report but cannot help but wonder why the BOS has been required to respond to all findings and all recommendations*

There is evidence of continuing misfeasance regarding the financing of MCRPD, by Board action which neglects their fiduciary duties of transparency and fiscal responsibility to the taxpayers of MCRPD. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

The MCRPD's Board of Directives is not representational of the four tax districts. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

MCRPD has received County Treasury advances on Teeter funds (property tax funds) for at least the past four years by the Board of Supervisors Consent Calendar actions. The Grand Jury could not determine if the Teeter fund advances were comingled within the MCRPD budget. MCRPD requires and spends 2018 tax revenue in the 2017 budget year. This annual MCRPD need for advanced Teeter funds indicates a serious deficit in budget planning, and indicates serious concern for MCRPD's long term financial viability. Disagree in part. While it is true that the MCRPD has been the recipient of loans from the County Treasury, the BOS is not aware of any evidence in the record that this indicates "a serious deficit in budget planning" or "serious concern for MCRPD's long term financial viability." As explained by the Auditor-Controller in his response to this finding, the annual loan amount in recent years has been $50,000 which is a small percentage of the MCRPD's annual revenue. Further, the funds that are "loaned" to the MCRPD may be considered an advance on the property tax revenue to which the MCRPD is entitled. The loan is repaid upfront as the property tax is received by the County. MCRPD pays interest on the loan at a rate equal to the average rate of return for the County Treasury. Borrowing a portion of the property tax to which the MCRPD is due is the most efficient and cost effective method of assuring that the MCRPD has sufficient cash flow to meet its obligations prior to receipt of the property tax payments to which the MCRPD is entitled.

The County does not require or perform any type of audit on a special district requesting Teeter fund advances. Because MCRPD is operating in structural deficit, the Board of Supervisors and County Auditory may be abdicating a fiduciary duty to the taxpayer by not questioning recommendations that appear on the Consent Calendar to advance the Teeter funds. Disagree. As explained by the Auditor-Controller in his response to this finding, the MCRPD is required to send a copy of their audit report to the Auditor- Controller. This is a requirement whether or not a district seeks to borrow a portion of the property tax due them. The BOS is not aware of any evidence that indicates the MCRPD "is operating in structural deficit." The BOS rejects the assertion that "the Board of Supervisors and County Auditor may be abdicating a fiduciary responsibility to the taxpayer by not questioning recommendations that appear on the Consent Calendar to advance Teeter funds." As explained in the response F3, every dollar loaned to the MCRPD is repaid with interest prior to any property tax funds being transmitted to the MCRPD.

THE MCRPD's annual audits have not been completed in a timely manner which prevents full public financial disclosure. The MCRPD's most recent audit, due June 30, 2016, was completed on February 8, 2017. MCRPD is currently delinquent on a capital lease and a note in the amount of $200,000 plus interest. Disagree. It has no authority or oversight function for the finances of the MCRPD. The BOS notes for the record that the statement that "annual audits have not been completed in a timely manner is contradicted by evidence in the record which indicates that completion of the annual audit within a year is consistent with state law and is therefore considered timely.

MCRPD minimally supports activities in communities outside of Fort Bragg, even though significant amounts of property tax funds are collected from those communities. For example, Mendocino District contributes 35% of the Teeter funds, yet only receives 5% of the property tax funds collected in that District for its recreation and other MCRPD benefits. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

The Grand Jury feels that the leaseback arrangement has an appearance of impropriety. The way in which the leaseback appears to be used in this particular situation is outside of the usual leaseback appears to be used in this particular situation is outside of the usual leaseback arrangement. It is conveying benefits to the lessees that are not within the normal course of business. This is to the detriment of the property taxpayers of MCRPD. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

MCRPD's financial problems were and are compounded by the purchase of the Hwy 20 property. MCRPD has assumed a large amount of debt with no clear means of repayment. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

The Grand Jury has substantial doubt about MCRPD's ability to continue as a viable operation. The MCRPD Board and Management have used poor judgment in borrowing money from individuals and commercials banks on at least three occasions. The loan repayment terms have not been met by MCRPD. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

The Grand Jury finds that MCRPD has no strategic plan. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

MCRPD acted irresponsibility by borrowing money outside of legal parameters by borrowing more money and for a longer period of time than allowed by California Public Resources Code §5788.21. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

The Grand Jury finds that MCRPD has not maintained property and complete records. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.

After originally requesting MCRPD documentation in January 2017, it was necessary for the Grand Jury to issue a subpoena in May 2017 to obtain MCRPD financial documentation. Disagree. It has no authority or oversight function for the finances or governance of the MCRPD.