Ten months after Yermo Community Services Director Sean Cloughen resigned in the face of a recall attempt and seven weeks after the recall of board president Bob Smith and board member Geoff Berner, the community and the district are nearing implosion.
With no clear operating authority, a lack of a quorum on the board and no entity with financial authorization to pay bills, the closest thing to an in-town governmental authority was adrift. No one had until just recently the authority to access or unlock the bank accounts that serve as the town’s public treasury and bills went and are still going unpaid, reducing the likelihood services will continue to be provided. As of this writing, even the fire department has not been paid.
At its most recent meeting, the Yermo Community Services District was unable to take a full range of action. That entity’s new president, Michael Cint, who replaced Smith, had virtually nothing to preside over. Citing Brown Act section 5456.5 that requires a majority of the board to approve a state of emergency, Cint, essentially, declared himself in a quorumless quandary.
Cint, acknowledging there was indeed an “emergency,” lamented that “we don’t have access to the bank accounts to pay for the Fire Department operations.”
The Yermo Community Services Board is supposed to consist of five members. A quorum of that five member panel would be a simple majority – three. But the recall of Smith and Berner on June 7 left only one director – GaryYeasley – on the board for over a month. That was remedied when Cint and Clarissa Loehr, Smith and Berner’s replacements, were sworn in earlier this month. The same voters who ousted Smith and Berner selected Cint and Loehr as their replacements.
Before Smith and Berner departed, no one bothered to have Yearsley – as of June 7 the last elected official in town left standing – added as a signee on the district’s bank account. With Smith and Berner’s departure, there were no authorized signers with regard to the district account.
To create authorized signers, the new board had to vote – after it met – to agendize an emergency item to elect new board officers. That done, Cint was named president and Loehr was made vice president. Yearsley was appointed fire commissioner.
But even with a board, or a bare minimum of a board, the district yet has no means of accessing its accounts. Upon being ousted from office, both Smith and Berner destroyed the district’s only credit/debit cards and the accompanying account access means then available to the district, which existed in the form of the credit cards in their names. They shredded those cards.
This has left Cint, Loehr and Yearsley somewhat miffed. A circular argument has gone on for a week now about whether Smith and Berner, once out of office, had the authority to close out the accounts in their names. At this time, that is a moot point.
The recall proponents claim their intent to rid the district of Smith and Berner was a high-minded one. Even if good intentions are imputed to the recall effort, the reactive element such actions bring should have been looked after. Rejected by the voters that once embraced them, Smith and Berner were acting within the standard realm of deviation when they took it upon themselves to divest themselves of the two items – the credit cards – which, if used at all after their removal from office, might be interpreted as a misappropriation of funds.
There are also reports that paper documentation of the district’s financial transactions were shredded at the time of Smith and Berner’s departure, or perhaps shortly before or after. That is a more serious problem, as the destruction of public documents can be deemed a felony.
Given the disarray in the district’s finances – which appears to have gone back for some time – and the neglect of district business for what is now pushing two months, the financial institutions the district transacted business through formerly are not in the most facilitative of moods.
The matter is complicated by other things that may have or may not have occurred during the vacuum of leadership following the recall.
By one account, Yearsley, the closest semblance of legally constituted authority in the district at that time, “ran off” the district’s general manager, Rita Dado, in the weeks after the recall. Whether that actually occurred is unclear. What is known is that on June 30, Dado officially resigned.
This indicates that for at least two weeks and for perhaps as many as five-and-a-half weeks, the district office was vulnerable to compromise. Whether such a compromise was serious is subject to interpretation. The district’s computers were password protected and with the departure of Smith and Berner and then Dado, it is unlikely that the computers could have been accessed. Whether Dado handed over to Yearsley the requisite codes – which were previously withheld from him when Smith and Berner were ruling the roost – is unknown. If Yearsley did not have the access codes before Dado left, the likelihood that he could have carried out a successful search on his own to discover them is remote.
In an effort to limp back into normalcy, the board has chosen Vicki Paulson to serve as the interim general manager for the next 90 days.
Yermo, a town of roughly 1,750 population in San Bernardino County’s Mojave Desert 13 miles east of Barstow and just south of the Calico Mountains has been buffeted by events in recent years. A good deal of those problems has pertained to water, a commodity of particular importance in the desert.
Decades ago, Donald Walker acquired the Yermo Water Company. Walker saw the water company, which had exclusivity in Yermo, as a profit generating entity, one that could be maintained with very little devotion to maintenance or upgrades. By the late 1990s the company’s pipes and pumping systems were falling into a state of disrepair. The situation was exacerbated in the early 2000s when Walker relocated to Florida, leaving the neglected and undercapitalized company in the hands of a resident of the area with no expertise or real understanding of how to run a water company, who served as its part-time manager. Despite the importuning of customers and local authorities, Walker refused to hire a licensed operator to look after and operate the system.
During the summer of 2006, the primary water tank serving the Yermo community’s water system developed a leak and customers were without water for a week in the community, where temperatures exceeded 100 degrees every day. The California Department of Health and the California Public Utilities Commission initiated an investigation into the matter in 2007.
A decision to pursue the appointment of a receiver was issued in May of 2009 but that effort was delayed while it appeared the sale of the system to a community-based prospective buyer was imminent.
After more than two years of negotiations, Walker refused to inform the prospective buyer how much he owed in back taxes and fines to the California Department of Health. As a result, the sale fell through. In August 2012 the California Public Utilities Commission filed to take control of the water company. Three months later, the Superior Court entrusted operation of the Yermo Water Company to the Yermo Community Services District and appointed California Public Utilities Commission Attorney John Richardson to act as receiver. The Yermo Community Services District then made $40,000 in emergency renovations to the system to keep it functioning.
The receivership arrangement that took place in November 2012 was contested by Walker’s family. His wife, Charlene, filed an opposition to the appointment of a receiver, raising a number of claims that were ultimately denied by the Superior Court on March 6, 2013.
In July 2013 Apple Valley Ranchos, acting on behalf of Park Water Company, bid $300,000 on the purchase of the Yermo Water Company. Subsequently, Bob Smith, president of the Yermo Community Services District, acquiesced in Richardson’s decision to accept Apple Valley Ranchos’ offer.