During last Tuesday’s end of fiscal year budget discussion, Supervisor Dan Gjerde again recommended that, given the County’s apparent tight budget, the Board should reduce the amount of the Transient Occupancy Tax “match” (subsidy) they unquestioningly hand over to “Visit Mendocino” for marketing the tourism industry every year and only give them the 50% match for the amount the unincorporated areas remit, a reduction of about $200k from almost the $600k the marketers now get. Gjerde pointed out that even with that reduction, Visit Mendocino would still be increasing the amount they spend on Chronicle ads, facebook postings, and free dinners for tony restaurant reviewers, just not as much of an increase.
Supervisor Williams wouldn’t hear of it, insisting without any evidence at all that any reduction in the County “match” would result in a reduction of the County’s bed tax and sales tax revenues and might be a job killer for the tourism industry on the Coast.
Gjerde reminded Williams that “there’s very little documentation” of a correlation between marketing and bed tax revenues.
Supervisor Haschak agreed, saying, “There’s no evidence that the ads produce increased Transient Occupancy Taxes.”
Instead, Haschak wanted to spend the $200k on non-existent “enhanced code enforcement.”
Obviously, Williams doesn’t want to get any complaints from his tourism industry constituents, and Haschak wants to appease his North County constituents by pretending that the County is doing something about illegal marijuana grows which are already down due to the pot market collapse.
Therefore, Williams said, “it doesn’t sit well” with him to spend an estimated $750k for “enhanced pot garden code enforcement, much less give them $200k of the marketing money. In fact, Williams is tired of the entire pot discussion, having proposed (perhaps sarcastically; we don’t know) several times that the County should get out of the pot permit business altogether and just issue a permit to everyone who applies and let the state sort it out.
Williams then asked Sheriff Matt Kendall about those illegal grows.
Kendall replied that the number of grows are indeed down, but the size of the remaining grows has increased in a feeble attempt to stay profitable in the black market. This would theoretically make “enforcement” an easier task.
Supervisor Maureen Mulheren thought it might be a good idea to try to figure out if marketing made any difference to the tourism remissions, but for the time being she didn’t want to cut it. “Gas prices are rising,” she said, hence, in her mind at least, the County “needs more marketing.” “I don’t know where we are headed in future,” said Mulheren, finally making a statement everyone can agree on. “The cannabis industry is in transition. There’s lots of soil in our garden shops, so there’s less gardens.”
What? The “garden shops” are supporting illegal activity? My heavens! Where’s code enforcement?
Supervisor Glenn McGourty, an auto-vote for anything to do with wine or tourism, was of course against any marketing budget reduction.
And that did it. “The majority has spoken,” declared Williams triumphantly.
But as a sop to the “minority” they agreed to think about asking somebody — perhaps McGourty’s wine buddies at UC Davis — to study the correlation between marketing and bed tax revenues.
They’ve done this before, but the people who do this kind of thing are part of the marketing establishment and they always brag about how many social media page views they log and how many ads they’ve placed and so forth since there’s obviously no way prove a direct connection.
But a glance at the sales and bed tax receipts shows that they go up and down with the local economy, no matter what the industry’s marketing budget is.
There’s no point giving any more money to the code enforcement warriors either though. As Interim CEO Darcie Antle noted, “We may not be able to recruit anybody for our existing openings anyway.”
A good use for the $200k would be as a stop gap for the County’s underfunded unincorporated area ambulance services. But instead of considering that, the Board wants to take years working on some kind of vague, ill-defined “Joint Powers Authority” for emergency services which might — maybe/maybe not, nobody knows — produce an uptick in billings.
The JPA idea is just another way, as Supervisor Williams bluntly stated, to tell the ambulance people, “You’re on your own,” suggesting that the tiny underfunded services districts in the County somehow try to figure out a way to propose their own mini-parcel tax add-ons — something that is not only bureaucratically impractical and costly, but unlikely to produce any near term help, if that.
Need we say again that the original intent of the “Bed Tax” was to help fund things like ambulances which respond in large part to tourists and their vehicle accidents and medical distress calls?
Whether it’s Williams and his grand “majority” or Haschak and Gjerde’s “minority,” this Board prefers to give that extra $200k to their politically expedient friends and constituents, rather than allocate it for the public good.
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In another muddled financial discussion the Board tried to pretend that last year’s decision to combine the Auditor-Controller with the Treasurer-Tax Collector wasn't really a consolidation, with Williams claiming it was just the elimination of an elected official. But of course, it's not as simple as that, as newly elected Auditor-Controller-Treasurer-Tax Collector Chamise Cubbison explained:
Cubbison: “Under the new consolidated office I hope the board fully funds the Auditor Controller's proposed budget with the understanding that to be successful we need to be fully staffed. We need to have resources that are appropriate. There's been changes obviously to the salary for the combined position, That is not something I requested but I'm willing to take on the challenge. I'm not sure where that money can be found but I urge the board find a way to make the Auditor Controller's budget whole.”
