Former Humboldt County Auditor-Controller Karen Paz Dominguez. | File photo by Andrew Goff.


The Humboldt County Board of Supervisors has approved a settlement agreement with the State Controller in the case of The People vs. Karen Paz Dominguez and the County of Humboldt.

The state filed the suit on May 2, alleging that Paz Dominguez, the county’s former auditor-controller, failed to file the county’s adopted budgets on time for two consecutive fiscal years — 2020/21 and 2021/22 — and also failed to file the county’s Financial Transaction Reports for fiscal years 2019/20 and 2020/21 “in the time, form, and manner prescribed by the State Controller.”

The state sued Paz Dominguez in both her personal and official capacities. The county was named as a co-defendant. 

In June, the county reached a separation agreement with Paz Dominguez, agreeing to pay her attorney fees and dropping its own cross-complaint against her, among other terms, in exchange for her early departure. 

Meanwhile, staff and legal counsel have been negotiating settlement terms with the state, and at today’s Board of Supervisors meeting staff presented the agreement for approval.

What are the terms, you ask? For one, in exchange for the state dropping its suit, the county has committed to “a detailed action plan that includes milestones” for filing the overdue budgets and reports.

The county also agreed to provide the State Controller’s Office with an update to the action plan within seven days of the suit’s dismissal, plus progress reports at the end of October of this year and January, March and May of next year.

“If [the] county’s updates are unsatisfactory to [the State Controller’s Office], the parties will, within 14 days, meet and confer to resolve their dispute,” the agreement says. “If the parties are unable to resolve their dispute within 14 days of their first meeting, [the state] may seek judicial enforcement of the terms of this agreement without further notice to defendants.”

The county also agreed to pay $12,000 in forfeitures for the delayed reporting, and each party will pay its own attorney fees.

The settlement agreement was approved unanimously, without discussion, as part of the consent calendar for today’s meeting.


DOCUMENT: Settlement Agreement with the State Controller Regarding Case CV2200584: The People v. Karen Paz Dominguez and the County of Humboldt