Steve Scheer Sentinel 1-14 Merge

November 22, 2017
Opinion Piece by Steve Scheer
Citizens of Coos County your Government is BROKE! There has not been enough
money entering the coffers the past two budget cycles to meet its obligations without
drawing from its assets to meet the shortfall.
The 2016-2017 budget was balanced with a transfer of approximately one million dollars
($1 million) from the Natural Gas pipeline reserve fund to the county General Fund.
The 2017-21018 budget was balanced with transfers totaling approximately one million
six hundred thousand dollars ($1.6 million) from the County Forest Fund to the County
General Fund. This Budget Committee approved this transfer and the overall budget on a
four to two (4-2) vote (public members Sven Backman and myself casting no votes).
Interestingly the 2017-2018 Budget includes for the first time moneys from Bandon
Dunes to the sheriffs department. These monies are in lieu of the motel hotel tax receipts
Bandon Dunes would have been liable for if the countywide referendum had passed.
This arrangement in itself is not a problem, but its administration could be. This
agreement between the County and Bandon Dunes is a MOU (memorandum of
understanding, signed June 6, 2016), were either party is able to exit upon notice starting
after December 15, 2019. The monies if used for personnel services would create a
perpetual obligation to the county General Fund, however the problem as you probably
notice is the county is committing to an ongoing payment without the assurance that the
corresponding income stream will always be there to support it. The answer is to commit
these moneys to short term acquisitions such as Materials and Supplies or Capital Outlays
(items which generally have a useful life of one or more years).
The 2017-2018 budget as enacted, is the equivalent of an ordinary citizen resorting to a

drawdown of their savings account, IRA, 401K, children’s college fund, etc in order to
cover the shortfall resulting from expenses exceeding income. Reasons for this action
could be beyond the citizen’s control (illness, job loss, catastrophic property damage,
etc).
However, county government has known for a long time that the current fiscal shortfall
was on the horizon, but has chosen to not to proactively tackle the problem, but instead
allowed it to occur.
This outcome was projected during the 2015-2016 budget cycle. Mary Barton then
County Treasurer / Budget Officer at the request of the Budget Committee prepared a
three (3) year forward budget projection predicting the shortfalls I’ve outlined above.
Fast forward to the coming 2018-2019 budget cycle, it still appears the county has not
learned it lesson. County government has decided (without widespread public input) that
it will balance future shortfalls by raiding the Coos County Forest and its funds (the
goose that lays the golden egg).
November 22, 2017 Version 1.1 Page 1 of 29

This is being accomplished by decreasing the Coos County Forest harvest schedule from
fifty (50) years to forty (40) years. Figures being discussed estimate that this policy
change will make available an excess of one (1) million dollars ($1 million) to the
General Fund through its Forestry Fund. Additionally the county has over three hundred
(300) acres of oversized (or approaching that classification) spruce. The oversize (50 –
80 inches in diameter) trees have no market and are to be cut and left to rot in place.
Those trees approaching fifty (50) inches will be clear-cut generating an estimated
sixteen (16) million dollar ($16 Million) windfall to the General Fund.
Rumors indicate that the county will be meeting in work session sometime in December
to determine how these additional monies will be spent. Did you know that?
The problem as I see it is that the Coos County Forest is the counties largest asset and
belongs to the citizens of Coos County. The effect of any policy change within its
management will be borne not only by current county citizens, but future ones as well
(your children, grandchildren, and great grandchildren). Shouldn’t county government
conduct public hearings throughout the county to gather input for their plan? The
objective at a minimum should be whether this policy is viable and if so should these
monies be used to sustain the future county shortfalls, or used to add new commitments
to the existing shortfall.
Webster defines Bankruptcy as “a person who becomes unable to pay his debts”. I have
a lot of problems with the county plan (which I’ll cover at a later time). What worries me
is that the goose was killed out of greed and the golden eggs ceased to appear. Continued
erosion and/or acceleration of county forestry assets (in my opinion) logically appears to
foretell that the fable analogy could be relevant to the county course of action being
proposed today, and its inevitable conclusion (i.e. eventual bankruptcy).
Remember Coos County Government belongs to you its citizens. You have a right to be
heard. The right to be listened to. The right to be informed. More importantly the right
to govern yourselves.

November 29, 2017
Citizens of Coos County last week I stated that in my opinion your Government is Broke.
This week we’ll explore in detail the first of two proposals that I mentioned last week as
county government’s response to this peril.
First a little background on how the county forest fund is generated.
Originally county forest harvest receipts were spent generally when they were received
and were allocated to the general fund for the budget year in question. The problem with
this strategy was the randomness of the revenue. Good years could be followed by bad
years causing large swings in available funding, making the budgeting process difficult.
This is equivalent to a citizen winning say $5000 on a lottery ticket one year and going
the next fifty years without. How would you manage this problem?
County government at some point in the past decided upon a plan to remove as much
uncertainty that selling timber on a yearly basis caused. Their approach became what is
now commonly referred to as the “the five year rolling average”. Timber receipts would
be credited to the county forest fund on a yearly basis. However instead of allocating the
receipts as they came in, an average of the past five years receipts would be used instead.
Excess of the average would remain in the fund for use by following budget years to
make up any shortfall. This has worked well and been honored by subsequent county
governments. Until now!
The reduction of federal timber receipts has put pressure on the forest fund. In my
opinion the two forest management policy changes that I previously mentioned are
county governments’ response to this federal funding shortfall. Reader you will notice I
used ‘response’ rather than ‘solution’.
First some assertions and assumptions. County Government has asserted that the yearly
cut will be increased from currently 300 to 375 acres per year. It’s further asserted that
the forest harvest schedule will be reduced from 50 to 40 years. Finally it’s asserted that
the new harvest schedule will result in $1 million plus generated for the general fund.
Next some assumptions: 1) the current forest is made up of 50 units containing 300 acres
of trees each, a unit also being a uniform stand of similar aged trees (unit 1 = 50 year
trees, unit 2 = 49 year trees, etc). 2) Harvesting will aim to first remove trees in the 40-50
year old range.
Straightforward, yes. Well, not necessarily. As is the case with everything in life, ‘the
devil is in the details’. So let’s look at the details and see how this will probably play out.
Changing the harvest from 50 to 40 years poses several challenges. The first is spreading
out the harvest, making the final conversion a stand of 1 to 40 year old trees in
approximately 375-acre units. The second is harvesting in a manner that doesn’t result in
outstanding units that at harvest are outside the size range those local and regional mills
are willing to compete for (i.e. large volumes of 50-80 year old trees).

There is probably no correct way to accomplish this, however it appears that any plan
would probably be a variation of one of the following scenarios.
The first (and probably more elegant) approach would be what I’ll call a ‘front loaded
harvest schedule’. The first year would harvest the current 300-acre unit containing 50-
year-old trees. The remaining 75 acres would be cut from the 49-year-old unit containing
300 acres leaving 225 not harvested. The 375 acres would be replanted that year. The
second harvest year would take 225 acres from the next 50-year unit (last year’s 49-year-
old trees, which have aged 1 year since the first harvest). The remaining 150 acres would
be cut from the original 48-year unit (now 49 years old). This would go on for 40 years
in four-year blocks that would reduce the yearly average age harvest 1 year during that
block (i.e. first 4 years = 49.5 year old trees, next 4 year block 48.5 year old trees, etc).
The last 4-year block would consist of 40.5-year-old trees. The forest would now be fully
rolled out in 375-acre units graduating from 1 to 40 years.
You’ll notice that the harvest volume will immediately spike the first year and then
gradually decline each year after that, with the highest volumes (i.e. revenue) occurring in
the first 12-16 years. Once the 40-year cycle had been completed harvest volume would
be at the new 40-year reduced rate.
The second option (and more convoluted) would be what I call the ‘back loaded harvest
schedule’. It would start by harvesting the current unit (300 acres) of 40-year old trees
and make up the difference (75 acres) with the units in the 41-50 year age range (starting
with the 50-year units). Again it will take 40 years to fully vest these 41-50 year old units
in their 4-year blocks, but would result in each remaining unit subsequently aging by 4
years in the process. At the end of the first 4 years the remaining units will be
approximately 53-year-old trees, until in year 36-40 the last 300 acres will be
approximately 78-81 years old. Hence harvest volume would gradually rise over the
entire 40-year period, and then plummet back to the original 40-year harvest volume.
You’ll noticed that the latter years will contain 75 acres of much older trees than the 40-
year-old forest. This will generate a larger volume of wood, and subsequently more
revenue. The problem with this approach is that 1) local and regional mills may not make
a market in those size logs. 2) It might encourage latter county governments to over
harvest these oversize trees resulting in a massive infusion of cash to the general fund.
That may or may not be spent in the best interests of the citizens of Coos County.
The upshot of what I’ve laid out is a dramatic change to how your most important County
asset is managed. A one-time windfall in revenue will result from the changes being
proposed.
Now for the dirty little secret, these plans will result is a massive intergenerational
transfer of wealth from the two generations covered by the 40-year time period to the
current citizens of Coos County. The amount is in the tens of millions of dollar (more on
this at a latter date).

