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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.

Del Norte County Grand Jury • 2015-2016

Crescent City Police Department

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Findings 4 findings

F7 Page 24
The Local Fair District Board entered into an MOU with the 41st Fair District to provide for funding of the Fairgrounds facilities while waiting for the Governor to sign the Lease Contract. The Grand Jury would like to know from legal counsel: a) if the Local Fair District can continue to provide funding to the 41st District for the continued operation of the Fairgrounds, and b) if the Local Fair District can continue to use an MOU to replace the Lease Contract which the Governor declined to sign, and c) if the Local Fair District can use the MOU to continue to operate in place of the requirements of Sections 5780, 5780.1 (c) and 5780.1 (h) of the Public Resources Code, and d) if the Local Fair District can use the MOU to continue to operate and continue to collect taxes despite their non-compliance with all of LAFCO’s formation requirements in Resolution 14-02? e) if the Local Fair District can use the MOU to continue to operate and continue to collect taxes despite their non-compliance with all of BOS formation requirements in Resolution14-002?
F8 Page 24
The MOU dated November 17, 2015 between the Local Fair Board and the 41st District states that the funds transferred between the two boards was initially given as a gift of public funds and later reclassified as a grant of public funds.
F9 Page 24
Currently the Local Fair District is accruing an average of $55,000 per month in local sales tax revenue. The sales tax has generated more than $600,000.00 to funding the Local Fair District. The Grand Jury would also like to know if the funds that have been given to the 41st District need to be returned to the coffers of the Local Fair District pending a determination of the status of the special district.
F10 Page 24
LAFCO requires the Local Fair District to reimburse the 41st District for the cost of being formed. The Grand Jury questions why LAFCO would make this requirement? Did the 41st District use public funds to create the Local Fair District? If so, the Grand Jury would like to know if this was an improper use of public funds by the 41st District. Since the Grand Jury does not have responsibility or oversight authority over this State Agency, should this matter be referred to the Attorney General’s Office for further review? Request for Legal Opinion The Grand Jury requested a legal opinion from the Del Norte County Counsel in order to ascertain if in fact the Local Fair District has been legally formed in accordance with the statutes of 5780, 5780.1(c) and 5780.1(h) of the Public Resources Code and if the Local Fair District is in compliance with the LAFCO requirements and the BOS requirements (questions 5 through 7 in the Findings Section above). In addition, the Grand Jury further requested the County Counsel provide legal opinions and guidance on all of the above listed questions 4, and 8 through 11 in the Findings Section above. The County Counsel’s Office recused itself citing a conflict of interest since that office helped with the formation of the Local Fair District. The Grand Jury has subsequently referred the above questions to the presiding Judge of the Superior Court. The Judge has subsequently referred the questions to the District Attorney’s office for review. Lacking further legal counsel and guidance the Grand Jury cannot complete it’s review of the Del Norte County Fairgrounds Recreation and Parks District.

Recommendations 3