In the latest update in the race for Calaveras County’s District 4 supervisorial seat, a Feb. 4 report released by incumbent supervisor Dennis Mills illustrates that he and challenger Amanda Folendorf, a current Angels Camp City Council member, hold different opinions on the county’s financial state.
The county is in a “sound financial position,” according to Mills.
The report states that the county had a historically high $200 million in its reserve and treasury accounts, otherwise known as its consolidated investment portfolio, as of December.
That’s $13 million higher than the previous year, Tax Collector Barbara Sullivan confirmed on Tuesday, adding, however, “today our balance is $182 million.”
The county’s spending on building repairs, staff raises and its ability to allocate millions of dollars in Butte Fire settlement funding to fire districts and road repairs all indicate that the county is solvent, the report argues. Additionally, the county would’ve been audited if it had spending problems, according to Mills.
Mills cited the county’s consolidated investment portfolio in similar fashion in 2017 to detail how enforcement of the then-proposed cannabis ban could be funded, according to an Enterprise report.
What Mills’ latest report does not state is that much of this money is already obligated for specific purposes – funding for school districts and special districts, capital expenditures, various grant programs and more.
According to a press release issued in 2017 by former County Administrative Officer (CAO) Timothy Lutz, the county operates over 100 different designated funds, separate from the General Fund because “they are not discretionary nor should they be commingled with discretionary funds. Much of the money in these designated funds are designed for specific services to clients or recipients of government aid; others are allowable only to conduct certain activities. Examples include Mental Health Services Act funds, CalWORKs assistance funds, funds to support criminal justice programs … and (department funds) tied to capital improvement or modernization activities … Therefore, while it may appear that there is a large sum of money in the County Treasury, much of the funds are not available to the county for use in any way.”
Al Alt, the current CAO, did not respond to requests for comment.
When reached for comment, Mills did not dispute that many of the funds in the county’s treasury and reserve accounts are indeed designated for specific purposes and would not be usable for balancing the budget.
According to Mills, the county is not in a dire financial state due to a “structural deficit.”
In a Feb. 5 Enterprise report, Folendorf said the county’s structural deficit is growing, and that if elected, she would reduce unnecessary spending and increase revenue to balance the budget.
According to an Enterprise report from July of 2019, expenditures for the 2019/2020 fiscal year were projected to be about $77 million, while revenues were projected to be $72.7 million. The county relied on cash carry (unspent funds from the prior year, such as salary savings from vacancies) and Teeter Fund transfers to balance the budget.
In a statement issued on Monday, Folendorf called Mills’ stance “radical and not grounded in reality.”
“Currently the county spends more than it brings in; that is the definition of a structural deficit,” Folendorf said in email correspondence. “The monies my opponent has mentioned before and mentions again here are restricted and intended for things like public safety, schools, (Calaveras County Council of Governments), etc., which are nondiscretionary and cannot be used anywhere else. His stance is radical and not grounded in reality … We need a supervisor that will be honest with the public about the reality of monies.”
Folendorf also slammed Mills for not supporting the adoption of the county budget over the past two fiscal cycles.
Mills, along with District 1 Supervisor Gary Tofanelli, voted against passing the 2019/20 final budget in September over a majority decision to not write unrealized reimbursements for county spending on federal- and state-declared disasters into the budget as forecasted revenues.
Reflecting on the vote, Mills said he wasn’t comfortable washing the unpaid $9.5 million “off the books,” as it wouldn’t show that the county was “prioritizing” going after the reimbursements.
Mills’ report concludes that the county doesn’t need funding from cannabis cultivation to be financially solvent.
Although in support of regulating commercial cannabis cultivation, Folendorf said cannabis tax revenues were not necessary to balance the City of Angels budget for the 2017/2018 fiscal year.
“The situation when I was first elected to the Angels Camp City Council was similar to what the county is facing now,” Folendorf said. “We could not kick the can down the road. The city was spending more than we were earning. We were able to balance the budget without cutting services. Without cannabis revenue. The county has a growing structural deficit. Fanciful thinking and questionable budget gimmicks will not fix it. We need to face reality.”
Further, Mills told the Enterprise there’s no proof that cannabis tax revenues will be enough to pay for unknown costs associated with potential needs for enforcement, site remediation, prosecution and litigation associated with both legal cannabis cultivation and the illegal grow sites that may follow the new wave of compliant growers.
“We do not need to burden county, particularly the Sheriff and Building departments, with responsibilities for the enforcement of laws and regulation protecting our county from an out-of-control marijuana industry, legal or illegal,” the report reads.
Mills said county supervisors should have a discussion around providing more funding for ramping up enforcement measures.
The costs of regulating cannabis will outweigh the benefits in tax dollars, according to Mills, who said there could be millions of dollars worth of remediation necessary on grow sites from the Urgency Ordinance period that haven’t yet been cleaned up, and that he expects that some permitted growers will “make mistakes.”
A prior version of this story stated that Folendorf said cannabis tax revenues were not necessary to balance the City of Angels budget in 2015. A correction was made on Feb. 13 at 10 a.m. to indicate that she was referring to the 2017/2018 fiscal year.