Last month we asked County CEO Carmel Angelo for clarification of several problematic budget categories discussed at recent meetings of the Supervisors. We assumed that since they had been discussed and were known to be in deficit, information on them would be readily available.
The five subjects we asked about were: Management pay raises, the cannabis program, juvenile hall, Sheriff’s overtime and overall revenue projections.
Turns out we were wrong to assume that the information, important as it should be, was readily available.
We were correct, however, to assume that each of the items we asked about represent serious budget problems because each is a major expenditure blithely not accounted for in budget projections.
Although we are more than four months into the current fiscal year, there is still essentially no information on revenue; it takes quite a while for such information to make its way into the County’s budget system.
As far as expense tracking in the four other categories, we are told that it’s not available yet either, but will be later this month (November) when it will be presented to the Board of Supervisors.
For now we can confirm that the cannabis program deficit is well over $1 million; management pay (Supes and senior officials) are taking at least half a mil more out of this year’s budget than last year; Sheriff’s overtime is down from last year but probably still over budget; juvenile hall is over budget because the Board of Supes decided to keep it open even though there are only a dozen or so delinquents, on average, in residence. (An alternative money saver would have placed our resident delinquents in the Sonoma County Juvenile Hall for a large net savings.)
Revenue projections are mostly arbitrary guesses by the Auditor and do not factor in what most people — including the CEO and her staff — think is actually going to be realized. You don't know how much money is coming in until several months after it arrives.
To make matters worse, there’s also a sizable deficit in the Agriculture department that had not previously appeared on a Board agenda or discussion.
According to a line item note for the Ag budget salary series, “1st Qtr: Adjustment to move $74,805 from 2710 to 2810 to correct salaries that moved from AG to CN Dept. will be hiring an Assistant Ag Commissioner at a higher pay rate than original budgeted. Dept. is also utilizing extra help to complete backlog of state reporting inherited from previous management.”
Translation: Last year some ag people were assigned to the pot permit program and didn’t do required reporting, causing loss of ag revenue and requiring the employment of extra help to get the reporting done, albeit late, and reinstating the revenue stream. It’s not clear how much is involved but it looks like the deficit in this line item is several hundred thousand dollars because of the cost of extra help and the loss of revenue.
The CEO and her top staff have assembled an impressive array of budget data and budget management software, and they seem competent and familiar with it, but without current data it’s hard to pin down the magnitude of the looming budget deficit. Our back of the envelope calculations are as follows:
Revenues: Instead of the rather arbitrarily budgeted 2% over last year, the County will be lucky to get the same as last year, for a revenue shortfall of at least $1.3 million.
Pot permit program: at least $1 million over budget.
Juvenile Hall: at least $0.5 million over budget.
Sheriff’s overtime and patrol: at least $1 million over budget.
Management and executive pay and benefits: At least $0.5 million over budget.
Ag Department: At least $0.5 million over budget
Total budget gap (revenue and expense): At least $5.0 million.
(Note these estimated costs all come out of “The General Fund,” which is currently at around $66 million overall, and does not include around $200 million in state and federally funded earmarked program funds, most of which go to Health and Human Services.)
The CEO advises us that later this month the picture should become clearer as actual expense and revenue data starts to arrive and is absorbed into the budget system. For now, depending on how the data actually works out, it looks like Mendo will not have any “discretionary” revenue this year or in the near future for roads, salary increases for line workers, or reserves — in fact reserves will be depleted. In addition the Board has already committed what little “discretionary” funds may materialize for emergency services.
Predictions and Implications:
[x] some kind of hiring freeze, previously proposed by the CEO but (sort of) overruled by the Board, probably for the General Fund departments, is likely to be recommended again.
[x] Raises for most line workers who naively assumed they would be up for raises since top officials already gave themselves big raises, will be declared “unaffordable.”
[x] The CEO will place the responsibility for much of the deficit at the feet of the Board itself since the Board turned down the CEO’s earlier proposed hiring freeze, decided to keep juvenile hall open over the CEO’s recommendation to close it, and set up the overcomplicated and failed pot permit program and all its manifest complications without CEO involvement. (Although in the case of the Juvenile Hall overrun, the CEO should have addressed the that problem years ago when the delinquent count went way down.)
[x] While Sheriff’s overtime seems to be down from last year (but still well over the budgeted amount), the Sheriff is ultimately responsible for his own budget and the Board is not likely to turn down whatever the Sheriff ends up asking for in overtime and overall patrol expenses.
[x] Whatever nice ideas the two new incoming Supervisors may have, the unhappy budget reality — which went largely undiscussed and undebated in their campaigns — by the time they take their seats on the Board, most of their time will be spent trying to figure out what to cut.
As far as we can tell from here in Boonville there is no detectable sense of budget urgency among the staff or the Supervisors, two of whom leave office in January.