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The Humboldt County Board of Supervisors on Tuesday provided a bit more breathing room to local cannabis cultivators who might otherwise be down to their last gasps.

Growers who are delinquent on their Measure S cultivation taxes had been given a deadline of March 31 to square up their bills or face permit revocation. After that deadline was established, nearly a year and a half ago, more than 400 permit holders entered a payment plan with the county, while a couple hundred others failed to do so.

Early in the hearing, Planning and Building Director John Ford ran down the numbers: Out of 1,861 current permit holders, nearly two thirds (1,228) have paid all of their Measure S taxes. Another 423 have entered payment plans and made some or all of their payments. The remaining 210 permit-holders owe taxes and have yet to enter a payment plan with the county. Their permits have been suspended, though not yet revoked.

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If the board had stuck to its guns, it could have sent all 600-plus delinquent growers into the suspension and revocation process. But as they’ve done several times before, the supervisors bestowed mercy on the county’s struggling weed farmers.

At the end of a public hearing that included emotional testimony from the public and from Second District Supervisor Michelle Bushnell, the board voted 4-1 to give the 210 most delinquent growers just a few extra days — until next Friday, April 4 — to make at least one payment and enter a payment plan.

The board offered a lengthier extension to the rest of the tax-delinquent growers, giving them until the end of this year to pay all Measure S taxes due in order to avoid suspension and possible revocation.

During the public comment period, more than two dozen growers and their advocates urged the board to show leniency once again.

“Think about the jobs that will be lost if you decide to revoke or suspend,” said Thomas Mulder, a licensed farmer and Bushnell’s appointee on the Humboldt County Planning Commission.

A grower who spoke by phone without offering his name said he’s made 11 Measure S tax payments despite some major business setbacks.

“In 2021 I had some sales lined up,” he said. “We sold the product to a licensed distributor who basically never paid us. It was a pretty heavy hit.”

Galen Doherty, owner of Whitethorn Family Farm, said the wholesale cannabis market is “worse than it has ever been,” and he described Measure S as an “onerous burden” on small, independent cannabis businesses. He urged the board to extend its payment deadline.

“Forcing farmers to pay these outstanding balances in full at the beginning of spring, when all of the startup costs for the year are coming in, is directly taking food off our tables and money out of our pockets when we need it most,” Doherty said.

Farmer Craig Nejedly asked for the deadline to be extended by another year, saying, “I feel like I’m being penalized for going all in on legal cannabis.”

Huckleberry Hill Farms owner Johnny Casali said that while he doesn’t personally owe any Measure S taxes, and while there are “quite a few farmers that don’t ever intend to give you a dime,” he believes the small farms of Humboldt County are worth preserving if at all possible.

Natalynne DeLapp, executive director of the Humboldt County Growers Alliance, urged the board to look at the faces of the people who’d shown up to the meeting. “These people are real people,” she said, “and they have given everything. And they’re asking for a chance.”

The normally stoic Ford agreed with this sentiment, saying that’s what makes enforcement actions so difficult. 

“Some of the people who are represented here, you know, you work with them over time, you fall in love with them,” Ford said. He added that the board may soon want to consider some policy changes, perhaps making it easier for locals to get a micro-business license allowing them more flexibility in growing, packaging, distributing and other facets of the business.

The board then set about debating how to proceed, with Bushnell asking her colleagues to consider the 210 most delinquent permit-holders first. The board was in general agreement that this group had gotten enough leeway.

Bushnell said this situation is heartbreaking for her personally. She watched the heavily cannabis-dependent Southern Humboldt community go from thriving to “nothing.”

“I’m born and raised there and have seen lots of transitions down in Southern Humboldt,” she said, citing the prior boom-bust cycles of cattle, timber and fishing. “But this transition, how devastated the community is, I’ve never seen.” Later, Bushnell mentioned that her own Garberville clothing and shoe store, Boot Leg, is failing and she needs to close it.

She also said it’s about more than just a job for the people involved in the industry. “Farming for a lot of folks is their dream,” Bushnell said. “It’s their lifelong dream, and they, they — it’s who they are.”

Madrone, meanwhile, said he and many of his constituents are concerned about fairness, considering the 1,200-plus growers who’ve paid all that they owe.

“So if we give all kinds of extensions to people who either haven’t done anything or made one payment or whatever, where’s the fairness in that?” he pondered. He later said he’s in favor of offering extensions but wanted them to be “measured.”

Fourth District Supervisor Natalie Arroyo said she feels deeply for those who are struggling as well as those who’ve paid all of their Measure S taxes. “So we’re between a rock and a hard place,” she said. Arroyo tossed out another proposal entirely — one involving multiple deadlines and percentages — but the notion failed to gain traction.

Bushnell wound up making a motion to set a new deadline of Dec. 31 for all delinquent growers except the 210 who’ve yet to enter a payment plan. Those folks have until next Thursday to come in and make at least one payment in any amount. The others who owe Measure S taxes must pay their full bills by the end of the year to avoid suspension and possible revocation.. That deadline will be firmly enforced, she vowed.

Arroyo noted that this is basically the same deal offered to tax-delinquent growers last time around, in October of 2023, but said she’s willing to give them one more shot.

Madrone cast the lone dissenting vote.

Decent Audit Reports

It wasn’t long ago that Humboldt County’s fiscal reporting virtually exploded in a hot mess of blown deadlines, fierce infighting, state investigations and multiple lawsuits. By contrast, Tuesday morning’s presentation of the Fiscal Year 2022-23 audit reports marked a return to auditing’s ideal state: boring.

Brianne Weise, a partner with the external auditing firm of CliftonLarsonAllen, delivered the reports remotely, explaining that her firm’s job is to issue an “audit opinion” on the county’s financial statements. What you don’t want in these scenarios, if you’re the one being audited, is a “finding,” much less a “substantial finding,” which is auditor-speak for “You fucked up.”

