Closing The Budget Gap, Mendo Style

Supervisor Dan Gjerde, Board of Supervisors Meeting, Tuesday, November 7, 2023: “I think we need to focus on implementing the cuts.” (Other supervisors had previously mused that some yet to be determined staff cuts would be required to balance next fiscal year's general fund budget.) “On that point, I mean, we've got three County employees who are working part-time on the Golden Gate Project, what they call the Golden Gate Project, looking at cost savings for the County. We are never going to solve the budget deficit with three county employees working part-time to solve the budget deficit. When I talk to people in the Executive office, I get redirected to the Golden Gate Project. They are the ones focused on making the structural changes and the cuts. That's not enough. By my count there are 18 people who are working for the CEO who are analysts or above in pay grade and responsibility and job description. I think we should direct the CEO to direct each of those 18 people to be assigned to work on at least one of the cost-saving ideas that have been captured and memorialized [sic] by the Golden Gate project. I am not privy to every single idea that has come in from County employees. I know of several items that have been discussed by this board that I have sent to the Golden Gate Bridge project which do not have a single county employee working on them right now because there is just the three of them. So I think we should give direction to the CEO to look through the 18 people who are analyst or above and who work for the CEO to go through that list and assign everyone on her team who is an analyst or above to work on at least one of those cost-saving ideas. I think we would see more forward movement than we are seeing right now. Some of these ideas… Right now, nothing is going to come forward unless the department that has a cost savings within it comes forward with implementing it. I don't think you can assume that within a department they will voluntarily, in every case, come forward with a proposal to save money. To get those departments to move we are going to need someone from the executive office working with the employees in the departments, the leadership of those departments, to track those ideas, work through the problems, and bring forward the implementation of those cost savings. Otherwise I think we are going to be here six months, a year from now and cost savings are going to be elusive and they are not coming forward and all we are going to see is bigger deficits with no solutions other than robbing Peter to pay Paul.”

Shocking as this number may sound, it at least appears to answer the question some people had asked about how many people are working in the CEO’s office. 

A normal person hearing this surprisingly large number, especially in the context of the budget deficit, would wonder why there are so many high level people in the CEO’s office and what they are doing, not to mention how much they cost. Including salary and multiple benefits, eighteen such people would cost north of $100,000 a year each, or over $2 million a year. Add the CEO and the five supervisors which cost another million dollars a year and we have the makings of “cost savings idea” #1. 

Supervisor Gjerde later reported that there were 72 items on the Golden Gate Initiative project's list of potential cost savings, but nobody asked for the list.

The board has previously stated that “public safety” is exempt from any budget cuts. In rough numbers that means that only about 40% of the $90 million general fund, around $35 million or so, would have to absorb upwards of $7 million (or more if you include the pension deficit) in cuts. Or 20% reductions in staff for such departments as Planning and Building, Transportation, Environmental Health, Public Health, Agriculture, County Counsel, and of course, the Auditor Controller Treasurer Tax Collector and several other smaller offices. (We do not know if the Public Defender's office qualifies as “public safety.”) The board has also previously exempted positions related to “revenue generation,” which would translate to even deeper cuts in remaining areas.

Of course if anyone were to propose such large cuts in those departments there would be significant pushback and, given this board's overall weakness, they would be paralyzed by having to consider such cuts in those smaller departments most of which are already understaffed.

We know of several significant potential cost savings ideas that have come up before but are unlikely to be on the 72 items on the Golden Gate Bridge initiative's list: 1. Eliminate Mendo's juvenile hall which costs over $2 million a year for a dozen or so delinquents. 2. Consolidate law enforcement dispatch from four 24/7 operations to one 24/7 operation (as proposed years ago by then Sheriff Tom Allman after which everyone agreed that it was a great idea but nobody did anything). 3. Eliminate the annual subsidy to the tourism industry. 4. Simply close selective officers for one day a week as was done back in 2009. 5. Cut the Executive Office and the Board salaries and benefits by 20%.

We heard this week that another senior staffer has been added to the CEO’s office to handle payroll who formerly worked in the already significantly understaffed tax collector's office, leaving that office with no experienced tax collectors.

Speaking of tax collectors, on the revenue side of the budget gap, the County has millions of dollars in uncollected taxes due — properties not on the tax rolls, improvements not (yet) assessed, new home buyers not (yet) assessed at higher market rates, tax bills not (yet) sent out, unsolved software problems, error corrections, and outright tax delinquents and lien sales. There are also indications that the Transient Occupancy Tax collections are falling short and are way behind and have not been audited since the last time former Treasurer Tax Collector Shari Schapmire hired an outside firm to audit the bed tax receipts a few years ago.

In the several hours the board spent whimsically discussing the budget and the oft-repeated need to close the budget gap, we heard nothing specific about possible cuts, nothing about revenue shortfalls or tax collection.

To add insult to irony, after Supervisor Gjerde’s comments about not enough people working on the possible cost-saving ideas, the Board asked CEO Antle to look for a consultant to train the 18 CEO staffers in how to handle cost-saving ideas.

Only Supervisor Maureen Mulheren said she was against hiring a consultant for this purpose. The other four wanted CEO Antle to find a consultant or hire another senior staffer and make a proposal at a future meeting.

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The Chicken Coop Reserve Fund

On Tuesday First District Supervisor Candidate Carrie Shattuck asked the Board why their budget chart that shows there’s more than $20 million in the General Fund Reserve when the Board says there’s only a $10 million general fund reserve.