CEO Antle told the board that $1.7 million ARPA funds were used to bring staffing back to pre-Covid levels for this year, but those funds will cease after this year. (And who knows how much will be spent given the ongoing vacancies and hiring difficulties and delays?)
Cubbison said she couldn't estimate the actual timing of the consolidation, perhaps three, or six, or nine months. She also said her office needs proper staffing to make sure all tax collections are received.
Williams: “There's a sense that the Board has directed the two offices to consolidate into one. I don't think that's quite accurate. You [Cubbison] are becoming the elected department head of both. But there's no pressure from the board to immediately consolidate. It's just that there is one elected department head in charge of the joint operations. I don't want the Auditor to feel that she's under a time constraint to merge the offices.”
Supervisor John Haschak asked Cubbison about cost savings which were expected to come with consolidation.”
Cubbison: “It's too soon to tell. But I didn't really see a huge benefit in terms of the budget because the reality is what you've done is increase the salary of the department head but the full-time equivalent workload of the department is not any different. So the fact that there's no longer an elected Treasurer Tax Collector means that we are now probably going to end up with a Treasury Manager or another Assistant Treasurer-Tax Collector to cover the workload. So there's actually an additional cost for the additional department head, and that position would be paid at the same level that the Treasurer Tax Collector. But there's also the added requirement by Government code that there's another audit to maintain the separation of duties on both sides of the money, so to speak. So we will need an additional audit for that. We will also need to contract with an outside CPA for an independent treasury count, probably quarterly. After the consolidation, we still need to maintain the separation. There may be some administrative efficiencies such as for Payroll and Accounts Payable, but those are not huge savings. We will probably need another outside contract to make sure that we are collecting as much as we can on the transient occupancy tax, we have not incurred that contract cost in the last few years. There will be additional cost in resuming that software license so we have access to that new data.”
A further discussion of the consolidation was postponed to a future board meeting. With the Board and CEO continuing to insist that there’s a tight budget, will the Auditor-Controller-Treasurer-Tax Collector find herself arguing with the Board that is looking for cost savings when she demonstrates to the Board that their ill-considered, unplanned and unanalyzed consolidation idea will end up costing more, not less?
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Another Angelo Time-Bomb?
Tuesday’s (June 7) $90k consent item to hire a bond consultant was rubberstamped along with dozens of other consent items, despite its apparent commitment to a costly long term borrowing scheme to replenish the reserves, the same reserves that CEO Carmel Angelo said were around $20 million when retired to San Diego County in March. Since then reserve numbers being batted around have gone down, however, as the budget picture remains murky. County employee union reps say the County should not be in deficit since most tax revenues (except pot revenues) are up. McCowen said the County over-committed the PG&E funds too soon, and they should have realized that they had unfunded capital projects that needed funding.
After former Supervisor de Vall’s call, we looked a little further into the bond counsel’s $90k contract and found that one of the “services” the County wants the bond attorneys to provide is preparation of a “preliminary official statement.” This particular phrase is a term of art for bond measures which as far as we can tell are intended to be put on the ballot. De Vall said that back in the 1990s when the County borrowed over $90 million (which McCowen referred to in his comments to the Board) they did it without putting it on the ballot and the County is still paying that off with interest. De Vall said he asked then-County Counsel Peter Kliein at the time why that bond (which was intended to finance a large pension deficit) didn’t go to the ballot for a vote and Klein refused to answer.
Is the County trying to avoid a future ballot measure? Can they incur major long-term debt for the County without a public vote? As long as the County isn’t proposing a new tax to pay off the bond, maybe they can. But given the contract’s reference to a “preliminary official statement,” it appears that a ballot measure is under consideration. If so, it would be in addition to whatever sales tax measures may appear on November’s ballot — if they are approved.
Is the County trying to avoid putting a bond measure on the ballot to cover the jail expansion project overruns knowing that the voters probably wouldn’t approve it?
Just like the gold-plated Crisis Residential Treatment Facility and the still-pending gold-plated Psychiatric Health Facility on Whitmore Lane, the County (i.e., former CEO Carmel Angelo) hired the very expensive Sacto consultants Nacht and Lewis to design and manage the jail expansion project, then Nacht & Lewis larded on all kinds of administration and construction management contract overhead costs, ballooning the cost even further. Nobody said a peep about the waste of Measure B money on Nacht & Lewis’s gold-plated services and proposals and nobody has said anything about their services and proposals regarding the jail expansion either.
