Board of Supervisors - Regular Meeting

Is a resilient community that will recover faster from disasters. So take some time today, visit our website, get yourself prepared so you can be Mendo ready.

A beautiful clean river doesn't start here. It starts here. What we put down our storm drains goes straight from our streets into our local creeks. Simple changes can make a big impact. Like when you wash your car, the best solution is washing at a professional car wash. Speaking of the Meniscus County Board of Supervisors. Madam Clerk, if you could take roll, please.

Supervisor Klein? Here. Supervisor Mulhern? Here. Supervisor Hachak? Here. Supervisor Norville?

Here.

Supervisor Williams?

Here. And then Mr. Stitches from the district attorney's office is going to lead us in the pledge today. Okay, we'll now open the podium to public comment on non agenda items. Anybody in the room?

Good morning. My name is Megan Wolfe, and I'm a library assistant for the Mendocino County Library and a SEIU ten twenty one executive board member. As our union is currently in contract negotiations with you, I felt it would be a great time to review the MIT cost of living calculator which can be found at livingwage.mit.edu. According to this website, this is a quote from there. Today families and individuals working in low wage jobs make too little income to meet minimum standards of living in their community.

We developed the living wage calculator to help individuals, communities, employers and others estimate the local wage rate that a full time worker requires to cover the cost of their family's basic needs where they live. So what is a living wage? A living wage is what one full time worker must earn on an hourly basis to cover the cost of their family's minimum basic needs where they live without additional public or private assistance. I have previously read this number to you before in past years and it has gone up a lot since then. I think the last time I was here, 2024, it was at $23 an hour which was still a lot more than my position was making and is making.

And now as you I'm sure you all have experienced inflation, the MIT wage calculator for living wage for Mendocino County for one adult and zero children is $26 an hour. We have a lot of people here working for the county who do not make that much and will not make that much even after they commit five years working at the county, myself included. So actually that's not true. In five years I'll be able to make $26.73 Anyway, and I want to reiterate, that's for one adult and zero children. If you were two adults, both working with two children, the minimum weight, the living wage is $30.57 There are a lot of people working for the county who do not make that much and are married and have two kids.

So I ask you to think about this, especially as I know you, many of you voted to give yourself a wage increase recently, I want you to think about the people working for the county who are making less than the living wage right now. Thank you.

Chair, I wonder if we could refer this to HR to look at the MIT calculations. I've looked at them in the past and found them to be one of the more credible sources.

Is there anyone else in the room? Madam Clerk?

Seeing no expression online.

Move on to the consent calendar. Is there anything on consent needs to be pulled? Otherwise, we'll go to the public. Clerk, proper notice has been established.

Proper notice has been established, and all correspondence, if any received, has been sent to your emails.

Okay. Supervisor Klein.

Thank you, Chair. Just wanted to make a comment. Consent calendar item C22 is from our Department of Transportation discussing the state funding for road maintenance. It outlines the main road maintenance work that will be done over the course of the next three years, including areas of Casper, Road Valley and Potter Valley. I wanted to bring that to the attention of the public. When I tell folks that there is roadwork planned for Potter Valley in 2028, they simply do not believe me. There is no trust that the county is going to come and work on their roads. So I wanted to point this out, and I hope we can make good on our promises to our constituents.

Thank you. Anybody in the room like to speak on consent?

Good morning. My name is Angel Slater, and I am the Recovery Relief Nurse Manager at Public Health. And I oversee WIC, communicable diseases, immunizations, community Wellness, and Juvenile Hall Medical, as well as co manage EMS and FEP. I'm here for Nurses Month, and I'd like to start off with it's an honor to stand here today as we prepare to celebrate Nurses Week May 6 through May 12 and recognize the incredible nurses who serve the community every single day. Nursing here is different.

It asks more of you. In a place as beautiful as spread out as Mendocino County, care doesn't always happen within the walls of the hospital. It happens on winding roads, in small clinics, in family homes, in schools, and out in the community where people live their daily lives. Our nurses don't just provide care, they create access. Whether it's supporting a new parent, ensuring a child is protected through immunizations, helping someone navigate mental health services, or responding during wildlife season, nurses in the county step in wherever they are needed.

They meet people where they are, often overcoming barriers like distance, limited resources, and lack of access to care. Over the past few years, we have all seen just how essential that work is. Through public health emergencies, natural disasters, and ongoing community challenges, nurses have been constant providing not just care but stability, trust and leadership. They've shown resilience in moments of uncertainty. They've shown compassion when people needed it most.

And they've continued to show up even when the work is hard and even when the recognition is quiet. That kind of commitment speaks volumes. In Mendocino County nurses are more than healthcare providers they are our neighbors, advocates, educators and leaders. They are part of the fabric of this community. So today we pause to recognize all the nurses working in Mendocino County, and I'm proud to be one of them.

Thank you.

Good morning. I'm Karen Lovato, Deputy of Operations for Health Services Behavioral Health. I'd like to thank Supervisor Mulhern and the Board of Supervisors for sponsoring the proclamation to raise awareness to May's Mental Health Month. During May, we raise awareness about mental health symptoms and resources and to decrease the stigma surrounding mental health conditions. Mental health conditions affect one in five adults, one in seven youth ages six to 17, and one in twenty adults has a serious or potentially debilitating chronic mental health condition.

These prevalence rates indicate that approximately seventeen thousand eight hundred adults in Mendocino County have or will experience a mental health condition, three thousand six hundred adults have a serious and chronic mental health condition, and approximately two thousand youth between six and 17 have a mental health condition. We encourage all to take care of their mental health. Mental health is as important as physical health, and each impacts the other. Learn what good mental health days and bad mental health days look like for you and create strategy to respond to the bad days. Practice mentally healthy habits that work best for you, getting balanced amounts of sleep, nutrition and sunlight, moving your body, engaging in creativity, practicing healthy breathing techniques, gratitude, and monitoring what messaging you consume.

Develop a healthy social group and seek outside support when you need it. Find out what works best for you and share it with your supports. Know the signs and symptoms of mental health conditions, such as changes in mood, changes in attending to hygiene or self care, isolation from others, withdrawal from the usual activities in your life, changes in sleep patterns, increase in risky behaviors, including suicidal thoughts, or experiencing thoughts that are notably different beyond what's typical or normal for you, your social group, or your cultural norms. If you're experiencing symptoms or noticing them in a loved one, talk to your support system and develop a plan to actively care for your mental health, including seeking help from a professional, such as a primary care doctor, support group, helpline, or crisis line. To connect specialty mental health services or for severe and chronic mental health conditions, contact the Mendocino County access line at 50906.

If mental health symptoms do reach mental health emergency level, contact the mental health crisis line at 503004. Help stigmatize mental health care by talking to someone about your own self care practices and normalizing seeking support and care. Be an advocate for mental well-being. Combat stigma and discrimination by supporting those struggling with mental health conditions as you would any other health condition. And wear lime green as the color of mental health awareness. These are for you. Thank you.

Thank you.

Good morning, Chair Norvell, members of the board, CEO Antle. This week, May third through ninth, is National Corrections Officers Week. We've got completed some walkthroughs of the new jail build with a few of the supervisors as well as our CEO. Wanted to thank you folks for the investment into the safety and security not only of our corrections officers but also of the residents in that jail. Next week, May the eleventh through the sixteenth is National Peace Officers Week and we want to celebrate the deputy sheriffs and the police officers in our area that are serving on a daily basis.

The sheriff's officers had some pretty tough calls over the last month. We've had a terrible homicide in Covalho, just an absolute tragedy. The deputies, my patrol division did well. The detectives are currently running at 40% of capacity and they were still able to solve that crime and make an arrest within about forty eight hours. So we're continuing to trudge along.

Numbers are low, but the morale is high and people are working very hard. We have the best of the best working for us currently. This last weekend we had the awards ceremony for several of our officers and some of the things that they've done going above and beyond for our residents are just flabbergasting to me. It doesn't matter whether it's a life saving award or one of these Medal of Valor awards where folks have basically placed themselves in peril for the service of others. Anyway, over the next couple of weeks, let's remember to treat our peace officers and our corrections officers well, if we see them, let's make sure that we thank them for their service. Thank you very much.

Thank you, Sheriff. Seeing nobody else in the room, Madam Clerk?

Seeing no further comments online.

Okay, we will bring it back to the Board. Supervisor Hashtag.

Move approval of the consent calendar.

Second.

Okay. We have a first by Supervisor Hashtag, second by Supervisor Williams. We'll vote by the button.

The motion carries unanimously.

It brings us to agenda item R1, discussion of possible action, including acceptance of informational reports from the assessor clerk recorder, register of voters, auditor, controller, tax, treasurer tax collector, district attorney, sheriff, and various county department heads or designees.

Good morning, supervisors. Julia Crogg, Planning and Building Services Director. I just wanted to come this morning to get additional public information out there on a scam that's happening that's targeting applicants with Planning and Building Services. So there's a series of fraudulent emails that have been coming out from an email domain that ends in usa.com, they're posing as myself as the Planning and Building Services Director and requesting wire transfer of funds. Unfortunately,

we've

had a few people in our county actually wire funds so we just want to get this information out as as widely as possible to tell folks wire transfer is not a form of payment and to make sure that if they are concerned they should contact our office to ensure that the email that they've received is actually accurate and pay fees either by coming into the office or our online payment system. So with that, I just want to help spread the word. Thank you.

Thank you.

Chair?

Yes. Director Krog, apologies for as you walk away. I know you have no inspections or plan reviews this week. Could you just tell the public a little bit about why that's the case?

Yes, absolutely. So during this week, we have our building inspectors are in a training that is actually a requirement for maintaining their certifications. Building inspectors are required to obtain a certain number of hours of training every three years in order to maintain their certifications and we're very fortunate to actually have specialist that has come to our County to provide in person training to our inspectors so they are in course for the next four days and that is the reason why we are not having inspections. However, on Friday this week we will be providing inspections and trying to hit as many areas of the county that we possibly can sending all of our inspectors out in the field so we'll be making exceptions to our regular inspection schedule to try to get folks inspections as soon as possible.

Thank you. Thank you.

Good morning, Chair and members of the Board. I'm Angela Godwin, the Agricultural Commissioner. I just wanted to give a brief update on the work the department has been doing and I have been doing to address the issue that keeps coming up of neglected or abandoned vineyards in the county. In the past two months I have received over 10 complaints and I am sure the Board is probably aware of it too. We've been documenting them but finding out how to go forward.

Planning on doing a presentation to the Board on the nineteenth, but I just wanted to update you that I've been working with County Council co compliance and two of the other counties both Napa and Sonoma they sent a lot of their documentation so I'm really getting my arms around what's going to be required the type of complaint forms, notices of violation. I want to present that all to the Board so the Board will have a good idea of the work the Department would needed to do to address these issues. These properties really can serve as reservoirs for pests and disease that threaten the neighboring active vineyards. So I really wanted to come forward with the other nineteenth with a whole approach, and I want the approach to be compliance based. I think that's what the Board will find when we go through some of the options that we really just want to get people to take care of their property or remove the vineyards.

But you know most of these people are already going through some market issues. Are trying to decide if they going to keep the vineyards put a different crop in so again there is there's some new authority that came through with AV seven thirty two which allows us to do civil penalties but that would be the absolute you know one of the last resorts along with real physical abatement. But we've come up with some forms and some process. NAPA has been doing this for the last few years. I met with their commissioner, met with Sonoma's commissioner, so I want to bring that whole thing to you on the nineteenth but I just kind of want preview a movie to come, and if you hearing from your constituents, which seems to be as the spring season is coming forth, it becomes more obvious that people aren't doing the work.

Any questions?

I believe we do. Supervisor Williams?

When will the plan be published? Certainly, Brown Act agenda noticing, but is there any chance of getting it out sooner? I think this is one where some of the stakeholders might want more time to review before giving us feedback.

I could probably have it I haven't finalized all the documents that I think we need, but I could try to get something out in the next couple days.

And I'm not pushing you if it's not ready, it's not ready. But if it is ready, I wonder if we could give a little bit more notice, especially Farm Bureau and other major stakeholders.

And I forgot to mention, but I have been working with Adam Gasker from Farm Bureau. What format would you like to see me put it out?

I trust your judgment. I think you know how best to work with But the farming that's the only feedback I've received is sometimes these large scale endeavors come out on a Thursday agenda and people feel they don't have enough time.

And I wasn't completely going to try to give you a finished package because I want to have your input because this could be the amount of time it could take for the department, again, and where we draw the line. Do we just take any complaint? There some details I would like the board's input on, but I have been reaching out with farm bureaus, wine growers. Are all really wanting to just make it a better growing agricultural experience and be good neighbors. So I just wanted to update you because it is becoming more and more of an issue. And there is quite a few articles that have been out recently.

Thank you.

