Run For Cover

by Mark Scaramella, December 31, 2008

The board of supervisors, two of them departing, held a "strategic planning" workshop on December 15th. The County's twenty or so department heads attended. The County's brain trust had assembled to discuss their "accomplishments" and to consider Assistant CEO Alison Glassey's "action plan" for, presumably, more accomplishments.

But County accomplishments, of which there were nearly none by any adult standard and some were clearly negative, shouldn't have taken longer to list than Glassey's alleged action plan, the latter consisting of workshops and meeting, known in the outside world as bureaucratic paralysis, but no one paid much attention to anything but supervisor Wattenburger whose clinical-quality paranoia was the whole show.

Strewn among his typically rambling remarks, Wattenburger got everyone's attention when he suddenly volunteered, "Someone mentioned insults, safety, etc. and as we had an incident earlier in the year of an actual threat that was conveyed to us [an unnamed man allegedly pointed a finger to his head while looking at Supervisor Pinches] I'd like to see somehow in these tough fiscal times that safety for both the board members and public be improved in the board's chambers as a direction into the future. We talked about that several months ago and I hope that continues... I hate to say it and I hate to admit it, but I was packing a gun at a lot of board meetings and it was not a situation that I enjoyed. But in one instance I was glad I had the safety net right underneath my desk and I'm sure a certain supervisor [Pinches] feels the same way that he was glad I had it also."

Pinches, who is not crazy, and seems to be the only all-the-way-sane supervisor of the five, replied, "I don't know. I've never seen you shoot."

As the room dissolved in laughter, Pinches continued, "Well, Mr. Chairman, that threat you were referring to in the board room, I didn't take it that seriously. I've been shot at twice in my life and that guy didn't even have a gun, so I wasn't too worried about it."

Wattenburger came back with, "I'll put you in front of me, then."

And everyone laughed again.

But the news that a person who imagines threats to his safety regularly carried a gun to public meetings wasn't a laughing matter.

Wattenburger doesn't have a concealed weapon permit. He knew he was violating the concealed weapon law because he said he was operating outside the law last year on KZYX. The Ukiah-area supervisor retired early from CalFire on a mental stress disability. Wattenburger has previously claimed, with no confirming evidence, that he and his wife have been threatened. Wattenburger did not report these threats to the police, but he suggested they originated with (1) pot people, or (2) opponents of the proposed mall north of Ukiah. In other words, hippies crazier than him.

District Attorney Lintott would not return media calls asking if she intended to prosecute Wattenburger for the misdemeanor offense of carrying an unpermitted weapon.

Ukiah Police Captain Trent Taylor told the Press Democrat: "It's not illegal to simply say you have a weapon."

However, brothers and sisters, if one of us were to walk up to a cop and say, "Officer, I'm carrying a loaded gun," we could expect to be loudly and repeatedly accused of intercourse with our mothers, handcuffed, thrown to the pavement, picked up and thrown to the pavement again by the entire Ukiah PD while Officer Hoyle trampolined our heads and the Sheriff's Department lurked in the background as "backup."

Having confirmed to the world that our supervisors may be America's wackiest elected body, and Wattenburger having announced he's ready round the clock to commence firing, the rest of the "strategic workshop" was anticlimactic. It was little more than an opportunity for department heads to tell a disbelieving public — the six people in the County who pay any attention to County business — what a swell job they're doing.

Mendocino County's "accomplishment" bar, you won't be surprised to learn, is about as high as a snake's belly.

A few examples:

Assistant CEO Allison Glassey said she was "addressing" the marijuana issue and for "working on" the General Plan.

"We have received well over 200 written letters on the General Plan," said Glassey. "Normally we'd expect about 50. Each letter represents ten or more people, so comments may be in the thousands."

Glassey failed to note that the flood of general plan letters are in living fact an indication that her fiasco of a long-delayed, multi-million dollar consultant-driven boilerplate of a General Plan Update is so appallingly deficient that an unprecedented number of County residents feel the need to comment on it.

DA Lintott grandly claimed credit for "prosecuting murder cases," adding that her office has been "inundated with marijuana cases."

Health and Human Services Director Carmel Angelo claimed credit for, among other things, "on-line dog licenses."

In a normal community about here someone would say, "Excuse me, but these are accomplishments?"

General Services Administrator Kristin McMenomey claimed credit for doing an evacuation drill and, to be fair to a capable person, the County's new microwave system, the latter a genuine accomplishment.

Chief Probation officer Wes Forman claimed credit for "improved on-time reports" and increased security at the reception desk.

Undersheriff Gary Hudson got a big laugh from the management team by sarcastically declaring, "The Sheriff's office would like to thank the largesse of some of our more well to do criminals in the county for helping to support a number of initiatives that were started years ago."

Hudson was referring to his office's large increase in pot-related asset seizure money, most of which assets are not returned even if charges are dropped or the defendant is acquitted.

In addition to funding part of the County's new microwave system, asset forfeiture proceeds from pot growers have funded cameras in patrol cars and a digital recorder at the jail's booking office. (The Sheriff might consider publishing the audio transcripts of booking procedures to go with his wildly popular on-line booking photos. Bits of dialogue to go with the photos would be a terrific show!)

