Under Water

by Mark Scaramella, November 16, 2011

In the afternoon following the tumultuous Board meeting on November 1st when the Board of Supervisors imposed a drastic 12.5% cut on about 750 of its lowest paid workers, CEO Carmel Angelo told the Board that bond rating agency Standard & Poor’s had given Mendocino County a BBB- credit rating, one notch above junk bond status.

Which means the money boys had decided that even though the County had forced wage cuts on its workers and had developed a plan to pay off its long-term “Teeter debt,” Mendocino County was still seen by the money mavens as a bad investment.

Teeter has long tottered. It's a means of borrowing against projected County income, mostly delinquent property taxes. The County has spent about $16 million more over the past 15 or so than it has gathered in delinquent property tax payments and penalties, and now has to pay it back in installments. Whether or not the County can do it remains to be seen, but the attempt to do it will come at the expense of fair compensation for its work force while the County's general un-credit-worthiness, as judged by the same people who brought us the “banking crisis,” will remain.

The low credit rating raises the interest rates the County must pay on its multi-million dollar, long-term debt.

To offset those higher interest rates, the County then made an attempt to refinance its long-term debt at a lower interest rate. But since the County’s credit rating is low, the banks require that the County obtain “bond insurance.” So Mendo’s “senior financial staff” and its highly paid bond consultant contacted “Assured Guaranty” the nation’s largest bond insurance company for a re-fi. Last week CEO Carmel Angelo reported that the bond insurance company had turned Mendo down flat, and probably had a good laugh at the naivete of the outback rubes for even asking.

“The one and only bond insurance agency that is the best agency for us to work with, Assured Guaranty, has denied our bond insurance,” said a glum Ms. Angelo. Angleo went on to say that Mendo's crack financial team found the rejection “quite surprising to us and for everybody involved. Why did this happen? We can assume, and based on comments in our telephone conversation, we certainly know all the issues that we talked about already — our Teeter debt to the General Fund, the fact that we anticipated a savings with wage concessions and they didn't come in on time. So all of those factors we believe are some of the deciding factors. [All two of them, actually.] However, we will be doing — we have asked for a phone conference with Assured Guaranty to discuss this further and really it’s a learning experience for us. Is there something that we really need to look at? We know our credit rating is still a BBB-minus. We had anticipated that our credit rating would go up this year. It did not. Standard & Poor's thinks that if we continue on the path that we're on [i.e., cutting wages and jobs and paying off the Teeter debt with money that could otherwise be used to pay for staff and salaries] that our credit rating should go up next year. But at this point in time it was a disappointment for us and we will be coming back to this Board at some point to ask to have this as an agenda item.”

Supervisor John Pinches was prompted to comment: “I think it's very disappointing that we spent $28,000 basically for a telephone conference call. I rest my case.”

CEO Angelo corrected Pinches. “It (the consultant and the phone call) was approximately $14,000,” she said.

Angelo then informed the Board that at least 18 additional positions will be eliminated next year. “It was clear that this Board wanted to see more long-term vacant positions eliminated,” the County's CEO explained. “So we will be discussing this further next week when we do our first-quarter report to the Board.” Real human beings will be eliminated next year too, of course.

* * *

Next up was an update on the status of the new Mendocino County Courthouse anticipated for downtown Ukiah. Ms. Angelo advised the Board that an Environmental Impact Report was being prepared for the two primary sites decided by the State’s Court Administration Office in San Francisco, and out of the box Mendocino County has Bay Area-based yuppos deciding everything from site to design, and you can be sure the design will be Neo-Bunker. (Security, you see.)

The proposed monstrosity will either be plunked down at the County library site a block east of the current courthouse or the North Coast Railroad Authority’s semi-abandoned depot on the railroad tracks another couple of blocks further east.

Even though the funding for a series of new courthouses across the state has been cut, the planning process for the Mendocino County Courthouse is proceeding as if it will actually be built — to the tune of some $120 million and counting, that fine sum coming from the fines and fees paid by everyday citizens and not the vaguely free money claimed by the structure's sole beneficiaries — The Black Robes.

Supervisor Pinches: “As far as this courthouse EIR, I think there is a major push all the way from the North Coast Railroad Authority to push for the site at the depot because basically the NCRA (an equivalently massive boondoggle) is committed for its proceeds from that sale to pay off some loans.”

Pinches went on to rightly point out that if the distant city yuppos decided that the new courthouse should go where the library now sits the County would have to build a new library, and there's no money to do that. “So I don't think anybody in the Ukiah Valley wants to see the Ukiah library demolished. If they pick that site, and probably the people making the decisions at the state level could care less about where it goes, we should at least submit a letter commenting on how it will affect our library system.”