Okay, but thank you.

Good morning. Sherry Johnson, Human Resource Director. I I wanted to update the Board and the public on three of the recruitments that we have been working on. So tomorrow, we have the Chief Executive Officer interviews with the Board. So there is three applicants.

So please stay tuned for that. And also wanted to update you for the county counsel position. An RFQ went out recently for proposals to law firms to look at potential county counsel. But also working with that is also aware of working to human resources had posted an opening for a county counsel, and it is flying on our site right now. But we also are in negotiations with an executive recruiter, so hopefully to have that contract next week, so they will take over that part of the recruitment.

So that is working right now. And I also wanted to keep you updated on the county health officer. So we have been unsuccessful with that recruitment, still working on that. Human resources is flying that. We have had five applications this last month, but they did not meet the qualifications. So we are working close with Doctor. Miller to keep the interviews going, keep it active, so we are still really looking for a county health officer. But we still have the contracted doctors that we are working with. So thank you.

Supervisor Kline.

Human Resources Director, have we looked at having a county health officer as a shared resource with other counties? Has that been a possibility? Yeah, we are talking to Doctor. Miller about that, so we have been in conversations with her. Yeah. Thank you. Thank you.

Thank you.

Thank you. Nobody else in the room? Madam Clerk, do we have any staff online?

Seeing none.

Okay. Public comment on this item? Anybody in the room? Madam Clerk?

Seeing none online.

Okay, we'll bring it back to the board for acceptance of the informational reports. Supervisor Williams? Move approval. I'll second. First by Supervisor Williams, seconded by myself. We'll vote by the button.

The motion carries unanimously.

Thank you. Item R2, discussion on possible action, including approval or denial of request department heads and elected officials regarding budget impacts, funding and recruitment of vacant or new positions following the strategic hiring process. Johnson.

Human Resource Director. So today we have three departments that will be requesting to hire Department of Transportation, the District Attorney's Office and Social Services. Thank you.

Thank you.

Good morning chair, members of the board, CEO Antle. Jim Snitches, chief investigator district attorney's office. Last week I prepared a letter that I submitted on a vacant position regarding the victim witness advocate. And this position was generated from someone seeking employment elsewhere. So I'm here to answer any questions regarding that replacement position.

Supervisor Hashczyk? Well I'd

just like to say thank you for providing the information about how that is going to be paid for. Thank you.

You're welcome.

Not seeing any questions? Thank you.

Thank you.

Good morning members of the board, Chair Norville. I am Stephen White, Assistant Director of Social Services, and today we are requesting your approval to recruit for two social worker assistants. They will both work in our public authority unit. They will be responsible for recruiting, training, and monitoring our providers who work within IHSS. There is no impact to the general fund, and I think you've all received the memo, and if you have any questions.

I'm not seeing any. Thank you. Thank you. And do we have DOT in the room? No? He's online. Thank you.

Good morning, mister chair. This is Howard DeShield, director of transportation. So the positions we've asked for are in our budget. They, you know, represent vacancies that have occurred. They are not an increase to our existing road crew staffing level. Again, road funded position not general fund. So I'll answer any questions.

Supervisor Williams. Move approval of all of the above.

Second.

More questions from the board. Will go to the public. Anybody in the room? Madam Clerk?

Seeing no comments online.

We do have a first and a second. First by William, seconded by Hashtag. We'll vote by the button.

The motion carries unanimously.

Thank you. Item R3, discussion and possible action, including direction to staff regarding updated cash flow projections for the Ameresco proposed energy saving performance project on whether to continue with the project or not. This is the executive office. Ms. Pierce?

Good morning, Board of Supervisors, CEO and Toll County Counsel Elliott. Sarah Pierce, Assistant CEO. So today we're in front of you to discuss the Ameresco project again. So as a brief history, I will not read all of the agenda summary. But we were in front of the Board on March 24, where staff was provided direction to work with a newly created ad hoc to review the new information and return to the Board with a completed plan to either continue or stop the project.

So ad hoc and staff met with Ameresco on April 16 to discuss the most recent changes to the cash flow. In that meeting, we discussed the price increases were due to utilizing the new foreign entity of concern compliant modules and inverters, the inclusion of an investment tax credit of 30%, and energy savings escalations at 6.5% based on the county's published rates. So after that meeting, the county looked into the investment tax credit a little further, and it's described in the agenda summary. But staff is concerned about meeting the requirements and the timelines around the investment tax credit, so we're asking the Board to look at the cash flows that exclude the tax credit to be conservative because we do not believe we'll be able to meet those deadlines. Additionally, the staff and ad hoc went back and reviewed the 6.5% energy savings escalation.

We compared it to PG and E rate increases over the last decade, and their increase for their compounded annual growth rate was roughly 2% to 4%. The ad hoc also did reach out to the city of Ukiah to understand what their growth rate was and if 6.5% was reasonable. Based on the feedback we received from the city of Ukiah, Over the last thirty years, they believe the growth rate should be closer to 2.85 instead of 6.5%. So we've attached six different cash flows with the tax credits and without the tax credits at different rates. I'm going to turn it over to the ad hoc to discuss, but please remember the county did allocate the funds for a solar energy project to reduce the county's carbon footprint and to reduce the county's ongoing energy costs.

As a baseline condition, a proposal must demonstrate the savings exceeds total expenses over the project, but to be fiscally responsible, we should take into consideration the net present value calculations. So now I'll turn it over to Supervisor Williams and Hashtag.

So one of the things that caught my eye was the previous iteration Ameresco had an energy escalation of 6.5%. So there's an assumption built in for the life of this project about twenty five years. Every year the competing energy will rise 6.5%. And I didn't think that was right because I know the CPUC has 3.5% for PG and E for the next five years. And they have undergrounding, you know, they had a bankruptcy, they have vegetation.

City is probably going to come in better. A quick call to the city of Ukiah highlighted the 2.85% over the last thirty years. In recent times, they have increased at a more substantial annual rate. But my read of that, and talking to the city staff, is it's like the way the county adjusts some of the fees. We wait a long time and then there's 100% increase in the fee. It's because it hadn't been adjusted in years. The average, the city is very competitive with PG and E. They're coming in, in the long term, lower. So if you take their rate, even if you bump it up 50%, this is a project where we're going to lose money. We're not going to recoup our investment over the life of the project.

It violates one of the two requirements that we put in place when we began this effort. So I think that's a nonstarter. And I want to credit the city of Ukiah, their staff for working with us, being so prompt in answering questions, identifying that these types of projects don't work. Because the city is such an efficient energy supplier, their rates are so low, we're not to beat them installing solar within their service area. And then secondarily, they don't do net metering.

Maybe they can't afford to do it yet. It's a large upgrade. Without net metering, when that sun is beating on the panel Saturday, Sunday, and there's not much energy use in here, our meter isn't running in reverse. We're not getting a credit for that. So that's another variable that makes it nonfeasible within Ukiah City limits. If we were to do this project at one of our other locations, Fort Bragg or Willits, we would be competing against PG and E's higher rates and we would benefit from the net metering. I think the ad hoc later would like to talk about what we do if this is nonviable so that we're not telling the public, no, we can't move forward, but we're going to have to tune the scope of the project to make it financially rewarding.

Thank you for that. Supervisor Hashtag.

Yeah. I appreciate Supervisor Williams working with me and staff on this issue. And, you know, we started this project and dedicated that money for two purposes to reduce the county's carbon footprint and to reduce the county's ongoing energy cost. So our understanding is that this project would reduce the carbon footprint by like remove 70,000 pounds of CO2 each year, you know, but we can't make it work, you know, with financials. And so I think that Supervisor Williams and I as the ad hoc would recommend that we don't pursue this project but that we continue discussions and maybe form a new ad hoc to look at options with Sonoma Clean Power, that they're willing to work with us, look at some of the facilities that we have outside of the city of Ohio.

Okay. Thank you. No more questions for the board or comments? We'll go to the public. Anybody in the room like to speak on this? No? Madam Clerk?

I'm seeing one comment online. Peter McNamee?

Yes. Thank you for giving me the opportunity to address this. Basically, there have been environmental folks throughout the county now for decades that have been pushing the county towards, lowering its carbon footprint and for taking, advantage of solar, which, is no longer a bleeding edge technology. It's an industry standard, not just in The United States, but globally. The price of panels has been consistently going down.

The price of batteries to store energy has been consistently going down for many decades now. And, it's very frustrating that we have not seen the county in the last five years, be able to move forward on a project. We don't dispute the numbers that are being presented here today, but we think there also what's not being presented here are the lost opportunities, that delay has cost the county and that many of the reasons why, these costs no longer work is simply because of political decisions that have been made in Washington about discouraging solar at the national level. And so, we would encourage the board to appoint a new ad hoc to look at alternative siding of solar and, make a determination as to, how that might, work out in terms of meeting the fiscal requirements. Basically, I think our position, as a community of environmentalists is that we want to lower the carbon footprint for the county, but we want to do it fiscally responsible.

And, we may have to delay, installation of a project until we get some resolution of these antiquated policies of our federal government relative to solar utilization. It's inevitable that we have to do this. And as I said, it continues to be rolled out on a global basis. There's more solar panels being installed this year than have ever been installed on a global basis. And that means that it does make sense.

It's actually less expensive to install solar as an energy source than it is fossil fuels. And, so the question may just be a matter of timing, and I encourage the board to go ahead and appoint a new ad hoc. Thank you.

Thank you. Madam Clerk, anyone else?

Seeing no further comments online.

Okay. We'll bring it back to the board for discussion and or action. Supervisor Hodyszczyk?

Well, I would move that we postpone or not go forward with this plan with Ameresco and that the ad hoc is appointed to pursue other options.

Supervisor Williams?

I'm going to second that, but I ask that we strike the word postpone. I don't want our staff time to be used efficiently, and I don't want them spending more on a dead end. Is that reasonable? Yes.

And then I'm sorry.

Briefly. And I just yeah, before we close this, I wanted to thank the executive office and facilities. I feel like we got to the bottom of this really quick once we all started working together. It was a great experience. On the new ad hoc, I want to be clear on scope so that we don't have to return to the Board. As I understand, the scope would be analyzing all County owned properties to determine financial feasibility to install green energy that would reduce carbon footprint and save the county on annual utility costs.

As well as look at options with Sonoma Clean Power?

Yes.

Okay. And the first agrees with all of that?

Yes.

Okay. We have the first by supervisor, second by Williams. Supervisor Klein?

That's a pretty wide scope. So I'm curious from County Council and the executive office if there needs to be a little bit more detail just on the scope of that. Looking at all County properties seems like a pretty large scope.

Supervisor Weir? Yeah, if I could clarify before staff. Sonoma Clean Power, we didn't meet as the ad hoc, but John supervisor Haseck and I have talked to Sonoma Clean Power. We're a member of this JPA. They have expert staff that's willing to look over our property list and do that legwork for us, so it wouldn't put burden on our staff to do the analysis. What we would be asking our County staff to provide is the list of APNs or addresses of County owned parcels.

Thank you for that clarification. It was County owned parcels, and I believe outside of City Of Ukiah city limits, if I understood prior.

That is correct.

Supervisor Mohan, you have your pen up?

Which one?

Okay. Supervisor Klein, does that answer your question? Okay. Again, first by supervisor Hashtag, second by supervisor Williams.

Through the chair, if I may. Would the first or second like to disband the existing ad hoc?

Absolutely, we do.

Yes.

You have everything you need, Ms. Bearden? Yeah. Okay. We'll vote by the button.

The motion carries unanimously.

And real quick, just thank you to the ad hoc and the staff for getting that done so efficiently. Thank you. Item R4, discussion of possible action, including acceptance of presentation of third quarter budget report on the status of county departmental spending and revenues for fiscal year 'twenty five-'twenty six and executive office recommendations and adoption of resolution amending the fiscal year twenty five-twenty six adopted budget. Ms. Pierce and Ms. Rakes?

If I may, would like to start. I CEO want to start with an appreciation for this board for taking fiscal stewardship seriously, such as the last item. Strategic hiring process has worked very well this year and prioritizing system improvements. I would like to thank the departments for showing leadership in financial restraint and being good stewards of public funds. This shows what we can all accomplish when we work together as a county team.

While this year's budget is coming to a decent close, I still have many concerns for the future unknowns for fiscal year 'twenty six-'twenty seven, which I will discuss in the next item. At this time, I will turn it over to IT Director Tony Rakes as Deputy CEO.

Good morning, Chair Novell, members of the Board, CEO Antle, County Counsel Elliott. Tony Rakes here to present the third quarter budget update for you. We'll start here with a summary of our general fund position as of third quarter. We are looking right now, as with our revenue projections, our nondepartmental ND revenue coming in approximately $2,000,000 above where we projected at midyear. A further slide will show that that is approximately $5,400,000 greater than where we started with the adopted budget.