December 6, 2017
Citizens of Coos County in the first of a three part installment (11/22/2017 Sentinel), I
stated that in my opinion your Government is Broke. Last week (11/29/2017 Sentinel)
we explored in detail the first of two proposals that I feel is part of county government’s
use of the county forest and its fund as its response to that peril. This weeks final
installment I’ll layout county governments second response using the same county forest
and its fund. Finally I’ll try and pull all three parts together and explain why this subject
is so important to you, your family, and future generations not yet born.
See last week’s installment for a background on how the county forest fund is generated.
County governments’ second plan is the over harvesting of an approximately 300-acre

unit of mainly spruce. This unit contains a large amount of 50-80 inch dbh (diameter
breast height). The county says there is currently no market for these trees so it proposes
to cut them down and leave them to rot. Note: this wood has been used as plywood core
material but local and regional mills are unable to peel any dbh greater than 50 inches.
The remaining trees will be clear-cut and sold at market. The net result will be an
additional several $millions of dollars to the county forest fund.
The major problem to this plan is the wasting of county resources. People I’ve talked to
say that it might be possible to salvage that large wood. Various ideas have been
expressed, but as a member of the county budget committee I’ve seen no documentation
to indicate that any alternatives have been studied (at least not shared with and allowing
general public input).
If I’ve done my job right, and if you the reader has followed the proceeding two
installments then you’ll have realized that there’s going to be a massive intergenerational
shift of assets from the next two generations to the ones paying taxes now.
Additionally, there’s going to be a boatload of money available during the next 10 to 15

years and especially in the next 4 to 5 years.
The question becomes then how do we allocate this cash windfall.
Oregon budget law states there are three classifications of expense: 1) personnel services
- expenses related to employees. Defined usually as perpetual in time. 2) Materials and
services- consumables and service expenses. Defined usually as less than one year. 3)
Capital outlays – items which generally have a useful life of one or more years.
With this in mind, a logical person would not take a windfall, say a 20 year lottery
annuity of $10,000 per year and apply it against a home purchase that required a debt
service of that same amount over 30 years. You income stream would not be available to
service the debt the last 10 years, possibility leading to default.
This should logically apply to any county decisions on spending any acquired windfall.

The second and third options are preferable because these are one-time only purchases as
long as they are paid for with cash applied against the windfall amount.
The responsible use of any windfall would be for 1-county infrastructure improvements.
2 – Set-aside fund for likely future county budget shortfalls. 3 – Reinvestment back into
the county forest.
Evaluating these (or any other) proposals I’ve covered earlier requires us to address the
intergenerational transfer of funds that a windfall would generate. In other words how do
we handle a windfall in the best interest of all county citizens present and future?
Options 1 and 2 don’t adequately address the problem, because though possibility in
effect over multiple years the money primarily benefits only present county residents.
Option 3 in my opinion addresses the intergenerational transfer inequity that I mentioned

last week. Allocating the windfall (or at least a major portion) to the purchase of
additional timberland would make those monies available to future generations. (Note:
remember the county asserts that the 40-year harvest schedule will generate the same
amount of revenue per year as the 50-year harvest schedule, so present generations would
not be harmed.) Future generations would realize these additional monies from a harvest
off a larger county forest (note: county residents currently less than 40 years old would
probably also benefit, assuming a 40-year harvest schedule as any purchased land would
be available for harvest within their lifetimes).
I’ve heard in some quarters that county government shouldn’t be in the forestry business,
competing against private entices. I’ll state right off that I believe this also. However,
the reality is that the county forest currently exists, and the law says that any sale of its’
lands must be repurchased in kind (so there’re is no way around this). Our current county
forestry department does a good job managing these lands and harvests for its’ residents.
Additionally if the harvest schedule is changed to 40-years then the smaller logs could
benefit the local and regional mills, supporting well paying jobs both now and for future
generations.
This now brings us to the question your obvious thinking? Why should we care enough
about future generations to provide for them at our current expense? The answer is the
connection between generations past, present and future. What was passed to us is now
our obligation to continue forth for those following us in the future.
Finally a thought to remember, no matter what anyone tells you, your county government
shouldn’t find it too easy to solve its’ budgeting problems by just cutting more trees.
After all once this windfall is spent, they could just proceed to a 30-year harvest schedule
generating another windfall to spend. County government shouldn’t repeat past mistakes,
but learn from them (i.e. federal forest funding).
Lastly some personal insight and action. I’ve spent the last 8 years serving on various
county committees observing our county government in action, including the last 3 years
on the county budget committee. I have reached the following conclusions (in my
opinion): 1 – there’s a lack of fiscal responsibility. 2- there’s a shortage of any long-term

fiscal planning. 3 – There’s a lack of inclusion of its citizens in the governmental
process. 4 – There’s a shocking lack of openness and transparency of that process to its
citizens. It’s apparent to me that county government has forgotten who it works for and is
no longer accountable to its citizens. I want that type of thinking changed.
Therefore I’ve filed and am currently a candidate for Coos County Commissioner.

December 13, 2017
Citizens of Coos County first some clarification. Contained within the (11/22/2017
Sentinel), I implied that the $16 million windfall would be generated from the harvesting
of a 300-acre unit of the county forest (though it’s hard to believe that that type of
revenue possible off that amount of acreage). In reality the dollar amount is correct,
however it’s spread over four years. I apologize for any misunderstanding.
Within that same issue I stated that our county government would be meeting on
December 14th to look at options on how to spend those monies. This week I’d like to
review some of the proposals that I think county government is, as well as should be
considering.
On August 31, 2017 your county government meet in worksession to discuss ‘forestry
revenue allocation’. Did you know about this? I didn’t nor did any other public member
of the county budget committee. However, we did find out at the last minute and two of
us attended, and were given the opportunity to comment on their proposals.
The first proposal county government presented was contributing $1 million dollars to
our shortfall in the Public Employees Retirement System (PERS).
Some background is in order. PERS is currently underfunded between $25 and $40
billion dollars (depending on whose estimate you use). As explained by the county each
individual entity that makes up PERS (Coos County in our case) can make up its shortfall
by contributing that amount into PERS. That money is then frozen from the county.
I testified against this proposal for the following reasons. 1 – The county is broke and
diverting money away from the general fund that could be needed at a latter date, but
would not be available is in my opinion irresponsible. 2 – PERS underfunding is a
statewide problem and in my opinion will have to be corrected in the future either
legislatively or judicially. Our county government doesn’t share my view. However,
though our County shortfall is $1 million dollars don’t forget that we citizens are on the
hook for all the other county entities (cities, schools, etc), not to mention our share of the
state bureaucracy. The math at the $25 billion figure comes to a $6250 obligation for
every man, women and child making up the approximately 4 million citizens of the state.
The obligation on our 63,000 citizens could be as much as $393,750,000 (though
probably less). Economically what do you think Coos County (or the state) would look
like if even a fraction of this scenario occurred? This is a difficult issue, and if the county
proposes to proceed it should be presented/discussed with county residents though a
series of public hearings.
Last weeks Sentinel (12/6/2017) contained a letter to the editor (submitted by Eldon
Rollins) regarding Coos County stealing money. This matter was first brought up by
Community Corrections at the April 2017 budget hearings. The upshot is that the County
entered into an agreement with them to provide ‘Parole and Probation’ beds at the Coos
County jail. Coos County didn’t keep their end of the bargain because of their ongoing
staffing issues at the jail. This occurred over two budget cycles (2015-2016 & 2016-
2017). The amount paid to Coos County was several hundreds of thousands of dollars.

