At Tuesday’s first-quarter budget review, the Board of Supervisors heard some unwelcome news about an addition to the deficit, while another attention-grabbing piece of information appeared to fizzle into mundane legitimacy.
CEO Darcie Antle painted a grim financial picture, saying, “I am very concerned about the fiscal sustainability of the county,” with the cost of goods, labor and services rising as revenue from all sources goes down. “One payroll every two weeks is $3 million,” she reminded the Board. She added that over the weekend, Doris Rentschler, the Executive Director of the Mendocino County Employee Retirement Association (MCERA), told her that, “There will be a $3 million impact to retirement for fiscal year 24/25 due to salary increases.” This, she said, will raise the deficit, even as labor negotiations drag on.
According to Rentschler, “the county’s expected contributions (to the retirement fund) are estimated at $34.8 million, an increase of $2.88 million over this year’s expected contributions.” This is due to changes in actuarial assumptions and the salary increases of employees who were either promoted or who received market adjustments for a negotiated minimum wage increase.
If the number of employees contributing a percentage of their checks to the retirement agency shrinks too much, the county will have to pay even more, to cover the unfunded retirement liability for past employees. Current employees only pay into their own retirement accounts.
Supervisor Dan Gjerde asked Antle and Deputy CEO Tim Hallman some questions about the labor contracts. “At the time of budget adoption, the budget assumed a growth in payroll and salary and benefits of nearly 9%,” he said. “Would that cover the contracts that are under negotiation today, or would that not be sufficient to cover the contracts that are under negotiation right now?”
“That was for covering our bases at that time,” Hallman said. “It was not projecting out any increases.”
Gjerde persisted: “If there are labor contracts adopted that increase salaries, even by one penny, it would be above what was assumed in the adopted budget.”
Antle confirmed, saying, “With labor negotiations, yes. Merits and other regular things that happen throughout the year would have been included.”
The Board agreed to take up the question of forming a citizens’ advisory committee to come up with a definition of market rate wages for county employees.
Acting Auditor Controller Treasurer Tax Collector Sara Pierce gave an update on last week’s startling news of outside bank accounts, telling the Board that they appear to be a legitimate means for county employees to deposit money rather than transporting it from various corners of the county. There is no active auditor on the accounts right now, “so it’s just trying to work through local banks to update signatory authorities,” she explained.
The county is contracted with outside auditor Clifton Larson Allen to complete the audit for fiscal year 21/22, but Pierce said she would like to put out a request for proposals for another firm. The county also has a contract with another auditing firm, Regional Government Services, to go through a backlog of items.
Megan Hunter, Assistant Auditor-Controller, said she doesn’t think her office is being heard. “We send the auditors what they request from us,” she said. “They did ask if we had any new bank accounts, and I did provide them with that information. There are also multiple bank accounts that do not hold public funds, like jail inmate funds…They’re not public funds, so they would not need to be disclosed. We are aware of the bank accounts. I feel like the way it was brought to the public’s attention was more alarming than what I think is necessary before everything is fully investigated. But we have been working diligently with the auditors. We’re not holding any information from them. We provide them with what they request.”
Supervisors also began to wonder about the details of the asset forfeiture funds. And they relented on one unpopular suggestion, agreeing to maintain a million-dollar carbon reduction fund that they had set aside from the PG&E settlement.
However, they let another million they had set aside for emergency medical services go into a designated reserve. Supervisor Ted Williams called it “a soft reallocation,” and said he was dubious about using one-time funds to solve a structural financial problem. But County Counsel Christian Curtis said he expected the county would have to spend tens of thousands of dollars of research to find out if a plan to form a joint powers authority for emergency services would even be viable.
Three employees are spending half their time trying to figure out how to improve the way things are done at the county. It’s called the Golden Gate Bridge Initiative, because they expect that, like painting the iconic bridge, the work will be ongoing. They currently have 73 items on their list. The Board voted unanimously to ask Antle to review the list and see if the analysts in her office could take up any of the items that are not currently being implemented. She’ll also come back with an outline of a job description for a consultant who could help with cost efficiencies
Chief Probation Officer Izen Locateli said he gets more done now than he did in 2017, when he had a bigger budget, because the department has stability. “It is replicable throughout the county, that you can create efficiencies and effectiveness,” he said. “But you have mass amounts of vacancies in your department heads and your leadership throughout the county. So how do you get anything accomplished when every year you have a new director or a new chief or a new boss? Leadership is something that you hope to grow internally, and that’s how we hope as a county that we’re going to get forward. But we have to prioritize.”
