Three years ago the County's budget had already grown to $187 million. There was the usual ritualistic rhetoric about belt-tightening, cut-backs and general austerity, but spending increased, fueled in large part by borrowing from sources only vaguely identified and understood not at all.
The budget grew larger and larger over the next two years and, as always at budget time, devotionals continued to be sung to fiscal responsibility.
This fiscal year the supervisors want $231 million to run our fair Mendocino County, golden land of the grape and the cannabis bud. But no one can explain where all the $231 million will come from because the Supervisors are saying that they've imposed 6% spending cuts on all departments. But the more they cut, the bigger their budget got until it became $231 million with nowhere near that amount coming in.
Sales tax revenues were up "noticeably" last year as were bed tax receipts. Nobody knows why. County Auditor Meredith Ford said she was "surprised" by the numbers. Ordinarily when numbers are "surprisingly" high they're toted up again. And again, until they make sense. The numbers have not been re-figured.
Timber tax revenues were down by about $38k, but no one expected them to be large in the first place. Outside corporations clearcut the county and ran away, our Supervisors cheering them on. The timber industry will come back some day, but most of us won't be around to see it.
The "property transfer tax" — i.e., the higher property taxes imposed when property is sold to a new owner — was (quite predictably) "down significantly," although Ms. Ford didn't say by how much.
There was a miraculous surplus of $548,000 at the end of last fiscal year, lower than most years so it's not nearly enough to cover the County's budget gap this year, that gap being the difference between revenues received (or borrowed) and actual cash money out of pocket.
Remember that Special Election for District Attorney last year? One of the big criticisms of then-Assistant DA Keith Faulder occurred when Faulder pointed out that state law clearly mandated a special election when the incumbent dies within a few weeks of an election. Faulder's uninformed critics, including the disastrous person now occupying that office, loudly claimed that the special election would cost the County hundreds of thousands of dollars. Turns out, however — just as Faulder said — because the special election is required by state law, the state has to pay for it. The state did pay for the election and, by a reimbursement formula as mystifying as any, the state paid Mendocino County almost $200k more than the election cost.
A windfall, in other words.
The Supes themselves came in under budget by about $62k, which means they allocated themselves way more than they needed, not that any of the five of them have ever been observed in fiscal hair shirts.
For unexplained reasons, Buildings and Grounds overran last year by $225k — probably because you can't keep buildings and equipment from needing repair. Stuff breaks and you fix it even if the budget you're theoretically working within says you don't have the money.
The Sheriff's Department, which included operation of our perennially full-up County Jail, over-ran by $406k because the department is always understaffed and Mendocino County is always over-crooked, meaning big overtime is accumulated for deputies and jail staff.
The financial black hole known as the "Planning Team" overran their already sizable budget by $115k, an odd overrun considering that the Planning Team itself produced exactly zero finished work product while it forked over hundreds of thousands of dollars to out-of-county consultants who produced next to no work product. Or at least no work product that a high school senior with access to a computer couldn't have managed as homework.
Assistant CEO Alison Glassey blandly mentioned in passing that the General Plan will not be completed until the end of 2009 now, another six-month delay and another big overrun for the Planning Team.
Reaction from the Supervisors? Ho-hums and cavernous yawns. Is it time for our tax-paid hour and a half lunch yet?
The County Assessor overran by about $200k. Again, nobody knows why and nobody asked. Maybe the assessors were putting in a lot of extra time trying to figure out how much revenue was going to be lost by the declining value of the County's housing stock. Budget shmudget. Who's watching?
CEO Tom Mitchell can be relied upon to respond to almost every comment or criticism with variations on "I'll get back to you on that." Like a one-man doo-wop chorus during the August 25 budget hearing Mitchell would say, "I'll put that on my list." ... "We're looking at that." ... "We're talking about that." And, "We're working on that." Occasionally a Supervisor would rouse him or herself to ask, almost plaintively, "When do you think you'll have something for us?" Mitchell would say, "Soon," and the proceedings would resume.