As far as we’re concerned everything that CEO Angelo turned over to Nacht and Lewis (without competitive bids) is costing a lot more than it should and now it’s looking more and more like Mendo’s former CEO’s spendthrift construction contracts may end up forcing the County into a long-term debt obligation that will put more pressure on the County’s general fund in the long term.
Speaking of jail expansion, the jail expansion project itself is about to go out to bid. We have not heard a forecast completion date for that project. Nor have we heard any discussion of how that expanded jail will be staffed and the associated cost of that additional staff. It’s supposed to be 60 more beds, presumably meaning more inmates. Will any existing beds/wings be closed and shifted? Nobody has said.
This all bears close scrutiny from a Board of Supervisors which has shown itself singularly disinterested with the particulars of their accumulating debts and budget details as they waste hundreds of thousands of dollars on strategic planning consultants and water agency consultants and so forth while bemoaning their supposedly “tight” and “austere” budget with no tangible taxpayer benefits.
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WE RECENTLY NOTED that Mendocino Grand Juries don’t do much, don’t hold anyone accountable, don’t follow-up, and mostly just go through the motions, largely rubberstamping or praising whatever they’re reporting on. And when they occasionally report something serious, such as when they told the Board of Supervisors that having a former Ortner official preside over Ortner’s selection as contractor and then administering his former employer’s contract was a conflict of interest, the Supervisors insulted the Grand Jury and told the Grand Jury to essentially mind their own business because nothing “illegal” had been done.
In March of 2020, just prior to the covid pandemic, the Grand Jury issued a report on the inadequacy of County responses to the Grand Jury’s 2018-2019 reports.
Here is that Grand Jury’s conclusion:
“The 2018-2019 Mendocino County Civil Grand Jury issued 24 recommendations requiring responses from four different County agencies or governing boards. Mendocino County Civil Grand Juries have not issued continuity reports [i.e., follow-ups] in the past 10 years. Accountability for respondents to meet the requirements of California Penal Code §933 and §933.05 has not been tracked by the Mendocino County Civil Grand Juries.”
In other words, they faulted themselves for not following-up.
For many of their 2018-2019 recommendation responses, the GJ correctly noted: “Implementation dates and/or timeframe [of corrective action or new program] not stated.” A statement that applies to much more of Mendo than just the Grand Jury reports.
But, “Recommendation: Future Mendocino County Civil Grand Juries continue to issue annual continuity reports. No responses are required or requested. This is a public report on the procedures of the GJ in the interest of transparency.”
So the best the Grand Jury could do was report that the responses didn’t have dates or timeframes, and they left it at that. And then they recommended that future grand juries do the same.
Here’s one of our favorites: “Recommendation #12: The BOS should draft a policy for responding to constituent complaints and issues. The policy should include an expectation of a timely response by the Supervisor.”
BOS response: “Has not yet been implemented but will be implemented in the future.”
GJ Comment: “Implementation dates and/or timeframe not stated.”
Of course, it was not implemented at all, much less “in the future.”
Or this: “Recommendation #4: The BOS needs to include expectations for completion at the time directives are given to the CEO.”
BOS Response: “Has not been implemented but will be implemented in the future.”
GJ Comment: “Implementation dates and/or timeframe not stated.”
Ibid.
Or, “Recommendation #8: The Consent Agenda should not include controversial items, e.g. salary adjustments or cost overruns.”
BOS Response: “Has been implemented.”
Only if you consider a items like sole-source unaccountable contracts to Camille Schraeder for $20 million “non-controversial” — which they apparently do.
GJ Comment: “No further analysis needed.”
And that’s where it stands to this day.
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POTTER VALLEY GRAPE GROWER, and lead advocate for their Cheap Water Mafia, Janet Pauli denies that her Irrigation District gives water away. (From a report by Monica Huettl on the recent County drought task force):
“Pauli also commented on behalf of the Potter Valley Irrigation District, addressing criticism that they have been ‘giving away’ water. This is not true. Customers pay PVID $22 per acre foot. Many users downstream (not in the District) have not paid PGE at all for water. A regional entity needs to be formed so that all users will pay fairly. The district doesn’t have enough funds to take over the Potter Valley Project and needs to work with other water users to ensure future water stability.”
Oh yes, it is true that the irrigation district gives away water for, as Supervisor Dan Gjerde noted, “virtually nothing.” Unfortunately for Ms. Pauli, the Potter Valley Irrigation District’s own rate chart belies her claim:
As the chart shows, they’ve only recently even raised it to $21.50 per acre-foot (325,000 gallons). As far as forming a regional entity “so that all users will pay fairly,” Ms. Pauli and her fellow Cheap Water Mafia members were dead set against Supervisor John Pinches’ attempt to do just that back in 2010. They made it clear that they didn’t want to get involved in reviewing water rates and Sonoma County’s water grab for fear it might lead to higher water rates for the Cheap Water Mafia.
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