California County News

Done Deal: Governor Brown and His Party Reach a New Majority-Vote Budget

An on-time California budget apparently isn't impossible; then again, it did take 6 months of negotiations and the result probably didn't turn out exactly the way the governor had hoped at the start of his term. Shortly before 11 p.m., Democrats approved the last budget bill, giving the governor the opportunity to sign a deal that bypassed the Republicans through a majority vote. Upon hearing that his party had passed the budget, the governor said in a statement that “Democrats in the California State Legislature made tough choices and delivered an honest, balanced, and on-time budget.”

It appears redevelopment agencies didn’t have a fighting chance, as it was reported that the governor signed bills related to their elimination early on in the night, despite the demands of supporters to produce a bill that would keep them alive. Senate leader Darrell Steinberg was dismissive of concerns about the legality of the RDA proposals by affirming the legislative action would hold up in court, but the CRA, the League of CA Cities, and a coalition of redevelopment supporters will fight back with a lawsuit to attack the Constitutionality of the plan. 

Barring the most egregious gimmicks, the budget deal that the governor and Democratic leaders agreed to this week is largely similar to the budget plan that he vetoed on June 16th. So what are the major differences? Most notably, the deal relies upon $4 billion in higher projected revenues in 2011-12, along with triggered cuts. Basically, if revenues don’t materialize, then the trigger cuts will go into effect based on various tiers. Other cuts (or gimmicks) that the new package avoids in comparison to the first majority-vote plan are as follows: $1.2 billion from selling state buildings; $1 billion from First 5 commissions; $500 million cut in local law enforcement grants; and $900 million from raising a quarter-cent local sales tax.

Key features of the plan include $200 million in Amazon online tax enforcement, $150 million cut to state courts, $1.7 billion from redevelopment agencies, $41 million by tapping county office of education reserves, and $150 million cut to both UC schools and the Cal States, among other factors. Treasurer Bill Lockyer has called the budget plan “financeable” and said it will reduce cash flow borrowing needs by up to $2 billion.

Earlier this week, Brown readily acknowledged that the new majority-vote deal with his fellow Democratic leaders was not his Plan A, the proposal that he started with in January, but he dumped much of the blame on Republicans by commenting that they had a “religious reluctance” to dealing with the budget by raising revenues through taxes.  Brown stated that even though he thought he was close, “At the end of the day, there was just not a willingness to go along with tax extensions.” Similarly, Steinberg voiced strong sentiments about the contributions of Republicans, stating that “I’m tired of talking about the gang who refuses to govern.” Steinberg said that the GOP had every opportunity to govern in a fair and balanced way.

Steinberg went on to say that Democrats left their comfort zone by agreeing to billions in cuts but that they were forced to deliver alone, calling the Democrats’ plan the “most austere fiscal blueprint Californians have seen in a generation.” The proposal is slated to eliminate the structural deficit over the course of 18 months. Perez commented that the plan will not cause massive job losses that threaten economic recovery and he reiterated that Democrats have not wavered in their belief that new revenues are crucial for addressing the state’s structural deficit, which they will tackle in 2012 through the ballot.

As for realignment, the governor made it a point to say it would be fully funded. The Bee reports: “The new budget includes a tax swap that redirects 1 percentage point of the statewide sales tax to counties for Brown's public safety ‘realignment,’ sources said. Under that plan, the state would redirect lower-level inmates to county jails and shift parole responsibilities. The tax swap has the added effect of reducing the state's Proposition 98 requirement for schools.”

John Tavaglione, CSAC President and Riverside County Supervisor, released the following statement about the approved budget: “Realignment will only work over the long-term with dedicated revenues and constitutional protections. The budget being passed today by the Legislature is the first step in realignment. Counties must work diligently with the Legislature and Administration on a complete realignment plan, including constitutional protections.”

When it comes to redevelopment, the expectation has been all along that budget battling over agencies’ fates would likely head to the courts, and agencies have renewed their vows to fight elimination through litigation in light of a deal that involves nixed agencies. The League of California Cities and the CRA have been in the process of preparing a lawsuit for quite some time. The deal announced on Monday follows the same terms in the budget package that the governor vetoed on June 16th, so basically pay up or die. Chris McKenzie, executive director of the League of California Cities, stated “We will file litigation at the earliest opportunity to defend the constitution and the will of the voters.”