The State in April stated they weren’t going to ask for its return. However in my opinion
the county has a moral obligation to return those monies to the State (if it has not already
done so) and not wait for a potential audit by the Secretary of States Office. People
should have an expectation that when dealing with Coos County that we will hold to our
end of any bargain and that any mistake on our end will be rectified once realized. The 4-
year windfall could cover this. FYI: the State has contracted for 2017-2018 with the
Curry County and Reedsport City Jails for this service.
As mentioned previously in the 11/22/2017 Sentinel, Coos County has allocated

$585,000 to an account called ‘Bandon Dunes Asmt Fund’. The MOU between Bandon
Dunes and the county states that the money ‘must be budgeted to the Sheriff’s Office and
that Coos County will not permit the operating budget of the Coos County Sheriff’s
office to fall below the 2016-2017 operating budget’. Either party for any reason can
terminate the MOU after 12/15/2019. Therefore, this money has to be spent supporting
the Sheriff and should be considered transient for budgeting purposes. These monies
should be used for infrastructure improvements or one-time investments. Previous
county governments had proposed a countywide Sheriff’s communications systems
wholly owned by the county (more on this at a latter date).
The Sheriff’s Department union(s) negotiated raises over three years of 5/4/4 percent.
This perpetual commitment becomes $800,000 a year begins in the third year (2019-2020
budget cycle) of that contract. Therefore, this obligation should be allocated for from
part of any windfall.
Additionally the 2017-2018 budget raided the county forestry fund (beyond the 5-year
rolling average) in the amount of approximately $1.6 million dollars. Baring any
unforeseen reversal in Federal Timber receipts this sum will continue to be needed in any
future budget cycle. Therefore it should also be allocated to any potential forestry harvest
windfall.
These two items represent $2.4 million dollars out of the yearly $4 million proposed
windfall, leaving $1.6 million dollars unallocated. I propose that the money either be
placed in trust for future budget shortfalls (remember the $4 million per year will only be
available for 4 years). Used to remove the Cost Allocation accounting method
implemented this year (more on this latter). Used to purchase additional forestlands
(remember, our discussion on intergenerational wealth transfer). Used as seed money for
public works projects (i.e. transform North Bend Annex into Commercial/Apartment use,
with rents paying the debt service and returning any profit to the general fund, or a new
County Park near the new bike trail and Tioga sport park.). I’ll take a closer look at a
latter date how the County could profit from this, and what other county districts are
doing in this area.

December 20, 2017
Citizens of Coos County when we last left off last week, I’d mentioned that the Coos County Board
Of Commissioners (BOC) would be holding a work session last Thursday the 14th. This week I’ll
cover that meeting, the rational used by the BOC to unanimously approve their proposal, and my
analysis of their decision.
First some clarification, I’ve used as the harvest acreage in previous articles’ 300 acres per year. In
fact the number the county uses is 270 acres (apparently 10% of the county forest is unsuitable for
growing timber). The county forester asserts that a 40-year harvest schedule will yield 17,000 board
feet per acre (17 mbf), a 50-year harvest yields 20 mbf per acre, and our current forest harvest is at
40 mbf per acre.
The BOC stated that their action is in response to an inordinate amount of 60+ year old timber in the
county forest. The problem as they outlined it is that there is only one buyer (Roseburg Forest
Products) for these larger logs, and as a result the BOC is not getting the return on these sales that
they feel is warranted. Their solution is to increase the current harvest from 270 acres to 345 acres
per year, generating an estimated additional $800,000 each year ($4 million over five years) to be
deposited into the 5 year rolling average (see 11/29/2017 Sentinel). In addition to this ongoing
change to the harvest schedule, the BOC proposed to harvest an additional 200 acres per year for a
period of 5 years generating $14 million over that span. The $14 million would be placed in a trust
to buy timberland, adding to the size of current county forest.
Public comments mainly centered on the terms of the trust. Would the trust be dedicated and
beholden to future BOC’s? No! In fact one member of the BOC said that their decision could be
changed 5 minutes after the close of that meeting. This seemed to me a rather flippant response to
public attendees concerns, who only sought reassurances from the BOC that the monies generated,
would be used for the intended purpose.
My first comment to the BOC concerned the intergenerational transfer of wealth from future
generations to the current citizens in the amount of $18 million ($4 Million + $14 Million) over the
next five years. I received a non-response from the BOC on this point, other than their need to get
rid of these older trees. This I found puzzling. I then asked that since one of the members of the
BOC five minutes earlier had praised a prior county governments forethought in the 1940’s in
assembling the forest for the use of its future citizens (us) why was the BOC not willing to extend
the same to future generations. This again received a non-response.
My second comment concerned whether the county had commissioned any marking studies
(white papers) comparing the way we currently manage our forest versus the proposed BOC
plan. Their response was NO! I then inquired why, and how could they propose such a drastic
change without having some reasonable assurances supporting their assertions, and not risk
becoming a victim of unintended consequences. The response from the BOC was one of the
most self-serving circuitous gobbledygook that I’ve ever witnessed. It boiled down to
speculation regarding foreign competition, market conditions, current business practices,
promises, and assurances gathered verbally from local sources. I could not imagine any similar
sized private firm venturing forth on such a massive financial undertaking with such limited
factual information to base their decision. Any such private entity manager submitting the
above findings as basis for their decision would be fired.

The fallacy of the 60+-year tree harvest, being caused by a lack of a stable market is countered
by the BOC increasing sales into that same market. Currently the county harvests 10.8 mbf
(270 acres times 40 mbf per acre) of timber. This harvest is to be augmented by an additional
11 mbf (200 acres + 75 acres times 40 mbf per acre) of timber, or an amount equal to the
current harvest. Basic economics (law of supply and demand) state that if your not happy with
your current price point for goods sold, you don’t double the supply (logs entering the market)
expecting more demand (higher price).
Additionally you don’t enter into a new market (40-year harvest of 16”-26” trees) without
knowing what sort of price point (dollars) to expect. The BOC will be entering into a market
controlled by local and regional mills that currently receive large volumes of their logs barged
in from Canada. Can we compete on that per unit basis? It would be nice to have some
assurance before we commit ourselves.
Another fallacy is the availability of these additional monies. This motion passed doesn’t go
into effect until July 1, 2018. In addition all county timber sales have a three-year grace period
(it may be longer) for the buyer to finish logging (most of the money is received upon harvest).
Therefore it’s possible that little money will be generated or received prior to fiscal year 2021-
2022. A lot can change in that time as one BOC member stated.
Most disturbingly is testimony from the county forester stating that the new 40-year harvest
schedule will require the tripling of the current size of the county forest in order for those
projected revenues to meet those currently being generated (15,000 to 45,000 acres). That
additional acreage is the real cost to future generations. Unfortunately if the $14 million trust
is spent entirely on augmenting the size of the forest it will only purchase somewhere between
3,500 and 14,000 acres (depending on the age, stocking density and supply of available
forestlands). Remember the same rules of economics apply when purchasing, and optimally
the forest acreage will only double.
Lastly will any BOC have the fiscal fortitude to leave the new trust alone, and use it for its
intended purpose? As I’ve previously stated (12/11/2017 Sentinel) the budget is increasingly
being attacked through the draw down of the forest fund 5-year rolling average. If there is no
change from the 2017-2018 budget the county is looking at least another $1.6 million draw
down in 2018-2019. Should that trend continue the BOC would assert they have no choice but
to reallocate the trust money to balance the budget.

December 27, 2017
Citizens of Coos County I recently had the opportunity to talk to a bright young businesswoman in
Coos Bay. When I’d finished describing a new money grabbing scheme rolled out during the 2017-
2018 budget cycle by the Coos County Board of Commissioners (BOC) she exclaimed that it fit the
adage of “stealing from Peter to pay Paul”. After reading the following see whether you agree.
I’ll reiterate once again Coos County is Broke! One way you can tell is when an entity starts selling
off its assets. The past 5 weeks I’ve covered the proposed change to a faster harvest schedule of the
County forest. A second way to tell is when an entity starts getting cute with the way it accounts for
it revenue and expenses. This issue I’ll cover how our BOC accomplished that and its full impact.
Coos County calls this ‘creative budgeting method’ COST ALLOCATION. If you search the County
2017-2018 Adopted Budget you will not find an entry for it, because it’s buried under ‘Materials &
Services’ within the ‘Contracted Services’ line item (you’d have to look at each departments working
budget documents to find its line item).
The theory behind Cost Allocation is that fixed costs exist within County Government, which are the
basis of the county’s existence, and without which it can’t exist. The BOC has identified these costs
as follows: 1) Finance/Tax ($124,854), 2) County Counsel ($523,772), 3) Board of Commissioners
($78,174), 4) Information Technology ($598,891), 5) Maintenance ($710,211) and 6) Miscellaneous
($600,821). This totals $2,636,724, and is referred to by the BOC as its COST BASIS. All other
departments pay their prorated share of these costs, thus transferring revenue to the general fund.
The BOC has decided to rollout Cost Allocation out over four years, with this years Cost to
Departments calculated at 25% of its final obligation.
The BOC further designates each department as either General Fund or Non-General fund. Under
the BOC designation, General Fund departments are those whose expenses exceed their revenue.
Non-General fund departments have revenue that meets or exceeds their expenses.
The BOC has decided General Fund departments, since they have no money to pay their Cost
Allocation will be credited from the General Fund for their corresponding debit, resulting in a wash.
Non-General fund departments are responsible for their obligation. Who are those Non-General fund
departments and what are they obligated to pay? A list follows with dollar amounts sited as this
years share followed by their fully implemented share (list contains top 5 departments).
Waste Disposal ($23,866 / $95,547). Community Corrections ($25,655 / $102,623). Public Health
($28,928 / $115,713). Public Works (i.e. road department) ($80,494 / $321,979). Coos Health &
Wellness ($179,785 / $719,141). Total amount ($445,894 / $1,783,576).
Remember our topic from two weeks ago on Community Corrections? Our Government stiffs them
for hundreds of thousands of dollars for services it doesn’t provide, but has the gall to turnaround
and extort them for another $25,655.
I argued vehemently during 2017-2018 budget hearings against Cost Allocation. In my opinion it’s
one of the poorest thought out polices that Coos County came up with during my 3 years on its
budget committee. My reasoning is as follows:

