HomeMy WebLinkAboutMINUTES - 04031990 - 2.1 2-oo1
TO: BOARD OF SUPERVISORS
Contra
FROM: `\
Phil Batchelor, County Administrator Costa
March 26 , 1990 County
_ �t
r•: .L
DATE:
SUBJECT: FINANCIAL STATUS OF CONTRA COSTA COUNTY COMPARED
WITH BUTTE COUNTY
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
INTRODUCTION:
During the 1989-90 fiscal year, Butte County found itself in such
financial straits that it asked the State of California for
permission to defer a payment of $2. 8 million owed the State for
fire protection provided by the California Department of
Forestry.
In exchange for agreeing to this deferral, the State Department
of Finance appointed an Oversight Advisor to review Butte
County' s financial condition and chart a course which will bring
Butte County back to financial stability.
While many may dismiss Butte County as a small, rural and unique
County, the facts pointed out by the Oversight Advisor point to
some chilling similarities with the other 57 counties - including
Contra Costa County.
We have abstracted some of the factual situations which Butte has
faced over the past ten years which do not seem to be so very
different than situations this County has faced.
HISTORICAL PERSPECTIVE:
* In 1977-78 Butte County received 26% of the property tax
collected by the County. By the 1987-88 fiscal year Butte
County' s share of the property tax had eroded to 23%. In
Contra Costa County, the County received 24% of the property
tax in 1977-78 and was still receiving 24% of the property
tax in 1987-88 .
CONTINUED ON ATTACHMENT: Yes YES SIGNATURE: G
IX RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
X,
APPROVE OTHER
SIGNATURE(S): L-�6 Z&eL(Z�
_ ACTION OF BOARD ON Apr i 1 3 , 19 9 0 ! APPROVED AS RECOMMENDED OTHER X
Supervisor Fanden recommended that a letter of. support be sent to Butte County,
letters sent to the County's State and Federal Legislative Delegation expressing
concern over the lack of an adequate level of funds for mandated programs, a
media campaign to inform the public of the crises facing county governments, a
staff review of the financing of the libraries, and the referral of these issues
to -the County Administrator. Supervisor McPeak referred to the joint effort of
the Friends of the Library and the Alliance for Better Libraries and proposed
that staff review the work of these two groups.
Following discussion of the Board, IT IS ORDERED that receipt of the report is
ACKNOWLEDGED. The Board REQUESTED the Finance Committee to explore alternative
revenue sources for county programs, including representation from the Mayors'
Conference on certain county human services committee.
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS(ABSENT ) 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: ATTESTED April 3 , 1990
County Administrator PHIL BATCHELOR,CLERK OF THE BOARD OF
All County Department Heads SUPERVISORS AND COUNTY ADMINISTRATOR
Legislative Delegation (Via CAO)
CSAC (Via CAO) BY DEPUTY
M382 (10/88)
* The population increase in Butte County between 1980 and
1989 exceeded the statewide average ( 2. 25% versus 2. 14% per
year) , placing more pressure than usual on the County to
provide more services. In Contra Costa County the
population increased even faster ( 2. 26% annually between
1980 and 1989) , compared with the statewide average of
2 . 14%.
* Part of the reason for the reduction in the share of the
property tax which Butte County receives is due to the
activities of two cities: approximately 90% of Oroville and
70% of Chico are in redevelopment projects. While in Contra
Costa County we do not have comparable estimates of the
percentage of city boundaries which are in redevelopment
projects, 14 of the 18 cities in the County have implemented
one or more project areas through their redevelopment
agency. The annual loss of property tax to the County from
the resulting redevelopment activity has increased from $2. 3
million to $8 . 3 million from 1980 to 1989.
* Local sales tax revenue received by Butte County over the
nine year period from 1980-1981 to 1988-89 has not grown at
all. Actual sales tax revenue decreased by $16 ,000 during
this period of time and a zero growth rate is predicted for
1989-90. In Contra Costa County, while the County received
100% of the local sales tax generated in the unincorporated
area of the County, 97 . 5% of the sales tax revenue generated
in the cities goes to the city, with the County receiving
only 2 . 5% of the revenue. Taken together, the County
receives only 120 of the total local sales tax, while the
cities receive 88% of the sales tax revenue. As a result,
sales tax revenue to the County, which in 1980-81 was $7 . 8
million, had increased by 1988-89 to only $9 . 3 million.
