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Good morning, everyone, and welcome. The meeting is now called to order at 9 o'clock a.m., we will now have a moment of silent, silent reflection, or silent prayer.

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Thank you. Please join me in the pledge of allegiance.

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Welcome, everyone, for the record. This is the board meeting of March 29th, 2016. Will the clerk please call roll.

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Supervisor Viyapudua, Supervisor Miller, Supervisor Wynne, Supervisor Elliott,

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Chair Sabian.

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Present.

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Thank you.

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We will start the morning off with a proclamation and then a commendation.

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So we will begin with a proclamation declaring the month of April 2016 as sexual assault awareness

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month in San Joaquin County.

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So I accept that proclamation on behalf of the community.

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We have Kate Masek, Marketing and Development Director of the Women's Center Youth and Family Services.

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So as I'm approaching the bias, will the clerk please read the proclamation?

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Where a sexual assault is a violent crime with public health implications for

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every person in San Joaquin County, as a victim, a survivor, or as a family member,

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or significant other or neighbor, co-worker of a victim or survivor, and whereas no one person, organization, agency or community, can eliminate sexual assault on their own, we must work together to educate our entire population about what can be done to prevent sexual assault, what can be done to support victims or survivors and their significant others, and what can be done to increase support for agencies providing services to victims or survivors, and whereas agencies

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agencies such as a woman's center, youth, and family services have led the way in Sandwell King County in addressing sexual assault by providing 24-hour help line services and responding to emergency calls by offering support and comfort to those impacted by sexual assault during medical exams and criminal proceedings and empowering those impacted by sexual assault to charter their own course for healing and whereas ending sexual assault in Sandwell King County must include active public and private efforts including

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conversations about what sexual violence is, how to prevent it, how to help survivors

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connect with counseling and other support services, and how to work together as community

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to better address sexual violence.

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And whereas a woman's center, youth and family services request community support as it

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continues its effort for eliminating the sexual violence in Samo King County, to create a

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future where all women, men, and children can live free from violence and exploitation.

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Now, therefore, be it resolved that the San Joaquin County Board of Supervisors just hereby proclaim the month of April, 2016, as sexual assault awareness month in San Joaquin County passed an adoptive this 29th day of March, 2016.

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Thank you very much.

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I'd like to thank the supervisors for their support of our organization.

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Women's Center Youth and Family Services is 40 years old this year with the history of serving because of sexual assault domestic violence, human trafficking,

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and homeless and runaway youth.

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I do have some materials for the awareness month

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that I'll give to the clerk for the Board of Supervisors

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so you can have all of those, including the awareness pin.

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The awareness month color is teal, so I ask that you wear these,

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that you tell people why you're wearing these

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to help us raise awareness.

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I checked the statistics yesterday to give a comparison

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of what numbers of sexual assaults are actually reported

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to law enforcement in San Joaquin County compared to the numbers of people that we see.

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And on average, between 130 to 175 rapes are reported to law enforcement agencies in San Joaquin County each year.

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By comparison, we serve almost 1,300 individuals on our helpline every year.

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Last year, we had over 1,300 victims and there's significant others receiving crisis intervention services,

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is over 1,000 individuals, you have advocacy and accompaniment to court, and the list goes

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on in terms of our support groups, our help with accompanying individuals to Sam King

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General Hospital for rape exams to support them throughout their recovery process.

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We know that victims are not going to come forward if they don't believe that the community

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is going to support them, if they're not going to be believed, and we know the answer is

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to talk about it, to raise awareness, so let people know that we stand with survivors that we will not tolerate a culture that allows rape to happen.

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I greatly appreciate Chairman Zapy and sending out the memo to all of the county department heads about denim day, and we're really excited to be able to do this again this year.

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We had over 2,000 participants countywide last year in denim day, and including over 750 county employees, we hope that will continue to grow this year as well.

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It's a way to raise awareness.

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It's a way for us to raise funds to support our services for survivors.

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And Denim Day this year is April 27th.

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I also have materials for you for Denim Day, including a Denim Ribbon, and the Denim Day

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San Joaquin Sticker that I hope you'll wear on April 27th, and you'll let people know why

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you're wearing these items to support victims.

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And to change the harmful attitudes that still exist about sexual assault in our community

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across the country and across the world.

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The history of denim day goes back to a court case in Italy in the 1990s, where a young girl was raped by her driving instructor.

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The conviction was overturned by the Italian Supreme Court simply because the victim wore tight jeans when she was raped and the court concluded that as a result she must have helped remove them and thus gave consent.

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The next day women in the Italian Parliament came to work wearing jeans, email and mail legislators in California at the state level did the same and this became the spark to a worldwide outrage against these harmful myths and misperceptions that still persist about sexual assault.

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So by wearing jeans, by donating on denim day, the members of the community are saying that we won't tolerate this in our community, we won't stand for sexual assault, and we support and we believe the survivors.

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Thank you very much for your time today, and thank you for this recognition and this very important issue in our community.

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Thank you.

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Thank you so much, Ms. Masek, to you, your organization, and all the other organizations and individuals who work hard to help heal victims of sexual assaults and bring awareness to this very important issue.

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At this time, if there are any comments from the board,

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all right?

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Very well, thank you so much, we appreciate your hard work, thank you.

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We now have a recognition of the San Joaquin County Purchasing Department for receiving the 2015 National Achievement of Excellence in Port Curement Award.

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by the California Association of Public Procurement Officials.

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I'd like to ask Mr. John Drake, our Director of Purchasing and Support Services to come to the podium.

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We have both a Board Commendation and an Agency Award presentation.

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So I would first like to present your department with our Board Commendation.

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And then I will ask the President of the California Association of Public Procurement Officials to present the Agency Award.

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So, having said that, would Ms. Duzinski please read the commentation?

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Whereas to recognize a significant role that public procurement professionals have in assuring the efficient use of taxpayer dollars by the effective and ethical use of procurement practices, the National Procurement Institute established the achievement of Excellence in Procurement Award or AEP Award.

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And where is the AEP award recognizes organizational excellence in public or nonprofit procurement based on high scores achieved from standardized national criteria, including ethics, training, innovation, continuous improvement, contractual development, professional certifications,

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e-procurement, leadership in the industry, and many more.

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And whereas the counties procurement professionals are responsible for the purchasing of goods and services,

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contract execution, bids and requests for proposals, as well as developing procurement strategies to obtain the best product or service at the best price.

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And whereas the San Joaquin County Purchasing and Support Services Department was awarded the 2015 AEP award for

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where it's demonstrated excellence in public procurement practices.

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And whereas this AEP award is a great honor for San Joaquin County as it was one of only

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50 counties in the United States and Canada that achieved this award.

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Now therefore be it resolved that the San Joaquin County Board of Supervisors does hereby

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commend San Joaquin County's purchasing and services department for being awarded the

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2015 National Achievement of Excellence of Procurement Award and recognize the outstanding

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efforts of the department staff who work so conscientiously to fulfill the county's procurement needs.

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Past and adopted this 29th day of March 2016.

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Now I'd like to call up Mr. Craig Raider, president of the California Association of Public Procurement Officials, who will present the agency award.

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Good morning, Chair and members of the board.

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My name is Craig Raider on the president of the California Association of Public Procurement Officials, also known as Capo.

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So on behalf of Capo, I'd like to applaud Mr. John Drake, Mr. Johnny Terry and the entire procurement staff at San Joaquin County for the hard work and dedication that made possible to be a recipient of this internationally recognized award.

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This is the first award for San Joaquin County, and I'm sure it's the first of many to come.

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The procurement profession is rarely given much praise or recognition, yet performed by vital and much needed service to the organizations that we support.

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This is not such an easy task, considered all the federal, state, and local laws, regulation,

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statutes, and policies that impact how we procure the products and services in the public sector,

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which is why we have typically seen as a roadblock.

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So just look around you.

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Everything you see was purchased by somebody, whether it's this podium, the microphone, the computers,

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the flag, the monitors, everything was procured by a procurement professional.

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Your procurement staff works hard to ensure its customer's either products and services required,

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all while complying with lily mandated requirements.

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The receipt of the AAP recognition is the receipt of the AAP is recognition that they do it and they do it.

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I'm honored and privileged to know most of your staff for many years mainly through our involvement with CAFO.

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I met Mr. John Drake several years ago when we were both serving on the Board of Directors.

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I've known Johnny Terry for roughly 20 years when we were mainly co-workers at that county of Sacramento.

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John and his staff's involvement in CAFO, either supporting the local Delta chapter, volunteering for the annual conference, or as in Johnny's case, voluntary to chair CAFO Technology Committee for about several years, is a testament to their commitment to the procurement profession.

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and the county of San Joaquin and has played a big role

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in making the receipt of this award possible.

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The AEP award confirms the consummate professionalism

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of the procurement and support services staff.

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Their desire to provide the best level of service

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to their customers and to focus continue

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on improving processes and operations.

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I am proud to join you in celebrating success

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and applaud John and his entire staff.

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Congratulations on receiving this receiving award.

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Would you like to say a few words Mr. Dre?

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Thank

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you, Mr. Chairman.

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As Mr. Raider outlined, this AEP award is the industry standard in collecting and evaluating best practices in our field.

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For example, some of the criteria not previously mentioned are providing ongoing contract training, offering procurement cards for county employees, conducting a continuous and relentless review of transactions to ensure compliance and complete process transparency.

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We are elated that we are successful in achieving this honor.

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I'd like to thank the County Administrator and her office for their steadfast support.

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I'd like to publicly thank Mr. Rader for being here today and presenting us with this award.

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He and Sacramento County have been a strong supporter of ours for many years now.

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Thanks, Greg.

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I really want to recognize the purchasing and support services team.

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Sometimes our jobs do not make us very popular with our county departments.

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It's hard being the messenger, but that's okay.

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It is our role to ensure that all processes are present.

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Deliver exemplary levels of customer service and professionalism. We constantly walk the fine lines between county interests, governing codes and ordinances and the vendor community. In the end, our sole objective is to properly contract for goods and services that deliver the right quantity and quality at the right time for the right price. I also want to take this opportunity to recognize our county departments and their respective teams. We work with

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every single one of them and I'm happy to announce that we have developed an effective working

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partnership. Finally, I'd like to acknowledge Johnny Terry, purchasing step-of-your-director.