Again, that's for nondepartmental revenue. That, combined with departments coming in meeting in total the 6% attrition savings, means that we are now projecting for the current year, fiscal year twenty five-twenty six, to only require $700,000 in one time funds used currently for offsetting public safety salaries to balance to end the year with a balanced budget, which is an incredibly positive development since our original conversation at the beginning of the year where we had appropriated and set aside $6,150,000 in one time funds to balance the budget. Now a reminder with that, those one time funds were appropriated for one time expenses. They were not meant to cover operating expenses, but between the departments coming in with their attrition savings and the additional revenue that have been projected since the adoption, we do not project to need the vast majority of that one time funding. Our next slide.

Here we have a slide regarding our health plan. So right now we're recommending a transfer of $2,800,000 to our health insurance fund, or Org HI, specifically for two purposes: one, to address cash flow, to manage cash flow with monthly expenses and revenue timing. That's $500,000 that we're recommending a transfer from our non departmental ND for that purpose. And the second is remaining ARPA funds, or American Rescue Plan Act funds, dollars 2,300,000 to transfer into the health plan to offset health insurance costs, expenses up to 12/31/2025. Those funds have a requirement to be used by the end of twenty twenty six and that they specifically need to be used for expenses that took place within the 2025 and prior period, so we're recommending to put that 2,300,000,000 into the health plan to offset those first year expenses or first part of the year expenses along with the $500,000 to manage that fund balance and cash flow.

Our next slide. We have here our familiar revenue projection slide. Now this is a little more detailed from what I started with the summary, but we have projected now as of Q3 about $100,000,000 as far as our non departmental revenue. That's again an increase of $5,400,000 over the adopted budget and $2,000,000 over what we had projected at midyear. And we also have the Exhibit A, which also contains more details as to that breakdown.

The next slide, however, does provide us some highlights as to what the impacts or the changes were, the primary changes for non departmental revenue. We have here our secured property tax, 1,400,000, along with a small jump in our sales tax, a larger jump in our Measure P sales tax, but keep in mind that's offset by an operating transfer out because that's set aside for the fire districts, and that's included in that bottom line there, transfers out, that $1,500,000 We had an increase in our TOT room tax, franchise tax interest, county cost plan, and then reduction in multiple categories in that revenue reduction, 418,000, which includes you have Williamson tax, tobacco settlement, opioid settlement tax, etcetera. But in general, add those all up and you come in with that $2,000,000 more than what we had projected at midyear. Next slide. Now our budget schedule is getting far shorter than it started at, which means we only have our June 2 budget hearing and proposed budget meeting.

So that's our next one. This is our last budget workshop until that point scheduled. And lastly, we have our CEO recommendations. We have our accept the fiscal year twenty twenty five-twenty six third quarter report as presented and approve the third quarter budget adjustments and administrative cleanup in Attachment A approve fixed assets and structural improvement requests included in Attachment B approve the creation of a new org, which we are calling ITERP, for Budget Unit 7 17 in fund 7170, that's the IT Reserve Fund and then approve a transfer of $500,000 from our infrastructure and systems reserve to that newly created org, to org ITERP, and appropriate those funds to object 80189, which are professional services line, or finance system project costs. And then lastly, approve the transfer of any unused one time funds for the twenty fivetwenty six to reserves per the reserve and fund balance policy number 32, with 50% of the potential funds transferred to the rainy day reserve and the last 50% to the infrastructure and systems reserve.

That one specifically doesn't call out a dollar amount because whatever potential unused funds at the end of this year to call those out what's remaining. And with that, that is your third quarter budget update. Any questions or comments?

We do, thank you. Supervisor Williams.

Yeah, want to add the CEO to that initial list of why we're in better shape now than we thought we would be. I think there's a lot of work that's gone on cleaning up the way County handles fiscal policy that most people probably aren't aware of and will never see, but it's I know it's why we're in better shape. One place where I have ongoing concern is the revenue forecast. I've done my own revenue forecast just because there's times where I can't I haven't been able to get data in the past, and I've just done a weighted regression. And my weighted regression seems to come really close to our final number when books are closed.

And the county's projections seem to always be really conservative, underestimating revenue. Is that completely off the record here is that intentional so that we have some wiggle room at the end to like, we doing this on purpose, or do we need to tune our method? Where is this coming from? Why is it all why are we always claiming we're going to have less revenue than we do?

If it may, through the Chair, I believe the Auditor Controller has raised her hand online.

Good morning, Auditor Controller Treasurer Tax Collector, Shamise Kebesen. If I may, through the chair, the question that was asked by Supervisor Williams. There's a couple of factors. Obviously, you know, we don't always know in the auditor's office whether departments are going to come in at their budgeted numbers, so there's an impact in terms of the overall amount of revenue that is received. The auditor's office is traditionally a little bit conservative.

We can't predict to an exact science how much interest is going to be available. That is many factors to it, including how much cash the general fund and other departments have actually in the county treasury in comparison to what the special districts and the school districts have in the treasury, and it actually is pretty difficult to project exactly what the cash balances are going to be, as well as predicting exactly what the yield is going to be from the investments because we are apportioning interest based on what interest we're actually receiving. And so that has to do with maturities because sometimes we don't receive interest, obviously, until an investment matures. So I would say that, for myself and, I believe, past auditor Lloyd Weir, we have been fairly fiscally conservative when it comes especially to interest. We would rather not have the general fund depend on more revenue than we're likely going to receive.

And then the other area that is actually more difficult to predict than you might believe is the property tax revenue. A factor that I think needs to be cautiously looked at when we do project the revenue is that there's

a

lot of factors in terms of the timing of the assessments in the assessor's office and also the market in general. So while we may appear to be making increases in property tax for secured tax, that is not based on the original bills that were sent out. Those changes are based on the fact that the county is processing corrections, and for this particular point in time, the corrections are increasing the actual secured revenue to the county. There are definitely times in the past when the corrections move in a downward, you know, based on the sales and the economy and also the timing of the assessments that are being done by the assessor's office. So there is also a concern that we do reach a point where we're actually issuing more refunds in the correction process than we are increased assessments.

So, you know, we generally tend to budget the revenue in ND for secured tax based on what the original charges are that we send out those tax bills for in October rather than trying to anticipate how many corrections there's going to be and which direction those corrections are going to be. Because, as I said, you know, we also have that concern that we are issuing a significant amount of refunds. And it happens to be this year and the last couple of years, possibly because of the delays we had with actually implementing some processes in the property system, that we've been fortunate to be experiencing upward corrections, for the last couple of years. And I would say we need to be careful about assuming that we're going to continue to have that, you know, trajectory. We do build in the CPI increase, that's the 2%, and that's the standard 2% unless market factors, or requests for reassessment, to the assessor's office indicate a lower amount.

But if you recall, maybe, I'm sorry, you may not be aware, the limit as to the increase in the assessed value is 2% unless there is a sale on that property that increases a higher, actual resulting price for the assessed value. Or if there isn't a request to actually downgrade the assessment, there could be a lower amount. So those are just some of the the factors. We also, obviously, you know, receive the projections from HDL for sales tax. It's not an exact science. It does change very frequently. So I'm sorry. That was a long answer to your question.

No, I appreciate that. And I understand the reason for auditor controller to be conservative. I'm not saying that's the wrong approach. But I a supervisor, when I vote on financial decisions, I'm having to add in 2,000,000 or $2,500,000 knowing that there's more money than what we were claiming. And it just strikes me as not a good way if all five of us are doing that.

It just muddies the water. The public is looking at this. And then here's at the end of the year, we found money, and it comes off like, you know, we misplaced it, it was in a closet, and we just found it. Rather than the organization was so conservative that we had more to work with than we were acknowledging. It would be helpful if the executive office not auditor controller, independent office if the executive office could provide a trend line, maybe with weighted regression to show approximately what we have to work with, I I think the five of us could have more meaningful discussions about how to budget.

Thank you. Ms. Antle.

Thank you. I would refer us back to the presentation that we had from the consultant, Ben Rosenfeld. Overall, our trend compared to other counties, we are actually very good on our projection. Dollars 5,000,000 additional revenue on $100,000,000 you are not too far off, and we are doing pretty good there. And I would also, in consultation with him, has encouraged the executive office, to your point, to be more engaged in the projections, revenue projections, and that is our intent moving forward is to be more engaged on those.

Thank you. Supervisor Hashtag. Well,

looking at the last recommendation of putting 50% to the infrastructure and systems reserve, And I think that came out of the Ben Rosenfeld suggestions. And I really like that idea because it will give us money to do some of the capital improvements that we need and it will be dedicated to that fund so that we can move forward with fixing the roofs and some of these other projects that have been put off for too long. So I really appreciate that recommendation.

Thank you. And just one quick question. On Page eight, the transfer of $500,000 from infrastructure, you mentioned a little bit what that was for. Could you tell us real quick how you came up with the 500,000

Of course. So the 500,000 there from the infrastructure and systems reserve to the IT reserve to that org ITERP that we call out on page eight was an estimate that we had on first year project costs to seed that reserve with funding for getting that project off the ground in terms of scoping the project, bringing in professional services to help us understand the scope of what we're working with regarding revising our financial practices with regard to the system that we're using. So it was an estimate that we had based on first year project costs.

Great. Thank you for that. No more questions. We'll go to the public. I'm sorry, Mr. Briggs, were you through?

Yes, I'm through. Thank you.

Thank you.

Dee Paulison from District five here in Ukiah. I just want to first want to say that I wanted to applaud out loud when you guys started your report. So good news and good work. Congratulations to everybody for their hard work. My only suggestion would be is we need to stop saying found money. That is what I hear a lot when people talk to me about what is being said here. The money isn't found. That suggests that we lost it and then all of a sudden found it. So I would really ask that we work really hard not to use that phrase anymore and to instead work to clearly explain that we don't know until we know kind of thing. And so that would be my only suggestion.

And I try to stress that at every opportunity. But I do get that a lot, they are like, well, if they found it, why didn't they know where it was? So I think we need to work on getting rid of that thing. That would be my only suggestion. Thanks.

Thank you.

Good morning again, Chair Norville, members of the Board. We didn't find much money. As a matter of fact, we cut back on a lot of services running currently the central area of the sheriff's office where our patrol beats are. I have four patrol beats that require 20 fourseven, 168 coverage. But I've got enough personnel to work about two eighty hours out of what my goodness, what's that put me at a little over 700 I believe.

So we're working two eighty hours out of 700 and having to cover the remainder with overtime. We do have some hiring prospects looking at us currently for positions that we still have, but we also need to start thinking about the future. I was looking over the annexation proposals and whatnot, and that does not look like a good idea to me currently in the way that these are being thrown out here. And when we think about how we are going to move forward, we've written checks on employees' backs currently where they're taking on double the work without much assistance. We're beginning to create a working environment that's a little more dangerous because they are working without backup.

And granted, it's different when you're a deputy. You get somewhat accustomed to doing that. We don't have backup in three minutes and sometimes it's an hour to an hour and fifteen. So we have to adjust things to keep ourselves safe and alive. But when I look at some of the new things that have been coming out on the annexation proposal, what I would do is I would encourage this board to please take a look at this and see if there is a net zero.

Because currently what I'm seeing is there are huge areas that have been carved out left in the county that are causing a great big drain on resources while areas are being carved in that are creating revenue. And I don't know that that's going to be good for us in the future. And currently I think that we have to look far enough into the future to say are we going to remain solvent? Are we going to remain well based on the decisions that we make today? And so as we look more and more into the future of the county and the well-being of our coffers, some decisions are going to have to be made that may not be fun, but they're the right thing to do for the county. Thank you.

Thank you, sir. Supervisor Winks?

Yeah, Chair, where could we direct the sheriff's idea to staff that when the annexation comes back and I'll say I'm a proponent of an annexation that's a win win. I think it's possible, and carrying out a long term vision that the county and city come out ahead. I'm So not against annexation as a concept, but I think the sheriff is right to ask what will the financial impact be on us. I would like that to come back whenever we have the annexation discussion. I think it's really pertinent to this discussion. Is that reasonable?

It is, and it's planned, I believe. Supervisor Kline?

Yes. In line with Supervisor Williams' comments, could the executive office share a little bit about what we know in terms of the financial estimate based on the current map that is being proposed?

Sure. I will start and then Assistant CEO Sarah Pierce can comment. What we have seen so far is just a rough map of the area that they are trying to annex to the North and to the South. So it is really hard to get clear expectation on the property tax impact until we have the APNs or a clear map that we can follow. I do want to point out there has been some comments that our general fund is $250,000,000 That is not correct.

Our general fund, as you just saw, for this year is $100,000,000 So the impacts start happening with sales tax. We have been able to take a look at that based on the HDL data that we receive. On the current quarter that we received, 15 of our top 25 sales tax producers are in that area to move to the city. That's not a it's about $3,000,000 per year in revenue. That's a slow bleed as we take those cuts over a fifteen year period as the sales tax transitions to the city.

