C. David Eyster Courthouse District Attorney P 0. Box 1000 Ukiah, CA 95482 Mike Geniella Public Information Coast Office

This lack of transparency violates the spirit of the original proposition and could be easily rectified by a simple alteration to the tormat of the County budget. · District Attorney's Response: The District Attorney agrees with this finding of the Grand Jury. The District Attorney nevertheless believes the focus and titling of this Grand Jury report should have been: "Proposition 172 Funds: A Need For Transparency And Compliance With The Law. " It remains an open question whether the long-standing problems relating to the lack of transparency and the local lack of accounting for Proposition 17 2 monies can, as the grand jury suggests, be "easily rectified by a simple alteration to the format of the County budget." This statement overlooks the need for catching up on long overdue fiscal year audits from the beginning of Mendocino County's receipt ofthese tax monies to the present.

The Auditor-Controller has been able to demonstrate the appropriate distribution of Proposition 172 Funds to municipalities within the County. However, the Auditor-Controller has been unable to demonstrate that the remaining Proposition 172 revenues have been entirely distributed to County public safety agencies as required. [Underlining added.] District Attorney's Response: The District Attorney agrees with this finding of the Grand Jury. of6 District Attorney's Response Proposition 172 Funds: A Need For Transparency April4, 2016 In addition to the Auditor-Controller having been "unable" to demonstrate to the Grand Jury that the remaining Proposition 172 revenues have been entirely distributed to County public safety agencies as required, the Office of the Auditor-Controller, in the face of a written demand to provide "an accounting of the Public Safety Tax Revenue for the current and most recent fiscal years, and a copy of the maintenance of effort calculations," has through institutional or other delay been unresponsive to this obvious need for transparency. (See Attachment A attached hereto.) Instead, the Office of Auditor-Controller responded with admittedly having done only "limited research" and a further admission that an annual maintenance of effort calculations had not been performed since fiscal year 2003/2004. Additional time was requested to further research the matter so as to be able to provide the requested information. (See Attachment B attached hereto.) However, a month later, the information was still not forthcoming. (See Attachment C attached hereto.) Worse, now almost five years later, the Office of Auditor-Controller still has yet to provide an audit or otherwise provide adequate documentation regarding the proper public safety tax disbursements, as well as explain how the required annual maintenance of effort has been calculated. Again, it remains an open question whether the manner in which the Proposition 172 monies have been received, accounted for, and allocated since 1994 -- all under the supervision of the Office of Auditor-Controller -- actually violates the law itself, not just the spirit of the law as mentioned by the Grand Jury, by commingling and allowing the allocation of Proposition 172 monies outside of its Public Safety-only mandates. 1

The failure to update the MOE calculation annually as required, has placed the County in a position of non-compliance with State requirements. District Attorney's Response: The District Attorney agrees with this finding of the Grand Jury. It is noted that non compliance with state requirements in these situations is normally remedied by state-imposed financial sanctions. The document that exposed problems with the handling of this purpose-specific revenue, as cited to by the Grand Jury on of its report, is a 2009 email from Auditor-Controller Meredith Ford to former District Attorney Meredith Lintott. This "conversation" was uncovered by the current District Attorney while researching why the Auditor-Controller was not performing annual audits of the County's Proposition 172 monies. The email is literally a "smoking gun," one that indicates that the Auditor-Controller had been intentionally commingling the Proposition 172 sales tax monies in the General Fund and then allocating those funds equally to all county offices- not just the mandated public safety offices -- in order, in the words of the former Auditor-Controller, to "spread the pain" being experienced by the non-public safety depattments due to the declining economy and, in turn, declining revenues. (See Exhibit D attached hereto.) The words written by the former Auditor-Controller in this email are contrary to the spirit and black letter law of the proposition, yet the current Auditor-Controller has yet to expressly repudiate this practice and make amends by providing annual audits. of6 District Attorney's Response Proposition 172 Funds: A Need For Transparency April 4, 2016 Grand Jury Recommendations (Rx):