Sierra County 2018-2019 - California Grand Jury Reports

June 24, 2019 — Response to Sierra County 2019 Grand Jury Report - Section 1.3 Finding F1.3.4*

2 pages 1 findings

Findings & Recommendations 1 findings

F1: 3.4 Jenny Varn Assistant Treasurer-Tax Collector Early in the 2018 calendar year, I was informed that a Sierra County Board member had put in for travel to a meeting he had not attended. Along with having requested and received payments from both the County and the Transportation Commission for the same travel. The Auditor's Office investigated and found multiple occurrences of the above over the last three years adding up to $608.06. At the time of the investigation I was informed by the District Attorney $1 of miss-appropriated funds by a government official could be a felony. At the conclusion of the examination of reimbursement records all information was handed over to the Sheriff for investigation. In July 2018 a letter and supporting documents were sent to the County Supervisor and a request was made for repayment. The Supervisor refused to repay Sierra County and the Auditor's Office continued to work with the Supervisor trying to get repayment until December. With the last full check of salary to be issued to the Supervisor, I decided we would reduce that check by the amount owed. This action was taken after consulting with Sierra County Counsel. Elected officials are not employees under the law. (29 USC § 630 (f); Brown Act. Gov Code Section 54957; 59 Cal. Opp. Atty. Gen. 266; Cal. Const., Art 7, § 4). This issue has also been tried in Sierra County Small Claims Court about 15 years ago when another elected official miss appropriated County funds and sued me personally when I also reduced her check by the miss-appropriated funds. The Judge agreed that elected are not employees and ruled in my favor. The

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June 21, 2019 — 2018-2019 Grand Jury Final Report*

32 pages 15 findings 2 recommendations

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Findings & Recommendations 15 findings

F1: 2.1 The Registrar of Voters and staff are highly knowledgeable and qualified to handle

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Related Recommendations (1)

R1: 3.4 It is the recommendation of this Grand Jury that the Auditor, working in conjunction with the Board of Supervisors, develop a policy by December 31, 2019, so that any future garnishment of wages is done in compliance with the law. (See

