How to resolve AdBlock issue? Hope for Konocti Harbor: Purchase said to be in process for famed resort
KELSEYVILLE, Calif. – Since it closed nearly two and a half years ago, the fate of Konocti Harbor Resort & Spa, the county’s premier resort, has been a source of near constant speculation.
For decades the resort had been a draw for county residents and visitors alike. Other resorts and businesses had benefited from the customers that came to enjoy its amenities and shows all the year round.
When it closed, hundreds of people lost their jobs, some other local resorts struggled and closed, and on an almost weekly basis there was a new story circulating the community about some well-known celebrity being at the heart of an effort to purchase it.
Now, however, there appears to be a bona fide purchase effort under way, according to county officials.
“We’re working with folks that are very interested in making it a destination resort,” said County Supervisor Rob Brown, in whose district the resort is located.
County Administrative Officer Kelly Cox also told Lake County News that he is aware that the resort is in the process of being sold.
Brown said he’s not at liberty to discuss specifics about who the buyers are, but added that the county has been working with the potential buyers for several months.
Cox said that seeing the resort reopened as a first class destination resort under new ownership has been a top priority for the county.
He and his staff have tried to be supportive of sales efforts, and have been willing to dedicate staff time to support it, including recruiting and meeting with potential buyers.
“We rolled out the red carpet to anybody we met with,” he said.
But those potential buyers didn’t seal the deal, and the resort – which Cox said had been the county’s largest generator of transient occupancy tax, or bed tax, by far – continued to sit empty on the shores of Clear Lake.
Aftermath of lawsuit
Konocti Harbor was closed “temporarily but indefinitely” in November 2009, according to the notice sent to local, state and federal officials by Boca Raton, Fla.-based WhiteStar Advisors LLC.
WhiteStar Advisors is an asset management company that was put in charge of overseeing the resort following a federal lawsuit, settled in 2007, in which the U.S. Department of Labor sued Local 38 of the United Association of Plumbers, Pipefitters and Journeymen, whose Convalescent Trust Fund, Lakeside Haven, had owned Konocti Harbor since 1959.
That suit alleged that Local 38's trustees violated federal law by diverting more than $36 million from retirement, health, scholarship, apprenticeship, and vacation and holiday funds to renovate and operate Konocti Harbor.
Department of Labor officials recently told Lake County News that the agency considered Konocti Harbor a “troubled property,” whose troubles had been exacerbated by the tough real estate market.
However, as a result of the lawsuit $3.5 million was restored to the Local 38 pension plan in September 2007 and additional money may be paid from the sale of the Konocti Harbor.
The lawsuit settlement also prohibited any further diversions of money from the employee benefit plans to Konocti Harbor, according to the Department of Labor.
Those employee benefit plans aren’t exposed to risk of loss, and if and when the property sells, “the plans have some potential for upside,” the agency said.
New concerns arise
Concerns about the resort’s future flared up last month, after a Bay Area newspaper published a story about Pacifica resident Kathleen Bernard’s plan to purchase the resort and make it into a mental health facility.
Both Brown and Cox said they were contacted by numerous county residents concerned about such a plan.
Bernard – who reportedly hosted a public meeting on the plan in San Mateo County last month – did not respond to a request for comment from Lake County News.
Additionally, statements made in the article about the “Mental Health Board of California” being aware of Bernard’s plans and her desire to use funds from Proposition 63 – the Mental Health Services Act – are in question.
When Lake County News contacted the California Department of Mental Health and the state Mental Health Services Oversight and Accountability Commission, officials stated that there was no such thing as a Mental Health Board of California, but suggested Bernard may have brought the idea to another state entity.
Bernard also had not made any contact with Lake County officials, said Cox, who surveyed departments including Community Development.
Cox said Konocti Harbor is not zoned for the use Bernard suggested.
“It’s resort property,” he said, adding that he couldn’t imagine the Board of Supervisors agreeing to a rezone.
Brown emphasized that the prospective buyers with which the county are working do not include Bernard or anyone associated with her.
Brown said the current deal that’s being worked out appears very hopeful.
He said the county wanted any prospective buyer interested in reopening the resort to know that “the county is solidly behind them.”
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Contractor gets four year prison sentence for defrauding Middletown development investors
LAKE COUNTY, Calif. – On Friday a Roseville building contractor was sentenced to federal prison for defrauding investors in a development near Middletown.
Leo Wheeler, 56, received four years and three months in prison, to be followed by three years of supervised release, from United States District Judge Garland E. Burrell Jr., according to United States Attorney Benjamin Wagner’s office.
Wheeler, who initially was indicted on 29 counts of mail fraud in late 2010, pleaded guilty last Aug. 26 to one count of mail fraud as part of a plea agreement reached with federal prosecutors.
He had operated a real estate investment scheme involving the Creekside Oaks Estates Subdivision, as Lake County News has reported.