There is no incentive amongst the three players to innovate or excel. General fund departments have
no reason to become non-general fund; Non-general fund departments have every reason to become
general fund departments, and the Cost Basis departments have no reason to cut expenses. For
example in the 2014-2015 budget cycle Coos Health and Wellness (CHW) received $125,000 in
general fund support, in 2015-2016 they received nothing. Under the BOC’s Cost Allocation that
action would have penalized CHW almost $305,000 for saving its citizens $125,000.
Non-general fund departments are primary funded from grants and taxes garnered from State and
Federal governments to carry out their programs. That’s why they are generally fully funded. The
BOC’s answer to them for any shortfall arising from Cost Allocation is to return to their grantors and
ask for more money. I’m no expert, but have some experience with grants, and administrative costs
are allowed by the grantor to cover the grantees time for providing grant support. Its not intended to
support county governments’ administrative costs. This policy forces each department to makeup its
shortfall, risk losing funding altogether, or cut expenses if it can’t pay. However in the last two cases
these loses could impact services to the public. For example potholes being fixed, roadside garbage
pickup, WIC services, Communicable Disease investigations, immunizations administered, nursing
home visits, restaurant inspections. CHW Behavioral Health Services contract services contains a
page long list of organizations it supports that provide help to the community. These all could be
impacted.
The theory supporting Cost Allocation is flawed. In reality Cost Allocation is a hidden tax on you
the citizens (remember the money the BOC is confiscating are tax dollars you’ve already paid to the
State and Federal governments). Again you lose, because if the department is able to secure
secondary funding that’s additional tax money that we will have to pay. If the department doesn’t
secure secondary funding then services you have paid for could be withheld. In the worse case,
grantors could withhold funds entirely. Finally it’s not applied equably to all departments. Coos
Health and Wellness (brings in over $13 million and employs approximately 78 citizens) is singled
out. Remember the list of the costs the BOC is trying to recover. Well CHW has their own staff
covering IT, Finance/Tax and their own building, but are taxed as if they didn’t. I brought this up
during the 2017-2018 budget hearings, and was told by the BOC they were aware of the disparity,
but didn’t have time to change it. Well it took me about a minute to figure that CHW is being double
taxed to the tune of $82,000 this year and $328,000 when fully implemented.
Reader you’ll recognize ‘fairness’ arising as a reoccurring theme. If the BOC feels so strongly about
the need to cover its ‘Cost Basis’ departments it should go directly to the people and ask for it, not
obfuscate their true intentions. Remember the law of ‘unintended consequences’? What services
would you recommend be cut or eliminated from the affected departments if funding can’t be found
or is lost? Is the County Administration more important than the services being impacted? You tell
me!

January 3, 2018
Citizens of Coos County I thought it might be appropriate in light of the recent disclosures of new
State and Federal Tax Law changes to prepare you for the possibility of a tax increase coming your
way at the County Level. After I’ve described the corner the Coos County Board of Commissioners
(BOC) have painted themselves into see whether you agree.
Reader just a warning, this and next weeks opinion constitute a two-part examination. They include
a lot of data combed from the past 3 fiscal years budgets. I empathize your having to assimilate it
first, however I never try to state an opinion without first giving you the data to support my position.
Thus you know what went into my thought process, allowing you to independently reach your own
conclusion. If you’ll bear with me this week hopefully it’ll become clear in next weeks article.
The BOC has been working on this for over a year. Did you know that? I first found out when
one of the currently sitting Commissioners approached me and laid out his thoughts on this
matter. He told me he had also broached the subject in talks to various civic groups. The crux
of the argument was that Coos County has one of the lowest taxing rates in the State, and we
need additional revenue.
The BOC for the 2017-2018 budget year imposed taxes at $1.0799 per $1,000 assessed value
for operating expenses. General Property Taxes represent approximately 24% of the General
Fund total for that period. Another 24.35% are derived from Other Sources including County
Forest (19%), Bandon Dunes Asmt Fund, Parks Fund, Waste Disposal Fund, Gas Pipeline, and
others. State and Federal Grants and Revenue account for another 23.47%. Working Capital
(beginning balance) accounts for another 18.7%. The final 10% comes from Licenses, Fees,
Permits; Charges for Services; Fines and Forfeits; and Miscellaneous Revenue.
As you can see 43% of the County General Fund revenue comes from Property Taxes and the
County Forest. Property Taxes are Constitutional Limited by measures 50 and 5 so are beyond
tampering by the BOC. I’ve covered (12/20/2017 Sentinel) the plans the BOC has for the
County Forest. However as I stated because of sale language any monies received may be
deferred to the 2021-2022 budget cycle. Federal timber monies dropped from $1,757,614 in
2016-2017 to $1,109,344 in 2017-2018, with no expectations for the downward trend to
reverse.
Bandon Dunes Asmt Fund in its first year added $585,000 to the General Fund (see 11/22/2017
and 12/11/2017Sentinels) and could’ve helped. However the MOU (memoriam of
understanding) between Bandon Dunes and the County states that the money ‘must be
budgeted to the Sheriff’s Office’. ‘To the extent practicable, the revenue from the Assessment
shall supplement and not supplant the existing public safety budget’. That ‘Coos County will
not permit the operating budget of the Coos County Sheriff’s office to fall below the 2016-
2017 operating budget’. Either party for any reason can terminate the MOU after 12/15/2019.
The bottom line is this money has to be spent supporting the Sheriffs Department and not the
other General Fund Departments.
I commend Bandon Dunes on their negotiating skills. There are parts of the MOU that also
benefits you the citizens, however the BOC paid too high a price. The fact of the matter is that
they abdicated part of their budgetary authority to Bandon Dunes and the Sheriffs Department.

David Jennings had an excellent piece in the 11/15/2017 Sentinel stating that in 2009 the
budget was balanced by layoffs in the Sheriffs department. I’m not advocating any such future
recourse in budget negotiations, but this, as a bargaining chip to gain concessions is lost.
Layoffs anyway would probably result in violation of the 2016-2017 operating level. The
MOU requires that the assessment be dedicated to the Sheriffs budget. Its restriction as a
supplemental addition to the existing Sheriffs budget further hamstrings the BOC. The BOC is
thus barred in allocating those monies in the future where they could be used for the greatest
public good.
As seen from the fourth paragraph the BOC is very restricted in where it can generate
additional revenues for the General Fund. Over 61% are capped by either legal or procedural
reasons (General Property Taxes; Federal & State Operating Grants and State Shared Revenue;
and Licenses, Fees, Permits). The only real area for growth is ‘Federal Revenue’ which
currently accounts for 7.5% of County General Fund revenue. However this includes Federal
Timber receipts which decreased $648,000 over the last year. The BOC thus has really very
few options, other than a further drawdown on the Forestry Fund ($1,200,000 drawdown over
the last 2 years), COST ALLOCATION (covered in 12/18/2017 sentinel) which is set to double
next year (an additional $446,000), and any increase in Marijuana taxes.
Oregon State law allows for “Local Option Taxes’. These are in addition to the permanent rate
levy, are temporary (for operations between 1-5 years), and must be approved by the voters.
You’ve probably heard of a ‘Jail Levy’ floating about over the last year. In addition to a Jail
levy the BOC could float an Operating Levy to augment all of County Government.
The problem is that the Sheriff already comprises 49% of the General Fund and when you add
in the DA and Juvenile that number bumps to 59.5%, thus a Jail Levy since it would be
dedicated, is more likely to attract voter support than an Operating Levy. The Jail Levy monies
could then be used to supplant the current Corrections (Jail) appropriation from the General
Fund ($5,555,111) with that amount now freed and available to other General Fund
Departments. This scenario would seem to honor the intent of the MOU, and the option more
likely to be adopted by the BOC, though the final Jail Levy tax could be less than the
$5,555,111 figure.
If the full amount currently appropriated to Corrections were supplanted by a Jail Levy the new
imposed tax would be in the range of $1.08 per $1,000 assessed value. That amount would
match the level we now pay under the permanent rate levy.
As you can see the BOC is being squeezed on the revenue side, but why don’t they just cut
expenditures you say. Good question! Next week we’ll cover its role in the budget process,
see what its being doing over the past 3 years, and weave both sides together to reveal the story
all budget documents are bursting to tell.