F2: 2.2.1 It is the recommendation of this Grand Jury that, by December 31, 2019, the Council develop a policy that prevents the City from using City funds, personnel, and/or equipment on private property, except where a public safety violation exists, and its remediation has been reviewed and approved according to City policy. Required responses In regards to Findings F2.2.2.1, F2.2.2.2, F2.2.2.3 and F2.2.2.4 and Recommendation R2.2.2.1, the Council shall respond in writing to the presiding judge of the superior court within ninety (90) days of the release of this report. Disclaimer Item 2.2.2 of this report is issued by the Grand Jury with the exception of one juror who, due to a possible conflict of interest, was recused from all parts of this investigation, including interviews, deliberations, and the writing and approval of this portion of the report. 2018-2019 Sierra County Grand Jury report Item 2.2.3: Building and Planning Investigation of the City's building and planning procedures brought to light these facts: the City and Sierra County entered into a Planning Services Agreement, dated April 1, ٠ 2008, whereby the county provided building and planning services to the City; at a special Board of Supervisors meeting on November 26, 2013, then-Council member, • Craig McHenry, informed the Board that: the City had not been using the county's planning services since July, 2012; • the City had discussed with the City of Portola using Portola's building inspector; • the City of Portola had agreed to issue joint building permits on a six month trial basis, ٠ and, the City's preference was to suspend the Planning Services Agreement with the county ٠ for six months. at the November 26, 2013, special meeting, the Board of Supervisors voted on a motion of ٠ intent to terminate the Planning Services Agreement; at a regular Board of Supervisors meeting on December 3, 2013, the Board adopted a • resolution terminating the Planning Services Agreement; at a Council meeting on December 11, 2013, the Council adopted a resolution terminating ٠ the Planning Services Agreement; at a regular Board of Supervisors meeting on December 17, 2013, the Board adopted an ۰ amendment to the resolution termination the Planning Services Agreement; and, currently: ٠ the City appears to have no building code; ٠ the City appears to have no formal process for granting building permits; • the City appears to grant building permits without a building code; • the City has no building inspector; and, the City appears to have no building and planning enforcement process. Recommendations R2.2.3.1 It is the recommendation of this Grand Jury that, by December 31, 2019, the Council, in conjunction with the Board of Supervisors, re-establish the Planning Services Agreement, so that the county again has responsibility for building and planning within the city. Required responses In regards to Finding F2.2.3.1 and Recommendation R2.2.3.1, the Council shall respond in writing to the presiding judge of the superior court within ninety (90) days of the release of this report. In regards to Finding F2.2.3.1 and Recommendation R2.2.3.1, the Sierra County Board of Supervisors shall respond in writing to the presiding judge of the superior court within ninety (90) days of the release of this report. 2018-2019 Sierra County Grand Jury report SECTION 2.3: OVERALL CONCLUSION OF CITY GOVERNMENT The Grand Jury's year-long investigation into the City of Loyalton, taking into consideration all of the facts gathered, leads to the following finding and recommendations. Findings F2.3.1 The City and Council have demonstrated, over a number of years, that they are unable to manage the City in a responsible, transparent, and ethical manner. Recommendations R2.3.1 It is the recommendation of this Grand Jury that, by December 31, 2019, the Council adopt a resolution to disincorporate the City. (See Appendix 3: Disincorporation) R2.3.2 It is the further recommendation of this Grand Jury that, if, by December 31, 2019, the Council fails or refuses to adopt a resolution to disincorporate the City, the citizens of the City initiate disincorporation proceedings by petition. (See Appendix 3: Disincorporation) Required responses In regards to Finding F2.3.1 and Recommendation R2.3.1, the Council shall respond in writing to the presiding judge of the superior court within ninety (90) days of the release of this report. 