Sunday, July 21, 2024

Mendocino County’s Financial Experts Calls Claims of a Financial Crisis a Deflection and Misinformation

[Stock photo by Matt LaFever]

The Mendocino County Board of Supervisors is facing fierce criticism after its unanimous decision last week to send a letter to the state controller, asking for help with the county’s books. “I think we have a financial crisis here, and we just don’t know how bad it is,” said Supervisor Ted Williams, during a discussion about projected cost overruns at the project to build a new jail. But the county’s own financial experts say the real problems are miscommunication, misinformation, and a lack of financial understanding at the leadership level.

On Tuesday afternoon, after last week’s Board of Supervisors meeting, Chamise Cubbison, the newly elected Treasurer-Tax Collector/Auditor-Controller, wrote a letter to the Board, complaining that “there was a lot of misinformation discussed at today’s meeting and no opportunity for rebuttal or open discussion. I would hope the Board would seek information directly before spreading rumors.” She took on Williams’ assertion that he hasn’t been able to get a credible financial report the whole time he’s been in office, writing that the statement that “outside auditor recommendations are being ignored and not implemented is false.” She claims that she had already explained to Williams that the outside auditor makes adjustments to the information depending on where it’s being reported, whether on a financial statement or to the state or federal government.

Former First District Supervisor Carre Brown and Shari Schapmire in the Board of Supervisor Chambers [Pictures provided by Shari herself]

And in an interview, Retired Treasurer Tax-Collector Shari Schapmire said that she believes “the majority of this board is ill-equipped to comprehend the financial complexities that are inherent in the operation of the county.” She added that overall, communication deteriorated during COVID, but she thinks most of the board members “also lack the communication skills to have any dialogue with any staff outside the CEO’s office that may be able to assist them. Right out of the chute, I want to say I do not believe the state controller’s office needs to access the records or clean anything up.”

Asked if she thinks there is a financial crisis, Schapmire said, “Absolutely not…I do not believe there is a financial crisis. I’ve been through a financial crisis. I know what a financial crisis is. And I cannot imagine that we would be there, less than five months after I have retired.” 

She took umbrage at Board comments about a lack of skill in the financial offices, particularly Supervisor Glenn McGourty’s assertion that he supports “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.” 

Schapmire drew on history to refute the claim, saying, “If you go back a decade ago and look at the financial meltdown, there was an unbelievable effort in place by the CEO, Auditor, Treasurer-Tax Collector, and the sitting Board of Supervisors, all working together to address several financial issues that the county was facing. And despite these claims, this group was extremely qualified to address those catastrophic issues and they were addressed. And I think there absolutely was a proven track record of those individuals that were there at the time, me being one of them. We handled this during the most dire of times. And I think if Supervisor McGourty hasn’t seen this, he wasn’t paying attention the last decade…It almost feels like they have some inadequacies at the Board, and it’s almost like they’re publicly airing irresponsible and inaccurate information because they’re trying to deflect from those inadequacies.”

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Chemise Cubbison [Screenshot from a County of Mendocino Board of Supervisors Meeting]

Cubbison emphasized the theme that financial information is available, and laid out some details about a breakdown in communication. She wrote that shortly before his retirement last year, she and former Auditor-Controller Lloyd Weer met with members of the Executive Office fiscal team to discuss the projected deficits in the health plan, which they expected would keep growing. The shortfall in the health plan for fiscal year 2020/2021 was $3.6 million. The projected shortfall this year is another $4 million. 

“It is unfortunate that the CEO’s office and the Health Plan consultants did not sound the alarm sooner on the growing deficit, but that is not because the information was not available,” she wrote. “Mr. Weer and I both believed that the CEO’s office would present the issue during the already scheduled future Board agenda item to go over the Health Plan. We were both surprised that a higher Health Plan contribution rate was not requested at that meeting.”

Schapmire thinks the Board should have allowed the auditor’s office to replace Weer as soon as possible. Leaving the top position vacant for months, and then consolidating the offices of Treasurer-Tax Collector and Auditor-Controller were two decisions that leave her with “very deep concerns.” She also does not have confidence in the fiscal team at the county’s Executive Office. “There is a lot of stuff this financial team doesn’t know anything about, and all those things are going to come up,” she predicted. “Nobody knew what these offices did before they consolidated the positions, and nobody really cared to find out.”