San Bernardino/Riverside Counties Face Physician Shortage of 3,000

Medical experts have great concern for the future of health care in Riverside and San Bernardino Counties due to an estimate from local medical school officials that the region has a physician shortage of about 3,000. Under Obamacare requirements that are set to go into effect in 2014, officials estimate that there will be 600,000 San Bernardino and Riverside county residents who will newly qualify for coverage. The immediate future presents issues for medical staff and patients because the region contains an older doctor population and insufficient number of physicians when taking into account population figures. California reportedly has the oldest doctor workforce in the country, as 30 percent are over the age of 60. The Daily Bulletin reports:

“In San Bernardino County nearly 33 percent of all physicians are age 56 or older. There are 44 active primary care physicians per 100,000 in San Bernardino County, while 60 to 80 are in the range of what is needed, according to a California HealthCare Foundation study released in June 2009.  Statewide, there are 59 primary care physicians per 100,000. If doctors of osteopathic medicine were added to the count, there would be 63 primary care physicians per 100,000 population, which is just above the bottom end of the supply need estimate, the study said.”

Over the course of the next 10 years, it is believed the two-county region will see its doctor shortage grow to 5,000. But Riverside and San Bernardino Counties aren’t the only ones in the state facing shortage issues. The California Medical Association has pointed out that 74 percent of counties have physician shortages and 45 percent of the state's counties are facing shortages of medical specialists.

San Joaquin County Loses Contract Language Dispute; Ordered to Pay $1.1 Million in Back Pay

San Joaquin County has lost a years-long court battle over contract language with law enforcement officials, so the local government will have to dish out $1.1 million to cover about eight years of back pay to current and former employees. In fact, the county is expecting it will have to pay more than $1.1 million due to higher pensions and future wages. The pay issue ended up in court because there was disagreement over determining salaries after a promotion. But the judge in the case deemed contract language on the matter very clear, so raises received since 2003 will have to be readjusted for many employees and the county reports that other workers will receive higher salaries more quickly because of the ruling. The Record reports:

“In recent years, the county had twice rejected the claims for back pay, arguing that the Law Enforcement Management Association and the Sheriff Deputy Sergeant Association hadn't objected to how pay was calculated for the 16 years before the two groups filed a complaint in 2008. The employee groups argued that the contract language determined what salaries after promotions should be, past practices notwithstanding.”

The board of supervisors passed a resolution to comply with the order and Board Chairman Larry Ruhstaller indicated that “The judge said to do it; we will do it; that's about the long and the short of it.”

Juvenile Hall Justice: Supervisor Upset over Jailing of 12-year-old Boy; Counters County Policy

Back in 2010, Santa Clara County Supervisors set a minimum age limit for juvenile hall admission, which at the time was considered one of the first county policies of its kind. Supervisors were disturbed by reports from the media about detentions of young kids who were kept in juvenile hall. Now Dave Cortese, president of the Board of Supervisors, is exerting his influence over another troubling detention that breaks with the policy adopted by the supervisors. Cortese wanted to free a 12-year-old boy from the juvenile hall who allegedly committed two violent crimes. Mercury reports that “Cortese's office spent weeks advocating for release to a facility more effective in treating a boy his age. The supervisor's staff presented to attorneys and probation officers involved with the case an eight-page list of alternative placements and interventions specifically addressing his problems with gangs, violence and family relationships.” The boy was eventually released to his mother and has been subject to round-the-clock social work and supervision.

A deputy district attorney commented that “The DA agrees with the policy to try and keep children 13 and younger out of juvenile hall -- wholeheartedly. We look at only the most serious cases in regard to detaining young minors. However, there are always exceptions." The boy was ordered to serve 30 days in juvenile hall. Supervisors originally passed the policy to influence judges into using supervision at home, foster care with intensive services, and small, community-based treatment centers. Cortese has noted previously that he would like to increase the minimum age limit for confinement at juvenile halls to 16.

Tulare Supervisors Agree with Grand Jury Report on Problematic Growth of Pot Farms

Tulare County Supervisors for the most part agree with the findings of the Tulare Grand Jury when it comes to problems that the growth of pot farms present. While Tulare is not the top-producing county where marijuana cultivation occurs, the report notes that more than 100 illegal marijuana-growing operations are occurring in Tulare County and most are run by drug cartels. Law enforcement officials have concluded that marijuana is the number one crop in the county. The jury found that state and federal costs were minimal in terms of helping local officials with eradication costs. Officials with the county have pointed out that they spent more than $350,000 last year to eradicate plants. The jurors make the following conclusion: “There is an urgent need to eradicate illegal marijuana growing” in Tulare.

