Marin supervisors are set to review the $717 million budget
Marin County supervisors are expected to review a proposed budget of $716.6 million for the 2022-23 fiscal year that begins in July, a five percent increase from the current budget.
Reflecting increased revenue and a $25 million injection of funding from the American Rescue Plan Act, the proposed budget contains $61 million in new spending, including $5 million ongoing.
“What’s unique about the proposed budget is that we’re recommending over $50 million in one-time spending,” Marin County Administrator Matthew Hymel told supervisors Tuesday after submitting the spending plan to the advice.
Hymel said the county’s one-time spending over the past few years has typically ranged from $10 million to $15 million. He said $25 million in pandemic relief funds available to the county for the 2022-23 fiscal year was a big reason for the proposed spending increase.
“We also recommend continued spending on high priority areas such as homelessness, sea level rise and emergency preparedness,” Hymel said, referring to the $5 million in ongoing spending. which he recommended.
“We haven’t been in this position very often either in my 17 years here as county administrator,” Hymel said.
Public hearings on the draft budget are scheduled to begin at 9 a.m. on June 20.
Some of the costliest items on Hymel’s list to fund with the $25 million in pandemic funding include: $7 million to help pay for renovations to a building at 1251 S. Eliseo Drive in Larkspur for a Project Homekey project; $5 million to help rehabilitate the Golden Gate Village public housing project in Marin City; $4 million to create a County Service Center in South Marin; $3 million to fight climate change and sea level rise; and $1.5 million to help municipalities manage homeless camps.
Some of the largest expenses that will be covered by the $5 million in ongoing new spending would include: $1.5 million for permanent supportive housing for formerly homeless people; $1 million to revamp the Office of Emergency Services and add staff; $810,000 to create a unit within the administrator’s office to combat sea level rise; and $800,000 to hire more public relations staff.
In a separate action on Tuesday, supervisors authorized the use of $1.9 million in current year savings to create a reserve for future ongoing supportive housing costs.
The remaining $31.1 million in one-time expenses would be funded by savings from the 2021-22 fiscal year, increased local and state tax revenue, and lower retirement costs.
The county expects county assessed property value, which determines property tax revenues, to increase 6.5% in fiscal year 2022-23 and an average of 5.4% over the next four months. years.
The county also expects local sales tax revenue in 2022-23 to be 20 percent higher than the prior year, and state allocations, which are based on revenue from statewide sales tax, will increase by approximately 18%.
The $31 million in one-time allocations would include: $5 million for the County Affordable Housing Trust Fund; $5 million for civic center improvements; $4.25 million for fire facility upgrades; and $3 million for technological improvements.
The county has over $200 million in deferred maintenance at over 40 facilities.
The one-time stipends would also include $500,000 for the local implementation of Gov. Gavin Newsom’s CARE Court, a court-ordered mental health care system for people with psychosis.
“We are concerned about state funding to support this program,” Hymel said. “We anticipate that there could be a real increase in demand for this program.”
Hymel said the county will lobby the state to adequately fund the county to operate the program.
The county expects its retirement costs, which make up nearly 10% of its spending budget, to decline by more than $6 million in the 2022-23 fiscal year. This is due to the extraordinary investment returns of 32% achieved by the Marin County Employees’ Retirement Association in fiscal year 2021.
The returns wiped out the county’s unfunded pension liabilities. The resulting savings will be spread over five years.
The bull market came as the federal government pumped trillions into the economy to offset the effects of the COVID-19 pandemic. This year, the stock market has performed poorly.
On Tuesday, the World Bank released a report warning of a global recession, as the United States raises interest rates to control inflation, and the possibility of “stagflation”, a recession combined with the ‘inflation.
Supervisor Stephanie Moulton-Peters asked Hymel: “There’s been a drop in the market, so I’m wondering where this is heading. I’m curious to see the market change, and I consider our retirement picture.
Hymel said the county expects MCERA to experience investment losses this year. He added, however, that these losses would be offset by last year’s gains “as long as the market losses are not as large as the 30% (gains) we had the previous year”.
The county still has $178 million in unfunded retiree health liabilities. Hymel recommends that supervisors use any annual savings resulting from reduced pension payment requirements to accelerate the repayment of these liabilities until they are at least 85% funded.
Supervisor Damon Connolly said he was pleased to see the budget contains $150,000 to support community oversight from the Marin County Sheriff‘s Office.
“We get a lot of inquiries about the status of this,” Connolly said.
Rollie Katz, executive director of the Marin Association of Public Employees, said he was pleased the budget recognized the need to address county employee recruitment and retention as one of the county’s top priorities. Nearly 15% of the county’s approximately 2,400 staffed positions are vacant.
“The reality is you have to pay people more money,” Katz said, “especially in today’s economic climate and especially because of the cost of living in Marin County, or for those who don’t cannot afford to live here, the cost of having to travel long distances.