County Budget Notes

It seems to have finally dawned on the Supervisors that blaming the Auditor time and again for their own failures and misperceptions about the County budget not only looks bad but won’t do anything to improve the County’s mulit-million deficit for next year. On Tuesday, three supervisors, Glenn McGourty, Maureen Mulheren and Ted Williams, actually bent over backwards to make nice with their Auditor, Chamise Cubbison, courteously thanking her for her financial reports and cooperation. McGourty went so far as to deny that he has been “persecuting” the Auditor, despite blaming the Auditor for the Board’s own rash consolidation of her department and its failure to deal with budget issues almost on a monthly basis since then. 

As if to emphasize the new, more “cooperative” picture they’re trying to portray with the Auditor, Ms. Cubbison, for the first time since being elected, was seated at the staff table last Tuesday instead of appearing in the interrogation box/public podium where she previously appeared to respond to various ill-informed financial pot shots. After Cubbison calmly explained her recent bookkeeping reports, there was no untoward grilling of the Auditor as the Board proceeded to pleasantly and unanimously accept her report as submitted.

Just like with the pointless $400k fight they picked with the Sheriff, we’re all now supposed to pretend the Board’s misbegotten campaign against the Auditor never happened.

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In introducing the County’s bleak budget picture CEO Darcie Antle began the discussion by saying: 

“We still have a health plan deficit. We are working with the Auditor Controller and the outside auditors to confirm that deficit. At this time it's somewhere between $1.1 and $3.6 million. As we are closing out fiscal year 22/23, the budget is over budget by roughly $3 million. This general fund deficit includes two vacant general fund department head positions. The department leadership of those general fund departments is being provided at this time by the Executive office, not to mention three other department heads that are non-general fund that are vacant at this time. Part of that deficit, you have a 2% wage and benefit increase that occurred in this six months of this year of 22/23. Those funds were covered by— those benefits were covered by one-time money including some federal money and the pension reserve. Part of that deficit again is, tax revenue has decreased on the sales tax and transient occupancy taxes. And then we have some departments that are running over budget at this time. Moving into next fiscal year, 23/24, this budget has a huge challenge for the departments, the fiscal team, the Auditor Controller Tax Collector Treasurer. The approach we are taking for 23/24 is not sustainable for the future. Changes must be made through the year to increase revenues and reduce the County’s footprint. Revenues are projected to be $1.4 million less than what was adopted in 22/23. We are experiencing expenses that are increasing due to inflation. We went out for bond certifications of participation this year and our bond payment is up, increased by $873,000.” Ms. Antle later noted that the County’s utilities costs were up by about $650k as well.

Auditor Cubbison explained that the health plan deficit range is due to some still outstanding medical claims against the county's former self-funded health care plan that have not yet been received so she doesn't know how much they will be.

The general fund deficit for this coming year, July 2023-June 2024, is being backfilled by “one time expenses,” mostly reallocating some unspent covid and PG&E settlement funds.

And that was before any consideration being given to salary increases for County employees whose employment contracts all expire at the end of June, 

As noted above CEO Darcie Antle’s proposed budget for next fiscal year (July 1, 2023 to June 30, 2024) does not include any new raises for employees, no cost-of-living raises, no new employment contracts with “market rate” adjustments, no benefit increases, nothing. 

Hearing this, Supervisor Dan Gjerde described the budget as “probably not realistic.”

Of course not. In the past they “balanced” the budget by assuming zero or very little Sheriff’s department overtime. “Balanced budgets” are an artifice, a plan. If the Board really cared about balanced budgets other than on paper they’d get routine monthly budget reports from each department with explanations of variances. But they have never done that.

Supervisor Ted Williams added another possible “non-realistic” budget problem: Declining property values associated with “fire sales” of pot farms that are packing up and abandoning their grows, legal or otherwise. Nobody knows how much of this there really is nor how much money it might represent.

County employee union rep Patrick Hickey told the Board that there was probably money in the budget for raises hidden in the approximately 25% vacancy rate that the County has been averaging for recent years. Later he also noted that the County is maintaining a larger general fund reserve than other neighboring counties.

Supervisor Ted Williams disagreed saying he thought the budgeted staffing levels no longer contain many budgeted vacancies. 

CEO Antle agreed, saying her staff had gone through the staffing lists “with a fine tooth comb” and only positions that they fully intend to fill were budgeted and considered “vacant.” 

Hickey didn’t argue any further.

The Board discussed hauling uncooperative department heads into closed badgering sessions if they refuse to cut their budgets by a certain amount in the face of the deficit. (Our top nomination: the regularly overbudget County Counsel Christian Curtis who advised the Board that they were allowed to conduct such sessions, probably assuming that he himself would never be the called on the carpet.)