Over a sixteen year period, at this rate, today's inflation of 3%, that's $27,000,000 So you're looking at a little over around $2,000,000 per year. And when you look at the jail and you look at the need for keeping a living wage in Mendocino County, a 1% increase is, I think, 1,300,000 to the general fund. So we are taking it very seriously. We need a little more information to take a deeper dive into that, but I will turn it over to Sarah if there's something else she'd like to add.

If I may, to the Chair, Sarah Pierce, Assistant CEO. So as CEO Antal pointed out, we still are waiting on the APNs, so we haven't been able to do much data digging and analysis on property tax. We have reached out to Roads to see if they're able to provide a high level estimate. But I believe previously Howard had noted that it could be a net zero effect, so we need to vet this out because any road miles taken out of our system also affects the calculation for the SB one. We will receive less revenue, so we have to vet that.

Are reaching out to public safety to understand data calls, calls in areas such as the Brush Street Triangle, And then we are also reaching out to planning and building to understand what impacts this may have on building permits. We are also reaching out to the auditor controller and treasurer tax collector to understand business licenses. That will be a very minimal impact. The other thing I would also like to note is that because of the way the master tax sharing agreement is written, it is nearly impossible to implement into Amentum, so it will likely need staffing increases and at least the auditor's office to implement the process. So for that, I'll pause to see if there's any other questions.

Just a quick question or maybe clarification for Ms. Handel. You mentioned 14 of the top 25 sales tax producers. That's a little bit of a moving target, right? I mean, that's per quarter or per year. It could be less or it could be more.

Correct. Yeah, that's correct. Some quarters, it's 13. A couple of quarters back it was 16. It varies depending on, you know, are we selling a lot of cars at the moment, you know, the prices, gas, fuel.

Thank you for that. Supervisor Mulher.

Thanks. I'm glad that we can have this public discussion about the financial work that the county is doing about the annexation. I appreciate understanding what the goals are that the county is currently looking at. I also think it is important for us to look at what the projections of the increase in sales tax are so we can talk about the process over fifteen years. But while we're looking at $150,000 the first year and then moving forward from there.

So there was, during the master sales tax negotiations, a lot of conversations about the gradual reduction of sales tax. And when we throw out a number like $27,000,000 I think there is a lot of shock and awe that comes with that, but that's not realistic about what we are trying to actually accomplish with any kind of annexation. So hopefully we're looking at that as well as the other expenses that come from road maintenance. So if you look at the twenty year plan for county roads, you're taking out roughly $20,000,000 in expenses that would be coming out of the proposed annexation area over the next seven years that are in that plan that the County Of Mendocino would no longer have. But beyond that, there are roads that the county has no intention of doing anything on.

And so if we're not looking at taking those out of the system as well and I understand SB1 and coming out of there, but also we're not doing mowing on those. We're not doing all kinds of functions that we would do that would free up county roads to be working in other areas. While I don't believe that there would be a reduction in either DOT or Sheriff's Office staff with an annexation. I think it's a matter of really figuring out how the two agencies can work together. And just as a reminder for the public and for the members of the Board, all four cities may look at annexation.

So while the city of Ukiah is currently working on a community plan and has a proposal for reorganization, there will be other cities that will also be looking at annexations in the future. That's why we have a Master Tech sharing agreement with all four cities.

Thank you. Supervisor Haczak.

Well, I think that this is a great discussion about the annexation issue. One question I had before I make a motion to accept the recommended action about the budget is I've seen about, you know, we had the discussion about Bella Vista the other week and so are we taking into consideration the Bella Vista project and how that would affect our tax base?

If I may, through the chair, that was brought up at our last meeting discussion with our council as well as with the city of Ukiah. It is something that we will have to take offline and do a little more detail and research into that to see exactly the timing of that project. We're going forward with the CFD and the skip funding, so it's a moving target on Bella Vista. But as of right now, it would be, at least in the original draft map the city has not finalized the map, it is in scope for the annexation.

Okay. Well, thank you. And I move the recommended action.

I'm going to second it and thank the sheriff for dynamically creating an agenda item to discuss the annexation. And my only final comment is, if for some reason this staff doesn't think it's a workable proposal due to finances, try to work with the city to improve it. Either give them some more liabilities or give us Costco, do something to balance it out so that when it comes to us, it's something that we can seriously consider.

Thank you for that. Okay. So we have a first by Supervisor Hashtag, seconded by Supervisor Williams. We'll vote by the button.

Through the chair if I may for the record there was no public comment seen online.

Thank you for that. Again we will vote by the button.

The motion carries unanimously.

Item R5, discussion and possible action including acceptance of presentation on Mendocino County's preliminary fiscal year six-twenty seven budget and possible direction to staff. Again, Executive Office.

Thank you. UNIDENTIFIED As we move forward to twenty six-twenty seven, there are several unknowns that we are still concerned about. One of those is the impact of H. R. One.

We expect a little information, we hope, from the state on how they plan to move forward with those impacts. I believe the May revise is scheduled to come out next week on May 14. The economic stability, whether that is local, nationally or internationally right now, is having an impact on our budget at home as well as at the county, such as gas prices. The proposed annex, we had a brief discussion on that just now. The health plan, you know, we are estimating to use $2,400,000 of ARPA to balance the health plan for twenty five-twenty six.

ARPA ends this year. Since 'twenty one-'twenty two fiscal year through 'twenty five-'twenty six, we will have used $6,000,000 to balance the health plan. So we are very concerned on how we are going to continue that moving forward. We do know we are going to have additional jail staffing. We are budgeting for that, but we have some concerns on the stability and getting that new jail up and operational as soon as possible.

And the system upgrades of what we talked about, the system upgrade that we would be looking for with the ERP, rough estimate, is a three year project, and it's multimillion dollars. So there are several things into the future that we still need to remain good fiscal stewards on and work together on. And with that, I will turn it over to IT Director Tony Rakes as Deputy CEO.

Good morning once again, Chair Nervell, members of the Board, Tony Rakes. Here now with your May budget workshop for fiscal year twenty six-twenty seven. We'll start here with a preliminary budget overview. We currently have a non departmental revenue available for our net county cost of $93,300,000 That excludes or that's after the funding obligations such as fire, roads, and everything that gets transferred out before it's available for departments, so $93,300,000 What we have in our department net county cost is $95,300,000 We've identified approximately $2,000,000 of one time funding, to one time expenses as part of this twenty sixtwenty seven budget, which brings us right now, as of this May budget workshop, this preliminary budget balanced with that $2,000,000 of one time funds to offset specifically one time expenses. We normally aren't at that point when we come here for our May budget workshop.

There's been an immense amount of work and effort that's gone into this, not only from the executive office, but from the county departments as well, there's a slide that says thank you to the departments, which I suppose I'll save until we get to that slide, but I wanted to highlight it here that there may be changes. As CEO Antal mentioned, there are unknowns regarding the state of our economy and rising costs and expenses, where we are today, we have a preliminarily balanced budget that we will continue to be vetting and continue to be working on until we present the final on June 2. Next slide. Here we call out what one time expenses we've appropriated one time funds or we're suggesting to appropriate one time funds for. I won't read them all to you, but I will highlight some of the bigger ones.

We have some capital projects with the museum. We have capital projects for land improvement, with the trash capture project, some building repairs at the Little River Airport, as well as some repairs or some structural improvements at the county jail, as well as some IT equipment, one time IT equipment that we're expecting to purchase in addition to additional funding for that finance system initial year project, so combined with the $500,000 from the third quarter report, combined with the $500,000 for the next year in terms of one time funds puts us at $1,000,000 for the first year projected project costs. And just to call out, acronyms are often difficult. ERP stands for Enterprise Resource Planner. It's referring to our finance system Munis and reimplementing or reimagining the way that we approach our finances and how we interact with that.

There are also some short term contracts that we have budgeted for those one time revenues as well or those one time funds that we don't expect those contracts to last over a year or short term. Moving on to the next slide, We have our remaining unrestricted fund balance.

Excuse me, sir. We do Thank have a you.

If we could go back a slide. A couple questions. What is miscellaneous short term contracts? I'm not against it. I just if the member of the public asked me, I have no idea what that $75,000 would be for.

Yeah, of course, if I may through the chair. Those short term contracts are contracts that are currently expensed out of our miscellaneous budget unit, and that includes our financial consultant, Ben Rosenfield, as well as KNN public financing contract that we do not expect to be long term, and I believe Assistant CEO Sarah Pierce has a comment.

If I may, to the Chair, it's all so it includes our bond counsel. So the two bond counsel and KNN financing we felt were important to have during 'twenty six, 'twenty seven as the jail project wraps up. So it's $25,000 each for each

Okay, got it. I fully support this. Terrific effort, especially Ben. Some of these numbers are, you know, dollars 25,000, 50,000, 500,000. We don't know exactly how much, but interestingly, the new jail is $400.103 dollars Is it just that the sheriff is good at estimating down to the buck or?

If I may, through the chair, the new jail projects is not actually for the new jail. We probably could have worded that wrong. It's projects for the existing jail. And they completed with facilities. So yes, these are truly legitimate estimates and there are cost escalations in there as well.

Got it. So some of these numbers are based on detailed project analysis. And then others are, you know, generally what we think we're going to. I guess the ones that are, you know, rounded to the nearest thousand are probably just ballpark. Is that fair? Okay. And then last, environmental health software implementation. What software is that?

If I may, through the chair, that's their they're moving to a new electronic health record or a new environmental health software that they're moving to a Tyler product, and they're converting their old system to this new one since their old system is end of life.

Excellent, thank you.

Thank you, sir.

Of course. Moving on to the next slide. We have here our unrestricted fund balance. We have remaining from our fiscal year twenty four-twenty five unrestricted fund balance $6,130,000 Of that, as part of this budget workshop, we've called out $2,000,000 that we are projecting to use, and that number, of course, may shift as we go through as we move into June 2. But with the remainder, that $4,320,000 left of that unrestricted fund balance This will sound familiar.

We're recommending a transfer of the remaining unrestricted fund balance from twenty fourtwenty five per the new reserve updated reserve policy, 50% to the rainy day reserve and 5050% to the infrastructure and systems reserve. Again, that $4,320,000 may shift and change as we work through the final month of the proposed budget, but based on where we are today as of this budget workshop, 4,320,000 remaining of that unrestricted fund balance. And again, we have a footnote there. Unrestricted fund balance is considered one time funding and shouldn't be used to cover any operating expenses. We have it appropriated only for one time expenses or recommended for.

Lastly here, I called it out earlier, but I think it's important to call out again appreciation for this budget process. This budget process has been unlike the last several years in the amount of collaboration and open communication that's occurred between the budget team, the CEO's office and the county departments. And we wouldn't be here today with the information that we have had it not been for the departments coming to the table the way that they did and openly communicating to us about their needs and being realistic about what those are and also on our part to be realistic about our expectations and what we need to have from them. So just a general shout out to the departments again for that. It's been a very positive experience this year working on the budget for twenty sixtwenty seven.

I would just like to confirm what Mr. Rakes mentioned is the budget process several years ago was absolutely horrible, And everybody was fighting and everybody was trying to get their share regardless of how the other departments were doing. And I really think over the last few years, we've been able to bring people together to understand the impact of one impacts all of us. And I think this Board really is becoming good fiscal stewards of the taxpayer dollars, and I really appreciate that leadership. And I hope it can continue into the future.

So again, appreciative of my team that have a huge lift on this. We are also working with HR Director Johnson to shore up that strategic hiring process so we can get that a little more efficient for you in 'twenty six, 'twenty seven as well. So I think you will be happy with the report on June 2, and Mr. Rosenfeld will be here on that day as well.

Questions from the Board before we go to public? Supervisor Hashtag.

Yes, so looking at this remaining unrestricted fund balance and putting the 50% to the rainy day reserve and the other 50% to the infrastructure systems reserve. So the process on that so we put $2,160,000 to that infrastructure and systems reserve. Can you outline the process that the Board would use to expend that money?

Made through the Chair. That money can be appropriated through Board action for specific projects or recommended by the CEO's office for capital projects or system enterprise wide projects. There's the reserve policy calls out the required, the four fifths vote required to pull from that reserve and to appropriate from, but otherwise can be done as part of the budget process or throughout the year as needed depending on projects that arise.

Okay, so at some point we'd look at that list of capital projects and prioritize them and then go down the list and approve as needed or as possible. Right. Okay. Thank you.

Okay. No more questions. We'll go to the public. Anybody in the room? No? Madam Clerk?

Seeing no comments online.

Okay, back to the board. Supervisor Williams.

Move approval of the recommendations.

Second.

Okay, first by Supervisor Williams, second by Supervisor Klein. Move by the button.