County Clerk Recorder Susan Ranochak complimented her staff for holding elections, adding that the assessor's office processed over 300 assessment reductions in 2008.

"There's no good news on that front," said Ranochak. "It's been a difficult year for revenue generation."

Human Resources Director Linda Clouser claimed credit for having "successfully negotiated bargaining unit contracts" for county employees, the so-called "Confidential Unit," the Management Association, and the Department Head Association.

That's right, Mendocino County's highly-paid department heads, including Clouser, are a "bargaining unit" just like the staff and line workers.

According to the "successfully" negotiated agreement (available on line at the County's Human Resources department website), department heads — whose base pay is from $90k to $120k per year — get perks the employees union could never even dream of: a deferred compensation match up to 4% of salary; a $1500 training slush fund; $2500 towards purchase of a personally owned computer; a $250 per month car allowance; longevity pay for over five years of service at 2.5% of salary for each five years service; 48 hours per year of personal time off; 280-440 hours of vacation (440 hours kicks in after 15 years of service — 440 hours of vacation is 11 weeks!); up to 60 hours of pay in lieu of vacation; a pension at 2% of salary per year of service after age 57; 48 more hours of "flexible time off," and eight hours of extra sick time to attend a wellness class.

That's almost 14 weeks of paid time off per year. It's almost as if the County is paying their department heads to stay home.

This is an accomplishment in a county looking at bankruptcy and layoffs?

Supervisor Colfax, as usual focused on himself, gallantly acknowledged that he'd been "on the short side of many 3-2 votes," then complimented firefighters for taking his Boonville home off the fire evacuation list during the lightning fires.

"You have done a fantastic job of providing services to this supervisor," Colfax declared.

The closest thing to a negative word came when Supervisor Pinches objected to Ms. Glassey's proposal to hold "educational workshops" in 2009 saying, "It's the responsibility of individual board members to be informed."

Which is an important point to make in a county that devotes endless public hours to absolutely pointless blah-blah sessions which no public employee or any other more or less sane person would even think of attending unless he or she was paid to be there, and paid well to be there.

At the end of the meeting during public comment, Supervisor-Elect John McCowen asked the group, "In addition to improvements to the budget process, do you have any insights on what didn't work so well and what additional improvements could possibly be made? Any room for improvement?"

The only response was from Supervisor Pinches.

"We have to straighten the budget out first," said Pinches.

Nobody else could think of a single thing needing improvement.

* * *

On December 17, Mendocino County's retirement system board decided to move about 50% of its bond fund holdings from previously high-yielding Dodge & Cox to Pacific Investment Management Company — Pimco, the largest institutional bond fund manager in the world with over $790 billion in total assets managed. You need a minimum of $5 million just to get a return call from Pimco.

Since June, the County's pension fund has lost $82.5 million. The fund previously had around $350 million. There is now $250 mil, more or less, remaining, down about 30%.

The County expects to lose another $3.5 million by selling the devalued Dodge & Cox bonds and giving them to Pimco.

Pimco account manager Mark Romano told the retirement board that his firm had deftly sidestepped the subprime mortgage problem by realizing early on that the loans were very risky.

"Our research showed that there was nothing behind those housing loans," said Romano. As a result, according to their own analysis, Pimco has outperformed the bond fund management company index most of the quarters since 1990.

Pimco's newest strategy is to "invest in companies that are under the government umbrella," said Romano. "We are comfortable that these organizations will be the ones which are bailed out. The government wants people to invest in these companies because we are all in this together."

We are?

And which companies was Romano referring to? The very banks who brought the country's economy to its knees, then blackmailed Congress into bailing them out, thus making the average American liable for the blunders and thefts of multi-millionaires.

"These are remarkable opportunities," said the investment expert Romano. "Some people are afraid to take advantage of this."

Not Mendo. Here's our money, Mr. Romano, and if that's not enough we can option our moms.

Romano also told the board that because of the $700-plus billion bailout money Bush gave to Wall Street the previously frozen credit markets have "begun to thaw. There is at least a drip," said Romano. "The money markets are starting to function. But the equity markets (the stock market) are still crazy."

Retirement Board co-chair and Mendocino County Jail commander Tim Pearce asked Romano how "comfortable" he was with the pending political change in the federal government.

"Isn't Obama going to rescue the entire world and the stock market will be back to 14,000 by February?" Romano asked in the ironic tones of a cretinous Fox News consultant. "Actually, " Romano continued, "2009 will be rough. The economy is very damaged. We had been exploring emerging markets in the second and third worlds which could bail out the developed world. Can China turn itself into an internal consumption model, purchasing more motorcycles, cars, carpets, washing machines and so forth? Will they be able to do that?" Romano rattled on in serial statements of the fiscally obvious, obvious that is to readers of the Wall Street Journal. He didn't provide anything new.

Romano said that his company is avoiding all forms of high yield and junk bonds.

"There are massive amounts of defaults with many companies now," said Romano. "They pay higher interest, but this is not the time for high-yield investments. If that changes in the future, then high yield might be better."

