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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