Shasta County supervisors approved a three-year, conditional forgiveness schedule for Hill Country Community Clinic’s $300,000, zero-interest note after a motion for immediate forgiveness failed to receive a second.
Under the First Amendment to the note secured by a deed of trust, the County would reduce the principal by $100,000 on April 8, 2027; an additional $100,000 on April 8, 2028; and a final $100,000 on April 8, 2029, subject to conditions and any payoff-trigger event. The amendment extends the note’s payoff date to April 8, 2029.
The Board’s Oct. 13 meeting transcript shows the immediate-forgiveness motion received no second. Supervisors then approved the three-year schedule on a 4-1 roll call, with Supervisors Long, Harmon, Kelstrom and Plummer voting yes and Supervisor Crye voting no.
County staff told the Board the note was issued in 2007 with Community Development Block Grant funds to expand the clinic in Round Mountain. Staff said the clinic’s continued operation and service to vulnerable and low-income residents were conditions tied to the loan, and that repayment would return the money as restricted CDBG program income for housing rehabilitation and first-time-homebuyer loans. The County’s current cash position would not change because the money was disbursed years ago, staff said.
The meeting also addressed why the County was formalizing forgiveness now. A county official said the parties’ reported 2007 understanding was that the 15-year loan would be forgiven, but that intention was not documented in the original records. After researching the available documents, staff concluded the County did not have documented legal authority to forgive the note as it stood. The amendment creates a prospective path to relief while keeping the clinic’s public-benefit and CDBG-related obligations in place.
The executed amendment contains an unresolved drafting problem. Section 3 says that if a payoff-trigger event occurs “on or after April 8, 2029, but prior to April 8, 2029,” the clinic would receive $200,000 in relief. That is an internally impossible date range. The document separately lists the 2027 and 2028 thresholds and says the full $300,000 would be relieved if no trigger occurs before the April 8, 2029, payoff date, but the reviewed materials do not establish what legal language, if any, governs a trigger during the disputed period.
No corrected amendment, erratum, board-minute correction or replacement filing addressing Section 3 was found in the materials reviewed. The County’s accounting entries and the timing or classification of any write-off were also not established by the meeting record.
