officials was filed last March with Alliant Insurance through Trindel Insurance Fund, the county’s broker. At the time an electronic memo between staff members at Chartis Insurance and Alliant Insurance acknowledged receipt of the claim, but asked for more information.

“We are trying to better understand how the insured may have suffered a loss,” writes Chartis’ complex claim director for fidelity bonds, in a e-mail to Alliant Insurance.

Chartis, headquartered in New York City, is a global insurance company offering various protection including political risk and crisis coverage, according to its web site. Alliant Insurance Services of San Francisco ranks among the 15 largest insurance brokerage firms in the United States.

Auditor Darcy Locken is another county official participating in early discussions with representatives of the insurance broker and the California State Association of Counties’ Excess Insurance Authority.

“I participated in a conference call with our insurance broker, Trindel representative and CSAC EIA representative. They had questions regarding the treasury deficit (what, how, when and where) and I did my best to clarify the situation. There was no actual transmittal of information, other than verbal communication,” Locken said.

The claim seeks damages against bonded county officials who are linked to the treasury misappropriation estimated at nearly $20 million. Heading the list, according to allegations by then-DA Gary Woolverton who drafted the claim, are former Auditor Judi Stevens, current Treasurer Cheryl Knoch and retired CAO Mike Maxwell.

It is unknown at this time if a monetary settlement would set in motion an effort by the insurance carrier to recover its compensation to the county by filing suit against the various individuals named in the performance bond claim.

2011-09-06T19:27:00.000-07:00

Modoc County Grand Jury Report

An Analysis

Editor’s Note: The Modoc County Grand Jury’s report is a reflection of its investigations into a broad area of county and city government. The following analysis is devoted only to the on-going financial scandal facing the county.

By Ray A. March

The recently released Modoc County Grand Jury report is both puzzling and revealing.

The report is puzzling because it fails to specifically reveal details of its on-going investigation into the misappropriation of an estimated $20 million from the county treasury.

It gives cursory acknowledgment that the treasurer and auditor’s offices were even investigated, leaving the reader in a state of wonderment.

The report is revealing because the strongest statements directed at the treasury raid are not to be found where one might expect to look, but in an open letter to the public tucked away at the report’s conclusion.The letter the public will read is an emotionally-toned down version rewritten by Judge Francis Barclay, according to grand jury sources who would not speak publicly.

An examination of Barclay’s version states the grand jury is of the opinion that there has been a “misuse and misdirection” by “certain county officials” of both state and federal restricted (treasury) funds -- and that misuse and misdirection is the primary cause of Modoc County’s fiscal crises.

Barclay’s version goes on to state that the findings by this recent grand jury and also previous grand juries “suggests” there is “potential” criminal liability on the part of certain county officials. The grand jury’s original unedited letter, while not naming any county officials linked to the treasury misappropriation, alleges that specific state laws were violated by “past and present elected and appointed county officials” -- not vaguely-described “certain” county officials.

The original letter also states that the grand jury has proof of the county’s illegal use of treasury funds and that the “Board of Supervisors’ decision-making process has denied the citizens of Modoc County the opportunity to be included or informed.”

“Dereliction of duties by elected and appointed officials has resulted in personal financial damage and harm to every resident in the county. In our opinion this is not a victimless crime,” the grand jury’s unedited letter stated.

In both versions, the open letter to the public called for more public monitoring of county officials and their appointees, and acknowledged that Barclay, District Attorney Chris Brooke and Attorney General Kamala Harris have been requested to investigate the county’s treasury misappropriation.

So far, Barclay has declined the invitation. Brooke did not immediately respond to messages and e-mails left with his office. It is not known if Harris has responded to the grand jury.

What is puzzling is that the grand jury was entitled to audit both the offices of treasurer and auditor, yet there is no evidence in the report that any grand jury audits were conducted. Continuing the mystery, the grand jury was entitled to report on so-called “questionable practices,” yet there is no accounting of questionable practices such as a treasury misappropriation in the report.

The grand jury was entitled to subpoena witnesses, yet there is no evidence anyone was subpoenaed.

As a result of interviewing Treasurer Cheryl Knoch and Auditor Darcy Locken, who was not in office during the misappropriation, the grand jury came to the widely known conclusion that restricted funds in the treasury were still being used by the Board of Supervisors.

Knoch, along with former Auditor Judi Stevens and former CAO Mike Maxwell, are among those named in a subsequent performance bond claim as officials potentially responsible for the misappropriation.

It is well known that last year when the Board of Supervisors took the calculated risk of using restricted treasury funds to off-set its negative cash flow in the general fund -- otherwise known as temporarily avoiding insolvency -- that it was at risk of a lawsuit challenging that decision. However, no lawsuit has surfaced.

The Board of Supervisors’ risk was based on a legal decision under Auerbach vs. Los Angeles Board of Supervisors which argued that the board did not have authority under the law to make transfers from the treasury to the county’s general fund. A lower court and an appellate court ruled that the county did have the authority.

Undefined is the question how long is temporary?

“At some level, the legal efficacy of the so-called dry period loan resolution is suspect,” wrote former District Attorney Gary Woolverton, when he drafted the $12.5 million performance bond claim now with the county’s insurance carrier.

To his credit, foreman Wesley Cook of Surprise Valley did devote considerable space to quoting the California Association of Grand Juries regarding a grand jury’s duties and authority. That same information appeared Sept. 14, 2010 -- nearly a year ago -- on the Modoc County Daily News blog.

In effect, the 2010-11 Modoc County Grand Jury report covers no new ground, but does emphasize that investigations by this most recent grand jury and previous ones have uncovered enough information to warrant a criminal investigation.

2011-09-06T19:12:00.000-07:00

Modoc-gate

Barclay Declines Request

For Criminal Investigation

Three months ago the recently disbanded Modoc County Grand Jury wrote a letter to Superior Court Judge Francis Barclay requesting that he impanel a criminal grand jury to investigate the misappropriation of nearly $20 million from the county’s treasury.

Barclay declined saying in an undated letter recently obtained by the Modoc Independent News that it was fruitless to form a criminal grand jury unless there was a prosecutor to pursue the case. Nevertheless, in the grand jury’s letter of June 1 to Barclay, it expressly argued that it has “solid evidence” that state laws have been violated by “the conscious and witting participation of elected county officials in creating a multi-million dollar deficit in the county.”

The letter, in its entirety, goes far beyond the grand jury’s report recently released to the public.The letter alleges that the county sheriff “when presented with the violations of the penal codes, determined not to pursue charges or open an investigation in this serious matter.” It is not clear from the letter if the grand jury was referring to current Sheriff Mike Poindexter or recently retired Sheriff Mark Gentry.

The grand jury pressed Barclay to address four major points: Misuse of restricted funds by county officials, the auditor issuing unlawful financial warrants against non-existent funds, the treasurer honoring warrants issued illegally and the Board of Supervisors’ failure to provide budgetary direction and oversight responsibility.

County officials named in a $12.5 million performance bond claim as potentially responsible for the misappropriation include current Treasurer Cheryl Knoch, former auditor Judi Stevens, former CAO Mike Maxwell and to a lesser degree various members of the Board of Supervisors.

“The treasurer stated that if ‘she had known that she could have refused to honor the illegal warrants’ she might have done so,” the letter to Barclay states. “The auditor issued illegal warrants. Both these fiscal departments have demonstrated an on-going unwillingness to follow approved accounting practices designed to assure compliance with existing laws and maintain proper accounting records.”

Barclay responded to the grand jury’s request by admitting he has “technical authority to impanel a criminal grand jury” but to do so would be meaningless “unless a criminal grand jury was requested by the prosecuting authority.” He acknowledged the information that the grand jury had simultaneously requested criminal investigations by both District Attorney Chris Brooke and Attorney General Kamala Harris.

“I believe that it is appropriate for you to request that either or both of these agencies conduct further investigation regarding potential criminal liability,” Barclay said. “However, I hope you understand that I do not intent to impanel a criminal grand jury unless or until a prosecuting authority requests the Superior Court to impanel one.”

2011-09-06T10:05:00.000-07:00

Editor’s Note

Blog Protocol

From time to time we are compelled to toss in our two bits worth in order to hopefully clear up misconceptions and gently guide our readers in the protocol of open forum debate on this blog. Now is the time -- again.

First, there is no such thing as a “legally recognized” newspaper. Let’s think about this for a moment. If a newspaper, regardless of which one, were legally recognized would that not imply that it is approved by the state -- and therefore a state organ? Such newspapers exist in totalitarian countries, but not to our knowledge in this country.

There are necessary newspapers, and we have one in this county, that are approved by the court to run legal notices. We are not that newspaper. One of the qualifications for adjudication is the newspaper must print at least weekly for a period of three years before appealing to the court. It is not a simple process as some of our readers would believe.

