Former Shasta County CEO candidate accuses county of illegal budget maneuvers
AENN
Tue, April 11, 2023 at 4:59 PM PDT
After the offer to be Shasta County executive officer was rescinded last week, Chriss Street was back before the Board of Supervisors on Tuesday to blow the whistle on what he said was serious illegal budget maneuvering by the county.
Street had been offered the CEO job pending the outcome of a background check. However, the board later voted April 6 to rescind its job offer to Street. The county has not commented on the background check results.
But Street came before the board Tuesday and told them that while doing research into the county budget, he’d found some improprieties.
He claimed during Tuesday’s meeting that the county was breaking the law by operating with a financial reserve that was too low and by transferring money from one account to another after the county budget had been approved.
“I was absolutely stunned. Because the way it works in California under California Government Code 29086, it is illegal to reduce reserves after the budget is set,” Street told the board.
“This is a very serious issue. You’re going to have your financial statement canceled, you’re going to have your independent audit pulled. You need to notice them today. This is of the greatest importance because this is public money. And these financials don’t match the reality,” Street said.
He also claimed the county violated state law by transferring $10 million from reserves to another county fund after the board had approved the county budget.
“If you look in the government code for this, for California Government Code 29086, it appears the violation of law states the general reserve may only be decreased at the time of adopting the budget. So obviously, this was a subsequent transaction. It was not disclosed,” Street said after his presentation to the board.
Supervisors anticipated Street’s presentation, so they called on county Auditor-Controller Nolda Short to provide a report rebutting Street’s claims.
Short said that at about $19 million, the county’s general fund reserves are lower than she would like to see, but said the county was not breaking any laws by keeping a reserve at that level. As of this week the county has 8.9% in reserves, she said.
The ideal reserve would be $37 million to $54 million, she said. That amount is based on a best practices recommendation from the Government Finance Officers Association, she said.
Regarding a $10 million transfer from reserves to another county fund, the board authorized it during budget hearings last summer, not after the budget was approved, Short said.
“I’ve heard a lot of things since Friday about the county going bankrupt and the financial status of the county. So hopefully this will let us know where we need to focus and also kind of gives people a reality check on where to jump,” Short told the supervisors.
“The county is not doing anything underhanded or illegal with its budget,” Short said after the meeting.
She said the $10 million transferred from reserves will be returned to reserves next year, increasing reserves to about $29 million.
“We need to have a plan to continue to put money into it (the reserves),” Short said. She also said later that no outside auditors had ever brought up the issues Street brought before the board Tuesday.
Supervisors took no action following presentations by Street and Short and Supervisor Chris Kelstrom commended her.
“I’m glad you’re at the helm of the ship. So again, thank you very much. Shasta County’s lucky to have you,” Kelstrom said to Short.
Street said after the meeting he is not letting the issue go and plans to ask the county Grand Jury to investigate his claims.
“I can tell you right now that you’re in a situation where your accountants must be notified immediately. They should have been notified at the time of the ($10 million) transaction,” he said.
Reporter Damon Arthur welcomes story tips at 530-338-8834, by email at damon.arthur@redding.com and on Twitter at @damonarthur_RS. Help local journalism thrive by subscribing today!
This article originally appeared on Redding Record Searchlight: Former County CEO candidate accuses county of illegal budget maneuvers
