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Sutter County votes to write off $234,968 in old CDBG loans to restore grant eligibility
Summary
The Sutter County Board of Supervisors unanimously approved a resolution to write off 13 legacy Community Development Block Grant loans totaling $234,968 after staff found missing or unrecorded deeds of trust that prevent collection and are blocking the county’s eligibility for HCD grants.
The Sutter County Board of Supervisors voted unanimously to accept staff’s recommendation to write off 13 Community Development Block Grant (CDBG) home-improvement loans totaling $234,968 so the county can regain eligibility for state and federal grants.
County staff and consultant Paul Ashby told the board the loans date from 1993 through 2009 and that many files lack recorded deeds of trust or have incomplete records. Staff said some loans are older than the original 30‑year terms, others were affected by foreclosure or bankruptcy, and some property owners did not respond to certified notices. Neil (development services staff) said the gaps were discovered in an external audit in 2021 and persisted through later audits, prompting action to clear the findings.
“Almost 40 years ago, it just wasn’t done the right way,” Supervisor Ziegmeyer said, adding: “This is taxpayers’ money right here.” Several supervisors said the county had exhausted legal options and that without recorded deeds of trust the county lacks authority to foreclose or otherwise compel payment.
Consultant Paul Ashby outlined the grant context, saying applicants can pursue substantial awards under the current Notice of Funding Availability. “You can go up to $3,600,000,” Ashby told the board, and he said roughly $3.3 million of that amount can be used for infrastructure and facility projects under typical NOFA allocations.
Board members discussed additional collection steps such as publishing debtor names in a newspaper and coordination with the treasurer‑tax collector for tax delinquencies, but staff said those measures would not resolve the CDBG eligibility problem. Accepting the staff recommendation, Supervisor Baines moved to adopt the resolution and Supervisor Boone seconded. A roll-call vote recorded all ayes and the motion carried.
The resolution’s purpose, staff said, is administrative: to allow the county and state HCD to close out the audit findings and restore Sutter County’s ability to apply for and receive CDBG and other HCD-administered funds. Staff said the county has since implemented more rigorous loan‑administration procedures to prevent similar recordkeeping lapses in future CDBG projects.
Next steps described by staff include submitting documentation to HCD and updating the board in future reports about the remaining loans and the county’s grant-application status.