The fact that the Modoc Independent News, a monthly newspaper with a subsidiary daily blog, is not adjudicated does not make it less a newspaper. We explained this once in our coverage of Supervisor Dan Macsay’s diatribe against us when he was chair of the Modoc County Board of Supervisors.

Which leads us to the comments we have been receiving recently concerning that other newspaper, the necessary one adjudicated by the court. It is not the intention of the Modoc County Daily News blog to engage itself or its readers in a debate over the merits of one newspaper’s coverage versus another. Newspapers should stand on their own two feet.

However, the Modoc County Daily News blog, in addition to its in-depth reporting on the county’s fiscal crisis and the misappropriation of treasury funds, finds that it has also evolved into a public forum for the exchange of ideas and information. Far be it for us to censure in any way a free exchange of ideas.

We would also suggest that if our readers have questions in their exchange of ideas that could possibly be answered by other entities who happen to be the subject of those questions that readers also direct those questions to those parties.

With that belief, we invite any and all subjects of debate on this blog to join our readers in their on-going commentaries -- with a proviso. Keep it constructive. Keep it free of libel. Keep it open in the spirit of traditional free journalism. With that said, we reserve the right to make judgment calls as to what appears on this blog and what does not.

The comments expressed on this blog do not necessarily reflect the opinions of the Modoc Independent News or its subsidiary publications.

-- Ray A. March

2011-09-05T10:32:00.000-07:00

2011-09-05T10:09:00.000-07:00

Nielsen Restraining Order Against Bird

http://www.willows-journal.com/news/nielsen-7097-bird-gerber.html

2011-08-30T11:47:00.001-07:00

Court Ruling Regarding Pension Disclosure

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/30/BA0M1KTG8E.DTL&tsp=1

2011-08-29T18:31:00.000-07:00

Modoc County Grand Jury Report Released

Editor’s Note: The long awaited Modoc Grand Jury Report was released today, Aug. 29. We think that for the time being it speaks -- or does not speak -- for itself. Further coverage of the grand jury and its investigation of the $20 million treasury misappropriation will appear both on the Modoc County Daily News blog and the Modoc Independent News, Sept. 7 issue.

Modoc County Superior Court

ROBERT A. BARCLAY JUSTICE CENTER

205 South East Street, Alturas, CA 96101

www.modocsuperiorcourt.ca.gov

(530)233-6526

FRANCIS W. BARCLAY DAVID A. MASON LINDA L. OSTOJA

PRESIDING JUDGE ASST. PRESIDING JUDGE EXECUTIVE OFFICER

Dear Ladies and Gentlemen:

I want to take this opportunity to express my appreciation and the appreciation of the Superior Court, to all of the members of the 2010-2011 Modoc County Grand Jury for a job well done. Your diligence, dedication and hard work is reflected in this year’s report.

I want to specifically recognize and extend an individual thank you to Wes Cook for his outstanding leadership as this year’s Foreperson. This year held an added challenge because of the reduction in size of the grand jury panel, however the panel is to be complimented in overcoming this challenge.

Finally, I want to thank the Modoc Sheriff’s Department for once again providing our Grand Jury with excellent meeting room facilities. The availability of these facilities greatly assists our jurors in performing their duties.

Serving as a Grand Juror is not an easy task and I commend each and every one of you for your sincere effort and commitment to addressing the complex, varied and sensitive issues presented to you.

Thanks once again for a job well done.

Sincerely,

F. W. Barclay

Francis W. Barclay

Presiding Judge
Modoc Superior Court

I certify that the Modoc County Grand Jury Final Report complies with Title Four of the California Penal Code and direct the Court Executive Officer to accept and file the final report as a public document.

/s/__________________________________________, date___August 23, 2011__

Publication of Websites

Table of Contents

Letter from Presiding Superior Court Judge Francis W. Barclay 1

Certification of Report by Superior Court 2

Publication Websites 2

Table of Contents 3

Preface 4

Functions of the Grand Jury 4-6

Grand Jury Roster 7

Acknowledgments 7

Grand Jury Reports – Reviews

Modoc County Treasurer 8
Modoc County Auditor 9
Modoc County Sheriff/Coroner Jail Inspection 10-11
Alturas Police Department 12-13
Devil’s Garden Conservation Camp #40 14
Modoc County Mental Health 15
Modoc County Environmental Health 16
Modoc Joint Unified School District 17
Modoc County Road Department 18

Grand Jury Reports – Complaints and Inquiries

Special Districts

Cedarville Cemetery – Special District 19
Daphnedale Community Service District – Special District 20
Stronghold Newell Pest Abatement – Special District 21

Notice to Respondents 22

Open Letter to the Citizens of Modoc County 23

Citizen Complaint form 24-25

Preface

To the Community:

The California Legislature authorizes and requires grand juries of each county. These Grand Juries are to inquire into the books, records, accounts, methods, systems and procedures of designated local governments. By diligently completing its civil function your grand jury encourages local government officials to use your tax dollars fairly and effectively.

To fulfill its civic duty this Grand Jury formed committees to investigate specific areas of local government. Each committee had at least two members. The foreperson was the ex-officio member of each committee.

The Grand Jury workload included investigating five citizen complaints and nine local Government reviews.

This final report was approved on June 16, 2011 by ten members present as defined in the Penal Code at the final grand jury meeting. The report was forwarded to the presiding judge for review.

Functions of the Grand Jury

The Grand Jury is part of the judicial branch of the government, mandated by the California Constitution, and is an arm of the Superior Court. The primary function of the Grand Jury is to examine local government. The Penal Code states the Grand Jury is specifically:

Mandated to conduct civil investigations and audits of City and County Government, to insure efficient and proper operation of all local government and to detect and expose fraud and malfeasance.

The Grand Jury addresses citizen complaints and conducts investigations to act as a “watchdog” for the citizens of Modoc County. The Grand Jury is appointed and sworn in early July of each year and serves until June 30 of the next year.

The Grand Jury reviews and evaluates the performance of local government officials and entities, focusing on procedures, methods and systems (not policies), to determine if more efficient and economical measures might be employed and if procedures are being followed.

The Grand Jury has three ways to exercise its powers:

1. Reports – Published reports evaluating local government conditions, generally addressing specific issues, with findings and recommendations. The County Board of Supervisors, City Council or affected agency must comment on each recommendation as per Penal Code Section 933.05 (When crimes are not charged but suspected, special reports with documentation may refer specific issues to other authorities.)

2. Accusations – Formal written complaints accusing a government official or employee of misconduct. (Conviction would result in removal from office/duties rather than criminal penalties.)

3. Indictments – Formally charging a person with a crime.

Under its review authority, the Grand Jury is specifically authorized to:

Inspect and audit local entity records, insuring proper and legal accountings of public records.
Investigate and report on performance of special districts or commissions.
Evaluate conditions of jails and detention centers within the county.
Investigate charges of misconduct by public officials or employees.
Investigate and report on “questionable practices” of such agencies or officials.
Request subpoenas.

The Grand Jury also receives complaints from citizens alleging mistreatment by officials, suspicions of misconduct, or government inefficiencies. While keeping all complaints confidential, each is acknowledged and considered by the panel. Those accepted under Grand Jury jurisdiction are investigated carefully before any action is taken.

Why the California Grand Jury Association Avoids the Term “Civil” Grand Jury

There is no such thing in California law as a “civil” grand jury. California has historically had only “regular” grand juries and every county is required by the California Constitution to have one every year. The regular grand juries have always had two different functions: criminal and civil.

One function, the criminal one, is to hear evidence to determine whether in the grand jury’s view it is sufficient to warrant making an accused stand trial. Typically the District Attorney’s office decides who to accuse, on what charges and what evidence to bring to the attention of the grand jury. The District Attorney guides and advises the grand jury during its receipt of the evidence. The grand jury determines whether or not to issue an indictment. As discussed below, this indictment function has fallen into disuse in some, but not all, counties. In addition to standard criminal indictment activity, potentially included within the criminal function is the obligation of every regular grand jury to investigate “willful or corrupt misconduct in office of public officers of every description within the county.” Whether or not a grand jury’s indictment function has fallen into disuse, this is a mandatory obligation and obviously may uncover criminal activity.

The other function, the civil one, is to investigate local government agencies and officials to form views as to whether they are acting properly. If a grand jury determines they are not, it has various options open to it. The most frequently used option is the presentation of a Report outlining the grand jury’s findings and recommendations in the matter. Such Reports are public and frequently attract media attention. They must be responded to in specific ways by the agencies or elected officials reported upon. Except where an investigation is mandated, the grand jury in its sole discretion decides whether and what to investigate when performing its civil functions.

Depending on the nature and severity of any wrongdoing a grand jury finds in its investigations it can, in addition to releasing a Report, request the District Attorney to pursue the matter criminally, issue its own Accusation to start a court action to remove a wrongdoing official from office, order the District Attorney to sue to recover monies the grand jury has determined are due and order the commencement of escheat proceedings to recover land. Collectively the preparation of Reports and these additional powers are frequently referred to as the civil function of a regular grand jury.