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He led our submission effort which is a large undertaking and we were successful.

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This is something we've been eyeing for seven years now and Mr. Terry led us in delivering this

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award for the county. So Mr. Chairman and members of the board, I am honored to accept this award

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on behalf of San Joaquin County, and the hard-working, purchasing and support services team.

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Thank you, Mr. Drake, to you and the rest of your departments.

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Are there any comments from the board?

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Just Mr. Reader, thank you for coming down, making this trip and to Mr. Drake, thank you for everything you've done, especially to your staff.

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This is a very prestigious award, and it just shows, you know, a hard and you and your staff have been working.

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Thank you so much.

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Thank you, Chair.

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Obviously, your job is very challenging and difficult, and I understand that sometimes the

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criticism that you and your staff receive

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that involvement would return it for a number of years and other agencies.

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I would just add one thing, which I think is most important.

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And last year, I was kind of spearheading a major project for the county, and I had some questions

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in regards to the process that you undertook in regards to a request for proposal.

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And I would say when I met with you, I was extremely impressed one because obviously

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you're not only, but you had a list of steps laid out that I could actually look at and

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to go through and keep and remind myself, et cetera,

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which was extraordinary because I just expected

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to have a short conversation.

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I think we spent more than an hour.

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The reason I bring that up is because I think

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that one of the things that your department

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and you as the director demonstrate

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is the caliber of our county and our departments

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and our leaders in regards to getting the job done

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for the residents.

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The second one is your personal engagement.

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Certainly with me, you know, trying to find out how the process works and taking the time because I know you're busy to explain it to me and show, you know, it's set by step, which I really appreciate it, which also was beneficial because I got a lot of calls in regards to the process, which I was able to sound halfway intelligent when I responded.

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So, I thank you for that, I thank your department for the great job they do, and again, well

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deserved, and I appreciate all the support that you give into the board, and certainly

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to the residents of Selma King County, thank you.

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Thank you.

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I would just also echo my colleagues, thank you for all your hard work.

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I think it's always difficult when you're the group that has to impose order, but I think

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your team does a great job in being consistent and being fair and it provides a lot of assurances

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for us when we interact with the public to be able, exactly as Supervisor Winds said,

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to be able to point to a process that is adhered to very consistently.

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It gives all of us and I think the public a great deal of comfort knowing that their tax

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dollars are being booked after and are really being spent in the most cost-effective way.

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So thank you.

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The last thing I would like to say is, would you like to have Mr. Terry and the rest of

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your team stand up so we can all acknowledge them?

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I would like to see them all.

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We'd like to take a picture with you if you don't want to.

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Yes, you bet.

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Thank you all.

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Well, thank you, Mr. Drake, and the entire purchasing department for your outstanding efforts

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Through out the years as evidenced by your receipt of this very prestigious award, it's certainly an honor to have an award like this being one of only 50 counties in the entire United States and Canada to receive such an award.

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So just high testament to the standards of excellence that you oversee throughout your department. Thank you very much for all your great work.

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Thank you all for your generous comments. Thank you.

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I'd now like to ask the members of the board to join me for a photo.

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Members of the department, please join us as well.

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In on in our agenda, we have the approval of the minutes.

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We have for the board's consideration the minutes of the regular meeting of March 15, 2016.

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Is there a motion in a second to approve those minutes?

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So move.

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Second.

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Moved and seconded.

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The providers please cast your vote.

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Motion carries five to zero.

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So much moving on to appointments to boards and commissions.

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We have no appointments for approval this state,

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so we will move on to public comments and the consent items.

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So now's the time for public comment on matters

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within the jurisdiction of the board of supervisors

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that are not listed on the agenda

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and any matters listed on the consent agenda.

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The request that she fill out a comment form,

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If you address the board, there is a time limit of three minutes for these comments.

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There is a device on the podium with a green yellow and red light.

206
00:22:21,040 --> 00:22:24,140
The yellow light will come on 30 seconds before the end of the three minutes

207
00:22:24,800 --> 00:22:29,460
with regard to public comment. The law strictly limits the ability of board members to discuss matters

208
00:22:30,000 --> 00:22:33,740
not on the agenda, so this is not an appropriate time to have a discussion

209
00:22:34,320 --> 00:22:39,820
with the board regarding your comments. We ask that you refrain from personal attacks during

210
00:22:39,820 --> 00:22:44,820
your comments and that you address all comments to the Board of Supervisors, not to the audience.

211
00:22:45,520 --> 00:22:49,120
Comments from the public may not reflect the viewpoint of the Board of Supervisors.

212
00:22:53,080 --> 00:22:56,100
I have a request from Mr. Kevin Schauver.

213
00:22:57,000 --> 00:22:59,120
I'd like to approach the podium.

214
00:23:02,160 --> 00:23:03,000
Good morning, Mr. Schauver.

215
00:23:03,520 --> 00:23:03,920
Good morning.

216
00:23:05,460 --> 00:23:06,940
My name is Kevin Schauver.

217
00:23:07,200 --> 00:23:09,240
I'm a lifelong resident of Stockton.

218
00:23:09,480 --> 00:23:12,020
I'm here today representing the Lincoln Highway.

219
00:23:13,720 --> 00:23:18,460
if you're not familiar what the Lincoln Highway is, it's America's oldest highway.

220
00:23:18,920 --> 00:23:21,400
It runs right through Stockton and Samokington.

221
00:23:23,080 --> 00:23:28,780
Over the last couple years ago, I started a project here in Stockton to have

222
00:23:31,970 --> 00:23:35,730
the signage installed along the route in Stockton.

223
00:23:36,350 --> 00:23:39,770
And there are 19 of these signs that go from the city limits

224
00:23:39,770 --> 00:23:45,150
It's on lower second eight mile down through South Stockton.

225
00:23:45,570 --> 00:23:50,490
They go right down Pacific Avenue, Maple Street, El Dorado and Center.

226
00:23:52,510 --> 00:23:59,930
I'm here today because I have something for board member Zapien.

227
00:24:01,130 --> 00:24:04,050
This should have gone to him when he was on the City Council.

228
00:24:04,050 --> 00:24:14,250
So some snags in getting this printed, some procrastination on my part, Mr.

229
00:24:14,390 --> 00:24:24,350
Zapion leaving the council to become a board member, I'm finally here to give it to

230
00:24:24,350 --> 00:24:24,470
him.

231
00:24:24,670 --> 00:24:28,830
I have a certificate of appreciation for you, Moses, and let's give it to you.

232
00:24:37,530 --> 00:24:47,690
I'm not only given this to Moses as the Lincoln Highways, with the Lincoln Highways appreciation but also with a personal thanks.

233
00:24:56,340 --> 00:24:56,660
Thank you.

234
00:25:12,630 --> 00:25:13,410
Thank you.

235
00:25:14,030 --> 00:25:15,050
Yes, Mr. President.

236
00:25:15,390 --> 00:25:16,470
Can you name those streets again?

237
00:25:21,950 --> 00:25:33,150
The Lincoln Highways in Stockton, the Lincoln Highway through Sam King County came down from Galt, the lower Sacramento road, Pacific Avenue, which back then was still called

238
00:25:36,930 --> 00:25:40,370
a couple block, a two-block section of Maple Street,

239
00:25:42,770 --> 00:25:47,650
Alderado from Maple to Weber, Weber from Alderado to Center,

240
00:25:48,830 --> 00:25:52,270
Center Street down to Turnpike Road and out Mantea Road

241
00:25:52,270 --> 00:25:54,970
on into the South County.

242
00:25:55,790 --> 00:26:00,890
It was later rerouted on what is now Highway 99 out of Lodi

243
00:26:00,890 --> 00:26:05,890
I do the area of the Wilson Way exit of 99 Newton Road,

244
00:26:06,090 --> 00:26:12,490
Cherokee Road, Waterloo Road, and Weber Avenue,

245
00:26:12,930 --> 00:26:16,930
and then the same route as the original route down

246
00:26:16,930 --> 00:26:17,910
through South Stockton.

247
00:26:21,190 --> 00:26:26,590
I'm not sure which board member is the representatives

248
00:26:26,590 --> 00:26:34,810
for Woodbridge and French Camp, but we'd like to get signs up in those towns also,

249
00:26:36,390 --> 00:26:44,450
and I'll contact whoever represents those areas in the near future.

250
00:26:45,250 --> 00:26:50,070
Very, my sister's in the back before you leave your number and

251
00:26:53,790 --> 00:26:55,530
So my district can see the

252
00:26:55,530 --> 00:26:56,030
riser wins.

253
00:26:56,710 --> 00:26:57,210
Okay.

254
00:26:58,230 --> 00:26:59,230
All right.

255
00:26:59,350 --> 00:26:59,750
Thank you.

256
00:27:00,310 --> 00:27:00,930
Thank you.

257
00:27:01,090 --> 00:27:01,270
Again, Mr.

258
00:27:01,370 --> 00:27:01,810
Shahbab Das.

259
00:27:04,320 --> 00:27:05,840
Our next request is from

260
00:27:06,450 --> 00:27:06,700
SOT

261
00:27:06,700 --> 00:27:06,940
Do you know Ken?

262
00:27:07,460 --> 00:27:08,040
Do

263
00:27:30,410 --> 00:27:31,810
you know Ken?

264
00:27:31,890 --> 00:27:32,290
Do

265
00:27:35,200 --> 00:27:35,800
you know Ken?

266
00:27:37,090 --> 00:27:42,560
I deteriorated in a few months.

267
00:27:44,720 --> 00:27:45,780
I lost vision.

268
00:27:48,300 --> 00:27:51,660
It's from Hedgehog, memory.

269
00:27:53,900 --> 00:27:59,020
Every body back, I cannot even walk.

270
00:27:59,020 --> 00:28:08,660
from outside their apartment outside. Why? They are playing a sand oak wind

271
00:28:08,660 --> 00:28:10,600
cow tea, so dull.

