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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

El Dorado County Grand Jury • 2023-2024

Reviewed Relevant Documents

2 pages

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Findings 17 findings

– The BOS is currently following the TOT Measure’s intent for the use of revenues/funds. Budget Resolution Number 063-2022 clarifies that TOT funds utilized by the BOS are the same as Sales and Property tax, meaning that the BOS has 100% discretionary authority to allocate TOT funds.

– There is no formal or consistent process for the various chambers or groups to request TOT funds, or transparency on how decisions are made to allocate funds.

– There is no compliance process to ensure the collection of all TOT revenues from short- term rental companies like Airbnb.

– The definition of ‘tourism and economic development’ is vague to the public and the source of misperception.

– Then-CSD GM failed to properly disclose income received from his consulting arrangement with DTA, a CSD contractor, on his Fair Political Practices Commission (FPPC) Form 700, which he signed under penalty of perjury.

- Then-CSD GM performed business development work to find new clients for DTA which, as far as the Grand Jury can verify from reviewed documents, was unrelated to CSD’s contracts with DTA. Carson Creek LLAD #39 Ballot Initiative

- CSD has been ignoring the will of the voting citizens of LLAD #39 by not acting on two previous initiatives to modify or remove assessments for the Carson Creek/Heritage Park. FINDINGS Case #24-05 EDH CSD LLAD Assessment Policies and Objections

– Neither the former GM nor the CSD Board of Directors properly certified the engineering assessment reports for 2022 and 2023 to the satisfaction of the County Controller during the same period that the GM was consulting for the CSD engineering assessment firm, DTA. As a result, the County has held up billing parcel owners for LLAD assessments, ending up in litigation which will be costly to taxpayers.

– Two other LLADs are contesting their assessments, Promontory Park and Blackstone, using an identical ballot initiative as Carson Creek LLAD #39, which will have significant impact on CSD revenue going forward if they all pass as expected. CSD Financial Health and Master Plan

F10

–CSD operates with 20-40% or more net revenue each year that accrues to increasingly larger treasury fund balances, now roughly $50 million.

F11

- CSD Financial Assets are far more than their reserve policies allow as stated in their operational policy document.

F12

– The CSD Master Plan is a long-term park enhancement and development plan that envisions spending $300 million according to a 2021 document, which seems unrealistic without significant additional funding sources.

F13

- There appear to be calculation errors in the Master Plan overestimating the amount to fully fund the proposed developments by more than $100 million.

F14

- CSD, despite its sizable financial holdings and the complexity of its accounts and revenue sources, does not have a licensed CPA on staff. Park Impact Fees and Reporting Requirements

F15

– CSD has been retaining Park Impact Fees (PIF) for more than five years and may ultimately hold several million dollars in funds for ten or fifteen years or more. This opens the CSD to potential litigation for not spending PIF funds in the short term. FINDINGS Case #24-05 EDH CSD

F16

– The plans to spend PIF through FY 29 and FY 31 on a Multigenerational Recreation Center and Bass Lake Park are contingent on significant additional funds of over $75 million. These plans are not consistent with the intent of the Mitigation Fee Act and will require a contingency plan in case the additional required funds are not available for the new park development. Developer Relationship

F17

– The public is concerned about several recent financial deals CSD has made with Parker Development, such as the CSD’s purchase of the Old Executive Golf property, the CSD acquiring the12.5-acre Serrano Village J lot to develop a turnkey park at Bass Lake area rather than enforcing Parker’s obligation to do so, and a significantly reduced amount for Park Impact Fees (PIF) for Parker Development.

Recommendations 13

R1

– The BOS should develop and implement a plan by January 1, 2025, to improve the transparency of the TOT funds request and allocation process, such as a TOT page on their website or a media campaign to alleviate public perception of misuse of funds.
R2

– To clarify that the funds are discretionary, Board Policy B-16 (see Appendix) should be updated in the latest CAO Budget Book, and everywhere else relevant, to properly set public expectations and reduce controversy.
R3

– The County Tax Collector should implement a compliance plan to ensure that all TOT taxes are identified and collected.
R4

– By December 31, 2024, the County District Attorney’s office should complete the investigation of any potential ethics or conflicts of interest violations, including required FPPC Form 700 disclosures, raised by the former GM’s consulting arrangement with DTA. Carson Creek LLAD #39 Ballot Initiative
R5

– , CSD should implement the intent of the Carson Creek LLAD #39 second ballot initiative to perpetually repeal LLAD assessments.
R6

– of this report, CSD should establish and document clearer guidelines for the CSD Board of Directors or GM certification of the assessment levy to the County Controller/Auditor and publish that procedure in the CSD Policies and Procedures documents.
R7

– Upon certification that the Promontory and Blackstone LLAD initiative petitions have been signed by the requisite number of voters, CSD must enact the Promontory and Blackstone LLAD initiatives without alteration, or submit the initiatives unmodified to the voters, as
R8

– , CSD should document the projected use for all Treasury fund assets, clarify which fund accounts are earmarked for what purposes and open the spending plan for public comment and approval.
R9

– By September 30, 2024, CSD should review, revise, and publicize its Master Plan from 2021 with realistic timelines for all new park development, as well as accurate and realistic cost estimates that can be funded and executed within a 10-year planning period.
R10

- , CSD should employ or retain a full-time licensed CPA professional to be Treasurer/CFO-equivalent.
R11

– , CSD should get public input on its latest 10-year development plan, including any updates to the Master Plan from 2021, and how they plan to use PIF funds over an extended period. This development needs to include a contingency plan for new park development in a reasonable time frame if additional funds do not become available that are required for the current Master Plan.
R12

– , CSD should document its plans for Bass Lake Park and justify why CSD took on the obligation to build a turnkey park in Village J7, and how development of Bass Lake Park will now proceed up through park completion proposed by CSD in FY 31.
R13

Discretionary Transient Occupancy Tax: Transient Occupancy Tax revenue, excluding voter approved Tahoe area-specific revenue, shall be directed toward the impact of tourism and economic development, with consideration for support of tourism and promotion activities within the County and for continued support for grant fund allocations to support Veteran programs within the County.