The price of dirt, Part 1

Part 1.
 
“Put your faith in the people who have been here from the beginning and have always paid their taxes while others come and go and cost us all money.” – Diana Westmoreland Pedrozo, executive director, Merced County Farm Bureau
 

Late in the afternoon of the August 18 Merced County budget bloodletting before the board of supervisors, Aldo Sansone, 77, a fixture in Westside landowner circles, rose to his feet. Sansone told the supervisors not to cancel a state subsidy to agriculture called the Williamson Act just because the state would not backfill the loss in property taxes to the county in the coming year. By that time in the budget hearing the board had laid off between 89-111 employees and eliminated 130 vacant county jobs. Sansone told a story, presumably for the purpose of convincing the supervisors of the goodness of Merced farmers. In 1942, he said, US War Department condemned more than 500 acres of his father’s vineyards and built Castle Air Force Base on it. He said his father got some money for his grape crop but nothing for the land. His father, an immigrant, didn’t speak English well, he said. He did not say that his father came from a country at war with the US at that time. While this was a misfortune for his family; on the other hand, US armed forces in the Pacific were not doing well in 1942. But others gave more than land to that war. We could not see the link between this military condemnation of farmland and the loss of a property-tax reduction for farmers that the county only approved 35 years after the Williamson Act became law in California.
 
Sansone explained that the problem with politicians was that they didn’t think like “business individuals.” He, like all the other members of the elderly and middle-aged farmers, urged the supervisors to prohibit any new Williamson Act subsidies to farmers but not to terminate existing contracts.
 
Today, 85 percent of Merced homeowners are upside down on their mortgages – they are making payments on mortgages for home prices that have fallen as far as 70 percent in three years. This has had, as they say, a negative impact on property-tax revenues to the county.  In 2005, Merced was considered to have had the second most overpriced housing market in America – houses selling for 77 percent more than they were worth. Today, every city in the county is ringed with unfinished subdivisions in which many houses are vacant as the result of foreclosure. Banks are refusing to put some 4,000 homes in some stage of foreclosure on the market for fear of driving prices down even farther.
 
Against the claims of good faith of the tax-paying farmers, that “agriculture is the county’s economic engine,” and that Merced’s farmers have heroically protected their precious agricultural land, there is this: although the US military in wartime had the power to condemn the Sansone vineyards for war purposes, neither developers nor local government (without negotiated compensation under eminent domain) had the power to condemn farmland for subdivisions and strip malls during the speculative real estate bubble that has burst. The farmers were willing sellers of the dirt on which the speculative real estate boom was constructed and they made a killing:  the price for that dirt was better than anything the farmer could make off it by farming. Every acre of land in this Valley has always been for sale at a price, as everybody knows, none better than its agricultural landowners.
 
After years of experience, we have never seen an example of more perfect agribusiness and county-government hypocrisy and deceit than the hearing on whether the county should pick up the agricultural subsidy called the Williamson Act at the same time as it was laying off scores of county workers, most of them in health and human services, in an economy now shrinking at the velocity at which it once bubbled.
 
It wasn’t by accident that the north San Joaquin Valley went through one of the most exaggerated real estate speculative booms and busts in the nation. We have often in these pages talked about a seamless blend of corruption and incompetence among our leaders. In this case, they entirely surrendered their roles as political leaders to a “free-market” ideology that allowed finance, insurance and real estate (beginning with local landowners) special interests to ruin the local economy. Both the cities and the county could have extracted higher fees from developers. UC itself admitted it was trying in court to get out from under $200 million in infrastructure improvements that it has not yet begun to pay. We will be paying for years for the lack of local political leadership because, in fact, they behaved exactly like “business individuals” Sansone talked about. They had valuable votes on land-use issues. We don't really suggest that, like "business individuals," they actually sold their votes. But, they certainly contributed them to a speculative real estate bubble that history had shown in the past and would show again would crash. We understand it is absolutely beyond politicians and government to admit errors in judgment. This policy of denial of responsibility, however, leads to evermore contorted “reasoning.”
  
Introduction.
 
County CEO Dee Tatum set the scene for the board:  The County will be laying off between 89-111 people and deleting 130 vacant positions for a total of 219 employees. There will be 76 layoffs in health and human services, where there are already 41 vacant positions. Staff is asking the board to eliminate 130 already vacant positions.
 