2018-2019 Sierra County Grand Jury report APPENDIX 1: GARNISHMENT OF WAGES California Labor Code 2929 (in relevant part) (a) As used in this section: (1) "Garnishment" means any judicial procedure through which the wages of an employee are required to be withheld for the payment of any debt. California Labor Code 224 The provisions of Sections 221, 222 and 223 shall in no way make it unlawful for an employer to withhold or divert any portion of an employee's wages when the employer is required or empowered so to do by state or federal law or when a deduction is expressly authorized in writing by the employee to cover insurance premiums, hospital or medical dues, or other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute, or when a deduction to cover health and welfare or pension plan contributions is expressly authorized by a collective bargaining or wage agreement. Nothing in this section or any other provision of law shall be construed as authorizing an employer to withhold or divert any portion of an employee's wages to pay any tax, fee or charge prohibited by Section 50026 of the Government Code, whether or not the employee authorizes such withholding or diversion. California Code of Civil Procedure 706.122 (in relevant part) The "notice to employee of earnings withholding order" shall contain a statement that informs the employee in simple terms of the nature of a wage garnishment, the right to an exemption, the procedure for claiming an exemption, and any other information the Judicial Council determines would be useful to the employee and appropriate for inclusion in the notice... Note: Interested persons should examine the entirety of Chapter 5 ("Wage Garnishment") (9706.10-9706.154 inclusive) of Division 2 ("Enforcement of Money Judgments") of Title 9 ("Enforcement of Judgments") of Part 2 ("Of Civil Actions) of the California Code of Civil Procedure. 2018-2019 Sierra County Grand Jury report APPENDIX 2: BROWN ACT California Government Code 54954.2 (in relevant part) (b) Notwithstanding subdivision (a), the legislative body may take action on items of business not appearing on the posted agenda under any of the conditions stated below. Prior to discussing any item pursuant to this subdivision, the legislative body shall publicly identify the item. (1) Upon a determination by a majority vote of the legislative body that an emergency situation exists, as defined in Section 54956.5. (2) Upon a determination by a two-thirds vote of the members of the legislative body present at the meeting, or, if less than two-thirds of the members are present, a unanimous vote of those members present, that there is a need to take immediate action and that the need for action came to the attention of the local agency subsequent to the agenda being posted as specified in subdivision (a). (3) The item was posted pursuant to subdivision (a) for a prior meeting of the legislative body occurring not more than five calendar days prior to the date action is taken on the item, and at the prior meeting the item was continued to the meeting at which action is being taken. California Government Code 54956.5 (in relevant part) (a) For purposes of this section, "emergency situation" means both of the following: (1) An emergency, which shall be defined as a work stoppage, crippling activity, or other activity that severely impairs public health, safety, or both, as determined by a majority of the members of the legislative body. (2) A dire emergency, which shall be defined as a crippling disaster, mass destruction, terrorist act, or threatened terrorist activity that poses peril so immediate and significant that requiring a legislative body to provide one-hour notice before holding an emergency meeting under this section may endanger the public health, safety, or both, as determined by a majority of the members of the legislative body. 2018-2019 Sierra County Grand Jury report APPENDIX 3: DISINCORPORATION California Government Code 56034 "Disincorporation" means the dissolution, extinguishment, or termination of the existence of a city and the cessation of its corporate powers, except for the purpose of winding up the affairs of the city. California Government Code 56654 (in relevant part) A proposal for a change of organization or a reorganization may be made by the adoption of a resolution of application by the legislative body of an affected local agency... California Government Code 56765 A petition for the disincorporation of a city shall be signed by not less than 25 percent of the registered voters residing in the city proposed to be disincorporated as shown on the county register of voters. Note: Interested persons should examine the entirety of Division 3 ("Cortese-Knox-Hertzberg Local Government Reorganization Act or 2000") (¶56000-¶57550 inclusive) of Title 5 ("Local Agencies") of the California Government Code. 2018-2019 Sierra County Grand Jury report

