SEIU Local 1021 President Julie Beardsley’s statement to the Board during Tuesday’s Public Expression to the Supervisors included a version of what we’ve been proposing for a several months:
“We understand that there are about $28 million in reserves. This is twice or three times more than most other counties have. I am asking you to pull down some of those reserves to provide a cost-of-living adjustment for our members. Then go out and do the assessments, collect the taxes that you need to do to bring in the money so that we can hire people. What you are offering us now is basically a wage cut, and it is not okay. And I would like to state publicly that if we do go on strike and people are told that they can tele-work, they are crossing the picket lines. And that is not okay. We are going into negotiations tomorrow. Please tell your negotiating committee to give us an offer, something we can work with. These people who work the front lines and save people’s lives deserve a fair cost-of-living adjustment to keep up with inflation.”
The Board chamber full of county employees with union t-shirts gave Ms. Beardsley a loud round of applause:
Supervisor Dan Gjerde was the only Supervisor to respond:
“I invite everyone in the room to look at the county budget. We have general county expenses of $357 million. We have general fund reserves of just under $10 million. That is less than 3% of our operating reserves. Last year we spent $7 million of one-time revenues to pay for ongoing expenses such as salaries and benefits. That's the first time in 11 years that this county has been required to use one-time revenues for ongoing expenses. So we have a structural deficit of $7 million. Everyone in this room needs to know that. We have another $3 million in added pension contribution costs next year. So that's a $10 million structural deficit that the county is looking at going into next year unless we find cuts. We all want to increase revenues. But let's be realistic about the revenues. The Assessor's office is understaffed. We have pushed harder than anybody to raise the salaries of the assessors so they can be more fully staffed. But how many buildings would have to come on the tax rolls to bring in, let's say, $3 million next year? Remember, the county only keeps 30% of the property taxes. So you would have to have $1 billion in assessed valuations, buildings, added to the tax rolls to generate $3 million in additional county revenues. What does that look like? That's about 3,000 houses at 1400 square feet each that would have to be added to the tax rolls that are not currently on the tax rolls. That might be possible to do. But does anyone in this room think that that will occur in the next 12 months? In the next 24 months? The next 36 months? The Assessor's office has added staffing to begin the process of adding buildings to the tax rolls that were built without building permits. It could take three or four years, if those houses exist, to add those 3,000 houses to the tax rolls. But even if they accomplished that mission, that's only $3 million in a structural deficit that is already $10 million next year. Where is the money going to come from? Be realistic. Where will it come from? They will have to come from a combination of cuts and new revenue. But the new revenue will come in two or three years down the road. The cuts will have to come in first in order for the county to have the money to even contemplate some increases.”
Union Rep Patrick Hickey was peeved:
“I disagree with everything supervisor Gjerde just said. The County has provided no background information for any of that. The Executive Director of the Retirement Association would disagree with the $3 million in terms of pension costs. I spoke with her last week. She said that is not true. The $7 million? Now I think Supervisor Williams says it’s $11 million? Every week the number changes. You do not provide the most basic financial information. So then you just make stuff up and say, We are in a crisis. The only crisis is the incompetence that we see on this Board. I would like to clear up a few things as well. Some of the Board has made claims that if you include benefits, Mendocino County is at market rate with other rural government jurisdictions which the county and the union have identified as comparable counties. This is false. … So start by getting your facts straight before you make comments and tell the employees that you can't afford to pay what they need to live here. … Next I would like to address the amorphous and ever-changing structural deficit that the administration has been trying to use as a bogeyman to scare residents about the state of the County's finances. The County has provided no basis for these claims. In fact, we mostly hear that they don't know how much we have. If they have some secret information, they should share it with the public. In negotiations we have asked for months for the most basic financial information and the County continues to say that they can't get it. And yet they now claim that there is information that there is an $11 million shortfall that they need to make up. This is, in our view, a fiction. Just as the budget is a ballpark idea of what will happen. Given the county's history, they have always overestimated costs and underestimated revenues. This will certainly happen again this fiscal year. One component of this mythical structural deficit is a potential increase in pension costs for the County next year. Yet when I spoke with the Retirement Association Executive Director last week she said there is no guarantee that the county's costs will go up. In fact, this year they went down. This board needs to get creative and look at the funding that's available. If the board provides County employees with a reasonable offer, we can move forward. If they stick to their guns with what they are currently offering, the County will continue to suffer and County residents will suffer as well.”
