Two top administrators at the Marin City Community Services District have announced their resignations, dealing the board a new setback as it stabilizes its finances.
The district’s fiscal administrator, Bruce Palmore, notified the interim general manager, Don Lancaster, that he was stepping down in an email on Sept. 15. Palmore said his last day would be Sept. 30.
“I believe we accomplished a lot and brought fiscal credibility to Marin City, especially with the county,” Palmore wrote.
Two days later, Lancaster sent an email to the district’s board announcing his intent to leave effective Oct. 1.
“It has been a pleasure serving Marin City,” Lancaster wrote. “We have made substantial progress over the past 16 months and I can confidently say that MCCSD is stronger today than it was yesterday.”
Neither Palmore nor Lancaster provided an explanation in their letters as to why they were leaving. Neither responded to requests for comment.
The Marin City Community Services District is a special district created by the Marin County Board of Supervisors in 1958 to provide recreation services to the unincorporated neighborhood. The district also oversees garbage services and street lights.
In fiscal year 2019-20, the district reported $1.3 million in revenue and $1.1 million in expenses. It is funded primarily through property taxes and grants.
Damian Morgan, chairman of the district’s five-member elected board, said he doesn’t know the reason for the resignations.
“The timing was a bit of a surprise because we’re still working through our financial position,” Morgan said. “But as the interim general manager you know that most likely it’s not long term.”
Lancaster has been interim general manager for 16 months. He is the district’s fifth general manager since 2018.
“Marin City is a unique community, and we’re under a lot here,” said Morgan, regarding the turnover of general managers. “Our board and staff are anticipating a very important financial budget meeting in the month of October.”
Morgan was elected to the board in 2018 as part of a slate of candidates that included Terrie Harris-Green and incumbent Royce McLemore.
“We stepped into a financial crisis,” Morgan said. “But to date we have made great headway, and we’re almost there. We’re all caught up except for a few in-house finance issues.”
Morgan declined to elaborate on what those issues are or what the district’s budget meeting next month will entail.
The district’s annual financial statements posted on its website show that in 2015, 2016, 2017 and 2018 the district’s expenses exceeded its revenue.
R.J. Ricciardi, the certified public accounting firm that audited the district’s 2018 financial statement, wrote, “We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Marin City Community Services District does not maintain accounting records sufficient to assure that all transactions are recorded.”
In 2018, the district board appointed a new interim general manager, Howard Smith, and laid off most of the district’s 28 staff members. Also in March of that year, Roy Given, director of the Marin County Department of Finance, began working with the district.
Given said in 2019 that at the peak of its financial crisis in 2018 the district was $125,000 in debt.
That year the district got back on track. Its revenue exceeded its expenditures by over $184,000, and in 2020 its revenues exceeded expenditures by $156,000. The district’s recent audits have been “unqualified,” or favorable.
“We have a surplus of over $200,000 at the moment,” Morgan said. “Payroll is being paid. We would like to be in a better state but as of now we’re OK. We’re looking to work in true partnership with the county’s Department of Finance to get through this transition.”
The district currently employs 10 people.
Supervisor Stephanie Moulton-Peters, whose district includes Marin City, said the county will assist the district if its board requests help, “as we do with other county boards when asked.”
“I really care about the CSD,” Moulton-Peters said, “and I do want to support them.”
Mina Martinovich, the county’s assistant finance director, said Thursday that she had so far received no request for assistance from the district’s board.
“The question is, in what capacity is the district seeking assistance?” Martinovich said. “In years past we did process their payroll on their behalf. But we stopped doing that effective calendar year 2020, and they began processing their own payroll.”
During the supervisors’ meeting last week, Moulton-Peters mentioned she has been meeting with the district’s board monthly to address a variety of issues.
Morgan criticized Moulton-Peters during the public comment period that followed.
“Unfortunately our meetings are a way of waiting us out to tell us what we want to hear,” Morgan said. “We’ve made no headway.”
At a supervisors meeting in July, Lancaster questioned whether the district was receiving its fair share of the increase in tax revenue that resulted from the creation of the Gateway shopping center in Marin City.
Lancaster declined to share what his specific concerns were after the meeting.
“I’ve looked into it, and in fact we had a meeting with the finance department and the CSD and provided them with information,” Moulton-Peters said. “The finance department has explained that they are receiving the money from the county that is due to them.”
Despite its challenges, Morgan said the district’s board is continuing to explore the feasibility of Marin City incorporation to make it the county’s 12th municipality.
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