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During next week’s meeting, the Humboldt County Board of Supervisors will discuss an array of issues on a jam-packed agenda, including the county’s ongoing financial woes, litigation against the Auditor-Controller, the local drought response and more.

Budget Proposal for Fiscal Year 2022-23

Possibly the most notable item on Tuesday’s agenda is the budget proposal for the upcoming fiscal year. The county’s backlog of delinquent financial reports have made it difficult for county staff to plan for the future and create a comprehensive budget for the upcoming fiscal year. As a result, county staff has developed a $570 million budget proposal to serve as a “placeholder” until a final budget is adopted later this year.

“…Without the audit adjustments for FY 2018-19 and FY 2019-20 having been posted, and a significant number of FY 2020-21 unposted journals and accounts not reconciled, staff are unable to provide your Board with reliable information regarding fund balances,” the staff report stated. “In addition, delays in closing months in the current fiscal year, delays in posting pending journal transfers, and expenditures and budget adjustments, only exacerbate the county’s lack of financial integrity.”

Following a presentation from Chief Financial Officer Tabatha Miller last month, the board agreed to hold off on the adoption of a final budget for FY 2022-23 until late September to provide additional time for staff to complete the audit for FY 2019-20 and for more transactions from FY 2020-21 to be posted to provide more reliable estimates of the county’s fund balances.

The $570,531,333 proposed budget will serve as a placeholder until a final budget is adopted on or before October 2. In the meantime, the County Administrative Office recommended a budget adjustment freeze, a hiring freeze and a continuation of the voluntary furlough program.

Update on Local Drought Conditions

The board will also receive an update from the Humboldt County Drought Task Force. For the past year, the task force has worked to develop short, medium and long-term strategies to address the impacts of drought across the county.

Humboldt County has received a significant amount of rainfall since the Drought Task Force’s last update in February. Even still, severe drought conditions persist across the majority of the county, according to the U.S. Drought Monitor.

Homestead Collective Weed Company Appeal

The board will also consider an appeal from the Homestead Collective Weed Company regarding the Zoning Administrator’s approval of a special permit for an existing 10,000-square-foot outdoor cannabis operation in Blocksburg.

Citing “a long history of complications and disagreements” between the applicant and the County Planning and Building Department,” county staff are asking the board deny the appeal and deny the special permit.

“The appeal is based on concern with a condition of approval…regarding the setback from a wetland on the site,” the staff report stated. “The concern with the condition has been resolved, but the applicant/appellant still wants to pursue the appeal and is unwilling to pay the cost of processing his permit.” 

Disagreements between the applicant and county staff stretch back to 2018 when the applicant initially refused to pay Measure S taxes on the issued interim permit, according to the staff report. Staff recommended the denial of the application during the Planning Commission’s May 7, 2020 meeting. During the hearing, the applicant agreed to pay the taxes and eventually received a special permit from the Zoning Administrator in December 2020. One month later, the applicant filed an appeal against the decision.

“The applicant refused to pay the appropriate appeal fee and was able to convince a staff member to accept the appeal application,” the staff report continued. “Planning staff worked with the applicant to address his concerns and had a verbal agreement whereby the appeal would be dropped once the appeal issue was addressed. The appeal issue was addressed however the applicant has not dropped the appeal.”

The staff report added that “it is difficult to discern what the applicant/appellant is seeking in this appeal.”

Litigation Against the Auditor-Controller

The board will convene during closed session to discuss anticipated and existing litigation relating to Humboldt County Auditor-Controller Karen Paz Dominguez.

Last month, the State of California initiated legal action against Humboldt County and Paz Dominguez, in both her personal and professional capacities, for failing to comply with government-mandated financial reporting requirements. Days later, the Board of Supervisors voted unanimously to file a cross-complaint against the embattled Auditor-Controller for failing to fulfill the duties and responsibilities of her position.

Earlier this month, the Eureka City Council unanimously voted to initiate its own lawsuit against the county and Paz Dominguez for failing to distribute the City’s “statutorily guaranteed tax revenue funds,” according to a letter from City Attorney Autumn Luna.

“Instead of calculating and distributing the funds as required by law, you are asking that the City of Eureka calculate and file a ‘claim’ in order to receive its funds,” the letter stated. “The calculation itself is a fundamental aspect of your enumerated duties, and where the legislature has conferred a duty on a public official, that public official cannot delegate that duty without further specific authority from the legislature.”

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The Board of Supervisors will meet at 9 a.m. on Tuesday, June 28. The agenda and a link to live stream the meeting can be found here.