Supervisor Mulheren’s Cock-Eyed Budget Optimism

Supervisor Maureen Mulheren posted an hilariously optimistic County budget summary on her facebook page on Thursday, following Tuesday’s budget presentation to the Board:

“At this week’s Board of Supervisors meeting, Mendocino County approved a series of important actions aimed at strengthening public health, improving hiring and retention, and balancing the County’s budget amid challenging state and federal constraints.

“Strategic Hiring and Staffing Progress:

“The Board approved the Vacancy Rate, Recruitment, and Retention Report as required under Assembly Bill 2561. This marks a significant milestone in a five-year effort to improve County hiring practices. While challenges remain, the County has made measurable progress by implementing a Strategic Hiring Plan that prioritizes intentional, efficient staffing for critical roles.

“Budget Breakdown: Closing Gaps, Preparing for the Future

With budget season underway, the County faces ongoing financial pressures from both state and federal levels. Still, County staff and leadership presented a balanced approach to meeting local needs while planning for long-term sustainability.

“Key budget details include:

• Completion of the final $4.3 million payment on Pension Obligation Bonds, freeing future funds.
• Use of $6.1 million in one-time funds to balance the current budget.
• Over 46% of the County’s population is enrolled in Medi-Cal, the reprompting continued investment in health and social services.
• Notable savings include $6.3 million projected from staff turnover and $338,000 from the Voluntary Separation Program.
• The County is exploring the use of Opioid Settlement funds to support medical services in the jail, in partnership with the Sheriff’s Office.
• $500,000 from the Drought Fund is being used to stabilize disaster recovery efforts.
• Certain upgrades, including $441,000 in IT services, have been deferred.

“Looking ahead to Fiscal Year 2026–2027, conservative estimates show that rising expenses could consume anticipated pension savings. Revenue is projected to remain flat at $83 million, not including restricted funds from Measures P and O, which are designated for fire services and libraries.

---

“Departmental Impact and Response

“Several departments expressed concerns about deep budget cuts:

• The District Attorney’s Office warned that Proposition 172 adjustments could hamper case closures.
• Probation reported difficulty meeting state mandates with reduced funding.
• The Sheriff’s Office will collaborate with County leadership on recruitment strategies, particularly for staffing the new Behavioral Health Wing of the jail.
• Human Resources is reducing staffing and contracts while enhancing cross-training and internal efficiencies.
• Animal Care Services will leave some positions vacant but expects no decline in service quality, thanks to strong collaboration between coastal and inland teams and dedicated volunteers.
• Disaster Recovery and the Office of Emergency Services continue to wrap up past FEMA projects and focus on readiness for future events.

“The Board approved the budget as presented and appointed Supervisors Ted Williams and Madeline Cline to an Ad Hoc Committee focused on the ongoing Strategic Hiring process and broader budget planning.

“Personnel and Hiring

• Approve the Vacancy Rate, Recruitment, and Retention Efforts Report per Assembly Bill 2561.
• Acknowledge improvements in the hiring process over the last five years.
• Continue using the Strategic Hiring Plan to fill vacancies more intentionally.

“Consent Calendar Items

• Approve furnishing the new Sober Living Facility at Ukiah Recovery Center using Opioid Settlement Funding.
• Approve the 2023–2026 Mental Health Services Act (MHSA) Three-Year Program and Expenditure Plan, and the 2025–2026 Annual Update.

---

“Budget Highlights

• Budget impacted by State and Federal constraints.
• County has been more active in meeting healthcare needs:

Record number of children’s vaccines administered.

Increased In-Home Supportive Services to help seniors age at home.

• 46–48% of the county’s population is on Medi-Cal.

Ongoing need to support this population to reduce mental health issues, substance use disorder, and child/elder neglect.

• Final payment made on Pension Obligation Bonds: $4.3 million.

Total of $6.1 million used in One-Time Funds to balance budget.

• $5.5 million in departmental funding requests were unfunded.
• $6.3 million in projected savings due to 6% staff turnover, supported by the Strategic Hiring Plan.
• $338,000 in savings from the Voluntary Separation Program.
• Exploring use of Opioid Settlement funds with the Sheriff’s Office for jail medical services (NaphCare).
• Use of $500,000 from Drought Fund to help balance the Disaster Recovery budget.
• Deferment of $441,000 in IT services.
• Budget +1 year estimate (FY 2026–2027):

$4.3 million in pension bond savings consumed by a 3% increase in expenses. Flat revenue projection at $83 million.

