Wednesday, December 6, 2023

‘We Have a Financial Crisis Here’: Mendocino Board of Supervisors Concede the County’s Books are Unreliable

(L to R) 3rd District Supervisor John Haschak, 5th District Supervisor Ted Williams, County CEO Darcie Antle, 4th District Supervisor Dan Gjerde, 2nd District Supervisor Mo Mulheren, 1st District Supervisor Glenn McGourty [All screenshots from the YouTube broadcast of the meeting]

A Mendocino County Board of Supervisors discussion about cost overruns for the new jail construction project veered into a cry for help from the state, as county leadership admitted that it does not have a clear idea of what its financial situation is.

“I would like to ask my colleagues for support on direction to the CEO’s office to reach out to the state controller’s office to help us get our books in order,” Supervisor Ted Williams announced, about a half hour into the meeting.

A few minutes after hearing that state review of construction documents is causing months-long delays and that cost estimates for the new jail are now $7-8 million over budget, Williams told his colleagues how frustrated he is by the lack of financial information, even after a budgeting process that started months ago. 

“I’m three and half years into a term,” he said. “I worry, I’m coming up on the point where I can no longer use the excuse, I’m new here. And yet in the three and a half years, I haven’t been able to get a credible financial report. I understand we have three different sets of books. They all differ. Why?”

CEO Darcie Antle corroborated the main point. “I would agree with you. I’m not quite sure,” she acknowledged. “I think a lot of the reason we have asked for a pause in the labor negotiations is that we don’t know. We don’t have a clear vision on what the books are, and where the finances are. And those discussions need to continue with the new auditor-controller.” 

It doesn’t seem like anyone has a clear idea, and that’s a problem for rank and file workers and the public as well as the leadership. SEIU Local 1021, the union that represents the bulk of the county’s employees, filed a complaint with the Public Employees Relations Board last month, detailing the information they’ve requested as they negotiate their contract. The union wants a 5% Cost of Living Adjustment, which Field Representative Patrick Hickey estimates would cost the county $3.2 million. The county released some information to the public a few days after the union filed its complaint, but Hickey said that he, too, is frustrated by missing details. He’s still looking for specific information about differential pay and temporary and part-time workers that will help the union understand the impact their proposals will have on the county’s budget. “That’s something we submitted all the way back in November,” he said last week. “So we’ve been trying to keep track as the county has parsed out little bits of information to us as the negotiations have progressed.”

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Though it seems no one has the information anyone wants about the budget, the county has had an unprecedented amount of money to work with in the past year and a half. Local agencies are still receiving their allotments from the county’s $22 million settlement from PG&E. And the county was awarded almost $17 million from the American Rescue Plan Act, or ARPA. Maria Avalos of UVA, a Latino advocacy group, requested more details about how those funds will be spent, and how the decisions will be made. She noted that over $4 million of the ARPA funds has been allocated for core county services and infrastructure. “So I’m just wondering, where is the breakdown of where that money will go?” she asked during public comment. “Will it be able to be found by the public? And how is the local government making the decision to use the funds? And will there be public input?” 

Williams counts himself among those agitating for financial transparency. But he told his colleagues yesterday that he doesn’t think anyone is able to provide detailed financial information about the county. “We do have an outside audit that happens,” he said. “When was the last time this board, you and I sitting on this board, voted to direct the auditor to incorporate the outside audit recommendations? I don’t think I’ve done it yet. I don’t know if past boards have done it. But it means we’re paying for an outside audit, we’re getting advice about changes we need to make to meet accounting principles. And then we’re ignoring the advice. So how much accumulated error is there, and over how many years is it? Ten years, is it thirty years? Is that why we have different sets of books, with different numbers? Because we never incorporate the outside audit findings? I think we have a financial crisis here, and we just don’t know how bad it is.”

Supervisor John Haschak pointed to a recent shakeup in the county’s main financial offices. But Williams thinks the problem goes back much further than the decision to consolidate the offices of auditor-controller and treasurer-tax collector.

“It’s just really ironic that this board voted to consolidate the two positions when those people in those positions said don’t do it, and that consolidation would not help, and now we’re in the position where we’re asking the state to step in to help out this position that in part we created as a board,” Haschak said.

“So I want to respond to that. A part of the reason that I supported the consolidation is that I couldn’t get financials,” Williams replied. “And we had an auditor retire, and shortly after, I learned we have a $4.5 million hole in the health plan. Why didn’t this board know that we had a $4.5 million hole? We would have planned accordingly. There’s an institutional problem here that this county doesn’t have a set of books that anybody believes. There’s nobody in this county today you could ask, how much money do we have to our name, and get a straight answer. How can I do my job, voting on a budget, if I don’t know how much money we have to spend?”