Gjerde glibly suggested that balancing the budget came down to static salaries or staffing cuts.

Williams glibly contended that government has a lot of excess in it, and that therefore the County should be able to operate with reduced staff. But, as before, Williams cited the demonstrably wrong example of a $75k “washer-dryer” proposal from Social Services as an example, when that number was actually for a larger room remodel for family and children’s services that included a washer-dryer. Instead of arguing that the room-remodel might be unnecessary, Williams continues to claim that the County was proposing to pay a patently wasteful $75k for a simple washer/dryer. 

This is the same Supervisor who, like his colleagues, has never complained about the cost of the $400k Supervisors chambers remodel, the nearly $400k that he helped waste on a pointless dispute with the Sheriff, the millions of dollars paid to outside consultants and lawyers and mental health contractors, the $5 million the County paid for a $1 million crisis residential treatment center, or the enormous $25 to $30 million about to be committed for an oversized and overdesigned psychiatric health facility on Whitmore Lane…

Probation Department Head Izen Locatelli was the only Department head to publicly object to the artificially imposed budget cuts, saying that he had already reduced his budget by 25% a few years ago and there was very little left to cut, that his department was forced to pay for a share of overhead costs like utilities, facilities, computers and insurance that he had no control over, adding that his department is part of “public safety,” and should not be subject to further cuts.

The so-called “Teeter Plan” is showing a sizable deficit this year as well. The Teeter Plan was set up well before the turn of the century to help stabilize revenues for schools and special districts while also benefiting Counties by allowing them to keep whatever extra revenue may come in later via penalties and interest on late property tax payments. Under the Teeter Plan, schools and special districts are paid their nominal share of taxes on a regular schedule giving them a relatively predictable revenue stream. Then the County keeps whatever penalties and interest come in later. Nobody has complained about the process before. But now, as more and more local properties are either unsellable or are owned by people (mainly pot growers) who have disappeared, the County is saying that they aren’t getting those expected revenues but the money going to schools and special districts is more than they’re getting from property taxes plus penalties and interest, creating a $1 to $2 million deficit. Predictably, there was talk about examining the Teeter Plan, which is certainly overdue for a close examination. Williams went further to suggest that the County withdraw from the Teeter Plan so that, according to Williams, schools and special districts would “feel the pain” that the County is feeling as a result of tax absconders. The trouble with Williams’s assertion is that schools and special districts have no legal leverage in collecting taxes. Only the County can put liens on property which, theoretically, can generate delinquent payments when the property is sold — if and when it is sold. Schools and special districts (including fire and emergency services) better keep a close eye on this admittedly arcane subject because if Williams has his way, they might find themselves being penalized for the County’s inability to collect delinquent property taxes. 

The Supervisors engaged in another tedious discussion of the annual tourism subsidy, with Supervisor Dan Gjerde arguing against it saying “they don’t need it,” and “We need the money more than they do,” and, “There’s no fuel in our tank anymore,” noting that the promoters have more reserves (proportionately) than the County does. 

Supervisor Williams, of course, thinks that every nickel the County hands over to the tourism people translates directly into more revenue for the industry, more jobs, more County tax revenue and other untold benefits and that the tourism industry is the only industry left in the County now that timber, fishing and pot have fallen off. 

Supervisor Haschak said he preferred to look at the “big picture” of overall economic development, without mentioning any. Haschak said the Board should postpone the tourism handout until other (vague) economic development options are explored. 

When Gjerde suggested that the three supervisors who are enamored with the tourism subsidy find an equivalent sized cut elsewhere in the budget to pay for it, Supervisor Williams called Gjerde’s proposal a “gimmick.” Again, this is the same Supervisor Williams who uses the exact same “gimmick” against anything he personally opposes. As usual, Supervisors McGourty, and Mulheren supported the subsidy while conceding that the budget probably couldn’t cover it. There was some question about the amount, however. Until this year the tourism promoters have been able to rely on a whopping $600k from the County to add to their own advertising (in print and on-line) and wine/food writer give-aways. But even the promoters seem to understand the budget situation and have proposed increasing their own levy on themselves to reduce the County’s $600k to around $270k. At the end of the meeting, they left the question semi-open pending a self-promotional report from the promoters early next month which the promoters say demonstrates how great their promotional advertising spending is.

Petty stuff: We wish the County would stop using the phrase “reach out” when they simply mean “ask.” We also wish Supervisor Haschak would learn the correct pronunciation of the word “proviso.” On Tuesday, Haschak, perhaps mixing up his phrasing with the word “provision,” suggested that a “pro-vizz-oh” be added to something (it wasn’t), when he should have said, “prov-eyes-oh.” It’s minor, but distracting and undermines whatever he’s trying to suggest; in fact, we have already forgotten what he wanted to add the proviso to.