Related Recommendations (1)

R2: 1.1.1 It is the recommendation of this Grand Jury that, by December 31, 2019, the Council develop administrative policies and procedures for maintaining and preserving City and Council documents, including availability to the public of those policies and procedures both in "hard" copy maintained at City Hall and through digital media.

F1.2.1: The Registrar of Voters and staff are highly knowledgeable and qualified to handle elections in Sierra County.

F1.2.2: The optical voting system for counting ballots functioned accurately and without problems.

F1.2.3: Voters in Sierra County can be assured that the voting process is fair and accurate, and that their votes are handled with competence and respect. 2018-2019 Sierra County Grand Jury report SECTION 1.3: BOARD OF SUPERVISORS TRAVEL POLICY Through filed complaints and direct discussion with some county government personnel, the Grand Jury was made aware that there were some potential problems with the travel policy of the Sierra County Board of Supervisors. Therefore, an investigation was begun, and eventually concluded, within the term of this Grand Jury. This investigation was conducted using the following methodology: the Grand Jury gathered information from nine persons, via face-to-face interviews, • correspondence, and/or telephone conversations; the Grand Jury examined printed minutes of Board of Supervisors meetings; ٠ the Grand Jury listened to recordings of Board of Supervisors meetings; and, ٠ the Grand Jury examined a variety of documents related to the subject. The investigation brought to light these facts: the travel policy for the Board of Supervisors is spelled out in the Sierra County Code, ٠ Section 2.04.090, "Supervisors' Mileage Allowance"; at the time this investigation began, the relevant code read as follows: ٠ Members of the Board of Supervisors shall be allowed reimbursement for their actual expenses in traveling on official business. Reimbursement for these expenses is subject to the provisions in Government Code Section 53232.2 and 53232.3 and members shall be allowed reimbursement for mileage when using their private vehicle on County business at the mileage rate allowed for other County employees and officers. three supervisors had, apparently, requested (and received) mileage reimbursements ٠ beyond what was allowed, either by requesting mileage reimbursement for meetings not attended, or by requesting mileage reimbursement for attendance as representatives of the Board of Supervisors to the County Transportation Commission; at the time this investigation began, the Transportation Commission reimbursement policy ٠ read as follows: Every Sierra County Transportation Commission member who attends a Sierra County Transportation Commission meeting shall receive $50.00 reimbursement for expenses for attendance of that meeting. the Auditor maintained that requesting mileage reimbursement in addition to the $50.00 reimbursement for expenses for Transportation Commission meetings was beyond what was allowed: two of the three supervisors who had requested (and received) mileage reimbursement beyond what was allowed repaid the overages to the county; 2018-2019 Sierra County Grand Jury report one of the three supervisors who had requested (and received) mileage reimbursement Ф beyond what was allowed refused to repay the overages to the county; as a result of this issue, the Board of Supervisors revised its mileage allowance policy in ٠ the code to read (in relevant parts): Travel shall be authorized only when the travel is in the best interest of the county.... In-county travel shall not be reimbursed. For out-of-county travel: Advance authorization by the Board of Supervisors as a representative or alternate to a committee or commission is required for any travel reimbursement.... Travel by private vehicle will be reimbursed at the IRS rate for business use of a personal vehicle in effect in the county at the time of travel. Mileage is not reimbursable if it is in addition to a per diem payment or mileage paid by the organization hosting the event, meeting or function unless specifically authorized by the Board of Supervisors.... Board members' mileage to the regular place of business from home is in-county travel and may not be claimed. Mileage in conjunction with authorized county travel to and from the authorized destination shall be based on the distance to the destination from the Board member's home or their regular place of work, whichever is shorter. as a further result of this issue, the Transportation Commission revised its travel ٠ reimbursement policy as follows (in relevant parts): The Transportation Commission shall not reimburse Commission members who are elected officials representing the County of Sierra-Board of Supervisors or City of Loyalton-City Council as those members have the option to seek travel reimbursement (vehicle mileage reimbursement) from their respective governing Board. The Transportation Commission shall authorize and approve travel reimbursement (vehicle mileage reimbursement) if Commission members representing either the County of Sierra or City of Loyalton are not elected members of the respective governing body; and, the respective governing body does not pay such members travel reimbursement for participation on the Commission. The Transportation Commission shall authorize and approve travel reimbursement (vehicle mileage reimbursement) for the one member of the Commission that represents transit in the County or City. as a still further result of this issue, the Auditor garnished the wages of the one supervisor who had refused to repay the overages to the county, without notifying that person in advance that the garnishment would happen; and, as a final result of this issue, all monies owed to the county due to overages paid for Findings

F1.3.1: The Auditor's Office is to be commended for its diligence in safeguarding the county's finances.

F1.3.2: The Board of Supervisors is to be commended for taking action to resolve the issue of mileage reimbursement in a manner that is equitable and fair to all involved.

F1.3.3: The Transportation Commission is to be commended for taking action to rectify the source of confusion surrounding mileage reimbursement in a manner that is understandable and fair to all involved.

F1.3.4: While it is uncertain as to whether the Auditor's decision to garnish one supervisor's wages was done according to law, it is the opinion of this Grand Jury that the Auditor's decision not to notify that supervisor that a garnishment of wages would happen lacked the level of compassion and moral correctness toward the person involved that should be expected of county officials.

F2.1.1: .1 The City has no policy or procedure, or disregards any in existence, for maintaining and preserving documents.

F2.1.2: .1 The City has demonstrated a blatant lack of financial policy and practices, including a historical disregard of auditor's conclusions and recommendations.

F2.1.3: .1 The Council demonstrated a lack of the compassion and moral integrity we expect of our governmental officials when they failed to inform City employees and retirees that the termination of the CalPERS agreement was under consideration, or to involve them in the deliberations and decision-making.

F2.2.1: .1 The City is possibly violating the law by not utilizing the water meters to determine water usage and to base charges on actual usage.

F2.2.2: .1 Council officials misused City funds, materials, and equipment on private property.

F2.3.1: The City and Council have demonstrated, over a number of years, that they are unable to manage the City in a responsible, transparent, and ethical manner.