They negotiated the pay increases in years past through the Koff Study. Now we are hearing is they did not account for this or consider the impact to the retirement costs, duh increasing wages = increasing contributions. Also this is not the first year so they should have expected it. They always try to blame others for their incompetence. CEO’s crack financial team really dropped the ball here for financial planning. Or is it they use this as a ploy to pretend it’s a surprise additional cost? Good thing their POB is paid in 2026. Better start putting those regular annual POB payments toward the unfunded liability after 2026 rather than spend it on a roof for Ag extension, tourism advertising, or worse outside lawyers constantly needed due to the Board overstepping their authority and bad legal advice from CoCo Curtis.
The Special State Audit will be interesting.
It will be interesting, but I doubt it will say anything about the actual finances. Ofter, these types of audits focus on how the finances are handled and look at a sample of transactions. I highly doubt they are going to find a pile of money that wasn’t known or a pile of money missing.
Perhaps. It would interesting to know where the money has gone for all the vacancies this gov’t has had for the last several years. Maybe the audit could shed light on it or maybe this is wishful thinking. I tend to think some depts may be hording unspent wages via long periods of funded vacancies. The Assessor’s office had vacancies as high as 70% off and on for a several years. All these positions were funded. Where is this unpaid wage?
If you would like to see what these type of reports show, I’ll put a link here for you. Its not what you think. Nobody will come out looking good or being vindicated or blamed. What will be interesting is that now that Cubbison has been removed and the Executive Office has functionally taken over the ACTTC office, the “response” section will only be written by Darcie Antle and/or Sara Pierce. Chamise Cubbison, the actual duly elected and independent Auditor will most likely not be responding. Meaning, the response to the report from the County will be one sided entirely, which I don’t think is in the public interest, even if Cubbison is completely wrong. Therefor there’s little value to it, just like Sara Pierce’s accusations of concealed bank accounts turned out to be politically motivated alarmism.
https://www.sco.ca.gov/aud_special_reviews_audits_local_governments.html
Good to know. I’m surprised the link was allowed on the comment section. I’m more skeptical of uncompetitive elected heads. Duly elected is a bit of stretch for Cubbison. She is more a last person standing than an elected official.
So you blow the bank accounts out of proportion to stir up everyone before you know what is going on, how is this temp person qualified to be the County Auditor etc?
Looking for efficiencies? How about stop paying for outside lawyers and consultants? Especially when we don’t heed the advice we wasted money and time on. And what the heck do our county lawyers do any way? Why do we have a County Counsel Office when we look to contracted lawyers for most things?
Grow leaders, yes, great idea. Until the employees you are growing realize how badly leaders are treated, used, broken and tossed aside. Anyone with a brain can see that a 5% pay bump to be a leader and get tortured is not the way to go. Even the leaders the county imports, well, look at the track record. How many wrongful termination cases do we have?
Not deeply covered in the story is the compensation study. The board had a study done but doesn’t like the results so they are going to look at compensation of county employees a different way. Seems rational, keep asking the question until you get an answer you like
also…On the Koff Study there was a modifier added to alter the results.
Darcie seems in way over her head. 18 analysts in the Executive Office? I thought that was an exaggeration but apparently its real. Darcie didn’t correct the board on that one. All I’ve seen is one report from the Golden Gate Bridge Initiative, talking about saving on gas by converting to an electric fleet! Never mind that you’re going to have to spend a bunch of money up front to convert the fleet, build a charging network in a county with over-stressed power infrastructure and regular PSPS events… all so presumably you could save on gas down the road. If you’re truly in a fiscal crisis, that’s all stuff you do in the good years to prepare for the bad ones. Darcie seems to think these magic consultants from RGS can come in, wave a wand and “fix” things. Darcie’s strategy so far seems to be “lets spend more money to find ways to cut costs.” Good luck with that. Also, Gjerde says a Tesla Model 3 is now cheaper than a Honda Civic. No its not. Look it up! Its closer than it used to be, only because of a $7,500 federal tax credit… a tax credit a government organization like the county does not get. These meetings are so painful to watch, but like a train wreck you almost cant look away.
What is it with Darcie always reading off a piece of paper, clearly fed to her and not fully understood by her, using an ever growing intensity and cadence to her vocals while telling the “story” to elicit fear from listeners, it’s weak and obvious and exhausting and eventually boring. It makes her look like she is just reading lines from a teleprompter without knowing what sentence she is reading next but knows her mission is to instill in the public.
Also why no response from Pierce about the tax bill public announcement to clarify what happened? People want answers and she had opportunity to address it in the last board meeting.
“makes her look like she is just reading lines from a teleprompter without knowing what sentence she is reading next”
As above, so below. The current model of governance.
Lol rising costs, sinking revenue, crooked employees and embezzlement
Don’t ask us for another dime,we have a budget and pay our bills on time and it’s getting tougher by the day.Get your act together!!!!