The worst of these layoffs are due to cutbacks in state funds for local programs and Tatum said there will be more cuts. Both state and local revenues from property taxes and sales taxes have shrunk dramatically since the end of the bubble.
 
Tatum’s salary has increased by 64 percent since 2001 to $261,000 in the last fiscal year, the Merced Sun-Star reported earlier this year. He is the highest paid employee in the county. He emphasized that his office did not make the cuts; he requested that the department heads do that.
 
Mr. Tatum’s assistant, Jim Brown, said that the county is in negotiations with unions at the moment, therefore it is impossible to anticipate any future reductions in costs, from, for example, work furloughs and reduced wages.
 
Giving more detail about the situation, Brown said the total shortfall was $44.3 million from tax losses, state reductions (human services, health mental health etc), $7 million in Human Services (CalWorks), $7 million mental health (drug and alcohol), and more reductions are expected in Prop 1A education funds, and finally, the Williamson Act. Locally, the county has reduced spending by $8 million in long-range projects and $9 million in vacant positions and in staff reductions. 
 
Kristy Waskiewicz, representing Local 2703 of the American Federation of State, County and Municipal Employees (AFSCME) , told supervisors the county had not bargained in good faith with its employees, had not looked at all the options before laying off people and that for a start, supervisors should return the $500,000 per year in discretionary funds they spend on projects in their districts. Tatum noted later that the amount had been reduced by 35 percent; each supervisor would only received $65,000 in discretionary funds per year.
 
Brown replied that there would be no union negotiations in public and proceeded to lay out the county’s position: it is under statutory deadline to prepare a budget at this time, whether in negotiations or not, and that county staff estimated that furlough days and “budget reduction” days would save between $3-4 million only, and the shortfall is $1.5 million. “It will have to be a multi-year reduction that will require many other reductions,” he said.
 
A young man from Community United by Empowerment (CUBE), Sam Gonzales, gave the supervisors and the general public a preview of that it means to gut the social safety net in a county where 35 percent of the population – and more are in need every day – is on some form of public assistance: “It may be a money matter to the state but you have to thing about the crime rate and all that professional stuff. It wouldn’t be fair to kids, kids who don’t have a say in this … Everybody doesn’t have parents and other things that they need  ... It keeps people safe, from harming themselves and doing things that aren’t really that smart, if you start it you should let it finish, if you start something, people get used to it, they start counting on it when they need something,”
 
One of Gonzales’ companions said that without CUBE he would not have enough to eat.
 
In fact, we learned later that CUBE had been preserved, with staff reductions.
 
The supervisors had postponed the public comment period in which the public can talk about general questions from its usual place at the beginning of the meeting and people we lined up to speak on various issues. Chairwoman Deidre Kelsey ended the comments on the consent item agenda, which was passed unanimously.
 
The next three items on the agenda dealt with policy issues. Assistant CEO Brown pointed out that the board, as a matter of policy, had instructed staff that if the state makes reductions, the staff is not to propose backfilling the reductions. CEO Tatum followed Brown’s comment by promising that we would “see this very democratic process at work” as the board decided what to do about the state’s withdrawal of funds to help the county pay for the property-tax reductions for farmers from the Williamson Act.  In fact, the county backfilled the Williamson Act reductions for wealthy farmers, while slashing mercilessly the budgets for health and human services for the sick and the needy.
  
Karen Adams, an elected official who directs an absurd jumble of departments as the result of a reorganization last year -- Adams is, simultaneously the Tax Collector, County Treasurer, County Clerk, Registrar of Voters and in charge of the Revenue and Reimbursement department – requested that the four permanent positions (three supervisory) that will be cut not be deleted, just held vacant, “so that finally someday I can complete the functional realignment advised by your outside consultants for the Registrar of Voters/Election Department.” She added that these hardships were foreseeable, that she’d requested last year not to do this departmental consolidation until a vision was properly included in the resolution. “I am especially thankful that I am an elected official paying taxes today,” she said.
 
Merced County should not have an understaffed, dysfunctional elections department next year with two open seats in the state Legislature and what is beginning to look like a serious challenge to the congressional seat, in addition to local government races that can be decided by very narrow margins.
 
