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Executive Summary:
This page contains video evidence, internal county correspondence, and municipal agreements documenting a multi-million-dollar taxpayer bailout of a private developer by the El Dorado Hills Community Services District (EDHCSD).
In August 2020, the EDHCSD signed an agreement legally releasing Parker Development/Serrano Associates from their obligation to construct the Village J District Park. At the time of this release, the developer faced a severe, inflation-driven financial shortfall, as the indexed cost to build the sloped, 12.5-acre park mathematically eclipsed the available cash in the governing Community Facilities District (CFD) fund.
Rather than requiring the developer to cover the deficit, the EDHCSD absorbed a $7 million to $10 million construction liability directly onto the District’s General Fund. This action constitutes an unconstitutional Gift of Public Funds (California Constitution Article XVI, §6) and is currently being used to falsely justify “fulfilled” infrastructure mitigations for new subdivision approvals by the El Dorado County Planning Commission.
To assist the County Planning Commission, independent auditors, and regulatory agencies in reviewing this evidence, please refer to the following critical timestamps proving the developer and the County had prior knowledge of the financial deficit two years before the 2020 bailout:
[01:54]: The Developer’s Legal Obligation County Auditor Joe Harn confirms that Parker Development legally acknowledged their obligation to build the Village J park in writing.
[04:11]: Lack of County Enforcement Auditor Harn warns the Board of Supervisors that the County has failed to designate an official to enforce 100% compliance with these development agreements, leaving the door open for the developer to bypass County oversight.
[04:51]: The Developer Admits the Shortfall Kirk Bone, representing Serrano Associates, publicly admits to a “math calculation” problem, noting there is only about $6 million left in the fund to cover multiple projects, including the massive Village J park.
[05:16]: The “Shut Up” Confession Realizing he is admitting to a massive financial liability on the public record, Mr. Bone states his lawyer would likely tell him to “shut up [and] be quiet” regarding the park’s finances.
(PDF of Joe Harn May 18, 2020 Email) 1. The Auditor’s Final Warning (May 2020) Three months prior to the bailout, County Auditor Joe Harn emailed the EDHCSD General Manager and Parker Development explicitly warning that while the developer is required to build the park, the indexed cap “may exceed the balance in the CFD.”
(PDF of County Planning Report Page 10) 2. The Unfunded Liability Transfer (August 2020) Despite the Auditor’s warning of a massive shortfall, the EDHCSD signed an agreement officially acknowledging that Serrano has “fulfilled all parkland dedication and parkland improvement obligations.” The District took raw dirt, legally released the developer from paying to construct the park, and hid the resulting deficit off the audited balance sheet.
(PDF of AGMT 18-54869) 3. The Control Sample: Standard Procedure Abandoned In 2018, the County forced this exact developer to sign a binding Subdivision Improvement Agreement and post a $3.46 million surety bond to guarantee the construction of roads for Village J6. The EDHCSD entirely abandoned this standard risk-mitigation procedure when it released the developer from building the adjacent public park.
This documented taxpayer bailout has severe implications for currently pending municipal matters:
El Dorado County Planning Commission (Village M5 Approval): The Commission is currently relying on the tainted August 2020 CSD agreement to claim the developer has fulfilled their parkland mitigations. Approving new subdivision maps based on an unconstitutional taxpayer bailout exposes the County’s CEQA and General Plan findings to severe legal challenge.
Independent Financial Audit (EDHCSD): CSD Management intentionally absorbed a $7+ million construction liability and subsequently hid it using a “land only” accounting trick. Auditors must evaluate this unrecorded liability against the District’s General Fund solvency and assess the Management Override of internal controls.
