Most folks know that for months, I’ve called for the County to stop talking about the County’s fiscal crisis and start doing something, get to the bottom of the root cause(s), and then take decisive action to solve it.
Recently, Fifth District Supervisor asked me what I think should be done to solve this crisis. This led a few days ago to Williams and I exchanging posts on the Anderson Valley Advertiser website.
What follows are excerpts from those exchanges that provide pretty solid information on what this issue is all about.
Here’s our dialogue:
“Ted, so my question is, assuming that both you and I are correct in our respective narratives, why haven’t you (or any of your colleagues) at least asked former-CEO Carmel Angelo to explain her assertion that ‘she is especially satisfied that the county, facing near bankruptcy in 2010, is today (February 2022) on firm financial footing with $20 million in reserves in the face of an annual budget of $340 million. I leave knowing the situation today is much healthier than when I was appointed CEO in 2010.’”
“There’s a Grand Canyon-sized chasm between you knowing back in 2019 that the County was in big trouble and Angelo’s declaration that it was “on firm financial footing” as she made her exit in 2022. Something’s not right with those pictures.”
“Jim, Angelo’s state of feeling satisfied is irrelevant to me. I’m looking at the numbers, not anyone’s feelings. The county cannot pay market wages to its existing employees, maintain its existing buildings, and maintain its roads with the current revenue. Perfect assessment and tax collection would help, but it won’t completely solve the gap. I’ve studied the budgets from 1965 to the present. It appears one board after the next ignored certain long-term liabilities in order to focus on limited priorities. For example, roads were forgotten. When was there last a long-term plan to maintain the road network? Your original question presumes the county was functioning well under prior officials. I find this wasn’t the case. The bad math was simply hidden.
“On untenable fiscal mess, the cost of doing business has outpaced revenue. This has been long standing. The county has increased wages by deferring maintenance of buildings, infrastructure, software, training, jail, etcetera. Under Prop 13, in a no-growth county, it’s foreseeable that the cost of doing business will increase at greater slope than revenue. One can agree with “hire more people, pay the people more,” but the revenue doesn’t create this possibility.
“Your idea would be good if we truly didn’t know how we got here. We already know. Over decades, officials grew the county beyond what the revenue from 90k people can support. The county will need to reorganize.”
“Ted, the discussion with you centers on the argument that the fiscal footprint of the County is no longer sustainable. This assumes that at some point, even if the currently missing revenues are restored, we’re still in the big hurt locker because, ‘Over decades, officials grew the county beyond what the revenue from 90k people can support. The county will need to reorganize.’ When you talk about the need to reorganize, I’m assuming that means laying off employees, eliminating certain services, selling off assets, including property and buildings, perhaps refinancing certain financial instruments (COPs, POBs), etc. In other words, you’re most likely proposing something similar to a quasi-Chapter 11 Bankruptcy Reorganization, sans Bankruptcy Court.’”
“Jim, the county has a long-standing tradition of paying below-market wages, but it was only able to pay these low wages by deferring maintenance. Essentially, the county-operated under a Whac-A-Mole model where certain problems would get addressed by defunding other needs. The underfunded pension debt hasn’t helped, but there isn’t a single cause for the financial woes. It’s cumulative impact from decades of decision-making without sufficient data. When a building was acquired, parkland accepted, a road adopted, the county didn’t plan and put aside dollars for eventual maintenance. Rather, it just kept empire-building. That’s all caught up with us. The local portion of In-Home Supportive Services was paid from general fund because nobody knew the 1991 Realignment could be used. The $27M or so we spend on privatized specialty mental health services isn’t money that could be used for other purposes. In fact, it only flows when services are provided. In my view, past boards didn’t connect the dots between the performance of mental health services and general fund impact of public safety. I say this because standardized data does not exist to compare the performance in our county to any other county, the state or the nation. Dollar for dollar, how does our performance rank? Untreated mental illness and social problems generate general fund expenses under Sheriff, District Attorney, Public Defender, Alternate Defender, Jail and Probation.
“It’ll be a softer landing if the board makes hard decisions well in advance of June 1 (2024). Ignoring the problem won’t make it go away.
“Bottom line, the revenue growth curve, considering state and federal mandates, is inadequate to meet public expectations. Change the board, change management, blame this person or that person, and the core problem will persist. It’s structural.”
As far as a timeline for implementing his reorganization plan, Williams told his colleagues at their most recent meeting, “I know you’re probably not happy with me for bringing this up but I’m really worried about we started the year off in a really bad place. We gave some direction (to staff) but we’ve been talking about everything else, acting like we don’t have a financial crisis. I don’t know how you figure the numbers but I write them down and look at them, and go through the position allocation table to see what we can trim. I just don’t see an easy way to get there without a major re-structuring. And the time to do that is not in March or April (of 2024). The time to do it is before the end of the year because it will take time for staff to execute and implement whatever we come up with.”
One over-riding consideration for any reorganization plan is that current negotiations with county unions are stalled out due to this fiscal mess. What Williams terms as “hard decisions” needing to be made, will certainly include some involving employee jobs and wages, and perhaps working conditions.
There’s an awful lot of work to accomplish on this reorganization, and the ride to its destination will be anything but smooth.
(Jim Shields is the Mendocino County Observer’s editor and publisher, observer@pacific.net, the long-time district manager of the Laytonville County Water District, and is also chairman of the Laytonville Area Municipal Advisory Council. Listen to his radio program “This and That” every Saturday at 12 noon on KPFN 105.1 FM, also streamed live: http://www.kpfn.org)
The end of the year is not far off. Considering the wide implications of a serious restructuring that is reality-based, the chances of actually accomplishing all that in a couple of months seem extremely remote.
Mendocino County’s budget corresponds to a fiscal year that begins on July 1 and ends the following June 30.