FELTON >> In 2014, the Felton Fire Protection District illegally sold land for less than the market value, depriving the district of revenue, according to a civil grand jury report released Tuesday.
The 11-page report details how the district board sold an unbuildable 7,900-square-foot parcel at El Solyo Heights and Hacienda Way for $2,365, without public notice. Similar lots in that neighborhood sold for seven times that price in 2014, according to the report.
Unsolicited, an owner of a neighboring parcel offered to buy the parcel for $1,500. Instead of offering the sale to other public entities first, as state law requires, the district asked other neighboring owners if they wanted to purchase the parcel. No one did, so the district countered the offer, which was accepted.
The grand jury found that the district violated other state laws. It didn’t publicly list its land each year. Prior to selling the parcel, it didn’t check the Santa Cruz County General Plan. Also, according to law, public entities cannot make a gift to individuals. A land sale well under the market value may count as a gift, the report contends. Despite the violations, the sale remains valid, according to state law.
Jeff Palsgaard, the jury foreman, said that fire districts don’t have “extra money.” For example, the Felton Fire Protection District held a pancake breakfast fundraiser in May.
“If you’re selling something potentially below its market value, then the public in turn is missing out on using that funding for other purposes that the fire district could use it for,” Paalsgard said.
The report also said that the buyer had a previous working relationship with the district’s fire chief, Ron Rickabaugh, so the board was not impartial in the sale.
Rickabaugh, a 36-year Felton resident, said that is untrue. He coached high school football with the buyer more than a decade ago, but that did not influence the sale. All land sale decisions were made by the board; he merely executed them as staff, Rickabaugh said.
The land was a gift to the district from its previous owner. Rickabaugh said for years, he would write the owner, asking him to maintain the land, as it was overgrown with brush and was a fire hazard.
“We didn’t go into it thinking, let’s get this property and somewhere down the road, we’ll make a monetary gain. So the fact that it sold for what it did sell was a gain to us anyhow because it was free,” Rickabaugh said. “It was gifted to us and we just maintained it and kept it free and clear (of brush).”
“It was a burden,” he said, adding that crews spent three days per year at the parcel, clearing brush. Plus, the district paid an insurance premium.
Mark Lilly, the district’s board president, said it’s unlikely this situation would happen again, since that lot was the district’s only surplus land.
“Felton Fire isn’t in the business of buying and selling land,” Lilly said. “We’re in the business of public safety.”
Lilly added that district is financially “very healthy,” since it’s mostly volunteer-run. Its annual operating budget is roughly $680,000.
“Even if we got a little more than what we sold it for, it certainly wouldn’t have changed a thing in the big picture of our financial picture,” Lilly said. “It’s a tiny drop in the bucket.”
The Santa Cruz Civil Grand Jury investigates local governments, county facilities, special districts and schools. Eight reports have been released so far this year and the last two reports are due this week.
The reports have tackled security and medical care at Santa Cruz’s Main Jail, the death of Krista DeLuca in jail, transparency problems in Soquel Union Elementary School District, problems with the County Mental Health Advisory Board, county retirement costs, civil asset forfeiture, the county Domestic Violence Commission and school safety and emergency plans.
June 21, 2016
Santa Cruz Sentinel
By Kara Guzman
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