• Revenue Projections Slide Notes:

Measure P and Measure O revenues are excluded from the general budget as they are dedicated to Fire and Libraries.

FY 2025–2026 projected to bring in $1 million additional revenue.

• Need to reserve PG&E Drought funds for: Emergency events, The Potter Valley Project, Coastal water security
• Transportation:

”Requires ~$5.5 million/year to meet 20-year plan goals.

A new tax could potentially generate $90 million over 30 years to address roads not covered in the existing 20 year plan.

“Board Action

• Board supported the proposed budget.
• Appointed an Ad Hoc Committee (Supervisors Williams and Cline) to work on the Budget challenges and solutions with Public Safety and Strategic Hiring process improvements for the most efficient outcomes.”

---

The level of rose-colored gloss-over in Supervisor Mulheren’s rosy budget summary is impressive in its naivete, especially when she’s talking about the largest budget assumptions in next fiscal year’s budget, mainly in the Sheriff’s budget.

For example, Supervisor Mulheren says, “The Sheriff’s Office will collaborate with County leadership on recruitment strategies, particularly for staffing the new Behavioral Health Wing of the jail.”

Actually, on Tuesday the Sheriff said he’d do what he can, but he’s facing a Sheriff/Patrol/Jail deficit of more than $4 million with no plan in place to reduce it, meaning that the County will somehow have to address it somehow during the fiscal year.

Kendall: “Because we represent the largest ask from the General Fund, the Sheriff’s Office is expected to take the largest cut. That’s approximately $2.7 million on the patrol side, and $1.4 million on the jail side. I understand that the strategic hiring freeze is important. But we also have to remember that we will be opening the new behavioral health wing of the Mendocino County Jail soon. That will cost us about ten employees. I do not know where we are going to come up with those if we don’t have the money to pay for what we have right now. We have some concerns regarding being able to get these people hired in time. That’s very important because we have to get that jail opened by a certain date or the state can come back after us for various things. I don’t want to play that game. I want to be able to get the job done. When I look at my overall budget, we are in hard times. I understand that. I am not expecting you guys [the Supervisors] to wave a magic wand or rob a couple of banks, because that’s still wouldn’t get us where we need to be. My thought process behind this is we will continue going down the road working with the CEO and looking for quarterly shore-ups. My Undersheriff, Mr. John J Magnan, has started down the road of looking at office closures on certain dates and times so we would have less professional staff in there through attrition. It would mean we would basically close an office to catch up on work on certain days at certain times where we wouldn’t have a huge impact on the public. That’s probably going to be helpful. A lot of the work that we have to do is mandated. We have to report to the state. We have to get reports to the District Attorney. We have to have a certain number of people working at the Mendocino County Jail to keep it off of lockdown, to keep it open, to keep the services going. If we don’t, we begin looking at liability and lawsuits. These are the issues that we are all facing at a time when we see prices going up and revenue going down. We gave cost-of-living increases and raises to our employees. I appreciate that because if we hadn’t maybe what you wouldn’t have any employees maybe that would solve the budget problem, but it wouldn’t solve the problem for the public. Currently, we face issues in Mendocino County that absolutely demand that we do our job. There is a demand that we have deputy sheriffs on the street. I don’t know how many of you folks have the public crawling up your back about there not being enough patrols in various areas when we have two people on the street at any time on the coast and for the Central District or the North County. If you split 3500 square miles between six deputy sheriffs… And usually, if we are lucky, we have a couple of sergeants to help. So at this point in time, we are running at the bare bones minimum. Some of this is my fault because I requested that we work very hard to get some market parity and raises for our employees. But if we had not done that we would not have the employees we have right now. We do have attrition. I have separated myself from a few of my employees over the last several months because they were not quite meeting muster. But would we be able to replace those employees? My hope is that we can get through this budget cycle without causing too much pain and over time allow us to work with the CEO on a quarterly basis and let you know what success we have. Rome was not built in a day. We will not solve this problem in 24 hours. We have had a structural deficit for quite a while. My budget has a structural deficit of roughly $4 million. We have to all get in the boat and start pulling in the same direction if we are going to get through this. We can get a little passionate about our agencies and our offices. But now is the time to be passionate about each other, working our way through this, making cuts where we have to. Hopefully we can get some one-time funding from the state or the feds to do some of this. We were able to lean in on that for the recent homicides in marijuana grows. That will save us about $300,000. Every homicide that we have I can almost immediately say that it will cost us at least $150,000 by the time we get done getting and giving testimony and having a person convicted. I don’t envy you folks. I am sorry you are in the positions you are in. I am sorry I may have caused some of that. But that’s what I had to do, so all of us have to do what we have to do to be able to get through this. … We are looking at roughly a $16 million structural deficit for next year as a county. How do we continue on? We will be coming in and we will be saying we have to hire for that new wing of the jail. We will be coming in asking for about how to close a $4.1 million deficit. Right now. I am not going to be able to come in on budget. I know that. But I will try. We will see where we land. We expect the new jail wing to open as early as January of next year. But we have a few basic items to iron out and see how we are going to run it. The last time we had to do something like this it took us about a month to be able to get the kinks worked out and to get inmate movement worked out and things like that. Sometimes the best laid plans do not look like what is necessary on the ground. You have to react to what’s going on when you are into it.”