* Butte County has had a successful program in the investment
of its surplus funds. However, this revenue source will
soon decrease as the county' s reserve funds are depleted at
the end of the 1989-90 fiscal year. In Contra Costa County,
primarily because of changes in federal law which reduce the
amount the County can borrow each year and thereby reduce
the amount of money the County has available to invest,
revenue from interest on investments in 1980-81 was $16.1
million. In 1988-89, this figure had dropped to $11. 0
million.
* During the 1989-90 fiscal year, in Butte County, the Courts
were allocated 42 . 9% of the General Fund revenue freed up as
a result of the Trial Court Block Grant to enhance their
level of service. The remainder went to other County
programs. In Contra Costa County for 1989-90 , 520 of the
revenue freed up as a result of Trial Court Funding went to
the courts or other criminal justice departments which
support the courts. The balance of the funds were dedicated
to the operation of the West County Detention Center. The
benefit of the Trial Court Block Grant Program to Contra
Costa County is further eroded by the required transfers to
the "no and low" property tax cities and by the transfer of
$50,000 annually to the Oakland Zoo.
* The Butte County Board of Supervisors, primarily to carry
out statutorily mandated programs has had to increase
expenditures by 100% over the last nine years. During this
same period of time tax revenue has increased only 69%.
* A number of efforts were made to increase taxes over the
years, but these efforts were defeated by the electorate.
• -3-
While in Contra Costa County, the Board of Supervisors has
not had to ask the voters to approve a general tax increase,
the effort to increase the sales tax for transportation
purposes was only successful the second time the measure was
placed on the ballot.
* Butte County share of expenditures for the AFDC Program
increased from $711,800 in 1980-81 to $3,041,000 in 1989-90,
an increase of 322%. In Contra Costa County, the County' s
share of AFDC expenditures has increased from $3 . 0 million
in 1980-81 to $6.7 million in 1989-90, a 119% increase.
* As a result of a series of court cases and economic
problems, the General Assistance grant in Butte County has
recently been set at $295 per month, plus COLA' s. The
annual cost of the GA Program to Butte County rose from
$104,400 in 1980-81 to $2,421,000 in 1989-90, an increase of
over 2000%1 In Contra Costa County, the County' s costs for
the General Assistance Program have increased from
$1 ,270 ,495 in 1980-81 to $10,824,655 in 1989-90, an increase
of 752%!
* There has been a dramatic increase in the share of Butte
County' s General Purpose Revenue which is needed to support
the AFDC and GA Programs. In 1980-81, these programs
consumed $816,200 or 4.0% of the County' s General Purpose
Revenues. For 1989-90 the County' s share has grown to
$5,462,000 or 17.1% of the County' s General Purpose Revenue.
In Contra Costa County, these same programs consumed $4. 3
million or 4% of the County' s General Purpose Revenues in
1980-81 and $17. 5 million or 8. 5% of the County' s General
Purpose Revenues in 1989-90.
* In Butte County in 1980-81 the Public Defender required
$290,000 in County funds. For 1989-90 this program will
cost Butte County $1,458,000 . While Butte County has
instituted changes to curtail the growth of this program,
the future expenditure level is expected to continue to be
at least at the same level as 1989-90. In Contra Costa
County, expenditures for the Public Defender in 1980-81 were
$2.4 million. By 1989790 this figure had risen to $7 . 5
million.
* As a result, in Butte County libraries have closed, animal
control activities have been curtailed and heavy caseloads
are being carried by employees in all county activities.
In Contra Costa County, many departments have had to layoff
employees, the Sheriff' s Patrol has been reduced, library
hours have been reduced, the cities have been asked to share
in financing the Animal Services Department and every
department is experiencing heavier workloads, as has been
documented in the County' s Economy and Efficiency Report. ,
RECOMMENDATIONS
Among the recommendations . of the Oversight Advisor for Butte
County, who, it must be remembered works for the State Department
of Finance are the following:
* Provide Butte County its full entitlement utilizing the
formulas prescribed for the Revenue Stabilization Program
(Chapter 1286/87 ) . This legislation provided nothing for
Contra Costa County.
* Provide in the State Budget Bill for 1990-91 and 1991-92
provisions for the buy-out of the county share of cost for
' the AFDC and GA programs which exceed the county' s share of
General Purpose Revenue for these programs in the 1980-81
fiscal year. In Contra Costa County, if the County' s costs
for the AFDC and GA Programs were frozen at the same share
of General Purpose Revenue they represented in 1980-81, the
savings for the 1990-91 fiscal year are estimated to be
$11. 1 million and $13 . 2 million for the 1991-92 fiscal year.