Creekside Oaks Estates is a 30-lot subdivision located on 14 acres at 18765 Hartmann Road, Middletown.
The case against Wheeler resulted from an Internal Revenue Service criminal investigation.
The investigation found that Wheeler defrauded more than 10 investors of hundreds of thousands of dollars by submitting approximately 85 fraudulent invoices for work he falsely claimed he had performed on Creekside Oaks Estates.
According to county planning documents, the Creekside Oak Estates Subdivision initially was approved in July 2005.
The original indictment against Wheeler stated that from 2005 to 2007 he solicited investors to provide money for loans to be used for the subdivision, guaranteeing investors an 11-percent rate of return and six months of prepaid interest.
Wheeler used three fictitious companies – Kenneth Gutman Trucking, SNC Solutions and California Maintenance – to funnel funds to himself and to other projects he was trying to keep afloat after suffering heavy losses during the financial crisis of the last several years, according to court documents.
During an interview with an IRS special agent, Wheeler admitted he had falsified numerous invoices and wrongly diverted investor funds, court documents showed.
Wheeler – whose criminal record includes a single misdemeanor theft conviction – originally had been set for sentencing in the Creekside Oaks Estates case last November, but the proceeding was delayed several times, based on court filings.
On April 2, Wheeler’s defense attorneys filed a document with the court requesting no more than a 30-month sentence, and arguing that the loss to investors was $985,000 – not the $1.5 million figure reached by the government – which would have allowed the reduced prison sentence.
Then on Thursday, just a day before his sentencing, Wheeler’s federal defense attorneys filed a motion requesting that sentencing be delayed yet again, for four weeks.
Wheeler’s attorneys also filed supporting documents that explained Wheeler had paid $20,000 toward restitution, and stated that six of the victims who were contacted were willing to support delaying his incarceration if it meant they would be repaid all or part of their money.
Letters were submitted to the court by Wheeler’s business associates, who had hired him as a subcontractor to manage nonprofit housing programs, asking that his sentencing and imprisonment be delayed. He has reportedly been working on such programs with the nonprofit Homes That Change Lives.
The government opposed the motion to continue. Judge Burrell denied Wheeler’s request for a delay and sentencing went forward as scheduled.
During Wheeler’s Friday sentencing, Judge Burrell said he was troubled by Wheeler’s submission to the court of an 11-page letter that minimized his conduct and claimed he had never engaged in a scheme to defraud.
“Not a wise move to submit to the court a misleading document when you are going to be sentenced,” Judge Burrell said.
Burrell also granted the government’s motion to take Wheeler into custody rather than allowing him to self-surrender at a later date.
“I have serious, serious problems with his credibility,” Judge Burrell said in ordering Wheeler into custody.
According to Lake County Senior Planner Emily Minton, the tentative approval on the Creekside Oak Estates Subdivision map is still valid.
She said it originally was approved July 26, 2005, and was good for two years. In 2007 it was extended to 2009, and has received two additional automatic extensions bringing the current expiration date to this coming July 26.
Minton said the Subdivision Map Act provides for an additional time extension of up to one year – taking the plan’s expiration to July 26, 2013 – if an application is made to, and approved by, the Board of Supervisors.
Assistant United States Attorney Russell L. Carlberg prosecuted the case against Wheeler.
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Clearlake City Council appoints Phillipe city manager
CLEARLAKE, Calif. – Following its decision last month to move to the city manager-council form of government, the Clearlake City Council has appointed its acting city administrator as city manager.
At its meeting Thursday evening, the council voted to appoint Joan Phillipe to the position.
Phillipe began with the city on an interim basis last October.
“I am very happy that the contract was approved and look forward to working with the city as it moves forward to address its new goals and objectives,” she told Lake County News on Friday.
She added, “There is a lot of potential for this city and I look forward to being a part of the positive progress on the horizon. I appreciate the confidence and support from the city council in approving the contract and making me a part of this team.”
Phillipe’s new contract with the city is for three years, going into effect on April 25 and running until April 24, 2015.
She will receive $10,700 per month, for a total annual salary of $128,400.
The city’s last full-time, permanent administrator, Dale Neiman, made $120,000 annually, before his hours were cut to half-time and his pay to $70,000, as Lake County News has reported. Neiman departed following the November 2010 election.
The contract calls for annual performance reviews, noting that the council shall increase Phillipe’s salary by a minimum 5 percent, with additional modifications to be considered for benefits. She also will receive separate cost-of-living increases annually.
Phillipe will cover her contribution of 7 percent to CalPERS retirement, while the council has agreed to provide health, vision and dental insurance, life and disability insurance, 15 days of vacation annually and eight hours monthly of sick leave.
She also will receive a monthly car allowance of $325 and a cell phone offset of $75.