A retired county worker spoke bluntly to the supervisors: “Given the economy out there, do absolutely everything – furloughs, work reductions, before you lay off workers.”
 
Director of Human Resources, Robert Morris replied that, “Reduction in force is always heart-wrenching” but laid all the blame on the department heads for the actual selection of the layoffs. But, he said, if the board approves the layoffs, the county would help them with Human Services support (if there’s anybody in the department left to help), and if the economy improves they would be preferred applicants for their old jobs from 18 months to three years “if they met the minimum qualifications and passed an interview.”
  
Waskiewicz, the union rep, made of her best of many statements during the hearting: “You’ve repeated the verbiage of ‘having exhausted all options short of lay offs,’ -- I’ll repeat mine: all options have not been followed. There have not been good faith meetings with us regarding other options.
 
“You’re proposing to lay off eight land-fill workers, guys with more than 20 years of county service, many not close to retirement age yet. How many could be saved with furloughs or other cost-savings measures. You don’t know because you haven’t looked at it yet.
 
“The public health lay offs are scary. Flu season plus swine flu are coming. There has already been one death from swine flu in Merced County and surrounding counties have had several. What are you going to do if we really get hit with the flu? You’re also proposing to lay off hazmat and environmental health staff: You’re talking public safety, which is not just sheriff, but any threat to health and safety of the public. Where is the concern for the public?
 
“We should be bearing the brunt of the worst economy any of us has ever seen together, but we’re not. You’re putting it all on our backs. You’re laying off the people that keep this county going.
 
“Going after people in services before you look at other options is not a balanced approach. You are failing in your obligation to do what’s best for the residents and employees of this county. We keep hearing how you don’t want to do this but have to. How do you know if you haven’t explored all options?  Before you can look all these people in the eye and say you’ve looked at every option – and you can’t – you shouldn’t lay off any of them.”
 
A county social worker said that her program for teenage pregnancy and young mothers costs $21 million a year and saves the county $120 million and has taken Merced from dead last in teen pregnancy to 51st out of the 58 counties. “Stanislaus uses federal funds for their teen pregnancy program. Could that option be explored?”
 
A community health specialist introduced herself, saying she is also known as “Delete 1. I wanted you to see that I am a real person and have worked for the county for 16 years, 11 years at Public Health. I am asking you to reconsider these cuts. I am willing to take a pay cut and am asking you to consider this option.”
 
A building inspector introduced himself, saying he “just wanted to meet you before you add me to the growing list of unemployed in Merced County,” expressed the hope that he would not face foreclosure on the house he bought last year. “My coworkers and I have heard rumors of furloughs and wage cuts and we agree these are much more desirable than lay offs. Your decisions today will affect many. Please don’t be politicians. Be the leaders we elected you to be,” he added.
 
Cheryl Meyer, a US Air Force vet and environmental health department technician said: “My position is 100-percent funded by purchase of new tires by California residents. The county has received tens of thousands over last four years. The program will continue to add revenues to county. This position is as important as fire and police because it also concerns public health and safety … We were notified Friday morning we would be possibly unemployed. Administrator stated they had known this since February. Why weren’t we notified in February?  Had I been notified in February, I certainly would not have purchased a home that did not close escrow until May. I made the offer March 3. Mr. Walsh you will almost certainly have another foreclosed home in your district because I will almost certainly not be able to pay for my home. That I have waited and worked and saved for nine years to move into. (Cries) I will have years of work ahead of me to reestablish my good credit. I am a single family household and have no other income to rely on. Mr. Pedrozo, you said last night on TV, ‘What else can we do?’ Talk to your employees and have them be a part of the solution. You will be considering my future as well as the county’s today. I pray that you will throw away those pink slips. When the air clears, those employees laid off will still be feeling the effects of your actions for years to come. Please take into account the faces and lives of those classification numbers we have been assigned. This is a nightmare and I only hope I can wake up. More than half of my life is over and here am I starting it again from the beginning. I never imagined this in a million years. To quote you Mr. Tatum it really is a horrible thing you said, ‘it really is a horrible thing to watch what you’ve built up only to see it torn down.’
“You have no idea sir, you have no idea. (Now sobbing)
 
“Please reconsider lay offs for a more across-the-board solution. Please talk to us to find out what those solutions are.”
 
