Financial crisis: "We just don't know how bad it is."
b"August 3, 2022 \\u2014 A 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 what its financial situation is.\\n\\n\\u201cI would like to ask my colleagues for support on direction to the CEO\\u2019s office to reach out to the state controller\\u2019s office to help us get our books in order,\\u201d Supervisor Ted Williams announced, about a half hour into the meeting.\\n\\nA 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. \\n\\n\\u201cI\\u2019m three and half years into a term,\\u201d he said. \\u201cI worry, I'm coming up on the point where I can no longer use the excuse, I\\u2019m new here. And yet in the three and a half years, I haven\\u2019t been able to get a credible financial report. I understand we have three different sets of books. They all differ. Why?\\u201d\\n\\nCEO Darcie Antle corroborated the main point. \\u201cI would agree with you. I\\u2019m not quite sure,\\u201d she acknowledged. \\u201cI think a lot of the reason we have asked for a pause in the labor negotiations is that we don\\u2019t know. We don\\u2019t 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.\\u201d \\n\\nIt doesn\\u2019t seem like anyone has a clear idea, and that\\u2019s 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\\u2019s employees, filed a complaint with the Public Employees Relations Board last month, detailing the information they\\u2019ve 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\\u2019s 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\\u2019s budget. \\u201cThat\\u2019s something we submitted all the way back in November,\\u201d he said last week. \\u201cSo we\\u2019ve been trying to keep track as the county has parsed out little bits of information to us as the negotiations have progressed.\\u201d\\n\\nThough 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\\u2019s $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. \\u201cSo I\\u2019m just wondering, where is the breakdown of where that money will go?\\u201d she asked during public comment. \\u201cWill 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?\\u201d \\n\\nWilliams counts himself among those agitating for financial transparency. But he told his colleagues yesterday that he doesn\\u2019t think anyone is able to provide detailed financial information about the county. \\u201cWe do have an outside audit that happens,\\u201d he said. \\u201cWhen 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\\u2019t think I\\u2019ve done it yet. I don\\u2019t know if past boards have done it. But it means we\\u2019re paying for an outside audit, we\\u2019re getting advice about changes we need to make to meet accounting principles. And then we\\u2019re 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\\u2019t know how bad it is.\\u201d\\n\\nSupervisor John Haschak pointed to a recent shakeup in the county\\u2019s 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.\\n\\n\\u201cIt\\u2019s just really ironic that this board voted to consolidate the two positions when those people in those positions said don\\u2019t do it, and that consolidation would not help, and now we\\u2019re in the position where we\\u2019re asking the state to step in to help out this position that in part we created as a board,\\u201d Haschak said.\\n\\n\\u201cSo I want to respond to that. A part of the reason that I supported the consolidation is that I couldn\\u2019t get financials,\\u201d Williams replied. \\u201cAnd we had an auditor retire, and shortly after, I learned we have a $4.5 million hole in the health plan. Why didn\\u2019t this board know that we had a $4.5 million hole? We would have planned accordingly. There\\u2019s an institutional problem here that this county doesn\\u2019t have a set of books that anybody believes. There\\u2019s 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\\u2019t know how much money we have to spend?\\u201d\\n\\nSupervisor Glenn McGourty called for structural change. \\u201cYou want to have people who really know finances, who are properly trained,\\u201d he said. \\u201cThat\\u2019s why I\\u2019ve 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\\u2019s history at the auditor-controller and tax collector-treasurer, we don\\u2019t see that pattern. So I still think we\\u2019re going to need long-term structural change in county government on this. This will not go away until we do.\\u201d\\n\\nThe 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\\u2019s fiscal issues."