* Expand the county revenue base by proposing an alternative
tax source which would include a tax effort by the citizens
of incorporated cities to support those services which are
provided by the County to all residents, including those who
reside in incorporated cities.
* Transfer the responsibility for supporting all of the
libraries, except for the central coordinating activity, to
the incorporated cities in which they are sited. In Contra
Costa County, the Library competes for funding from the
Special District Augmentation Fund with the fire districts
and Sheriff ' s Patrol, along with many other special
districts which receive funding from this source.
* Establish a permanent State unit to be responsible for
coordinating and working with the various counties to carry
out the many laws and regulations promulgated at the state
and federal level. CSAC has been developing a proposal for
something like a Director of County Affairs in state
government who could advocate on behalf of the counties.
* Establish a special task force to review the provisions of
AB 8 and prepare a report covering suggested changes to its
provisions as applicable. The Senate Local Government held
hearings in the fall of 1989 at which some of the inequities
in the distribution of the property tax were discussed.
While Contra Costa County' s situation is certainly not as
desperate as Butte County' s, there are clearly some disturbing
trends and similarities with regard to the erosion of local
control in order to finance state mandated welfare, health and
criminal justice programs. The differences are in degree, not in
kind and illustrate the need for significant reorganization of
the fiscal and programmatic relationship between the state and
the counties.
A4 �a t.$radiisiro Qronidr *¢¢* CALIFORNIA
Bu't'te BlamesState for MakingIta Beggar
Rural county will go
Residents See It a Different Way
Gridley,Butte County bankruptcy and force the state to take over the CALIFORNIA—
Chmnrcte Corm
ByAnnit In this tidy, "wr sus..
ponpwsarnr flat agricultural town and an the programs!t requires.
high green ridges above the Feather River,resi. A June ballot measure to impose a$36.50 yearly
Oroville,Butte County dents have no trouble finding someone to blame fee on each county dwelling tfor lib
County Administrator Will for the county's financial troubles. o pay libraries is
r"`"" ,w•.:
considered likely to fail.Two of the county's six
Randolph compares himself these "If you could see the line of food stamp People branch libraries are run entirely by volunteers, �.N caw Befte
days to a hospice worker. up here on the first of the month,it'd just blow and the rest are run on reduced schedules with c«us
"We're dying,"be says of the your mind,"said Marlene Taylor of the Thermalito funds from cities and private donations. Ua •�=
state's first county ever to begin Action Committee, one of several taxpayers' ~
bankruptcy proceedings."We just groups referred to by county supervisors as"neo- Away from the county government center in
anarchists." Oroville and outside the ranks of taxpayers' c.•
don't know how to fall down." <� •,,
Without a significant state bail- Her comments reflect resentment among some groups,many citizens seem only faintly concerned
about Butte County's fiscal mess,reasoning that +•• o.,.. s•" c�
out,Butte Count will o bankrupt taxpayers in the county that state-required coni- os;. k• ,•,,,�„
County g P bankruptcy would not affect them. Franciscon si,w w•
by August 30—the date its budget fare programs are eating up funds once used to �n .,e
for next fiscal year comes to $16.8 Pay for sheriff's deputies,libraries and dead ani- "I guess we'd all be interested if they go bank- wno
mal pickups. rut 'said M.E.Hamilton,a grizzled plumbing and
million short. P: g ' g
This month, county officials `The board(of supervisors)has been claiming electrical estimator who lives in the high butte
the state's "
are scheduled to meet with credi- at fault,"said Lance Smith,publisher of sown of Paradise. Even then,it wont make much The same is true of Plumas Coun-
tors to work out reduced the weekly Durham Forum and head of the Alli- difference in our day-today lives."
payment ance of Butte County Taxpayers."If that's true, Aside from arousingty,where on some shifts there is
schedules in the event of bank- then there's no reason for count taxpayers to bail anger and a sense of pow- not a single deputy on patrol.
ruptcy. They are visiting state Yerlessness over vast social problems, however,
the state out." Butte Count Fresno County,despite its pop
agencies in Sacramento,giving no- County's plight has yet to hit many of Its ulation and building boom,
Line that the state may have to step "They have siphoned off all the money that citizens where the live. g pro•
in after August 30 to run the coun- `We've Paid in taxes for our protection and welfare Y jests a $13 million budget deficit
ty assessor's office,district attor- —fire,sheriffs and animal control—and put it "I don't think most people can see how it affects this year—the total amount the
ney's office and elections depart. into social services,"complained Nell Lind,spokes- them, personally," said Gary Archambault, who county has budgeted for other pro
ment. woman for the Butte County Taxpayers Associ- has worked for several county departments over grams af ter state requirements are
ation. the past 20 years. "I've never called a sheriff's paid for.
