LAKE COUNTY, Calif. – Lake County agencies and organizations are asking Lake County to come together for children during the month of April 2012.  

As part of the national Week of the Young Child celebrated and the nationally recognized Child Abuse Prevention Month, Lake County is honoring young children and all those who make a difference in children’s lives with an Advocacy Walk and Children’s Festival, to be held Saturday, April 21, in Lakeport's Library Park.

This free event begins at 10 a.m. with a special ceremony and advocacy walk, and continues throughout the day in the park with free activities for children, and local entertainment including high school bands, DJ Dre, and other entertainment groups.

“All young children need and deserve a safe childhood as well as high-quality early learning experiences that will prepare them for life, and Lake County has a great opportunity to do our part to help young children and raise awareness by participating in these special Lake County Cares for Our Kids events,” said Shelly Mascari, director of the Lake County Child Care Planning Council.

To register for the walk or sign up for a booth, visit www.lakecoe.org and click on “Lake County Cares for Our Kids under Current News,” or call 707-262-4162.

The first 100 registrations will receive a free Lake County Cares for Our Kids T-Shirt.

Additional efforts are taking place throughout the month, including a special Lunchtime Learning presentation from Child Welfare Services, identifying the “Signs of Safety,” a fresh perspective on the strategies used to identify, strengthen and support at-risk families.

There is no charge for this special presentation held at 12 p.m. on Thursday, April 26, at Lake County Office of Education. Visit www.lakecoe.org/calendar , and click on the event for more information and to register, or call 707-262-4146.

The Lake County Board of Supervisors also will issue a proclamation at their board meeting scheduled for 9:15 am, April 17, at the Board of Supervisors Chambers in Lakeport.

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.”

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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.

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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.

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .