Finance

Accomplishments

  • Refocused our County finances to fund public safety as a top priority.  The Sheriffs' Department and District Attorney's office are cornerstones to this accomplishment.
  • Addressing and funding our Other Post Employment Benefit (OPEB) liability, which was $2.6 billion when I joined the Board and is now under $800 million.
  • Stopped depending on County reserves to balance our budget and have rebuilt our reserves with new policies to protect them.     
  • 2015/2016 brought our fifth structurally balanced budget in a row and increased reserves of $220 million.  This positions us well to achieve long term fiscal sustainability for the benefit of taxpayers.
  • Grown from a declining AA rating to a glowing AAA credit rating from Standard & Poor's.  We worked hard to achieve this and there is no higher rating available.

Highlights 2015

  • Adopted a balanced County budget in excess of $3 billion for 2015/16
  • Awarded the Distinguished Budget Presentation Award for the fifth year in a row
  • County AAA bond rating affirmed by Standard & Poor’s, its highest rating. This rating indicates a stable financial outlook of the county’s financial operations and our strong reserve levels.
  • Refunded $55.6 million of existing County debt resulting in a net present value (NPV) savings of $4.5 million, or 8.17%.
  • Received Standard & Poor’s highest pool credit quality rating for the County’s investment program, AAA, making it a total eight (8) years in a row we’ve consistently maintained such rating.

Highlights 2014

  • Over the recent years of recession, the county experienced significant reductions in assessed valuation and property tax revenues compared to earlier periods of robust growth.  Starting in 2008 and lasting through 2012, Contra Costa County revenue from property taxes declined by over 11%.
  • In response, the county drastically cut expenditure growth, reduced the workforce, and lowered its Other Post-Employment Benefits(OPEB) liabilities.  As a result of these long-term restructuring actions, Standard and Poor’s Ratings Service (S&P) upgraded the county’s long-term credit rating two notches from AA to AAA, the highest possible credit rating.  Only six California counties received this AAA rating from S&P in 2014.  In addition, S & P upgraded the county’s pension obligation bonds and lease revenue bonds two notches from AA- to AA+.
  • In their credit report announcing the county’s upgrade, S&P cited very strong management, budget flexibility, financial policies and the county’s location within the very strong Bay Area economy as key factors supporting the rating levels.
  • Contra Costa County is just now recovering from the ‘great recession’ but continues to closely manage its financial recovery.  Although property tax revenues are now returning to pre-recession levels, the total net increase in property tax revenues over the past six years is only 2.32%. 
  • In spite of that the County has/is:
  • Continuing to fund our Other Post-Employment Benefits (OPEB) obligation at $20 million per year.
  • Obtained the GFOA award for our budget presentation indicating that our budget documents provide a compressive (and more importantly, readable and understandable) statement of our commitment to financial stability of the County.
  • Negotiated Labor agreements for the majority of Bargaining Units which will increase salaries by approximately 7.0% over the next two years.
  • Structurally balanced the General Fund budget for each of the past three years by emphasizing very strong management, budget flexibility and financial policies.
  • Worked with the Community Corrections Partnership (CCP) to achieve a Public Safety Realignment Plan under AB 109 that allows us to responsibly deal with the transfer of State Prisoners to the County.
  • Continued to develop options for the delivery of health services to all our communities while reducing dependency on the General Fund.
  • Began allocation of funds to address the backlog of $270 million deferred maintenance on our County buildings and infrastructure.

Highlights 2013

  • The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Distinguished Budget Presentation Award to the county in recognition of its Recommended Budget. This was the county’s third time to receive the award. To receive the award, the county had to satisfy recognized guidelines for effective budget presentation. The guidelines are designed to assess how well an entity’s budget serves as a policy document, financial plan, operational guide, and communications device.
  • On December 20th, we learned that Standard and Poor’s had up graded us to AAA which is defined as "AAA" Extremely strong capacity to meet financial commitments. And which is the Highest rating that they give. Currently only one other California County has the AAA rating (San Diego).
  •  AAA rating is important to show the public and potential investors that the County is well managed, has been conservative in its financial affairs, and has the capacity to meet its ongoing financial commitments. It is a credit not only to County staff but also the leadership of the County Board in managing the last few years of economic turmoil and budget reductions. Thanks to all of you for your leadership. Additionally, we have increased our reserves and have begun to address deferred maintenance.

Highlights 2012

  • OPEB Liability – In 2006 total liability for Health Insurance was $2.57 Billion. By eliminating retiree health insurance for new hires, capping current County contribution for existing Employees, and contribution $20 million per year into a Retiree Health Care Trust Fund the Board of Supervisors has been able to reduce this liability to under $987 million, a decline of over 60% in the liability. More importantly the Board has put in place a plan that will completely eliminate the liability over the next several years.
  • Pensions - Even before the dramatic decline of the Market over the past 12 months, our pension obligation for next year (2012/13) was already scheduled to increase by an additional $20 Million.  CCCERA‘s (the Pension Board) return for 2011 was 2.7%, far less than the 7.75% assumed rate of return. This is likely to mean additional pension increases by the County for the next several years.
  • CalPERS also did not meet its assumed rate of return of 7.75%, achieving only a return of 1.1%. CalPERS pension fund has only earned 3.41% annually on the average in the past five years; 5.36% in the last 10 years; and only 6.97% in the last 15 years. CalPERS is currently funded at about 70%.
  • Property Tax Revenues - Our Property Tax revenues have fallen for three years in a row (09/10 – 7.2%) (10/11 – 3.38%) and (11/12 – 0.49%) (Total reduction in three years = 11.07%) This has never happened before; during the Great Depression there were only two years in which the Property Tax Revenues were negative. Our optimistic projection for 2012/13 is no further decline, but a zero increase in Property Tax Revenues.
  • Infrastructure needs – The County has identified close to $100 million in building maintenance and repairs that will be necessary to maintain our aging infrastructure over the next decade. The 2012/13 budget starts to address this need by setting aside $5 million for immediate repair of some of these structures (Orin Allen Youth Facility in Byron and the Finance Building in Martinez).
  • Reserves - Although we continue to meet the Board of Supervisors Policy of keeping our reserves at the 10% requirement, as our budgets have shrunk, so has the actual dollar amount of Reserves (10% of a smaller number) and what remains is necessary to pay bills as they come due (cash flow) Policy is for 10% of Total Fund Balance and 5% of Unreserved Fund Balance. Unreserved Fund Balance is at $140.5 Million (9.4% of General Fund) at the end of 10/11.
  • As of June 30, 2011 Unrestricted Fund Balance as a % of Revenue was $122.6 Million or 11% and Total Fund Balance as a % of General Fund Revenues was $142.7 Million or 12.8%. (General Fund was $1,211,651,000) ($1.2 Billion).
  • Real Estate- 60% of California sales are “stressed properties” this means one more year of flat prices before we expect to see the market start to recover and then likely only 2% per year. In Contra Costa County the median home price in 2011 was $240,000. This represents a decline of 56.4% since 2007 when the median home price was $550,000.

Contact Friends of Mary Nejedly Piepho

MaryNejedlyPiepho@gmail.com

P.O. Box 1014, Brentwood, CA 94513

FPPC ID# 1254519

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