Spring 2012 pg9

LAWSUITS,

LAWSUITS

& MORE LAWSUITS

An in-depth look at how the Humboldt County Supervisors determine and prioritize the expenditure of the general funds since there are many competing uses.

Have you ever wondered how the County of Humboldt can have a budget approaching $300,000,000 (that’s right nearly 1/3 of a BILLION dollars) and have no money to keep the County roads in shape? Or keep Sheriff substations open? Or keep patrol services from diminishing? Have you ever wondered how this nearly $300,000,000 is spent? Well, about 70% go to ‘mandated or entitlement’ programs which are required by law, such as health and human services programs. Most of the monies spent on these programs are given to the County by the State or Federal government with the condition that the monies are spent in a certain manner. The remaining 30% of the budget is what is called “discretionary funds”, or sometimes referred to as the General Fund. These are the monies that the Supervisors can spend however they desire, for public safety, roads, parks or for whatever they like.

Given the above, it is easy to see that there are a lot of competing uses for these “discretionary” funds. Which gives rise to the question – how is the expenditure of these funds prioritized? What must the priority list look like that our County Supervisors consult when spending these “discretionary” monies? Our two most recently elected Supervisors bring a refreshingly new perspective to County management and appear to recognize that there needs to be some type of cost-benefit analysis done prior to spending tax payer dollars. Was there ever any kind of benefit – cost analysis done in the pastor was the spending just wild until the check book said zero? Since the Board of Supervisors is a deliberative body, it would be hard to imagine that they are wild spenders, so there must be a “spending priority list”, whether formal or informal, be it collectively or individually.

Formal or informal, it is obvious that the threat and use of litigation must rank near the top of the list and is a well-entrenched management tool. Over the past several years, it is increasingly becoming apparent that the County is using significant sums of these “discretionary” dollars in a very aggressive and litigious manner, particularly with land use matters. There has been an explosion of lawsuits either actively filed and pursued by the
County, or as a result of citizenry revolt to overzealous actions by the County. When multiple private citizens dig deep into their own pockets to seek redress of grievances from the courts, there is a message here for County management.

It appears to many that the philosophy of the County, particularly when it comes to land use matters, is one which is akin to a bully – “I am bigger than you, I have more money than you and if you don’t do what I say we’ll end up in court”. Examples of such are:

1. Tooby Ranch/McKee lawsuit ongoing since 2002, with legal fees spent by both parties approaching $10,000,000 AND the case is still ongoing with new charges and counter charges yet to be heard by the court, see this article – Buck Mountain Ranch – Williamson Act.

2. The McClellan Mountain Moss enforcement action on a company that has been in business continuously for 40 years. Monies estimated at $200,000 have been spent by both sides and NO County charges were ever filed. The only result was the shuttering of one local business that provided 10 local jobs and the threatening of another local business in the area.

3. The current General Plan Update process has provided fertile ground for legal action (even before the unveiling of the EIR document), primarily due to the County’s “my way or the highway” philosophy when questioned by the public on the legitimacy and transparency of its process. Suits related to the GPU that have been filed, or being contemplated, are:

a. A suit over the County’s failure to adhere to Section 1500 of the current General Plan (which provides the guidelines for public participation when crafting updates to the General Plan).

b. A suit by the McKinleyville Community Services District, which among other things, alleges that their concerns were not meaningfully considered in County proposed land use changes within their boundaries.

c. A suit by a local developer relative to land use changes, resulting from last minute General Plan Update changes.

d. A suit filed against the State mandated Housing Element, which the County lost and the court is now considering awarding legal fees to an intervening and prevailing party of up to $500,000 in attorney fees.

e. Multiple communications to the County from the cities of Eureka, Fortuna, Rio Dell and several Service Districts expressing increasing frustration with County actions. The tone of which is becoming more and more legalese in tenor.

4. A class action suit filed against the County over Planning Department records which placed a cloud upon the legal status of nearly 2000 land parcels.

These are just examples of some of the suits and issues that the County is unnecessarily embroiled in and a majority of those in charge of the budget are acting as if MONEY IS NO OBJECT. Were the County run like a business that had to justify its actions to its owners or shareholders, the questions the owners would be asking is – What are we getting for the expenditure of our monies? Is there a positive benefit that outweighs the cost of these lawsuits? Is there another way to solve the problem? Does the other side have a legitimate defense? Should we seek an outside independent second opinion?

In business there is a term called “sunk funds” which refers to funds that have been irretrievably spent and cannot be gotten back. The management philosophy of the County appears to be one which ignores this “sunk funds” reality and appears to espouse the philosophy “If we have spent monies on it we must blindly continue since they were public monies and we must get something for these expenditures no matter how minimal”. The County apparently does not recognize that there are times when the continued costs will never be positively rewarded.

Questions that the County decision makers should consider before continuing on this litigative path to zeroing out the General Fund, and all of its reserve funds, are:

1. Is there a benefit that the average citizen can relate to? It is doubtful that the average citizen even knows WHERE the Tooby Ranch is, let alone what the legal issues of the case are. How did the average citizen benefit by the County closing down the McClellan Mountain Peat Moss business?

2. Are public health and safety measures adequately funded to the extent that there are funds available for the elective filing of litigation? Elective litigation, or the threat of it, should not be anywhere near the top of a management priority list or used as an active management tenet.

3. If litigation is warranted, where are the funds going to come from? What department, reserve fund or trust fund will face diminished budget dollars?

4. Do the benefits outweigh the costs? In carrying out the “police power” duties of the County, the decision makers have considerable discretion prior to determining a strategy of action. Weighing the financial cost and contrasting it to the benefit, rather than blindly forging forward, is routinely done with most governmental agencies. Why not Humboldt County?

The citizens pay taxes and these tax dollars are entrusted to the County leaders to expend in a manner beneficial to the average citizen. There is no place in community government for this philosophy of “management by litigative fear”. These dollars should be used for the public benefit such as road maintenance, the Sheriff ’s Department and other crucial service areas. Two of our Supervisors appear to get it. Too bad a third can’t.

Note: As was recently announced, HumCPR has filed a lawsuit against the County of Humboldt to compel them to produce documents which would reveal the amount of taxpayer dollars spent on lawsuits. After waiting since December 15, 2011, (the law requires the production of these documents within 10 working days of the request), HumCPR believes it is time for the County to tell its citizens how much and the source of funds spent on these lawsuits. The County recently announced it would “defend” this lawsuit. It would seem to us that if the County were to produce the requested documents, a “defense” of this lawsuit would not be required.

 

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