The small utility district that owns Riverbend Golf Club has been identified by the state as one of California's least-timely public agencies.
The Sierra Foothills Public Utility District in Madera County was among 120 local government agencies cited in October as being more than a year behind providing required financial data -- including details of employee wages and benefits -- to state Controller John Chiang. As of last week, all but 20 had complied with the mandate.
Sierra Foothills is one of three identified by the Controller's Office as the most egregious -- at least two years behind on legal paperwork. Information from the state indicates that Sierra Foothills hasn't filed since at least 2009.
The reports include details on agency revenues, spending and long-term debt. In 2010, hyperlink to the rules were beefed up in response to the financial scandal involving city officials in Bell, a suburb of Los Angeles, to include disclosure of wages and benefits for agencies' employees.
The Sierra Foothills district was formed in 1998 with the intent of providing infrastructure such as streets, streetlights, water and sewage service, plus recreation facilities for the planned Rio Mesa community covering 2,260 acres on the north side of the San Joaquin River east of Highway 41.
But with only four homes within its sphere of influence, the only service the district provides is the golf course. The golf course is leased to a management company and remains open for business, unaffected by the district's financial troubles.
Rio Mesa never got off the ground. Its Fresno-area developer, Dennes Coombs, was dragged down by millions of dollars in defaulted municipal bonds. The Sierra Foothills district also lost a wrongful-termination lawsuit several years ago.
Doug Thornton, who lives in one of the district's four homes and was appointed to the district's three-member board last year, said this week that the agency is in dire financial straits due to years of mismanagement by employees who no longer work for the district.
"Not only did they not file these forms, they had not paid employee withholding taxes to the IRS from about 2005 to 2013, to the tune of $1.6 million," said Thornton, an attorney who practices in Fresno. "The district is destitute; we have no money in the bank, and we have about $4 million in debt. ... We don't have any money for payroll, so everyone who's working (on district business) is doing so pro bono, trying to right the ship."
A spokesman for the Controller's Office said this week that it has fined the 20 agencies that aren't current and plans to audit each of them. Thornton said it was his understanding, from a conversation he had last week with representatives from Chiang's staff, that no audit was imminent.
"We're trying to get to a position where we can hire a CPA to fill out the reports," Thornton said.
Jacob Roper, the spokesman for the Controller's Office, said the audits will not only sift through the required financial data, but also examine the agencies' processes and controls. "Where we see the majority of problems with small districts is a lack of clear distinction of duties and arms-length contracting ... to prevent any kind of corruption," Roper said.
Sierra Foothills has been targeted for outside looks before. In 2010, a municipal service review conducted for the Madera Local Agency Formation Commission, or LAFCo, determined that the district was surviving solely on loans to fill an operating shortfall, which the commission reported "is not a sustainable financing strategy."
The review recommended that LAFCo eliminate the district's sphere of influence, essentially assigning responsibility for infrastructure service to another county agency, and ultimately dissolve the district.
The 2012-2013 Madera County Grand Jury last year repeated that recommendation.
The 20 non-reporting government agencies that the state controller's office says it plans to audit:
Sierra Foothills Public Utility District, Madera
Atwell Island Water District, Tulare
South Dos Palos County Water District, Merced
Burbank Paradise Fire Protection District, Stanislaus
Western Hills Water District, Stanislaus
County Service Area No. 20, Tuolumne
Biggs-West Gridley Water District, Butte
Klamath Community Services District, Del Norte
Smith River Cemetery District, Del Norte
Reclamation District No. 2070, Lake
Westport County Water District, Mendocino
Spreckels Memorial District, Monterey
Spreckels Community Services District, Monterey
Feather River Canyon Community Services District, Plumas
Indian Valley Ambulance Service Authority, Plumas
Indian Valley Community Services District, Plumas
San Martin County Water District, Santa Clara
Downieville Fire Protection District, Sierra
Happy Camp Fire Protection District, Siskiyou
Hornbrook Community Services District, Siskiyou
District is at least two years behind on legal paperwork
Source: California Controller's Office
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