December 12, 2022, Sarah Reith — The Board of Supervisors is looking for $6.1 million to balance its books for Fiscal Year 2021/22, as costs and interest rates soar and sales tax decreases.
The county reached a tentative agreement with its largest employee union for a 2% Cost of Living Adjustment, which it might be able to fund with a pension reserve account. The self-funded healthcare plan that was in place when the county racked up a $3.6 million deficit has now been swapped out for a pool plan that will require an increase in employee contributions. That’s supposed to save the county $685,000 a year, but unknown future obligations are likely to be sizable.
At last week’s budget workshop, the Board reviewed an analysis of the costs for building the new jail for mentally ill inmates, which includes millions in staffing.
The Board also heard a reminder that the county is still waiting on more than $9 million of covid relief money promised by FEMA. That money has been borrowed from the treasury, and the interest is not recoverable.
And there’s been no paper trail documenting the direction that former auditor Lloyd Weer allegedly received from the State Controller’s office in 2016, telling him the county should spend down the healthcare reserves by not paying into the health plan for three months out of the year or requiring employees to pay into it.
Supervisor Ted Williams described the situation to Assembly member Jim Wood last week, and asked him for help from the state.
“I don’t know, when I’ve voted on balanced budgets in the past, whether they were actually balanced,” Williams said. “That’s coming to light. We have a health plan that was millions over, and part of that was due to a holiday. I understand that’s because we got a call from the state. The state said we had accumulated too much money. We needed to spend it down. I don’t know what department of the state or why they would have done that by phone instead of writing…our finances are in such disarray, if I were in the state’s position, I would be looking at this rural county, thinking, we need to conserve them, clean up this mess and then give control back. Do you have any thoughts on how we move forward? We don’t have the local labor pool, we don’t have the funds to hire the staffing. It sounds like we have an office that was based on paper and spreadsheets, not automated systems. I think the Board and staff want to move forward and get our books in order, but we don’t know how.”
Wood was noncommittal, saying, “We’re happy to work with you on that. Those are issues that we’re becoming aware of. I don’t know where there is potential for state resources there, but one of the things I’m always pushing for in my role is more technical assistance and support for rural counties.”
Acting Deputy CEO Sara Pierce told the Board the county has received $9.1 million in covid money from FEMA and is still waiting for another $9.4 million. Supervisor John Haschak questioned her and CEO Darcie Antle. Pierce said when the county receives the amount FEMA has promised, it will go into the county’s disaster recovery budget unit, since that unit “is currently sitting in a $10 million deficit.”
“How does that deficit show up?” Haschak asked. “Are we using reserves to cover that deficit at this point?”
Antle told him that she believes the county is paying interest to the treasury, as it is for the money it borrowed to cover the health plan deficit. “And so that interest won’t be recoverable,” Haschak deduced. “When FEMA finally pays us, it will just be the base pay.”
“Correct,” Antle confirmed.
The Board also learned that the new jail will cost the county $2.5 million a year in employee wages and benefits.
General Services Agency Director Janelle Rau explained why expectations for ongoing facilities costs at the new jail have risen.
“We’re moving towards a cost of ownership model, versus the historical practice of what is contained in the Board’s Policy 33 regarding facility maintenance,” she said. That policy, last amended in 2007, states that seventy cents per square foot is to be funded for future capital costs. The standards for the cost of ownership model, which includes a capital reserve that budgets for ongoing facilities upkeep, is closer to $3 a square foot. Projections under the new model are sobering, and possibly more realistic. Rau told the Board that, “What we’ve estimated now, based on that expanded footprint, would be an additional $175,000. Again, currently the Board is not funding capital maintenance reserves. Funding is occurring on a project by project basis.”
Supervisor Dan Gjerde argued for several belt-tightening initiatives, including consolidating dispatch services, offering employees the option of a less comprehensive healthcare plan, and unloading county parks.
“How can we maintain the pretense that we’re going to keep these five or six county parks that are basically neighborhood park...