January 10, 2018
Citizens of Coos County last week I thought it might be appropriate to prepare you for the possibility
of a tax increase coming your way at the County Level. In that issue I stated my case that the Coos
County Board of Commissioners (BOC) has entered a long-term phase of continued revenue
shortages. This week I’ll cover the expenditure side showing that the BOC can’t make up for the
expected revenue shortfall by cutting expenses (except through layoffs). After I’ve described the
corner the BOC have painted themselves into see whether you agree.
I know to most people budgets and numbers are boring, but if you study them carefully they’ll
tell you a story. County budgets if analyzed over time will reveal its economic health and how
it got there. The following data is for clarification, and referred to latter in my analysis.
The period we’ll be covering is the 2015-2016 through 2017-2018 General Fund budget cycles.
This is a period of three years. During that time the budget increased $389,402 or 1.71%.
That’s less than 1% per year, not bad by any standard. However when you compare the 2016-
2017 to the 2017-2018 cycle it increased by $2,000,000 or 9.4%.
Unfortunately parts of the budget weren’t so stable. Overall Personal Services increased
$2,087,661 or 17.52%, and is further broke down as follows: Wages +$823,205 or 11.30%,
FICA +$73,358 or 13.38%, PERS +$586,126 or 36.21%, Insurance +$557,519 or 27.70%,
Workers Compensation +$47,453 or 13.66%. Materials and services also increased by
$736,710 or 18.91%, though $496,761 or 67.43% was attributable to the Sheriffs department.
If you exclude the Sheriff the increase is now +$239,949 or 6.16% which is a good number.
Not surprisingly the cost per employee to the County also increased from $78,897 to $94,067
($15,070) or 19.23%. The department with the highest cost per employee was the Sheriffs
Dunes Patrol Division at $122,467. The lowest was the Clerks Department Records Division
at $66,953
So how did the budget over a 3-year span increase by $389,402 but personal service and
materials and services increase by $2,087,661 and $736,710 ($2,824,371 total) respectively?
This represents a difference of $2,434,969, and if were the true figures over the period in
question would reflect a 10.71% rather than 1.71% increase. Well it appears that it was
reallocated during a change from an Ending Fund Balance to Operating Contingency line item
in the Contingencies and Unappropriated account in the Miscellaneous Fund (what a
mouthful!). The drop was from $5,816,192 to $2,058,460 or $3,757,732, easily covering the
amount in question.
You’ll have observed that the largest gain over the 3-year period was in Personal Services, with
Wages, PERS and Insurance accounting for $1,966,850 or 94.21%. PERS and Insurance by
themselves accounted for $1,143,645 or 54.78% of the increase. The PERS increase for 2017-
2018 was a whopping 20%. This helps explain the Cost to the County on average for each
Employee increasing to $94,067.
If we compare these Personal Services costs Wages, FICA, PERS, Insurance, and Workers
Comp it comprised 51.97% entering the 2015-2016 budget and 60.13% of the 2017-2018
budget. PERS and Insurance alone account for 20.66% of the budget.

This data boring as it is shows how difficult it will be to reduce expenditures going forward.
The 3-year budget cycle shows that there is no fat left to cut. When combined with the
analysis on the revenue side in last weeks (01/03/2018 Sentinel) piece, it confirms that the only
option that the BOC has in balancing the budget going forward is to increase revenues.
The BOC can still delay the inevitable, by changing the timber harvest contract language to
secure more of the monies earlier after the sale. It can also draw down on the Working Capital
Beginning Balance, currently $4,329,574. However Working Capital has already been drawn
down almost $1,500,000 during this period. This typically is money not spent during the last
budget cycle (i.e. carryover). For example, the last 3 budget cycles the Jail has been fully
funded by the budget committee for 98 beds, but due to hiring issues that funding for those
positions were not been spent and each year reverted back to the General Fund. David
Jennings in his 11/15/2017 Sentinel article stated that the Sheriff plans to have a fully staffed
jail at 98 beds in March of 2018. If that becomes the case then the Sheriffs carryover and thus
Working Capital should reflect that in a lower beginning balance.
Another option is employee layoffs, however as stated last week (01/03/2018 Sentinel) the
Memorandum of Understanding (MOU) between Bandon Dunes and the BOC forbids the
operating budget of the Coos County Sheriff’s office to fall below the 2016-2017 operating
budget level. Therefore layoffs in the Sheriffs department would probably violate the terms of
the MOU. Since the Sheriffs office employs 76, and the DA and Medical Examiner another 14
of the 148.9 employees covered by the General Fund, it leaves little room to generate any real
savings. The remaining 58.9 employees have an average salary of $80,396, so for example in
order to realize $1,000,000 in cuts would result is approximately 12 of those employees being
laid off. That represents 20% of the remaining Courthouse employees. This just isn’t practical,
and would seriously deteriorate County services.
I’m reminded of the old adage that ‘those who do not heed history are doomed to repeat it’.
That’s where Coos County and the BOC find itself now. The mistake by the BOC was not that
it didn’t recognize the paradigm shift in Federal Forest harvesting, but in not taking the needed
steps to move the County to a more sustainable fiscal model at the time the shift was
recognized. This has led us to the brink of a similar scenario reoccurring, but this time with
our own County Forest. Once this option is depleted then what? This time it’s not only our
future at stake, but also those of forthcoming generations that we owe a fiduciary responsibility
to. There’s still time to avoid repeating the same mistake. However time is growing short, and
the time already wasted will necessitate a longer recovery timeframe. Without some
immediate major shifts in County Fiscal Planning, there can only be one other alternative going
forward. I’m afraid that our current BOC will choose that option because it doesn’t require any
critical thinking and is the most politically expedient. That is higher taxes!

January 17, 2018
Citizens of Coos County this week I thought you might be interested in what has transpired in the
past regarding the County Treasurer position and what’s lurking in its future. I’ll start with a brief
overview on how County Elected Officials have their compensation adjusted. Then detail how the
current Treasurers position became part-time and how the Coos County Board of Commissioners
(BOC) almost succeeded in eliminating it all together. I’ll finish by showing how the BOC could be
planning another try at its elimination.
ORS 204.112 regulates County Compensation boards and what they do. The BOC appoints the
public members of the budget committee. Public members must match in number the makeup of the
governing body, and in our case that is three. In Coos County those public members also form the
County Compensation Board. Their main duty is to meet ‘annually and recommended a
compensation schedule for the county officers mentioned in ORS 204.005’. The compensation
committee therefore recommends adjustments to the Salaries of the BOC, Treasurer, Assessor, Clerk,
Surveyor, and Sheriff. Interestingly though the Sheriff is the only elected official whose ‘salary shall
be fixed in an amount which is not less than that for any member of the Sheriffs department’.
The trigger that set off the chain reaction to follow was the announced retirement of Mary Barton the
then Coos County Treasurer. The BOC expressed in budget meetings their apprehension that upon
her retirement that the county would not be able to recruit a suitable replacement. The county over
the years had given, and Mary had accepted duties beyond those defined for her office in ORS 208.
This included budget officer and tax collector, however a December 2013 Association of Oregon
Counties (AOC) study showed of the 33 counties that had a Treasurer position 11 held the position
of Tax Collector and another 9 of Budget Officer. In addition ORS 208.010 could be interpreted to
include Tax Collector as one of the Treasurers duties. Budget Officer could have been negotiated
with the new Treasurer, as the Compensation Committee could have adjusted its salary to be
commensurate with the final agreed duties.
I find it ironic that despite the concerns of the BOC the Deputy Treasurer and another member of
that office filed for the Treasurer position. This is the way the system is supposed to work. Our past
Treasurer readied two competent individuals from her staff, who were prepared to assume her
position.
The BOC solved their dilemma by creating a new title of Finance Director. The BOC established
supervisory duties to include accounts payable, payroll, accounts receivables, tax and cash
management, tax collector, and budget officer.
During a Compensation Committee meeting February 9, 2016. The BOC laid out a 6 scenario
reorganizing the treasurer/tax, human resources, and county counsel offices. The upshot was that the
Human Resources department was merged with the County Counsel department. The Finance
Department was setup as outlined above. The Treasurers department was left as a half time position
($28,000 per year plus benefits), which had been set at a meeting December 15, 2015. All treasurer
personnel were transferred to the Finance department. The Treasurer was left with no staff and a
minimal budget.
On December 7, 2016 (after the Treasurer elections) the Compensation Committee met again, with
the BOC proposing that the Treasurers position essentially be eliminated. They proposed that

