UPDATE: Lawsuit alleges Shasta County's 30-year agreement with Redding Rancheria is illegal
A group called the California Land Stewardship Council is suing the Shasta County Board of Supervisors over its approval last summer of a 30-year financial agreement with the Redding Rancheria.
Supervisors voted 4-1 on July 25 to enter into a contract with the Rancheria for the tribe’s proposal to relocate Win-River Resort and Casino to freeway frontage property just south of the Redding city limits.
The agreement came despite the fact the county counsel's office did not approve the contract and could not “guarantee” the pact was legally sufficient.
The lawsuit alleges that the board “gave away millions of dollars of public funds via an agreement with the developer of a casino” that commits the tribe to recurring and non-recurring payments to Shasta County.
“The claimed purpose of those payments is to mitigate the Project’s impacts related to providing County services, and other fiscal impacts relating to traffic and roads. However, the Board did not disclose or perform any cost-benefit or other analysis to determine whether the payments called for by the Agreement were actually sufficient to compensate the County. In fact, the payments are grossly insufficient by any measure. What’s more, the Board disregarded a ‘scathing’ report about the Agreement prepared by the County’s own outside counsel,” the lawsuit says.
The agreement supervisors approved is illegal, the lawsuit alleges.
“For example, the Board ignored its own procedures for approving contracts. The Board also made its decision based on no evidence, recklessly committing the County to a 30-year term. The financial terms of the Agreement are egregious and constitute waste of public funds. In short, the Board failed to comply with its legal duties and prompt judicial intervention to protect the County,” the lawsuit says.
Paul Hastings LLP — a global law firm with five offices in California, including San Francisco ― is representing California Land Stewardship Council in the lawsuit.
A representative from Paul Hastings did not immediately reply to a request seeking comment.
California Land Stewardship Council was incorporated on Feb. 5. The lawsuit was filed eight days later, in Shasta County Superior Court on Feb. 13.
A California Land Stewardship Council representative could not be reached for comment.
The lawsuit, using graphs and other charts, alleges Shasta County left millions on the table compared with other counties and their financial agreements with tribal gaming facilities for fire, law enforcement, traffic control and road maintenance.
Supervisors Patrick Jones, who was then the board chair, Kevin Crye, Chris Kelstrom and Tim Garman voted to approve the agreement with Redding Rancheria. Supervisor Mary Rickert voted no.
Under the agreement, the Rancheria, among other things:
Will make a one-time payment of $1.6 million to the county, rather than pay annual property taxes, permit fees and other impact fees
Will make a one-time payment of $1 million to help fund law enforcement, then recurring annual payments of $1,000 per service call.
Will make a one-time payment of $1 million to help with costs associated with fire and emergency services, then recurring annual payments of $10,000 per call for service.
The deal was approved over the requests of Sheriff Michael Johnson, District Attorney Stephanie Bridgett and county Fire Department Chief Sean O’Hara to continue negotiating with the tribe.
“I have not been part of the process, so it came as a shock for me to see such an agreement,” Johnson said during the July 25 meeting.
Johnson, Bridgette and O'Hara declined to comment for this story.
At the July 25 meeting, then acting county counsel Matt McOmber cautioned supervisors about approving the agreement without the approval of county counsel or the county’s risk manager.
“In the event of waiver of the county counsel review, and I can’t speak for risk management, I cannot guarantee that there are not any legal insufficiencies that have not been resolved,” McOmber said minutes before the vote. “That is something that I want to make sure that the board's aware of in making this decision.”
Reached Wednesday for comment, Supervisor Jones defended the financial deal with the Redding Rancheria.
"We have a very good agreement. If you take a look at the other rancheria agreements around us, this agreement is based on actual calls for service, not just a flat fee. It's a better deal for the county, in my opinion," Jones told the Record Searchlight.
Shasta County retired Public Defender Jeff Gorder was at the July 25 meeting and he was not surprised that the supervisors are being sued.
“Hearing the agreement without consulting county counsel, the risk management department, the sheriff, the DA, the county fire chief: it seemed like a lawsuit waiting to happen,” Gorder said Wednesday.
Gorder is spokesman for the group attempting to recall District 1 Supervisor Crye. The recall is on the March 5 ballot.
Crye sponsored the agreement with the Redding Rancheria and its placement on the July 25 agenda.
"Crye has declared frequently that it is a priority of his to protect the county from lawsuits," the Committee to Recall Kevin Crye stated in a news release about the lawsuit.
Crye did not immediately reply to an email seeking comment.
In a statement emailed to the Record Searchlight late Wednesday afternoon, Redding Rancheria CEO Tracy Edwards said in part that the lawsuit is a "political stunt" and a "possibly misguided attempt to delay our casino relocation project."
Edwards said most of the allegations in the lawsuit are "demonstrably false."
"As just one example, the complaint alleges that the 'Board did not disclose or perform any cost benefit analysis…' In reality, over a period of nearly four years of negotiations, staff from the Redding Rancheria met with 8 different county officials, including 2 county counsels, 5 county CEOs, and 1 assistant CEO. Tribal staff provided these county officials with comprehensive data relating to the cost of providing essential government services to our proposed project. Included in the materials were local agreements from our neighboring counties," Edwards said in part in the email.
"If Shasta County demonstrates that the payments called for in our local agreement do not cover the actual cost of the services they provide, then the renegotiation provision in our local agreement kicks in and compels the Redding Rancheria and County to renegotiate a new rate," she added.
The lawsuit asks supervisors to set aside/and or rescind its decision to approve the 30-year contract with the Redding Rancheria and it asks for a jury trial.
More: Shasta Public Health Director Robin Schurig is latest administrator to leave Shasta County
This is the second high-profile lawsuit brought against the county since November.
Residents living in the area of Supervisor Jones' proposed shooting range filed a lawsuit against the county and Jones, claiming environmental studies on the project were not thorough enough.
There are other cases piling up in the county counsel's office in addition to the up to 50 unfinished contracts that need to be completed for the Health and Human Services Agency.
The county hired Joseph Lamour as new county counsel in December. But he doesn't start the job until April.
Meanwhile, Alan Cox was the county's acting counsel at the board's Feb. 6 meeting. He is the fourth attorney to assume the role since Rubin Cruse Jr. retired as county counsel to take another job last spring.
David Benda covers business, development and anything else that comes up for the USA TODAY Network in Redding. He also writes the weekly "Buzz on the Street" column. He’s part of a team of dedicated reporters that investigate wrongdoing, cover breaking news and tell other stories about your community. Reach him on Twitter @DavidBenda_RS or by phone at 1-530-338-8323. To support and sustain this work, please subscribe today.
This article originally appeared on Redding Record Searchlight: Group sues Shasta County over financial agreement with tribe
