HomeMy WebLinkAboutMINUTES - 08211990 - IO.2 I.O.-2
TO: BOARD OF SUPERVISORS 5E L Contra
FROM: Internal Operations Committee t `-`-
!s Costa
County
August 13, 1990 os -iP'
DATE: rq,cdun`�
SUBJECT: Proposed Response to the Report of the 1989-90 Grand Jury:
"County and City Government Finances"
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1. Adopt this report of our Committee as the Board of Supervisors' response to
the Report of the 1989-90 Grand Jury: "County and City Government Finances."
2. Request the County Administrator to make available to the 1990-91 Grand Jury
the report on the economic analysis of the Greenbelt Initiative which the
Board of Supervisors considered' on August 7, 1990, with the suggestion that
the Grand Jury review the analysis for whatever subsequent action the Grand
Jury believes is appropriate.
3. Suggest that the 1990-91 Grand Jury review the issue of the need for further
regionalization of services and make whatever recommendations they believe
are appropriate as a result of their review.
4. Remove this item as a referral to our Committee.
BACKGROUND
On May 25, 1990 the 1989-90 Grand Jury submitted the report entitled "County and
City Government Finances" which was subsequently referred to the Internal
Operations Committee. On August 13, 1990 our Committee met to discuss the
recommendations and review proposed responses. At the conclusion of these
discussions we prepared the attached response utilizing a format suggested by a
previous Grand Jury which requested that responses clearly specify:
A. Whether the recommendation is accepted or adopted;
B. If the recommendation is accepted, a statement as to who will be responsible
for implementation and a definite target date;
C. A delineation of constraints if a recommendation is accepted but cannot be
implemented within the calendar year; and
D. The reason for not adopting a recommendation.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR -RECOMMENDATION OF BOARD COMMITTEE
_APPROVE OTHER
OW
SIGNATURES: Sll ervisor S. W. McPak S ervisor T. Powers
ACTION OF BOARD ON Augugt 21, 1990 APPROV AS RECOMMENDED X OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS(ABSENT III, IV ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
CC: County Administrator ATTESTED�.e�..[i .�i��9 90's��/ 1Q 90
Grand Jury Foreman PHIL BA HELOR,CLERK OF THE BOARD OF
Community Development Director SUPERVISORS AND COUNTY ADMINISTRATOR
Auditor-Controller
Building Inspector
Public Works Director BY DEPUTY
M382 (Wu%ty Counsel
-2-
Responses to Grand Jury recommendations coming from our Committee will follow this
format as closely as possible.
COUNTY AND CITY GOVERNMENT FINANCES
Recommendation No. 1
Establish a policy that housing developments in the unincorporated areas of the
County not be permitted unless the development has arranged to be annexed by an
incorporated city, incorporates itself or becomes a self-sufficient, urban service
area.
Response
A. This recommendation is not accepted.
B. While conclusions reached by the Grand Jury are accurate, this recommendation
for dealing with their conclusions will only intensify the problem - the
County's poor financial situation caused by the lack of state funding.
Encouraging annexation or incorporation before development occurs is not an
answer to the County's financial problems. In fact, such a policy could
worsen these problems. This is because property annexation or incorporation
results in a lower share to the County of property taxes generated while none
of the obligations to provide countywide services are reduced. Furthermore,
the County will be required to provide additional services resulting from
development. In addition, the so-called urban services provided by the
County would either not be provided at all, or provided at a significantly
reduced level and at a very low cost if compared to city-provided urban
services. Reducing the County's revenue base would only amplify the County's
problems in providing services.
The Board of Supervisors recognizes the need for more affordable housing in
the County and is committed to taking whatever steps are necessary in order
to insure an adequate supply of affordable housing is made available for our
residents. The County is, in fact, doing a good deal more in this area than
are most cities in the County.
Five exhibits are attached to this report to illustrate the County's funding
situation.
Recommendation No. 2
Take steps to withdraw the County from the provision of "city" services by a
combination of the following actions:
a. Fostering with all of its authority and influence the annexation of
unincorporated urban areas by adjacent cities.
b. Facilitating the incorporation of those unincorporated urban areas that
resist annexation.
C. Establishing unincorporated urban areas that resist both annexation and
incorporation as self-sufficient urban service districts, with the necessary
rearrangement of revenue flow.
d. Contracting with incorporated cities for the provision of services to
unincorporated areas that remain after the actions listed above are taken.