instead of being halftime, the position now be compensated by a stipend of $10,000 per year. In
addition all benefits would be eliminated. The reasoning behind their proposal were 1) the Treasurer
position as now described (verified by Mary Barton) only accounted for about 10% of the past
Treasurers time, 2) Accounting in nature. It would be too time consuming to keep track / account
where the new Finance Director / Treasurer was spending her time. They equated it to a
bookkeeping nightmare. I’d worked over 15 years for a fortune 500 company, who required this
type of tracking from all of its employees. It’s called split coding. It does take a little more time to
track, but gives the firm a more accurate snapshot of where employees are spending their time.
After almost 2 hours of very intense lobbying by the BOC staff, the Compensation Committee
rejected the proposed change on a 2-1 vote. Our reasons were that it wasn’t an undue hardship to
track time this way, but mainly we felt that this was a backdoor attempt to eliminate the Treasurer
position without public input. Under the BOC plan no one would probably run for the Treasurer
office ever again, leaving it as a de facto public office of the Finance Director.
What I find most disconcerting under the BOC proposal, is what was once an independent elected
Treasurer is now employed and reporting to the BOC. At least the current Finance Director /
Treasurer has some measure of independence from the BOC, since if removed from the Finance
Director position she could remain as Treasurer. Even more importantly she could petition the
Compensation Committee to adjust her salary back to its original level.
I bring this narrative to your attention at this time, so you the citizens of Coos County will be aware
that another attempt to implement the original proposal could be imitate by the BOC. A change in
membership of the Compensation Committee was made by the BOC. One of its members who
voted against their proposal has been replaced by the BOC, opening up the possibility that this issue
will be revisited in the future.
Any attempt by the BOC to further consolidate their power and control by stripping it from its
citizens by eliminating an independently elected office is cause for alarm. To attempt it without
public support through a referendum shows a lack of respect for the citizens they are elected to
serve.

January 24, 2018 Opinion Piece
Citizens of Coos County on November 6, 2012 you rejected local measure 6-144 'Create County
Administrator by a 58% - 42% vote’. I’ll bet you’ve assumed these past five years that you the
people had spoken and the idea was dead. Well maybe not! This issue I’ll detail how the Coos
County Board of Commissioners (BOC) has been secretively planning its implementation. Finally
I’ll identify the warning signs to watch for if the BOC decides to sneak though the creation of the
position over your expressed instructions.
Our current BOC saw an opportunity in the retirement of our long time Treasurer, and under the
guise of not being able to find a suitable replacement undertook the process of all but eliminating the
Treasurers position and slowly morphing it into a County Administrator.
The BOC started the ball rolling by creating a Finance Director position. This was in addition to the
Treasurers position, and would be trained for 1 year by the departing Treasurer. The Treasurer was
to receive compensation of $57,000 per year, the Finance Director $63,000. Remember that during
this apprenticeship the Treasurer was still the tax collector and budget officer.
As an aside, in the BOC Budget Message for Fiscal Year 2017-2018 dated April 5, 2017 Page 4
Paragraph 1 it states “First, we saved money by combining the Treasurer and Finance Director into
one position.” Factually this is misleading, because first you the citizens voted the then current
Finance Director to the position of Treasurer. The BOC can’t combine the positions, in this case the
positions are held independently of one another. If the BOC fired the Finance Director she would
still hold title of Treasurer. The Treasurer can only be removed by recall. Secondly the BOC didn’t
save the citizens of Coos County any money, just the opposite. The 2017-2018 budget shows a
combined Finance/Tax and Treasurer at $694,494. The 2016-2017 budget shows it at $737,181,
which are savings of $42,687 to which they refer. However, remember my previous statement that
budgets tell a story? Well in this case if you go back 1 year to 2015-2016 before the BOC created
the Finance Director position, the Treasurer essentially performed the same duties, and her budget
that year was $487,772. That is $206,722 less than what we’re paying now with the same number of
employees. I ask how this represents a cost saving to you.
Once the Finance Director was elected County Treasurer in November 2016, additional supervisory
duties of payroll and accounts payable where added. Compensation was set by the BOC for the new
Finance Director/Treasurer at $80,950. That is broken down to $27,996 as Treasurer and $52,954 as
Finance Director. The Treasurer position is budgeted at 49% and Finance Director at 51% of
allocated time. This comes to $23,950 more than the retiring Treasurer with only the additional
duties of payroll and accounts payable. If you expand out the allocated time for each title you’ll see
that the Treasurer is compensated at $55,992 per year commensurate with the old Treasurers salary
of $57,000 per year. However the Finance Director position expands out to $103,831 if calculated at
100% allotted time. You’ve probably already seen where I’m heading with this logic track. In last
weeks Sentinel I warned you about the elimination by the BOC of the Treasurer position by
converting it into a clerical job paid only a $10,000 year stipend with no benefits. If the Finance
Director / Treasurer pay remains the same then the Finance Director portion is now $70,950 for 51%
of their allotted time, or $139,117at 100% allotted time. If you include the Treasurer stipend then it
comes to $149,117. Folks my analysis may seem far-fetched however over the years I’ve watched
how the BOC operates. They are as patient in their implementation as they are secretive to their
intentions and would only be setting this up if the position were to someday serve as a de facto
County Administrator, with their ultimate goal a permanent position.

If you look at what some of the other Oregon Counties are paying for Finance Director / Treasurer
you’ll see that these figures are commensurate with those positions for counties of twice our size.
According to the Association of Oregon Counties (AOC) Elected Officials Salary Survey dated
December 2013 only 2 counties (Deschutes and Jackson) have a Finance Director/Treasurer position
with salary levels of $126,394 and $108,014 respectively. Both counties have over 800 employees.
That same survey shows 19 counties have County Administrators with an average salary level of
$126,074. There doesn’t seem to be any correlation between size of county budgets or employee
count, if the county has an Administrator it is compensated at these levels.
Now you know how our current system is compensated (Finance Director/Treasurer) and what a
County Administrator would earn. You’ll have noticed that once the case is made for a higher salary
within the current structure how it can be easily be adapted to an Administrator.
If the conversion is to take place you’ll see in the future additional duties assumed by the Finance
Director/Treasurer. The most likely assignment would be Human Resource functions. Those duties
are now held by County Counsel, but with the historic high turnover in that office, a case could be
made to move it.
Another clue would be the assignment of BOC overview of county departments, commissions,
boards, and committees to the Finance Director. This could be justified by the BOC desire to lighten
their workloads. This would probably start with small departments (i.e. planning, forestry, surveyor,
veterans, or clerk) since they all have one thing in common, money flows through them. Of course
all this would necessitate a higher salary, thereby self-fulfilling a need for a County Administrator,
since department heads now report to the Finance Director.
There you have it, how we have moved from a citizen elected Treasurer to a Finance
Director/Treasurer and who knows maybe a County Administrator in our future. If you take
anything away from the narrative of the past 2 weeks don’t bet against any of this happening. The
BOC has shown a willingness to operate outside the purview of citizen input and review. The
traditional concept of government answerable to its citizens doesn’t seem to matter.

January 31, 2018 Opinion Piece
Citizens of Coos County do you have any idea how many people are employed by your county
government? No! Well it’s unlikely that you would because you’d rightly assume that your Coos
County Board of Commissioners (BOC) would know that in your stead. You’d be wrong! This
week we cover the last 6 years county staffing levels. We’ll focus on the last budget cycle (2017-
2018) documents which show differing head counts. Finally I’ll analyze what it all means and
formulate my conclusion. I think you’ll be surprised!
First full disclosure. The data used to support this opinion piece consists of a spreadsheet that I
prepared based on the published Coos County 2015-2016, 2016-2017 and 2017-2018 adopted budget
documents obtained from the Finance Directors office. I’ve been aware from previous data
gathering that errors exist in these documents. However, this piece required a much deeper
investigation into all of the described documents. Sadly the existence of numberless mathematical
and formatting errors could be construed to the level of raising questions regarding the validity of the
data used in my analysis. After pondering the issue I’ve decided the errors don’t materially affect
the outcome that I’ve reached. It only raises another more troubling issue that I’ll cover later in this
piece.
We’ll start our employee count with the County Budget Message for fiscal year 2017-2018 dated
April 5, 2017. Page 2 paragraph 2 last sentence states “In the year 2000, the county employed
approximately 530 and for the year 2017 the county employed approximately 300 dedicated highly
skilled workers.” I use the term approximately with numbers as a means to reduce clutter, and as a
form of rounding. My dictionary states its meaning as “almost exact or correct”. Therefore we
should have some reasonable confidence in the 300 number noted by the county, well say within 1%,
or 3 employees either way.
As a starting reference point the Association of Oregon Counties (AOC) Elected Officials Salary
Survey dated December 2013, (which falls in the middle of the 2013-2014 budget cycle). Within the
data that was submitted by Coos County it shows an employee count of 294.
So we have supporting County documents from 5 years ago showing 294 employees and 5 years
later of 300 employees give or take 3.
My research into the last 6 budget cycles indicates employee counts as follows: 1) 2012-2013 at
313+ employees 2) 2013-2014 at 311+ employees, 3) 2014-2015 at 327+ employees, 4) 2015-2016
at 347+ employees 5) 2016-2017 at 346+ employees and finally this year 2017-2018 at 345+
employees. You’ll notice that right away we haven’t been anywhere near the quoted level of 300
employees at any time over the last five years
To complicate and maybe confuse you even more I’ll give you some more employee counts from
other county documents presented at the last budget committee meeting in April 2017. The COST
ALLOCATION worksheet presented by the BOC to support their assignment of departmental costs
(See 12/15/2017 Sentinel for explanation of Cost Allocation) shows the county employee count at
347+ employees. A budget packet listing of all departments and the individual positions within them
shows an employee count of 344+ employees.
You can see for yourself that Coos County hasn’t employed anywhere near approximately 300
employees in at least 6 years. In fact the county employee count has risen approximately 53

