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The audit for Fiscal Year 2021-22 is finally complete.

During a presentation at today’s Humboldt County Board of Supervisors meeting, Rich Gonzalez, a principal auditor with outside accounting firm CliftonLarsonAllen (CLA), went over the findings of the single audit report for the 2021-22 fiscal year – which is about a year and a half overdue – and a corrective action plan to settle material weaknesses identified during the audit.

“The county is making a lot of progress cleaning up findings from prior years,” Gonzalez said. “We’re happy to see that the first finding is kind of a carryover from prior years.”

In its report, CLA identified material weaknesses in the county’s internal controls over financial reporting from the Fortuna Fire District, which included “discrepancies that prevented [CLA] from giving it a clean opinion,” Gonzalez said. The report also identified $7.5 million in “grant receivables” from the Federal Emergency Management Agency (FEMA) that were not recorded. 

“This one was kind of a tricky one because there was no receipts because FEMA usually takes a while to disperse its funding,” he continued. “So that’s probably the reason why it was missed the last few years is because there was no cash receipt to analyze for the proper reporting.”

CLA recommended that the auditor-controller’s office work more closely with other county departments “to ensure that all receivables are captured” in the future. As he wrapped up his presentation, Gonzalez said he was “really happy to see the progress” the county has made in the last year or so.

CLA has been working closely with Humboldt County Auditor-Controller Cheryl Dillingham, who was elected to the position in June 2022, to get the county’s finances back on track after years of well-documented financial mismanagement under the leadership of ex-Auditor-Controller Karen Paz Dominguez.

Dillingham | Screenshot

Dillingham acknowledged that staff is “still behind” on its financial reporting but said the county should be caught up by this time next year.

Turning to comments from the board, Fifth District Supervisor Steve Madrone thanked Dillingham and her team for their dedicated work in the last two years.

“[It’s] really nice to see the progress being made with our auditor, and the decrease in the number of conditions and things like that,” he said. “I just want to thank you for all that hard work, [which] has not been easy.”

First District Supervisor and Board Chair Rex Bohn echoed Madrone’s comments, adding that the “last two years have been a lot better than the previous four, I bet.”

“Next year, we’ll be there,” he said.

County Administrative Officer Elishia Hayes joined the chorus, expressing her gratitude to Dillingham and her team for the “magnitude of work and accomplishments demonstrated in this audit.”

Hayes said it almost feels like a miracle. “The staff and Cheryl really have done an incredible job, and this puts the county and your board in a good position to fund our Facilities Master Plan in the future, and puts us in a much more reputable position with our peer agencies,” she said. “[I’m] very, very grateful for all of the work that they have done in this audit, and without a doubt, it’ll be even better next year.”

Third District Supervisor Mike Wilson eventually made a motion to accept the report, which was seconded by Second District Supervisor Michelle Bushnell. The motion passed 5-0.

Regional Climate Action Plan

A little later in the afternoon, the board took a look at the latest draft of the Regional Climate Action Plan (RCAP), the county’s guiding document for reducing local greenhouse gas emissions and related climate impacts in the coming decades. The plan, developed in collaboration with Humboldt County’s seven incorporated cities, aligns with the state’s goal of reducing greenhouse gas emissions by 40 percent below 1990 levels by 2030 and achieving carbon neutrality by 2045.

The draft RCAP was originally published for public review in 2022 but was deemed “overly ambitious” by Rincon Associates, the consulting firm hired to complete the environmental review of the document. The revised document was released for public review at the end of last month. 

Ford | Screenshot

“The existing draft that’s before you does include achievable goals,” said  Planning and Building Director John Ford. “It does something else the previous draft did not, which was to give consideration to the unique situation within Humboldt County [and] its urban and rural needs. There are different objectives for the rural areas and different objectives for the urban areas.”

The issue of rural versus urban came up several times throughout the discussion, with one member of the public making the case that McKinleyville and Cutten is relatively urban compared to much of Southern Humboldt. Wilson, on the other hand, felt Humboldt “qualifies as rural in general.”

One of the most significant changes to the draft plan is the formation of a Regional Climate Committee, which would be responsible for administering the measures outlined in the RCAP. 

“This really is where the plan starts to differentiate itself in terms of being a unique approach in that its real ambition is to achieve greenhouse reductions as a region, rather than as eight different jurisdictions,” Ford said. “And so that becomes a hallmark of the county’s ability to work together.”

The committee would include representatives from municipalities across the county and regional agencies, including the Humboldt Transit Authority (HTA), Humboldt County Association of Governments (HCAOG), Humboldt Waste Management Authority (HWMA) and the Redwood Coast Energy Authority (RCEA). Ford noted that the committee could be formed by an existing joint powers authority (JPA), such as HCAOG.

Fourth District Supervisor Natalie Arroyo felt HCAOG would have the capacity “to get things rolling quicker” than forming a brand new JPA. “I’m certainly open to exploring a new JPA, but I think that was a good fit for now, especially given that the plan identifies that almost three-quarters of the greenhouse gas emissions are transportation-related,” she continued. “HCAOG seems like the right fit to me.”

Arroyo suggested that staff include guidelines for industrial refrigeration systems, which are “a major contributor to greenhouse gasses.” Ford said the current draft of the RCAP didn’t include any specific guidelines for industrial refrigeration but indicated that staff would be willing to look into it. 

After a bit of additional discussion, Wilson made a motion to receive the report and, per Bohn’s request, directed staff to come back next month with additional information on some of the board’s suggestions. The motion was seconded by Arroyo and passed 5-0.

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The county will host a public meeting on the RCAP at the Wharfinger Building (1 Marina Way in Eureka) tonight at 6 p.m. If you can’t make it up to Eureka, you can tune in virtually via Microsoft Teams — more information at this link. The 30-day public review period for the RCAP will end on Friday, Sept. 20.

The county will also host a public scoping on the draft plan at the Humboldt County Agricultural Center (5630 S. Broadway in Eureka) on Tuesday, Sept. 17 at 3:30 p.m. This meeting will be focused on issues that should be addressed in the EIR and potential environmental outcomes of the draft RCAP. The public scoping period for the EIR will end Monday, Sept. 30.