Rosemarie Perez, who works in county health support services, said:  “The last time I was before you was to receive my 25-year pin; now I am before you pleading for my job. Currently I am a support services analyst at public health, environmental health division, and on August 14, I found I might lose my job due to two deletions of two jobs with the same title and due to bumping rights. Bumping rights policies need to be changed to reflect years of service to county, not just in a particular classification. I had worked for the purchasing department of General Services for 24 years. One of my duties at environmental health is processing state grants so that revenue can be generated. I bring 24 years of county knowledge and experience to this position. I have been working for the county since June, 1981. My husband is currently unemployed and now I will have no vision or dental for my family. If this is approved, I can’t cash out my sick leave. Were hours reductions or furloughs even considered before this decision to delete over a hundred positions? I was looking forward to joining the pool of retired county workers. I have been working for Merced County for more than 27 years and now all I will receive is a pink slip.”
 
A landfill hazardous material worker testified that the state Department of Toxic Waste requires two workers on site. If one is cut, the site will be closed, county residents will have nowhere to take hazardous materials. Small businesses and the county will suffer for lack of this place. This will cost the county more through hazmat disposal contractors. This is one of the only places in the county which will dispose of pesticides, flammable substances, solvents, and other toxic substances. Twenty-five households per day visit the site and 400 businesses participate.
 
Gloria Sandoval noted the ripple effects of firings. As a high school counselor, she’s already seeing a lot of stress. Too many young people are having to move from one place to another. The remaining people will be overworked, increased stress levels that will create other problems in our community. We have not recuperated from the $2000 less than the national average we receive from the federal government. We need to pressure the congressman. “Please do not make these cuts.”
 
Board deliberations began with Supervisor Hub Walsh asking CEO Tatum what other considerations were made besides laying off people. Tatum’s response turned into a diatribe against the state, concluding in a menacing tone, “I can’t tell you what to do, obviously, sir. Management will toss in 5-10 percent. This isn’t the first time this has been discussed. You can check the tapes.”
 
Walsh worked for 25 years in human services administration. He’s the newest addition to the board, having just completed two terms as mayor of Merced. Tatum and the other supervisors appeared uncertain if he was a management team player yet.
 
Walsh's next question was about limits on travel and acquisitions. Tatum replied that paid out-of-town trips have been curtailed but that staff had reserved $375,000 to repair and maintain several Veterans and community halls close to condemnation.
 
Walsh then asked if the land fill situation determined by Merced County Area Governments (MCAG). Tatum explained that while supervisors pass budgets on transit and landfill issues, MCAG decides policy. Public Works Director Paul Fillebrown concurred that MCAG’s Solid Waste Policy Board makes final decisions on staffing and that the layoffs are in accord with what the county thinks MCAG “wishes.”
 
So, the decision on the hazardous waste workers will be made by a selected committee of an appointed board composed of elected officials of a bureaucracy that exists by a memorandum of understanding among jurisdictions to recommend highway projects and to receive federal highway funds passed through the state.
 
Walsh then asked how are bumping rights are established and or adjusted and about seniority?
 
Human Resources Director Morris replied that bumping rights are from contracts we have with the bargaining units (unions).
 
Supervisor Kelsey asked when bumping rights were established.  She said she was told “before the earth cooled.”
 
Tatum interrupted the chairwoman, saying that the quote was “attributed to me... What they would like to know is when they were established. They’d like to have the date when this was first agreed to.” He was perhaps guiding Morris’ response – that he didn’t have that information and would have to review the contracts and regulations before answered.
 
Walsh prodded forward, saying he understood that there is some consideration for special district funds reductions and that discussion is forthcoming.
 
Tatum replied: “That discussion is not only forthcoming. Your special district funds have been reduced by $35,000 and with this action today. The thought is that you walked up to this number and would walk back down to zero is these years continue.”
 
Supervisor Mike Nelson said that Adams, the Tax Collector/Treasurer/County Clerk/Voter Registrar/Director of the Revenue and Reimbursements Department, “got up here and complained about the loss of her fiscal manager. Dee, who actually picked these positions for deletion?”
 
Tatum replied:  “The board asked us to make a 10-percent reduction in every department. We asked the department heads to make the reductions. We didn’t suggest positions to be deleted. In order to make her 10 percent she put this position on the list, not willingly, but reluctantly. I give her a great deal of credit as an elected official.” 
 