* * *
First, Ms. Beardsley is correct in citing the $28 million General Fund reserve. The May 2023 budget presentation included a Reserves chart that showed as much. There has been no reported change in the numbers since then, although they apparently have allocated $500k of it to the Assessor’s office.
Second, Gjerde’s reference to “general county expenses of $357 million” is mostly NON-General Fund money that is paid for or reimbursed by state and federal money as it’s spent. Therefore it is irrelevant to the cost of living increase question.
Where are Gjerde and Williams getting their “structural deficit” numbers? Hickey is right that neither they nor the County have provided a clear breakdown of the alleged deficit. Their numbers vary depending on who’s talking and when and what’s included or excluded.
As Gjerde suggested, we went back the June budget presentation and found this in the CEO’s budget summary (Notice the precision of these numbers):
“Total proposed Budget Unit 1000 (Non-departmental Revenue [aka General Fund]) available as of May 24, 2023, is $94,921,521 with special fund allocations of: $2,457,863 to Debt Service, $3,997,422 to Transportation, $1,464,282 to Library, $166,648 to IT Reserve, $4,880,000 to Fire Agencies, $400,000 to Disaster Recovery, and $145,443 to Water Agency, leaving $81,403,863 for allocation to General Fund Departments for their Net County Cost (NCC) assignment. As stated in Attachment A, the total proposed Net County Cost for General Fund Departments is $82,229,705. To balance the budget, it is recommended that $500,000 be appropriated from the General Reserve, $325,844 be appropriated from the TEETER reserve, and the appropriation of $4,474,333 one-time funds.”
In June, the Board approved the 2023-2024 budget based on that summary. So one might say that there’s a $4.5 to $5.3 million gap in the basic general fund. If there’s a bigger gap than that, then the Board or CEO have to lay it out and explain why it’s necessary. If there’s an additional pension gap, the Board and CEO and the Retirement Association need to lay that out too. If there’s a health plan deficit (which there probably is) the Board needs to lay it out and propose financing and health plan options. If there are capital projects that are in the general fund budget, the Board and the CEO need to lay them out so that they can be prioritized and scheduled and determine if there are grants available to cover any of them. (The Jail expansion overrun of at least $10 million comes to mind.) If there are projected under or over-runs in the departments, the Board and the CEO need to lay them out. If Gjerde or Williams have a basis for their projections they need to cite them.
Gjerde may be right in his abstract but ultimately irrelevant math about theoretically adding 3,000 new houses to the tax rolls. But again, that’s not the point. The tax collection gap that Ms. Beardsley referred to has little to do with adding houses to the tax rolls. The gap is derived from taxes not billed, taxes not paid, taxes not collected, un- and under-assessed buildings and improvements, transaction tax re-assessments, and the Teeter Plan which should not be in deficit. This is a core function of County government and requires active, regular management and attention from the Board. Gjerde’s “3,000 houses” is clearly “just made up.”
But we see no such Board attention nor a sense of urgency about it. Therefore, Hickey’s “incompetency crisis” charge and his charge that the Board/County is “just making stuff up” have merit.
To get a clue about how much attention the County pays to tax collection one need only look at the budgets for the relevant departments. While the Executive Office and the Supervisors cost taxpayers a whopping $2 million a year for whatever they do or don’t do, they have only budgeted around $400k for the tax collector function in the ill-combined Auditor-Controller-Treasurer-Tax Collector office. While the Board claims to have designated $500k extra for the Assessor’s office to hire additional appraisers and catch up on assessments, it is still significantly below the amount the Assessor asked for.
