Follow The Bouncing Budget

Item 4c on the October 7 Supervisors agenda called for the Supervisors to “Approve or Deny Requests from Department Heads and Elected Officials Regarding Budget Impacts, Funding and Recruitment of Vacant or New Positions Following the Strategic Hiring Process.”

Mendocino County CEO Darcie Antle introduced the item by saying: “We have some hard decisions here. A handful of departments in front of you today have requested to fill positions. There is no doubt that all these positions are for needed and mandated services…”

That “handful” of departments included the District Attorney, the Library and the Assessor Clerk Recorder.

Antle continued: “The county currently has 68 positions in some form of recruitment not including those in front of you today. As you know, we are operating in the current physical year in a deficit. And we are projecting a $16 million deficit for fiscal year 26/27, not to mention HR-1 [Trump’s “Big Beautiful Bill”] and the state budget. The fiscal team with the help of the departments will present first quarter financial data on November 4. They will be able to provide more current fiscal information at that time. I expect the Auditor Controller Treasurer Tax Collector to have closed fiscal year 24/25 at that time.”

CEO Antle did not offer any estimate of the budget impact of filling the 68 positions that are “in some form of recruitment,” nor how many of them are expected to actually be filled, and nobody asked about it.

After approving a couple of new Library hires which were not funded by the County’s General Fund, and some very limited hiring requested by the Assessor Clerk Recorder (which was accompanied by detailed budget numbers), the DA’s request to fill vacancies was put off to the November 4 meeting because the Board claimed they didn’t have enough budget info to approve them — despite, as Supervisor Madeline Cline noted — the agenda item specifically calling for the requests to be accompanied by budget impact info. CEO Antle promised that she would provide the necessary budget on November 4.

November 4 arrived and not only was there no budget impact information about the District Attorney’s staffing request, there was no mention of the request from the DA at all.

The latest District Attorney’s office budget vs. actual expenses chart included a note that said, “The District Attorney’s Office has reported that the Office will meet the applied 6% attrition [leaving vacant positions open] savings of $414,341. Executive Office attrition tracking for the Office projects the DA budget will be over budget by approximately $800,000 in Salaries and Benefits by the end of fiscal year based on current trends. The Executive Office will continue to work with the District Attorney’s Office and monitor activity throughout the fiscal year as more information becomes available.” The Executive Office did not mention the DA’s request for new hires, including several relatively expensive staff attorneys.

To summarize: The District Attorney did not return to request that positions be filled; the District Attorney “will meet the applied 6% attrition savings” presumably because vacated positions will be left vacant; and yet the DA is expected to exceed his budget by about $800k.

The November CEO Report segment listing budget vs. actual for the First Quarter of Fiscal Year 2025/26 (July-October 2025) shows that the District Attorney “regular employees” line item expense so far this fiscal year (July-October) is about $1.35 million vs. an annual budget of about $3.35 million, or about 40% expended for about one-quarter of the year. If the regular employees expense continues at this rate it will be end up at about $5.4 million, about $2 million over budget.

No wonder the Board didn’t know what to do with the District Attorney’s staffing request.

There was no further discussion of the District Attorney’s budget or staffing at the November 18 Board meeting.

For comparison, the Sheriff’s office (excluding the jail) “salaries” budget for the first quarter is about $10.7 million with a reported $3.6 million expended. At that rate the Sheriff’s salary line item will end up at about $14.5 million, some $3.8 million over his annual budget.

The CEO budget note on the Sheriff’s office (and Jail) budgets:

“The Sheriff’s Office and Jail do not expect to meet the applied 6% attrition savings – totaling $1,719,765 and $855,128 respectively – for Fiscal Year 2025-26, due to public safety staffing needs for patrol and new Jail staffing expenses. Elimination of positions and cuts to services and supplies have been offered to address, in part, the 6% savings. Total combined savings for BU 2310 [the Sheriff’s office] due to cuts … total approximately $225,500. Additional revenue from the Opioid Settlement funds applied to Coroner related expenses may further offset general fund contribution, but this amount will likely not be known until mid-year.