The motion carries unanimously.

Thank you, Ms. Bearden. Apologies. We have a break scheduled for 10:30, and I'm not sure we're going to get through our six in time, so maybe we'll take that fifteen minute break now. Come back at 10:40. Thank you.

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It is 10:40, and we are gonna move on to item r six, discussion and possible action regarding a recommendation from the GGC related to delinquent cannabis business taxes. Whom from the general government committee would like to start?

I'd be happy to start.

Thank you.

Over the last couple of months, there's been several discussions around cannabis business tax and the best way for the County Of Mendocino to try to move forward supporting those businesses. Since 2023, there has been a reduction in the tax that was paid by cultivators, and the DGC had an agenda item where we discussed the opportunities to offer additional relief, and that's included in the recommended action today. And Supervisor Hashak, did you want to add?

Yeah. This item really deals with the delinquent cannabis business taxes and the direction of the board, the other meeting was to try to link the business tax to make sure that there is compliance between the business tax for cannabis cultivation and the permit. And so working with the auditor controller treasurer tax collector, the cannabis department and lots of other people, have this recommended plan of action. So if we wanted to go through it one by one and see if there is approval of each item that might be a way of getting through this or we could just take a, we could go through and approve the whole thing. So really number one was writing off the twenty eighteen-twenty nineteen cannabis business taxes as uncollectible and that's what the auditor controller says, it would just be too difficult to collect it.

Number two is write off as uncollectible delinquent twenty four, twenty five, twenty twenty through 2024 cannabis business tax owed by cultivators no longer active in the program. So if they are not in the program, they owe back taxes and it's going to be very difficult to track these people down. Number three is offer amnesty for interest and penalties for delinquent cannabis taxes. Number four, cannabis business tax and true ups for tax years '25 and '26 due and payable with interest and penalty if not paid timely. So that makes sure that people are up to date.

And then number five, is going to the next agenda item two, cancel the true up minimum tax starting tax year 2027 and all cultivators pay the 2.5 starting 2027. And number six is amend the ordinance to require full cannabis business tax payment and report filing compliance for all cannabis business license renewals starting with 2028 year. So that would be what ties it in so that you have to have your taxes paid up and to have your permit. And then last one is all cannabis business taxes must be paid current by 01/31/2028 and quarterly filings must be current by 01/31/2028 for the 2028 license. So that whole plan, if we adopted it, it would get everyone, you know, give an option, a way of getting the delinquent taxes paid and then move us forward to where there's tax compliance which is tied into the permit.

Thank you. Supervisor Williams?

Yeah. I appreciate the work by the committee members, and generally I'm in support. But a question about number two on this list. It seems like it's a little bit unfair to the people who are still in the program that they're going to pay the tax, and the people who walked away don't owe. It's almost a penalty for continuing to work with us, continuing to be legitimate and pay taxes and meet all the requirements. Any thoughts on that?

Well, I think that that goes back to the auditor, controller, treasurer's tax collectors' recommendation saying that it would just be too hard to try to track these people down.

I understand that side of the argument, but I don't understand how we try to collect from people who are still in the program. We might have more leverage there, but we're essentially penalizing them for playing by the rules.

Supervisor Klein?

A question for Ms. Kevison. Would it be possible to outsource this kind of collection to collections agency? Auditor Controller Treasurer Tax Collector Shamise Kevison we have some concerns about that it is not a program that was set up with the intention of being sent out to collections So the type of information that's required to collect on people before we actually refer them to collection agency is not something that we have you know collected on them in terms of social security numbers, dates of birth, know other addresses. And then, you know, part of the other issue depends on the years that you're talking about.

When we're really talking about significant changes in the program, the type of documentation that's available between the cannabis program moving departments with different staff and you know what the file looks like because we've also had cases where we've paused or delayed timing of true ups or the notices and the payments. So you know, for some of these years it's going to be very difficult when we send it out to collection agency. We've vetted that process. We are going to need to notify the people that we're sending that were going to send it out. We would need to also do the legwork to establish enough information to send the file out.

So it's staff's opinion that that's not really a viable option and would not be advisable because we never intended it wasn't like we didn't set up to actually have the information necessary to send it out to a collection agency. We did recently do a contract for unsecured taxes that are delinquent, and that collection agency has shown no interest in cannabis whatsoever. And it's very specialized to deal with cannabis in terms of it's not just the same kind of collections as other industries perhaps have. So we actually aren't even aware of a collection agency that if

we

had collected that information. So just to clarify, your recommendation is based off of it wasn't set up to be collected sent out to a collections agency, and there's additional staff work that would need to be done order Yes. To make that And, you know, many of these some of these license holders or previous license holders, they aren't even the property owner. So tracking down where they have property, are they even still in the county, you know, there's some significant challenges. But also to being able to have vetted all of those files to refer to collection. Thank you for that context.

Item number or recommendation number two, the 2020 through 2024, how much money are we talking about versus how much work would it actually take to try and collect that money? I guess my question is, is it worth it to get after that money?

Well, unfortunately, once somebody is no longer in the program and they're inactivated in the system, the system doesn't continue to generate, for instance, the interest and penalties. It's not like property tax system. It's actually just a revenue collection system that doesn't continue to account for all of that. So we don't have exact numbers on exactly what that total amount is. So that's part of the challenge. Every account has to be looked at and calculated to come up with that number.

Do you have a ballpark of how many accounts?

It's hard to say because there's kind of been transitions.

I guess my concern is probably shared a little bit with supervisor Williams maybe, but at a different angle is, you know, how much money are we writing off because we think it's gonna be difficult to collect? Is it a lot of money? Is it five permit holders? Is it 55? Are we talking about $100,000 or $1,000,000

It's significantly more money than that. But the problem is, again, we don't have necessarily even current information for a lot of these permit holders. They were not necessarily, in many cases, the property owner. And so tracking down these people means that we're individually tracking them down wherever they ended up. So it's not as though they were required to be the property owner.

It's not same the thing as when we're talking about like property tax, or in many cases we even have better information on the TOT lodging establishment. So it's a considerable amount of money, but it's also money that you're looking at the older stuff. As I said, there hasn't been a perceived, at least historical with previous leadership in the treasurer tax collector's office, belief that the board wanted to pursue aggressively some of that, because people were required to be participants in the program in order to get through the licensing process. And some of those people, they weren't cultivating yet. They still had to pay the minimum in order to be in the program to be licensed.

So you know there's information that is difficult to quantify because once we inactivate the people and stop trying to collect from people who are not active, it isn't, like I said, accounting for that anymore in a distinguishable manner.

Okay. And I'm just going to try again, narrow you down on the dollar amount. I said a million. You said considerably more than that. Do you have a ballpark?

I don't know that I have a number. It's a lot of money. And we don't deem it collectible. So it could be a million dollars, it could be $2,000,000

Okay. Thank you. Supervisor Hashczyk.

Well just to go on to kind of hone in on that a little bit more. So these people that aren't in the system anymore and they owe these back taxes, there's nothing that would like, it's not tied to land or anything. Right? We can't put a lien on their land for these taxes, can we?

Well, if we can determine that we can find that they have assets that we can pursue, we can pursue assets. But we then have to determine who else has also claimed to that. What are the lienholders already in first position on those properties? Do we expect that we're actually going to get any money from pursuing that?

Right.

So that's a nod of time that what we're talking about is directing staff away, for instance, from collecting TOT, directing staff away from collecting other taxes that we can reasonably assume we'll be able to collect.

Right. It seems like one of the discussions we had was like, are there bigger fish to fry?

Certainly.

Right? Is it, where's the bang for our buck in our tax collecting office?

Yeah. And I understand that, but I don't know how big the buck is at this point. That's my concern. Supervisor Williams?

Yeah, I'm with you. I'd like to know that number, but I think what auditor controller is telling us is it's deemed uncollectible. So it doesn't matter if it's 1,000,000 or 10,000,000. If we can't collect it, what are we doing spending staff time and public money going after it? But I'm still back on the lack of fairness that if we're going to let some people off because they're hard to track down, but we're going to go after other people who are playing by the rules doesn't set well. It seems like it should be a level playing field. Whatever rule we decide applies to everyone for that year.

Okay. I'm not seeing any more questions. Did you Supervisor Kline?

In line with Supervisor Williams' comments, I'm really struggling around this issue because I see us playing ping pong so often, shifting the goalpost back and forth. It seems like we're really letting folks off the hook when they haven't tried to play by the rules, and holding other folks to a high standard. We've had multiple instances where we've the past boards, previous boards, have had tax relief. I just am really feeling unsettled by the situation we're finding ourselves in.

Supervisor Mohan.

Thank you. I joined this board in 2021, and I think that the goalposts for cannabis have been ever shifting. And I think also for me, during this time period when we were looking at cannabis business tax reductions, the cannabis program, I would say, existed but not was up and running in the way that it is now. So the people that were in program 2020 through 2024, many of them did not make it through program, but also their expectations and the follow-up with the county was very inconsistent and unclear. And I think that helped me make my decision to bring forward that, yeah, this is probably not something we're going to collect on because those people maybe have moved or no longer are in the cannabis industry.

So I think that that's another thing is that we, the county, was shifting the goalposts at that time.

Supervisor Hajczak.

Well, I think that the goalposts have changed because the world has changed and the cannabis industry has changed, and we are dealing with a very different set of situation. Economically, the situation has changed dramatically over the last half a dozen years and now we are even looking at federal changes that could really affect the industry. And so luckily we have around 600 people who are still in the program. We're just dealing with about 200 that haven't been paying their taxes. We're trying to clean that up and set the program off into a very clear direction.

And I think that with the number two, the people that are uncollectible as deemed by the treasurer tax collector, it's a different situation because why do we pursue these people if it's deemed uncollectible? And you know the cannabis growers I've talked to who are saying let's just move on, let's go forward and we still got a lot of issues to deal with as far as you know the cannabis issues, you know the taxes as is and you know, so that's why I think that I support, you know, number two is just it's a reality of what we're dealing with.

Thank you. Supervisor Williams?

Yes, so number five, I think, is a really great idea, canceling the minimum tax. Fun fact, I had an agenda item for this. It was the first agenda item I ever wrote in 2019, And the executive office came to me and said, your colleagues won't support you on this, and staff has already budgeted the dollars that this represents. And it became clear it wasn't going to go anywhere. But at the time, the thinking was the county hadn't even figured out the sequence story, what site specific review meant.

We were going to have people paying a tax who wouldn't have income. And I think this tax was envisioned in an economy where the licensed cultivators were getting old illicit market prices. And you look at what they're doing today, they're basically poor farmers. And I have a lot of respect for farmers, but they're basically poor farmers that are trying to, you know, make ends meet, pay their property tax, and get by. The idea that we would tax somebody $10,000 which could represent 50% tax rate, 100% tax rate, it could be that we're charging more tax than their yield for that year, given circumstances.

We wouldn't do it to any other business. Imagine if we applied this to some other business in our county or your district. We'd have this room packed with people talking about the unfairness. And that's where we are. This never should have happened. So I'm really behind number five. One thing that's not on this list is I do think the tax should be applied to all cultivation, whether or not it's permitted and licensed. We have a lot of cultivation in this county today that's not part of the program, and it's an unfair business practice that they're not contributing, not playing by the rules, and not getting a bill from the county. I think we know where they are, we should send everyone a bill.

Supervisor Mohan.

I'm just trying to wrap my head around being in favor of five and not two because the people that were delinquent for that tax, like you said, may not have even made a profit or made even any income to get to the required true up. So I'm just unclear as to why you would be in favor of one and not the other.

May I? Yes, I'm not against number two. I just think that it should be broadened, equal protection. That if you're going to let some people off, you let everybody off. Because there's people who are still on the program that had crop loss, weren't generating income, had the exact same circumstance, and they're going to be held to paying the tax. But there's other people who walked away and were going to say, well, it's hard to collect from them, let them go. I think it should be, out of general fairness, give everyone the same deal. If you're going to let people off in 2020, let them all off whether or not they're still in the program.

Supervisor Hashtag.

Well, looking at number four is that in my conversation with the auditor controller treasurer tax collector, we could get rid of the true ups. This is my understanding, for 2026 and just move on to the new because we are in the middle of 2026 and those true ups won't come due until 2027, April of next year, and so we could just eliminate true up for 2026.

Do we have a dollar amount for what supervisor Haczek is talking about?

Auditor Controller Treasurer Tax Collector, Shamisa Kobison. So we did send out $1,300,000 of true up for 2025 this month. Based on previous experience, they've been paying roughly 50% of the true up.

Thank you. Supervisor Williams?

