For the first time since the CEO started generating a “Year-To-Date Budget Report-General Fund” a few months ago, the report is listed as a Board agenda topic. Previously it has been buried several layers deep in the CEO Report that few look at (including the Supervisors) because the CEO report is otherwise full of info-free departmental propaganda and boilerplate. But the Year-To-Date Budget Report is a step forward in financial reporting, despite the fact that it is full of accounting jargon and bureaucratese and is unannotated leaving major budget variances unexplained.
Also on Tuesday’s agenda is a presentation from Mendo’s obscure “Risk Management” department. Risk Management is a “department” because insurance companies require that insured organizations have risk reduction plans in place to (theoretically) reduce incidents that result in claims, thereby (theoretically) reducing insurance payouts and (theoretically) reducing insurance rates.
Although the presentation offers no case status or claim rundown, it says that Mendo’s insurance rates are increasing because “losses” are increasing across the state — “losses” being payouts by insurance companies when government or companies settle claims or when they lose in court. Those receiving the payouts probably do not refer to them as “losses.”
“What’s driving losses?,” (i.e. why are rates so high?) asks a boilerplate topic provided by a generic insurance consultant.
Answer:
- Frequency and severity of nuclear verdicts. [Although not explained in the presentation, “Nuclear verdicts” are what the insurance industry calls “exceptionally high jury awards” in excess of $10 million. These are usually the result of juries finding that the defendant organization has committed some kind of gross injustice.)
- AB218 [the recent State law that expands the definition of childhood sexual abuse and extends the statute of limitations].
- Inflation – medical, litigation financing [i.e., increased outside attorney fees/costs], social [? — “social inflation”?]
- Decreased # of Insurers willing to participate in California’s liability market [i.e., the insurance monopoly].
- Increased Severity of Workers Compensation Losses. [In this case, “losses” means “injuries to workers, not insurance losses mentioned above.]
- Increasing Cyber Threats [No explanation how cyber threats translate to insurance payouts.]
- Increases in Jail claims from AB 109 and State Prison closures [which shifted large groups of inmates who have committed serious felonies back to county facilities].
- Increased natural disasters and catastrophic losses
This generic state-level list provides no breakdown of these “risk” increases and losses as they apply to Mendocino County, making the presentation nearly useless in terms of the County taking steps to reduce its “risk.” All Mendo can do is sit back and pay up.
As a partial, but undefined, offset to “losses,” Mendo has experienced a measurable decrease in workers comp claims over the past five years and workers comp premiums have come down somewhat.
“What Can We Do?” asks the Risk Manager:
- Encourage Teams meetings to reduce exposures from travel related accidents or injuries. [Teams meetings? Is Mendo really experiencing “travel-related accidents and injuries”? Why?]
- Make sure policies and procedures are up to date and compliant with the law. [They might not be?]
- Departments should work with the Executive Office, County Counsel and Human Resources on potential liability issues. [They’re not already?]
- Work with nearby Counties and public entities to make sure we are handling sensitive matters consistently. [How consistent handling of “sensitive matters” translates into lower risk and/or insurance cost savings is not explained.)
- Maintain our legislative platform and speak with our legislators on the ramifications of new laws. (A pointless and quixotic suggestion, to say the least. Sheriff Kendall has repeatedly pointed out that Sacto doesn’t listen to Mendo, or other rural counties.)
There’s no correlation whatsoever between any of these obvious suggestions and reduced insurance costs.
The Risk Manager makes no mention of avoiding liability by not abruptly suspending elected officials without pay on flimsy charges based on inapplicable law.
The recent $800,000 State Audit is listed as a topic on the workshop agenda, but no breakdown of topics to be addressed is provided.
Buried in the Transpo Department workshop presentation is a cryptic summary of a “Potential Local Sales Tax for Roads”:
“County may pursue sales tax in unincorporated area only – No overlap with incorporated areas.
1 cent sales tax could provide approximately $6 million annually IF dedicated for Roads, thus receiving State “Self-Help County” share ($5.5 million without “Self- Help County” share)…”
We don’t know where they got the $6 million annually tax revenue estimate. We seriously doubt that a 1 cent sales tax increment that applies only to the unincorporated area of the County will generate anywhere near that much money.
“New $5.5 million budget could provide about 20 miles per year – ability to treat all 317 miles not in the RMRA [Road Maintenance and Rehabilitation] 20-Year Plan in 18 years:
- 5 to 9 miles paving per year – sharp curves - steep grade
- 9 to 13 miles, In place recycle w/ chip seal (double layer)
- 43-67 miles chip seal (double layer)
- $1⁄2 million to restore maintenance crew staff by 7 to 9 positions.
The Transpo presentation goes on to note that a road tax proposal may compete with other sales tax proposals under consideration and would face an uphill climb for approval given the public’s low opinion of the Board of Supervisors. The author of the presentation adds that the voter approval percentage that a sales tax measure requires depends on whether it is proposed as a “general tax,” meaning the revenues go into the general fund and are distributed by the County as discretionary outlays, or a “special tax,” where the money is legally restricted to be spent only on designated road projects.
The road tax presentation is preliminary and riddled with unanswered questions and unexplained options, particularly the potential revenue levels. If the Supervisors, already prone to inarticulate, ill-prepared, vague and aimless discussions, are able to translate this into any kind of specific, supportable road tax proposal, it would be a near-miracle.
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