For historical and logistical reasons many District Attorneys do not seek indictments from their regular grand jury. In some counties District Attorneys always elect to proceed without indictment. In other counties limited purpose “additional” grand juries are impaneled to handle criminal matters. Where an additional grand jury has been impaneled it has, with one exception, the exclusive power to indict. It does not, however, have an exclusive power to investigate and the regular grand jury retains the power to investigate crimes. If a regular grand jury found an indictable offense during one of its investigations and an additional grand jury was sitting, the regular grand jury would turn the results of its investigation over to the additional grand jury to issue the indictment. Whether or not a regular grand jury sits in a county whose District Attorney simply chooses not to make use of its indictment function, or in a county with an additional grand jury sitting, the regular grand jury possesses all of the criminal and civil investigatory powers of any regular grand jury.

The term “civil grand jury” is frequently used as a shorthand way to refer to a regular grand jury that sits in a county where the regular grand jury’s indictment powers are not called upon. It is a convenient but unfortunate, shorthand term that makes it easy to refer to such a regular grand jury. The CGJA tries to avoid the term, however, and encourages grand jurors to do the same. The reason is that the term conveys the impression to the public, the media, the government officials over whom you have oversight jurisdiction, and perhaps worst of all, to grand jurors themselves, that regular grand jurors do not have the strong powers that in fact they do have. It can lead to a diminishing awareness of and commitment to your powers to investigate public official misconduct in office, to issue accusations, to direct the District Attorney to recover monies and to investigate criminal matters even if you will not be asked to issue an indictment. In short, it can lead to a mentality that, in counties where they are not asked to issue indictments, all that regular grand juries do, or even all they are required to do, is issue Reports. That is wrong and such an attitude can severely weaken a grand jury and, indeed, the strength of all of California’s regular grand juries in the future. It is also possible that if enough grand jurors think of themselves as possessing only reporting powers for a long enough period of time, the legislature may agree and significantly change the historic role of the regular grand jury.

The CGJA encourages regular grand juries to refer to themselves simply as the “Modoc County Grand Jury”. If an additional grand jury is impaneled let it refer to itself as an “additional”, “special” or “criminal” grand jury but reserve the unrestricted term “grand jury” for the regular grand jury.

Reprinted by permission of the California Grand Jury Association

www.cga.org

Modoc County Grand Jury Roster 2010-2011

Wesley Cook, Cedarville

Frank Carter, Alturas

Jim Massey, Jr., Tulelake

Terry McChesney, Alturas

Gary Slinkard, Alturas

Bob Zane, Alturas

Barbara Boyd, Tulelake

Loretta McGiffin, Fort Bidwell

Leta Bethel, Alturas

Patricia Budmark, Alturas

Jerry Schliesser, Fort Bidwell

Serving on the 2010-2011 Grand Jury has been a vast learning experience for all, but most especially for me. The process has been frustrating as well as rewarding. Thank you is not enough for all the dedication, time and hard work my fellow jurors have spent investigating and deliberating some very complex issues. It was an honor to serve with this fine group.

Wesley Cook - Foreman

Acknowledgements

This year’s grand jury would like to express our sincere thanks to Judge Francis W. Barclay and Linda Ostoja for the legal and logistical support received from the Modoc Superior Court.

We would also like to acknowledge the excellent cooperation we received from the County Department heads and members of their staff.

Last, but not least, a big debt of gratitude to the Modoc County Sheriff’s Office for providing a meeting room, and Modoc County Sheriff’s Office staff member Sara Wright, for handling our scheduling needs.

REVIEW OF MODOC COUNTY TREASURER’S OFFICE

AREA OF STUDY

Modoc County Treasurer

ISSUE

Ongoing investigation, based on recommendations for further review by the 2009-2010 Grand Jury

GENERAL

The Treasurer explained the duties of the job, knowledge of job requirements and standard procedures.

During the course of the interview, some of the questions asked included but weren’t limited to:

Q – Does the Treasurer have the power to refuse to pay warrants?

A – Yes

Q – Are restricted funds still being used?

A - Yes

METHOD OF INVESTIGATION

Interviewed Modoc County Treasurer

FINDINGS

The Treasurer failed to perform duties to insure government funds were legally spent and properly accounted for.

RECOMMENDATIONS

Follow duties and guidelines as set forth by the State and Federal Government.

Have accurate monthly reports to the Board of Supervisors that are factual and transparent.

Continued follow up by the 2011-2012 Grand Jury.

FORMAL RESPONSE REQUIRED

Modoc County Treasurer to respond to finding #1 and recommendations #1 and #2 to Presiding Judge of the Modoc Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

REVIEW OF MODOC COUNTY AUDITOR’S OFFICE

AREA OF STUDY

Modoc County Auditor

ISSUE

Continued investigation, based on recommendations for further review by the 2009-2010 Grand Jury

GENERAL

The Auditor discussed her duties as Auditor and her qualifications to serve as the Auditor. She gave information on past employment history, formal education and background information.

During the interview questions were asked regarding the audit process that was currently underway by VTD Audits.

METHOD OF INVESTIGATION

Interviewed Modoc County Auditor

FINDINGS

Restricted funds are being used on advice of County Counsel.

Modoc County is currently borrowing from restricted funds and there is no guarantee the funds will be paid back by the end of the fiscal year.

RECOMMENDATIONS

The Auditor should review and comply with laws associated with restricted funds.

FORMAL RESPONSE REQUIRED

Modoc County Auditor to respond to finding #1, 2 and recommendation #1 to the Presiding Judge of the Modoc Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

REVIEW OF MODOC COUNTY SHERIFF/CORONER JAIL INSPECTION

AREA OF STUDY

Modoc County Sheriff’s Department

ISSUE

Required annual review

BACKGROUND

Adult Title 15 & 24; Minimum Standards for Local Detention Facilities – 2001 revision

METHOD OF INVESTIGATION

Interviewed Modoc County Sheriff/Coroner and members of the Sheriff’s office staff

FINDINGS

The sheriff’s department has sub-marginal staffing. Six months before the new Sheriff was elected the Board of Supervisors were notified by the sheriff’s office that the jail was in non-compliance of Adult Title 15 & 24 Minimum Standards for Local Detention Facilities. The State of California Correction Standards Authority is aware of the non-compliance and has notified the sheriff’s office that it would necessarily side with any litigant who sues where non-compliance was at issue. At issue is section 1027, where it states that “whenever one or more females are in custody, there shall be at least one female employee who shall in like manner be immediately available.”

The Sheriff’s Department has only one female officer and must operate 24/7/365 and cannot Meet Title 15 & 24 requirements.

Modoc County appears to be in financial jeopardy.

The 2009-2010 Grand Jury found the Sheriff’s Department in non-compliance in the above areas.

The outgoing Sheriff’s reply to the 2009-2010 Grand Jury findings was to state that he agreed the department was in non-compliance with the state standards but that the condition was not itself engaging in an illegal practice.

The incoming Sheriff’s response to the 2009-2010 Grand Jury stated a very different conclusion.

Vehicle licensing fees (VLF) legislation is scheduled to expire in June 2011. The VLF pays 48% of the departments enforcement budget. The new California Governor has pledged to put further VLF up to the people by ballot. The Sheriff cannot know how that vote will go so he must develop two budgets, one with VLF funding and one without VLF funding.

Presently, the Sheriff is covering the gaps or vacancies in his deputies’ shifts because of marginal staffing.

The department is starting a “Neighborhood Watch” program hoping to supplement manpower with qualified people or retired law enforcement personnel.

The Sheriff has been rebuilding the Sheriff’s office front area with his own personnel (no county maintenance personnel) using his own tools and time.

Martial Arts training, shooting range training and the training of investigational officers is difficult.

Several needed detention facilities (jail) repairs were identified:

Leaking roof.
Sprung door.
Electronic monitoring console.
Deteriorated/unusable 18 person cell wing.

Some of these conditions contribute to unsafe working and/or incarceration conditions. There is need for immediate attention.

RECOMMENDATIONS

Sheriff needs to consult with District Attorney and County Counsel and get a final determination about the legality of the current staffing situation particularly as it pertains to female staffing requirements.

Sheriff’s office should have access to the assistance and support of the County Works Department in the maintaining of the jail facilities. The needed work should be completed in the shortest time possible.

