As expected given the dearth of information requested by the Board and/or provided by staff last week, Tuesday’s budget discussion was another disorganized, muddled mess. In the end we couldn’t even figure out what the final motion was. Even though Board Chair John Haschak asked that the motion be read back, that was bungled too. The motion they voted for was incomplete. It had something to do with asking staff to return at a future board meeting with more info, presumably budget related. If history is any guide, they still won’t have much to work with. Staff wants “direction” from the Board and the Board wants ill-defined info from the staff.
There was plenty of untethered free association and opinion about rudimentary sixth-grade budget philosophy, such as a vague preference for not using one-time funds, the county’s “structural deficit,” what are “mandated services,” what kinds of things should be exempt from the budget axe, how the budgets of various departments are linked, and on and on. None of which addressed the question of how to actually balance the budget.
Supervisor Haschak had a scattergun list of ideas, most of which wouldn’t make much of a dent in the alleged budget gap. Supervisor Bernie Norvell thought the County should institute a “hard” hiring freeze where only the Board could authorize new hires. Williams suggested withdrawing from the Teeter Plan. The other two board members, Ms. Mulheren and Ms. Cline, had no specific ideas or suggestions. There was no follow-up or motions related to any of the ideas mentioned, amorphous as they were.
The “Teeter Plan,” a state option which allows counties to pay a fixed allocation to schools and special districts while letting the County keep penalties and interest on delinquent taxes (if and when they are paid) is said to be losing money. Historically it has made money via those penalties and interest. Instead of asking why it’s losing money, the Board threw up its hands and said they should consider withdrawing from the Teeter Plan. Such an ill-advised move would destabilize school and special district funding and would reduce the County’s motivation to collect taxes due. It’s a bad idea, so the Board will probably move in that direction.
Sheriff Kendall told the Board he his budget was not a “sacred cow,” and that he’s willing to accept his fair share of cuts if and when it comes to that. Although he has millions of dollars of unbudgeted requirements that must be addressed somehow, chief among them the staffing of the new wing of the jail.
Former Willits City Councilwoman Madge Strong told the board that their disorganized budget discussion was too scattered to expect any useful input from the public.
Patrick Hickey, Mendo’s long-time union rep for the Services Employees International Union which represents the majority of county employees was the only speaker with substantive remarks.
Hickey: “As you work to prepare the budget for 2025-2026 you need to understand that the public and your employees have lost trust in you. You need to earn that trust back by being transparent and more forthcoming regarding county finances. Why don’t they trust you? Let me give you one example. In 2023, the board and the administration swore up and down that the county was deep in the red with a structural deficit of tens of millions of dollars. We called that a fiction at the time. So what did the 2023-2024 annual comprehensive financial report end up saying? A surplus of $13.6 million. A swing of more than $20 million. The county has always overestimated expenses and underestimated revenues. These chicken little announcements about the sky falling are once again being rolled out like clockwork as the board begins its discussion on the budget. If you do this every time you lose credibility and you lose public trust. You need to earn that trust back. What are some steps that the board could take to make a stronger budget? First, stop digging a deeper hole. Cut your losses on ill-advised legal actions that cost county residents and take your focus off running the county. The county has many allocated positions that are vacant and have been sitting vacant for some time. Those should be taken out of the budget. Do a vigorous review of the Teeter Plan. It has been a money loser for the county. Determine if the county has a reasonable manager-to-worker ratio. Streamlining and flattening the chain of command can boost efficiency and provide cost savings. Keep focused on collecting funds that are owed to the county. Delinquent property taxes under assessed properties, uncollected, transient occupancy taxes. None of these will generate huge revenues, but it adds up. It would confirm to county residence that the county holds everyone to the same standard. As the county works on its 2025 2026 budget are there reasons for concern? Yes absolutely. Based on the proposals coming from Congress to gut Medicaid And so forth are putting the county and our nation in a very dangerous position. Funding that supports healthcare, nursing homes, home healthcare workers, substance, abuse, treatment, public health programs, mental health programs, all are at serious risk. If they are cut, it will fundamentally change County services. We urge everyone to advocate strenuously against these disastrous ideas and for the county to prepare contingency plans for how best to respond to all possible scenarios.”
As usual, Hickey was ignored.