Looking to the future, Schapmire thinks last week’s public stumble could affect the county’s credit rating. At its meeting next week, the Board will discuss how much money it wants to leverage through new bonds to pay for the new jail. “Anytime that you want to issue new debt, a rating agency is going to review the county’s credit rating,” she explained. “And in order to maintain a positive credit rating and receive the best rate, they need to see that there is a stable government. You know, the governing body and the financial leadership team. And I think by saying these kinds of things, and acting like this county doesn’t have a clue what’s going on, I don’t think they understand the consequences of their actions,” she concluded.

Watch the financial discussion here.

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    • Interesting how circus ringmasters/ringleaders happen to dawn a bowtie as well.
      Any future BoS meetings being watched online should include the following audio/loop in the background.
      It makes it much more palatable and a tad bit more entertaining.

      ~panem et circenses

  1. This current board is completely disconnected. One can only imagine the information that has been overlooked.
    Open the books, restructure our local county government as needed and REMOVE those department heads that are not carrying out the duties they have been assigned. Better yet, re-hire those that have bolted with the historical knowledged we need to move forward.

  2. The reason the health care plan has these continuing overruns is because the plan is a self-insured plan, and the pool of people paying in, is too small. SEIU has been asking the county for years to please move to a different plan with a larger pool of people so that rates would remain more stable. The County can not increase the rates this year as per our SEIU contract with them that remains in force. However next year they could increase the amount of money members pay for health care. As salaries are still below market rate, I am concerned that this increased cost will drive employees to look for other jobs. Staff turnover and understaffing is already a problem, and this will only acerbate the problem.

    • Julie, I think that is very likely. Many departments, including the Sheriff’s Department, are running at half staff. Those who are employed work overtime and will eventually burnout. These death spirals are difficult to stop.

    • And let me emphasize the reason high staff turnover and understaffing is a problem is because it means the county can’t provide the services they are mandated to provide, and that the tax payers are paying for. So I would encourage the Board of Supervisors to do their job and protect county services because the citizens of this county deserve better.

    • OMG – the insurance is horrible!!! I got much better insurance with my last employer and that was NOT a County job. I can’t even imagine paying more for the crappy insurance the County offers. I’d definitely need to reconsider employment if the insurance costs go up.

  3. “[Cubbison] took on Williams’ assertion that he hasn’t been able to get a credible financial report the whole time he’s been in office, writing that the statement that “outside auditor recommendations are being ignored and not implemented is false.” Williams attempts at gaslighting are getting weaker by the day. He is not an innocent bystander to this mess, rather a principal enabler. To deflect attention from his shortcomings, he throws professional people like Ms. Cubbison under the bus to deflect attention from his own shortcomings and thereby sow the seeds of distrust and disfunction.

  4. Thank you Schapmire and Cubbison for speaking out, and boo to McGourty for trying to paint them as incompetent. McGourty is clueless AF on every topic except grapes and the Russian river watershed

  5. Hats off to Shari and Chamise for speaking truth to power. The wheels are coming off the county short bus as it is heading over the cliff. Heck of a legacy you left Carmel (assisted by the blind subservience of the Board of Supervisors)

  6. This is also due to the BOS allowing former CEO Angelo to become a dictator with no one able to advise tge board. She and her minions had absolute control and hand fed the board info that put her in a good light. The BOS had no clue and no backbone to inquire.

  7. Let’s talk about the real plan here:
    1- Dan Gjerde was tasked in the early stages to help with combining the two offices because the Board did not want Ms. Cubbison as Auditor. Their plan was Shari Schapmire would be a team player and handle the combined offices, one problem Shari has always been against combining the offices for numerous reasons. The Board moved forward publicly with the plan without talking to Shari. She objected to their plan and only one Supervisor talked to her, John Haschak, who by the way voted No on combining the offices. Shari understood at this point the Board was not going to work with Elected’s and do what was right for the County. Shari retired after 43 years of service. Plan B, Shari’s assistant would be the team player and fill the void, wrong again!! Julie Forrester was also against the consolidation, she retired thus leaving Ms. Cubbison the only one standing. Ms.Cubbison ran for the office unopposed and now the Board had her not in charge of one office but two. Brilliance at is finest.

    2- Now what do we do? Bowtie Ted steps in, let’s publicly shame the financial part of the County and blame Ms. Cubbison so we can convince the voters that a Director of Finance is needed, to accomplish this they need to put it on the ballot and voters must give the okay. So this is where we are!!