Famous for lack of follow-up, on those rare occasions someone does wonder what happened to this or that request, Mitchell can be counted on to reply, "More pressing matters intervened," or "We're still looking into that."
Because Mendo's management class much prefers talk to action, Mitchell's transparent evasions are quite effective; they spare him and everyone else the effort. Heck, they probably didn't really mean it anyway.
For example, at the August 25 budget hearing Mitchell said he was "working on better ways to collect the bed tax." Mitchell's also "working on" better reporting, and he's "working with" law enforcement to "mitigate their personnel issues." Additionally, Mitchell is "working on reducing the General Fund subsidy to cities for solid waste." And he's "working with the courts to reduce costs."
Assistant CEO Alison Glassey told the Supes that all departments have complied with the CEO's direction to cut their budgets by 6% by "salary savings," i.e., using lower paid people for higher paid positions, or letting jobs go unfilled for extended periods or by attrition.
On paper, this informal hiring freeze looks like it's a budget balancer but, as Sheriff Allman pointed out, if he's out of money by January, and he expects to be, the Supes still have to pay for law enforcement. Naturally, the supervisors all said they were "committed" to doing just that. But Allman's blunt statement that his costs are his costs regardless of what budget the Supes give him, again demonstrates that the budget is essentially meaningless. Individual departments spend what they can or must while CEO Mitchell "works on the problem."
The County's overall budget is way up yet Ms. Glassey and her staff say the departments made 6% cuts and the state is probably going to impose even greater cuts, which will result in cuts greater than 6%.
So, what exactly are the supervisors cutting 6% out of?
The nine administrative budget units — Supervisors, CEO, County Counsel, Clerk of the Board, Human Resources, Auditor, Treasurer, Information Services, and "miscellaneous" administration — have gone from expenditures of about $4.2 million in 2006/7 to $5.9 million in 2008/9 — an increase of over 40% in just two years.
Services may be squeezed, and money may be tight, but management and administration continue to grab big increases for themselves.
Everyone pitched in a gripe about the state's budget process and the likely effect of the long-delayed budget agreement in Sacramento, statements they channeled directly from the Santa Rosa Press Democrat, Ukiah's preferred source of misinformation. Blaming tight budgets on Sacramento, a deteriorating economy, the feds, pot growers and the general collapse of Western Civ —whatever — conveniently ignores the profligacy headquartered on Low Gap Road, Ukiah. Glassey, whose qualifications for her job as the County's number two manager consist solely of her absolute loyalty to her superiors, said that she expects most cuts to be in client benefit payments and hospital subsidies and reimbursements, not County staff.
As a long-time welfare bureaucrat, Glassey learned that the poor can always be squeezed because they are not politically represented, Mendocino County's laughable reputation as a kind of rural Cuba notwithstanding.
Glassey said the County won't be buying any new cars this year, and they don't plan on any big new projects. She added that the management team wants to "reduce the use of extra help" but doing that "needs constant vigilance."
Translation: Extra help (part-timers not counted as county employees) is going to overrun big time.
As predicted here months ago, the County's multi-million dollar microwave communications system is now more than a year behind schedule. Delays always translate to cost increases, but nobody mentioned any.
The biggest subject of the day was the mysterious "Teeter Debt."
Under the Teeter Plan California counties can borrow against the penalty and interest payments that delinquent property owners pay when they pay their taxes late.
It's obviously a pretty big — but variable — number. Mendo bought into the Teeter Plan in the mid-90s to cover the almost $5 million overrun on the County's new Low Gap Road Admin Center. If that had been the end of the borrowing the penalty and interest tax payments from delinquent property owners may well have paid it off in a few years.
But the County was hooked. "If we can borrow $5 million, why not $7 million, $8 million — whatever we need?"
