Board closes budget hearings
The Board of Supervisors will formally ratify the county budget on June 21.
June 14, 2022 — The Board of Supervisors has closed its budget hearings and will formally ratify the final county budget on June 21. The total county budget is over $355.8 million, with an operating budget of over $29.6 million per month, according to documents attached to the June 7 agenda.
Talk of closing the county museum was notably absent from the list of recommendations. Several organizations asked the board to consider funding them from the American Rescue Plan Act (ARPA), including Meghan Barber-Allende, the Executive Director of the Community Foundation, who asked for $300,000 for hunger relief and another $200,000 for non-profits that were unable to hold fundraisers during covid. “We can make a difference, and we can feed our communities, especially those that are extremely vulnerable,” she told the Board. “I think it’s just very, very hard to think about how families and individuals and seniors are going to survive this, if we don’t figure out how to provide some support.”
Supervisor Ted Williams asked acting deputy CEO Sarah Pierce if it would be possible to fulfill the request. “As we go through these presentations, what would the funding source be?” he asked. “What is the pot of money we have to divide up? Because I can already tell you, I support all of these projects. How do we pay for it?”
Pierce told him county staff was keeping track of requests for ARPA funding, but that they were following earlier Board direction to use the funds for county core services first.
The health plan deficit, even with an infusion of $4.6 million from the ARPA funds, is projected to be over $3 million by the end of the calendar year. And cannabis tax projections are $1.5 million, down from $6.1 million last year. Supervisor Ted Williams was chagrined. “I see that we had $6.8 million that we didn’t collect on cannabis,” he noted. “We’re not going to collect that, aren’t we?” Interim CEO Darcie Antle confirmed his assessment that, “that’s just written off for this year.”
Still, some petitioners were given some hope. Stephanie Garrabrant-Sierra, Mendocino County Resource Conservation District’s new Executive Director, told the Board that, as a special district, her agency is “a government partner,” which is working to alleviate climate change.
With the rising costs of gas and steel, she requested double the $45,000 the RCD typically receives. The Board directed her to Department of Transportation Director Howard Dashiell, to see if it’s possible to provide more funding for the district under his allocation.
Projected secure property tax for the next fiscal year is up to $41.8 million from $36.8 in May of this year, and projections for the transient occupancy tax are up to $8 million from $6.2 million actuals in May.
Patrick Hickey, the field representative for SEIU Local 1021, insists that the budget is not as dire as presented. The county is currently in negotiations with all its labor unions. “Sales taxes are projected to be up by $700,000, transient occupancy taxes are projected to be up by $2 million, property taxes are projected to be up by $2 million as well,” he recited. “This doesn’t sound like a county in trouble to me. But how well has the county done at projecting its revenues? Actually, they’ve underestimated Budget Unit 1000 every year.” This unit is for non-departmental revenue, derived primarily from property tax, sales tax, and ToT, or transient occupancy tax, also known as bed tax. The funds are usually used to make up the difference in expenditures and revenues by county departments that operate at a loss. Hickey went on to say that the county had underestimated Budget Unit 1000 by nearly $8 million in FY 2018/2019, $1.3 million in FY 2019/2020, and $9.4 million in FY 2020/2021. “I think you can see the pattern here,” he concluded. “The county is in the habit of overestimating expenses and underestimating revenues.”
Antle provided some more information about the revenue projection, saying, “In the past, the revenue projection has come from the auditor-controller's office, and as you know, we had a change in that position this year. Those numbers weren’t provided to us by the auditor-controller, so the fiscal team made the projection for this coming year of 2022/2023.” She added that the team had eventually received the report from the auditor-controller, but not until May 20, which wasn’t timely enough for them to use it when the budget process started at the beginning of March. She told the Board that the only difference between revenue projections by the fiscal team and the auditor-controller is that “ours is $700,000 higher.”
Hickey also suggested that the county stop budgeting for the nearly 400 positions that it can’t fill, which he believes would free up money to pay more to existing staff. The Board agreed to a discussion with department heads to find out if they are still actively recruiting for positions that are funded, but which have been vacant for years.
The Board also directed the auditor-controller to track where the cannabis tax that has been collected has gone. In 2016, county voters approved AI, a cannabis business tax of no more than ten percent of gross receipts for cultivation and distribution. The general tax measure was accompanied by AJ, an advisory measure that asked voters if they wanted a majority of the taxes generated by AI to be used for enforcement, mental health, county road repair, and fire and emergency medical services. The destination of the money has not been diligently tracked. AI was a general tax, which means it only needed a simple majority to pass, and the revenue it generated went into the general fund. Advisory measures are not legally binding.
The budget also includes direction to the auditor-controller to encumber the unspent PG&E settlement money for its designated projects; and to create one new budget unit within the general fund with $320,000 in it for parks; and another to track grants for the Air Quality Management District.
Acting auditor-controller Chamise Cubbison provided some analysis. She said she had given the CEO’s fiscal team an updated projection using her own calculations, and had tried to have a conversation with them, but “I got the sense that they didn’t want to change the projection, because that was what they had based the initial net county cost assignments on. So I understand that…I’m most frustrated by the fact that the auditor-controller budget is the budget unit that appears to be taking the largest hit, at least from the CEO adjustments. And there’s been many references today to direct the auditor, direct the auditor, direct the auditor to do things. But I do need to point out the fact that the auditor-controller’s budget unit cannot be underfunded to the tune of more than $340,000 and expect that I’m going to be successful and that my team is going to be successful. The auditor controller’s office is a key part to the property tax and the ToT distribution and collections processes, along with the special districts…we do put on the tax roll and distribute over $160 million to the county, to the cities, to the special districts, and the schools. So under the new consolidated office, I really would hope that the Board would fully fund the auditor-controller’s proposed budget, with the understanding that in order to be successful, we need to be fully staffed and we need to have the resources that I think are appropriate. So I would hope that the Board would consider possibly revising the ToT projection by enough to possibly cover the auditor-controller’s budget, or direct the ARPA funds be allocated to bring positions up to pre-covid, or that that ARPA fund be used somewhere else in the county to free up additional general fund to help support the auditor’s office budget.”
Antle said part of the one-time $1.7 million of ARPA money that was set aside to bring up staffing to pre-covid levels could be used to fund Cubbison’s office.