272
00:28:15,730 --> 00:28:22,270
Secondly, I cannot see clearly, but I could

273
00:28:22,270 --> 00:28:23,170
For

274
00:28:25,350 --> 00:28:28,910
charity, Mr. Girl's fashion body,

275
00:28:36,960 --> 00:28:37,380
however,

276
00:28:42,010 --> 00:28:47,950
Mr. Boss Elliot, so happy to see you there

277
00:28:48,350 --> 00:28:49,890
even you have it.

278
00:28:51,170 --> 00:28:54,070
So far, I love that like in me.

279
00:28:56,220 --> 00:28:56,640
Secondly,

280
00:28:58,930 --> 00:29:02,610
share the pain to be the happiest,

281
00:29:07,300 --> 00:29:11,640
try to be happy, and make me so happy.

282
00:29:11,640 --> 00:29:21,680
is your responsibility. You are not a care. The young you have a

283
00:29:24,020 --> 00:29:28,220
lot of capacity. Work with

284
00:29:40,280 --> 00:29:41,280
You

285
00:29:43,810 --> 00:29:58,270
have too many criminals immoral, like the demotions, the beating, I have been

286
00:30:01,870 --> 00:30:11,990
Lim, to come, of the family, airy, soft center, and, in the fake council, and council of center

287
00:30:11,990 --> 00:30:19,450
really, post the rescue mission, in charge of the homeless people,

288
00:30:21,600 --> 00:30:25,940
I suffer. Over 23, yes,

289
00:30:29,450 --> 00:30:37,350
because everybody knows I had been kidnapped in mental health,

290
00:30:37,690 --> 00:30:43,710
lock of prison. You know it. So now the conclusion is.

291
00:30:44,950 --> 00:30:48,070
Thank you, Ms. Nguyen. Fortunately, your time is up.

292
00:30:48,090 --> 00:30:49,830
Thank you,

293
00:30:54,020 --> 00:30:54,360
Ms. Nguyen.

294
00:31:09,140 --> 00:31:10,140
Thank you, Ms. Nguyen.

295
00:31:10,720 --> 00:31:12,640
Thank you,

296
00:31:23,490 --> 00:31:23,830
Ms. Nguyen.

297
00:31:23,830 --> 00:31:26,670
I'm going to have to ask you to make a seat. Thank you.

298
00:31:29,970 --> 00:31:32,030
Thank you. Ms. Shirley Maynard?

299
00:31:47,580 --> 00:31:57,080
I live at 35, 35, more to you. I've been here. That's right. I've been here several times before,

300
00:31:57,400 --> 00:32:03,240
and I'm asking for the same, I'm stating the same reason why I'm here, because I've

301
00:32:03,240 --> 00:32:10,280
I live in this house, and I've been to the county office on hate system, and I've been

302
00:32:10,280 --> 00:32:15,040
here 34 times, and the condition has not gotten any better.

303
00:32:15,740 --> 00:32:22,240
He said it was going to send someone, he said it was going to advertise, advertise, get a contractor

304
00:32:22,240 --> 00:32:24,420
to prepare my house.

305
00:32:24,900 --> 00:32:30,080
My house has been, you know, I live there, and I'm going to stay there, I've been there all my

306
00:32:30,080 --> 00:32:37,260
life. I moved, I lived, my mother purchased it. She and my father purchased that house in

307
00:32:37,260 --> 00:32:46,200
50, 53 and we grew up in the house on Warfield. I'm in the district one, Cardinal's,

308
00:32:46,200 --> 00:32:53,600
Filipino. But anyway, I would like someone to come out and repair some of the things that

309
00:32:53,600 --> 00:32:56,480
It's really needed to frame my house up to code.

310
00:32:58,140 --> 00:33:07,280
I have asked different people to do my fence and my fences, and I don't have one to knock

311
00:33:07,280 --> 00:33:09,260
it down, and I need a fence.

312
00:33:09,760 --> 00:33:17,180
I need to, uh, foundation paired in the house, because the house is crooked, it's like this.

313
00:33:18,100 --> 00:33:21,240
And I would like someone to come out do something.

314
00:33:21,420 --> 00:33:22,040
I know somebody.

315
00:33:22,040 --> 00:33:29,140
you can't find a contractor and that's understandable but I need somebody to

316
00:33:29,140 --> 00:33:37,700
come out and just research a place so I can help in my classes. It's really

317
00:33:39,720 --> 00:33:47,740
before I get deteriorated and I need help out there and I know it's money in

318
00:33:47,740 --> 00:33:54,060
city, money in the county, and it's money that somebody can do something about, because

319
00:33:54,060 --> 00:33:57,180
I can't, I don't like living like that in that condition.

320
00:33:58,120 --> 00:34:04,560
It's in the community, and everybody knows that the community, everybody is supposed to

321
00:34:05,640 --> 00:34:07,840
afford it to the colds out there.

322
00:34:08,440 --> 00:34:14,520
So what I'm asking is, because the thesis I want out, I evaluate the place, follow me and

323
00:34:14,520 --> 00:34:23,780
I can't tell me that nobody ever came out, but I really need and that's what I need and I want to thank you.

324
00:34:24,780 --> 00:34:25,780
Thank you, Ms. Maynard.

325
00:34:26,480 --> 00:34:29,300
Those are all the requests for public comment that I have.

326
00:34:29,500 --> 00:34:32,900
Is there anyone else who would like to provide any public comment at this time?

327
00:34:35,700 --> 00:34:39,220
There being no further public comment, we'll move on to the consent agenda.

328
00:34:40,320 --> 00:34:43,660
Consent agenda consists of items number one through 33.

329
00:34:43,660 --> 00:34:47,340
are there any requests to pull any of those items for questions or comments?

330
00:34:48,900 --> 00:34:52,020
I'd like to pull item number 6 for comments.

331
00:34:55,360 --> 00:34:55,840
Pfizer-1?

332
00:34:56,580 --> 00:34:57,200
I don't know number 2.

333
00:35:01,700 --> 00:35:02,660
Any additional items?

334
00:35:03,300 --> 00:35:05,640
6, 15, 33.

335
00:35:14,120 --> 00:35:15,720
Item number 6, supervisor Miller.

336
00:35:16,620 --> 00:35:17,180
Thank you.

337
00:35:17,760 --> 00:35:23,840
I just pulled this for a couple of comments and I'm so pleased to see this.

338
00:35:23,840 --> 00:35:27,720
This is such a good example of intergovernmental collaboration.

339
00:35:28,860 --> 00:35:37,000
We started out last year, City of Stockton approached us wondering if they had some one-time

340
00:35:37,000 --> 00:35:44,820
money, if they could get us to provide some additional spaces for summer job training

341
00:35:44,820 --> 00:35:45,520
for youth.

342
00:35:46,140 --> 00:35:52,920
Our staff worked really closely with them, and very quickly we were able to put this thing

343
00:35:52,920 --> 00:35:59,580
together. And now this year the city is doubling the amount of their commitment. So I want to thank

344
00:35:59,580 --> 00:36:04,980
our staff for continuing such strong collaboration with the city. I also want to really applaud the

345
00:36:04,980 --> 00:36:12,560
city of Stockton. This is, you know, given their very constrained fiscal situation with being

346
00:36:13,520 --> 00:36:20,280
a prime necessity for them is to adhere to their bankruptcy exit plan that they are

347
00:36:21,600 --> 00:36:30,080
committing some additional one-time dollar to the youth in our area, I think it's really commendable.

348
00:36:30,420 --> 00:36:35,740
And so I'd like to applaud them, also encourage them to continue this kind of collaboration with the county.

349
00:36:36,220 --> 00:36:39,180
It becomes very cost effective for the city.

350
00:36:39,380 --> 00:36:41,260
They can really, those dollars go.

351
00:36:41,400 --> 00:36:42,860
They don't have to invent a new program.

352
00:36:43,240 --> 00:36:47,000
They go right into summer job training for our young people.

353
00:36:47,000 --> 00:36:51,240
So, I just wanted to thank both our staff and also the city staff.

354
00:36:51,360 --> 00:36:52,720
This is a really great example.

355
00:36:53,640 --> 00:36:53,760
Thank you.

356
00:36:54,000 --> 00:36:55,240
Thank you so much, Supervisor Miller.

357
00:36:55,720 --> 00:36:57,400
Supervisor Villapurri, you had a comment on this?

358
00:36:57,620 --> 00:36:58,940
Yes, through the chair, thank you.

359
00:36:59,180 --> 00:37:02,420
I would also agree with Supervisor Miller.

360
00:37:03,640 --> 00:37:07,620
When I said, I said also, sit on the committee for the Parks and Rec.

361
00:37:08,660 --> 00:37:10,660
One of the committees that we all sit on.

362
00:37:12,040 --> 00:37:16,540
The meeting last night that we had, the question was that years back they used to have a

363
00:37:17,480 --> 00:37:23,400
Theater, art, drama, and they were trying to see if there's any way that they could add

364
00:37:23,400 --> 00:37:28,740
that to only that they had years ago.

365
00:37:30,240 --> 00:37:31,380
That's just a question.

366
00:37:33,340 --> 00:37:34,420
Thank you.

367
00:37:35,400 --> 00:37:37,040
Thank you, Supervisor Villapudra.

368
00:37:37,580 --> 00:37:39,580
Supervisor Wynn, item number two.

369
00:37:41,020 --> 00:37:42,080
Thank you, Mr. Chair.

370
00:37:42,080 --> 00:37:52,520
I just brief comment, I was speaking at a dinner last Thursday night and after I made my presentation there was a comment from the audience in regards to this item.

371
00:37:53,660 --> 00:37:58,940
And then from the rest of the proud that was there.

372
00:37:59,640 --> 00:38:09,700
And I guess what I'd just like to say is I appreciate my fellow board members certainly county council in regards to revisiting this issue because it has brought some clarity.

373
00:38:09,700 --> 00:38:12,100
to the agricultural and the county,

374
00:38:12,340 --> 00:38:15,640
agricultural, and the county in regards to these type of easements.

375
00:38:15,940 --> 00:38:20,020
So I think that's a plus anytime we can provide clarification

376
00:38:20,560 --> 00:38:23,540
to the public in regards to how they handle particular issues.

377
00:38:23,820 --> 00:38:25,200
And so that's just my comment.

378
00:38:25,400 --> 00:38:25,640
Thank you.