Response
A. This recommendation is not accepted.
B. Please refer to our response to Recommendation No. 1.
Recommendation No. 3
Develop and promote a joint powers agreement with the cities that would establish
the library district as a self-governing district, with the County and the cities
providing the funding needed by the library system above the tax revenue it
currently receives as a special district.
Response
A. We accept this recommendation as to an agreement with the cities. We do not
accept the recommendation as it pertains to providing funding above its
current revenue.
B. The Board of Supervisors concurs that the cities and County should work
jointly toward addressing certain issues, such as library funding, although
none of the current resources of the County can be devoted to increase
library funding. A Public Manager's subcommittee is currently working on
this. In addition, a consultant has been hired to determine the feasibility
of a tax rate increase to fund library services. Finally, a city/county
revenue committee has been meeting since December of 1989 regarding ways to
increase the size of the revenue "pie" all very positive indications of the
abilities of the County and cities to work together. The Board agrees that
even more city/county efforts to "get the state's attention" related to
County financial problems would be beneficial.
Recommendation No. 4
Be receptive to and supportive of efforts toward regionalization of selected
government services.
Response
A. We accept this recommendation.
B. The Board of Supervisors will continue to monitor and assess all
opportunities to provide quality services to its citizens.
Recommendation No. 5
Intensify its efforts, singly and in alliance with other counties, to achieve
state action to alleviate the counties' burden of partially funding state-mandated
programs.
Response
A. This recommendation was adopted.
B. This Board of Supervisors has been very actively involved with the County
Supervisors Association of California (CSAC) in their litigation against the
state to recover costs for mandated programs. Supervisor Sunne McPeak is on
the CSAC Board of Directors and has the encouragement and support of the
Board of Supervisors to continue these efforts.
Each year the County vigorously pursues State reimbursement for programs
through AB-90 claims which provide for certain reimbursable costs.
The County Administrative Officers Association of California provides a
vehicle for the Chief Administrative Officers of California counties to speak
to the state in one voice.
SB 1333 (Dills), legislation just adopted pertaining to the 1990-91 budget,
makes many state-reimbursable mandate options and authorizes local agencies
to levy fees or charges to cover their cost of optional mandates. The new
legislation also expresses legislative intent to fund specified mandate costs
in the next three budgets.
Exhibit 1
Contra Costa County
Inequities that Already Exist
1. County share of total property taxes raised is 24% - 54th of 58 counties.
2. County share of total local sales tax is 12% - city share is 88%.
3. County share of fines and forfeitures split (Penal Code 1463) ranges
from only 5%to 24%, yet virtually all post arrest services are provided by
the county.
4. Most of the services. the county provides are to city residents. For
example:
The county unincorporated area has 19% of the population, but
consists of only:
4.47% of total cash grants awarded for welfare cases in
Contra Costa County.
3.7% of monthly grants for general assistance recipients.
4.1% of total patients discharged from the County's
Merrithew Hospital.
2.8% of total juveniles incarcerated in juvenile facilities.
Exhibit 2
p ~
to Up o \ O
N � Ln U O
`4 O
LD d LO y
CA
a
CD
> Uv O
co c d O
:.:i;:;o;;:
U � W-
ca ''"' r
F..
O
In
Fm a�
Q = N
Fm N Cc
ol
.,.. . oFM
=
kyr.
N.n
W N
:::: ��
0
d 3
e
U
c
a�
Cocis
c
L
>u:, L
li
a
CL
U
, .;
c
N c
N
d V
..........
N
� a
U �
Exhibit 3
:
gg
MKI
LM
,.. W XCL
3
cc
LL
cc
ca
� O
a %:: ♦w
y;
v.\.
a
a� V
0
0 .O — o °� O
U
Lm
.�w
0 Z^3` '
ca
' W co LL.