Supervisor Glenn McGourty called for structural change. “You want to have people who really know finances, who are properly trained,” he said. “That’s why I’ve supported a professional financial office, which is what most big organizations have, where you appoint people based on their skill set and a proven track record of handling money well. And if we look back through Mendocino County’s history at the auditor-controller and tax collector-treasurer, we don’t see that pattern. So I still think we’re going to need long-term structural change in county government on this. This will not go away until we do.”

The board voted unanimously to ask the state for more money for the new jail, and to ask the state controller for help with the county’s fiscal issues.

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  1. To paraphrase a bit “I’m 3 & a half years into term. I worry im coming to the point where I can no longer use the EXCUSE that I’m new here” ??? I hope that was said with some sarcasm! But sounds like an admission of incompetence to me. Seems like a lot of people in charge of millions have no idea where the $ is or how to properly spend it when they have it. Someone, or someone’s, ining their pockets. Hopefully that/those someone will get time in the lovely new overpriced jail if there’s any $ left to build it.

  2. Idiots. And you want the public to vote Yes on Measure P to tax ourselves more so you can mismanage more of our hard earned money and provide less services. What a joke! So the ring master has left and the circus is falling apart. Emperor Angelo, that you all fervently served, said we had $20 million in reserves when she scooted out the door, where is that money? Someone best send her a bill for the mismanagement of the county. Sue her ass off. You are just now waking up to the sham, you idiots! There will be so much more to find. And you appointed Angelo’s 2nd in command as the new CEO. She was in charge of the budget under Angelo, HELLO? Idiots.

  3. “I’m three and half years into a term,” my supervisor Ted Williams said. “I worry, I’m coming up on the point where I can no longer use the excuse, I’m new here…I haven’t been able to get a credible financial report.” This from a supervisor who was taken under former CEO Carmen De Angelo’s comfortable wing as her confidant and new fair-haired, bow-tied boy. An excuse of ignorance is proof of ignorance unless it’s used to deflect truth.
    Where have my taxes gone?

    PS. Three and one half years is not new, and as an excuse it borders on a lie.

  4. Isn’t multiple sets of books illegal? This reeks of embezzlement.

    Meanwhile lets bully all the weed cultivators into PTSD. I’m so sick of our banana republic local government. They need to be inside that new jail alright.

  5. The Ship of Fools has spotted the iceberg.
    But it’s already through the hull, and expensive outside advice is routinely ignored.
    What would an honest forensic review of the “books” reveal?
    The Great Redwood Trail of Tears

  6. While the board of supervisors and management continue to give themselves raises without knowing the numbers. Classic!

  7. Supervisor Haschak seems to be the only supervisor who really understands how the various financial offices work. To be clear, the Treasurer- Tax Collector’s Office has absolutely NOTHING to do with the budget or where the County spends its money. The primary function is to collect, collect, collect taxes, assessments, and other fines and fees. The Auditor’s Office and the CEO are the offices that have the responsibility of working with the Board if Supervisor to establish the Budget and where the funds will be allocated. In their infinite wisdom, the only thing this Board accomplished by consolidating the offices was to double the pressure on the Auditor’s Office to perform their duties. The two offices have completely opposite duties, sometimes called “checks and balances.” What a concept! Maybe the Board and CEO should have been a little more focused on other issues over the past 2-1/2 years, instead of just figuring out how they could hunker down and not take care of business. DON’T BELIEVE THE SPIN!

    • Haschak tried multiple times to reign in the others. Ted actually bullied him. Made fun of the 3rd district, and wanted to close the museum and tax us more to make up for their incompetence , He repeatedly supported the large corporate growers over the residents. Now they are using surveillance of us from satellite to extract more revenues , from guess who, residents.

  8. The tragedy of Mendocino County is quickly becoming a comedy. Again.

    Say what you will about Carmel Angelo, and most of it was deserved, but she did fill a leadership vacuum at the admin center. It’s now a directionless blind clown show with the Board’s first priority being to throw anyone under the bus they can. After that, they lament not being able to throw money at a problem. Never a discussion of actual performance once money is available. Who would work for this County??? Who would vote for a tax measure authored by this Board???

    Ted Williams: “And we had an auditor retire, and shortly after, I learned we have a $4.5 million hole in the health plan. Why didn’t this board know that we had a $4.5 million hole?” Ted, the Mendocino County Health Plan is administered by HR, under the CEO. It’s not the Treasurer’s job, nor the Auditor’s job to run the plan. After 3.5 years in the position, you should know this. Audit reports come out well after the money’s gone out the door. Where is Antle’s responsibility in this?