FORMAL RESPONSE REQUIRED

Modoc County Sheriff/Coroner to respond to finding #1, 5 and 7 and recommendation #1 to the Presiding Judge of the Modoc Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

REVIEW OF ALTURAS POLICE DEPARTMENT

AREA OF STUDY

Alturas Police Department

ISSUE

Required annual review

BACKGROUND

“Proposition 172 Facts: A Primer on the Public Safety Augmentation Fund”

METHOD OF INVESTIGATION

Interviewed Alturas Chief of Police

FINDINGS

Police Department finger/palm print machine is not hooked up to the Justice Department and may not be fully functional. The money ($3,000.00) for a maintenance contract with Identrix (the manufacturer) is not available. A similar machine is maintained by the Sheriff’s Department. At this time the Alturas Police Department can only make “hard” copy fingerprint cards. Perhaps County IT can set up the machine for the police department

3. We discussed AB-172, the Public Safety Sales Tax (PSST). The City is to be included in the PSST cash distribution. The Chief stated that AB-172 calls for a Public Safety Committee, which is composed of members of the public safety agencies including the Sheriff’s Office and Police Department and may include Probation, District Attorney and Fire Departments. A member of the City Council was assigned the public safety issue, and has yet to determine who, if anyone, is on the Public Safety Committee. The Public Safety Committee is to determine the allocation of the Public Safety dollars to the various Public Safety agencies. Right now, the Police Department is getting 3% per year ($12,000.00) of the Public Safety dollars (approximately $300,000.00) coming to the County.

The County wants to assess the Police Department approximately $80,000.00 per year for dispatch services. The County Sheriff’s office gets the lions share of the PSST funds.

The Police Department has six (6) officer positions (including the chief’s position). Currently there is one (1) vacant position that the City Council has approved to be filled.

It is possible that if the Vehicle Licensing Fee bill does not pass, the Alturas Police Department will be cut by 50%.

RECOMMENDATIONS

None

FORMAL RESPONSE REQUIRED

Alturas Police Chief to respond to finding #1, 2, 3 and 4 to Presiding Judge of the Modoc Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

REVIEW OF DEVIL’S GARDEN CONSERVATION CAMP #40

AREA OF STUDY

Devil’s Garden Conservation Camp #40

ISSUE

Required Annual Review

BACKGROUND

“Devil’s Garden Conservation Camp # 40” – a fact sheet

“2010 CDCR Adult Institutions Outcome Evaluation Report” – pg 38, Table 21

Recidivism Rates

“California State Auditor Report 2009 – 107.1” – pg 77-79 Average Inmate Costs Report

GENERAL

The Camp Commander and his staff met with the Grand Jury review team on February 22^nd and provided a general overview of the Camp’s history, purpose and a broad description of daily camp life and the work schedules performed by the inmates. Camp personnel were able to answer all of the questions brought up by the review team and were anxious to show the team around the facilities and workshops.

METHOD OF INVESTIGATION

Interviewed CDCR Administrator and Staff

FINDINGS

The professional management of the Camp, and the well organized and disciplined activities at the Camp have safely provided the local communities with 10,464 hours of conservation work. Federal agencies received 57,432 hours; BLM received 29,144 hours and the USDA Forest Service received 28,288 hours. In addition, crews responded to 30 fires and provided 23,313 hours to fire fighting.

Of the 33 CDC camps operated throughout the State of California, The Devil’s Garden Camp has one of the lowest recidivism (repeat offenders) rates.

RECOMMENDATIONS

None

FORMAL RESPONSE REQUIRED

No response required

REVIEW OF MODOC COUNTY MENTAL HEALTH SERVICES

AREA OF STUDY

Modoc County Mental Health Services

ISSUE

Periodic Review

BACKGROUND

There are four Departments administered by the Director

Mental Health
Drug and Behavior
Public Health
Environmental Health.

METHOD OF INVESTIGATION

Interviewed Director of Modoc County Mental Health Services

FINDINGS

Each of the Departments has experienced budget cuts.

Most of the restricted funds belonging with these four departments has been repaid though not all.

The Director and the personnel working with her are to be commended.

RECOMMENDATIONS

None

FORMAL RESPONSE REQUIRED

None required

REVIEW OF MODOC COUNTY ENVIRONMENTAL HEALTH

AREA OF STUDY

Modoc County Environmental Health

ISSUE

Periodic Review

BACKGROUND

Responsibilities and Operations of Department

METHOD OF INVESTIGATION

Interviewed Department Head of Modoc County Environmental Health

FINDINGS

This agency has responsibility for 22 programs.

Food sanitation, restaurant inspections.
Hazardous material.
General underground/above ground storage tanks.
Land use.
Rabies and animal control.
Liquid waste.
Solid waste.
Water systems.
Wells.
Permits and inspections.

This list does not include all the programs but gives a picture of the scope of the department.

Due to the financial crisis in the county, the staff has been reduced to two people. The Department Head and a secretary/bookkeeper.

RECOMMENDATIONS

None

FORMAL RESPONSE REQUIRED

None required

REVIEW OF MODOC JOINT UNIFIED SCHOOL DISTRICT (MJUSD)

AREA OF STUDY

Modoc Joint Unified School District

ISSUE

Periodic Review

GENERAL

The Superintendent explained the function of the superintendent’s office, structure for the District, budget process current financial picture and restricted funds.

The Superintendent also gave a very clear picture as to how the district’s financial accounting is handled. He commended his personnel for their knowledge and work on following correct accounting procedures. He explained that when it was brought to his attention that the county was using the school’s restricted funds, steps were immediately taken to have those monies restored. The interest lost from the use of these funds has not been replaced.

The Superintendent’s office is to be commended for their professionalism and work on behalf of the students.

METHOD OF INVESTIGATION

Interviewed Superintendent of Modoc County School District

FINDINGS

None

RECOMMENDATIONS

None

FORMAL RESPONSE REQUIRED

None required

REVIEW OF MODOC COUNTY ROAD DEPARTMENT

AREA OF STUDY

Modoc County Road Department

ISSUE

Periodic Review

BACKGROUND

How the current budget has affected the Department

METHOD OF INVESTIGATION

Interviewed Deputy Director of Transportation
Interviewed Office Manager/Fiscal Officer

FINDINGS

The department laid off five (5) employees in 2010. These layoffs were based on projections of income for the 2009-2010 fiscal year.

Modoc County has 500 miles of paved roads and 488 miles of unpaved roads. Currently the Road Department works four ten-hour days. The department used 10% of the asphalt in 2010 that it used in 2009. Due to low staffing every person must work in the field when a large project is being completed.

The Road Department receives no tax monies from Modoc County. The State of California determines when gas taxes are released to the counties. It is difficult to budget when the state changes policies. A big impact on the budgeting is the fate of the Secure Rural Funds Act.

The Road Department has pursued various stimulus grants for road work. In one instance the grant wasn’t obtained because the County does not have a County Audit that was required for the application.

Both the Deputy Director and the Office Manger/Fiscal Officer expressed concern that the Road Department cannot continue to maintain roads in good condition if their department is to operate at a minimum level of activity.

RECOMMENDATIONS

None

FORMAL RESPONSE REQUIRED

None required

REVIEW OF CEDARVILLE CEMETERY DISTRICT

AREA OF STUDY

Cedarville Cemetery District

ISSUE

Complaint – Alleges lack of maintenance, especially puncture vine control and irrigation needs. This cemetery was compared to the other three cemeteries in Surprise Valley.

METHOD OF INVESTIGATION

Reviewed maintenance activities with the Caretaker (new Caretaker as of Spring 2010).
Reviewed short and long range plans for the cemetery with the Board of Directors.

FINDINGS

The irrigation well is inadequate, especially when agricultural wells in the area are being used. The older portion of the cemetery is not given to ease of maintenance and family plots are to be maintained by the families. It also should be noted that there were maintenance problems observed in the other three (3) cemeteries. (All were visited on 11/4/10.) Cedarville is by far the largest of the four cemeteries.

RECOMMENDATIONS

Confer with vegetation management consultant.

Review dry scape plans for use of drought tolerant plants to help ease pressure on water supply.

Contact Devil’s Garden Conservation Camp for possible help in maintenance (especially weed removal).

Contact Probation Department regarding use of individuals who have been sentenced to community service.

Place an article in the local papers stressing that families need to take care of their family plots in the older part of the cemetery.

FORMAL RESPONSE REQUIRED

Cedarville Cemetery District to respond to finding #1 and recommendations #1 through 5 to the Presiding Judge of the Modoc County Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

REVIEW OF DAPHNEDALE COMMUNITY SERVICE DISTRICT (DCSD)

AREA OF STUDY

Daphnedale Community Service District

ISSUE

Complaint, possible embezzlement of DCSD funds

GENERAL

Reviewed numerous allegations of misconduct regarding accounting, meeting protocol and engineering violations.

METHOD OF INVESTIGATION

Interviewed Resident; Board Member DCSD, as well as the President and the Secretary DCSD
Reviewed District operations, problems and inspected the past five (5) years bank and financial records.
Modoc LAFCO held a hearing April 12, 2011 regard DCSD.

FINDINGS

No evidence of embezzlement was found.

The Daphnedale Community Service District has a tremendous amount of internal and financial problems.

RECOMMENDATIONS

Follow the recommendations as set forth in the Modoc LAFCO Hearing of April 12, 2011.