\♦, (3)
U
�;attu.�\♦\C�v``'(\\\�\�\\vitt
;�w< �♦��4.,\�:\�:.'```y::�:�:�>:h'v?:�R^ys�;,�c�\"�' .Va::;:�:::\,,vx.$:.,..\.:`�,'�a^\ \�:\'\v.\v. \, ':,.�' v,�R:,;o:�:,;v.,,.> :v a:. \
.\-...:< ����. :\a9Cx\ti�♦\�i\,.,�1�,..,»;i::<,\��\���:n\��\i1\\1::.`a.c,\\ r� ,�\aU: ` .♦.>,`P.,\ � ♦ �\\ .,\�, ,\�
:..\.,\��:`:♦.va,v\j::i:':,+.....,..u.,`a ;..v),:\Jva,.,c�\c. ..a.:v:.��,.oa::.,�:v\\. \:.\\..:.�\♦:.\v♦:�`.;��.\�,xw\:ua,..v.:,v�iC\�\J .\.\�\...\.-.,'L`.`\\\'
Exhibit 4
Contra Costa County
County Share of Local Sales Tax
County
12%
Cities
Source: State Board of Equalization,April 1,1988 to March 31, 1989
Exhibit 5 }
Contra Coma Count
County GeneralFund Property mist 6 RedevelopmentAge er
«z « millions)
q,
$8.,
$8 . - - - - - - - - - - - - - - - 7 - - -
Revenue $6.7
$6 ® ® '
.
- - � - - - - - - - - - - - � - -$5./ - - - ��
s
v m . . .
- -
$4-2
q
$2 } l
{ -
.
1984-85 1985-86 1986-87 1987-88 1988-89 1989-90
Fiscal Year
A REPORT BY
THE 1989-90 CONTRA COSTA COUNTY GRAND JURY
1020 Ward Street
Martinez, CA 94553
(415) 646-2345
REPORT ON COUNTY AND CITY GOVERNMENT FINANCES
APPROVED BY THE GRAND JURY:
DATE: O /
ol DONALD G. HA
G,r ANDJURY 0REMAN
ACCEPTED OR F LING:
DATE: Z'�CLO
NORM& SPELLBERG
PRESIDING JUDGE OF THE SUPERIOR COURT
SECTION 933 (c) OF THE CALIFORNIA PENAL CODE
Sec. 933. Findings and recommendations; com-
ment of governing bodies, elective officers,
or agency heads
(c) No later than 90 days after the grand jury submit
a final report on the operations of any public agency
subject to its reviewing authority, the governing body of
the public agency shall comment to the presiding judge of
the superior court on the findings and recommendations
pertaining to matters under the control of the governing
body, and every elective county officer or agency head for
which the grand jury has responsibility pursuant to
Section 914.1 shall comment within 60 days to the
presiding judge of the superior court,with an information
copy sent to the board of supervisors, on the findings and
recommendations pertaining to matters under the control
of that county officer or agency head and any agency or
agencies which that officer or agency head supervises or
controls. In any city and county, the mayor shall also
comment on the findings and recommendations. All
such comments and reports shall forthwith be submitted
to the presiding judge of the superior court who impan-
eled the grand jury. A copy of all responses to grand
jury reports shall be placed on file with the clerk of the
public agency and the office of the county clerk, or the
mayor when applicable, and shall remain on file in those
offices. One copy shall be placed on file with the
applicable grand jury final report by, and in the control
of the currently impaneled grand jury, where it shall be
maintained for a minimum of five years. (Added by
Stats 1961, a 1284, §L Amended by Stats 1963, c 674,
§ 1; Sratz 1974, c 393, § 6; Stats 1974, c 1396, § 3;
Stasi 1977, c 107, § 6; Stats 1977, c 187, § 1; Stars
1980, c 543, § 1; Stats 1981, c 203, § 1; Starz 1982 c
1408, § 5; Stats 1985, c 221, § 1; S=1987, c 690,
§ 1; Seats 1988, a 1297, § 5.)
uruur § 933, added by Stats.1982, a 1408. § 6, amended by
Stats-1985,c-221,§ 2,operative Jan. 1, 1989,was repealed by Stats.1987,
c. 690. § 2
Former 1 933. added by Stam1959, c. 501, § 2, was repealed by
Stats-1959. c. 1811 § 3.
REPORT ON COUNTY AND CITY GOVERNMENT FINANCES
SUMMARY
The incorporated cities in Contra Costa County generally
have sufficient income to provide their traditional ser-
vices. In contrast, the County government does not have the
revenue to provide all of its mandated and optional services
at an adequate level.
The County and the cities are fostering development and
making land use decisions on the basis of tax revenue
considerations at the expense of soundly planned growth.
