Mendo Budget Jumbo Mumbo

The proposed Mendocino County budget is written to hide the county's true fiscal plight. It also pretends that the austerity budget will work and that it's fair. But its overblown prose, larded with impressive-looking but meaningless charts of accounts and deceptive statistics isn't likely to fool anybody who takes the time to read it.

Starting in August, the Supervisors will begin formal hearings on this bogus document. In reality, "budget hearings" mean that the Supervisors will devote a couple of weeks in their big leather swivel chairs listening to their overpaid department heads drone on from prepared statements about what a swell job they're doing and how miserly they are in spending public money. 

Some department heads indeed do a good job, some don't, but the supervisors come and go, and the county's bureaucrats never leave -- pretty much the same crew of administrators has been in place for twenty years.

Candidates for summary dismissal include the two men who prepared the coming year's fiscal plan, County Administrator Jim Andersen and his deputy administrator, Bruce Mordhorst. The entire upper echelon of the county's historically troubled Department of Social Services should go, as should much of the ever larger, ever more ineffective Department of Mental Health. The redundant Mendocino County Solid Waste Authority has always been a solid waste of public money created to satisfy the private interests of Supervisor Shoemaker, and is the second of two garbage agencies in a county of about 90,000 people.

We've appended an initial roster of proposed cuts; we mention the above as among the least defensible areas of local spending, and mention the two administrators as the two individuals most responsible for poor fiscal planning and the kind of easy over nepotism characteristic of most Mendocino County bureaucracies.

This is the county whose supervisors recently wondered, "Where did these 400 new employees come from?" 

The supervisors themselves have consistently set a profligate example, granting themselves and their department heads large raises based on a bogus study they commissioned from an outside "consultant" to tell them what they hired him to tell them -- "We need to pay ourselves more to reward excellence and hard work." The assumption is false.

Mendocino County is broke and getting broker. It's only partly the state's fault, but self-interest and casual profligacy reign here at home, too, as they do at the state and national level. The county administrator tells us that vast, distant cataclysms disappeared Mendocino County's money; he and the people who supervise him are not responsible. It's out of their hands.

True, but only partly true.

CAO Andersen begins his message to the Supervisors with a fatuous, big picture analysis of the fiscal situation which is not only wrong, but is of no value in explaining Mendocino County's projected shortfall.

"During this past year, economic recovery stalled and sputtered in large part due to a lack of certainty relative to the United States' continuing efforts to combat terrorism emanating on [sic] our own soil..."

Untrue. The national administration has cut taxes, and continues to cut taxes because it wants to disencumber government of responsibility for social programs, environmental protections, business regulation, and increased defense spending. The Bush administration's deficit spending is harming the national economy as it affects ordinary people and local government funding, but that doesn't mean that heedless local spending characteristic of Mendocino County isn't partly responsible for its projected deficits.

Andersen continues:"...as well as from Afghanistan and other nations. In addition, our nation engaged in a lengthy and divisive world debate regarding the need to use military forces in Iraq, and the preparation for and execution of that war."

Divisive? Lots of blanded down Mendolanders of the secure sectors of the middle-class believe that debate is inherently "divisive" and, therefore, by definition bad, ten thousand years of productive adult argument notwithstanding. Besides which, the international debate over American foreign policy isn't so much a debate as it is a nearly global expression of fear at what Bush's unilateral, pre-emptive military policies are likely to do to international stability.

"During this period, personal and institutional investors remained cautious, thereby causing a stagnation of economic activity. In short, investors 'held their breath' for the better part of the 2002/03 fiscal year, unable to foresee the outcome of world events and the impact that such events would have upon their economic decisions."

Wall Street is only one of many economic indicators of relative economic health, but in the context of a badly managed Mendocino County government, not particularly relevant.

"Since the end of the war with Iraq, economic indicators have been providing mixed messages. While job losses continue to occur, and the unemployment rate has reached its highest level in many years, the major equity markets appear to have stabilized and are slowly climbing in their aggregate value."

The Iraq war is not going to end any time soon. Things are bad, people are losing jobs all over, but the stock market's going back up! And then down, and up and down, and sometimes sideways. So what? Again, Wall Street is a general indicator, not a specific one, and certainly no Mendo indicator. 

Andersen implies that there's no need to do anything differently here at ground zero Ecotopia because when the stock market "recovers" everything will be fine in Ukiah, Gualala, Covelo, Branscomb, Willits, and Yorkville.

"In a recent message, Federal Reserve Board chairman Alan Greenspan expressed his opinion that the United States economy will begin to recover in a more robust fashion."

