“First and foremost the county is strong, possessing great strength in its human and physical capital,” said Tulare County Board of Supervisors Chair Steven Worthley, early in the state of the county address he delivered at the board’s January 23rd meeting. “I believe, we are positioned to increase our strength if we remain true to our principles of stewardship and responsibility to the people of Tulare County.”
Worthley praised county employees, “who continually labor to improve the physical, emotional, and spiritual lives of our county residents,” as well as the board’s strategic policies that encourage and support economic development in the county, and use conservative estimates in spending taxpayers’ money.
“Leveraging that financial strength with private, state and federal funding opportunities has proven fruitful,” he said. “Over $1 billion of transportation projects have been delivered since the voters approved Measure R in 2006. This year, we will complete the construction of the largest county construction project in over a half of a century with the completion of the south county jail, a $66 million project. In 2018, we will break ground on another public safety facility in the north county, a $40 million state-funded project. The purchase of the Tulare-Akers Professional Facility last year and the $3.5 million renovations thereafter resulted in the sheriff’s command staff and several divisions move from the 1960 jail, and the entire fire administration department move from rented facilities.”
Worthley noted that these capital purchases, “have been and will be completed without incurring any additional debt to the county. In contrast, when Government Plaza was purchased in 1996, the entire transaction was financed by borrowing and only recently was the debt retired.”
He reported that the county has restored all of its employees’ deferred step increases and given 10% cost of living salary increases to general and safety employees in the last four years. County employees will receive an additional 2% in July and safety employees will receive 3%.
“These increases have been made without incurring debt and in keeping with board policy of providing sustainable and reliable incomes to our valued employees,” he said.
The Challenges Ahead
Worthley then focused on the challenges facing Tulare County.
“While the county has substantially eliminated its formal debt, we face a mounting financial burden in our unfunded pension obligation to the Tulare County Retirement Association, which operates independently of the county,” he said. “It seems counterintuitive that after an incredible bull market economy in 2017, which saw a remarkable rise in the stock prices and real estate values, that our own funded ratio of assets needed to pay current and future pensions dropped from 83% to 78%.”
An independent analysis looked at such factors as how long people live after retirement, future inflation assumptions, increased labor cost assumptions and return on investments, said Worthley who, after explaining the numbers and the formulas used, reported, “the retirement assets suffered a $35 million loss last year, which was added to the previously existing $238 million unfunded liability.
“This might just seem like some abstract math problem except that it has real financial consequences to the county’s financial heath and ability to continue to pay competitive salaries to our employees and provide essential services to our residents,” Worthley explained. “Tulare County is obligated to pay the ongoing costs of retirement, which is currently equally matched by employee contributions. The county is also obligated to pay down the unfunded liability and interest charges thereon at the 7.25% annual rate. This interest charge alone will cost the county $17 to $20 million in the coming year and significant future increases are projected.
“Within a few short months, a strategic plan will be presented to the board for review and proposed implementation to greatly assist the county in meeting its future obligations,” he said. “The cornerstone of this plan is similar to refinancing a home mortgage with reduced interest rates. At current pension bond rates, the county expects to borrow money at 4 to 4.5%. Bond funds will be applied to the county’s unfunded liability on which we currently pay 7.25% interest. This difference in interest rates is projected to save the county approximately $52 million over the next 19 years, matching the time frame the board is obligated to pay off its liability.”
New Jail Staff and County Buildings
“Another looming financial challenge will be staffing needs for the new jail facilities now under construction and those expected to break ground this year,” said Worthley. “At full buildout, it is expected that this will add $2.5 million annually to the sheriff’s budget.”
He proposed that the board consider utilizing an independent third party review of the public safety departments and thereafter apply a similar review of all other departments.
“While there are costs to such an analysis, other county governments who have engaged in such a process are recognizing significant savings while seeing improved public service levels,” he said.
Worthley then turned his attention to county buildings.
“We have invested significant resources improving many of our building interiors,” he said. “Now it is time the board consider how we can beautify the exteriors of our facilities and their surroundings. I propose that a comprehensive plan be developed for future implementation that will accomplish this goal. Such a plan would include guidelines and policies setting forth principles of aesthetic beauty accomplished with drought-resistant landscaping, and viewing our facilities through the eyes of our residents. In many cases, small things like a thorough cleaning, rearranging or disposing of unneeded personal property, and paint can go a long way. Removing dead or damaged vegetation and replanting with durable plants and aesthetically pleasing materials including the use of art will greatly enhance the appearance of our facilities.”
As an additional incentive to county employees, Worthley suggested, “that within 60 days of today’s date we select the best and most cost-effective suggestion for recognition at a public board meeting and honor the selected employee with a $1,000.”
Worthley finished his state of the county address by briefly talking about “other challenges, which require active engagement by our residents and their elected representatives,” such as ensuring that agriculture, “the foundation of our economy,” has the water it needs.
“Building Temperance Flat reservoir on the San Joaquin River is critical to addressing the ground water stabilization required by the Sustainable Groundwater Management Act passed by the state legislature in 2014,” he said. “The San Joaquin Valley Water Infrastructure Authority, of which the county is an active participant, has submitted its application for funding for the Proposition 1 Water Bond. We must remain vigilant in pursuing state bond and federal funding for this project.”
Another other challenge is the drought that left 29 million dead trees in Tulare County.
“While 2017 was a banner year for snow and rainfall in our region, nearly 5 million additional trees died from the lingering effects of the drought and the infestation of pests,” he said. “The county must continue to advocate with the state and the federal governments to address this problem and reduce the risk of catastrophic wild fires, and to move beyond a passive management system which significantly contributed to the current crisis.”
After the applause that followed his address, Worthley then joked that, “Following the state of the county address, it’s become something of a tradition to allow board members to make their snide comments.” The four other supervisors instead offered positive words on the presentation.
“Having visually appealing buildings and landscaping is a very good thing,” said Supervisor Pete Vander Poel.
“I don’t think any of us can argue that there’s anything we don’t want to work on,” said Supervisor Amy Shuklian.
“I like that the board is trying to run the county like a business,” said Supervisor Mike Ennis.
Supervisor and Board Vice Chairman Kuyler Crocker praised the entire state of the county address, noting that he “didn’t see one person nod off.”