Chairman Steve Worthley discusses difficult financial challenges facing the County in ’18
VISALIA – Last year was a good year for the entire economy including Tulare County’s, and this year is projected to be just as good if not better. But that didn’t keep new Tulare County Board of Supervisors chairman Steve Worthley from recognizing the monumental financial challenges that still lie ahead.
“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,” Worthley said.
In 2017 retirement assets suffered a $35 million loss which was added to the previously existing $238 million unfunded liability. Worthley went on to say even more economically impactful was the decision by the retirement board to lower the assumed annual rate of return on assets from 7.6% to 7.25%. The lower the assumed rate of return, the larger the pot of money needed to pay future benefits. This change added an additional $82 million dollars to the unfunded liability and resulted in the 5% reduction.
“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 added.
Worthley says the County’s Strategic Finance Ad Hoc Committee extensively reviewed this situation with the retirement board and its administrator, the county’s investment counselor, and other experts. 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. Pressing still will be the additional staff requirements for the new jails opening this year.
He said the cost is projected to add $2.5 million annually to the Sheriff’s budget and considering about 70% of the County’s committed budget is dedicated to public safety it is the Board’s job to ensure the County’s finances are still responsibly run despite the increased costs. Worthley went on to suggest the Board employ an auditor to identify cost savings.
“I propose the board through its ad hoc committee process, consider utilizing an independent third party review of the public safety departments and thereafter apply a similar review of all other departments,” Worthley said.
His address was not all about the challenges that lie ahead though. Worthley made considerable mention of the improvements the County has made to bolster their financial position while adding significant infrastructure.
“This year we will complete the construction of the largest county construction project in over a half of 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,” Worthley said.
He added that none of the County’s projects resulted in incurring additional debt, which included the movement of several County agencies like the Sheriff’s department and the Fire Department into the Akers Professional Facility after the $3.5 million renovation.
“In contrast, when Government Plaza was purchased in 1996, the entire transaction was financed by borrowing and only recently was the debt retired,” Worthley said.
He said as well that employees in Tulare County have also benefits from the better economic times citing reinstated deferred step increases and 10% cost of living increases to general and safety employees in the last 4 years and employees will receive an additional 2% this July and safety employees will receive 3%. And there is one additional benefit to a particular employee.
In an effort to beautify the exterior of their office building 2018’s board chairman has called on all employees to keep an eye out for ways they can improve the outside of their workplace.
“It is time the board consider how we can beautify the exteriors of our facilities and their surroundings…I challenge all of our elected officials, department heads, and every employee to examine your surroundings as though you were a tourist visiting your work site for the first time,” Worthley said.
He added an incentive of $1,000 to the person whose plan was selected as the best and most cost effective suggestion and will be recognized at a public board meeting and honor the selected employee with a $1,000.00.
Worthley closed the meeting by saying that this will be his last year as chairman and a board supervisor.
“On a personal note, this will be my last state of the county address and it has truly been a privilege and honor to engage with you all in this wonderful enterprise of making Tulare County a place I, and I trust you, are proud to call our home.”