Calaveras County owes the Federal Emergency Management Agency $1 million or more in disaster recovery grant funding for the 2015 Butte Fire due to bad record-keeping, the county auditor-controller told the Board of Supervisors on Tuesday in San Andreas.

The Department of Homeland Security Office of the Inspector General will likely audit the county’s spending for tree and debris removal, Rebecca Callen, the county auditor-controller, told the Board of Supervisors.

Missing documentation for how federal monies were spent include basics like time records, photographs, geotags, and destinations for where post-fire debris was transported to, Callen said.

The auditors will likely scrutinize and review a sampling of tree-by-tree and parcel-by-parcel data, and “if there wasn’t proper documentation, if we can’t find the time records, if we didn’t do the proper federal procurement requirements, if we didn’t take the pictures appropriately, if we didn’t geotag every single tree that was removed, didn’t document where the debris went, those are all going to be pain points,” Callen said.

The million-dollar bombshell Callen dropped came during discussion of a board agenda item that was not scheduled to be discussed: a request to extend a contract with Tetra Tech, Inc. for recovery of homeowners insurance revenue associated with right-of-entry debris removals.

District 4 Supervisor Dennis Mills pulled the item for discussion.

“I do have some concerns as to whether or not we’re going to be impacted by an audit in the future for these moneys,” Mills said. “And that if there’s a possibility that we may have some of these charges disallowed, that it will be something that we will in essence be having to take out of some other funds in other locations.”

District 2 Supervisor Jack Garamendi, the board chair, said, “Let’s assess the risk.”

District 5 Supervisor Ben Stopper asked Callen, “This project’s been passed around between multiple heads by now, and none of this is the fault of the current project manager, right? The fact that things weren’t documented properly in the past?”

Callen answered that poor documentation of emergency expenditures has been a problem for Calaveras County staff over the years.

In October 2016, the Department of Homeland Security questioned Calaveras County’s ability to handle an $11 million Butte Fire grant. Callen said Tuesday that was a different audit for different purposes. But that previous audit highlighted shortcomings in the county Department of Public Works, as debris removals took precedence over tree removals, and fire-damaged roads limited how much work could be done despite state and federal grant parameters.

“It’s part of the issue we’ve had historically, there’s been a lack of county-wide training, and so when the emergency happened, nobody was, three-quarters of the people, didn’t know where the emergency operations plan was,” Rebecca Callen, the county auditor-controller, told the Board of Supervisors.

The quarter of county staff who did know where the emergency operations plan was were not familiar with it, Callen said. There had not been county-wide training. There weren’t county-wide forms to fill out, and so when the emergency was happening, and everyone was scrambling to ensure the public was safe, and people were trying to protect everyone that’s out there, as well as county staff, while Callen was sitting there saying “You need to take a moment and document,” the response she got back most of the time was “We’re in an emergency, we don’t have time for that.”

The way Callen explained it, the roughly $1 million in emergency spending that was mishandled by the county was funding spent and reimbursed by FEMA to the county. Problems will arise when federal auditors come to Calaveras County because the money was spent without adequate documentation.

“The million dollars is what I know for sure that is going to be a problem,” Callen told the board. “Because they were activities that while the board may have approved them, they weren’t allowable under the terms of the grant program. So those are going to be an issue. And these are conversations I’ve had with the current CAO, the former CAO, the CAO before that.”

Callen is one of the Calaveras County department heads who have been on the job since before the Butte Fire, which broke out in early September 2015. She said she knew about the lack of documentation for some county spending of federal assistance funding from the outset as the terrifying Butte Fire blew up, burned up more than 110 square miles, destroyed 921 structures, including 549 homes, 368 outbuildings and four commercial properties, damaged 44 structures, and resulted in two civilian fatalities.

“I’ve said all along that documentation is really our responsibility as a county,” Callen told the board. “And I do know that there were times where proper documentation didn’t happen, and so I’ve never been shy about stating this to the board, saying this publicly, there will be disallowances by the OIG.”

She said in a phone interview Tuesday afternoon the timing for the audit can be one year to five years following the end of the grant program, and when it does happen, the county has about a million dollars set aside to cover that, Callen said.

Callen indicated that county negotiators took those foreseeable, disallowable expenditures into account when they were in settlement talks with Pacific Gas and Electric Co., the utility giant that was found at fault for igniting the Butte Fire. So that roughly one million dollars is covered for now.

The Calaveras County Board of Supervisors accepted a $25.4 million settlement from Pacific Gas and Electric in November 2018 for damages incurred by the county in the Butte Fire, and more than $5 million of that settlement will go to the legal firm contracted by the county to secure the settlement.

Department heads and staff across all county government departments are going to require comprehensive training to ensure this kind of fiscal mismanagement doesn’t happen again, Callen said.

Ultimately, the board voted unanimously to approve extending an existing contract with Tetra Tech, Inc. for recovery of homeowners insurance revenue associated with Cal Recycle right-of-entry debris removal operations in the wake of the Butte Fire for an amount not to exceed $854,656, from August 2018 through June 2019.

Fixing the emergency grant-spending problem in Calaveras County is going to require across-the-board, county government-wide focus on policies, procedures and training by the county Office of Emergency Services for all other county departments, Callen said. County OES staff will have to provide all that training and documentation to other county departments “so they’re prepared for the next emergency,” Callen said.

In other business Tuesday, the board voted unanimously to dispense with competitive bidding requirements and authorize a purchasing agent to piggyback on a federal contract for the purchase of a 22-foot Fastwater Aluminum Boat for $101,930 from Rogue Jet Boatworks of White City, Oregon, for use by the Sheriff’s Office Marine Safety Program.

More than a third of the items that went before the Board of Supervisors on Tuesday had to do with the Butte Fire, hazardous tree removal, debris removal, and local states of emergency stemming from the Butte Fire, tree mortality, winter storm damage in January and February 2017, and winter storm damage this month.

Three of those items dealt with contracts and spending on Butte Fire hazard trees, Butte Fire debris removal, and tree mortality mitigation totaling more than $11.9 million.

Contact Guy McCarthy at gmccarthy@uniondemocrat.com or 588-4585. Follow him on Twitter at @GuyMcCarthy.

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