In other words, even if the economy doesn't tank as seems likely, yields will be substantially lower for the foreseeable future.

Nevertheless, retirement executive Jim Andersen insists on using what he calls "five-year smoothing" to forecast the future. Five-year smoothing means that you project the future based on the average return for the last five years, which, in the five years prior to June of 2008, were abnormally high and not likely to be repeated any time soon.

In answer to a question from Supervisor Kendall Smith, long time retirement board member Tim Knudsen pointed out that the county has to make up the difference if the investment returns are below benefit payout levels. For the last few years the pension fund has projected that they would get at least 8% return on their investments. At present they're getting 4% and the 4% is sinking towards 3%.

"That difference creates an increased unfunded liability," said Knudsen flatly.

Translation: revenues are down, reserves are dwindling, benefits are going to be cut, coverage will be reduced, costs will go up, and rates for retirees will go up. But hey! Andersen says it'll all average out because the economy is not going to stay down over a five year period.

At the end of the meeting John Sakowicz repeated his question from last month: What is the total cost of fund management? Administration? The County's sole-source financial consultant Peter Chan? And the various fund manager costs?

Knudsen told Sakowicz that he would have to make an appointment with Andersen to get those questions answered, adding that "at the present time" they do not contemplate another pension obligation bond. Knudsen also said that there is enough money coming into the system from interest on savings and payments from the County and current employees to cover the pension payments to existing retirees, excluding their healthcare.

"There is no need to issue a pension obligation bond in the future unless it makes sense to do it because of interest-rate advantages which could be realized," said Knudsen.

When Sakowicz followed up with a request that his meeting with Andersen be on the record, Andersen said, "We can discuss that."

Supervisor Smith asked why the information that Sakowicz wanted wasn't already public information. "Can't he just be given that?" she asked.

Knudsen replied that they are just finishing up with their outside audit for this year and that report will have all the financial information on the retirement system — "in January or February."

Andersen said that he is "trying" to be more transparent, and will be meeting with a consultant who specializes in public information, websites and business practices (spending retiree money). He also said that he is working with Peter Chan to compare Mendocino County's system, rates of return, investment policies and performance with the other independent retirement systems in California and he "wants to" make it all available to the public.

When told by another board member that that was what then acting-administrator Knudsen said last year and nothing happened, Andersen replied that he is still working on priorities and resources and needs Board direction to focus on informing the public as opposed to doing other tasks.

* * *

According to Supervisor John Pinches there are hundreds of thousands of dollars in savings to be had if the County's remaining five solid waste transfer stations are turned over to Jerry Ward, owner of Solid Wastes of Willits who already operates the majority of the waste hauling and recycling operations in Mendocino County.

Ward has given a proposal to Mendocino County to assume responsibility for the five County-operated sites, have them open for more hours, offer recyclable buy-back services and expand the transfer station on the County's South Coast, a project which the County was projecting as a near-term cost but which would be done at no additional cost if Ward takes it over.

At the December 15 Board of Supervisors meeting County CEO Tom Mitchell told the Board that at the present time he is "discussing" the idea of privatizing the South Coast transfer station with Ward — i.e., he's looking into it — but hasn't come to any conclusions yet.

If given the South Coast transfer station Ward says he'll expand it to accommodate bigger trucks which will give customers more options and lower his operating costs. In addition, Ward points out, South Coast trash is now being hauled to a Sonoma County landfill which is filling up and could refuse to accept the trash with only a few months notice at any time. Ward on the other hand has a long-term agreement with the huge dump at Potrero Hills with favorable tipping fees.

At the moment, because of the depressed economy, recyclables have dropped in value to the point that it's no longer economical to recycle them. But Ward says he'll continue to accept recyclables, although no particular pricing schedule has been offered. Ward hopes that the economy will improve and recyclables will return to profitability.

During public expression Bob Parker, a senior County transportation department employee, complained that the Solid Waste privatization proposal was not a timed item on the Supes agenda, saying that the people who will be most affected by it should have an opportunity to provide input. He also described Ward's proposal as "very light, not a basis for agreement at all. Everything being said here is opinion, not facts. The analysis should include employee retirement benefits, profits, etc." Parker agreed that Solid Waste of Willits has a good reputation but that the upshot of the privatization could be a 20-year monopoly and therefore should be put out to bid with a formal request for proposal. "I object that County Counsel ruled that no competition is necessary but she won't share that opinion with the public," said Parker.

Apparently, in the past, previous attempts to get other bidders for Mendo's trash have produced little results. But a formal RFP does seem like a proper thing to do.

Supervisor David Colfax thought the County should simply negotiate an agreement with Ward.

Supervisor John Pinches has been the primary force behind privatizing the county's five remaining transfer stations because the north part of the County, Pinches' district, is already operated by Ward at a net cost savings. Pinches wanted Mitchell to take up the entire privatization proposal, not just the South Coast.

CEO Mitchell promised that he would finish his analysis of the South Coast portion of Ward's proposal in 60 days — i.e., by the end of February.

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