Tuesday, Jan 29, 2019
Christa Bigue
  • budget

    The County of San Mateo’s finances remain healthy, the Board of Supervisors heard at today’s regular meeting during the 2019 mid-year budget report, but the expectation of a looming recession and the pressure of current federal politics and tariffs led County Manager Mike Callagy to urge keeping a watchful eye. 

    The County closed FY 2017-18 with an $177.5 million surplus, plus added $121.7 million to the general fund reserve, according to the Fiscal Year 2018-19 mid-year budget update.

    Callagy, in delivering his first mid-year report since assuming his position in November, credited the Board of Supervisors for its prudence in addressing the County’s unfunded pension gap and five straight years of property tax revenue as major factors in the current financial strength. The result of that strength is the County of San Mateo being one of only handful of counties in California with AAA ratings from both Moody’s and Standard and Poor’s

    The annual mid-year check in is an opportunity for the Board to assess current status and make any necessary adjustments based on changing political or financial circumstances. The Board of Supervisors will consider the recommended FY 2019-20 budget in June with adoption in September.

    Callagy’s message at the Jan. 28, 2019, meeting built on the budget the Board adopted in September 2019 at which time fiscal restraint was similarly raised. Callagy cited an expected softening of the real estate and construction markets, federal politics and policies and volatile equity markets as reason to take a thoughtful long-view approach to avoid triggering structural deficits.

    “As uncertainly looms, now is the time for the County to adjust its sails which will allow the Board the creativity to turn challenges into opportunities to meet the uncertainty of our changing environment,” Callagy said.

    Ongoing expenditures are projected to grow approximately $90.5 million over the next two years which is the same pace as ongoing revenues. If that pace is not kept in check, the County’s expenditures could exceed revenues, Callagy warned.

    Mid-year budget highlights include:

    • The defeat of Proposition 6 means the County will receive $9.6 million in gas tax revenue in FY 2018-19 and an additional $1.3 million due to Measure W starting in FY 2019-20;
    • The County received Excess Educational Revenue Augmentation Funds (ERAF) of $170 million, which is $41 million more than last year. Half has been budgeted and the other will be used for one-time expenses including $25.7 million in additional pension contributions;
    • The general fund is projected to end FY 2018-19 with a $479 million fund balance but that calculation does not included costs associated with labor agreements.
    • The County remains on target for significantly reducing its pension liability by FY 2022-23.

    The complete Board agenda and packet, including the mid-year budget report, are available at: https://sanmateocounty.legistar.com/DepartmentDetail.aspx?ID=35506&GUID=FDD8703C-9349-47E5-842F-419E8979C549&Mode=MainBody