Sutte 160 Endorsed Filed*

There is a serious communications breakdown between the Conservancy, JOHN F. SHIREY Chair Sutter County Board of Supervisors and County appointees, both in the time consuming and unclear method of selecting Conservancy board members and MICHAEL JOHNSTON insuring our county liaison is actively involved. Vice Chair CHANDRA CHILMAKURI Response: There has been no breakdown in communications between the Secretary Conservancy and County appointees to the Board of Directors or Sutter County GABRIELLE STADEM leadership. There are periodic communications, mostly by email and telephone, Treasurer with the County's CAO and its Principal Planner. These are well documented. Additionally, the County's Principal Planner is invited to and actively MELINDA BRADBURY Board Member participates in the NBHCP Implementation Group, which meets periodically and consists of all "Parties" to the NBHCP, including the Conservancy, the City DAVID CHRISTOPHEL of Sacramento, the California Department of Fish and Wildlife and the U.S. Fish Board Member and Wildlife Service. Occasionally the County's Principal Planner is joined by STEVEN COHN the County's Development Services Director at these meetings. (Note: no Board Member meetings have been held during COVID-19.) Finally, the County's appointees NANCY JOHNSTON to the Conservancy's Board of Directors meet in session every other month, Board Member receive periodic emails from the Conservancy's Executive Director, and a number of Sutter County appointees are contacted and consulted with on CHRIS NOREM various matters, usually related to their expertise and engagement in Board Board Member activities (e.g., committee assignments, etc.). PAUL SQUIRES Board Member

Past board of directors at the Conservancy approved risky investments of Sutter County mitigation funds which are still in place and could lead to financial problems in the future. EXECUTIVE OFFICER Response: It would be helpful if the Grand Jury would specify what John R. Roberts investments the Conservancy's past Board of Directors approved which could Executive Director The Honorable Susan E. Green Presiding Judge of the Sutter County Superior Court Grand Jury Report comment be deemed "risky." If there were risky investments made, they would have been identified by the independent auditor, by other HCP fee payers (which regularly examine the Conservancy's operations), by the Conservancy's investment advisor, which continues to note the Conservancy's endowment funds are 100 percent invested in T. Rowe Price mutual funds and in accordance with a carefully-approved (by the Board of Directors) investment policy (considered by the investment advisor to be conservative). Or the alleged risky investments would have been identified by one or more of the knowledgeable people who serve and have served on the Conservancy's Board of Directors appointed by Sutter County, which include past members of the Sutter County Board of Supervisors, by attorneys or by the County's senior management appointed to the Conservancy's Board of Directors. Or by a long- standing former Sacramento City Mayor, City Councilmember, multiple former City Managers, an attorney and similar officials (such as City Treasurer's office management executive) appointed by the City of Sacramento. Or, more recently, a CPA in private practice. But we are unaware that any Board member has ever voiced to Conservancy management or the Board of Directors in meeting any concern about such "risky" investments. Instead, they regularly approve the investment policies, as amended, by unanimous vote, which investment policies are followed by the investment advisor (T. Rowe Price). Additionally, the City of Sacramento's city management officials recently spent approximately a year reviewing details of the Conservancy financials in a due diligence effort, and having completed its review, awarded the Conservancy a non-interest bearing, non-recourse loan of $2 million to use in purchasing additional mitigation land. If investments were risky, as alleged by the Grand Jury, the City would have identified that and recommended corrective action. Finally, the Yolo County Grand Jury recently met with the Conservancy, extensively, and ended up posting in its final report that a consequential conservancy organization in Yolo County consider partnering with the Natomas Basin Conservancy, having told Conservancy management that "everywhere we go, when we ask questions about successful conservancy organizations, it seems they always tell us to meet with you." (That is, with the Natomas Basin Conservancy.) If the Conservancy invested its endowment funds in risky investments, the Yolo County Grand Jury would surely not have made the recommendations it did. ¹ "Final Consolidated Report," 2019-20 Yolo County Grand Jury. . As presented in the report, responses section: "The Plan provides the YHC Board of Directors with the authority to partner with an existing land management agency (a plan operator) such as the Natomas Basin Conservancy that has an existing staff with the required qualifications and infrastructure to manage the Plan and to hire and manage the necessary environmental consultants. Response [by Yolo Habitat Conservancy]: The respondents agree with this finding." Later: By June 30, 2021, the YHC Board of Directors and the member agencies of the JPA should evaluate whether the Plan would be best served by partnering with an existing plan operator, such as the Natomas Basin Conservancy." The Honorable Susan E. Green Presiding Judge of the Sutter County Superior Court Grand Jury Report comment