Adams explained: “Yes I did request it. The budget office requested that I eliminate five positions. I was given a dollar amount. So, when I looked at seniority, I was looking at two tax clerks. Of course their two salaries didn’t match the fiscal manager. It was a no brainer It cost me many sleepless nights. My staff can concur on that. So, I appreciate the Budget Office sensitivity by letting me determine the person I had to sacrifice.” 
 
Nelson continued, saying that he could not see in the staff report a waste-tire subvention for the environmental health department, “like the lady said.”
 
Health Department Director John Volanti did not respond to Nelson’s comment. He said that the he cuts that were made were not according to various grants so the person least senior was laid off not because she was subvented, leaving the public and probably the supervisors to guess where the waste-tire money would be going in the future.
 
Nelson expressed shock that county workers lose seniority when they change departments, the crux of the bumping rights issue. Tatum explained that that was negotiated by the unions and that’s the way it is.
 
Nelson said he didn’t necessarily agree with that.
 
Tatum interrupted him, saying, “That was mutually agreed to by both parties, not just gotten by the unions.”
 
Nelson asked: “And sick leave can’t be cashed out? How does that work?”
 
Tatum replied: “I think the issue is that if a person retires … if a person leaves and goes to other counties, cities, whatever they’ve gone, when they leave, they can cash in their annual leave vacation but they do in fact lose their sick leave. That’s supposedly one of the benefits you get by staying here forever and a day. You cash in half; the other have goes to your long-range. If you are laid off, Rosemarie is exactly right. I researched it. If you’re laid off a person would lose that sick leave, it would just go away because we say in our rules that they have no cash value.”
 
Nelson asked:  “So vacation is a vested right and sick leave is not?”
 
With a chuckle, Tatum said he’d yield to counsel on that.
 
County Counsel James Fincher said: “That is correct with one caveat. If a person is old enough to retire, they can cash it out. The people not eligible to retire would lose it.”
 
Supervisor John Pedrozo asked, to huge applause from the public, if the county could still explore the possibility of work furloughs and budget reduction days.
 
Kelsey scolded the crowd for the cheers.
 
Tatum replied, “We’ll sit down tomorrow if they’d like. The later date was mutually agreed to. We know generally what it would save us and in safety since you no longer have a hospital.”
 
Supervisors Jerry O’Banion said, “I specifically remember in November asking if budget reductions could be discussed. It was Kristy. Testimony was heard before this board that there was no interest on the part of the employees of this county to talk about furlough days…I’m not saying that it would save every position because it won’t – no way that it could because of the immense hit that the County of Merced has taken from the State of California. But it could have helped and a lot more if it could have been implemented last January or last July or this coming January. So, as far as I’m concerned, let’s talk about those reduction days or furlough days but remember it’s not going to solve the whole problem and we’ve got the $12-18 million hit from the state and it’s going to come again next year. I have full sympathy for the individuals affected. It hurts to have to make these decisions. I went through this one time before. I voted to close libraries, parks, some of the other issues and eliminating positions and it’s no fun, but we have to keep the county solvent, which requires a balanced budget, but if there were alternatives that could have been broughten forward, they should have been a long time ago,. But we can talk tomorrow if there are some other solutions and the board can reconsider decisions it has made but those decisions have to be made to progress.
 
Walsh proposed that the board could take a 5-percent cut immediately. This proposal was not taken up with great enthusiasm by the rest of the board.
 
Kelsey said that if the issue of the bumping rights happened and was agreed to “before the earth cooled,” it’s probably an appropriate time to look at that. I’d sure like to know how you lose your seniority when you take a new position in the county.
 
She went on to blame the situation on the state reductions and reductions in property taxes, warning that it could take 15 years before our property taxes return to what they were. “This may be a new reality in which we don’t have the income we’ve had in the past.”
 
O’Banion moved to accept the staff cuts. Chairwoman Kelsey requested the motion be reread and she took a roll call vote before she cast the lone vote against it. Walsh, Pedrozo and Nelson, who had been quite critical of aspects of the policy of force reduction, voted for it. If O’Banion had not moved to approve, the items would have died for lack of a motion.
 
End Part 1.