379
00:38:26,080 --> 00:38:27,160
Thank you, supervisor one.

380
00:38:27,740 --> 00:38:30,200
Supervisor Viaputo, item number 15 and 33.

381
00:38:40,780 --> 00:38:42,600
This is just a quick question.

382
00:38:42,980 --> 00:38:46,040
If you can just elaborate and explain to me what we're doing.

383
00:38:46,040 --> 00:38:53,540
and then the second one is I saw that the mobile crisis support team is going to

384
00:38:53,540 --> 00:38:58,640
expire. Are we going to also bring that back or is it as it's

385
00:38:58,640 --> 00:39:01,920
censored and buy for a grant?

386
00:39:04,390 --> 00:39:06,410
Jim Garrett, our new director of

387
00:39:06,410 --> 00:39:07,770
behavioral health.

388
00:39:18,160 --> 00:39:18,640
One second.

389
00:39:21,040 --> 00:39:24,280
There you go. Okay. There we go. As a result of the

390
00:39:24,280 --> 00:39:27,320
Affordable Care Act, we had an increase in the volume of medications we run

391
00:39:27,320 --> 00:39:38,320
through our pharmacy and with the increase price of those drugs to, we've seen a $973,000 increase in expenses.

392
00:39:39,000 --> 00:39:43,500
That's been offset by a $1.2 million revenue increase.

393
00:39:44,440 --> 00:39:56,820
Though the difference, I believe, is about $272,000 is being repurposed, and I've got that $127,000 being repurposed to support our new mobile

394
00:39:56,820 --> 00:40:02,660
crisis support teams, those in their design are funded, the staffing on those

395
00:40:02,660 --> 00:40:07,920
was funded for a period of two years, and through the application of those

396
00:40:07,920 --> 00:40:15,260
services we expect them to be appropriately continued funding, but this was an

397
00:40:15,260 --> 00:40:21,580
opportunity for us to continue to fund them at least through part of next year and the staffing and the things.

398
00:40:21,580 --> 00:40:26,540
and then I see there is no additional cost to the county.

399
00:40:27,180 --> 00:40:27,200
Correct.

400
00:40:27,600 --> 00:40:28,680
No additional cost to the county.

401
00:40:28,940 --> 00:40:30,100
Very good. Thank you very much.

402
00:40:30,620 --> 00:40:30,880
Thank you.

403
00:40:38,730 --> 00:40:40,790
Same thing, number 33.

404
00:40:41,830 --> 00:40:42,870
Just if you could just...

405
00:40:44,090 --> 00:40:44,490
Good morning.

406
00:40:46,050 --> 00:40:48,270
You can just elaborate what we're doing here.

407
00:40:49,450 --> 00:40:49,690
Yes.

408
00:40:50,310 --> 00:40:50,510
Surprise.

409
00:40:50,730 --> 00:40:52,910
I hope we do our Christmasology Director of Public Works.

410
00:40:54,350 --> 00:40:56,630
This is a good news coming in.

411
00:40:56,630 --> 00:41:00,050
as an, you know, appropriation increase, actually.

412
00:41:00,690 --> 00:41:05,610
So what we did was the Department of Public Works entered into an agreement with the city

413
00:41:05,610 --> 00:41:10,830
of Mantika to get their ways to a lowly transfer station.

414
00:41:11,590 --> 00:41:16,070
So we're getting about, you see, what the amount is.

415
00:41:16,230 --> 00:41:25,250
We're getting a revenue of approximately $1,000,000,000 and $22,000 from the city of Mantika for

416
00:41:25,250 --> 00:41:33,290
getting their ways to our transfer station. But we, the board also obligated the county to take

417
00:41:33,290 --> 00:41:38,230
that solid waste that we collect from the city of Manthiga that goes to the Low Lakes transfer

418
00:41:38,230 --> 00:41:48,150
station to the privately owned forward landfill. So we pay the forward landfill $138,000. So in effect,

419
00:41:48,690 --> 00:41:54,450
like, you know, we net approximately $300,000 in revenue to the county. So we take more

420
00:41:54,450 --> 00:41:59,090
from Antica than what we pay to forward to take it to that landfill.

421
00:41:59,790 --> 00:42:03,070
Since this agreement was done after the budget was approved,

422
00:42:03,730 --> 00:42:07,390
we need that when we did the media budget,

423
00:42:07,390 --> 00:42:08,350
we looked at these things.

424
00:42:08,510 --> 00:42:13,130
We need the appropriation authority to make this transfer to happen.

425
00:42:13,630 --> 00:42:15,390
We get that and it goes back to our general fund.

426
00:42:16,010 --> 00:42:16,270
I'm sorry.

427
00:42:16,830 --> 00:42:18,470
We get that and it goes back to our general fund.

428
00:42:18,710 --> 00:42:20,910
It goes back to the SWF basically,

429
00:42:21,070 --> 00:42:22,230
it's always enterprise fund.

430
00:42:22,950 --> 00:42:26,050
Very good. Good news. Thank you so much.

431
00:42:26,370 --> 00:42:26,690
Thank you.

432
00:42:27,130 --> 00:42:32,090
Thank you, Supervisor Veipudra. That concludes discussion on the consent items.

433
00:42:32,570 --> 00:42:37,430
Is there a motion in a second to approve the consent items numbers 1-33?

434
00:42:38,570 --> 00:42:40,110
Motion to approve consent.

435
00:42:40,830 --> 00:42:41,170
Second.

436
00:42:41,770 --> 00:42:45,190
Moved and seconded. Supervisors, please cast your vote.

437
00:43:05,810 --> 00:43:07,830
Motion carries 5-0.

438
00:43:07,830 --> 00:43:15,770
All right, moving on in our agenda, we come to our scheduled morning public hearing.

439
00:43:17,860 --> 00:43:22,880
This is the public hearing to adopt a resolution ordering the cancellation of certain authorized

440
00:43:22,880 --> 00:43:28,280
but unissued general obligation bonds of the Stockton Unified School District and the

441
00:43:28,280 --> 00:43:30,360
aggregate principal amount of $30 million.

442
00:43:31,120 --> 00:43:36,400
We are going to present to this item is Mr. Shabir Khan, the county treasurer and tax collector.

443
00:43:36,400 --> 00:43:37,740
Good morning,

444
00:43:51,350 --> 00:43:52,590
Mr. Chairman and board members.

445
00:43:53,950 --> 00:44:02,990
We have a, I have with me, Nicole Roberts of a Dale Scott in company, financial advisor

446
00:44:02,990 --> 00:44:10,150
for Stock and Unified School District, and Lisa Grant Dawson, CBO from Stock and Unified

447
00:44:10,150 --> 00:44:10,890
School District.

448
00:44:11,690 --> 00:44:13,710
Lisa will make a brief presentation.

449
00:44:15,730 --> 00:44:17,230
Nicole will, I'm sorry.

450
00:44:17,230 --> 00:44:38,650
So after that presentation, I recommend that you conduct a public hearing to adopt a resolution ordering the cancellation of version authorized but unissued general obligation bonds of the Stocking Unified School District in the aggregate principal amount of $30 million.

451
00:44:54,600 --> 00:44:57,780
My name is Nicole Roberts, I'm with Phil Stockton Company.

452
00:44:58,400 --> 00:44:59,980
We represent Stockton, if I-

453
00:45:00,000 --> 00:45:09,420
The school district does their financial advisor. Going to go through a brief presentation of the recent history of the school districts measure Q&A bonds.

454
00:45:11,760 --> 00:45:26,140
In 2008, the school district went to the voters for authorization for 464.25 million in authorization for the projects identified by the school district.

455
00:45:29,140 --> 00:45:30,760
The election passed.

456
00:45:30,760 --> 00:45:35,940
That's a little bit under 69% approval rating, which is a great support for the school district.

457
00:45:37,400 --> 00:45:43,940
The bonds authorized had a provision, the Proposition 39, where there is a soft tax rate

458
00:45:43,940 --> 00:45:47,340
cap of $60 per 100,000 per evaluation.

459
00:45:48,100 --> 00:45:53,280
The tax rate applies to the selection and any bonds series under the selection.

460
00:45:53,280 --> 00:46:02,720
The district followed its plan to issue bonds in 2008-1910, but a third of the way through

461
00:46:02,720 --> 00:46:09,180
the bond authorization program, bond issuance program, the recession hit, and the district

462
00:46:09,180 --> 00:46:11,360
was unable to continue with this program.

463
00:46:13,900 --> 00:46:23,320
On slide two, it goes the total percent change of the disfiguration of the properties in

464
00:46:23,320 --> 00:46:24,420
in the school district.

465
00:46:25,220 --> 00:46:27,020
During the election, seven election,

466
00:46:27,300 --> 00:46:31,340
we had planned for a rise in growth

467
00:46:31,890 --> 00:46:33,780
and the district did not expect,

468
00:46:33,780 --> 00:46:38,660
nor did we very steep decrease in assess valuations.

469
00:46:39,180 --> 00:46:41,700
Between 2010 and through 2013,

470
00:46:42,280 --> 00:46:45,800
the district saw 24% decrease in assess valuation.

471
00:46:46,700 --> 00:46:48,400
That, of course, with that decline

472
00:46:48,400 --> 00:46:58,720
the authorization for measure Q hit that $60 tax rate in the decision was unable to continue with the bond program as planned.

473
00:47:02,060 --> 00:47:11,220
The next slide, we developed an alternative for the district by going back to the voters and asking the voters to reauthorize a portion of the measure Q bonds.

474
00:47:11,220 --> 00:47:16,620
Then 2012 went back to the voters that better support than actually the

475
00:47:16,620 --> 00:47:26,100
Measure Q authorization at 74% approval and reauthorized $156 million which was

476
00:47:26,100 --> 00:47:32,560
about half of the uneasured portion of the Measure Q bonds. This gave the

477
00:47:32,560 --> 00:47:38,760
district a new $60 tax rate limit to proceed with their bond program that's

478
00:47:38,760 --> 00:47:47,260
plan. You can see the district issued that in 2014, $65 million. We completed a bond

479
00:47:47,260 --> 00:47:52,020
issuance this past winter for $30 million and the district plans to continue with this

480
00:47:52,020 --> 00:47:58,920
program issued the last tranche of these bonds that are around spring of 2017 or 2017.

