Keeping an eye on potential threats to the county’s solid financial position and examining how federal policy changes could affect local services were among the steps county officials pledged to take in approving a nearly $2.8 billion budget for the 2018-19 fiscal year Tuesday.
Citing concerns about the toll an economic downturn could take on county revenue as well as the uncertain future of federal and state funding streams for health care and road maintenance, County Manager John Maltbie urged supervisors to evaluate their priorities in the coming year before they head into another two-year budget cycle next spring. With property tax growth reaching 8 percent in recent years and reserves projected to reach $200 million in the coming months, Maltbie acknowledged the county’s fiscal health yet warned officials about the effects of even small decreases in revenue as they weigh other costs expected to increase, such as a 2 percent yearly hike in salaries and benefits for existing staff.
“I think you’re going to need to begin to prioritize the things that you do because I don’t think you’re going to have the resources to do everything just as you’re doing today,” he said. “You just have to weigh what are the priorities and benefits of each of those things in relation to the other, in order to make this budget work.”
In outlining the last budget he will submit to the board before he retires from his role in December, Maltbie commended supervisors for their commitment to addressing homelessness, improving reading skills for young children and ensuring youth in the county’s foster care system are receiving a high school education. He acknowledged the county’s success in making summer reading programs available through the county’s library system as well as the some $100 million spent in the last five years or so on affordable housing projects to create an estimated 1,770 units in the near future as signs of progress.
But he said future decisions may become more difficult in the case economic growth slows, or decreases in state and federal funding and increases in the county’s pension liability take shape. Maltbie pegged the county’s health care costs as a primary concern since recent changes made by the president’s administration to the Affordable Care Act could boost the number of county residents who are uninsured. He added the rising cost of providing care for seniors, a growing subset of the population, could also put a strain on the county budget.
Maltbie also looked to an effort to repeal Senate Bill 1, a gas tax increase state legislators passed last year, to create headaches for officials with the county’s Public Works Department counting on the funds to support road maintenance.
Maltbie said those leading county departments were asked to factor in a 2.5 percent reduction in their budget as they crafted this year’s budget and recommended they include those reductions in the next cycle. Supervisors agreed county officials should continue looking for places where they can cut expenditures, but agreed they should closely examine the concerns Maltbie outlined in the next year to ensure they understand the potential risks those changes pose to the county’s fiscal position.
Board President Dave Pine acknowledged the county’s efforts to make payments toward pension liabilities as quickly as possible, which Maltbie said helps mitigate the impact of stock market fluctuations on the county’s existing obligations. At an estimated 84 percent funded, Maltbie said the pension liabilities could be paid down as early as 2023, which Pine thought could help avoid making cuts other cities and counties have had to face.
“We’re in better shape than virtually anyone because of our efforts to make these prepayments,” he said.
But Pine anticipated more difficult discussions to come with regard to allocation of Measure K, a half-cent sales tax extension voters approved in 2016 and used toward projects like affordable housing and a planning process for the North Fair Oaks community in unincorporated San Mateo County. Though Measure K revenue is set to generate $90 million in the coming year, Pine said officials would have to take a close look at the effectiveness of programs funded by the tax down the road should sales revenue fall.
In response to concerns from residents across the county about how immigrants and those seeking asylum in the United States are being treated, supervisors agreed to allocate some $764,000 to create an immigrant defense fund, which Maltbie estimated could fund hiring of attorneys, support staff and outreach for a year. They agreed to discuss the parameters of the work that would be supported by the new fund at their July 10 meeting.
El Granada resident Joanne Rokosy urged supervisors to consider making funds available to residents in need of them on the coast since they may not be able to travel to resources located further inland. She added many may not consider English to be their first language, which may further isolate them from helpful resources.
“Our immigrant neighbors on the coastside are truly isolated and there are a lot of them,” she said.
In other business, supervisors approved a recommendation from the 19-member Charter Review Committee to amend the county’s charter outlining the process for selecting a county manager so a requirement to select a panel able to evaluate candidate qualifications and submit a list of five to seven of the most qualified candidates to the board is removed from the document. The deleted section is expected to be replaced by a requirement that the county manager will be appointed by the board of supervisors on the basis of executive and administrative qualifications and experience and can be removed by a vote of three of the board’s members, should voters approve the change on the November ballot.
The committee also reviewed the possibility of consolidating the offices of controller and treasurer-tax collector but voted against putting the change on the ballot. They opted against separating the responsibilities of the assessor-county clerk-recorder into separate offices as well.
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