Response to the 2015-2016 Grand Jury Final Report, Chevron Solar Energy Savings Project.

Findint The BOS signed an agreement with Chevron ES to construct energy producing and energy saving devices on and within Sutter County facilities. Financing for the project was provided by PNC Equipment Financing, LLC in the form of a Master Lease-Purchase agreement spreading the repayment over fifteen years. Response: The Office of the Treasurer-Tax Collector agrees with the finding. Finding F2: The Master Lease-Purchase agreement stated that repayment would be considered to be Rent Payments under the lease. These payments would constitute an annual expense for the County. Response: The Office of the Treasurer-Tax Collector agrees with the findlng in that each payment represents principle and interest, an expense, of the capitallzed lease agreement.

Finding The Rent Payments are a part of the annual budget for the respective departments of the county, instead of project funds. By defining the payments as rent, it removed it from the Auditor- Controller's jurisdiction and independent oversight. Response: The Office ofthe Treasurer-Tax Collector dlsagrees with this findinB. The Auditor- Controller is responsible for the oversight of the Countys accounting functions including oversight of the County's budget.

Finding The largest photovoltaic array is projected to produce over half ofthe total power produced by all ten solar units. The site for this large array was the Sutter County Airport. However, the Federal Aviation Administration (FM) advised the County that an extensive delay would be Incurred while a site RECEIVEE 」UL 0 5 20i6 ° 463 2nd Strcct,Suite l12・ Yuba Cit/,CA 95991・ 5308227117・ 5306716133F麗繋蠣醤繁翼誦栞ドl 11点 July S,2016 RespOnse to the 2015-2016 Grand Jury Final Report of3 study was to be conducted to determine if there were any safety issues regardlng the airport operations. This required an alternate site be selected. Response: Findlng F4 is not within the purview of the office of the Treasurer-Tax collector. The determination of facilities and land use falls under the purview of the General Services Department along with the CAO and County Counsel offices. FindinB F5: The second largest photovoltaic array is projected to product 15% of the total power. lts site at Mental Health also proved to be problematic with no alternative site yet to be determined. Response: The Office of the Treasurer-Tax Collector partially disagrees with the findinS. The photovoltaic array site at the Mental Health location was requested to be relocated or redesigned by the Building Committee, which is attempting to preserve the site for a possible future building site. The planned array was to be bullt on the ground. The committee believes and has requested that other options be investiSated such as placing the array or a portion thereof on the roof of the Mental Health building and or covered parking structures' Finding F5: ln the rush to complete the chevron Project, incomplete research resulted in the selection of ,,prJlem,' sites for two thirds of the total projected energy productlon resulting in extensive delays and added expense to the county. Response: The office of the Treasurer-Tax Collector agrees with this finding. Had time been provided to fully research all possible sites for their pros and cons along with cost benefit, changes to the proiect would have been miti8ated prlor to the start of construction' Finding F7 The BOS approved the cAo and the Asslstant cAo sole access to the s9.1 million escrow ...ornt to dirbrrse funds for the chevron Project. This was later amended by giving the Treasurer-Tax collector and the Auditor-Controller sole access to the account' Response: The office of the Treasurer-Tax Collector agrees with the finding. Through a corroborative process involving the office of the Auditor-controller, office of the Treasurer-Tax Collector, Office of the Assessor, members of the CAO office and a member of the Board of supervisors the us Bank Escrow account was transfer to the control of the Treasurer-Tax Collector and with the Auditor-controller providing checks and balance (internal controls) between the approval process and the release of funds. July 5,2016 Response to the 2015-2015 Grand Jury Final Report