Two months ago the Board directed that the Assessor provide a monthly report on this activity. So far they have not received any written reports but only an incomplete hurry-up oral report from Assessor Katrina Bartolomie in July. And nothing in August. Despite Gjerde bringing up the subject on Tuesday, nobody asked about the “monthly report” they directed nor expressed any interest in the progress.
First District Supervisor Candidate Carrie Shattuck took to the podium on Tuesday as well. Among other things she made the point that the Board does not get decent or regular info from the departments.
“The way that the department heads and elected officials communicate with the board and the public is not good,” said Shattuck. “You do not have a section on the agenda for regular updates. Instead public officials have to speak during public comment. It is very unprofessional. How are we supposed to get information or stay up to date on any of these departments — their projects, their budgets, their personnel — if they never have a standing agenda item with the board for updates? Even if it's only every month, not every meeting. It's very unprofessional for Chamise [Cubbison, Auditor/Tax Collector] to have to come up here during public comment, or Katrina [Bartolomie, Assessor], and get an update on their budgets or what's happening in their departments. That should change. That should be a top priority for this board, that they put something on the agenda to deal with that. … And this board has not mentioned taking one penny of a cut to their salaries. This union has been in here for months and not one of you has offered to take one dime, or a percentage or anything off of your salaries. I think it's really shameful.”
Board Chair Glenn McGourty went into condescension mode: “We have a CEO report where department heads are asked to give updates. Is that correct? CEO Antle? Can you comment on how that works so Carrie can understand better?”
(“Carrie” understands perfectly well.)
Antle: “Typically on a monthly basis we ask in the CEO report that the departments report their statistics of what they're working on and what they are doing. Does every department follow through every month? No. But the majority of them do on a regular basis every month or every other month.”
Shattuck didn’t buy it: “No offense, but that CEO report is very lacking. It gives no figures, no totals. Mostly what I see it is things like animal control and basic stuff, not the huge items that affect our budget or the functioning of our county.”
Which is demonstrably true. The CEO report is a random collection of generic, selective departmental self-hype and mission statements. There is no substantive information in the CEO report about departmental budgets, staffing, projects, pending grants, or status.
McGourty: “As I understand it, are you saying the department heads are not required to report to your CEO report?”
Antle: “We ask that and we put that in your evaluations of department heads that we just did on the department heads.”
McGourty: “Carrie, are you saying if you win you are going to give your salary to help the workers?”
Shattuck: “I have already offered a 50% reduction if I am elected in my salary to immediately help the county's budget. Absolutely.”
McGourty: “Just for the record, I don't take any benefits with my salary. So the county is not covering the 70% that goes for benefits for most of our workers.”
Shattuck: “Okay, but you are still getting retirement and…”
McGourty, in high dudgeon: “No I am not. That's what I just said! I give up all my benefits that I do not take because I'm already retired from another system. So the County saves 70% overhead on my position.”
McGourty may have “given up” some of his County benefits. But as he admitted, he’s not giving up his retirement or taking any kind of cut since he’s a retired employee from his days as official grape expert for the UC Extension office (a free subsidy to the wine industry). So he’s hardly sacrificing anything like what he’s expecting County line workers to do.
Not wanting to look even worse, none of McGourty’s colleagues dared venture into this shameful discussion. Good for Ms. Shattuck for boldly pointing out the hypocrisy of the Board and their flat out stonewalling the employees and their union reps while not even considering token cuts for themselves like some Supervisors who understood how bad it looks took back in the 2009 Great Recession.
To close public expression, Chair McGourty got the Insincerity of the Day Award by claiming: “Thank you for your input. We really do appreciate it even when you don’t agree with us.”