If Phillipe is terminated without cause within the first 12 months of the contract, she’s entitled to six months’ severance pay; if after the contract’s first year she’s terminated without cause, she shall be entitled to a lump sum payment equaling a year’s pay and six months’ worth of health insurance for her will be paid by the city.
The draft contract can be seen below.
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Lake County broadband planning meeting takes place April 4
LAKEPORT, Calif. – A planning meeting for the effort to expand broadband in Lake County will take place this Wednesday, April 4.
The meeting is scheduled for 1 p.m. to 2:30 p.m. in the Board of Supervisors' chambers on the first floor of the Lake County Courthouse, 255 N. Forbes St., Lakeport.
High-speed Internet access is a vital component for economic growth.
Today, many rural areas of California, including many parts of Lake County, are vastly unserved or underserved when it comes to broadband access.
CSU Chico’s Center for Economic Development and the Corporation for Education Network Initiative in California are leading the effort to create a broadband plan for each of the counties in the Upstate California Connect Consortium, which include Lake, Sonoma, Colusa and Glenn.
Once the plan is created, the goal is to then connect these individual county plans into a regional plan that will then provide the basis needed to access grant funding for regional broadband projects.
Funding for this project is provided through a broadband planning grant from the California Public Utilities Commission.
Agenda items for Wednesday's meeting include updates on infrastructure, technical planning, priorities and timelines.
Community members are invited to join in the continued effort to improve broadband access throughout Lake County by assisting in the development of Lake County’s Broadband Plan.
Here are three ways to get involved:
- Take the Lake County broadband survey – www.lakecountybroadband.org – and encourage your friends, colleagues, and neighbors to take the survey.
- Join the Lake County Broadband Alliance.
- Participate in the Lake County Broadband Planning meetings.
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Annexation discussion, housing element consideration on April 3 supervisors' agenda
LAKEPORT, Calif. – A discussion relating to the city of Lakeport's proposed annexation of S. Main Street/Soda Bay Road and the consideration of a new general plan housing element will go to the Board of Supervisors this week.
The board will meet beginning at 9 a.m. Tuesday, April 3, in the board chambers on the first floor of the Lake County Courthouse, 255 N. Forbes St., Lakeport. TV8 will broadcast the meeting live.
On March 13, the board discussed a proposed agreement between the county and Ruzicka Associates for a $27,000 feasibility study regarding a public water system in the South Lakeport area when issues about the study were raised by Lakeport city officials in light of city desires to annex the area.
At 10 a.m. the board will take back up the discussion on the feasibility study and also discuss the city's annexation proposal, which in recent months has led to disagreements and strained relationships between the county and city.
At 10:45 a.m. the board will consider a proposed negative declaration based on initial study for the adoption of and update to the housing element of the Lake County General Plan.
In a joint meeting of the board and the Lake County Planning Commission on March 27, the commission approved the document and recommended it to the board, as Lake County News has reported.
In an untimed item, the board will consider a resolution declaring an intent to adopt a resolution of public use and necessity regarding the acquisition of easements for the Southeast Regional System-Lift Station & Force Main Project. The resolution is a part of the process for ultimately acquiring the easements by eminent domain if necessary.
The full agenda follows.
TIMED ITEMS
9 a.m., A-1 to A-4: Approval of consent agenda, which includes items that are expected to be routine and noncontroversial, and will be acted upon by the board at one time without discussion; presentation of animals available for adoption at Lake County Animal Care and Control; consideration of items not appearing on the posted agenda, and contract change orders for current construction projects.
9:05 a.m.: Citizen's input. Any person may speak for three minutes about any subject of concern, provided that it is within the jurisdiction of the Board of Supervisors and is not already on the agenda. Prior to this time, speakers must fill out a slip giving name, address and subject (available in the clerk of the board’s office, first floor, courthouse).
9:10 a.m., A-5: Presentation of proclamation recognizing the importance of public awareness and understanding of the roles and responsibilities of counties and celebrating National County Government Month – April, 2012, “Healthy Counties, Healthy Families.”
9:15 a.m., A-6: Presentation of proclamation designating the month of April 2012 as Sexual Assault Awareness Month, April 5 as the Sexual Assault Awareness Day of Action, April 25 as Denim Day and April 10-16 as National Crime Victim Rights Week.
9:20 a.m., A-7: Presentation of proclamation commending Eric J. Hicks for his years of service on the Upper Lake Fire Protection District Board of Directors.
9:30 a.m., A-8: (a) Consideration of request to waive the formal bidding process and make a determination that competitive bidding would produce no economic benefit to the county; and (b) consideration of request to authorize the county administrative officer/purchasing agent to enter into an agreement between the county of Lake and EP Aeration for the purchase and installation of an aeration/air diffusion system for Holiday Harbor Marina.