    Financial Crisis: Why does the County’s third party audit report show that between 2018 and 2021 the County unrestricted general fund reserve increase from 6.8m to 20m? Remember, upon retiring Angelo lauded her accomplishment of bringing the reserves to 20m. The third party audit report is where she got that number. Mendocino County is floating in cash. This is not to mention the 30m+ that sits in Board designated reserves. What the Board designates, it can undesignate or redesignate. Mendocino County is awash in cash and has been so since about 2016 onward. Mendocino County’s real problem is getting quality services out to the community, dollars out the door effectively spent, employees fairly compensated for work. Guess what, that’s the Board and CEO and Department Heads who are responsible for that. The chain of failure sits squarely with the Board.

    • Mendocino County has a real problem retaining employees. Our departments hire bright eager new people who leave for greener pastures as soon as they can. We’re basically training new deputies, social workers, deputy district attorneys, and deputy public defenders for other counties. We’re Sonoma County’s farm team.

  9. This is appalling! The county doesn’t know its financial position. Really? This is the bitter fruit of Carmel “Boss” Angelo’s reign of terror. She was secret by nature.

  10. Holy cow. If I ran the circus, I’d fire some clowns.
    The Supervisors say they have been trying to get information from the CEO’s office for years. Why didn’t they fire the non-performing CEO when it became apparent they were being stone-walled? Three sets of books sounds mighty suspicious. Maybe the Department of Justice needs to step in an take a look at what is going on with the public funds….

  11. The Board, in particular Mr. Williams, portray themselves as innocent bystanders. In truth they have been bystanders but not innocent ones. Glaring example — Carmel Angelo proclaiming a $20M surplus and two weeks later the budget team sputtered that it was a $12 million hole. Not one Supervisor asked a question or offered a comment. To balance the budget, they took, at Mr. Williams suggestion, $16M of covid relief intended for people impacted by the lockdowns, shoved into the General Fund and balanced the budget thereby violating one of their important financial goals — don’t use on time receipts to pay for recurring expenses. During a debate Mr. Williams was proclaiming a Measure B success (buying and renovating existing property). I asked him why this was a success since it took six years to accomplish. He replied that you can’t spend money you don’t have not realizing that is what loans are for. And he is the “fiscal hawk” supposedly.

  12. Aside from the panicky sounding supervisor’s comments, the problem seems to exist somewhere around the new jail costs, which are 7-8 million dollars over budget. To me, that is a considerable amount of money, and scrutiny should probably be focused on how that happened and if it is really justified. I don’t know about other taxpayers, but in my neighborhood we don’t have sidewalks, bike lanes, street lights, parks, or recreation areas, or even a bus stop, and I have not seen a traffic cop on this street in about 40 years, seriously. AND YET the powers that be think it an issue that the jail just isn’t up to snuff somehow. Next stop the new, super expensive courthouse we don’t need and that will cost a fortune.Which will drain business away from our very cute and increasingly rare locally owned downtown. Our city fathers already messed up the courthouse decades ago by installing that pseudo-modern boxy re-do, and now they’re going for broke (literally?) on a whole new complex for our “legal community”. And don’t even get me started on them! I don’t know, but it may be that instead of a financial advisor, we need help in allocating projects to the places they are really needed, then getting to the icing on the cake later, if at all. I think decent bike lanes, sidewalks, library branches, recreational centers, and better scrutiny on what our police are doing would be a good start.

  13. Board of Supervisors are supposed to be our leaders and managers and they sit back playing victim. Darcie looks so cute in her light blue suit her hair perfectly coiffed. The poor thing she sat under Carmel believing everything and now is left holding a sow’s ear silk purse with the bottom that fell out. Somebody’s got some serious explaining to do but besides the explains something needs to be done immediately. This cannot keep grinding on.

  14. The State should send in Auditors as soon as possible. Combining the Controller and Treasurer offices into a single entity violated separation of responsibilities, a key tenant in assuring financial integrity. The CEO’s “finance people” are NOT professional accountants and cannot produce a timely and accurate report of finances for this County.

    Voters MUST vote “NO” on the deceptive “Fire Prevention” sales tax measure – those funds will go into the County black hole of accounting mismanagement just like Measure B where funds were wasted and the oversight committee asleep at the wheel. This County’s finances are a mess and the BoS is NOT to be trusted to provide oversight.

  15. It’s illegal to have three sets of books, especially with public funds. The People of Mendocino County need to file a complaint with the State and request an audit of our Public Funds from taxpayers. All who have known this was an issue for years have contributed by their non action. Why has this been kept secret from the Mendocino County taxpayers? Have we been overtaxed? Defrauded? Money embezzled? Funds commingled into accounts and spent in places that are illegal and unauthorized? Have we been overcharged in Property Taxes? What about the millions of dollars in bonds on our property taxes? Have we been overcharged? Has the bond money been misappropriated by the County to other agencies or for other unlawful purposes? We don’t trust you to tell us where our money is. We demand the state investigate you and your handling of our funds.

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Sarah Reith
Sarah Reith
Sarah Reith is a radio and print reporter working in Mendocino and Humboldt counties, focusing on local politics and environmental news.

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