While the Sheriff may be working on whittling down his current $4 million deficit, he will also be swimming upstream against very predictable cost increased which could easily add significantly to the deficit he already faces.

Mulheren also says, “Notable savings include $6.3 million projected from staff turnover and $338,000 from the Voluntary Separation Program,” and, “$6.3 million in projected savings due to 6% staff turnover, supported by the Strategic Hiring Plan.”

As we have noted before those “Strategic Hiring Plan” savings (about two thirds of which are included in the Sheriff’s $4 million plus estimate), are simply not going to substantially materialize, not to mention that the numbers don’t add up (mainly because they include resignations and retirements in non-General Fund positions).

Mulheren says the County is going to “Use of $6.1 million in one-time funds to balance the current budget.”

But she does not say where those one-time funds are coming from or what the impact of not spending them for their intended purpose will be, or what the County will do next year when, even with the end of the Pension Obligation Bond payments, those funds are gone and the deficit is projected to be bigger than this year.

There are a couple of other significant gaps in Mulheren’s report.

1. There’s no mention of the consternation caused by the City of Ukiah’s massive annexation proposed, sparked, of course, by Mulheren’s ill-advised tax sharing agreement with Mendo’s incorporated cites, a deal which, if not withdrawn as many inlanders are calling for, will only make the County’s long-term financial viability worse.
2. Mulheren makes no mention of what the County could or should be doing to increase revenues.
3. There’s no mention of the cost of the Supervisors and the Executive office where the fewest cuts could result in the most savings with the least impact on services.

Rather than optimistically pretending that the budget is fine and everything they’re doing is routine and it will all work out in the end, Mulheren and her colleagues should take a page out of the Sheriff’s approach and honestly state that the County’s budget is seriously out of whack and drastic measures will need to be taken when, during the course of the coming fiscal year, they run out of bailing wire, duct tape and chewing gum to patch it.

---

MENDO’S BUDGET-BALANCING SHELL GAME

Another dubious assumption in the County’s projected budget for 2025-2026 is that the “carryover” from this fiscal year (2024-2025, ending June 30, 2025) will be around $6 million and that this carryover, which just happens to be about the same amount as the dubious estimate of the amount to be saved by keeping positions vacant for the year, will be drawn on to cover whatever savings don’t materialize from not keeping funded positions vacant.

Get it? First they assume there will be millions in carryover (unspent money) this year (a number which won’t be known until the books are closed sometime in the fall), and then they assume that it will be a whopping $6 million, and then they tell everybody that if they don’t meet their ridiculous vacancy target that they will use the mythical $6 million carryover to cover the mythical vacancy savings which nobody expects to save because they know that they will have to replace many of the vacant positions. Then they call all these rolling assumptions “one time funds,” and — presto! — they have a “balanced” budget.

The whole idea of a “balanced budget” when there are always unknowns and variables and assumptions involved is a fishy pretense to begin with on top of a very fluid process. But when the budget builders put in ridiculous and precarious assumptions just to make the budget appear to be “balanced,” it makes a mockery of the process and makes their empty claims that “we don’t have the money” for this or that hard to believe since they can cover millions of costs with assumptions that don’t stand up to scrutiny.

The budget is supposed to be a management tool, not just a once-a-year math exercise. It’s supposed to help managers see trends, optimize revenues, and examine expenses over the period of the budget. When the budget is seen as a perfunctory requirement built on financial number manipulation, it gives the Board and the CEO an excuse for not dealing with actual budget gaps because they know that underneath it all the “budget” is just a pile of false assumptions and self-serving estimates.