On Tuesday, we wrote that Supervisor John Haschak had said that he read something in CEO Darcie Antle’s CEO report about the County not meeting its attrition/cost savings targets that we had not found in the CEO Report. Then on Wednesday, we received a second CEO report for September. (CEO Antle usually prepares one CEO report per month.) In this special one-day-later second report we did find the Budget remarks from CEO Antle that Haschak was probably referring to.
They are disturbing:
Antle: “To balance the Fiscal Year 25/26 Budget, $6 million dollars in anticipated attrition savings was assigned to each County department…”
Bad wording, Antle probably means a $6 million total estimated cut was apportioned to the departments. Attrition, meaning leaving positions vacant that were made randomly vacant by staff departures for whatever reason.
Antle: “…This attrition savings was based on a salary and benefit calculation and the average turnover rate across all County General Fund departments…”
We said at the time that the calculation by Antle and her staff was not only dumb (no thought was given to which departments, no distinction was made between general fund and non-general fund departments, no attempt was made to establish key positions that were important to be retained, etc.), but the assumptions made were ridiculous and appeared to be backed into by starting the CEO’s $6 million estimated budget gap, not on a realistic staff turnover rate. Nevertheless Antle and the Supervisors pretended it was a legit target because it made the budget look balanced. But in reality, it just meant postponing the inevitable, again.
Antle: “…The CEO’s Office has been monitoring the progress made toward realizing the $6 million attrition savings and has determined that the budget is on track to save approximately half of the $6 million savings projected…”
They are not “on-track” for anything. The entire process is random and no effort is being made to save money; they’re just sitting back and watching who quits. They are lagging well behind their own dumb assumption. Back in May, the CEO’s office had promised to deliver monthly progress reports so that we could all see how the “Strategic Hiring Process” was going. Now more than four months later, all the CEO provides is an unverifiable claim that the (ridiculously calculated) $6 million is not expected to be reached by “attrition.”
Antle: “…The CEO’s Office recommends the County continue to follow the Strategic Hiring Plan and existing hiring freeze to avoid losing anticipated savings and to realize further savings over the course of the 25/26 Fiscal Year. The CEO Budget team will continue to monitor and provide regular status reports through the CEO and Quarterly Budget Reports…”
They did not “lose savings.” There were no savings to be “lost.” There were simply fewer people quitting than they wrongly assumed. Now the formerly promised “monthly” vacancy reports have become “regular” and/or “quarterly” vacancy reports, which means whenever the CEO feels like it, if at all. We have yet to see even one. The CEO also suggests that the path forward is to follow the hiring freeze. But already this year several departments have reported that they have hired new staff without CEO or board review or approval.
Antle: “… Fiscal Year 24/25 Non-Departmental revenue [i.e.,. property, sales and bed tax] is expected to come in higher than originally projected, with final actuals pending Auditor year-end close. The 1st Quarter Report for FY25/26 will include information on the potential impacts of the increased revenue and CEO recommendations for use of the potential funds…”
“Use of the potential funds”? Since there’s no monthly budget reporting of expenses or revenues, whatever the CEO and Auditor determine the close out to be will come as a surprise to the Supervisors, so they will have no ability to consider in advance how to use any “potential funds.” Apparently the CEO thinks that “higher than originally projected” means a significant portion of the budget deficit will be covered. We doubt it.
Antle: “…The CEO’s Office will be working with County Departments starting at 1st Quarter to track funding sources more accurately for each County employee…”
“Will be”? September 30 is the end of the “1st Quarter.” Funding sources are not connected to “each County employee.” They are allocated to departments to cover departmental salary expenses.
Antle: “…This improved fund accounting will help in understanding which funding streams fund which positions and create greater opportunities for utilization of grant and reimbursement funding…”
Pure hot air. By using their random vacancy approach, there’s no point in trying to connect funding to positions. Fund accounting improvements, if there are any, will do nothing to reduce the looming deficit. As long as there’s no budget reporting we all have to take the CEO’s highly dubious word that the budget gap will be significantly reduced.
Meanwhile, the Board seems stuck in their zero sum budget game with the only significant cost savings idea being mentioned being resignations and layoffs, with no consideration given to revenue enhancement or the much larger range of options the Board and CEO considered back in 2010 when comparable budget shortfalls had to be managed. But back then Mendo had a more competent Board and CEO who, flawed as they may have been, did the hard and unpopular work of balancing the budget.
Excellent reporting. Thank you.