Please see the action alert at the end of this post.
Our meeting with the County on April 4 went well. We had good attendance and we put them on notice that we are watching and concerned about budget issues. I understand an article about the meeting will be appearing in the Register soon.
There was some frustration in that most of the information was general, and also lacked context. The context that we needed was historical and statistical. We found out many facts about this years budget, but it was not given in relation to anything from which to draw relevant conclusions.
Therefore, we are going to continue to meet with the county, and I am asking everyone who attended and also those who did not to identify important questions for follow up. The main need is for historical information, like what the per capita growth in government expenditures has been, and what is responsible for the increase. We also have yet to get detailed salary information but I am working on that soon.
Please email me the issues you would like clarified, as I am continuing to meet with the county and city. Today, Leon Brauning, Don Clark and myself are meeting with Mike Parness and Carol Wilson from the City of Napa.
Some gems of information have emerged, and I have followed up by attending the County budget workshop put on by staff today for the Supervisors and have continued to gain understanding of the budget. Some of the facts gathered from both events include:
* Over 50% of the state budget and 65% of county taxes are devoted to schools, the overwhelmingly largest item in tax expenditures.
* The unfunded liability for the County for just non safety employee pensions is about $48 million. The unfunded liability for health and other benefits for non safety employees who are retired is about $34 million, for a total of about $81 million–far more than I previously was told.
A pension expert was at the meeting today who evaluated the health portion and said that the county would need to pay $5.9 million a year into the pension fund for 14 years just to cover the health part. That is big bucks for the county, as another budget expert today gave $2 million annually as an example of an amount that would seriously impact the budget. They haven’t even started to look at the bigger pension liability yet.
* Safety employee pensions have been switched to a CalPers pool by State law, and the county does not know the dollar amount that is unfunded, but the percent funded is 87%. For comparison, the percent funded above that is leading to the $4.7 million annual payment is 85%, about the same. Safety employee benefits are much better than regular employees, but there are fewer of them. In any case it is going to be a sizeable annual sum to straighten this out.
* The county is $220 million short in funds in needed road maintenance according to the roads department. That is over a period of 30 years, which works out to about $7.3 million per year. For purposes of comparison, the current annual budget for the whole department is around $4 million from the county, with varying additional funds from the state. $1.2 million was given from the State last year, but next year we are expected to get nothing from the state which means nearly a million dollar deficit.
Due to the risk of putting everyone to sleep (if you have gotten this far), I will stop with the numbers.. Also, in fairness I have to say that I am tending to list the worst problems, but there is no doubt that we have some formidable issues here.
On the bright side the County has some large reserves, but if they were to pay off all these expenses it would take more than we have by a large margin. They are being paid off slowly while the county maintains reserves, a prudent policy.
The main problem as I see it now is that the unfunded liabilities and the problems that are creating the unfunded liabilities are not going to go away. Those problems are too generous salaries and benefits, and continued increases that are ongoing. The County is in negotiations with their two unions now for new contracts and there is no doubt that they are going to be pushing for further increases, while the current rates are leading to the above problems as it is. I note that there is an assumed 6% salary increase for the 08-09 year in road department projections.
Whatever pressures may be on the County to increase salaries and benefits, we are past the point of being able to afford it. Nothing will happen except increased debt unless citizens in Napa wake up and take action to demand that this train slow down.
One possibility that was mentioned at the Supervisors meeting by their long term budget consultant was to form a citizens advisory committee to consult on budget priorities. The Supervisors appeared cool to that idea, so I stood up and said that I thought it was a good idea, which I do. A group similar to the General Plan Steering Committee to go over all this and make recommendations to the County would be the best way to do it, in my view.
It is quite possible that this is eventually going to turn into a heated political issue, and the only way to generate more light than heat and not get bogged down into partisan warfare is to have citizens from all sides of the political spectrum informed and active in making long term budget decisions.
ACTION ALERT! Please email or call your supervisors and tell them that the citizens committee to set long term budget priorities is a good idea. Better yet, volunteer to be on it. You can get their contact information by clicking on their names at this address .
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