STOCKTON – San Joaquin County has proposed $1.75 billion structurally-balanced budget for fiscal year starting July 1.
It represents a $112.7 million increase from the current fiscal year.
“The recommended 2018-2019 budget has been carefully designed to advance the public interest and to benefit the health, safety, and economic growth of our community. We have identified a spending plan which addresses a diversity of needs, opportunities, and long-term challenges,” said San Joaquin County Administrator, Monica Nino.
Funding for county’s
strategic priorities
The 2018-2019 proposed budget supports San Joaquin County’s adopted strategic priorities, including:
*GOOD GOVERNANCE & FISCAL RESPONSIBILITY: The budget is structurally balanced where ongoing revenues can fund continuing operating costs. The budget also invests in local resources that address new mandates and the Board of Supervisors’ highest priority areas. The County-wide good governance and fiscally responsible policy provides meaningful goals for reserves in the event of another economic downturn.
The County’s unfunded pension liability continues to challenge the County’s financial sustainability. As of the latest actuarial report dated Jan. 1, 2017, the system’s liability increased from $1.4B to $1.5B. Further, on June 8, 2018, the Retirement Board (SJCERA) approved to lower the assumed rate of return from 7.4% to 7.25% for the 2019 calendar year. The impact to the County for the rate of return adjustment is $8.7M annually, and will likely have a negative impact on the County’s unfunded pension liability in future years.
With the addition of $5.8M to the County’s Reserve for Contingencies, the recommended Reserve for Contingencies is anticipated to be set at $87.4M in 2018-2019.
The Human Services Agency eliminated 84 vacant positions, 77 of which are related to eligibility services, due to improving economic conditions and anticipated caseload stabilization in the CalWORKs and CalFresh programs.
Of San Joaquin General Hospital’s anticipated $426.7M budget, the County General Fund support will remain at the minimum Maintenance of Effort level of approximately $2.1M.
*LAW & JUSTICE: The recommended budget for Law and Justice totals $346.1M, which is an increase of $19.9M from 2017-2018. Overall, the budget includes a net increase of 27 positions for all Law and Justice budgets; 16 in the District Attorney’s budgets, 11 in the Probation budgets, 6 positions in the Sheriff’s budgets, 2 positions in the Public Defender’s budget, 7 positions in Correctional Health Services, the overall deletion of 11 positions in the Child Support Services budget, and the transfer of 4 positions due to the Alcohol-Drug Alternative Program budget being consolidated into the Substance Abuse Services budget within Health Services. It includes $2.7M for Local Community Corrections AB109, and $2.0M in operating costs for the Office of the Medical Examiner.
*ECONOMIC DEVELOPMENT: In 2015-2016, a reserve for Economic Development was established to support the County’s promotional/marketing efforts and economic development activities/programs, including incentives for businesses to relocate and/or expand in San Joaquin County. The balance as of April 30, 2018 is $582,656. For 2018-2019, the budget directs $102,158 of the Transient Occupancy Tax (Hotel/Motel Tax or TOT) to this reserve. This represents the amount of the projected TOT that has not been programmed in the proposed budget for economic development-related activities and programs.
* WATER: The Proposed Budget directs $730,000 toward the County’s continuing efforts to defeat the California WaterFix twin tunnels project including legal action, advocating for positions, responding to proposed legislation, building and participating in coalitions, communicating positions through media and other outreach avenues, and coordinating with various County water and Delta interests.
Additional impacts
*LABOR AGREEMENTS – The County has current labor agreements with 92.5% of the County labor force leaving 7.5% expired or near expiration by June 30, 2018. The bargaining units without contracts are Law Enforcement Management Association (LEMA), Deputy Sheriff's Association, and Sergeants. The Probation Officers’ unit is set to expire June 30, 2018. The Register Nurses (CNA) unit is set to expire December 31, 2018. The potential costs resulting from these negotiations are unknown, therefore, are not included in the proposed budget.
*UNFUNDED LIABILITY – One of the County’s largest increases in operational costs remains retirement expenses. Approximately 50% of the Proposed Budget is for salary and employee benefits. The Proposed Budget includes $23.0M for contributions toward the unfunded retirement liability with a net county cost of $8.5M, for a total contribution of $31.1M as of June 30, 2018 beyond the minimal cost of retirement. The balance of the Unfunded Pension Liability Reserve as of April 30, 2018 was $16.0M, and the Proposed Budget adds an additional $4.0M to the Reserve.
*ANIMAL SERVICES - The current agreement with the City of Stockton expires on June 30, 2018. Negotiations are currently underway between the City and County for a possible new agreement. The Proposed Budget allocates $1.4M in 2018-2019. However, current funding is unstainable and County staff is exploring long-term financing solutions.
*CANNABIS – It is anticipated that an adoption of ordinances allowing commercial cannabis businesses and regulating personal cannabis cultivation in the unincorporated County, as allowed under State law, will impose direct and indirect costs on County services estimated at $7.2M. The recommended budget does not include additional funding or costs for this purpose.
*IN-HOME SUPPORTIVE SERVICES (IHSS) – The Human Services Agency continues to monitor the IHSS program which provides assistance and services to eligible older or disabled individuals to help them remain safely in their home. The Governor’s May Revision estimates that IHSS costs will increase by $105.6M in State General Fund in 2017-2018 and $174.7M State General Fund in 2018-2019. This result is from increases in overtime, hours per case, and costs per case. The increases are partially offset by slower caseload growth. Due to the elimination of the Maintenance of Effort in 2016-2017, the fiscal impact for years beyond 2018-2019 remain uncertain.
For a more detailed look at the county budget go to www.sjgov.org/department/cao/county_budget
