Covering Debts, Employee Pensions And Other Liabilities
Sonora, CA –Tuesday, the Tuolumne Board of Supervisors heard and accepted the county’s 2015 debts and liabilities report with a good deal of discussion focused on continuing to pay down debts and responsibly address potentially looming liabilities, such as public employee pensions, a statewide concern.
Tracey Riggs from the county administration office and County Auditor Debbie Bautista made the presentation. Here are a few highlights:
The 2014-15 adopted budget funds total $168,287.983, compared to the 2006-07 budget of $187,936,458. Major differences include decreases of over $22 million and almost $8 million in the current enterprise and general funds, largely due to the closing of Tuolumne General Hospital, according to Bautista. An increase by over $22.5 million in governmental funds mostly came from funding to the county’s new juvenile detention facility.
Last year’s debt total principal balance of $9,706,892 will increase to $16,805.537 this year, due to the establishment of a new “safety side fund” loan through Umpqua Bank. Set up to cover Public Employee Retirement System (PERS) liabilities. Bautista explained the reasoning: “We drew a line in the sand and said, this is the liability, because that liability was growing and we were not paying off what PERS was saying [indicating].” She also pointed out, “The interest rate that PERS was charging us was seven and a half [percent] and now [through the new loan] we’re paying four.”
Stepping Up Debt Pay Downs
Other external debts include pay down on two existing Jamestown Landfill loans, scheduled to pay off in 2017 and 2019 and a Jamestown Mine loan. County Administrator Craig Pedro noted with approval two items missing from the debt sheet — Gibbs Hangar and the Armory – as those loans were paid off last year.
The report noted that employee numbers, which have greatly diminished since 2002, when there were 910 county employees, peaked in 2004, with 965 on the payroll. After dipping as low as 558 in 2012, the current active workforce sits at 601. Since 2013, Bautista pointed out, the county has more retirees than active employees.
The county’s PERS liabilities currently include a $346,000 annual cost to the county and estimated $15.1 million in future liability to cover a total of 81 active employees and retirees who grandfathered into the no longer available county executive/confidential medical insurance program. The benefit pays 100 percent of health insurance premiums after retirement for those with 20 or more years of service.
At $121,000 annual cost and $9 million in future liability to the county, a figure that will continue to increase, the non-vested Public Employees Medical and Hospital Care Act (PEMHCA) is available to all retirees participating in PERS, of which there are presently 156. As employers provide minimum monthly contributions, adjusted annually with no cap, Pedro recommended that the board add to its legislative platform the action to attempt to secure reforms, such as making participation optional, setting a benefit cap and vesting criteria.