In recent fiscal years such findings have been rampant in the Humboldt County government, but this week’s report card was much improved. 

“The financial statements of the core county, I’ll say, are unmodified, which is effectively a clean opinion,” Weiss said.

However, her firm identified two “material weaknesses” in its financial statement audit — much less worrisome than a “deficiency” or (gasp) a “serious deficiency” but not ideal, either. One was related to a discrepancy in the reporting methods employed by an outside fire protection district, an issue that Weise and Interim Auditor-Controller Mychal Evenson believe can be remedied soon. 

The second “material weakness” concerned mis-filed receivables, including about $5 million in cash receipts that should have been recorded in 2023 and about $16 million in property tax receivables that was recorded in “custodial funds” — where assets are held for outside agencies — rather than in the general fund. Fifth District Supervisor Steve Madrone later asked if this meant the county is less deep in the hole financially than previously thought and was told no, the money was just misfiled, effectively.

“I would be remiss if I didn’t mention how much effort management is doing to get this resolved and going forward,” Weise said. “So I do see a lot of improvement, despite the fact that we still had a finding.”

Weise also pointed out that the county maintains more than 120 government trust funds. “And while this in itself isn’t a problem, we just think that it increases the risk of human error, certainly when you’re doing transactions to and from those funds,” she said.

The county also faces a “significant risk” in accounting for its large volume of receivables from the Federal Emergency Management Agency (FEMA), including some awards that are quite old.

Board Chair and Second District Supervisor Michelle Bushnell thanked Evenson and his predecessor, Cheryl Dillingham, for keeping things running smoothly. Madrone noted that the county is nearly caught up on its financial reporting and echoed Bushnell’s gratitude. “I really think you and your staff deserve a lot of thank yous from us as a board, from everybody in the county for the hard work that’s been done,” he said.

The board voted unanimously to receive and file the audit reports.

Child Welfare Services

Earlier in the meeting, in honor of Social Worker Appreciation Month, the board received a staff presentation on the county’s Child Welfare Services program, which operates under the Department of Health and Human Services. This program was the subject of a state investigation nearly a decade ago, with the county ultimately agreeing to make sweeping changes in the program.

CWS Director Amanda Winstead delivered the presentation alongside members of her leadership team. They focused their presentation on the work they’ve been doing around the Indian Child Welfare Act, or ICWA. With approximately 30 to 40 percent of the program’s casework involving Native American families, Winstead said program managers acknowledged years ago that they need to do more to meet that population’s specific needs.

“It’s been a big learning curve, and we’ve had some bumps, and we’ve skinned our knees here and there along the way,” Winstead said. “But we have now an ICWA program that is shaping up to be one of the best in the state, and something to be very proud of here in Humboldt County.”

Program Manager Kim Schneider said staff in the program’s child abuse and neglect reporting line has processed more than 3,200 referrals over the past year, adding, “On any given day in Humboldt County, there are approximately 100 investigations of child abuse or neglect underway.”

Program staff told the supervisors that whenever a child’s Native American tribal enrollment is verified, CWS remains in partnership with the tribe throughout the investigation’s involvement with the family. And when it comes to a tribe’s sovereign rights, “We are committed to deferring whenever possible,” one manager said.

After the presentation, a woman who identified herself as Kiana pleaded with the board about the plight of her own family, saying she’s been alienated from her four kids, including two “ICWA children,” since shortly after moving here from Utah in November.

“I am a good, good mom,” she said, her voice trembling. “And now my children don’t even know me.”

Third District Supervisor Mike Wilson made a motion to receive and file the CWS report, and he acknowledged that, “None of these systems are perfect.”

Organizational Change-em-up

Toward the end of the roughly eight-hour meeting (when you include closed session), Human Resources Director Zachary O’Hanen delivered a report about a possible way to change the county’s management structure to have certain county departments report to the county administrative officer (CAO), rather than to the Board of Supervisors directly.

O’Hanen said there is “no clear industry standard on the reporting structure of counties in California when it comes to their appointed department heads and their CAO [or] CEO.” However, he went on to say, “We are actually the outlier on some level, in that all of our appointed department heads report to you as a board.”

The board discussed the pros and cons of giving the CAO more authority, with current CAO Elishia Hayes saying it might make sense to have a subset of county department heads — those whose departments the board isn’t “heavily involved in” — report directly to her in order to make decision-making, feedback and discipline more nimble.

“I think that this is a model that the agency could benefit from, that your board could benefit from [and] I could benefit from in my ability to maneuver and influence and manage the organization,” Hayes said.

Wilson said he leans toward the CAO model and suggested having all departments whose heads aren’t independently elected, besides Public Works and Planning and Building, report to the CAO rather than the board. Arroyo said she’s receptive to that idea, though she’d like the board to retain hiring and firing authority in departments reporting to the CAO. (She also said the Department of Health and Human Services should still report directly to the board.) Madrone agreed, though he added that the county needs to improve its models for progressive employee discipline.

But Bushnell said she’s reluctant to cede authority to the CAO, especially if someone other than Hayes were in that role. She would worry about the executive being less than forthright, “and so that that is scary for me, to think that I’m the one that’s held responsible for someone else’s decision making process.”

O’Hanen said that, given the board majority’s interest in reorganization, he would work with Hayes to develop a proposal for an appointed department head reporting model, to be considered at a future meeting.

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If you’re so inclined, you can watch the entire meeting (minus closed session) below.

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CORRECTION: This post was corrected from an earlier version that mis-stated the nature of the Dec. 31 Measure S tax deadline and misspelled the names of Mychal Evenson and Brianne Weise. The Outpost regrets the errors.