So the County continued to borrow against those anticipated but delayed revenues. Never mind that nobody really knew how much the revenues would be or when they'd come in — or even if they'd come in.
Compounding the problem, until this year the County with all its financial management mavens, and treasurers and controllers and auditors and resource analysts and chief financial officers, never put the Teeter Plan into the County budget. It sat unmonitored from about 1995 to now.
Teeter has tottered. Big time.
So, how big has the Teeter debt become? Nobody knows, but it's big — really, really big. It could be as much as $17 million. Maybe it's $13.5 million. Maybe less. Interest is accruing daily. Payments are made as penalties are paid. Various numbers were tossed around at the August 25th budget hearing until the Supes finally gave up and called another special meeting to try to pin it down.
Over the years, the County has, in theory, applied whatever property tax penalty and interest payments they do get to pay down the outstanding Teeter debt, tottering it, so to speak, but the County went further and further into the hole by continuing to borrow against Teeter, thus debt accrued, and the interest on the growing debt made it even bigger.
The question now is: how much money from the General Fund will the County apply to Totter, to reduce the monster-sized Teeter? Every nickel paid to Totter comes out of operations in what's already a tight year.
Solving the problem, however, will be made more difficult by the muddled thinking of the County's top brass.
Here's Assistant CEO Alison Glassey explaining a line labeled "diverted from Teeter" on the freshly added "Teeter Debt" page of the County budget.
"Diverted from Teeter is in the process of trying to insure that we had a balanced proposed budget despite all the cuts that were being made by all the departments, etc. by which it is meant that — and you can define it however you want — but either we're complying with the board directive to put all the Teeter revenues in the Teeter budget unit but we're only making around a $200k payment from the General Fund towards the debt or you could say that we're making the amortized schedule but it's essentially like we're not putting the revenues in so the budget that you've got represents $2.4 million that has been diverted from the repayment of Teeter which is not something that your staff are particularly excited about and — I mean in the sense of being pleased with it. We're excited about it in terms of this isn't where we want to be and I think that one of the challenges from the Board's standpoint is what from your standpoint constitutes a balanced budget."
Got that? A balanced budget is whatever they want it to be. But they don't know either.
"None of this Teeter stuff is clear," concluded a baffled Supervisor David Colfax. "Are we going to pay $700k? $200k? Will we have furloughs? It will be a hard sell to our employees if we tell them they have to take time off to cover this. Five years ago you couldn't find a single supervisor who knew what the Teeter Plan was."
Five years ago?
Things have improved a little in five years, though. The Supervisors now know they have a big amorphous bill due and its name is Teeter.
The Supervisors also seem to have tardily realized how clownish and indolent they seem to the public. There was CEO Tom Mitchell's wacky riff on how he wished he could somehow apply the late Tim Russert's interview methods to his budget presentations, followed by his goofy attempt at metaphor. Mitchell described the budget variously as a "whole milk budget" and "a skim milk budget" and "a non-fat budget" before Chair Wattenburger's suggestion that it was a "powdered milk budget" with Mitchell countering with "goat's milk budget."
The list is long.
Lame Duck Chair Wattenburger explained last week: "Certain members of the press [i.e., the AVA] have taken me to task for repeating that the County is broke. Well, the County is broke. But the real statement is a positive one. This [the budget process] could have turned into a cat fight, not a herding of cats. We're working together for the betterment of the County as a whole. I thank my colleagues for that hospitabil... hospility... hospitality — whatever the word is. I appreciate that amount of civility."
Supervisor Colfax, PhD, came to his colleague's rescue.
"I thank the Chair for doing a good job. It gets a little silly up here at times. It is interpreted as frivolous, but it's really tension release because we have enough problems up here trying to figure out at least where two supervisors are going at any moment. You never know where the next shot is coming from. We know where we are now, we know how we got here, although we haven't really got all the way."
Not all the way, indeed.
Maybe $17 million short. Maybe a lot more.
They don't know, we don't know, no one knows.