However, for a problem that is only growing, questions have been raised as to whether the county can afford the resources to have a major impact in curbing the spread of illegal growth. In an editorial, the Visalia Times-Delta writes that “The Grand Jury did the community a service in defining the extent of the problem. It's huge, which is exactly why it's beyond local ability to control.” The seemingly unwieldy problem is no easy feat to address, as raids can be dangerous and require extensive preparation and authorities. While the supervisors plan to make their agreement known in their response to the report, the officials did point out that they disagree with the recommendation that the county should have its own helicopter. Supervisors said the idea was far too costly. 

Sac County Grand Jury Scolds City Over its Pot Farm Deal; Says Blinded by Revenues

Sacramento County's grand jury concludes Isleton officials allowed procedures and laws to be compromised because they had their sights set on receiving $25,000 in monthly revenue from a pot farm that jurors conclude was approved without delay due to the financial prize. Under the deal, Delta Allied Growers would be allowed to construct a massive spread of greenhouses on the eastern edge of Isleton for the purposes of growing medical marijuana, which landed city officials in hot water when every manager and elected official in the town was subpoenaed by Sacramento County District Attorney Jan Scully.

The critical jury report also reveals that even though Sacramento’s District Attorney and federal authorities warned the city and the growers that that the planned operation was being investigated, growers cultivated more than 1,000 plants in three garages and then buried them deep in the ground. The Bee notes that the jurors single out “City Attorney Dave Larsen, who was paid by the marijuana growers $100 an hour over his city-paid rate to ‘help expedite the procedural aspects of the application’ for the farm. That arrangement ‘suggests an improper financial interest in the project,’ the report states.”

An excerpt from the report reads as follows:

“The grand jury concludes that the City of Isleton was highly vulnerable to a seemingly lucrative proposal, and that DAG exploited that vulnerability. However, city officials compounded the problem, by failing to exercise due caution, by failing to keep city council members fully informed, and by failing to ask obvious questions. The grand jury also concludes that this situation might never have arisen if state law and guidelines regarding medical marijuana were more definitive and had been more carefully observed.”

The report also noted that Delta Allied Growers claimed to be a not-for-profit entity incorporated under California law, but when the outfit made its proposal to the city, that was not the case since DAG was not technically incorporated. One of the recommendations the jury makes in its conclusion is that the City Council should establish policies defining when expedited project approval is allowed. The city attorney is arguing that he visited the site several times and there was no evidence that marijuana was being grown. Read the full jury report here.

North San Diego County Tribe Victorious Against the State after Supreme Court Rejects Appeal

The state of California’s attempt to secure more payments from a North San Diego County Indian tribe in exchange for more slot machines resulted in a legal defeat for the state, as the Supreme Court has refused to take up California’s appeal of a lower court ruling. The previous ruling stated that it was a violation of federal law to make the tribe pay casino revenues into California's general fund, which gave the Rincon Band of Mission Indians a victory. The tribe first filed a lawsuit back in 2004 when then-governor Arnold Schwarzenegger insisted that the tribes pony up more money if they wanted additional slot machines. Rincon Chairman Bo Mazzetti commented the following about the court outcome: “Regrettably, Gov. Schwarzenegger chose to thumb his nose at the federal law and the tribe's interest in reasonable compromise, costing the state and the tribe money and time, money better spent in creating jobs and providing much needed services.”

California has a $7 billion tribal casino industry, so the case will have a major outcome in future negotiations with tribes and how deals turn out. Many tribes have already indicated that they wanted to reexamine deals that had been reached with Schwarzenegger in light of the new ruling. From the tribe’s perspective, the case only confirmed the claims they have been making from the start: the state was trying to use illegal taxes and violated the federal Indian Gaming Regulatory Act. The lower court wrote the following in its opinion:

“We are mindful that many states, and especially California, are currently writhing in (a) financial maw. However, we are also keenly aware of our nation's too-frequent breach of its trust obligations to Native Americans when some of its politically and economically powerful citizens and states have lusted after what little the Native Americans have possessed."

After a press conference about the budget, Governor Brown was asked about the case’s outcome, but he only replied, “No comment.” As Attorney General, the governor defended the state’s assessment of the situation.

Riverside Supervisors Consider Public Records Fee and a Levy on Solar Developers

If you’re in Riverside County and you want copies of public records, then you might have to break open your piggy bank, as Supervisors are considering a fee of $50 an hour for fulfilling all such retrieval requests. The motivation for the proposal is to help the county recover the costs of duplication, including the amount of time that many requests involve, which takes county workers away from other duties. But should access to public records be contingent upon a fee? Open government advocates would likely disagree and opponents may argue that the potential ordinance is a violation of state public records law. Under the terms of the proposal, the first hour spent on a public records request would be free. Advocates for greater transparency fear that public inspection of public documents will be less likely if a fee is in place. The Press Enterprise reports that Terry Francke, general counsel of Californians Aware, an open-government advocacy group, commented the following: “If you have no idea what the access is going to cost, then I think you are going to be hesitant to even make a request. If the county does approve this, we would think seriously about filing suit challenging it.”

