We didn’t really expect the Supervisors to address the many inconsistencies and incongruencies in Tuesday’s budget presentation that we previously outlined, that would be unheard of from this Board.
But at least they touched on — without resolving, of course — the still unaddressed multi-million dollar gaps in next year’s budget.
The Board agreed that Tuesday’s presentation by relative budget newcomers Sara Pierce and Tony Rakes seemed to be better than previous attempts, but nice graphs and charts don’t balance budgets.
The picture this improved presentation provided wasn’t positive. This year, property tax revenues are expected to be up a modest 3%. Sales tax revenue down almost 5%. Bed taxes down 12%. The carry forward from last year is at least $2 million less than in previous years, the Board’s recent salary and pension increases have put more strain on all departmental budgets, tax default auctions are way behind, the General Fund has had to cover about $5.5 million in Teeter Plan debt because the County paid schools and special districts their nominal amounts, but sales from long-delayed tax defaulted properties didn’t make up for it…
And that was just this current year (July 2023-June 2024). Instead of proposing any increased tax collections or specific budget cuts, Acting Deputy CEO Tony Rakes (the latest in a parade of budget presenters that CEO Darcie Antle has put forward), proposed using a variety of one-time funds to close the gap. Rakes also said the CEO’s office has asked the departments to reduce their non-salary costs (travel, training, supplies, contracts, etc.) by 5%. But that’s a small percentage of a small percentage, if it happens.
When Acting Auditor-Controller Treasurer Tax Collector Sara Pierce said that she expects some revenue from defaulted property auctions to make up for the Teeter Plan debt, Supervisor Haschak was skeptical, saying that even if they got some late taxes or property sales revenue from that process it wouldn’t come close to the $5.5 million loss the Teeter Plan has already suffered via the General Fund. Pierce said it was too early to say, and that they are only now catching up on a large backlog of tax lien sales and supplemental tax bills that accumulated during covid and before.
Supervisors Gjerde and McGourty thought the County should be doing more to increase tax collections, despite Supervisor Williams’ continued irrational insistence that it wouldn’t change the underlying deficit problem because, basically, revenues are not keeping up with inflation.
Supervisor Gjerde became so frustrated with the lack of attention to uncollected revenue that he grumbled:
“I don’t see anything in this presentation about revenues and tax collection. I don’t see it here in the meeting, on camera. I don’t hear it from the CEO saying ‘this is what my plan is, I’ve got a plan.’ I’d like to hear a plan from our CEO who’s paid $200,000 a year. So my plan would be that we direct the CEO to either put out an RFP [for assessing non-assessed properties] from the CEO’s office or we work with other counties to put out an RFP … In rural counties like Mendocino County all the houses are built as one-offs, not in a subdivision, and every contractor or every ‘builder’ [Gjerde’s air quotes] in Mendocino County asks their client, ‘Do you want building permit?,’ as if it’s an option! We know most projects are built outside of the system. Everyone has known that for decades. So I would like to see a bullet point to direct the executive office to send out an RFP to hire somebody to do the work because we cannot rely on the elected Assessor to come forward with a plan. I want the CEO to add a bullet point under budget projections for what they’re going to do to increase revenues and improve cash management because I’m not convinced we’re collecting enough [interest] from CDs and money markets, etc. and come back with budget projections. That’s how you balance the budget: you increase revenues one step at a time, one piece at a time.”
Supervisor Gjerde made his blunt criticisms of the $200k CEO and the unreliable Assessor clear. He may be exaggerating about “every builder” in the County asking their clients if they want a building permit, and that “most projects” are built outside the system. But he’s right that Mendo needs to focus on revenue collection, as we have been pointing out for years.
Haschak thought the County should do something to accelerate the retirement incentives they offer, noting that very few senior staffers have taken the County up on this option. Deputy CEO Cherie Johnson (and acting Human Resources Director) said that the Departments have been reluctant to guarantee that such vacancies would stay vacant for two years to realize the expected savings of such vacancies and still make sure that necessary work can still get done.
There was no public comment on the budget. In the end the Board voted 4-1 to accept the two presentations (one for this year and a preliminary one for next year) which depend heavily on one-time funds, such as the remaining PG&E settlement money, the remaining covid money, what’s left of the carry-over and use of some reserves. But this still leaves an estimated $4.225 million deficit for this year (ending on June 30) which went unaddressed. Supervisor McGourty added that the Board wants the CEO to come up with a plan for increased assessments and tax collections, to increase the rate of return on the County’s investment pool, and to try harder to avoid construction costs overruns. Williams was the only no vote, saying he didn’t like using one-time funds to balance the budget.
The highly anticipated re-hearing of the Redwood Valley gas station developer’s appeal of the Planning Commission’s permit denial ended in another postponement. Supervisor Williams appeared to have ignored the applicant’s demand that he recuse himself. We’ll have more on that coming up.
I believe the Board of Supervisors and the Executive Office are doing the best they can based on their capabilities.
Maybe Gjerde should look in the mirror, he pushed the consolidation of the two financial offices that left someone in charge with no knowledge of tax collection, tax sales, etc.
Tony Rakes is a good guy, but his experience is in computers/IT. He is not a person who has been working with budgets during his tenure with the County.
Require the budget managers to come with solutions or find other employment. Poor performers can be replaced. The CEOs have been running the county for way too long.
The Board caved into Haschak’s plan to cut the tax on pot growers in half. Perhaps he could admit that was a big mistake and the tax should be reimposed and the cost of policing pot growers should be borne solely by the the pot growers who are getting a free lunch.
Perhaps the Board should explain why for over a year they knew 1/3 of the property in the county pays no tax because it has never been assessed and why improvements are not assessed. And maybe this paper can actually expend some shoe leather on the issue.
The Board could at least acknowledge that by balancing the current budget using reserves, people like Carmel Angelo and John Pinches should be thanked. Angelo took the job when the County had no such reserves, no such tricks to pull out of a hat. She and Pinches had the moxy to actually take on Sheriff Allman to balance the budget and they made him sweat and probably contributed to his eventual heart attack. The current group has done nothing but throw Angelo under the bus, all of them. At least with Pinches they just pretend like the guy never existed. They have taken a lot of flack for it, but the solutions being used today are Angelo and Pinches’ legacy the current Board now uses to cover their ass while making not one single hard decision.