San Mateo County is poised to approve an updated $2.82 billion annual budget next week after tweaking it to the tune of nearly $123 million in expenditures — including transportation funding from a recently passed Senate bill.
This year’s final fund balance adjustments and September revisions include a nearly 5 percent increase in the countywide spending plan for fiscal year 2017-18. The increase is primarily credited to rolling over unspent funds from prior years, but also includes anticipated revenue from new state transportation funding and the state reimbursing taxes left over from schools. The expenditures will go toward a range of needs from repairing infrastructure damaged by last year’s winter storms to allocating more toward affordable housing programs.
The Board of Supervisors is slated to review and vote on the changes to the first year in a two-year budget cycle Tuesday, Sept. 26.
Officials remain pleased with the county’s strong financial footing, but are heeding warnings about uncertainties that lie ahead — whether related to a potential economic slowdown, as well as changes at the federal or state level.
“We are in a pretty good financial position. It hasn’t always been that way. I remember when I first got on the board, we were cutting. So it’s positive, but in some ways difficult because, when you have money, everybody seems to want it. So you have to make sound decisions and not get yourself overcommitted because we do know the downturn will come,” said Don Horsley, president of the San Mateo County Board of Supervisors.
Following the closure of last year’s books, the adjustments will cover the breadth of the county’s operations including criminal justice, health care, social services, community programs and infrastructure repairs.
“I think overall the revenue outlook is good,” said Finance Director Jim Saco.
That’s due in part to revenue projections at the state level coming back higher than originally anticipated. But there are also risks from changes both in Sacramento and Washington, D.C., Saco warned.
While drivers brace to pay more at the gas pump following the Legislature’s passage of Senate Bill 1, there are some local benefits being realized as the new statewide law is expected to contribute $3.2 million toward county road maintenance projects, according to a staff report. The overhaul in how the state funds transit needs included increased vehicle registration fees, gas tax hikes and a surcharge for electric cars.
The county is also hoping the Federal Emergency Management Agency will cough up support as it prepares to allocate $4.4 million in road and sewer funds to complete repairs stemming from last winter’s storm damage, according to the report.
Changes previously discussed at length relate to affordable housing and countywide sales tax expenditures from Measure K. The increases include allocating a full $5 million grant to the county Housing Endowment and Regional Trust this coming year for a revolving loan program, transferring $1.3 million toward a housing program for at-risk youth, and $276,000 to provide legal aid services for immigrant populations. Of the half-cent sales tax which generates about $82 million annually for a wide spectrum of programs, there is a proposed total of $21.3 million in adjustments, according to the budget.
The county will also fund the replacement of its property tax collection system, which is responsible for assessing billions of dollars worth of assets. The nearly $33 million update of this important technology will be funded in part by $15.9 million in reserves from county’s portion of the excess educational revenue augmentation fund, Saco said.
Excess ERAF is tax revenue returned to counties, cities and special districts after the state ensures its educational expenses are covered. The county anticipates receiving nearly $110 million but typically only budgets for about half of the reimbursements that fluctuates and aren’t always guaranteed.
Another major change includes $7.9 million in department reserves being returned to the Sheriff’s Office as the county re-evaluates plans to repurpose the old Maguire Correctional Facility into office space. The return is due to the price of the multi-million dollar project escalating, Saco said.
Much of the additions are related to the county’s nearly $450 million capital improvement plan that spans a variety of government functions, Saco said.
Horsley said he’s been particularly pleased with the county’s investment in public safety, such as fire protection, and is hopeful they’ll continue to make progress on parks.
The ambitious capital improvement plan also includes new county office buildings and major changes at the county-operated San Mateo Medical Center.
Some of the increased expenditures are intended to balance reductions to the state’s contributions to health care programs such as in-home support services for the disabled, as well as adding new positions to meet Medi-Cal requirements, according to the report.
Balancing federal and state uncertainties are particularly poignant for the Health System’s budget, Saco noted.
“We’re OK right now, but there are question marks going forward,” Saco said. “Another big question mark that’s still unresolved is the Affordable Care Act.”
The budget revisions also include nine new employees bringing it from 5,508 authorized positions to 5,517. The adjustments also include allocating $285,246 to hire six public safety call takers, and two others to support the new computer-aided dispatch system, according to the report.
While mindful of the cyclical nature of recessions, Saco said right now the county is doing well and the adjustments made this month are fairly routine.
“It’s great that we’re able to maintain and exceed the minimum reserve requirements and fund a $450 million capital improvement plan, and maintain critical services for the public,” Saco said.
Twitter: @samantha_weigel
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