Yeah, one last point. If we're looking at this through the lens of how much can we extract, it's shortsighted because in the process we may put farms under. And then we don't get anything from them in the future. And today what we get from them is their sales tax. They're buying stuff in the local economy. They're putting people to work. They're paying their property tax bill. I think we need to broaden our analysis to what happens if we put the industry under. There's greater ramifications financially for the county. And so I'm with Supervisor Haschak. I'm not against considering 2026 as well. I think we should collect the tax on what they actually sold. But as far as minimum tax, if they didn't sell enough to hit that threshold, I don't know that we want to give them a higher effective tax rate.

Okay, I'm not seeing any more questions. You're finished?

Here to answer questions.

Thank you. All right, we'll go to the public. Anybody in the room?

Hello. Good morning. Steven Amato, Menasino Cannabis Alliance. We ran into the same issue at the GGC that the next item is really kind of very intertwined with this one, especially the recent conversation that the board was having about the minimum tax. So I'm gonna save my thoughts on that for that portion and just say in general, there's a lot of difficulty.

It took a lot for me to wrap my head around. I've been in multiple industries and businesses, and this is one of the most unique taxes that I've ever seen, especially the collection methods when I really read through the outline. And it's been a very tough job for the tax collector to go by those guidelines. I still did not hear whether or not there was an opinion on whether licensure can be tied to non payment of taxes for renewal or not. I think that's a very big component towards these collection methods.

In general, I agree with them. I unfortunately, as a person who did pay and paid in a year where I had major crop loss and still paid my taxes up to date don't feel it's necessarily equitable or fair, but then you can start going down that rabbit hole. If there are some folks you can go after because they own property and you can put liens on them, what about the folks that didn't and didn't have anything and just like left? Now is that fair to them? It just keeps going on and on.

And just with the way it was written and how difficult it is because it's a voter initiative, I think we do need to maybe try to come up with some logical paths forward and just accept what we can get, what we can't get. I'd really love to see the folks that are still in the system have the clearest pathway to get up to date by 2028. I think that is a beautiful way that that was put out and written, that let's try to get everyone on board. Let's get a really good way to move forward. I'll be making more comments about that in the next agenda item that I feel will also help for the folks who are up to date and been doing the right thing and such.

And it's very difficult unless you want to really sit down and read through this whole tax thing and really try to scratch your head to understand what was thought of when it was put out as a voter initiative. I mean, I'll say it on record. I personally voted against it because I just felt it just wasn't written properly. A minimum tax, not knowing what your sales would be, not even knowing what your license stature situation was going be at that time, It's just compounded to where we are today of all these folks who just left delinquently. But I would really like to know whether or not we could legally put some teeth into this so that folks who want to keep their licenses pay their taxes, whether that's legal or not.

Otherwise, this is going to be difficult ongoing. And we're going to probably be costing the county more money than we might end up collecting in it. And I don't think that's a road we want to go down.

Thank you. Thank you.

Marty Klein, 3rd District. I live in Willitson Farm in Covalho. This is a real tough topic. But I agree with the delinquent side of it for 'eighteen and 'nineteen, just eliminate all of it. 'twenty to 'twenty four, eliminate anybody that's no longer in the program.

Just let it go. Those that are in the program, they should have their interest and penalties eliminated. Reduce whatever is in four I'm sorry, 'twenty to 2024 down to 50%. Keep 'twenty five and 'twenty six as is, eliminating the 'twenty six true up and a moratorium for 'twenty seven for all those people to get up to date back to 02/2005 in 2028 for everybody. Thank you.

Thank you.

I'm Matthew Browning, 3rd District. I have my family farm Mendo Mystic in Willits. And then I also run a website that I work with about 50 other small cultivators here within the county and the general idea is that they're struggling, you know, this minimum tax has hurt them quite a bit and, you know, in general I echo what Steve and both Marty have said. Any help that we can get helps us. Thank you.

Thank you. Anybody else in the room? Madam Clerk?

Seeing one online. Carrie Yuval.

Hi.

Unfortunately, Carrie, you are echoing, and that is something that is with your microphone.

Okay. Can you hear me now?

Yeah. You're still echoing. Maybe if you could turn your volume down.

Okay. Or if you're watching the meeting on a separate device, that could be where the echo is coming from. How about now?

That's perfect. Thank you.

Okay. Okay. So I think that

It seems like it's still echoing. I don't

know what's happening here. But if you can hear me, I'm just gonna say that next people that are gonna be in front of you will be all of the, vineyard owners because right now we're in a bad spot, and we're paying business tax to the county on equipment and so forth. And so don't be surprised if you give up on this tax for the cannabis growers that, we'll be next in line asking for the same thing. So that's my recommendation is that you don't get rid of this tax, and you go look at those that owe more on the tax and maybe have a baseline that you're gonna go collect with or go to those that may still own property. It's the same thing as a landlord tenant relation.

When they owe you, you can take them to small claims court. In your case, you have a better way to collect. You can get judgments against them. It could be garnished against wages. If they do own the real estate, it could be secured against the real estate.

And when they do sell the property, it would be paid out of escrow and collected and given to the county. So I think you should not let all of it go. There will be some that you will need to, but draw the line of what is feasible to go forward and keeping in mind that the next folks that will be before your doors looking for a reduction or waiver of these taxes will be people in the vineyard business. Thank you.

You.

Seeing no further comments online.

Okay. We'll bring it back to the Board. Mohan?

Thank you. Think that one of the differences with this cannabis business tax that I'd just like to remind the board was that this was a voter initiative, and voters approved that this tax be implemented on cultivators, and I think that a lot of that has to do with the legalization that was just occurring at the time when this went to the voters. And then, of course, we still have a considerable amount of stigma against cannabis businesses. So just as we've been weighing this item and the next item that has been on my mind, that there is still a lot of concern from other business owners and the community around cannabis as a business. And I think, again, one of the major reasons that I agreed with the auditor controller's recommended action was the inability to collect the tax.

If the board members have an alternate motion, of course, I would be happy to consider that.

I just have one question, supervisor. Maybe you can clarify this for me on number two. These people that owe this tax could be people that started business and never had a harvest. Correct. Okay. Thank you. Supervisor Williams?

I think HASCHECK may have been ahead of me.

Supervisor HASCHECK.

Well, I'm going to move the recommended action with one change, number five, is to cancel the true up minimum tax starting tax year 2026.

Second. And I have a comment.

Go ahead.

Was that Kerry Ball? It was. Yeah. So I don't disagree with her or others who say there should be parity, that, you know, if you give one business a deal, you've got to give it to others. I agree with that philosophy.

I don't think the county has been clear because the taxation is so complicated. It was a voter initiative, the language, you know, all the hurdles and, you know, the drama of 21 times the Board discussed cannabis in 2021. For the general public to understand that we're moving towards parity, that vineyards pay an unsecured tax on their farm equipment, cannabis cultivators are going to pay that as well. They're not getting off the hook for any of their property tax. This is a tax that nothing like this has been applied to any other business.

It would be like having a minimum tax for the grape growers, that we're going to tax them a set dollar amount irrespective if they have a harvest that year. So it's not that I don't think we're giving any special arrangement to one sector. I think we're bringing that sector into alignment with how we treat every other business.

And so we do have a first and a second, but I have a question on the motion. The number five, the true up, if we forgive that, what's the dollar amount there?

Order controller, treasurer, tax collector, Shamise Kevison, are you referring to starting with 2026?

Yes.

So it is difficult to know exactly how much, because part of what we're also asking is there to be a requirement to file the quarterly return. And we're going to be working on trying to develop a process to confirm those reported amounts. So we don't know whether everybody who is paying a true up is truly could possibly be somebody who isn't filing with their gross receipts and is just paying the true up. So we don't know how to quantify how much they would be paying if they were paying strictly on gross receipts and reporting it, as opposed to filing through the true up process. Because you have to have hit a certain threshold in gross receipts to owe that equivalent amount, and obviously it's been reduced for the last couple of years.

The overall tax rate has been reduced. So unfortunately, being able to quantify exactly how much that means we're giving up or foregoing is difficult, especially, as I said, because we haven't even been charging the full 2.5% or the full true up amount for the last couple of years because we've reduced it. The board has already taken action to reduce it. So we don't know exactly how much that's going to be. We know that what we just sent out the bills for is $1,300,000 at the already reduced rate, for which we normally collect 50 percent.

So I can't say whether or not it's going to be $600,000 I don't know that, unfortunately. Because we have roughly between 4550% who don't file their quarterly returns. So we don't know. Many of them, we just send the true up minimum. We didn't get anything from them. We have no idea what their gross receipts were. They're just paying the minimum.

Okay. And then I guess my last question would be I don't see Mr. Rakes in the room anymore. So Ms. Santel, for giving all this money, I don't know what does this do for items R4 and R5 or maybe specifically R5?

If I understood Ms. Kovison, she hasn't accounted for the dollars and so I don't think they're included in the budget projections.

If I may, I do believe we have probably budgeted 1,400,000 again for twenty six,

twenty twenty seven, but not the true up.

No, we have not. That includes whatever portion is the true up. We don't know from year to year what portion is going to be the true up. So there could be an impact, the 2627 for the revenue we will be collecting for '26. That depends.

So if you're getting rid of the '26 true up, that is revenue that we would be getting in twenty six-twenty seven, correct? So it could be $600,000 might not be, because like I said, would be going to the full 2.5% for everybody, right? No, it's not. So I'm sorry, '26 is still a reduced rate year.

Thank you. Supervisor Kline?

Yeah. I just want to note, we have a track record and history of doing these amnesty programs, wiping the slate clean, doing tax reductions. I just think this really sends the wrong message to the public. We have a culture where it's okay to not follow the rules, it's okay to not pay your taxes. I understand that there is a need to update the tax system for cannabis. It is an extremely complicated, ineffective system, so I don't want to disrespect that portion of it, but I just generally disagree with the way that the county has handled these kinds of issues, and culturally, we're just allowing folks to pick and choose what they follow.

Thank you. Supervisor Hajczak.

Well, I would disagree with that depiction of this because what we are trying to do is really tie in the cannabis taxes with the permit. So when we do that we will have a clear path forward that you're either in the program or you're not in the program. You're either paying your taxes or you're not paying your taxes. And so this will clear it up and I think that going back to that question about what will be the fiscal impact, I totally agree with the auditor, controller, treasurer, tax collectors that one of the things that is so difficult about this true up issue is that we don't know what the actual impact will be of moving to this other model but we do know that the other model is what everyone else is using for to pay their taxes. And so it's really just aligning it with the standard industry practice, standard taxation practice and then making sure that we can account for people's gross receipts.

So that for me is the process I see.

Thank you. Supervisor Klein.

I disagree with some of the comments that have been made. Again, we're in a situation where the real problem are the folks who aren't pursuing having a license, who pay nothing into the tax. We have zero enforcement around those folks. What efforts are the counties making to collect taxes on folks who are not legal operators? To my knowledge, there's none, because there's no mechanisms to go out and do that. So that's the real crux of the situation of the problem.

Supervisor Williams.

Well, I'm happy to support Supervisor Klein, either as part of this effort, if you want to amend it, or bring back a different item. But my previous talks with a different county council highlighted that the county could send bills to all cultivators, that this tax was not passed referencing participants in our permitted and licensed system. And you have my support on that. I think it's unfair. We have some people in the room that are honest, have been paying their taxes against all struggles. They're still in business. We should be recognizing them and taxing the people who haven't played by the rules.

Yeah. Quick question for county counsel. Can we tax an illegal activity?

So I understand my predecessor has stated that. And so the answer is, I suppose, yes. But then you're sort of giving it recognition. I think it would be hard. I mean, if they're operating illegally, frankly, they should be shut down.

I know that the state is providing more and more funds. There's grants out there in terms of we were using them in Nevada County to go and shut down the illegal gross, which are a large part of what's hurting the industry. I mean, if you're trying to do it right, you're trying to come in, you're trying to comply, and you're competing against persons that are not doing any of those things, then that would be, I would say, more bang for your buck doing message out that that's not going to be allowed. And again, the state is recognizing that and giving more grants to counties to go after these illegal grows.

Okay. Thank you. Supervisor Williams.

When the people passed this tax, they didn't condition it on having a permit or a license. They said if there's cannabis cultivation on a parcel, it's to be taxed. So I don't this you know, the argument that we're taxing illegal activity, I would call it undocumented. The county could send a bill, say you forgot to get your permit. You need to work on that immediately and halt until you do, and here's your bill.

To respond, I mean, I agree that would be allowable. If we know somebody's starting something but they don't have a permit and they're not complying with everything, that would be a possibility.

JAMES is also something. We could get through this agenda item and bring that subject back as a different agenda item whether or not we wanna go after those illegal grows with tax. Correct?

That's correct. Or give direction to

I mean, think it's a worthy discussion. I don't have an issue with it. Yes. Ms. Antle.