employees or 17.66% over that period of time. At approximately $78,897 average cost per county
employee this represents an additional $4,181,541 to the budget (both general and non-general fund).
I bring all this to your attention, because it’s important for you the citizens to believe what your
county government (more specifically the BOC) is telling or not telling you. To artificially keep
employee number counts low when it’s obvious from other numerous accompanying documentation
that the counts are erroneous is well at least troubling.
This information should be the easiest form of data to collect upon the part of the BOC. It has a
payroll and it writes checks, withholds taxes, etc. Folks this is basic accounting! All you small
business owners out there know what I’m talking about here.
I like to tell a story that illustrates the point I’m trying to make. When I worked as a software
engineer, we needed some specialized assembly language programmers. My company contracted
with a fortune 500 company to supply us with a couple of people with the needed skillset. Since I
also possessed those skills I was assigned to work with them. In the course of a conversation one
day, one of the contractors informed me that his company had just found out that in their Portland,
Oregon field office it had be paying 2 employees for over 2 years who weren’t working. This it
turns out was due to a slipup in a reorganization that somehow didn’t reassign these individuals. You
must have some checks and balances over the system or you can be gamed.
I’m not saying that this is happening here, however, it’s plain from my earlier references to the
Adopted Budget Documents that some sloppiness has crept into the system. Spreadsheets are
wonderful tools, but they’re only as good as the people who put them together. Erroneous formulas,
incorrectly formatted pages and columns, the lack of aggressive cross-checking, and inadequate
document review before printing all can contribute to the problem.
Finally the most important element that appears to be missing is a lack of management overview of
the process. This starts with the BOC. Their direct reports have to know what is expected of them,
and they must be held accountable for not meeting the level of performance that the citizens of Coos
County have a right to expect. The BOC must put the county on a business path that its citizens can
respect and have confidence in. The overall county budget exceeded $100 million this year. That is a
lot of somebody else’s money and needs to be managed with the fiduciary responsibility and moral
obligation that it requires. How you handle the little things is a good indicator of how the rest of the
system works.

February 7, 2018 Opinion Piece
Citizens of Coos County I’d like to take this opportunity to acknowledge my use of data
contained within articles written by David Jennings and Rob Taylor contained within last
weeks (January 31, 2018) Sentinel. As always the analysis and conclusions drawn are
wholly mine and any misrepresentation of such is my responsibility alone.
I first addressed this topic in the Sentinel (12/13/2017) in response to a letter to the editor
(submitted by Eldon Rollins) regarding Coos County stealing money
It was my understanding from Community Corrections presentation during budget

hearings last April that they would not be contracting with the Sheriff’s office during the
2017-2018 budget cycle, and would resort to the Reedsport City and Curry County jails
for those beds. However the counties published budget does match the Community
Corrections budget that was presented and subsequently passed. The money is listed
under contracted services in the amount of $228,362 (Jail Beds/Programs/Services).
There are no footnotes to the published County Budget to indicate to whom the money
was going.
I’m been unable to find any contradictory evidence in the published budget to counter the
approval by the budget committee of Community Corrections budget which didn’t
include payment to the Sheriff’s Department for state inmate bed space. That leaves only
one explanation for why there exists a spitting contest between the three parties involved.
That is Community Corrections changed their minds and Coos County agreed to once
again provide jail beds to state inmates.
This scenario does have some logical bearing because as I’ve previously pointed out the
Coos County Board of Commissioners (BOC) has a revenue side shortfall. What better
way to rectify part of that shortfall than by contracting out services to an outside agency
generating an additional cash stream. This would result in a dollar for dollar decrease to
the drawdown of the General Fund since the Sheriff’s office gets most of their money
from that source.
There’s a lot of blame to go around explaining what went wrong, however Community
Corrections must bear a large part of the responsibility. You’ve heard the adage ‘fool me
once ...’ well this goes beyond that. Who in their right mind after being stiffed for 2 years
to the tune of $509,460 continues to do business with that supplier? I’m sure you small
business people out there can relate to my assertion.
It’s probable that Community Corrections was feeling the full effect of its decision to
contract with Reedsport and Curry County. I’m sure that the logistics of moving
prisoner’s longer distances, additional costs for staff time and the added transportation
cost, drove the cost higher than the original figures.
The Sheriff bears some blame, however he does find himself in a pickle on this matter.
When this discussion took place last April I asked the Sheriff since it was anticipated that
the jail would be staffed soon at 98 beds whether it was possible to budget the
Community Corrections monies knowing we’d have the capacity July 1, 2017. The
Sheriff to his credit, said it wasn’t something he could guarantee, but the prospect of

entering a 3rd year at 49 beds when you’d had your budget approved for 98 beds during
that same time must have been daunting. In addition if the BOC was bearing down on
him to accept the state inmates to staunch the flow of cash from the General Fund, then
for the good of the County it would have been difficult for him to resist.
The Sheriff’s assertion that the County is subsidizing the state inmates at $145.63 per
inmate per day however is mistaken. The only way subsidization would occur would be
if the Sheriff had to pay another entity to house county inmates at a higher cost than what
he received from the State to house theirs. The citizens of Coos County have allocated
the quoted figure of $245 per day to operate each bed for the safety of the community.
That is a fixed cost that must be paid just to open the doors to accept prisoners from all
law enforcement agencies operating within the County. We pay that amount whether the
jail has no inmates or 49 inmates, it’s just a fact of life. The Sheriff to his credit is trying
to reduce that cost by accepting state inmates at $111 per day. Using the $320,235 paid
by the state for the 6 months ending December 31, 2017, he has reduced the average jail
bed cost by approximately $36 per day to $209 per day. Why not take the States $111 per
day for each inmate he houses, especially if the bed was going empty that day anyway.
On a yearly basis this comes to a tax savings to the citizens of Coos County of over
$640,000.
Finally the (BOC) has shown a lack of leadership on this issue. Why the BOC despite
voting 2 to 1 to resort to a pay as you go basis never formally adopted the vote by written
resolution is a mystery. This type of inaction sends a message of uncertainty to the
parties involved and leads to further confusion and disagreements as each party is free to
implement their own interpretation.
In my opinion a solution already exists and is contained within the Juvenile Department
budget. Under the Contracted Services section Coos County contracts with Douglas
County for use of their detention bed space. That contract allows for a fixed number of
bed days for a fixed amount. If additional bed days are needed and are available they are
contracted out at a fixed amount per day. This would seem to benefit all parties in our
case and eliminate future misunderstandings.
I wish I could say the BOC’s action is an anomaly, but over the years I’ve noticed this
type of behavior towards departments headed by other elected officials. It’s disheartening
because the BOC should supply the leadership and support to those officials whenever
needed.