FORMAL RESPONSE REQUIRED

Daphnedale Community Service District to respond to recommendation #1 to the Presiding Judge of the Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

REVIEW OF STRONGHOLD NEWELL PEST ABATEMENT DISTRICT (SNPAD)

AREA OF STUDY

Stronghold Newell Pest Abatement District

ISSUE

Periodic Review

BACKGROUND

SNPAD is a special district in the Modoc portion of the Tulelake Basin for the sole purpose of rodent and vegetation management. Funding is provided by an annual acreage assessment collected by the Modoc County Auditor and administered by the Modoc County Agriculture Department.

METHOD OF INVESTIGATION

Interviewed: Agricultural Commissioner; Tulelake Office Staff and Alturas Office Staff

Review of the 2010-2011 and 2011-2012 Budgets
Review of weed and rodent policies and procedures
Review of meeting protocol and annual operations

FINDINGS

Stronghold Newell Pest Abatement District is a fiscally sound district with a forward-looking Board of Directors with day-to-day operations being performed by the very capable staff of the Modoc County Ag Department.

RECOMMENDATIONS

An annual press release should be made to the agricultural section of the Herald and News to inform District constituents of policies, annual operations review and contact information for service.

FORMAL RESPONSE REQUIRED

Stronghold Newell Pest Abatement District to respond to recommendation #1 to the Presiding Judge of the Modoc Superior Court within 90 days of publication of this report pursuant to Penal Code Sections 933(c) and 933.05.

Notice to Respondents

Response Requirements

On January 1, 1997, an extensive change in the legal requirements affecting respondents and responses to the Grand Jury Findings and Recommendations took effect (California Penal Code Section 933.05). Each respondent identified in this report should become familiar with the law and, if in doubt, should consult legal counsel before responding.

How to Respond to Findings

For the assistance of all respondents, California Penal Code Section 933.05 is summarized as follows:

The Respondent (person or entity) must respond to Findings in one of two (2) ways, stating that:

You agree with the Finding.

You disagree wholly or partially with the Finding; in which case, the response shall specify the portions(s) of the Finding that is disputed, and shall include an explanation of the reasons for the disagreement.

How to Report Action in Response to Recommendations

Recommendations by the Grand Jury require action(s). The Respondent must identify action(s) on all recommendations in one of four (4) ways, stating that the recommendation:

Has been implemented, with a summary of implemented activities.

Has not yet been implemented, but will be implemented in the future, with activities and time frames for implementation.

Requires further analysis or study. In such case, the law requires a detailed outline of the analysis and time frame not to exceed six (6) months. Further, the complete analysis or study must be submitted to the officer, director or governing board of the entity being investigated.

Will not be implemented because it is either unwarranted or unreasonable with an explanation(s) and supporting facts.

Timing of Responses and Actions to Findings and Recommendations:

As stated in Penal Code Section 933(c), No later than 90 days after the grand jury submits a final report on the operations of any public agency, the governing body of any public agency subject to grand jury reviewing authority, shall comment to the presiding judge of the superior court on findings and recommendations. Every elected official or agency head for which the grand jury has responsibility shall comment within 60 days to the judge of the superior court with a copy sent to the Board of Supervisors. For 45 days after the end of the term, the Grand Jury foreperson or designees shall, upon reasonable notice, be available to clarify recommendations in the report.

OPEN LETTER TO THE PUBLIC

The 2010-2011 Modoc County Grand Jury and previous Grand Juries have inquired extensively into the fiscal crisis of Modoc County. We have concluded, as have past Grand Juries, that there has been a misuse and misdirection by certain County officials of both State and Federal restricted funds.

We believe that the misuse and misdirection of these restricted funds has significantly contributed to the fiscal crisis now facing Modoc County and we believe that every citizen of Modoc County has suffered or will suffer financially in some form as a result of this misuse and misdirection.

We further believe that the inquiries and findings made by us and previous Grand Juries, suggests that there is a potential for criminal liability on the part of certain County Officials under Penal Code section 424 (Misappropriation of Public Funds) and/or Penal Code section 425 (Failure to Keep and Pay Over Public Funds as Prescribed). In this regard, we have forwarded letter requests to California State Attorney General Kamala D. Harris, Modoc County District Attorney Christopher Brooke, and Modoc Superior Court Presiding Judge Francis W. Barclay, requesting that they further investigate and initiate appropriate action concerning this serious matter.

In closing, the 2010-2011 Grand Jury strongly encourages all of the citizens of Modoc County to participate in the monitoring of our elected and appointed officials and to become more involved in our local government in general.

Respectfully Submitted

2010-2011 Modoc County Grand Jury

Modoc County Grand Jury

205 South East Street, Alturas, CA 96101

Citizen Complaint Form

Your Name:_________________________________ Date:___________________

Print or type

Mailing Address:________________________________________________________________

Street or PO Box City State Zip Code

Telephone: _______________________________ ______________________________

Home Work

1. Entity and Individuals – Identify entity (agency, organization or department) and

Individuals about whom or which you are making this complaint.

Agency, organization or department: _________________________Telephone #_____________

Business Address:_______________________________________________________________

Agency Director, Manager or Department Head:_______________________________________

Staff Persons Involved:___________________________________________________________

2. Summary of Issues – Briefly state each separate issue for investigation, including specific dates, events, individuals involved (staff persons, officials, etc.) Attach additional sheets, if

necessary.

______________________________________________________________________________

Is this complaint already in litigation? Yes [ ] No [ ]

3. Your Contacts to Date – List the agencies and individuals contacted, showing related entity and date of conflict. Also address and telephone number of each if possible.

______________________________________________________________________________

______________________________________________________________________________

4. Potential Grand Jury Contacts – Who do you think the Grand Jury should contact or interview about this complaint and why? ____________________________________________

______________________________________________________________________________

5. Your Expectations – What result(s) do you want from the Grand Jury investigation?

______________________________________________________________________________

6. Attachments – List and attach any correspondence and supporting documentation that you believe are pertinent to this complaint.

______________________________________________________________________________

______________________________________________________________________________

Among the many responsibilities and authorities of the Grand Jury is the investigation of Citizens Complaints. The Grand Jury serves as a “watchdog of citizens” to ensure that all branches of local government (i.e. County of Modoc, City of Alturas, their departments, officials, staff, as well as agencies or organizations with jurisdiction within Modoc County) are being administered efficiently, honestly, and in the best interest of the public. All complaints submitted to the Grand Jury are handled in strictest of confidence as protected by State Law.

Signature and Date – Please sign and date your complaint below.

______________________________ _____________________________ ____________

Signature Print Name Date

2011-08-26T15:19:00.000-07:00

Editor's Note: News get around. The article "Judge Barclay Explains Delay in GJ Report" published on this blog was picked up the Digital Clipping Service and then picked up by the Redding Record Searchlight.

http://blogs.redding.com/bross/archives/2011/08/wheres-the-gran.html

2011-08-24T15:24:00.000-07:00

Judge Barclay Explains Delay in GJ Report

Editor’s Note: Vagueness continues to surround the delay of the release of the Modoc County grand jury report for 2010-11 addressing, among other investigations, the misappropriation of an estimated $20 million from the treasury -- the single most important issue facing the county since the financial crisis was revealed in early 2009. On July 18 in an effort to gain an understanding of why the report was delayed in being made public, and to clear up reports of dissatisfaction on the part of either grand jurors or the courts, we sent the following list of questions to Judge Francis Barclay, presiding judge, Modoc County Superior Court. On Aug. 23, more than a month after our first media query, he responded by e-mail with the following answers.

Question

Why the delay in issuance of 2010-11 grand jury report?

Barclay

A combination of factors contributed to the delay in issuance. This was the first year that the number of regular grand jurors was reduced from 19 to 11. There was a glitch in last year’s training resulting in last year’s grand jury getting little, if any, training and direction on preparation and submission of the draft report. (As a result, we have made a positive change this year in our training practices).

We received the draft report in a non-electronic mode with different fonts and formats for each of the reporting committees and significant re-formatting had to be done to get the report in publishable form, and then it had to be re-circulated for approval by the grand jury. All of this was happening at the same time the courts were laying off staff, putting other staff on furlough days, and doing the best that we could to keep up with regular duties during these tough economic times with reduced resources

Question

Our understanding is you are dissatisfied with the wording in the grand jury’s open letter to the public? Is that true?

Barclay

I am going to respond to this question with some questions of my own. First, if the grand jury did intend to include an open letter to the public as part of their report, how is it that you would even be privy to this given that the report has not been published? Second, given that communications between the grand jury and the presiding judge of the Superior Court are confidential, how would you even be aware of whether there was or was not dissatisfaction with wording in an open letter that may or may not have been submitted as part of the report?

Question

When do you expect the report to be made public?

Barclay

We have completed the re-formatting and should have the report ready for public release before the end of August 2011.

Question

In what form will the report be released?