No one asked about past budget balancing measures. No dates were set for future decisions. No one asked for tiered recommendations. No commitments were made.
A READER ADDS: The Board appears to have sleep walked back to what led to the 2010 era budget wars. Probably 75-80% of the County budget is jobs, the county being a people intensive industry. Back then it was the “Slavin Study” that enhanced county pay to be more competitive. The Board entered 2010 with no reserves, having spent them down in the good years leading up to it. Then cut pay by 10 percent and all the other battles. Today, the County has entered into new competitive agreements and clearly have no plan on how to pay for the cost. They have reserves but no political will to protect them, instead always kicking the can down the road, which is what I suspect will happen again. The day they don’t or can’t kick the can down the road, a new era of budget wars will result. It’s now only a matter of time. This year or next year? This isn’t just history rhyming, it’s almost the exact same thing. But the thing about the 2008 recession is it hit property taxes hard, which is a county government’s bread and butter. A true gut punch to the county system. Today, so far, this isn’t a revenue issue, its completely a spending issue. Completely the Board’s fault.
Bored of Supervisors?
Me too
The Teeter Plan is basically a “loan” to taxing entities within the county, such as school districts and special districts. The amount of the loan each year is the amount of property taxes assessed in that year less the actual property taxes collected, for each district. The benefit to the county is supposed to be that the county will keep those delinquent taxes, plus all penalties and interest when they are eventually paid. For reasons that have not been adequately quantified, the county has never been able to collect enough delinquent tax, penalties and interest to recover the original “loan”. This system has been in place for over 30 years, it is still dysfunctional, and the county does not know if it will ever be functional. It is time to be rid of the Teeter Plan, and concentrate on matters that county officials can understand. Yes, school districts and special districts will receive less than before, but they will not receive a “loan” that will never be recovered by the county.
Before dropping the Teeter Plan, which has obvious benefits to the School and Special Districts, both categories of which are better managed than the County, it would be nice if the Board of Irresponsibles at least tried to find out why the Teeter Plan does not make money and fix it.
That’s usually a reasonable request, Mark. But it has been done a number of times over the years, and we are no closer to having answers. 30+ years is enough.
The County had to be bribed by the State to enroll in Teeter back in the 90’s. Its a program that could work, but Mendo’s slow growth, questionable housing code enforcement and the decline of the Hill Muffin puts the County at a heightened risk than a urban or suburban county. Oh, and one very minor fact being that the Board has taken the Teeter revenues and applied it to the General Fund, as opposed to the debt, for over half of every year Teeter has been a program. That might lead to a problem.
I never understood why the county called it the Teeter “debt”. It was not the county’s debt, it was money that was owed to the county, and expected to be received at some future time.
It was a county debt back then because when the money was received by the County it was put into the General Fund as opposed to the Treasury Pool to pay back the debt to owed the Treasury Pool. Proceeds were then spent by the County as though it were County revenue. The debt then remains with the Treasury Pool which needs to be paid interest. But year after year the balance grows because they kept siphoning off the money meant to pay down the debt. The program started with debt. When times are good, interest payments to the Treasury Pool may be very low, even with a large amount of debt. However, when times are bad, the Treasury starts to rake in a lot of interest that the County is required to pay that interest and suddenly you start owing quite a bit just to pay interest. Bottom line is that Teeter was never meant to be a benefit to the County, but to the Schools (reducing the State’s Prop 98 liability) and Special Districts so that they would have revenue predictability. And of course the County gets no credit for doing something nice. For some reason people continue to believe that Teeter somehow is supposed to benefit the County, and it might under ideal circumstances, but it wouldn’t be very much money. Teeter essentially became a back door way to (accidentally or purposefully) create debt that the County owes the Treasury Pool that does not show up on the books unless someone looks. The Treasury Pool holds cash that does not just belong to the County. The issue with Teeter was addressed during the last recession, but if there are problems again, my guess is its because either (a) the cannabis crash has caused a lot of defaults that will take 5 years to worm their way through the system to be repaid or, (b) they started siphoning off the payments as though they were exclusively General Fund revenue, again. The only real benefit the County got from Teeter was whatever bone the State threw at them back in the 1990’s to get them to adopt the program which by now is long forgotten/spent.