9:45 a.m., A-9: Public hearing, consideration of submittal of an application in response to the 2012 State Community Development Block Grant Notice of Funding Availability.
10 a.m., A-10: Continued from March 13; (a) consideration of proposed agreement between the county of Lake and Ruzicka Associates for a feasibility study regarding a public water system in the South Lakeport area, in the amount of $27,000; and (b) discussion of city of Lakeport’s proposed South Main Street/Soda Bay Road Annexation.
10:30 a.m., A-11: Public hearing, consideration of proposed ordinance amending Article 1 Section 5-f.2 of Chapter 5 of the Lake County Code relating to the sale, use and display of fireworks in the unincorporated areas of the county of Lake.
10:45 a.m., A-12: Continued from March 27; consideration of proposed negative declaration based on initial study (IS 11-32) for the adoption of and update to the housing element of the Lake County General Plan (GPAP 11-03).
NONTIMED ITEMS
A-13: Supervisors’ weekly calendar, travel and reports.
A-14: Resolution declaring an intent to adopt a resolution of public use and necessity regarding the Southeast Regional System-Lift Station & Force Main Project.
A-15: Consideration of proposed Grant Application to Cal-EMA for Public Safety Interoperable Communications (PSIC) funding, in the amount of $70,000 (with a 25% county match) to purchase portable repeaters, mobile and portable radios and upgrades to Command Post, and authorize the county administrative officer to sign the grant assurances.
A-16: Consideration of request to approve out of state travel for Invasive Species Program Coordinator Carolyn Ruttan to attend the Aquatic Plant Management Society Conference, April 30-May 4, 2012, in
Westminster, Colo.
CLOSED SESSION
A-17: 1. Conference with Labor Negotiator: (a) County Negotiators: A. Grant, S. Harry, L. Guintivano, M. Perry and J. Hammond; and (b) Lake County Deputy Sheriff's Association, Lake County Correctional Officer's Association and Lake County Deputy District Attorney's Association.
A-17: 2. Public employee appointment, county administrative officer/clerk of the board.
A-17: 3. Public employee performance evaluations, information technology director and public services director.
CONSENT AGENDA
C-1: Approve minutes of the Board of Supervisors meetings held on March 27, 2012.
C-2: Adopt proclamation recognizing the importance of public awareness and understanding of the roles and responsibilities of counties and celebrating National County Government Month, April 2012, “Healthy Counties, Healthy Families.”
C-3: Adopt proclamation designating the month of April 2012, as Sexual Assault Awareness Month, April 5 as the Sexual Assault Awareness Day of Action, April 25 as Denim Day and April 10-16 as National Crime Victim Rights Week.
C-4: Adopt proclamation commending Eric J. Hicks for his years of service on the Upper Lake Fire Protection District Board of Directors.
C-5: Approve agreement between the county of Lake and TALX Corp. for unemployment claims administration services through April 30, 2014, at a rate of $0.76 per employee annually, and authorize
the chair to sign.
C-6: Adopt resolution approving Public Health’s application to the California Department of Public Health, Childhood Lead Poisoning Prevention Branch for the grant program for Fiscal Years 2011-12
through 2013-14, and authorizing the director of Health Services to sign said application and grant.
C-7: Adopt resolution approving the certification statement for the state of California Department of Public Health’s Community Nutrition Expansion Project Grant and authorize the board chair to sign said certification statement.
C-8: Approve first amendment to the agreement between the county of Lake and North Valley Behavioral Health for FY 2011-12 specialty mental health services, for an increase of $80,000, and authorize the chair to sign.
C-9: (a) Adopt resolution accepting gift of funds to help fund Lake County energy savings projects and appropriating said funds as unanticipated revenue ($8,000 from Pacific Gas & Electric); and (b) authorize chair to sign letter of appreciation to PG&E for the donation.
C-10: Approve request to waive 900 hour limit for extra help Eastlake Landfill Employee Darryl Prather.
C-11: Approve request to waive 900 hour limit for extra help construction inspector Richard Navone.
C-12: Approve memorandum of understanding between the county of Lake and the Lake County Superior Court for the administration of the Comprehensive Collection Program for court ordered debt, and authorize the chair to sign.
C-13: Approve memorandum of understanding between the county of Lake and the Judicial Council of California, Administrative Office of the Courts relating to the reimbursement of collection commission costs of up to $7,272 associated with the Court Ordered Debt Amnesty Program (establishing record keeping and AOC reporting requirements), and authorize the chair to sign.
LAKE COUNTY SANITATION DISTRICT BOARD OF DIRECTORS
C-14: (a) Approve easement deed and direct clerk to certify for recordation (APN 039-481-45 - One Shot Mining, LLC), and approve right of way agreement between the county of Lake and One Shot Mining LLC for the construction of the wastewater force main sanitary sewer line, and authorize the chair to sign agreement.
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