From NapaValleyRegister.com, James Noonan, 20 Apr 2011.
Housing Napa County’s farm workers is becoming more expensive, and local officials say that changes must be made to keep three Upvalley centers afloat.
Operating costs overtook revenues beginning last year, according to the Napa County Housing Authority. It oversees operations at the Mondavi, Calistoga and River Ranch housing centers.
The funding problem is structural, said Auditor-Controller Tracy Schulze, and the centers will continue to turn out deficits unless something is done to stabilize their finances.
For the immediate future, the authority will be able to balance their budget using carry-over revenue from a $10 per crop-producing acre assessment approved by the county’s grape grower. The carry-over revenue will run out in 2015, however, when the authority will have to dip into operating reserves to stay in the black, officials said.
The farmworker housing centers have run into financial trouble before — most notably a 2006 fiasco which saw more than a million dollars in housing funds shifted from the city of Napa to the Upvalley centers without authorization. The incident led to the departure of two city officials, a reprimand from the Napa County grand jury and the dissolving of the authority that oversaw the centers.
Since then, the county has assumed control of the centers through the Napa County Housing Authority, and officials say that the current problem — in some ways — stems from the program’s recent success.
Nancy Johnson, the authority’s executive director, said that last year was the first time in the program’s history that all three centers were operating at full capacity during the peak of the growing and harvest seasons.
With greater demand came a spike in operating costs, she said, particularly feeding the extra mouths.
“The biggest issue that we’ve had has been food costs because it’s one of the things that we have the least control over,” Johnson said.
In the past year, the daily cost of providing three meals to one renter has jumped from $2.90 to $4.15, Johnson said.
The increased cost in food can be attributed to a number of factors, Johnson said, including a jump in shipping costs due to rising fuel prices and less food being donated by the county’s food bank from previous years.
Schulze’s financial projections assume that the cost of operating the centers will increase 3 percent annually.
Facing such increases, Johnson said the authority is looking for ways to cut costs, but will likely need a more permanent solution.
“I think eventually we’ll need to look for other revenue sources,” she said. “Especially if we’re going to continue operating at the level we are now.”
Currently, the cost of running the centers is borne in a variety of ways:
• an annual $100,000 grant from Auction Napa Valley,
• $10,000 a year contributed by American Canyon, St. Helena, Calistoga and Yountville,
• the $12 per night rental fee
• the $10 assessment on crop-producing acres.
Some of those sources are dwindling, while others are limited in their ability to be increased.
Local jurisdictions have been reluctant to continue paying for the program as they struggle to patch up problems with their own general funds, Johnson said.
Additionally, the $12 per night rental rate is viewed as a financial tipping point.
“They’re looking for the best deal for their money,” Johnson said of the centers’ guests, noting that an increase might drive some workers away from the service. The result would not only affect revenues but also defeat the centers’ purpose of providing safe and affordable lodging to the county’s farm worker.
Further complicating the situation is that the $10 assessment — known as CSA #4 — was capped at $10 per acre by the state Legislature in 2002.
Larry Florin, the county’s community and intergovernmental affairs director, said that if the stakeholders wanted to increase the assessment the cap would first have to be revised by the Legislature.
Any increase would need to be approved through a vote of those actually paying the assessment, Florin said, and the county would seek action on the state level only if constituents were willing to consider the increase.
That action, however, would need to be taken quickly, as constituents are set to reauthorize CSA #4 in the coming year. If the county hoped to see the state’s restriction changed before that vote, actions would need to taken by this June, Florin said.
Sandy Elles, executive director of the Napa County Farm Bureau, recognized the importance of the farmworker housing program, but said the search for new revenues should begin with a “thoughtful review of the program,” rather than jumping to an increase.
“There’s really a need to sit down and have all the parties work through our next step,” Elles said.
Johnson said that she is setting up such discussions, while also looking at ways to cut costs in coming years.
“I think there are fixes and things that we can do differently,” she said, noting that any solution likely wouldn’t happen overnight. “We’re going to approach this in a really slow process in concert with all of the industry groups.”