Chair, if I may, to your prior question, we had a second to take a look at what we budgeted. We budgeted $1,400,000 65% of that is typically from true ups. So just based on that alone, we would be losing close to 900,000,001 million dollars Now, the revenue on the 2.5, I don't think that comes in '27. Shamise, can you help me with the true up?

Auditor Controller Treasurer Tax Collector Shamise Kevison.

I'm not following all the dates, sorry.

Yeah, so 2026 is still reduced rate. But I guess my point is that I don't believe that when we say the true up is 65%, that we get rid of the true up, that means we're going to collect nothing. Those people are still going to be required to report and pay what their gross receipts were. It's likely less than what they would have paid. But I believe there should still be receipts from those people who are paying the true up unless every one of them truly is going to report zero.

Supervisor Harris Chair.

I think one of the issues is that people aren't paying their quarterly on gross receipts because they know they have to pay that true up at the end so they kind of wait and then just pay the true up all at once. And so it's not like we would lose all that money potentially. We we don't know. There's a lot of unknowns with this, but that's one way of looking at it. But I would if we're ready, I would call the question.

Supervisor Williams, did you have a question? I thought your pen was up now. Okay. Well, I thought it was up before that. It's fine. Okay. We will so, miss Bearden, could you read the motion again for me?

From what I have, it is the recommended action with the change being to number five, the only change being to number five, cancel true up minimum tax sharing tax year 2026 instead of that 2027. And then all cultivators pay 2.5% starting 2027.

Alright. We'll roll by the button. We need to change our motion, yes? Excuse

I'm sorry.

Please.

I made through the chair. So '26 is already a reduced rate here for all payers. So be conscious of the some people have already paid for their first quarter. So you need to make a conscious decision if what you're doing is saying we're going to reduce the true up, but we're going to restore the rate to 2.5% for 2026?

No, that's not what we want to do.

So you're saying that we're doing the reduced rate for everybody in 2026 with no true up.

Right. And then all cultivators pay the 2.5 starting 2027. So it is correct. Okay.

Alright. We'll vote by the button.

The motion carries with supervisor Norvell and supervisor Klein dissenting.

Thank you. And the only reason I voted against that, I'm 100% in support of everything that's written here, it's just the, you know, we made a big deal today, and I think rightly so, about our budget. And then here in this item, we, you know, we we added on more. I understand the reasoning behind it, but I just I just disagree. There's a lot of unknowns about exactly how much money that we're we're giving back.

So that's that's my only concern. I don't want the people to think that I'm against all of this because I'm not. So we will move on to item R7. Discussion and possible action regarding recommendation from the General Government Committee to direct staff to develop an ordinance to eliminate the minimum cannabis business tax effective tax year '27, further allowing the expiration of temporary cannabis business tax decrease, which which began in 2023 with future cannabis taxes due at two and a half percent of sales as per county code. Again, this is a general government committee. Supervisor Mohan.

Sure. I can start. As I had mentioned with the other item, the general government committee heard several cannabis business tax related items, and this item removes the true up amount and requires that in the future, business taxes are at 2.5% moving forward. Supervisor Hashtag?

Yeah, this certainly is in line with what we just did about removing the true up and it's one of the issues is the 2.5% it has been reduced 50% and then we moved it to 40% and then 35% this year and it's something that probably with the state of the 600 permitted cannabis cultivators in this county not doing that well it could be reconsidered in the future reduction. But at least this is the structure we have and it provides a tax collector with a straightforward method of collecting taxes which is easier to do.

Thank you. Supervisor Mulher.

During the GGC meeting there was conversations around whether or not this cannabis business tax could continue to be changed and if it could have reductions in the future. And the answer is yes, it can. I think my concern is that, again, the goalposts keep moving. And what I said during the meeting, I still believe today that while I understand that the minimum true up tax did not work for cultivators, especially as the market shifted and they were unable to meet their gross receipts to make that really a viable part of their business, especially for very small cultivators. My concern is that we'll continue to leave this door open to changing the tax, and I think that that's, again, an uneven playing field for the people that are participating in the legal system.

So I think that if the board moves forward, we should continue without the minimum tax at 2.5% and not change it again and not have a reduction. And of course, legal counsel will tell us that we can't tie the hands of other future boards and anything could change, but I just think that setting an expectation that it will be changed or reduced in the future further encourages people to not comply with the tax, which is part of the question that some of my colleagues had.

Thank you. Seeing no questions, staff have anything to add to this? No? We'll go to the public.

Hello. Steven Amato, president of Menaceana Cannabis Alliance again. We're in agreement. All our cultivators have wanted to move away from the true up, so we appreciate that that was done on the last item and it's being reconsidered. And just speaking with many cultivators and such, they are a little bit apprehensive that now that even though that's being lifted, they're actually going to be getting charged more next year at a time when they're still struggling, things are still distressed, and there's still issues. Now I'm a property owner, live here in the county myself. I like nice roads. We all do. We all need it. I know that there's a ballot measure this year that's increased taxes in order to fix our roads and such.

But I really just like the board to really consider and think about what I'm about to say here. We need to really consider revenue preservation in this topic. If we're going to be pushing folks towards getting up to date by 2028, otherwise, you're gonna get your license revoked. That's a real major threat to removing licensed operators who may just be struggling, might just be a little bit short. I still don't even know what that process really is gonna involve.

I hope there's gonna be a a, you know, at least a hearing or something opportunity to discuss what's going on in their particular situation. Also, the federal landscape is changing. Right now, as we speak a few weeks ago, medical cannabis was rescheduled. That's showing to prove that there's going to be opportunities outside the California market for some of our cultivators. The Department of Cannabis Control just made major movements to allow people to change their license type from recreational to medical to try to get on board with that.

There's hearings set in June that are really looking towards moving towards cannabis as abroad that might potentially push the needle and deregulate towards federalization that our farmers could really benefit from. They're not going to be able to do that right now, but maybe for next year or the year after that. So I'm going to propose one more reduction. I know it sucks. But one more reduction, just one time shot of all the folks that have been paying up to date, doing their job.

One standing here right in front of you, paying all our dues, taking our knocks, taking our licks, no matter what our crop loss was, to have one year of 0%. That's going to allow folks who fell behind to hopefully catch up and get their bills paid up to date. And then it's just that's the expectation. You're getting your one more break, and then it's going to go to the 2.5% on a receipt based system. And if federalization does come around, I feel like that will be a lot easier for the tax collector to see those receipts because people are going to be filing their taxes properly.

It's going to start getting more normalized. Right now, it's very difficult, This whole nonsense with the minimum, who's actually going to pay, what are they actually going to declare. Just want to make one comment about going after the illegal folks like that. They don't have receipts. So I don't know what bill the county would even send them. Hit them in another way. I'm all in favor of they are competing with us and having a massive unfair advantage. But I think we really should start thinking, do we want to invest in our county? And giving our growers at this conjecture where things are starting to change on the landscape, just I want to say one last thing. I know I'm over time.

Humboldt County has reduced theirs down to zero. Sonoma County just a few days ago has reduced theirs down to zero. Do we want to be the county where investors are looking less at us because we have a higher tax rate for this? Thank you very much.

Thank you. Supervisor Mohan.

Thank you. I just wanted to note for the record, because that's come up in other topics, that those reductions were for one year, and then they're going to revisit. So I don't want for people to think that that was a blanket reduction for

sir.

Marty Klein, 3rd District. I agree with Steve. I paid my taxes from the beginning. And being able to move into 'twenty seven without having that burden on a wholesale product that we're selling is a lot of money. Last year, I billed just over 90,000, driving all over the state, selling my own product, doing my own deliveries through distribution companies and metric properly.

And 2.5% of that is just too much on a wholesale product we're already losing money on. So I would agree that letting everybody catch up in 'twenty seven and get into a new playing field 01/01/2028 would just it would be parity with the other counties around us. It'd make this farmer feel a whole lot better to move into '27. I want to stay in cannabis. I love cannabis. I just got an award yesterday for the Mendo Cup. So anything you do would be helpful.

Thank you.

My name is Matthew Browning, third district. I'm just here to echo mostly I agree with what Steve and Marty said. Any help that we can get to catch up, that's one of the, I guess, what we want out of this and yeah we're just struggling as a category of small businesses thank you thank

you Madam Clerk anyone online

seeing no comments online Okay.

Back to the board. I do have a question for the committee. Did you guys have a discussion about reducing the tax again? Talk about that, if you would.

We did, and I think that we disagreed on whether or not we would support that, and that was part of the conversation that we had. And like I stated with the last item, for me, this is about the entire community of Mendocino County, what their expectations were of how the county would operate the cannabis program, how we would handle illegal operators, which we've had not a lot of success at. I think that as we look at future taxes and going to the voters to ask them to pay taxes, it's hard for me to wrap my head around a voter initiative that was passed by the community and then to have the board change that. While I understand we can legally do that, I think that for me as an elected official, it's a question of I'm changing their original intention and then coming and asking the entire community to pay more as well. So that's where I was, and I think Supervisor Hashak and I disagreed on that, and we thought we'd bring it to everybody to have the conversation.

Thank you. Supervisor Williams?

Yeah. 2.5% doesn't sound like much. Is your business viable if you can't afford a 2.5% tax? But this is on sales, right? This is on gross. And so, you know, imagine you have a fishing business, you bring in $1,000,000 of fish, you have $1,000,000 of expenses. You didn't walk away with any profit, and then here comes government to say we want a big tax on that. It's kind of what we're doing here. So I can see the perspective of some of these farms are struggling to stay in business. And, you know, now that we're making it a requirement that they catch up in order to keep the license, what happens if they can't pay it?

Not that they don't want to, or that they're prioritizing other business expenses, but they just can't pay it. So we boot them out of the program. Now we don't ever get any revenue from them. We have a property that may not pay property tax in the future. Again, this is a tax that we don't apply to any other business. This is really unique that we thought this was so lucrative. And I think, you know, voters at the time didn't understand how bleak the future would be for cannabis farmers. And so all of this seemed reasonable. In 2026 going into 'twenty seven, I don't think it's reasonable. I think that we're part of the driving force in putting these businesses under, and that's not helping our bottom line.

Supervisor Haschak. Well, I

agree with both the comments previously stated, you know, that the people did vote for this tax and had expectations of it, But times have changed and the situations for the cannabis industry is not as lucrative as it used to be. And so it's like how do we keep these 600 who are in the permit program viable as businesses, as families that are just struggling to maintain. And so we have been giving a break 50%, then 40%, then 35%. So I guess I would look at what if we decrease that 2.5 down to 2% and that would be something like 25%, 20% reduction. So I could see that.

I don't see it moving to zero because I don't think that there is a will on the board to do that. And we do have a budget to balance. If we moved it to two point zero, then it would be something to move forward with.

Lauren?

My question I guess is two point zero moving forward or two point zero for one year? I don't understand that.

Well it would be moving forward because I heard from you that you didn't want to keep revisiting this all the time so two point zero would kind of be like a compromise position. Because right now at the three point or 35% it's probably closer to 1.6 or seven or something like that.

You're suggesting reducing the two and a half to 2% in perpetuity? Right. Yeah. I don't I don't don't think I could support that. I may I would certainly entertain the idea of a reduced tax, but I don't think I would not certainly not reducing it probably.

Well, then what would you reduce it to for one year?

I don't know what I would reduce. I mean, maybe the the half a percent like you talked about. I don't know that I heard maybe it was brought up in the GGC about what they would recommend it gets reduced to. If you said it today, I apologize. I don't recall it. But did you guys discuss a number when you were in the committee?

Not that I recall. I recall discussing removing the true up and whether or not we could have it be nothing or if there would be another percentage reduction like we've done in the past. But I think I have the concern, as I mentioned, just around taxes and voter initiatives in general, and how this board or future boards upholds the will of the public in that way.

Yeah. And probably for me, it's going to be a struggle not knowing suggesting a reduction without knowing what the fiscal impact again is. And again, I go back to our two agenda items today where we were basically patting ourselves on the back for getting to where we are now. And then here we are, again, talking about reductions. So I don't I'm I'm not gonna make a a motion to reduce the tax. I do support, what is here, 100%. I don't have an issue with it, but that's where I stand.

Supervisor Hashtag. Well, with that, I'll I'll move the recommended action.

Second.

Okay. First by Hashtag, second by Williams. We'll vote by the button.

The motion carries with Supervisor Klein dissenting.

Okay and then Ms. Santel do we have anything timed and closed today? Can we boogie right through the rest of these?

Yeah you can keep going and then we'll get into close when you're done. Thank you.

Okay. So we're going to go the CEO report has been withdrawn. We have, I believe, nothing under alleged platform. Correct? All right. So we'll go to r 10, supervisor reports. I'll go real quick. I did attend the Casper community breakfast. I met with the owners of the, water system and their plans. They wanna expand.