If a resident faces financial hardship, then under the ordinance they would be able to have the fee waived, but in the end, the citizen would be forced to jump through hoops. Supervisors are scheduled to discuss the proposal at their meeting on Tuesday. Supporters argue that the county’s tight budgetary times make the ordinance necessary. Info on the order initiating the ordinance can be seen here.

And in other Riverside-related news, Supervisors are also considering a solar development fee. The county currently has the largest solar energy plants in the state, but in light of the effect that massive plants can have on the county and development, officials are weighing a 2% levy on solar developers’ annual revenue. Riverside has proven to be an attractive location for solar energy plants, and critics of the fee argue that it will slow down renewable energy in the region. Riverside County Supervisor John J. Benoit supports the fee and commented, “We're just saying that when we're left with all the impacts of development, give us a little something back for the imposition on our county.”

Public Pension Promises Projected to Cost $1,398 Annually Per Household in New Study

A new study on retirement benefits examines the revenue demands of the pension promises to public employees by calculating the average contribution that American households will have to contribute to fulfill such costs. According to the Kellogg School of Management at Northwestern University and the Simon School of Business, each American household on average will have to pony up $1,398 per year to fulfill public pension promises. The authors posit that if newly-hired public workers were switched to defined-contribution plans, then the per-household annual contribution would only be reduced by about $175. The study also looks at calculations of the increases in contributions that would be required to achieve fully funded pension systems. Here are some highlights from the report:

• Government contributions to state and local pension systems must rise to 14.2% of own revenue to achieve fully funded systems in 30 years. Average contributions would have to rise to 40.7% of payroll to achieve these goals, corresponding to an increase of 24.3% of payroll.
• In thirteen states, the necessary immediate increase is more than $1,500 per household per year, and in five states they are more than $2,000 per household per year.
• Assigning new hires to DC plans is known as a “soft freeze” of the DB plan. Our analysis shows that soft freezes have moderate revenue-saving effects. The required increases decline from $1,398 to $1,223 per household
• Taxpayers may leave the states that are the most burdened by the legacy liabilities and look for places with lower taxes and better public services.This sorting is likely to further increase the burden on states with the largest unfunded liabilities. Third, in states where the burden is large relative to revenue, there is likely an increased danger of a municipal debt crisis if the holders of public debt lose confidence in the ability or willingness of taxpayers in the state to foot the bill for legacy liabilities.

For California, the authors found that between 2008 and 2009, employee contributions grew by 7.2% for the funds covered in that study (CalPERS, CalSTRS, and the University of California Retirement Plan), while government contributions shrank by 3.4%, so that total contributions shrank by 0.1%. Based on these figures, it was calculated that in 2009, there were $6.47 billion of employee contributions to state-sponsored plans, $10.95 billion of government contributions to state-sponsored plans, $1.87 billion of employee contributions to locally-sponsored plans, and $4.28 billion of government contributions to locally-sponsored plans. Read the full study here.

Done Deal? Bill to Remove Indicted Officials from Regional Boards Moves Closer to Approval

As a way to protect federal funding, Assemblyman Paul Cook, R-Yucca Valley, introduced AB 309, which would remove indicted officials from regional boards. The bill is moving through the Capitol on its second attempt. Under the terms of the legislation, it is outlined that “this bill would provide that an appointed or ex officio office becomes vacant where the appointed or ex officio individual has been debarred, suspended, disqualified, or otherwise excluded from participating in federal covered transactions, as prescribed under federal law.” Assemblyman Cook felt the need to push forward the bill due to the indictments of four San Jacinto councilmen, which created issues related to federal funds for the Riverside County Transportation Commission.  At a time when funding is hard to come by and state and local budgets are in a tight squeeze, Cook wants to ensure that those facing criminal allegations do not make any group they are associated with ineligible to receive federal funds. The Press Enterprise reports:

“The process is called debarment. Federal law bars money from flowing to individuals accused of crimes such as money laundering, theft or abuse of political office. Riverside transportation officials worried the indictment of former councilman James Potts, a member of their board, put the agency's federal funding at risk. San Jacinto officials opted to replace Potts and Jim Ayres on all regional boards. Ayres pleaded guilty Thursday to three felonies in relation to the corruption probe.”

The bill will be sent to the governor if the Senate approves it. The Assembly has already provided its support.