The Humboldt County Board of Supervisors will consider two items to address the ongoing financial turmoil associated with the auditor-comptroller’s office at Tuesday’s regular board meeting.
The board will discuss a letter signed by 13 of the county’s 19 department heads who say Auditor-Comptroller Karen Paz Dominguez “has failed to fulfill the duties and responsibilities of her position.” According to a staff report, the board will then consider taking further action against Paz Dominguez, including referring county tax reporting deficiencies to various state agencies.
The staff report states:
A memo signed by department heads representing more than 90% of departmental employees was submitted to the Board on April 4, 2022, stating that despite department heads’ efforts to support the Auditor-Controller, the latter does not failed to fulfill the duties and responsibilities of his position and, as a result, plunged the county into a financial crisis.
Although the Council has received similar letters from outside agencies in the fields of education, local municipal government, workforce development, public safety and the private sector, as well as letters from county individuals, the attached memo is the first time a majority of department heads have submitted these documents to the Board.
The note is sent by department leaders, elected and appointed, expressing that their departments cannot collaborate with the single department through which all financial transactions must be recorded, and therefore they are facing dangerous financial challenges that must be resolved.
The council package includes a fact sheet that lists more than 40 existing deficiencies associated with the Office of the Auditor-Comptroller, including overdue tax reports, communication failures and more.
The board narrowly approved a vote of ‘no confidence’ in Paz Dominguez in November 2021. Earlier this month, the board was expected to consider a second vote of ‘no confidence’, but Paz Dominguez was unable to attend the discussion advice.
The staff report notes that the county’s Workforce Development Board recommended that “the matter be referred to the California Fair Political Practices Commission, the California State Attorney General’s Office, and the Department of California State Department for appropriate action.
Realignment of payroll services
The board will also consider the operational realignment of payroll services, a county function that has been plagued with issues and controversy since the board voted to move payroll from the human resources department to the office of the auditor-comptroller in August 2021.
Last month, the board asked staff to consider removing payroll services from the Office of the Comptroller. “Specifically, your Board has directed the Acting Director of Human Resources (HR), County Administrative Officer and Auditor-Comptroller to initiate discussions regarding the collective objective with respect to payroll operations, to assess previously collected data regarding payroll operations, provide your board with updated findings, and present your board with refined options related to the placement of the payroll function,” said the staff report said.
The board will consider three options:
Maintaining payroll functions in the Office of the Auditor-Comptroller, which would be “least disruptive to the current payroll process”, but would likely result in “additional resource demands, existing communication issues and provision of services”.
Transferring payroll to the county administrative office, which could provide an opportunity to stabilize payroll operations “through increased stakeholder engagement and cross-departmental collaboration, increased communication and responsiveness, and dedication to provision of services”. However, there is no precedent for such a change and it would only be temporary.
Or, to allow the payroll function to remain in the auditor-controller’s office “for additional time”. This option appears to be almost identical to the first option but specifies that the pay would “stay with the [Auditor-Controller’s Office] in the near future” and includes a list of additional recommendations should the item be selected, including continued assistance from financial consultant KOA Hills.
The staff report also recommends that the county retain the services of CliftonLarsonAllen (at a cost of $259,000) to conduct a payroll services audit to identify deficiencies.
“[CliftonLarsonAllen] will assess county processes surrounding a test pay period,” the staff report said. “…[CliftonLarsonAllen] provide the results with a summary describing the scope, objectives, approach, and overall conclusion of the internal audit assessment. Besides, [CliftonLarsonAllen] describe identified internal control deficiencies along with recommendations for process improvement. »
TOT working group
The council will also consider forming a Transitional Occupancy Tax (TOT) task force comprising stakeholders who would oversee and review TOT revenues and work with county staff to develop recommendations for of the supervisory board on how the funds should be spent.
The case has been brought in an effort to allay the concerns of local hoteliers and hospitality industry representatives who strongly oppose Measure J, the Humboldt County Hotel Tax Update Measure, which seeks to increase the TOT rate in unincorporated areas of the county from 10% to 12% while also making the tax applicable to overnight RV parks and private campgrounds.
Members of the Humboldt Lodging Alliance (HLA) criticized the county — particularly the county administrative office — for not including industry representatives in early conversations on the subject. The organization also raised concerns about the timing of the ballot initiative and called its wording “misleading”.
“The timing of the measure for local hoteliers could threaten the fragile gains made by the industry in recent months as the economy recovers from Covid-related measures,” the alliance says in a statement. April 22 letter. “…Furthermore, while county staff and elected officials said the money would go for specific purposes, such as rural fire services, homeless support and the arts, it would nonetheless go in the general fund without restriction, which means that TOT funds could be used for purposes related to county government operations.There are simply no laws or ordinances to ensure the best use of TOT funds . »
The HLA is calling for a “no” vote on Measure J, but if it were to pass, the organization said it “would like to be an active participant” in the proposed task force.
The Supervisory Board meeting will take place on Tuesday, April 26 at 9 a.m. The agenda is available here.