If Greenspan told the truth -- that even Big Capital thinks Bush's economic policies are running the economy onto the rocks -- the American economy would immediately collapse like the gigantic Ponzi it is. You can't borrow forever while you spend more and tax less. The furriners who are putting up a third to half of the money that now finances America's debt will cease lending US money as soon as it becomes evident we can't finance even more debt. The national economy under Bush is like credit card bingeing on a local, state and federal level. Eventually, you can't get another card because you can't pay for the ones you've got.

Listen up, Andy. Your Big Think opinions are the intellectual equivalent of derivatives, and they don't absolve you of responsibility to administer sensible, prudent fiscal policies here in Mendocino County.

"At the local level, we will continue to watch carefully during the upcoming fiscal year to discern the 'trickle down' ramifications of international and national events, and their resultant economic consequences on our own financial condition."

Only a $100,000-plus Mendo administrator would say something as silly as "discern the trickle down." Let us know in time to put on our rain hats, okay?

"Finally, the State of California has amassed an almost unimaginable projected budgetary imbalance of some $38.2 billion. The amount of this budgetary shortfall is approximately fifty percent (50%) of the combined budget deficits of the other 49 states, and its dollar magnitude is only surpassed in Gross National Product by thirty-nine (39) countries in the world. The impacts to Mendocino County as a result of the ongoing financial crisis at the state level will be described below."

This, of course, comes as a surprise to no one, but Andersen feels compelled to say it as if it's some kind of insight and, again, as if it somehow absolves him from spending county money on more upper-echelon county employees, more money for himself, more money for the supervisors who employ him, and more money for more and more employees as the actual functioning of local government becomes less and less defensible.

Deep in Andersen's 11-pages of deception and delusion, we find this even more mysterious tidbit:

"On June 3, 2003, the Board approved use of approximately $450,000 from the Debt Service Forward Delivery Agreement proceeds to finance the one-time upgrade of computers within the county system that provide possible security risks (Windows 95/98 operating systems), and the one-time purchase to bring the County into compliance with Novell licensing requirements."

This is the first mention of the "Debt Service Forward Delivery Agreement," which of course everybody understands, but thanks to which the county, aka CAO Andersen, has handed almost half a million public dollars to Microsoft and Novell (a computer network supplier) to fix a Microsoft-created backdoor security bug and to "comply with Novell licensing." 

Huh? Fixing a Windows computer bug and protecting a corporate entity's arbitrarily imposed licensing standards is a Mendocino County budget priority? 

Who signed this contract? 

Andersen also adds up the amount of money the Supes are wasting on expanding its toothless Water Agency in a time of major budget gaps.

"Pursuant to Board directive and state priorities, staff increased the general fund contribution to the Water Agency from $60,000 to $335,000 in anticipation of increased Water Agency activities. The appropriations will support existing staff and reasonable overhead, sufficient legal counsel and engineering costs, as well as the local match for the Coyote Dam feasibility study for 2003/04. Staff did ask the director to work closely with the Department of Transportation to review opportunities for obtaining engineering services to defray some costs."

Where will this money come from? Presumably they'll get it by laying off janitors, code enforcement officers and DA investigators and other line workers as outlined in their recent round of layoffs.

Several pages later, Andersen tries to explain where he got the money to give Microsoft and Novell. 

"In April of 2003, the County awarded a successful bid to Citigroup for a Debt Service Forward Delivery Agreement (DSFDA). The proceeds from the agreement amount to $4.8 million. This is not a new debt to the County. The County is simply allowing for the investment of its debt service payment on its 2002 Pension Obligation Bonds by a private investor in exchange for a sum of money. The County can actually derive a greater present value benefit from the DSFDA than from accruing interest itself on the debt service payment due to the fact that governmental entities are limited in their investment vehicles (no more Orange County debacles), while investment options available to DSFDA bidders, such as Citigroup, are not. The agreement ensures that the principle and interest payments to the bondholders are paid as they become due."

Translation: The county has given its pension system payments to CitiGroup so they can invest them in the kinds of high-risk schemes that were prohibited in the wake of the early 1990s Orange County bankruptcy. CitiGroup's investment sagacity, being greater than ours, will get Mendocino County's pension fund all the money it needs to keep it solvent. (Actuarially speaking, it's not solvent now, hence the CitiGroup gamble. The employees' pension fund has been shorted by the county for years now.) 

Will the pension fund get its money back from CitiGroup? County employees better hope so.

Andersen offers this explanation of the Mental Health Department budget:

"The Mental Health Department is continuing to propose a spending plan that is consistent with revenues that can reasonably be expected to be earned in the 2003/04 fiscal year. The revenues will include approximately $1.0 million in a MediCal Cost Report claim that is expected in January of 2004. The Administrative Office and the Mental Health Department are recommending that the revenue be realized, and utilized to finance the payment of indirect costs to the General Fund and to reduce the deficit in the Special Revenue fund by approximately $650,000. This plan is being proposed, in part, to maintain the practice of payment of indirect costs (self-sufficiency), as well as to mitigate a deficit that is expected to be in excess of that which was previously communicated to the Board. The current deficit projection at the close of 2002/03 is anticipated at $2.0 to $3.0 million."