481
00:48:01,920 --> 00:48:23,060
So the next step in issuing the authorization, the authorization of measure e-bonds kind of follows this path shown on the slide where the next step was to the district promised to voters that we would not go past the originally authorized

482
00:48:23,060 --> 00:48:30,800
a 464.5 million authorized from measure Q. So this kind of goes by step by step where

483
00:48:31,480 --> 00:48:40,480
first we authorized the measure Q bonds issued 152 million. There was that the recession and 312

484
00:48:40,480 --> 00:48:49,800
million became unavailable to us because of $60 tax rate. So we went back to the voters,

485
00:48:49,800 --> 00:48:54,860
is asked for a reauthorization of about a third of that original amount, 156 million,

486
00:48:55,280 --> 00:49:01,800
with the intent that with issuance of the measure e-bonds, we would decertify a like portion

487
00:49:01,800 --> 00:49:06,140
of the original measure, two bonds, zone in step three there.

488
00:49:06,860 --> 00:49:15,900
So this shows us upholding that promise to our voters that we would not go past the total

489
00:49:15,900 --> 00:49:19,220
464.5 million total authorization.

490
00:49:22,380 --> 00:49:30,300
The last slide shows that same thing on tabular form, the measure Q bonds at the top showing

491
00:49:30,300 --> 00:49:36,180
the first series of bonds that the district has sold, 2008-2014, 2011, apologize.

492
00:49:37,240 --> 00:49:44,660
And the bonds that we've issued under measure E in 2014, the 65 million and the 30 million

493
00:49:44,660 --> 00:49:50,800
this past winter with the intent of the resolution we're asking for you to pass today.

494
00:49:51,400 --> 00:50:00,500
Add that line item for measure Q. You certifying or canceling the like amount of measure Q bonds

495
00:50:00,500 --> 00:50:07,760
that we issued in this past one of the 30 million like we did last in 2014 of the 65 million.

496
00:50:09,200 --> 00:50:11,080
That is the end of my presentation.

497
00:50:11,080 --> 00:50:12,820
I would answer any questions.

498
00:50:14,240 --> 00:50:15,480
Thank you so very much.

499
00:50:15,540 --> 00:50:17,120
Questions and comments from the board

500
00:50:17,120 --> 00:50:18,460
before I open up the public hearing?

501
00:50:20,670 --> 00:50:21,010
All right.

502
00:50:23,620 --> 00:50:26,000
I hear by declare this public hearing open.

503
00:50:26,620 --> 00:50:28,800
Is there anyone who would like to provide any comment?

504
00:50:42,290 --> 00:50:43,070
Maureen again, Ms. Nguyen?

505
00:50:45,320 --> 00:50:46,220
Elk Nguyen.

506
00:50:47,620 --> 00:50:51,720
I don't know anything about something you find.

507
00:50:54,310 --> 00:50:54,610
Done.

508
00:50:58,130 --> 00:50:58,450
However,

509
00:51:00,680 --> 00:51:03,500
I want to send an opinion

510
00:51:03,500 --> 00:51:06,140
by opinion, not when you fight.

511
00:51:07,520 --> 00:51:08,920
And others, group,

512
00:51:12,880 --> 00:51:13,700
home business,

513
00:51:17,530 --> 00:51:18,030
cry,

514
00:51:20,430 --> 00:51:21,270
all of that.

515
00:51:22,570 --> 00:51:26,470
US, Europe, the rest of the world.

516
00:51:29,000 --> 00:51:32,000
How dare, many women,

517
00:51:33,140 --> 00:51:35,620
in any group,

518
00:51:38,880 --> 00:51:42,260
they talk about more money

519
00:51:42,260 --> 00:51:44,020
for personal gain.

520
00:51:48,340 --> 00:51:53,640
The conclusion is, I know nothing about this bond,

521
00:52:01,360 --> 00:52:06,660
wrapping any kind of money from any group is

522
00:52:10,280 --> 00:52:11,620
so shameful.

523
00:52:13,100 --> 00:52:15,120
Keep looking at them.

524
00:52:16,660 --> 00:52:21,160
Not just adults and seniors, look at kids,

525
00:52:21,160 --> 00:52:26,780
one of the five in Hungary, in Missouri,

526
00:52:29,210 --> 00:52:33,670
so the conclusion is, I don't know anything about the

527
00:52:33,670 --> 00:52:40,950
bond authorization. Now it's time to cut Benning,

528
00:52:43,840 --> 00:52:46,200
especially an illustrator,

529
00:52:50,060 --> 00:52:53,400
law, and what do you call it?

530
00:52:53,400 --> 00:52:58,140
Attorney, up of any kind of the

531
00:53:00,570 --> 00:53:05,540
officer have to cut,

532
00:53:10,590 --> 00:53:12,530
that's what one has to say.

533
00:53:14,920 --> 00:53:18,080
Ms. Nguyen, is there any further public comment?

534
00:53:20,570 --> 00:53:24,410
There being no further public comment, I hereby declare this public hearing closed.

535
00:53:25,550 --> 00:53:28,110
Bring back the agenda item back to the board.

536
00:53:28,750 --> 00:53:29,770
There are no comments.

537
00:53:29,770 --> 00:53:30,870
I

538
00:53:35,960 --> 00:53:38,820
will, hereby, entertain a motion and a second.

539
00:53:40,400 --> 00:53:42,140
Move to approve, staff recommendation.

540
00:53:42,640 --> 00:53:43,340
All right, second.

541
00:53:43,860 --> 00:53:44,740
Moved and seconded.

542
00:53:45,580 --> 00:53:47,520
To provide just please cast your vote.

543
00:53:53,170 --> 00:53:54,450
Motion carries five to zero.

544
00:53:56,720 --> 00:53:58,140
That concludes the public hearing item.

545
00:53:58,840 --> 00:54:02,460
We're moving on to our items under discussion, general government.

546
00:54:03,100 --> 00:54:09,200
Our first item under that section is the acceptance of the Kyron report on funding alternatives.

547
00:54:09,200 --> 00:54:28,880
for the San Joaquin County Employees Retirement Association and approve an additional annual county contribution ranging from 0% to 5% a payroll for the next 10 years effective January 1st, 2017, December 31st, 2026, pay down the

548
00:54:28,880 --> 00:54:32,820
and funded retirement liability and an accelerated time frame.

549
00:54:33,560 --> 00:54:38,100
Here to present this item is Ms. Nino and her staff, Ms. Nino.

550
00:54:39,440 --> 00:54:42,100
Good morning, chairs, APN, and members of the board.

551
00:54:42,500 --> 00:54:58,860
We are here to present today options that are being considered in coming up with our ultimate recommendation in assisting and paying down the county's unfunded liability in a more timely fashion with the goal of a funded ratio of 80%.

552
00:54:58,860 --> 00:55:07,680
percent. Why is this important? For the county, the unfunded liability is for benefits already earned

553
00:55:07,680 --> 00:55:15,700
by both active and retiree employees. The two resources to fund an employer's unfunded liability

554
00:55:16,060 --> 00:55:21,840
is typically from investment earnings and that are generated from the retirement system,

555
00:55:22,240 --> 00:55:28,180
along with employer rates. I want to thank this board for being proactive in your

556
00:55:28,180 --> 00:55:30,060
consideration of today's recommendations.

557
00:55:30,720 --> 00:55:41,140
Chris Rose from my office, along with Kyron, are consultants that were hired out of the CAO's office, are here to present the options, along with today's recommendation.

558
00:55:43,620 --> 00:55:45,560
Good morning, Mr. Chairman, members of the board.

559
00:55:46,280 --> 00:55:57,580
In today's presentation, the county minister's office will provide the background on the county's unfunded retirement liability and compare Samuaking County with other 1937 Act plans.

560
00:55:58,320 --> 00:56:03,180
Cairon will then present its report titled, Funding Alternatives for the San

561
00:56:03,180 --> 00:56:07,140
Winking County Employees Retirement Association or S.J. Cera.

562
00:56:08,220 --> 00:56:12,980
Cairon's report will include how the system is funded, the status of our system, and

563
00:56:12,980 --> 00:56:16,620
several options the county can consider to improve our funded ratio.

564
00:56:17,520 --> 00:56:22,180
Once Cairon has completed its report, our office will make a recommendation for your

565
00:56:22,180 --> 00:56:23,100
board's consideration.

566
00:56:23,100 --> 00:56:31,460
The definition of funded ratio is the ratio of assets actually on hand to the asset goal

567
00:56:31,460 --> 00:56:37,760
set by the actuarial funding method, assuming that all actuarial assumptions are met.

568
00:56:38,420 --> 00:56:44,620
In nonactuarial terms, it is the ratio of the pension plan's assets compared to the total

569
00:56:44,620 --> 00:56:46,680
payments the plan is obligated to make.

570
00:56:46,680 --> 00:56:53,820
For example, if the plan stopped on January 1, 2015, the total payments of the plan is

571
00:56:53,820 --> 00:56:57,000
obligated to pay is $3.73 billion.

572
00:56:57,700 --> 00:57:00,960
The value of the plan's assets was $2.47 billion.

573
00:57:01,380 --> 00:57:08,680
The $2.47 billion in assets equates to 66% of the total liability the plan is obligated

574
00:57:08,680 --> 00:57:12,220
to pay, which equals a funded ratio of 66%.

575
00:57:12,220 --> 00:57:18,920
Prior to the 2008 stock market crash, the county's retirement system was 87% funded.

576
00:57:19,320 --> 00:57:24,760
From that point, the funded ratio decreased down to 63% through 2013.

577
00:57:25,420 --> 00:57:30,900
The funded ratio improved gradually over the last two years and is currently at 66%.

578
00:57:33,750 --> 00:57:38,730
There are 20, 1937 at county retirement systems in California.

579
00:57:38,730 --> 00:57:46,790
The average funded ratio for the plans is 81% with a high of 93% and a low of 59%.

580
00:57:46,790 --> 00:57:52,590
Down King County rakes 18th or 3rd lowest with a funded ratio of 66%.