The county's fiscal distress is Voters have refused to raise sales taxes and deputy to come out,have you?" In a lawsuit filed more than
beginning to spark fears statewide property fees,and the taxpayers'groups are en- two years ago and now pending
that unless some Systematic chang- couraging the county in its attempts to declare —Ann Bancroft before the Court of Appeal in Sac-
es in county financing are made, tomenta,Butte Cotfnty is arguing
.Butte may be just the first of sever- that the state's costly mandates
al Counties that could topple under
the weight of costly,state-required property taxes,state budget writ- nexing prime retail space,and cre- have deprived it of its constitution-
program. WHERE MONEY GOES ers have become accustomed to ating redevelopment districts that al rights to home rule.The county
county officials trekking to the siphon off taxes from the county, has asked the court to order the
Like the rural counties of pity- Capitol for handouts. sales taxes to the count have not state to take over payments for its
ma, Merced, Yala and Trinity, ■State-required programs P Y welfare programs and other man-
Butte County has paid for increas- paid for entirely or almost en- Last year, the state helped increased at all,and property tax dates.The court is expected to rule
ed costs in state-required welfare tirely by counties Butte County by deferring a$2.8 revenues have remained virtually within 90 days,but even a decision
and criminal justice programs by p Board of Supervisors million debt for state provided fire stagnant. in favor of Butte would not like!}
chipping away at the services tra- O Assessment Appeals services after the county agreed to Butte County residents, who forestall bankruptcy because the
ditionally rendered by local gov- p Clerk of the Board gut its library program.This year, have always leaned toward the state would undoubtedly appeal.
ernment — law enforcement, ii- O Treasurer-Tax Collector Randolph says, the county needs conservative,anti-tax,anti-govern-
braries,county health and admin- p Assessor an additional $8 million just to ment posture typical of rural pop- Bills have been introduced in
istrative services. . ❑Elections make it through August. ulations,are angry about the ero- the Legislature to provide Butte
"Butte County is simply in the ❑Grand Jury As part of last year's agreement sion of county services and appear County with another "Band-Aid"
,vanguard,"says Dan Wall,lobbyist I]Courts to defer the fire-services debt,the to be adamantly opposed to raising bailout and to ease the fiscal pres•
for the County Supervisors Associ- 0 District Attorney state Department of Finance sent fees or taxes to pay for state-re- sures on counties by changing the
ation of California. "This Is not 13 Juvenile Hall in an auditor to examine Butte's quired costs. formulas for shifting sales and
simply a rural phenomenon.These ❑Public Guardian books and determine whether the "We feel that the Board of Su. Property taxes from the state to
forces are acting on all the coun- Q Animal Control problem lay with mismanagement pervisors here in our county and counties,
ties,and you see it in Fresno,you O General Assistance Welfare or, as county officials claimed, in other counties should have The Senate Local Government
see it in Solano,you see it in Los 0 Required county programs deeper structural problems be- stood up to the state long ago,and Committee will hold a special hear-
,Angeles." tween state and county govern- said:'This is it.We cannot give up ing today on the plight of Built-
substantially financed by the meets. essential services like police, fire County and is expected to vote or,
Ni Now Taxes state or federal government to on
so , a y
The verdict was clear — the and pay for state mandat- three bills b Senator Jim Nielsen,
❑Aid to Families
Counties are struggling with an with Dependent Children county, constrained by Proposi- es,"'said 75-year-old Willard Shin. R-Rohnert Park,to aid Butte.One
faaCo to raise r rt tax neve tion 13 and other limitations on ners,a retired U.S.meteorologist, would provide a$690,500 grant,an-
inability property Y 17 Housing/Community raising tax dollars,has simply been volunteer fireman and head of the other would allocate$4.1 million to
nues, rapidly increasing costs of Development
state-required programs and voter p unable to keep up with the stag- Ridge Taxpayers Association of Pay for the county's share of AFDC.