The division of responsibilities between the County and the
cities needs to be altered.
-1-
INTRODUCTION
Local government services are supplied to residents of
Contra Costa County by several jurisdictions.
Public schools, fire protection services, water supply and
sewer systems are the responsibility of special districts,
which serve geographical areas of varying sizes, but usually
larger than a single city.
The justice system (courts, detention facilities and cor-
rection programs) , welfare programs, health programs and
administrative services such as tax collection, recording of
deeds, elections, etc. , are the responsibility of the county
government.
Public safety (policing, animal control, building inspec-
tion, flood control) , road and street maintenance, land use
planning and regulation and parks and recreation are the
responsibility of city governments in incorporated areas and
the county government in unincorporated areas.
The liarary system, which serves the entire County except
the ci=y of Richmond, is technically a special district but
is administered by the county government.
The focus of this report is the financing of the county and
city gcvernments, which have seen demands for services grow
steadi_y as the population increases and society changes.
FINDINGS
1. True population of Contra Costa County increased by 15
percent between 1980 and 1989, rising from 672,300 to
7;5,500.
2. True number of Contra Costa residents living in
incorporated cities increased by 36 percent between
1980 and 1989, going from 463 ,200 to 628 ,100. They now
account for 81 percent of county residents.
3 . Ccntra Costa County has become almost a totally urban
ccanty. Only about two percent of residents live in
rural areas. The other non-city residents live either
in identified urban communities, such as E1 Sobrante,
Pacheco and Oakley, etc. , or in scattered unincorpor-
ated areas surrounded by cities.
-2-
4. Revenues of the County government rose by 132 percent
between 1980 and 1989, moving from $207. 8 million to
$483 million. Roughly half of this increase can be
attributed to inflation with the remaining port=on
consr_tuting real growth.
TOM MENU LS — 10-YEAR CO1'Q'AMON
Corm-*
1950 $208 Million
1924 $483 Mi
Comb--ted Cities
198C $143 Million
19E4 $399 Million
5. Comb zed revenues of all of the incorporated cities ( 15
in 1980 and 18 in 1989) increased by 178 percent
between 1980 and 1989, rising from $143 .3 million to
$398.' million. Again, the increase is about one-half
infla-ion, one-half real growth.
6. Both city and county governments have three main
sources of income, aside from the occasional sale of
bonds for construction and other capital programs.
These sources are taxes, grants or allocations from
other governments and self-generated income, such as
user and franchise fees, business license fees,
interest, rent, fines, etc.
SOURCES OF REVENUE
Grants
Tates
522 45%
Grants
Taxes Self- 17%
elf-generated generated
29Z 38%
19z
Cbnnt -- 1989 Combined ties — 1989
-3-
7. For the county government, grants from other govern-
ments are the largest source of revenue, accounting for
65 percent of the total in 1980 and 52 percent in 1990.
The second largest source is taxes, which supplied 26
percent in 1980 and 29 percent in 1989. Self-generated
income rose from nine percent in 1980 to 19 percent in
1989.
8. For the combined city governments, taxes are the
primary source of revenue, supplying 43 percent of the
total in 1980 and 45 percent in 1989. Self-generated
income accounted for 32 percent in 1980 and 38 percent
in 1990, while grants from other governments
contributed 25 percent in 1980 and 17 percent in 1989.
W REVENUE Sy TYPE
Sohn
Property :L;
mss
Other Property
Other
8S 36S
Sales
72
County — 1989 Coabimed Citim — 1989
9. County government property tax revenue rose from $44.6
million in 1980 to $121.7 million in 1989, accounting
for more than 80 percent of tax revenue in both years.
Sales tax revenue is minor for the county government,
amounting to $9. 3 million, or seven percent of tax
revenue in 1989.
10. Combined city government tax revenue is more evenly
divided, with sales taxes providing 41 percent in 1988,
property taxes contributing 36 percent and other taxes
supplying 23 percent.
11. The County's two major responsibility areas--the
justice system and health and human services--consumed
70 percent of expenditures in 1980 anc 69 percent in
1989. In each year the justice system share was 17
percent.
12. Public safety programs consumed 39 percent of the
expenditures of the combined city governments in 1989
and required eight percent of county government out-
lays.
13. The County's official budgets and financial reports do
not identify the cost of supplying "ci:y" services to
residents of the unincorporated areas of the County.