581
00:57:52,590 --> 00:57:59,010
In dollar values, Down King County has the 7th highest unfunded liability at 1.3 billion,

582
00:57:59,530 --> 00:58:06,950
only bested by larger counties including LA, Orange, San Diego, Kern, San Bernardino, and Alameda Counties.

583
00:58:06,950 --> 00:58:16,810
It should be noted that 13 counties have outstanding pension obligation bonds and these amounts are not included in the unfunded liability for these county systems.

584
00:58:19,260 --> 00:58:28,460
There are eight different employer contribution rates depending on whether the employee is a general member or a safety member and when the employee entered into the retirement system.

585
00:58:28,460 --> 00:58:37,640
The composite rate is the average rate for the plan based on the total employer contribution divided by total salaries attributed to the pension costs.

586
00:58:38,040 --> 00:58:44,860
This table shows the adopted composite rates for calendar years 2007 through 2015.

587
00:58:45,320 --> 00:58:50,480
The annual county costs for retirement and the funded ratio of the retirement system.

588
00:58:50,480 --> 00:58:58,740
During the nine year period, county cost for retirement increased from $80.7 million to $155.5 million,

589
00:58:59,100 --> 00:59:04,000
while the funded ratio decreased from 87% to 66%.

590
00:59:06,500 --> 00:59:20,660
In recognition of the significant county obligation, your board established a reserve for the county's portion of unfunded liability to be funded with remaining fund balance after the annual budget is structurally balanced,

591
00:59:20,660 --> 00:59:23,940
and the board policy of an annual contribution to the

592
00:59:23,940 --> 00:59:25,500
contingency reserve has been met.

593
00:59:26,300 --> 00:59:31,600
Initially, the 2015-16 adopted budget included $2.5 million

594
00:59:32,140 --> 00:59:36,940
for the reserve in September 2015, and additional $1.6 million was

595
00:59:36,940 --> 00:59:40,060
set aside for a total reserve of $4.1 million.

596
00:59:42,520 --> 00:59:46,420
Additionally, during the 2015-16 first quarter report in

597
00:59:46,420 --> 00:59:50,300
November 2015, it was noted that the County Administration's

598
00:59:50,300 --> 00:59:53,940
office would evaluate various funding options to pay down the

599
00:59:53,940 --> 00:59:57,040
unfunded retirement liability in accelerated time frame.

600
00:59:57,660 --> 00:59:59,820
The consulting group Kyron was contracted.

601
01:00:00,000 --> 01:00:29,980
To identify options to address the unfunded actuary liability and improve funding ratio. Identify how the county's additional contributions to the retirement system can best benefit the county and identify how to maximize federal and state funding participation. At this time, I would like to introduce Robert McCrory and Ann Harper from Kyron to present their reports and analysis. After their presentation, our office will make a recommendation for your board's consideration.

602
01:00:29,980 --> 01:00:31,160
Good

603
01:00:37,140 --> 01:00:37,440
morning.

604
01:00:37,820 --> 01:00:39,340
It's a pleasure to be here.

605
01:00:41,060 --> 01:00:42,300
I'm Bob McCrory,

606
01:00:43,700 --> 01:00:44,820
an actuary with Kyron,

607
01:00:45,360 --> 01:00:47,260
and an actuary for 44 years now.

608
01:00:48,360 --> 01:00:49,980
With me as Anne Harper,

609
01:00:50,800 --> 01:00:53,060
he's been an actuary less long than that.

610
01:00:54,080 --> 01:00:56,040
But it's very experienced.

611
01:00:56,880 --> 01:00:58,600
We're going to go through our presentation,

612
01:00:59,040 --> 01:01:00,820
and I'd like to encourage you to,

613
01:01:01,280 --> 01:01:03,220
well, we take direction well.

614
01:01:03,800 --> 01:01:07,580
And so, if you have a question you want to ask, just ask it.

615
01:01:08,040 --> 01:01:10,180
If we're boring you to death, tell us so.

616
01:01:10,900 --> 01:01:14,880
If we're not hitting something that you want us to explain more fully,

617
01:01:15,260 --> 01:01:17,140
please ask us to expand on it.

618
01:01:17,620 --> 01:01:21,320
I've been doing this a long time, and has two teenage boys,

619
01:01:21,500 --> 01:01:22,580
so she's tough as nails.

620
01:01:23,640 --> 01:01:26,780
So, we'll be glad to change our presentation to suit you.

621
01:01:32,090 --> 01:01:34,270
I'm going to go over a few steps here.

622
01:01:34,530 --> 01:01:37,750
We're going to talk about why do we fund the retirement plan at all.

623
01:01:39,190 --> 01:01:43,830
Where are we in that funding, where are we going, and that's when Anne's going to pick

624
01:01:43,830 --> 01:01:49,110
it up, what can we do about it, and we'll close with some practical considerations.

625
01:01:53,700 --> 01:01:59,180
So we have a slide here with a lot of very small type on it, and I'll try to summarize

626
01:01:59,180 --> 01:02:00,180
it as best I can.

627
01:02:02,260 --> 01:02:07,000
One of the things that's unique about a pension plan is you are earning benefits while

628
01:02:07,000 --> 01:02:10,780
you're active that you will be paid when you're retired.

629
01:02:12,200 --> 01:02:20,380
So since benefits are paid after the termination of employment, there's a cost matching principle

630
01:02:21,080 --> 01:02:27,000
that accountants like to see, so that liabilities are paid for when they're incurred.

631
01:02:27,760 --> 01:02:35,980
So as members work and earn pension benefits that they'll be paid many years later, cost matching

632
01:02:35,980 --> 01:02:42,700
principle says set aside money, match those liabilities now for the benefits to be paid later.

633
01:02:43,900 --> 01:02:46,640
That's the accounting cost matching principle.

634
01:02:47,930 --> 01:02:53,900
It also ties into actuarial funding, which is based on the insurance industry, which says

635
01:02:54,350 --> 01:03:04,000
during a member's life, start collecting premiums, or the death insurance, so we have actuarial

636
01:03:04,000 --> 01:03:08,320
funding and the cost matching principle both having use set aside money during a

637
01:03:08,320 --> 01:03:12,500
member's active working lifetime for the benefits that you'll pay be paid.

638
01:03:13,600 --> 01:03:19,700
There's a third principle that applies to the government and it's called

639
01:03:19,700 --> 01:03:27,420
generational equity. The taxpayers should be paying now the expenses for the

640
01:03:27,420 --> 01:03:33,980
county employees that are providing them with services now. The idea is that

641
01:03:33,980 --> 01:03:39,940
your tax dollars now, pay not only for their current pay but also for the future retirement

642
01:03:39,940 --> 01:03:40,400
benefit.

643
01:03:43,210 --> 01:03:45,410
So for all of these reasons we fund.

644
01:03:46,630 --> 01:03:49,810
Now I want to take a step back here.

645
01:03:49,930 --> 01:03:55,650
This concept of generational equity comes up in sort of mysterious ways time to time.

646
01:03:58,630 --> 01:04:04,930
Generational equity says, as we said, current generation of taxpayers pays for the benefits

647
01:04:04,930 --> 01:04:07,170
that they're receiving from county employees

648
01:04:07,350 --> 01:04:10,250
and pays also for those employees, retirement labor.

649
01:04:11,690 --> 01:04:16,250
If you adhere very rigidly, generational equity,

650
01:04:17,030 --> 01:04:20,110
a every generation of taxpayers must pay exactly

651
01:04:20,630 --> 01:04:22,970
what they're getting back in county services

652
01:04:22,970 --> 01:04:24,010
and county costs.

653
01:04:24,890 --> 01:04:28,050
No variation, then it forces you

654
01:04:28,050 --> 01:04:30,570
to a very conservative investments

655
01:04:31,290 --> 01:04:34,270
where you're actually buying a laddered bonds

656
01:04:34,270 --> 01:04:37,430
the guarantee that there can't be any market.

657
01:04:39,780 --> 01:04:41,920
Now, if there's any magic,

658
01:04:42,260 --> 01:04:46,020
actual science at all is in pooling of risks,

659
01:04:47,220 --> 01:04:49,340
I mean, if you try to ensure your own home

660
01:04:49,660 --> 01:04:51,920
by setting aside enough money to replace it

661
01:04:51,920 --> 01:04:53,040
in the event of a fire,

662
01:04:53,940 --> 01:04:56,160
impossible for a person to average me.

663
01:04:57,020 --> 01:05:00,680
But, insurance company and pool those risks

664
01:05:01,720 --> 01:05:03,720
and offer you homeowners insurance

665
01:05:03,720 --> 01:05:07,020
in a very reasonable and practical way.

666
01:05:08,300 --> 01:05:12,160
Similarly, if we're willing to relax a little bit

667
01:05:12,160 --> 01:05:16,240
on the generational equity side by investing in risky assets,

668
01:05:17,300 --> 01:05:20,660
then that means that some generations of taxpayers

669
01:05:20,660 --> 01:05:23,920
are going to pay more, some generations of taxpayers.

670
01:05:25,960 --> 01:05:29,120
But overall, because of higher average earnings

671
01:05:29,120 --> 01:05:32,920
on the risky, everybody will pay a bit less.

672
01:05:34,390 --> 01:05:36,830
So, that's one of the things that's going on.

673
01:05:37,030 --> 01:05:43,730
Generational equity is a reason to fund, but it's not rigidly adhered to the name of

674
01:05:43,730 --> 01:05:50,150
holding down the overall average cost, including the risk, if you estimate risk, cross-generated.

675
01:05:53,360 --> 01:06:00,120
So, that's one reason, cost matching generational equity that we've, another reason, expense, which

676
01:06:00,120 --> 01:06:06,820
I've just alluded to, about half to two-thirds of the cost of retirement benefits are paid

677
01:06:06,820 --> 01:06:08,160
for by investment earnings.

678
01:06:08,880 --> 01:06:10,640
That's another important reason.

679
01:06:12,440 --> 01:06:18,960
You are legally required to fund retirement benefits in the employee retirement law and

680
01:06:20,220 --> 01:06:30,480
And the California Constitution actually requires that you hire an actuary to help you

681
01:06:30,480 --> 01:06:31,500
out in this endeavor.

682
01:06:33,100 --> 01:06:36,140
Oh, I guess I'm legally required evil.

