San Rafael, CA – The County of Marin is working on closing a projected $5.6 million gap in its next two-year budget for 2018-2020, representing about 1.3 percent of the current $440 million General Fund budget. The County Administrator has asked all 22 departments to submit about $9 million in cost reduction options to help close the budget gap.
Budget Manager Bret Uppendahl speaks to the Board of Supervisors on December 5. The County Administrator will present a proposed plan to close the budget gap at the March budget hearings. In the meantime, staff is planning a workshop in February to provide a budget update and discuss long-term facility and capital needs.
“Even though the local economy is strong, we need to do some minor belt-tightening to balance our budget next year,” said Budget Manager Bret Uppendahl. He presented a report to the Marin County Board of Supervisors on December 5 and explained that the projected gap can be traced to a slowdown in revenues and an increased cost of maintaining County facilities.
The largest slice of the County budget is for personnel costs (more than 60 percent of overall costs). Those costs have grown because of wage increases, health benefits, and workers’ compensation costs. The long-term pension investment earnings assumption recently was changed from 7.25 percent to 7 percent, which will lead to higher pension costs for the County over the long run, although the cost increases will be largely offset by better-than-expected investment returns in 2016-17.
Over the past five years, the County’s unfunded retiree liabilities have declined by more than $200 million as the result of strong investment earnings and more than $90 million in discretionary payments to reduce unfunded obligations. All three independent bond rating agencies have affirmed the County’s AAA rating in recent years, citing a strong local economy, sound fiscal management and a proactive approach to reducing unfunded liabilities.
The County also has made several high-priority investments over the past five years, including improved technology, solar panels, energy efficient lighting, MCE Deep Green renewable energy at County facilities, expanded mental health and homeless services and road repaving in unincorporated areas.
The Board has identified high priorities for the next budget, including:
- Enhancing mental health services
- Preserving affordable housing
- Prioritizing racial equity
- Investing in County infrastructure
- Addressing climate change and adapting to sea-level rise
- Implementing the County’s 5 Year Business Plan for 2015-2020
- Continuing to reduce unfunded retiree liabilities
Economists have noted uncertainties on the horizons such as federal policies such as tax reform and health care reform, but local and regional indicators for Marin have been positive.
Uppendahl said the County Administrator’s Office has convened a working group to provide recommendations on ways to improve its performance management program. The stakeholder group includes Board members, department heads, assistant department heads, County employees, and community members.
The public is encouraged to participate in the budget process. Residents are encouraged to learn more on the County’s budget overview webpage, and emails may be sent to CAOBudget@marincounty.org.