Barclay

The report has to be distributed to governmental agencies required to respond before it is made publicly available. This year we will distribute to the government agencies, lodge with the county clerk, distribute copies to the library, have copies available at the Superior Court and provide complete copies to the media. Because of budgetary constraints, we have prepared the report in-house and are not going to solicit bids for publication. We would encourage media to print the entire report for the benefit of the public but do not have the budget to pay for publication as we have in past years.

Question

What is your opinion on the request of the out-going grand jury that a criminal grand jury be impaneled to investigate the 2010-11 Grand Jury’s findings per its letter to you dated June 1, 2011?

Barclay

Again, I must respond to this question with a question. Assuming that the grand jury did send a letter to the presiding judge of the Superior Court regarding impaneling a criminal grand jury, I would like to know how you are privy to this communication given that nothing has been made public at this time and communications between the grand jury and the presiding judge of the Superior Court are confidential by law?

Notwithstanding the concern I have regarding confidentiality, I can tell you that practically speaking it is my opinion that it makes no sense for me to impanel a criminal grand jury unless a prosecuting authority such as a district attorney or attorney general requests that I do so as the purpose of a criminal grand jury is for a prosecuting authority to present information to this jury for purposes of obtaining a criminal indictment.

2011-08-23T17:19:00.000-07:00

First Amendment Coalition

Editor's Note: The First Amendment Coalition has been extremely helpful to the Modoc County Daily News in assisting us in obtaining public documents that Modoc County was resistant in releasing. If there are readers out there who feel helpless in their dealings with public officials, we highly recommend the First Amendment Coalition. The service is free, but a contribution within your means would be thoughtful and welcome. The information below is from the First Amendment Coalition.

The First Amendment Coalition offers an incredibly useful and FREE legal consultation service. FAC’s Legal Hotline, available on our website, is staffed by top media lawyers who will answer your questions about freedom-of-information, open-meeting laws, First Amendment protections for journalists, bloggers and ordinary citizens, and other open-government issues.

FAC wants you to use this completely FREE service. FAC is a nonprofit. Our Legal Hotline service is made possible by grants from the McCormick, Knight, CS and Central Valley Foundations, as well as individuals who contribute generously to FAC.

When a government agency refuses to disclose public records, or a city council deliberates secretly on issues that should be aired in public, or a police officer forbids the videotaping of an arrest, you are not powerless. Use the free Hotline service on FAC’s website for an expert analysis of your issue and to find our what your options are. If the matter is urgent, you can call us directly (at 415.460.5060).

Here are some examples of recent questions submitted to the Hotline and the answers given by FAC’s lawyers at Holmes Roberts & Owen (a national law firm with offices in San Francisco):

You’ll also find a searchable archive of more than 1,000 authoritative answers by FAC’s lawyers responding to previous Hotline users. This feature, called Asked & Answered, is a vital legal resource that you can consult again and again.

The Legal Hotline is not new. We’ve provided the public with answers to access law questions for more than 20 years. But the need today is greater than ever. Financially-strapped news organizations are no longer able to dispatch lawyers to vindicate the "people's right to know." The role of the Hotline is to legally empower citizens and journalists of all kinds to stand as a counterweight to government secrecy.

To make a long story short, we want you to take advantage of us, to pick the brains of our First Amendment experts, and, armed with a better understanding of your legal rights (and citations to relevant legal authorities), to push back effectively against recalcitrant government officials.

FAC is an advocate for free speech and access to government, but to succeed we have to connect our know-how with your need-to-know. So, use our free Hotline service.

2011-08-22T19:01:00.000-07:00

California Public Records Act

Editor’s Note: We offer this link to the Los Angeles Times as food for thought. We share in its message to its readers. The message is as applicable to the Modoc County Daily News blog as it is to a major metropolitan newspaper. If you want to get involved in your local political process, there are constructive ways to do it. This blog and its parent publication Modoc Independent News have successfully used the California Public Records Act (CPRA) in its investigations of the county treasury misappropriation. We are currently using the CPRA and we pledge that we will continue to do so. It’s our -- and your -- right.

http://documents.latimes.com/sunshine/

2011-08-04T16:55:00.000-07:00

Editor's Note: The August issue of the Modoc Independent News has reported that this year's Modoc District Fair may be the last. See below for a related story by the San Jose Mercury News which includes coverage about that possibility.

California fairs face tough times as state funds evaporate

By Ellen Huet

ehuet@mercurynews.com

The Santa Clara County Youth Fair bottomed out in 2008: Staring closure in the face, the fair shrunk from Ferris wheels and cotton candy to 4-H'ers and farm animals but has rebounded each year to celebrate another summer -- like it will again, beginning Thursday. This year, the carnival rides are back.

But not all small county fairs will be able to overcome their latest financial obstacle. When in May the state slashed all $32 million in funding for California's fairs, it also rang a death knell for small fairs like Modoc County's, where this month's four-day event -- complete with saddle bronc riding and greased pig contests -- is not only the biggest annual happening in the northeastern corner of California, it will likely be the last.

In all, 29 of the state's 78 district and county fairs such as Humboldt and Monterey counties' are now listed on the Western Fairs Association endangered list. But one small fair on the list -- Santa Clara's -- has already been to the bottom and back, transforming from a 16-day mega-event to a tiny youth agriculture fair and rediscovering modest success as a leaner fair that is focused on its roots.

This year's fair features livestock showings, a motocross race, a hands-on musical instrument exhibit and a traditional Mexican charro horse show that will bring about 50,000 attendees to the fairgrounds in San Jose.

Back to Basics

"When I first came into the business, it was one of the strongest fairs in Northern California," said Steve Chambers, the Western Fairs Association executive director whose career spans back to the 1980s.

But by the early 1990s, Santa Clara's fair shrunk so small that it stopped qualifying for state funding, said the fair's marketing director, Steve Stagnaro.

Since 2008, when it downsized to a youth fair and focused on local 4-H and FFA participants showing and selling their animals, the fair has been on a rebound.

"We went back to the very basic reason why fairs exist in the first place, and that cut the cost of running a fair way down," Stagnaro said. That year, the fair "had no rides, had really no food vendors, and was down to just some tents where 4-H and FFA kids could show their animals and auction them off," Stagnaro said.

But a pared-down budget and some county funds helped the fair slowly turn itself around. In 2009, the fair brought in new entertainment and carnival rides. Without tickets there wasn't an official attendance count, but Stagnaro estimates it drew about 10,000 more people than 2008. After three years of free admission and parking, the fair is charging for parking on the weekend this year and hopes to ramp up to a paid-admission, five-day event in 2012.

Most importantly, the fair -- which operates on a $142,000 budget this year -- finally grew large enough to get $120,000 in state funding for the 2011 season, half of which will be used this year and half of which is set aside for 2012. The money is helping offset a loss in funds from the county, which stopped supporting the fair after 2010.
"We're probably in better shape than other fairs in that we've lived without that money for so long and learned how to adapt," Stagnaro said.

Bad times in Modoc

In order to stay afloat, Santa Clara County's fair is hoping to increase revenue from renting the fairgrounds. But that formula won't help counties like Modoc, which must close its fairground during winter due to cold weather. The future of the Modoc District Fair looks dim.

This year, organizers expect four days of sheepdog trials, a demolition derby and livestock showings will draw 6,000 of 9,700 residents. Local nonprofits like the volunteer fire department rely on high attendance to garner almost all of the donations needed to run their programs the rest of the year, said fair CEO Dannette DePaul. If the fair disappears, she said, these organizations simply won't be able to pay their most basic bills.

The Modoc District Fair has operated since 1920 and gets $199,000 of its $275,000 operating budget from the state. The fair has enough savings to operate this summer's fair and the next few months, but will likely close its doors before it can put on another fair, DePaul said.

Larger fairs receive less money and rely less on state funds: the Alameda County Fair has a largely self-sustaining operating budget of $19 million and only received small funding for capital improvement projects, and the San Mateo County Fair received $52,000 from the state in 2011, less than 1 percent of its budget. San Mateo County Fair general manager Chris Carpenter said the state funds will be missed but that the fair will move on with different revenue sources.

Ripple Effect

But if even just a few small fairs close next year, the effects will be felt throughout the 78 fairs in California. Fair-based businesses and attractions like carnival rides need a healthy fair circuit on which to travel to stay in business, Chambers said.

"Fairs have to be examined as a whole, with the understanding that anything that impacts one has a ripple effect on all," added Alameda County Fair marketing manager April Mitchell.

Fairs, Chambers said, celebrate the accomplishments of ordinary people, whether it's in livestock breeding, agriculture, photography or even in text-messaging contests at the Marin-Sonoma County Fair.

And despite growing urbanization in larger counties, the charm of an agricultural fair is still a powerful draw.
"I remember an exhibit at the San Francisco County Fair at Pier 39 years ago where you could stand in line, pet a pig and get a sticker that said, 'I petted a pig on the pier,' " Chambers said. "It was a two-hour wait. If you set up that exhibit in Amador County, people would think you were nuts."