683
01:06:37,620 --> 01:06:39,980
And then additionally benefit security.

684
01:06:40,900 --> 01:06:46,620
Now the key issue with benefit security and the retirement plan is that the financial

685
01:06:46,620 --> 01:06:48,420
The initial soundness of the retirement plan,

686
01:06:48,860 --> 01:06:52,580
the initial soundness of the county, are inextricably linked.

687
01:06:54,560 --> 01:06:58,380
If the county is sick and having revenue problems and expense problems,

688
01:06:58,800 --> 01:07:02,240
that manifests itself in difficulty funding the retirement benefits.

689
01:07:02,920 --> 01:07:05,940
Similarly, if the retirement benefit, having trouble,

690
01:07:07,180 --> 01:07:10,020
investments are so forth, that manifests itself in higher expensive.

691
01:07:10,940 --> 01:07:13,200
But you are like conjoined into it.

692
01:07:18,070 --> 01:07:22,990
Benefit security is somewhat provided, somewhat increased by the assets in the fund.

693
01:07:23,990 --> 01:07:27,630
Ultimately, benefit security most depends on the health of the plan.

694
01:07:29,270 --> 01:07:31,670
That's sort of a funding primer about what.

695
01:07:34,010 --> 01:07:40,010
If we look at where we are now and see that the funded ratio has been as

696
01:07:40,010 --> 01:07:45,650
pointed out declining over time, it's backed up in the last couple of years.

697
01:07:48,570 --> 01:07:49,210
Currently,

698
01:07:51,350 --> 01:07:55,310
the funded ratio is 66%, that's lower than we would like to see it.

699
01:07:56,110 --> 01:08:03,550
But one of the problems here is that the board has been moving all posts, and we have been

700
01:08:03,550 --> 01:08:12,070
complicit in that effort with them, specifically over the last two actual experience studies.

701
01:08:12,070 --> 01:08:20,250
is we have increased the lifespan that people are living on because people are living on.

702
01:08:21,290 --> 01:08:28,110
We have decreased the expected return that we anticipate receiving from plan investments.

703
01:08:29,450 --> 01:08:38,310
So in essence, we've been making the plan, increasing the flow of assets into the fund in

704
01:08:38,310 --> 01:08:44,350
In order to get more money into the fund, as we expect people to live longer and we don't

705
01:08:44,350 --> 01:08:50,650
expect the earn as much in investments, that lowers the investment or I mean, lowers

706
01:08:50,650 --> 01:08:51,610
the funded ratio.

707
01:08:51,790 --> 01:08:58,050
So we appear to be in versus shape, actually in a sense, we're in better shape for more

708
01:08:58,050 --> 01:09:03,210
conservatively funding the plan and we're not expecting as much from the end.

709
01:09:07,220 --> 01:09:08,780
So that's a large part.

710
01:09:08,780 --> 01:09:16,480
If, in fact, we were to do evaluation today, an actual report today, based on our assumptions

711
01:09:16,480 --> 01:09:23,480
back in 2009, or a lifespan, in return, our funder ratio would be about five percent.

712
01:09:27,230 --> 01:09:31,550
So, and we talked about, Chris presented the parasitic with you.

713
01:09:32,990 --> 01:09:38,290
So, Anna's going to take you through slides about where we're going in the Boston funder

714
01:09:38,290 --> 01:09:38,530
ratio.

715
01:09:40,550 --> 01:09:47,970
Good morning, so this slide gives you a look at where the plan is going and what the future

716
01:09:47,970 --> 01:09:54,730
looks like with a caveat that all actuarial assumptions are met just as we're into

717
01:09:54,730 --> 01:09:57,670
and that includes our investment return assumption.

718
01:09:58,950 --> 01:10:06,670
The top line is the projection of the funded ratio on a market value of asset basis and you

719
01:10:06,670 --> 01:10:18,510
that right now is at 66% and it slowly is increasing to 100% by 2035, the plan is expected to be fully funded.

720
01:10:20,050 --> 01:10:28,690
And the contribution rates are the bottom line with the dash line where the current county contribution rates are 41%

721
01:10:28,690 --> 01:10:32,190
and you're seeing a slight increase in that contribution rate.

722
01:10:32,190 --> 01:10:38,890
Since we have taken it upon ourselves to assume that that discount rate that the plan has

723
01:10:38,890 --> 01:10:48,090
is seven and a half percent, and the board has made some – there's some –

724
01:10:48,090 --> 01:10:49,830
There's feeling on the board.

725
01:10:50,050 --> 01:10:54,550
There's feeling on the board that they're going to continue to do that discount rate down

726
01:10:54,550 --> 01:10:56,050
to maybe seven percent.

727
01:10:56,050 --> 01:11:02,730
So we worked that assumption in actions so that you could see with those projections with them.

728
01:11:03,610 --> 01:11:08,910
So the contribution rate goes from 41 to about 47% and then it slowly declines over the period.

729
01:11:09,630 --> 01:11:14,530
Let me just make this clear. The board is taking no action in this regard. Currently the board is

730
01:11:14,530 --> 01:11:22,510
assuming that the investments will return 7.5%. But we expect that along with many other plans,

731
01:11:22,510 --> 01:11:24,570
they may wish to drop it more.

732
01:11:24,910 --> 01:11:29,730
So we've assumed a 10 basis point, 0.1% lease,

733
01:11:30,310 --> 01:11:32,890
in the next five years, 7%.

734
01:11:32,890 --> 01:11:36,450
That may not be realized in which case the cost above

735
01:11:36,450 --> 01:11:39,170
and the funder ratio might be more.

736
01:11:40,470 --> 01:11:43,830
The second thing is that this is of course something

737
01:11:43,830 --> 01:11:45,810
I refer to as the actuarial fantasy,

738
01:11:46,910 --> 01:11:51,110
as it assumes that all the contributions that they won't be.

739
01:11:51,110 --> 01:11:52,770
Where these are always wrong.

740
01:11:53,430 --> 01:11:58,330
We're really good at predicting things like mortality, turnover, retirement rates, those

741
01:11:58,330 --> 01:11:59,170
kinds of things.

742
01:11:59,810 --> 01:12:02,810
We are like everybody else really bad at marketing.

743
01:12:03,770 --> 01:12:09,830
So we use the 7.5, going down to 7% as sort of a planning figure, and then make adjustments

744
01:12:09,830 --> 01:12:10,650
when we go.

745
01:12:11,290 --> 01:12:12,110
Oh, that.

746
01:12:18,200 --> 01:12:24,440
In this picture depicts the scenario that Bob was talking about where there is a lot more

747
01:12:24,440 --> 01:12:25,940
variability in the markets.

748
01:12:27,060 --> 01:12:29,060
And since we know the actual assumptions,

749
01:12:29,600 --> 01:12:32,060
especially on the investment side, will not be bad.

750
01:12:33,770 --> 01:12:36,560
The graph shows the funded ratio

751
01:12:37,010 --> 01:12:39,480
and the variability in the funded ratio

752
01:12:40,550 --> 01:12:41,820
due to market fluctuations.

753
01:12:42,780 --> 01:12:45,960
Black line is that same line that I showed you

754
01:12:45,960 --> 01:12:49,380
in the previous slide for the funder ratio,

755
01:12:49,820 --> 01:12:51,700
starting at around 66%.

756
01:12:51,700 --> 01:13:07,740
And then as time goes on, we have run the statistical analysis where we run about 10,000 trials based on your asset allocation environment fund.

757
01:13:08,360 --> 01:13:10,300
Generates these different returns.

758
01:13:11,060 --> 01:13:17,720
So in the first couple years, you see some variability in the funded ratio, what the expectation is,

759
01:13:17,720 --> 01:13:22,580
that the band's widen as time goes out because you're seeing these under different,

760
01:13:22,780 --> 01:13:26,660
uh, 10,000 different files in different areas of what they're doing.

761
01:13:27,900 --> 01:13:35,960
Like, um, in 2017, for example, funded phrase show, there's a 90% probability

762
01:13:36,600 --> 01:13:44,460
that the funded ratio will be between 55 and 80, and that then as you can see as time goes on,

763
01:13:44,460 --> 01:13:48,420
and it's much harder to predict where that funded ratio

764
01:13:48,420 --> 01:13:52,940
where I actually land because the markets are at heart

765
01:13:52,940 --> 01:13:53,580
to predict.

766
01:13:59,300 --> 01:14:03,180
So this slide also shows that the baseline

767
01:14:03,180 --> 01:14:05,240
that I showed a couple of slides ago in the blue

768
01:14:05,540 --> 01:14:07,780
where we have the funded ratio and the contribution rate.

769
01:14:08,440 --> 01:14:13,220
The yellow lines represent what your funded ratio

770
01:14:13,220 --> 01:14:14,920
and contribution rates would look like

771
01:14:14,920 --> 01:14:23,880
Like if the fund only earned 5% over the next 10 years, now those 5% to show this projection

772
01:14:23,880 --> 01:14:30,580
and this is just a what if scenario, because the current economic outlook by many investment

773
01:14:30,580 --> 01:14:40,000
consultants is that plans of your of the San Joaquin, that type only earn between maybe 5

774
01:14:40,000 --> 01:14:43,100
I've maybe up to 7% in the next 10 years,

775
01:14:43,100 --> 01:14:44,580
given the market environment.

776
01:14:45,740 --> 01:14:48,200
So you can see what happens here.

777
01:14:48,260 --> 01:14:50,020
It just puts complete downward pressure

778
01:14:50,020 --> 01:14:52,860
on the funded ratio where it stays pretty flat

779
01:14:52,860 --> 01:14:56,580
for the next 10 years, while then solely over time

780
01:14:56,580 --> 01:14:59,520
the contribution increased to make up for

781
01:15:00,780 --> 01:15:10,420
Assets that are not coming into the plan, those investment returns. The more between 7 and 7 and a half percent versus the five that were actually being earned.

782
01:15:14,510 --> 01:15:33,910
There's just a comment about that. When you inquise investment consultants about their expectations for the future. One thing they'll point out is that the stock market is pretty fully valued as fairly high multiples of priced earnings. And they'll also point out that you're not getting anything in the money.