By Steve Scheer
Citizens of Coos County I’ve spent a lot of your time trying to explain what’s wrong with your
county budget and finances. You’d have a perfect right to ask the question why as a member of the
budget committee I didn’t do a better job for you. In this issue I’ll show how the system is not setup
for that to happen. I’ll close with few suggestions that I think could correct a lot of this problem.
Oregon Budget Law outlines four phases for the budget process: 1) Propose the budget 2) Approve
the Budget 3) Adopt the budget and 4) Changes after adoption.
The first phase is where it all starts to go wrong. It states that the Governing Body, in our case the
Coos County Board of Commissioners (BOC) designates a budget officer who prepares the budget
under their direction. The budget officer in the past has been the county Treasurer, last year it was
the Finance Director. FYI: The budget committee along with the BOC is made up of 3 public
members.
The second phase is the Budget Committee approves the Budget. This is the point where the Notice
of Budget Committee Meetings is published to the public. The budget committee at its first meeting
1) receives the budget document, 2) hears the budget message (from BOC Chair), 3) hears and
considers public comment, 4) discusses and revises the budget as needed, 5) approves the budget,
and 6) approves the property taxes.
You’ve probably already spotted the flaw and you’d be right. First the public members of the
Budget Committee have no input into the preparation of the budget. Second the BOC has already
met in worksession with the various departments prior to the budget hearings and essentially
approved the budget that’s presented. Thirdly, the public members are allowed to only essentially
act in an advise and consent role on the budget. That’s because it would take a unanimous negative
vote by all the public members of the budget committee (forcing a tie vote) to force a
reconsideration of anything the BOC presented
During my term on the budget committee, despite repeated requests none of us ever took part in any
discussion or decisions concerning the revenue side of the budget before the first budget committee
meeting. I’ll go further and say that in my 3 years on the budget committee we only met once with
the BOC in meeting or worksession, outside of that 10-14 day period (usually April) when the
Budget was presented. Therefore, all my previous narrative regarding the revenue side (i.e. cost
allocation, change in county forest harvest schedule, over harvest of county forest for the next 5
years) was concocted and set in motion by the BOC themselves.
It’s that BOC policy that finds us here now. During last years budget process I asked repeatedly for
additional time and documentation to study these revenue side proposals in order to make an
informed decision. I was refused. Our role seemed to be confined to going over the expenditure
side of each department’s budget looking for mathematical errors and squeezing small amounts out
of individual line items. Meaningful discussions regarding the revenue side were discouraged if not
outright ignored. Staffing levels were not part of any discussion.
Unfortunately according to budget law the only recourse for public budget members is though the
voting process. Two of us last year resorted to that and cast negative votes. If any member of the
BOC had any reservations concerning the budget they could have voted no, thereby forcing a tie

leading to reconsideration. That didn’t happen. Afterwards we were asked by the BOC why we
voted against the budget. It’s clear from their question they hadn’t been listening to our concerns
during the budget hearings. Therefore there can logically be only one conclusion; the public portion
of the budget is for show only. After all the BOC must keep up the appearance that your input really
matters.
Now that you have some idea of what goes on in the budget process and why it’s designed to fail you
the ordinary citizen of Coos County, what can be done about it? How can it be made more open,
transparent and to best serve the needs of you out there whose taxes are being spent?
I would start by having the public members of the budget committee involved in county finances
throughout the entire year. There could be standing monthly meetings noticed to the public so that
you and the media could also attend. The subject at a minimum should provide a snapshot of where
the county’s at in managing its cash flow and expenditures in relation to the adopted budget. This
would also be the appropriate time to bring up any unforeseen problems arising on the revenue and
expenditure side. It could also be used to trial balloon new ideas on increasing cash flow (i.e. cost
allocation, county harvest schedule changes, etc) and decreasing expenditures. It only makes sense
that getting the public involved as early as possible in any major policy shift, will not only generate
support but more importantly breed goodwill between the BOC and its citizens.
Finally an exchange that took place during last years budget hearings to illustrate what you’re up
against. At one point I asked one of the Commissioners if he handled his personal budget in the
same manner as the counties. He replied no! Upon which another Commissioner chimed in that
governmental budgets are different. That’s true, in the first scenario the money is yours and you’re
free to spend it anyway you wish; in the second it’s you the taxpayers money and I contend that a
higher standard exists when managing that money than when managing your own. Coos County’s
tax dollars are assessed on you but still belong to you its citizens. You have entrusted those dollars
to the BOC and have a right to expect that they be spent wisely and for the greatest public good.
That is a scared bond that must never be broken.

By Steve Scheer
Citizens of Coos in last weeks issue I explored why as a member of the budget committee I didn’t do
a better job for you. This week I like to give you some impressions from my interactions with the
various departments that make up the budget process.
First as always some disclaimer regarding what I’m about to say. Though some departments do a
better job making their case during the budget process, that’s not to say that those not mentioned in
this narrative don’t do good work. Whatever the reason(s) some departments stand above the others.
A final disclaimer, I speak only from my experience during the budget process. I make no claims
how these departments are run internally or how they interact with you their customers. Though
logic would indicate that they probably hold themselves to the same standards.
One additional comment before I proceed. The following departments all shared one thing in
common. They all had a very strong deputy department head. They were not called that in every
case, but their duties, as a highly functioning adjutant to the department head was easily observable.
In each case they added to and enhanced their presentation.
Of all the department presentations over the last 3 years the one that consistently stood out above all
the others was the Assessors Office. Maybe the reason that I like their documentation and
presentation so well is it’s a lot like the way I try to present my own narratives to you. Supporting
facts, use of color appropriately, and strong command of their budget. They think outside the box.
When asked to produce approximately $40,000 in budget cuts to support their request for keeping an
existing field assessor, they were very creative in how they accomplished that task. Approximately
$14,100 of that amount was by reducing the annual health insurance benefit of an employee who
was already covered by their spouse. In another case the Assessor renegotiated a second software
license resulting in a savings of approximately $5,000.
My second choice is Coos Health and Wellness (CHW). Their budget is approximately the size of
the counties General Fund Budget, but with about half the employees. They have their own IT
department, Finance Director, strong leadership and bring a management team to the table that is
ready to do business. They’re sharp, know their operation and it shows.
My third choice is a small department that only appeared before the budget committee once in the
past 3 years. That’s the Planning Department. In many ways they’re like the Assessors office in
their budget preparation and presentation. The Planning Director has a good grasp on her budget,
knows it well, and conveys that to the committee.
A co-third choice over the full 3 years was the Surveyors office. Here you have a Public Official
who actually does field work alongside his staff. Performs excellent work for the County with a
small budget.
My fourth choice is the Sheriff’s Department. This is a massive budget, not only from its size
(approximately 48% of the General Fund), but the many divisions it comprises. The fact that there is
Patrol, Jail, Dunes, Marine, and LNG Planning, requires a lot of coordination between the division
heads, the Sheriff and his administrative deputy (who was new to the position last year). They are,
as you would expect being law enforcement officers not as polished in their presentations as the
other departments I’ve listed. However they make up for it with their excellent command of each

divisions internal working and fitting those tasks to the budget. Also the Sheriff is a realist, knowing
his position within the bigger budget picture. He’s aware of the current budgeting limitations and is
always accommodating in those last days of the budget process when we were looking for every
dollar that could be eliminated.
The last department is the Road Department. Again very well prepared both by the Roadmaster and
his Deputy. In addition to their budget they have to include Risk Assessment planning as part of
their budget. This is a difficult task made harder by having to be almost perfect in identifying
potential liability risks to the County. Their budget is approximately $10,000,000 made up of mostly
Oregon State and Federal monies that must be accounted for, further complicating their job. Still
possess a great command of their budget and its ramifications.
Lastly I’d be remiss if I didn’t highlight the one department I know most about from an internal
point of view. That’s the Information Technology (IT) department. Folks we’ll blessed to have a
manager with a skill set usually found only in a large scale technologically complicated organization.
He and his staff are organized, logical, forward thinking and excellent at mapping the counties future
networking needs as well as keeping the current one up and running. What I’ve said regarding the
other five departments applies here as well.
Almost without exception the citizens of Coos County are from my late vantage point on the budget
committee well represented by the departments and their employees who are charged with getting
things done, and doing it smoothly. I always appreciated their willingness and cheerfulness to work
to make the budget happen. This even when they knew that the result of their cooperation could
place their departments in an untenable position when it came to accomplishing their mandates.
Finally I’ve referenced Working Capital in a previous Sentinel issue. It’s sometimes also referred to
as carryover. This is money allocated to a fund, but not spent and returned to the General Fund at
the end of the Fiscal year. One of the reasons that money exists in this fund is that despite the tight
budgeting restrictions placed upon them by the Budget Committee the departments still try and
spend the money entrusted to them for its intended purpose, and at a lower cost. Citizens of Coos
County that’s one clue in identifying good government.

Steve Scheer Sentinel 1-14 Merge

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November 22, 2017

Opinion Piece by Steve Scheer

The 2017-2018 budget as enacted, is the equivalent of an ordinary citizen resorting to a

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First a little background on how the county forest fund is generated.

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County governments’ second plan is the over harvesting of an approximately 300-acre

Additionally, there’s going to be a boatload of money available during the next 10 to 15

The question becomes then how do we allocate this cash windfall.

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Option 3 in my opinion addresses the intergenerational transfer inequity that I mentioned

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As mentioned previously in the 11/22/2017 Sentinel, Coos County has allocated

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It was my understanding from Community Corrections presentation during budget

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