Supervisor Ted Williams (and CEO Antle) responded that they’d added a chart since that first chart was posted which shows that about $10 million of the General Fund Reserve was “dedicated” reserves and, added Antle, “not available for payroll purposes.”

We found the second chart in a hastily added board packet item for the Tuesday meeting which indicated that some of the General Fund reserve was “dedicated.”

Williams said that the AVA has been saying that the General Fund Reserve is over $20 million and that’s wrong because, according to Williams and Antle, some of it is “dedicated.”

First, it’s not wrong. The $20 million is from their own chart with no indication of “dedicated” reserves until just recently.

Second, when we read the silly note about the newly added “dedicated” reserves, we saw that “Designated Reserves involve over 30 different reserve accounts housed [sic] in the General Fund. These reserves are set aside, or designated, to a specific purpose. Two examples of the designated reserves in this reporting would be, the General Plan Update Reserve, that is money specifically set aside to fund a future General Plan update, or the Spay/Neuter Deposit Reserve, in support of the County’s Spay and Neuter programs… the general reserve may only be established, canceled, increased, or decreased at the time of adopting the budget as provided in Government Code Section 29088. The general reserve may be increased any time during the fiscal year by a four‐fifths vote of the board.” 

So, saying that the mostly undefined (they only cite two of the 30 examples) “dedicated” reserve is “unusable for payroll purposes” is as if we at the AVA set up a Chicken Coop Reserve a few years ago but when the crunch hit for the last utility bill we couldn’t use the Chicken Coop Reserve for anything but a chicken coop.

Please. 

The County puts out a chart showing the general fund reserves are over $20 million, but then, after it’s pointed out by us, sneaks in an explanatory chart at the last minute with weasel words that some of it is supposedly “dedicated” to obviously unneeded projects like the General Plan update and a spay/neuter reserve (which the County’s many animal organizations should and probably would pony up for). These examples are the ones they picked to highlight out of 30?) Then Williams declares that the AVA was wrong for reporting that their own General Fund Reserve chart says it’s over $20 million. Which it clearly is, “dedicated” or not, and is available for general fund expenses at the time of budget prep if the Board chooses to use it.

Unfortunately, this minor example is typical of the way these self-serving and untrustworthy people handle even the mildest criticism and another reason the County needs a genuinely independent Auditor.

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Notebook

Dan Potash, covering the Mendocino Town Community Services District for the Mendocino Beacon last week reported that the District Board “heard concerns from residents and business owners regarding the lack of progress on a community water system…” Mr. Potash didn’t say which community water system he was referring to. Perhaps there are more than one. But careful readers will recall that in March of 2022 after the Big 2021 Drought Supervisor Ted Williams and State Senator Mike McGuire made a big announcement about a $5 million state grant that was supposed to finance the installation of a large water system for Mendocino:

“From Senator Mike McGuire: Big news for the Mendocino Coast: The Village of Mendocino is one of the most water scarce areas in our region. After months of work, help is on the way! Nearly $5 million will be invested by the State to build desperately needed water storage tanks and new wells that will enhance water supply and fire safety. Big thanks to the Special Services District [Mendocino City Community Services District] for the tremendous job on the planning efforts. We’re thrilled to start moving dirt, getting these projects built and we’ll continue to work with the District to ensure the project’s success in the months ahead!” McGuire’s political buddy Supervisor Ted Williams added, “This is huge news for Mendocino. I do not know any of the details and I do not see anything on the district site just yet.” 

A couple of weeks later it was later reported that the project would take five years because it’s in the Coastal Zone and paperwork requirements for such a basic system will be much greater than the already large amount of paper required. McGuire’s big announcement didn’t mention waiving any of those requirements because of the supposed water emergency the Town was facing which required them to buy trucked-in water from Ukiah. Now, the entire project has fallen off the radar screen and doesn't’ even get a mention at the Mendocino CSD meeting. 

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It’s unfortunate that the “Independent” Coast Observer has joined the Supervisors in their bogus “Get Cubbison” project. In their November 3 edition, the ICO’s Supervisors reporter Susan Wolbarst again reported false claims about Cubbison’s tenure as Auditor-Controller / Treasurer-Tax Collector. The front page headline said, “Mendocino County acting auditor drops bombshell at supervisors’ meeting.” Wolbarst went on to quote Acting Auditor Sara Pierce’s remarks at the October 31 Board meeting and her “numerous concerns” including some supposed bank accounts that Pierce said had not been disclosed to the Auditor. Wolbarst admits that “these accounts seem to be legitimate at first review,” and goes on to say that a review is underway, but that didn’t stop her from her sensationalistic headline. Wolbarst didn’t mention that these accounts were known to the Auditor staff and were not, as Pierce implied, some kind of secret slush fund. Then this week Pierce confirmed that the accounts were indeed fine and were set up at Coastal banks for the County’s various Coastal operations to save having to drive to Ukiah to deposit cash or checks. It’s not a problem, never been a problem, and is hardly a “bombshell” worthy of front page headlines. Wolbarst, who has not mentioned anything about Cubbison’s or her attorney’s defense, has done the ICO’s readers a disservice and has been very unfair to Ms. Cubbison. It will be interesting to see if she reports on Pierce’s update this week now that Pierce has said there’s no problem, no bombshell.