“Total savings to Jail from add/deletes/cuts total approximately $104,000. There may also be additional revenue realized through the Jail Based Competency Treatment Program (JBCT) agreement with Department of Homeland Security (DHS) due to the program’s success and the occupied bed count increasing slightly from what was initially budgeted back in March. We are projecting approximately $100,000 in additional revenue from JBCT activities.”

Of course, these numbers are snapshots, not anywhere near final budget numbers for the fiscal year. The period that the expenses cover in the detailed budget vs. actual report is not entirely clear. (It could be a couple of weeks more than one quarter.) So all of this is guess work, subject to change.

However, whatever the numbers are, the picture is both confusing and ugly.

On November 18, CEO Antle reminded the Board that the carryover from last year — the amount of revenue received minus General Fund expenses — is between $11 million ($12 million if you include inaccessible investment value increases) and $16 million, is “one time funds” and should not to be used for ongoing expenses or to cover this year’s deficits.

On the plus side (if you’re inclined to think that keeping positions vacant is a good way to balance the budget), the CEO reported last week that her finance team now forecasts that the projected vacancy savings for this year are magically up by almost $2 million compared to her estimate just two weeks prior.

Which brings us to Supervisor Ted Williams’ concluding remarks last Tuesday:

“In just about every conversation I have with constituents it’s about county finances and reporting. I hope the board will give serious consideration to treating it as a number one priority to revamp our financial systems so that we cannot just talk about what happened two years ago, but talk about the year ahead. We don’t seem to have a forecast that we can really believe because in one breath we are talking about a financial crisis and we won’t be able to make payroll and in another breath we find there’s $11 million on the table. Somebody after the fact could make sense of all this, but there’s no way to tell that story looking a year ahead. It makes every effort that the county engages in difficult because we don’t know what we have to work with. I have come to the appreciation that we have good people working diligently but within a really archaic framework. We also have some bad tools. Maybe the tools are fine, but we just need to rethink how we work with them. But that’s where my constituents would like the county to put emphasis: fixing that financial accounting system and the reporting structure so that we can work on dependent projects.”

Which is it then? Is the County’s finance/budget computer system faulty? Is the “thinking” faulty? Is the CEO incapable of using the accounting data to provide meaningful reports? Is the Board incapable of even knowing what the problem is?

None of Supervisor Williams’ colleagues responded to his request to make financial reporting improvements a top priority.

Does that mean they think everything is fine and there’s nothing to worry about?

Funny, four years ago in the run up to the wrongful suspension of Auditor-Controller/Treasurer-Tax Collector Chamise Cubbison the then-Board, led by Supervisor Williams (and former Supervisor Glenn McGourty), was doing everything it could to blame the financial reporting problem on Cubbison. That misguided effort not only fell embarrassingly flat, but is likely to cost the County millions of dollars they don’t have in a settlement of Cubbison’s pending civil suit. (Cubbison’s lawsuit was on the Closed Session agenda again on Tuesday, but the Board again had “nothing to report.)

Four years later and the Board is still in the dark, questions of staffing and filling vacancies are going unasked and unanswered, and nobody seems to know what the problem is. In fact, they don’t even agree that there is one.

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Budget (Fantasies) vs. Actuals

Supervisor Ted Williams:

“Mark Scaramella wrote: ‘Which is it then? Is the County’s finance/budget computer system faulty? Is the ‘thinking’ faulty? Is the CEO incapable of using the accounting data to provide meaningful reports?’…

Mark, the county’s accounting system is not capable of producing the reports we expect today. When the county transitioned from the old workflow into the then-new software, the migration appears to have been done without fully considering what the new system could and could not produce using that legacy flow. At the end of the day, accounting software is just a database and a database can only generate meaningful reports if the underlying structure and inputs are sound.