Supervisor McCowen said he agreed, adding that since the state would have to pay for relocating existing entities he thought it unlikely the library site would get the nod. McCowen also said he was worried about what would happen to the old courthouse which, if abandoned, would mean two large, crumbling structures in Ukiah's crumbling downtown, the courthouse and the abandoned Palace Hotel, plus the new ugly courthouse wherever it ends up. (Maybe if the State picks the library site, the County could simply move the Library to the old courthouse!)

Pinches: “It's my personal opinion that I don't think the state is going to move forward with a new courthouse in Mendocino County. We'll see. But that's my looking into the future.”

* * *

Most of the rest of the day was spent discussing what's left of the water agency, reduced now to one part-time employee, hydrologist Dennis Slota who works out of Planning and Building. (See Off The Record, for some Water Agency notes.)

Supervisor McCowen suggested defunding the planning for Scout Lake and for the Coyote Dam-raising feasibility study, but leaving them on the list on the off-chance funding is found someday. The items should be retained as items for the future, McCowen said, “even though we may not be devoting resources to them.” Other organizations have responsibility for part of the funding of the dam raising feasibility study anyway, which has been estimated to be in the hundreds of thousands of dollars.

McCowen also suggested eliminating the Ukiah groundwater study. “I think the county should drop that. We should not bear the whole cost.” McCowen also proposed eliminating the remainder of the County’s contribution to maintaining the stream flow monitoring gages on the Navarro and the Noyo. “Why is the stream gauge monitoring the county's responsibility when there are other entities out there that are benefiting directly by those gages?” McCowen asked.

In general, most of the proposals to trim down the active Water Agency tasks (the Board of Supervisors is also the County Water Agency, even though they have very little to do with water, legally or financially) were approved, but no actual vote was taken. The subject will get a final formal vote in an upcoming meeting.

But that didn’t stop Supervisor Pinches from launching into a general complaint about the overall water situation in the northern part of the County: “I'm kind of frustrated because this whole process basically is kind of Ukiah Valley-centric,” the North County supervisor grumbled. “When you look at what's really going on in all of Mendocino County, our water quality and our water supply is going away because of illegal diversions. [Presumably Pinches was talking about marijuana growers, but he never came right out and said that.] I mean, I would venture to say that that not tons of fertilizer, but hundreds of tons of fertilizer, maybe thousands of tons of fertilizer, and similar amounts of pesticides and all sorts of chemicals are in our waterways. There was a high school kid who did a study on a small stream out of Willits and maybe some of you read about that. [“The Killing of Alder Creek,” by Tim Stelloh, AVA, December 30, 2009, about 14-year old Bryan Pearn of Willits and his highly praised efforts to document why Alder Creek outside of Willits is dry.] It's really devastating. I mean, there was like 40 or 50-some illegal diversions on that one little stream. It used to be a trout stream, but now it's a dry stream down there. A high school kid did that study. Here we have a high school kid in Willits who did a study to try to bring out the importance of what's going on there to our waterways and yet we talk about it and law enforcement says they will make a priority out of illegal diversions and all this. We have National Marine Fisheries, all these other agencies, Fish and Game, and virtually what I'm seeing is nothing being done about it and were talking about— there's a big controversy with the Eel River diversion coming through Van Arsdale. If you go down the Eel River you don't have to go very far before you can count up more one and two inch pipe diversions that add up to more than the whole diversion that comes through the tunnel! But yeah, it goes on and on and on and I feel frustrated here sitting— It's like we're, we're trying to pick up a crumb on a big auditorium floor. You know, that's what we're dealing with! We are losing our water supply and our water quality! We are losing it! It's almost gone! The Eel River this spring had as much water in it as there was in a drought year because there's a lot of people getting the benefits of that water. Are we going to wait until all these rivers are just silt and dust? You know who benefits from our water? In Mendocino County? Humboldt and Sonoma County! They are the real beneficiaries of our water! But we are not protecting our watershed. I'm not against people using water, but you know a grape grower has to go through the permitting process to use the water so other people should go through the same process. In my lifetime I've lived in the hills and I see that streams that were nice trout streams when I was a kid the water now doesn't even reach the main Eel River. There's no water in them in the late fall because it's all being used! Anyway, that's a real issue and we're sitting here talking about and the real issue is that our water is going away. And it's being polluted. I mean, I'm surprised that the environmental community isn't— When they go to all these stores and see these stacks, these big stacks in the spring of the year, pallets of fertilizer and pesticides and everything. That's going directly into our waterways. But yet our environmental community doesn't even mention it. I don't get that.”

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