Supervisors consider cuts
The Board of Supervisors went over the budget in preparation for next month's budget hearing, discussing what to cut from a budget hit hard by the inflation and the loss of cannabis tax revenue.
May 5, 2022 — During a third-quarter budget workshop this week, the Board of Supervisors hashed out where to make cuts in a county budget with significant projected shortfalls and very little information about the cannabis department.
While county staff estimates that $6.8 million in cannabis tax revenue has been uncollected, the cannabis department was one of three that has not yet turned in its projections. Another installment of cannabis taxes is due at the end of May.
The combined health plan deficit for this year and last year is $6.2 million. The Executive Office presented an operational budget that would have been balanced if not for that deficit, and asked supervisors to decide where to make adjustments.
Interim CEO Darcie Antle summarized the basic cuts she was seeking. “We’re looking for $3.3 million,” she said. “And if you close the museum, that reduces it, and then if you don’t fund the parks at $1.6 (million), that would reduce the $3.3 (million) even further. So at that point, you’re down to needing an additional $2 million, and so then we sort through these other items as you would like.”
The museum, which costs over half a million dollars a year to run and brings in $20,000, appears to have been spared. Even if it were closed, preserving artifacts and maintaining the building would continue to incur costs. Supervisor Dan Gjerde offered some suggestions for adding more money to the museum’s coffers, like tapping those who have donated artifacts for monetary donations, or offering the option of contributing to an endowment. He noted that he found it “a bit radical” to cut the museum, but that, “I think we do need to have, as a full Board, a better understanding of what the long-term strategy is for the museum.”
Supervisors also considered cutting parks, which would entail laying off staff. Supervisor Maureen Mulheren laid out the quandary regarding the parks, saying, “It’s my understanding, from having served on the ad hoc and then bringing that item back twice to this Board, that there were no parks that we wanted to close. So if we don’t find a way to fund them, they have to be closed. We can’t have it both ways.”
General Services Agency Director Janelle Rau said her department is asking for $4.8 million for parks over the next three years, based on a needs assessment of the parks and what it would take to restore them to a safe condition. She said the county’s more than sixty parks have been fiscally neglected since the 1980’s. Bower Park in Gualala is currently closed due to a number of hazard trees. Supervisors discussed other funding mechanisms, like special districts and assessing which parks could bring in revenue by offering concessions. But parks are unlikely to generate revenue for the county.
Half a dozen departments are projected to come in more than $100,000 over their net county cost assignments, with the sheriff in the lead at $1.4 million.
Antle told the board that the county reserve, which includes designated funds, comes out to $20 million. She added that an ideal reserve would be three months’ worth of county expenditures, which would be $48 million.
The one-time American Rescue Plan Act, or ARPA funds, are likely to be used for a variety of purposes, from parks to funding the sheriff’s hiring bonuses and backfilling the District Attorney’s budget. Deputy CEO Sarah Pierce told the board about plans for the $16.8 million award, which was intended to alleviate the long-term impacts of the pandemic for hard-hit communities. The county has already obligated $4.8 million, leaving about $12 million. “Of that $12 million, ten can be used on county core services, and then the remaining can be used on staffing to pre-covid levels, and parks is an eligible expense,” she said.
Mulheren asked her colleagues if they would consider setting aside some of the ARPA money for grants to community organizations, and Gjerde said he would only support that if it were divided among the five supervisorial districts. Supervisor John Haschak suggested using some for community health workers, but the board did not give direction on either suggestion. Antle told Haschak that the only other possible source of revenue is the cannabis tax, some of which is not yet due. “At this point, we have met with all the departments, per your request on the 19th,” she said. “And the departments that I mentioned, which is a couple of handfuls, were able to come back with some money. At this time, there are no areas that we are aware of that could be reduced. The only other is if the cannabis revenue does come in,” by May 31st.
Supervisor Ted Williams summarized his view of a few budget scenarios, saying that, after cutting $1.5 million from parks, the county would need to cut $2 million from its budget if it does use ARPA funds, and $7 million if it does not. And he said it’s time to stop relying on cannabis tax. “This strikes me as a structural deficit,” he said. “I don’t see this as a one-time. We were living on cannabis revenue, average about $5 million a year. That game is over. Cannabis is now in the legal market, where the price will just be set by marginal revenue intersecting with marginal cost, in a county ordinance that only allows 10,000 square feet, figure 28 grams per square foot, at declining market price. That revenue is not coming back. And so the past couple of years we’ve lived on revenue that we should have treated as one-time, but instead it’s been used to augment the county for staffing. This coming year we don’t have that revenue. We’re probably not going to have it again.”