Contact Ellen Huet at 408-920-5852.

--

2011-08-02T19:03:00.000-07:00

Overdue Grand Jury Report
Delayed Again

The release of the long overdue Modoc County Grand Jury report containing its investigation into the misappropriation of nearly $20 million in treasury funds and expected to be made public last week -- has been delayed. Again.

Court Executive Officer Linda Ostoja told Modoc County Daily News the report still faces an assessment process that includes jury foreperson Wes Cook’s review and possibly review by members of the out-going grand jury.

“When it has final approval, it will be sent to the parties who were investigated and two days after that happens, it will be released to the public,” Ostoja explained. “So, realistically, it will probably not be public until the week of Aug.8.”

2011-08-01T13:14:00.000-07:00

Kerry Sloss in the News

Editor's Note: Readers will be interested in this article about Kerry Sloss, daughter of the late Bob Sloss who was highly regarded as editor and publisher of the Modoc Record for 30 years until his death in 1997.

http://www.mercurynews.com/breaking-news/ci_18586094

2011-07-30T15:39:00.001-07:00

Bulletin

   The non-supervisory employees of Surprise Valley Hospital have requested that a representative of Teamsters Local 137 from Redding conduct a meeting Thursday, August 4 at the hospital. The purpose of the meeting will be informational and to determine if there is sufficient interest among the employees to unionize. Issues to be discussed are representation of grievances, secure employment, normalization of wages and the possibility of better benefits.
    Teamsters Local 137 represents Surprise Valley School District teachers and hospital employees throughout northeastern California.

2011-07-19T15:41:00.000-07:00

Overdue Grand Jury Report
May Surface Next Week

The long overdue Modoc County Grand Jury report containing its investigation into the misappropriation of nearly $20 million in treasury funds is expected to be made public next week.

While unconfirmed by presiding Superior Court Judge Francis Barclay, the release of the highly anticipated report was predicted by Wes Cook, out-going grand jury foreman.

“It should be out next week,” Cook told the Modoc County Daily News.

Normally, grand jury reports are released before the next grand jury is sworn in, according to a spokesman for the California State Grand Jurors’ Association. The 2011-12 Modoc County Grand Jury was impaneled by Barclay June 27.

Barclay did not immediately respond to inquires as to why there has been a delay in the report’s release, or in what form the report would be made public.

A possible reason for the delay in the issuance of the grand jury report is that “it may not have been in any kind of shape to be accepted or released as a final report document,” according to a source who spoke on the condition of anonymity. “It sounds like last year's jury was somewhat dysfunctional and or disadvantaged.”

Cook, who otherwise was selective in his comments, disagreed with that assessment.

“I thought they worked very well together,” he said. “We had a limited number who worked excellently together.”

What is known, according to sources who would not speak publicly, is that Barclay, working under an apparent shroud of secrecy, has severely toned down the emotional level of the grand jury’s original open letter to the public.

In that letter the grand jury, while shy of naming anyone, clearly accuses “past and present elected and appointed county officials” of “misappropriation” of treasury funds, a violation of state law.

Barclay’s version, according to a copy of his draft letter obtained by the Modoc County Daily News, deletes one specific charge of misappropriation and refers only to “certain county officials” as being responsible for using restricted funds from the treasury.

However, the judge’s rewrite of the grand jury letter strongly states, “We further believe that the inquiries and findings made by us and previous grand juries suggests that there is a potential for criminal liability on the part of certain officials.”

There is reference to Penal Code 424 (misappropriation of public funds) and Penal Code 425 (failure to keep and pay over public funds as prescribed).

Missing in Barclay’s rewrite of the grand jury letter is the statement that “dereliction of duties by elected and appointed officials has resulted in personal financial damage and harm to every resident in the county. In our opinion this is not a victimless crime.”

In separate letters, it has been learned, the grand jury asked Barclay, District Attorney Chris Brooke, and Attorney General Kamala Harris to conduct a criminal investigation of the misappropriation.

The reference to a request for an outside criminal investigation in itself, including impaneling a criminal grand jury, does not appear in Barclay’s version of the grand jury’s open letter to the public.

Cook, when asked if Barclay, Brooke and Harris had responded to the grand jury’s request for a criminal investigation, said no one as yet had replied but he expected them to do so. The letters were dated June 1 and June 8.

Both the original grand jury letter to the public and Barclay’s edited version close with a strong appeal that “all citizens of Modoc County…participate in the monitoring of our elected and appointed officials and to become more involved in our local government in general.”

-- Ray A. March

2011-07-18T16:34:00.000-07:00

Update: Grand Jury Report

Editor’ Note: Readers have been wondering why the Modoc County Grand Jury report for 2010-11 has not been made public. Their question is a legitimate one considering it is common knowledge that the grand jury for the last year has been investigating the misappropriation of nearly $20 million from the county treasury. We have asked Judge Francis Barclay to tell us why he has not released the report, but to date he has not responded. We will report more on this tomorrow, July 19.

2011-07-11T19:45:00.000-07:00

Modoc County Ranks No. 1
In Federal Dollars Received

Contrary to its conservative political posture of anti-government, anti-taxes, Modoc County receives more federal dollars annually on a per capita basis than any other county in California.

In five different categories ranging from farm and ranch subsidies to salaries for federal workers, Modoc County received $227,670,000 in federal expenditures in 2009, according to the U.S. Census Bureau’s “Consolidated Federal Fund Report,” the latest data available.

That total figure is higher than any other county in California.

The federal report coincides with state data revealing that Modoc County, with the highest Republican registration of any county in California, on a per capita basis also gets more state taxpayer dollars than all but one of California’s 58 counties -- easily making the county the highest ranking receiver of combined state and federal expenditures.

The five categories totaling nearly $230 million in annual federal expenditures are federal employee salaries, retirement and disability payments, grants, procurements and “other direct payments.”

Salaries for federal employees totaled $115,292,000 or $12,660 per capita and a ranking of number one compared to $635 statewide.

Retirement and disability totaled $38,254,000 or $4,201 per capita and a ranking of fourth compared to a statewide average of $2,213.

Grants totaled $26,824,000 or $2,945 per capita and a ranking of eighth compared to a statewide average of $2,460.

Other direct payments totaled $24,338.000 or $2,672 per capita and a ranking of sixth compared to $2,186 statewide.Other direct payments are primarily direct payments to individuals such as farm and ranch subsidies.

Procurements or federal contracts totaled $22,962,000 or $2,521 per capita and a ranking of fifth compared to $1,866.

It is not just a single category that makes Modoc County California's top county for per capita in federal dollar expenditures. Modoc County’s No. 1 rank is due to top eight rankings or better in all five categories. The county’s data is significantly above the state average in every category.

The U.S. Census Bureau report also shows Modoc County’s annual per capita income at $17,285, compared to $22,711 statewide.

Based on these figures, it is apparent that Modoc County -- while considered a “welfare” county -- is not the “poorest” county in California. The county actually ranks number 40 out of 58 counties in California in per capita income.

In effect, its income standing is due in a large part to federal expenditures.

Editor’s note: This article first appeared in the July issue of the Modoc Independent News.

2011-07-06T09:12:00.000-07:00

Maxwell, Stevens and CalPERS Benefits

Two of the principals named in the performance bond insurance claim seeking damages to replenish the raided county treasury are drawing nearly $4,000 to $5,000 a month in retirement benefits, according to public records.

Mike Maxwell, retired chief administrative officer of Modoc County, received a gross monthly benefit of $3,349.54 from Jan. 9, 2009 to March 31, 2011, according to the California Public Employees’ Retirement System (CalPERS).

Judith Stevens, retired county auditor, received a gross monthly pension benefit of $4,675.38 for the same period, according to records obtained by the Modoc County Daily News under the California Public Records Act.

Both Maxwell and Stevens, among others, are named in the insurance claim as two of the top county officials most likely responsible for the treasury misappropriation of $20 million.

Alice Marrs, named as a lesser party to the misappropriation, has a lifetime monthly benefit of $1,217.65, according to the CalPERS records.

Former Supervisors Dan Macsay, Dave Bradshaw and Mike Dunn, all listed in the performance bond claim, are not currently receiving monthly retirement benefits from CalPERS.

-- Ray A. March

America the Beautiful

2011-07-04T07:54:00.001-07:00

O beautiful for spacious skies,
For amber waves of grain,
For purple mountain majesties
Above the fruited plain!

America! America!
God shed His grace on thee,
And crown thy good with brotherhood
From sea to shining sea!

O beautiful for pilgrim feet
Whose stern impassion'd stress
A thoroughfare for freedom beat
Across the wilderness.

America! America!
God mend thine ev'ry flaw,
Confirm thy soul in self-control,
Thy liberty in law.

O beautiful for heroes prov'd
In liberating strife,
Who more than self their country loved,
And mercy more than life.

America! America!
May God thy gold refine
Till all success be nobleness,
And ev'ry gain divine.