-4-
14. Allocations to the library system rose from $5 million
in 1980 to $8.8 million in 1989.
15. Despite the growth of the County budget, many County
services are falling below acceptable levels because of
insufficient funding. Some examples are:
a. Court calendars have become increasingly jammed as
the volume of both criminal and civil activity
rises at an accelerating pace.
b. Juvenile service programs have decreased in both
quantity and quality.
C. County roads and streets have deteriorated, with
11.6 percent of the total mileage now classified
as needing total reconstruction.
d. Library hours have been substantially decreased
and acquisition of new. books and: other materials
more and more limited.
16. New and heavier demands for human services are being
made as the numbers of the homeless, addicts, AIDS
victims, "crack" and AIDS babies and the medically
indigent increase.
17. Redevelopment projects, designed to reinvigorate
rundown urban areas, siphon off property taxes from
county and city governments since any increased
property tax revenue is reserved for financing the
redevelopment costs. The County Administrator
estimates that the County's property tax loss to city
redevelopment agencies amounted to nearly $9 million in
budget year 1990.
18. Increases in sales tax receipts in redeveloped areas of
incorporated cities provide immediate help to the
cities, since one cent of the 7.25 cents sales tax per
dollar goes to local governments, with the cities .
getting 97.5 percent and the County 2.5 percent.
19. New development such as the building of homes, busines-
ses, industrial plants, etc. , on previously undeveloped
land generates property taxes immediately upon com-
pletion of the development.
20. Both city and county governments actively foster new
development in order to increase tax revenue, with
apparent little attention to possible adverse long
range consequences of emphasizing short term gains.
-5-
21. Expectations of substantial revenue help from new,
housing developments may be illusory, as experienced
observers believe in many cases the added costs of new
service demands will exceed tax revenue.
22. Proposed annexation by cities of newly developed areas
in unincorporated areas of the County have generated
friction between the cities and the County over tax
revenues distribution.
23. Some California counties have adopted policies to
prohib_t or discourage new housing developments not
under city jurisdiction.
24. This year Californians will vote on proposals to levy a
new "awcohol" tax and to increase the gasoline tax. If
approved, these measures would be of some help to the
County in the areas to which the taxes are dedicated.
CONCLUSIONS
The 1989-90 Contra Costa County Grand Jury concludes that:
1. The inzorporated cities of Contra Costa County gener-
ally have sufficient revenue to provide essential
services and the most desired additional services, even
though some cities are considerably more affluent than
others.
2. The co-unty government does not have the revenue needed
to protide at an adequate level all of the mandated and
optional services it currently undertakes.
3 . The he=lth and human services mandated by the state and
federa= governments are not ,fully funded by those
governaents and require an increasing amount of County
funds.
4. The cointy government is inherently unable to provide
"city" services as effectively and economically as the
cities.
5. Many Land use decisions made by the County and the
cities are based on tax revenue generation
considerations rather than sound, balanced growth
principles.
6. The cu-rent division of responsibilities between the
County and the cities needs to be altered.
f
-6-
RECONS
The 1989-90 Contra Costa County Grand Jury recommends that
the Board of Supervisors:
1. Establish a policy that housing developments in the
unincorporated areas of the County not be permitted
unless the development has arranged to be annexed by an
incorporated city, incorporates itself or becomes a
self-sufficient, urban service area.
2. Take steps to withdraw the County from the provision of
"city" services by a combination of the following
actions:
a. Fostering with all of its authority and influence
the annexation of unincorporated urban areas by
adjacent cities.
b. Facilitating the incorporation of those
unincorporated urban areas that resist annexation.
C. Establishing unincorporated urban areas tsat
resist both annexation and incorporation as
self-sufficient urban service districts, with `.he
necessary rearrangement of revenue flow.
d. Contracting with incorporated cities for the
provision of services to unincorporated areas that
remain after the actions listed above are taken.
3. Develop and promote a joint powers agreement with the
cities that would establish the library district as a
self-governing district, with the County and the cities
providing the funding needed by the library system
above the tax revenue it currently receives as a
special district.
4. Be receptive to and supportive of efforts toward
regionalization of selected government services.
5. Intensify its efforts, singly and in alliance with
other counties, to achieve state action to alleviate
the counties' burden of partially funding state-
mandated programs.
-7-