    Let’s now discuss the Board and CEO Office:

    Carmel’s goal was to take over every department and run it from her office with her Dream Team, so Ms. Antle acting like she doesn’t know what’s going on is cowardly, she was Carmel’s right hand woman. She knows where the bodies are buried.

    Bowtie Ted- self appointed leader of the Board, thinks he is the smartest human being in the world but most importantly the most dangerous. Comes up with plans but gets someone else to carry the load, i.e. Dan Gjerde.

    Photo Op Mo- notice how quiet she is on this issue, not a good subject to put on Facebook. She has a habit of running from every tough decision and most of the time votes with Bowtie Ted or is the first to recommend an Ad-Hoc Committee. One word comes to mind, Useless.

    Moronic McGourty- probably the dumbest Supervisor ever elected. Listen to his words, he doesn’t know what he is talking about and he makes no sense. He blamed the Treasurer-Tax Collector Office for assessor records, Hey Glenn that info would come from the Clerk Recorder/Assessor, by the way a combined office that has been failing for over 20 years. The Elected there kisses Bowtie’s butt so he compliments them.

    Basement Dan- wants to zoom the rest of his life. Still can’t figure out if he lives in his mom’s basement or his mom lives in his basement. Notice he is also quiet on this issue. His silence is due to failure, you see he screwed up Bowtie’s plan and Bowtie is not happy with him.

    Common Sense John- the only guy who cares about the County. And that really pisses Bowtie off!!!

  8. Schapmire is 100 percent correct. The reality, as shown in the County’s independent third party financial reports, (all available online) is that the County is awash in discretionary cash. Angelo did not make up the $20m figure, if ANYTHING she understated it! Why is the County Board of Supervisors crying poor?

    One reason is absolutely the incompetence of the Board, their CEO and Executive Office fiscal staff. It’s simply easier to cry poor than to try and deliver services. For whatever reason the fallout of the 2008 financial crisis resulted in the executive and Board to unquestioningly prioritize the stockpiling of excessive amounts of cash. Prudent reserves are a good thing, but the County also exists to provide services. They have thrown out the challenge of delivering services to focus almost exclusively on the ever growing reserves, as if the County were a private corporation trying to boost its outlook on paper. The reality is the County Board controls over $50m in undesignated and designated reserves.

    The second reason is that pulling the “crisis” card grabs headlines. It gives the management and the Board the ability to delay or prevent increases to employee compensation. The Executive Office is good at crisis. I would even say addicted to it. The reason? Incompetence. They can’t proactively manage, because that would actually involve doing their real jobs. It’s easier to cry crisis and hunker down than it is to stand up, make a decision about where money goes and then deliver on that commitment.

    I’ll give you an example. The jail cost overrun. The County is currently paying down $50m in debt for their portfolio of office buildings they bought and remodeled two decades ago, including the Board chambers they decided to prioritize remodeling yet again last year. Those payments are about $6m a year. If the jail’s $6m over budget (not a surprise) all they have to do is add another $6m in debt to pay for it, or use the reserves. This is not a crisis. It is unfortunate. But its not the end of the world. It is very common to issue debt for a capital asset like a building. In fact, you can make a good business argument to do that very thing. But that would require a CEO and fiscal staff in the Executive Office who know what they’re doing. Who build good working relationships with the Auditor and Treasurer. Has anyone in that office issued debt, refinanced or done anything even remotely technical like that? My guess is no. Again, cry poor and hope someone else comes to the rescue.

    If you had a dog as sick as this Board and Executive Office, it would be time to have a difficult discussion with your veterinarian.

    • So Bowtie Ted has access to these online reports? So is he lying to us? This man cannot be trusted, a habitual liar. He even admits that if you ask him a question he does not want to answer, he would tell you he hasn’t been there long enough. Now he publicly states that excuse won’t work anymore. Great Job, 5th District electing this morally corrupt human as Supervisor.

  9. At this point in United States history any public servant who says something is misinformation is probably lying and that misinformation is most likely true

  10. They solved the disaster last time by cutting employees wages 12%, then giving themselves a raise. That was the competent solution. It was a slap to the ones really doing work.

  11. I think the board members don’t have a clue. Elections here are a popularity contest; not based on actual experience and credentials.


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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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