e4 P B [J Public Health gering increases in costs of the Paradise. costs and to give the county until
pay for
risice ng
o raise fees or taxes to O Mental Health programs that the state requires. Shinners'association and other 1889 to pay back last year's loan of
pay for rising program costs.Not O Public Works $2.8 million for fire services.
every county faces the same com- O Rape Crisis Intervention Welfare Costs county taxpayer groups were sue•
bination of problems, however, O Civil Disaster Program cessfui fast year in blacking the Under bills by Assemblyman
.and state fiscal experts say that CI Transportation Planning Butte County,with 0.6 percent formation of a county service dis- Chris Chandler,R-Yuba City,Butte
even if enough money were avail- O Fish and Game Commission of the state's population,has more trict to pay for fire services with would be given a$15 million grant
able to meet all county needs, it O Recorder's Office than 1 percent of the state's case- fees assessed to property owners to stave off bankruptcy and an ad-
would be difficult to create a fair load in every welfare category. and in roundly defeating a half- ditional$8.8 million to pay for fire
formula for dividing it among M Local option programs run Like many rural counties, Butte cent sales tax on the ballot for oth- services provided by the state De-
counties by counties,not required by has experienced an influx of low- er county services. partment of Forestry over the
"It's not as simple as saying state income urban refugees and retir- next three years.Chandler also has
P Y g ❑Sheriff ees fleeing Echoes Statewide
there's one thing about financing g high housing casts.As introduced measures under which
county governments that's broke, 0 Administration and Patrols result,more than half of the coun- The strain between Butte and counties would get an extra half
and we can fix it,"said Fred Klass, O Fire Departments ty's$132 million budget is spent on Sacramento over state require- Percent of the state sales tax,and
assistant program budget manager0Libraries welfare. ments that gobble up the money the state would pay the counties'
for the state Department of Fi• 0 Public Works Improvements The county's general assistance that they would otherwise use for share of AFDC costs for four years.
nance."Not all counties are in bad D Refuse Disposal payments to indigents ineligible local services is echoed in counties Lawmakers and administration
shape.Some are driven to distress for Aid to Families With Depen- statewide. officials concede that although a
with welfare costs; others have dant Children(AFDC)or other wet- in Tehama County, where six Butte bailout bill may pass,chane
very few welfare recipients but who have cut back on hours rather fare programs increased 2,000 per- of nine libraries have closed in the es of.a major overhaul in state
are weighted down with health- than take pay cuts,are overwhelm- cent during the past 10 years,from past five years,state-mandated so- county financing practices is un,
care or jail costs,"he said. ed by work that would normally be $104,000 to$2.4 million.The coun- cial service costs have more than likely in this election year, when.
Butte County, however, has done on full-time schedules,with ty's cost to run its public defender quadrupled in the same period. the state's own finances are tight.
"hit the wail"financially,and is in more employees.There is a 20 per. program has risen during the same
no position to.wait for a statewide cent annual turnover In most period from $290,000 to $1.4 mil.
solution,Randolph said, county departments. lion, while county revenues have
If an animal dies in Butte Coun- Doubts About Plight increased just 26 percent. i
��.
ty today, nobody but neighbors With cities like wealthy Chico
bothered by the sight and the When county supervisors an- and the county seat of Oroville an-
stench will cart the carcass away. nounced last year that they would .
Libraries outside of incorporated hire bankruptcy attorneys to be-
cities are closed, and frequently gin the process of formally goingE96
ty RE Broker License Prep Ut CIO
only two sheriff's deputies are on broke,some state officials roiledocket full sales commissions'.
patrol in the entire 1,675-square- their eyes at what appeared to be for s mmsipmdence auesnl,teanoot,toile count . an overly dramatic public rela- ptiml 1 weekend crus ctxn+FRES 1,594
Convicted felons are released tions ploy.Since passage of Propo- hue mshin&Iti nowpt'. Hrs ALES PERSON:€i05 A Q8
early from the overcrowded coun- striae 13 in 1878 slashed counties' Ae.Is M329s4.1S lin CONT.Co.a$69.INSL72- Wid,
ty jail and,once released,go unsu- ability to pay for services with ANG:$195.CONTRACTOR$149.Re&Ux hewer
51:954.lh,tf Agent$254.AMERICAN SCHOOLS
pervised because the county can- ss re,,., ci r xi.e, rets.. c, ce. ueee
not afford an adequate staff of i s I i It T