STOCKTON – San Joaquin County has unveiled a proposed $1.8 billion structurally-balanced budget for the fiscal year starting July 1.
It represents a $40.8 million increase from the current year.
“The 2019-2020 Proposed Budget has been carefully designed to advance the public interest, while at the same time remain fiscally sound. The $1.8 billion budget demonstrates that San Joaquin County is well governed and financially sustainable,” said San Joaquin County Administrator, Monica Nino. “The Board’s thoughtful stewardship of County resources has resulted in a strong government organization with a structurally-balanced budget and increases to reserves. It also fully funds current departmental staffing levels, and where appropriate, augments staff to address critical operational needs as well as County programs and services.”
Proposed budget highlights include:
uThe County’s unfunded pension liability continues to challenge the County’s financial sustainability. While the final actuarial report for 2018 has not been finalized, the annual financial report indicates the investment earnings falling far below the expected earnings rate of 7.25% at (-2.11%). The proposed budget assumes retirement rates to increase approximately 4% in calendar year 2020. For every 1% increase in the retirement rate, the total cost to the County is approximately $4.9 million, with the net county cost of $1.7 million.
uWith the addition of $2.1 million to the County’s Reserve for Contingencies, the recommended Reserve for Contingencies is anticipated to be set at $90.2 million in 2019-2020.
uThe recommended budget for Law and Justice totals $379.8 million, which is an increase of $31.6 million. Overall, the budget includes a net increase of 63 positions for all Law and Justice budgets: 26 in the Child Support Services budget, 16 positions in the Sheriff’s budgets, 10 in the District Attorney’s budgets, 5 in the Probation budgets, 4 positions in Correctional Health Services, and 2 positions in the Public Defender’s budget.
uIn 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, 2019 is $885,000. For 2019-2020, the budget directs $386,000 of the Transient Occupancy Tax (Hotel/Motel Tax or TOT) to this reserve for an ending balance of $1.3 million. This represents the amount of the projected TOT that has not been programmed in the proposed budget for economic development-related activities and programs.
uThe proposed budget directs $730,000 toward the County’s continuing efforts to respond to the California Delta Conveyance single tunnel 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.
uThe County has current labor agreements with 86.8% of the County labor force leaving 13.2% expired or near expiration by June 30, 2019. The bargaining units with expired or expiring contracts are the Law Enforcement Management Association (LEMA), Deputy Sheriff’s Association (DSA), Sheriff Deputy Sergeant Association, Physicians (UAPD), and Nurses (CNA). Additionally, Service Employees International Union (SEIU) MOUs which covers the majority of the County’s workforce will expire on September 5, 2019. The total number of positions within the bargaining units that are expired or will expire on or before September 5, 2019 is 5,793 or 87.5% of the workforce (includes recommended position changes for 2019-2020). The potential costs resulting from these negotiations are unknown, therefore, are not included in the Proposed Budget.
uOne of the County’s largest increases in operational costs remains retirement expenses. Approximately 51% of the Proposed Budget is for salary and employee benefits. The 2019-2020 Proposed Budget includes $23.9 million for contributions toward the unfunded retirement liability with a Net County Cost of $8.2 million. The balance of the Unfunded Pension Liability Reserve as of March 31, 2019 was $25.5 million. The Proposed Budget adds an additional $7.3 million to the Reserve.
uSheriff’s Animal Services Officers have been successful in reuniting animals with their owners. In 2018-2019, a total of 1,868 animals were reunited with their rightful owners, saving the County approximately $607,100 in costs for shelter services.
uConstruction of the Phase II Acute Care Patient Wing Expansion Project was completed in 2018-2019 at San Joaquin General Hospital. The new facility replaces 45 of the 89 inpatient beds in the seismically non-compliant Towers building. The new patient wing is scheduled to be operational in fall 2019. Project funding was provided by the Hospital Enterprise Fund without incurring additional debt or subsidy from the General Fund.
Further deliberation and adoption of the final budget is expected at 9 a.m. on June 25 and 26 where public comment is welcome. To review the full budget proposal or for additional budget highlights and details, please visit the website at: www.sjgov.org/department/cao/county_budget.