How, exactly, can this $2-$3 million deficit be called "self-sufficiency"?

According to Andersen, the Public Health budget is a problem because:

"The Department is facing a number of significant new issues including Bio-terrorism, SARS, unprecedented cases (9) in Tuberculosis, and the West Nile Virus. The new challenges are causing a strain on the department's current resources."

Bullshit. 

Bio-Terrorism? SARS? West Nile Virus? Where? There has been no bio-terrorism in Mendocino County nor is their likely to be any. Terrorists are terrorists, not ironists. Ukiah is not a high priority terror target, and the non-existence of SARS, the West Nile Virus, and nine TB cases does not constitute a budget busting epidemic.

"There will still be some reductions in force in the smaller departments," adds Andersen casually, "but they will be applied in a fashion that we believe protects the core mandated services and functionality of those departments."

Functionality?

Andersen couldn't tell functionality from frozen fish. He doesn't tell us which "small departments" are about to be functionality-ized.

"The most notable example [of the budget team working diligently to review the operations of the smaller, internal support departments] is the collaborative effort between employees and managers to assist the Risk Manager in reviewing and altering our employee health plan. This effort will result in an annual savings in excess of $1.0 million."

Translation: Employees are going to be paying higher medical premiums to help avoid their own furloughs and layoffs. The Risk Manager's office does not pay for itself in net county risk reduction, but don't expect it to be downsized. What you should look for and can expect to see is the personal friends of Andersen, Mordhorst, department heads, and the more pliable supervisors (Shoemaker, Campbell) being retained, low-level "un-connected" line staff getting offed.

In a surprise move, Andersen notes: "As directed by the Board, we have also begun to review areas where services can be consolidated." [Emphasis added.]

And what "area" is listed as an example of consolidation that the county's brain trust has "begun to review"? "Risk Management and Administration," two departments that already operate as one, the consolidation of which would not result in the elimination of a department head or otherwise save any money.. But Animal Control's consolidation with, say, Public Works, the Ag Department or the Sheriff's Department, would save an executive salary that should have been saved years ago, as would the elimination of MSWMA with transfer of its few real functions to Solid Waste, the Department of Mental Health with Public Health or the Sheriff's Department (the cops now provide the most crucial of the County's mental health services -- that of responsibility for the county's truly dangerous lunatics.)

This isn't a budget; it isn't even inspired wishful thinking. It's more of the bloated same at a time when we can't afford more of the same.

The County of Mendocino is going from broke to broker. Our county administrator at least makes that much clear.

Quick Cuts

• 10% across the board pay cuts for Supervisors. (5 Supervisors @40k ea. = $200k. Savings: $20k. 
• 10% across the board pay cuts for 33 Department heads at approx $80k (average) per Department Head (0.1x$2.64 mil.) Savings: approx. $264k. 
• Immediate defunding of Mendocino County Alliance. Savings: $150k
• Closure of Supervisor Colfax's Boonville Office. (perhaps $500/mo rent.). Estimated Savings: $6k.
• Layoff of two excess judges at $110k/judge. Savings: $220k.
• Eliminate LAFCO (the Local Agency Formation Commission), add its trivial responsibilities to County Counsel or CAO's office. Savings: $167k.
• Eliminate MSWMA: Duplicative garbage agency. Estimated Savings: at least $150k.
• Put Animal Control in County Ag department.
• Eliminate Alternate Pubic Defender office. Have DA review and approve all conflict claims. And, have Public Defender review and approve all DA conflict claims, resulting in fewer bogus "conflict" claims.
• Put Probation in Sheriff's Department. 
• Put Solid Waste Department in Public Works/Transportation.
• Reorganize and consolidate other departments, combined with above, eliminating up to 16 Department heads. Downgrade high paid Department Head positions to lower grade positions. (Average of $80k/department head). Estimated Savings: At least (16x$8k) $128k.
• Create three new consolidated departments: 
  1. RESOURCES -- Planning & Building, Water Agency, Environmental Health, Air Quality.
  1. HEALTH & HUMAN SERVICES -- Social Services, Public Health, Mental Health
  1. ADMINISTRATIVE SERVICES -- General Services, Information Services, Risk Management, Human Resources, Emergency Services, Library/Museum, residual LAFCO functions.

Conservative savings would be at least reduction of grade for 12 Department Heads. More Savings would result if the consolidated/eliminated department head positions were converted to line staff positions. 

Then Hire back the janitors, two code enforcement officers, the DA's investigators, etc. (Twelve positions at $30k.) Adding: $360k 

Net Savings: About three quarters of a million dollars.