The County of San Mateo’s finances remain strong despite uncertainties due to federal policy direction under the new administration and a gubernatorial program elimination that could ultimately place future financial burdens on the County’s shoulders.
The County’s current circumstances are nearly out of Dickens’ A Tale of Two Cities, contrasting the financial stability afforded in part by passage of half-cent sales tax extension Measure K with the looming questions from the Trump administration that portend potential unpredictability, according to County Manager John L. Maltbie in his Fiscal year 2016-17 Budget Update.
Maltbie delivered the update, including key revenue and expenditure projections and budget assumptions, at Tuesday’s regular Board meeting. Each year, the Board reviews the current fiscal year budget at mid-year to ensure revenues and expenditures are in line with estimates and to direct the county manager in preparing the upcoming budget.
The larger questions coloring Maltbie’s report were the potential repeal of the Affordable Care Act, the Trump Administration’s voiced support for new infrastructure and transportation projects, the availability of federal tax credits and Section 8 certificates for workforce housing projects and trade issues. The potential costs to the County for those run into the multiple millions of dollars. Gov. Jerry Brown also eliminated a program that caps In-Home Support Services costs at 2011-12 levels plus 3.5 percent annual growth. The potential cost to the County for proposed cut is initially $6.9 million.
Given these fiscal unknowns, Maltbie urged prudence in preparing the budgets for FY 2017-18 and FY 2018-19. Specifically, he recommended no new or expanded programs and capital expenditure recommendations will be for future projects already funded or in the pipeline.
“Despite these cautions, I remain optimistic about the future of San Mateo County as … an inclusive community in which everyone has the opportunity to succeed and a community that values and preserves its natural resources,” Maltbie wrote in his report to the Board.
As of the mid-year report, the County’s general fund is projected to end FY 2016-17 with $360.6 million in fund balance and the general fund reserve levels remain at 18 to 20 percent of the budget. General fund operating departments are projected to end the fiscal year with an $84.5 million fund balance, which exceeds appropriated reserves by $31.8 million and keeps them on track to meet year-end targets. The general fund will end FY 2016-17 with a $360.6 million fund balance.
Revenues are also a bright spot for the County with an expected 5 percent increase, or $23.8 million, due primarily to a 7. 6 percent increase in secured property tax. This fiscal year, Measure K sales tax is projected to remain relatively flat at $81.3 million, due largely to more fuel-efficient vehicles and stagnant fuel prices.
The complete FY 2016-17 Mid-year Financial Update is available at http://sanmateo.siretechnologies.com/sirepub/mtgviewer.aspx?meetid=352&doctype=AGENDA under Regular Agenda, County Manager.
The Board of Supervisors will consider the recommended FY2017-18 and FY 2018-19 Budget in June and formally adopt it in September.