O beautiful for patriot dream
That sees beyond the years
Thine alabaster cities gleam
Undimmed by human tears.

America! America!
God shed His grace on thee,
And crown thy good with brotherhood
From sea to shining sea.

2011-06-28T09:45:00.000-07:00

Reasons for Misappropriation:

Weak BOS, Controlling CAO

A former county employee in the social services department points to a weak Board of Supervisors and a controlling chief administrative officer as reasons behind the misappropriation of an estimated $20 million from the treasury.

“I don’t know why he had so much power,” pondered the employee in referring to retired CAO Mike Maxwell and speaking on the condition of anonymity because she was sworn to secrecy resulting from an out-of-court settlement with the county for wrongful termination.

“The Board of Supervisors had to give it to him,” she said, “but how did he get it from them? He couldn’t have manipulated me to crossing the street so he wasn’t such a good con man. But something was happening and I watched it. I watched him gain power over ever department.

“What would cause the department heads to abdicate? I never understood why he should be in charge of every department in the county, but the Board of Supervisors as a rule is not very educated.”

The former employee said the misappropriation of the treasury had been going on for some time before it was disclosed by former CAO Mark Charlton in early 2009.

“It goes way back, but it does not precede Maxwell,” she said, explaining that she worked for the county for 20 years before being fired over a child abuse case. “There was a lot of loose money that they used to redecorate offices and did what they apparently wanted. Everybody on some level was aware of it.

“They did not keep very good track of their money,” she said. “Maybe they still don’t. I saw the treasury reports, but it was such an antiquated system. They used long strips of green paper, it was real antique, and they cut them up in pieces. I can’t tell you what a fiasco it was. It was absolutely difficult to follow what was going on. No one could audit the departments without information.

“It was just kind of coffee shop talk, but everyone knew,” she said referring to the misappropriation of funds. “There was general knowledge floating around that something wasn’t right. The structure that had been in place kind of collapsed and Maxwell was in charge of everything. And absolute power corrupts absolutely.

“I don’t know how Maxwell got in charge,” she said. I have no idea how he gained the power he had. He was kind of nothing with no background and suddenly he was in charge of everything.

“The Board of Supervisors is a lot of work and anybody with any intellect wouldn’t want the job,” she said. ”Just looking at the pile of papers you would have to read and you don’t have any legal aid to sort out that garbage. Maxwell could have gotten power from that. They were not capable of doing it or didn’t want to do it.

“Maxwell had one hundred percent power over the Board of Supervisors and the Modoc Medical Center. He just got in charge of everything in the county.”

-- Ray A. March

2011-06-27T20:54:00.000-07:00

New Grand Jury Takes Over

The 2011-12 Modoc Grand Jury was sworn in today, June 27, according to Superior Court Executive Officer Linda L. Ostoja.

The panel is as follows:

Jim Massey Jr. foreperson

Terry McChesney

Bob Zane

Ruby Jacob

Paul Armstrong

Joan Carter

Cordelia Saltzman

Joan Radkey

Patricia Wood

Sharon Molder

Dennis Silverwolf

Alternates:

John Flournoy

Marlene Holland

Suzzann Northrup

Paul Allen

Catherine Filomeo

2011-06-21T17:13:00.000-07:00

Lookout Fire District

Missing Money, Equipment

Charges of corruption, disappearing money, lack of audits, missing equipment followed by mass resignations involving the Lookout Fire Protection District have surfaced in the wake of Modoc County's financial crisis stemming from the misuse of treasury funds.

Public records at the county courthouse reveal that between 2007 and 2010 five members of the district's board of directors resigned, giving reasons ranging from lack of interest by board members in following routine policies and procedures to county corruption.

Strongest in their allegations are Mike Rodriquez and Norah Harper. Both have told the Modoc County Daily News that equipment assigned to the district never reached its destination, that the district was in financial trouble and the Board of Supervisors failed to act, and that money would go missing from the district's account with the county and then mysteriously reappear on the books.

Two other board members resigned during the same period. Bea Hetrick resigned Oct. 29, 2010, but gave no reason for her resignation. Norman Carpadus resigned May 24, 2007, also giving no reason.

The fifth director to resign was Chester Stansberry, on March 2, 2010, who only stated in his letter of resignation, “You all know why.”

Rodriquez was the most pointed in his reasons for resigning. As chairman of the district's board at the time he gave his reason for stepping down as “corruption and political power.”

“Seeing now the corruptness and political power plaguing even inside the county government and having my honor questioned by those I am sworn to serve, I find no alternative than to resign from the Lookout Fire Protection Board,” he wrote in his Oct. 17, 2007 letter of resignation.

Harper told the Modoc County Daily News that the fire protection district board was in such disarray that she felt physically threatened.

“We had so much trouble with the fire department that two of them stood up and physically threatened us,” she said. “I was a afraid I was going to be harmed and I reported it to the sheriff (Mark Gentry) and he didn’t care that we were threatened. A deputy had to come to the next meeting to make sure there was order.

“It's all tied in with the Modoc state of mind,” she said. “I don'’t understand it all and nobody wants to do anything by the law and it starts at the top and goes all the way down. I know Mike Maxwell (chief administrative officer at the time) got all stressed out. It’s the worse soap opera you ever saw.”

Rodriquez said when he became chair of the district's board he ordered an independent internal audit and then placed the district's money in an account separate from the county's treasury.

“I started getting hassles for doing this,” he said. “There is a right way and a wrong way and that started the fight. When money started vaporizing I talked with Bradshaw (Dave Bradshaw, county supervisor) but it was like talking to a cow, in one ear and out the other.

“Money was missing from the Lookout account,” Rodriquez said. “Bills were supposed to be paid by the fire district. Up to 50 percent was missing, then magically we would get it back and then it would go missing again.”

Equipment that allegedly disappeared included cots, blankets, fuel, CERT (Community Emergency Response Team) kits -- even trucks. Total estimated value of the missing items, according to a statement filed with the county by Harper, was upwards of $30,000 – not including the trucks.

“Several of our trucks are missing,” Harper stated in a Jan. 30, 2009 report. “We do not know where they are and cannot get anyone to tell us.”

Asked if the Office of Emergency Services (OES), which distributed the equipment to the fire district had a method for accounting for the missing items, Tony Richno, deputy OES director, said records show the equipment was delivered to Linda Tucker, a board member.

“It's a pit over there,” Richno said. “I know Linda picked it up, it was stored and then it disappeared. Audits are confusing, and they didn't know how to read their account balances,” he added in response to the accusations that money was disappearing and reappearing.

“There is no way to say what actually happened,” Richno said. “I can't substantiate, nor can I prove it.”

An internal memo written by Richno on Feb. 9, 2009 reveals he had concern for the Lookout Fire Protection District's ability to keep track of equipment that is owned by the county.

“I would hesitate to allocate or assign any more equipment or supplies to Lookout Fire, Lookout OES or Lookout CERT until their internal conflicts are resolved, ensuring that the equipment will be used for its intended purposes,” Richno stated in the memo.

– Ray A. March

2011-06-15T09:54:00.000-07:00

Just Two Openings Left - Call Now 279-2099

2011-06-14T07:47:00.000-07:00

Editor's Note: As Modoc County and the city of Alturas move closer to sharing planning services, Tehama County will continue a similar program with the city of Corning.

Corning, Tehama County Share Planning Director

By JULIE ZEEB -DN Staff Writer

Updated: 06/13/2011 11:23:39 AM PDT

The Tehama County Board of Supervisors Tuesday approved a Memorandum of Understanding with Corning to continue using its planning director, John Stoufer.

The contract, which initially came about in 2010, allows the two entities to continue splitting the costs and Stoufer working part-time for each.

Corning voted May 24 to approve the agreement, which will start July 1 and continue through June 30, 2012.

Stoufer was originally asked to fill in as Tehama County's interim planning director following the retirement of Tehama County Planning Director George Robson.

Corning City Manager Steve Kimbrough has said the deal, which allows Stoufer to gain experience at the county, is a good one, especially in light of the economic recession.

"The city of Corning does not want to lose John Stoufer's talent and we have a number of projects to keep him busy full-time in Corning, however this continues to provide a way to offset the cost of our planning director during the recession and helps the county at the same time," Kimbrough said in the staff report presented to the Corning City Council.

The agreement, which can be terminated early by either party, could return as much as $57,400 to Corning's budget, Kimbrough said.

One concern discussed was conflict of interest.

Councilwoman Toni Parkins asked Stoufer if doing both jobs would involve any matters in which there might be a conflict of interest.

The only time I can see where there would be a conflict is if the county had a project in the city's sphere of influence," Stoufer said.

There were no concerns raised Tuesday at the supervisor's meeting. A copy of the Memorandum of Understanding is available on the Corning website at www.corning.org on the May 24 agenda.

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Staff Writer Julie Zeeb can be reached at 527-2153, extension 115, or atjzeeb@redbluffdailynews.com