This issue spans multiple departments, including those under the Board of Supervisors and those under independently elected officials. Addressing it would be a multimillion-dollar effort and would require coordinated collaboration across departments. Without that effort, we will continue to see the same outcomes.

While upgraded software might improve the workflow, it is also very likely that much of the workflow could be corrected within the current system if it were properly analyzed and reconfigured.

The solution costs are software licensing, support and staff time. The status quo costs are the outcomes we see today.”

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Mark Scaramella replies:

As usual, Supervisor Williams avoids the necessary particulars to form the basis for a useful exchange. Somehow his individual departments are capable of managing their budgets reasonably well as we periodically but randomly see when department heads discuss their budgets. The Sheriff, the DA, the Planning Director, the Probation Chief, the Auditor-Controller/Treasurer Tax Collector, the Clerk-Recorder-Assessor, the Transportation Director, the Library Director, etc. all seem to have a decent grasp of their budgets and actuals. We never hear them complain about the software during their budget presentations.

The Board, including Supervisor Williams, has never asked for a department by department monthly or quarterly budget breakdown, even though 1. We’re sure the Departments are generating them, and 2. Lately the CEO’s office has been including full department by department budget vs. actual (expense) snapshots with percentages for each line item. Surely, this could be the basis for adequate departmental budget reporting.

We recall the Williams-led drumbeat leading up to the entirely unjustified unpaid suspension of Auditor-Controller/Treasurer Tax Collector Chamise Cubbison during which Williams regularly berated Cubbison for not providing financial reports that Williams and McGourty said they wanted. In every case those complains arose prior to the suspension, Ms. Cubbison politely requested that Williams and McGourty provide examples from other counties of what they wanted. But Williams and McGourty weren’t listening, blindly repeating their misdirected Cubbison complaint over and over. Cubbison also correctly pointed out that she could provide revenue status reports, but that expense budgets vs. actuals are the responsibility of the departments and the CEO. Again, no response. To this day, we have yet to see Supervisor Williams tell us exactly what he thinks is missing from the existing budget tracking system/software that would magically make them “the reports we expect today.” (“We, of course, being Supervisor Williams; none of his colleagues seem to care.)

Therefore, the problem, such as it is, lies at the CEO and Board level, not with the software, and not with the departments. Nor is it likely that a “multimillion-dollar effort” would fix whatever reporting problem Williams is talking about.

For a small example, after reviewing the Sheriff’s budget status report buried deep in the CEO’s latest report the other day it appeared that the Sheriff’s extremely high workers comp expense for his patrol division was running much higher than the workers comp for the jail. When I asked the Sheriff why, he knew right off the bat that for some reason they pay workers comp for Patrol once a year and it was fully paid, but workers comp for the jail is paid quarterly. This raises an interesting question about the budget-busting workers comp cost (yet another overpriced insurance racket to begin with that the state should pick up, if it must be paid), but not about departmental budgeting.

If Williams and his colleagues were serious about budget tracking, as I have suggested time and again for years, they would invite each department head to submit monthly or at least quarterly budget reports based on the existing reports the CEO is now producing, and ask them to explain any significant variations and where they expect to be at the end of the fiscal year. (This would also have the salutary side-effect of giving the Board a better understanding of department operations and problems.)

Or take the County’s two soon-to-open new facilities — the Psychiatric Health Facility and the new wing of the jail. If they were serious, the Board would ask Behavioral Health Director Dr. Miller and Sheriff Kendall to submit staffing, scheduling and budget plans for these facilities.

But so far, despite these large and glaring info gaps with major budget and personnel implications, the Board has expressed zero interest. (Not only do these facilities require specialized staff which will be hard to train, employ, supervise and manage, but most of them will be high-salaried people, many of them paid out of the overdrawn General Fund.)

We suggest Supervisor Williams stop speaking about vague, grandiose “multi-million dollar” software fixes that he can’t define, and look in the mirror.