It sounds like the community needs them to expand, or at least do something different to get water to everybody. They've got some rezoning ambitions in order to do some of the stuff. And at this point, I'm in support of what they're up to, and I told them so. The home the homeless ad hoc met with doctor Miller last week, in what I would consider a fruitful conversation talking about a different approach to street level homelessness. We actually found a program the county ran before that was quite beneficial to the outcomes that we're after.

The annexation ad hoc, had a meeting with staff in the city of Ukiah Thursday of last week where the city proposed a new map to be considered. We did talk a little bit about that today. And then, I was one of the ones with supervisor Klein in the CEO's office who got a tour of the new, behavioral health wing of the jail. We look forward to that opening. I think they're they're hoping August.

And then lastly, McCavin is still collecting needles. If you find needles, please call McCavin House, (707) 462-1932, or you can call Joe Ditto directly, (707) 727-0402. And that you know in regard to that they have been reporting out that they are getting some calls because they are advertising it too and they have been doing some cleanups so supervisor Klein

Thank you. I know we've spent some time talking about annexation, but I do want to report a little bit on my perspective. The city did reach out to the county, the city of Ukiah specifically, to discuss their larger annexation proposal and restart the conversation after previous iteration of the proposal from April 2025 was withdrawn earlier in the fall. The tone of the meeting was better than previous interactions. Since the city did not feel comfortable sharing the map or associated information ahead of time, the first time we were seeing that information was in the meeting.

Within an hour of that meeting ending, the city did launch their information with the public and announced a public workshop for the following week. That did take me a little bit by surprise, because the city wasn't clear in the meeting about when the information would be shared with the public. I attended the first part of the public meeting. I did see quite a bit of resistance from the public, but I think that the breakout room format that was utilized made the sharing of information difficult, and so I hope folks can be willing to hear the city out but still feel comfortable voicing their opinion in a manner. We do not have the APN numbers for the properties, as was already reported, so some of the detailed financial analysis we need has not yet started.

The city also indicated that this map is not finalized, so according to the Master Tax Sharing Agreement, there only need to be additional conferences between the city and the county around the final map. At RCRC's Executive Committee meeting, we had Director Carla Nemeth from Department of Water Resources come and speak with us. We had a very candid conversation around the state water plan that was mandated by SB 72, and also how the 2014 water bond has resulted in zero new water storage in our state twelve years after its passage. The state desperately needs permitting solutions to make storage and infrastructure upgrades possible. I've also continued to push for stigma reform, especially for small groundwater basins with medium priorities such as ours, and I think that the Director indicated that they're open to some of that work.

The Community Foundation hosted a meeting on spay and neuter across the county, and I appreciated the invitation to participate in the conversation. The animal care director, Amy Campbell, was also in attendance, along with representatives from the coast and inland nonprofits and private animal practices alike. Their long term goal is to have a county veterinarian, and short term solutions were discussed to support the spayneuter program. I'm really excited what can happen from these kinds of conversations and appreciated the very collaborative format. Residents from River Valley reached out to me concerned about the development of the Low Intensity Camping Ordinance.

They had a lot of questions, so we met with planning and building staff to discuss in greater detail, and planning and building staff will also be coming to the next River Valley Municipal Advisory Council to share a little bit of information and answer questions about the process. And just for the public's awareness, that ordinance is in development, not expected until the end of the year, and there will be lots of opportunities for public input. At the next Board of Supervisors meeting, we'll be hearing from Phison Gas Station. That appeal will come back for, of course, Robe Valley right off of 101 at the base of the grade. I have been spending quite a bit of time at the site and with neighbors hearing their concerns.

I think this will be a different conversation at the nineteenth. Appreciate the sheriff's office for the tour of the new behavioral health wing of the jail. It's going to provide some safety improvements and programming in line with the state's recommendations. That concludes my report.

Supervisor Haschak.

Yeah, I attended a meeting in Brook Trails and one of the issues was the emergency access routes that we've supported in the past And it turns out that the MOUs, some of the owners of the new owners of land on those roads are reluctant to sign it. So I think Brook Trail's board was energized to to reach out to those homeowners, landowners, and, get those MOUs in place. MTA, we're working on Mendocino Transit Authority, we're working on the budget. I appreciate the League of Women Voters for their candidate forums throughout the county. The Snow McLean Power, I appreciate their work, working with Supervisor Williams and myself and looking forward to more discussions since the ad hoc has been approved.

I attended the Round Valley History Day and that's such a great event for the it's a community event where people bring their history, their family history, and also the history of the schools and the Indian schools and everything to to the Methodist Church up there and share that in a real communal way. It's just a great event. So, if anyone has a chance to do it, it's usually in May. And they also had William Bauer who's a professor of native American history at the University of California in Riverside and he's from Covalho and gave a talk about the history of Covalho and logging practices. So that was very informative and well done.

Otter Valley project, certainly there's a lot of discussion about that in my district and overall especially with regards to this Lake Elsinore Water District proposal or whatever they're doing. And there's certainly a lot of concern of people, you know, to maintain water for Mendocino County. Keep it here, keep control and that's always what this board has represented was local control over these kind of issues especially water. The GGC met last month and appreciate the work we did on it today, some of those issues. And then the first five had a meeting in Laytonville and we heard about the family resource centers up there in Laytonville, but also Jamia Shields Spence who is the coordinator for all the family resource centers in the county.

And I'm just hearing about the issues that they're facing and the struggle that they have especially with HR one and those issues coming forward, greater needs of people in our communities. So I really appreciate the work they did and First Five and the work they do with all of the children and families in our county. Thank you. Supervisor Mohan.

Thank you. I'll try not to be duplicative for my colleagues as we often attend the same meetings. Had talked about the general government committee. We brought those items forward. I attended the Great River Trail grand opening for phase four.

About 45 people participated in the first ever Ukaya Great River Trail Fun Run, three miles, And I thought it was great to see so many younger people, younger people that are in fitness coaching, and a new running organization, Mindo Milers, come out for that. I think it's really important for our community to see the Great Railroad Trail as not only an opportunity for active transportation, but for recreation and for healthy activities. So that was a nice there was also a ribbon cutting. Senator McGuire was there, members from the city council, and Supervisor Haseck to introduce the public to the trail. And there were I would say I spoke to about 10 people that had never used it before and used it for the first time that day.

And I'm always happy and willing to walk on the trail with anybody that hasn't used it. If they have questions or concerns, I'm happy to meet with them and walk on the trail. I met with the new interim director of Visit Mendocino to hear an update about what they're working on, and really just want to continue to highlight for anybody in the tourism industry, the Mendocino Coast did wonderfully at making a name for themselves during the shelter in place pandemic when COVID and people couldn't travel out of the country. I think that's amazing. Inland, we've not had the same opportunities.

And outdoor recreation is really, in my opinion, one of our best next steps. And that includes the Russian River, Lake Mendocino, and the Great Redwood Trail, and also just highlighting outdoor recreation with mountain biking and motocross and the opportunities that we have with federal lands in our community and really trying to keep that top of mind that we capture some of those things that are already happening, the grasshopper race, other races that are happening in our community for our tourism industry, so people are staying in the hotels and also dining and shopping. We had a LAVCO meeting yesterday. Supervisor Kline is also on the LAVCO board. We heard the first introduction of the Pointer Arena municipal service review and sphere of influence study, and that'll come back to the LAFCO board, but I just think it's important that there were a lot of questions around how Point Arena was doing.

Some of those were answered yesterday. Folks can read that agenda item or watch those videos on YouTube. It's on the Mendocino LAFCO website. EMCOG also met and had discussions about the future housing needs numbers, and the numbers for Mendocino County are just astronomical, how much housing we need here, and that is something that all of our municipalities are challenged with, making sure we have enough services water, sewer, police, fire but also really how our planning and building departments are working on navigating, making building housing as easy and quick as possible. And we've struggled with that as a board.

I mean, the conversation about Bella Vista was brought up, and that is a project that was originally approved in 2008. And although there's been many challenges first, economic financial viability, change in ownership, there's been a lot of challenges. But some of those challenges, the county as an agency really needs to understand that we participated in presenting some of those challenges, and we've done work to remove those barriers, but we're not done with that project. And regardless of which jurisdiction it sits in, it's an important project for our community moving forward. I also attended Ukiah the annexation workshop.

It was interesting to hear the public comment. I had not previously attended because there's not formally board of supervisors ad hoc, but I had not previously attended. And so attending this and hearing some of the feedback or questions was really interesting because for me, it's some of the communication that we can all improve on. One of them was about abandoned vehicle abatement, which is something that I bring up pretty often. We all pay into that program, and if there are questions about abandoned vehicles in neighborhoods, whether they're in the city of Ukiah or the county of Mendocino or any of the other jurisdictions that are reporting functions that can happen, there was questions about homelessness.

And again, I think it's confusing to the public about who works on homelessness, what the outreach looks like, where the funding comes from. And I just think there's a lot of opportunities to communicate with the public and to educate about where the funding comes from, what it's used for, that type of thing. I guess that's it.

Thank you. Supervisor Williams?

Sure. I talked to the CEO about updating the strategic plan next year and my preference to not pay a facilitator. I don't think it's a good use of public funds, unless my colleagues think otherwise. The Mendocino Community Services District is doing some plumbing rework, which it's wonderful to see that they were able to pull that off. It's desperately needed.

I think the work is having an impact on our county roads, and I've asked the CEO and Council and Director of Transportation to take a look to come up with a plan for next steps because it's feeling like an obstacle course. Golden State Connect Authority is a JPA we're a member of. RCRC started it. I'm the board assignee, and I've been going to the meetings where teleconference is allowed. They have some in person, and I don't think I'm going to go unless my colleagues want me to go.

It seems like another poor use of public funds in that, as far as I can remember, decisions are always unanimous. We're not swaying it one way or another, And they're not working on any projects in our county because we're not receiving any state funds for the unincorporated. So it just doesn't seem very applicable. Maybe something changes in the future that federal funds trickle in for broadband, but nothing on the horizon that's going to benefit us. Sonoma Clean Power, working with Supervisor Haschuk, it was an eye opener.

So I think there's more opportunity for us to work with them on projects that may not use our general fund dollars for solar farms and the like. And so I hope we're able to continue those conversations and look more broadly at how Mendocino County can be part of a solar future. I went on a Jackson demonstration forest walk with some of the parties involved with two thousand four hundred ninety four. And I applaud Supervisor Mulhorn for bringing up the broader scope of outdoor recreation. I hear this from the public often, that it's seen as one of our untapped economic opportunities in the County.

It's one of the areas the county could be doing more that would have a direct benefit. Minasino Coast Recreation and Park District has, for some time, been trying to understand where their revenue comes from, how much of it is from different parts of their district, and the county hasn't been able to provide it. I understand LAFCO has asked for the same information, and they've been turned down. If somebody would give me access to the raw data, a few lines of code, I could run through and give them what they want. It doesn't seem like a difficult problem.

I can imagine from their perspective it feels like we're stonewalling. It may be that we need some help from an outside vendor to figure out how to do the query. But this has been going on for more than well more than half a year. And I don't think it's in our interest because I think they're a great partner for maintaining parks, something where the county has fallen short. And then I had a meeting with city of Ukiah staff regarding annexation. They just wanted to bring me up to date. This was after they published information. I appreciated the opportunity. I left feeling like I wish they were working for us. They have some really effective staff over there.

I did suggest from my perspective that we should take Costco as part of this deal. CEO is the witness to it. And maybe it's not Costco per se, but it needs to balance out. It needs to be net zero. And I'll tell you, I can't figure out the financials. You know, what Supervisor Mollhorn points out in the beginning, it won't be so bad for us. I think that's true. But I don't know what that starting point is and what the end point is and all the ramifications. So in concept, I think I can see they put a lot of effort into it. They're trying to do something that's a benefit for everyone. I think that could be the outcome. But I don't have a lot of confidence in our ability to ascertain the actual numbers today.

Okay. Yes.

Chair, if I may, I'm sorry. There's a little confusion with my staff at the moment. So I just want to clarify on R6, Item five, you are canceling the true up minimum tax for 2026. All cultivators pay 2.5% starting 2027, which correlates perfectly with R7, right, because R7 is effective to 2.5% for tax year 2027. I think we are struggling with our dates there. Thank you.

I am glad we could clear it up.

Okay. Any public comment on supervisors report out? No, Madam Clerk?

Seeing none online.

Okay. We are now it's 12:02. We'll go into closed. We have one item, CS1. Is there any public comment on closed session? Madam Clerk?

Seeing none online.

Okay. And we will return no sooner than 12:30. Greeks.org.

Remain self sufficient for seventy two hours. Find a list of supplies for disaster kits on our website, mendoready.org.

A prepared community is a resilient community that will recover faster from disasters. So take some time today, visit our website, get yourself prepared so you can be Mendo Ready.

And we have nothing to report out of from closed and we will adjourn.