783
01:15:33,910 --> 01:15:35,390
I'll know this.

784
01:15:36,290 --> 01:15:45,150
So if traditional sources of current at least for the short-term future five, ten years

785
01:15:45,690 --> 01:15:47,690
kind of aren't there, that's why they're pretty.

786
01:15:48,530 --> 01:15:51,190
Something in the vicinity of 5% for a diversified.

787
01:15:52,630 --> 01:15:53,730
I wanted to show you that.

788
01:15:54,970 --> 01:16:01,470
That is kind of where the some investment consultants are.

789
01:16:01,470 --> 01:16:08,630
I mean, said that, I think the Wall Street Journal published a different organization.

790
01:16:08,850 --> 01:16:14,670
They published a bunch of rejections by investment consultants going forward and it changed

791
01:16:14,670 --> 01:16:22,130
all the way from 0% to 13% for the stock market, so you can see nobody now.

792
01:16:23,030 --> 01:16:29,590
But alternatively, we'll move a little more quickly through the rest of this.

793
01:16:31,050 --> 01:16:38,630
It's either an enormous super tanker there, it's just mind us the size of the problem and

794
01:16:38,630 --> 01:16:44,310
we'll talk about that in a second and then we'll look at several alternatives listed

795
01:16:44,310 --> 01:16:48,610
here, n% extra for 10 years, 5% extra for 10 years.

796
01:16:56,280 --> 01:17:03,780
There's a lot of money in the environment plan relative to payroll assets right now are

797
01:17:03,780 --> 01:17:10,040
over six times member payroll. As the plan becomes better funded the assets will

798
01:17:10,040 --> 01:17:16,300
over nine times payroll and that's the current member payroll and their assets

799
01:17:16,300 --> 01:17:22,300
there. So consequently you can see that if you were able to put in one year an

800
01:17:22,300 --> 01:17:28,700
additional one percent of payroll not in significant amount for you, the

801
01:17:28,700 --> 01:17:39,220
the funded ratio 0.11% on 9% will actually be some abilities to make a difference of 10% in the

802
01:17:39,220 --> 01:17:47,340
funded ratio would have to contribute an additional 7.5% of pay for it assuming that the fund

803
01:17:47,340 --> 01:17:50,040
then helps you out by returning 7% return.

804
01:17:53,200 --> 01:17:54,960
In other words, the entrepreneurial assumptions are

805
01:17:56,060 --> 01:18:03,400
So, it's a big pool of money, and you don't have a lot of leverage, but you have to, you

806
01:18:03,400 --> 01:18:06,240
know, not something that you've

807
01:18:08,830 --> 01:18:10,550
got to deal with much of a difference.

808
01:18:12,150 --> 01:18:17,270
So, recognizing the size of it, in fact, that any approach that's going to be successful

809
01:18:17,270 --> 01:18:22,750
is going to be somewhat gradualist, and is going to present several alternatives to it.

810
01:18:24,130 --> 01:18:31,710
So this first alternative is an extra 10% of payroll, a contribution of an extra 10% of

811
01:18:31,710 --> 01:18:33,250
payroll for 10 years.

812
01:18:34,570 --> 01:18:40,370
And again, the baseline is your blue lines, the yellow represents the funded ratio and

813
01:18:40,370 --> 01:18:44,890
the contribution rate assuming you're making an extra 10% of pay for 10 years.

814
01:18:45,350 --> 01:18:50,490
And at the bottom there, that's showing the actual numbers for the funded ratio and contribution

815
01:18:50,490 --> 01:18:52,950
right for this scenario for the yellow lines.

816
01:18:54,110 --> 01:18:59,850
So you can see in the short term, the funded ratio gradually is increasing and it takes

817
01:18:59,850 --> 01:19:06,370
time as Bob said for it to make a difference in your funded ratio but after 10 years that

818
01:19:06,370 --> 01:19:16,800
of at the 81 percent funded ratio in 2026 should be at 89 percent.

819
01:19:16,800 --> 01:19:20,480
So, that's a difference of about 8%.

820
01:19:21,600 --> 01:19:28,280
And you can see the contribution rate, though, jumps up to about 53%, instead of 43%,

821
01:19:28,280 --> 01:19:31,840
and then stays about that level, and the client's a little bit over time.

822
01:19:32,740 --> 01:19:37,120
And the good news once after that 10 years, though, is that the contribution rate does fall

823
01:19:37,120 --> 01:19:41,300
below the baseline, because you're putting more contributions in up front, so you're paying

824
01:19:41,300 --> 01:19:45,700
more now and then less later.

825
01:19:47,970 --> 01:19:49,570
This is a similar scenario.

826
01:19:49,730 --> 01:19:51,970
It's an additional contributions of 5% of payroll.

827
01:19:52,610 --> 01:19:57,550
And the effect is virtually about half of the impact that you get at 10%.

828
01:19:57,550 --> 01:20:03,550
So the funded ratio in 2026 now is at 85% with a 4% difference.

829
01:20:04,470 --> 01:20:07,030
And the contribution goes up half as much.

830
01:20:07,030 --> 01:20:08,070
This

831
01:20:13,130 --> 01:20:21,750
graph is showing if you were to put an extra $125 million payment in now, or 2016.

832
01:20:22,930 --> 01:20:28,290
And you can see there's a spike in the contribution right that yellow dash line goes up to 73%.

833
01:20:28,290 --> 01:20:37,250
And then the funded ratio, though, you get an immediate 3% boost in the funded ratio the year after that contribution is made.

834
01:20:37,250 --> 01:20:52,590
However, any gains in the fund ad ratio that you have are less than as time goes on because then the contribution adjust itself as well because of more money coming into the fund than the fund anticipates that there's more assets so the contribution gets adjusted.

835
01:20:53,070 --> 01:20:59,390
So this is really just almost like a one time boost and that you're going to continue to make higher payments with that fund ad ratio.

836
01:20:59,390 --> 01:21:02,590
So keep it going up.

837
01:21:05,760 --> 01:21:12,380
This scenario is a rather ambitious scenario to try to fund the plan to 100% in 10 years.

838
01:21:13,660 --> 01:21:21,060
So you can see in 2026 that yellow straight line goes all the way up to 100%, but the

839
01:21:21,060 --> 01:21:27,220
contributions required for that over the 10-year period is 63% of payroll for 10 years.

840
01:21:27,220 --> 01:21:32,520
So that's rather ambitious, but we thought you might be interested in looking at something

841
01:21:32,520 --> 01:21:35,880
like that, just to see where benchmarks are.

842
01:21:40,350 --> 01:21:47,450
And this graph is showing, assuming that the plan earned that 5% that we wrote in one

843
01:21:47,450 --> 01:21:53,190
of the slides before, if that assets are 5% for 10 years, if you wanted to maintain your

844
01:21:53,190 --> 01:21:58,770
funded ratio over those 10 years and you funded upfront for that, it's very similar to the

845
01:21:58,770 --> 01:22:05,630
the funding at 100% where your contributions go up to about 60% over the course of 10

846
01:22:05,630 --> 01:22:05,970
years.

847
01:22:06,510 --> 01:22:11,810
And you can see the blue and the yellow lines are almost on top of each other so that

848
01:22:11,810 --> 01:22:13,570
you're maintaining your funded ratio.

849
01:22:14,490 --> 01:22:19,990
Under this scenario, if the plan did earn the assumed rate of return, you would see that

850
01:22:19,990 --> 01:22:23,310
your funded ratio would go up to about 100% in 10 years.

851
01:22:25,410 --> 01:22:25,990
And

852
01:22:28,390 --> 01:22:33,450
this just is a summary of all the different scenarios that we put together for you.

853
01:22:34,030 --> 01:22:38,790
The top line or the top graph is the funded ratio projections, the bottom again, the employer

854
01:22:38,790 --> 01:22:39,430
contributions.

855
01:22:41,110 --> 01:22:47,050
And the red line, if you can see it, that's the 10% additional contributions.

856
01:22:48,070 --> 01:22:52,590
And again, if you want to look at 5%, it would be about half that.

857
01:22:52,590 --> 01:22:59,930
And you can see that the scenario that gives you the most boost in your funded ratio is

858
01:22:59,930 --> 01:23:03,270
that targeting 100% in 10 years, which again is very ambitious.

859
01:23:04,750 --> 01:23:11,290
I think from looking at these graphs, the bottom graph, you can see that all of the scenarios,

860
01:23:11,670 --> 01:23:16,010
the contribution rates are higher than that baseline that we showed, the baseline is the blue.

861
01:23:17,410 --> 01:23:21,890
They're all higher in the beginning and they drop off after the 10-year period.

862
01:23:21,890 --> 01:23:30,550
And so it's just the same thing, is if you pay more now, you're going to pay less later so it's either paying now or paying later.

863
01:23:35,250 --> 01:23:37,670
Just close with some practical considerations.

864
01:23:38,250 --> 01:23:44,410
One of the things we've noticed is that it's a lot of assets out there, a lot of liabilities.

865
01:23:45,250 --> 01:23:49,350
It takes a concentrated effort over a period of time to move it.

866
01:23:49,350 --> 01:23:54,250
There's limits to what what you can do, but right now six times payroll is out there

867
01:23:54,250 --> 01:23:55,210
in assets.

868
01:23:55,550 --> 01:23:56,750
It's going to increase over nine.

869
01:23:58,790 --> 01:24:07,190
We'll need cooperation from SJ Sarah in order to make this work, specifically for additional

870
01:24:07,190 --> 01:24:07,910
contribution.

871
01:24:08,110 --> 01:24:12,930
We'll need to be separately accounted for so that other participating employers don't have

872
01:24:12,930 --> 01:24:16,150
their rates reduced because of your increase in contributions.

873
01:24:18,050 --> 01:24:22,750
Plan actually will have to make some additional calculations in order to have a special

874
01:24:22,750 --> 01:24:23,830
rate for you.

875
01:24:25,510 --> 01:24:30,470
These are not major, neither of these as a major issue, it would be a problem in the aim

876
01:24:30,470 --> 01:24:32,350
of getting additional funds in.

877
01:24:32,490 --> 01:24:36,530
I would expect that the retirement board be very favorably disposed to work with you.

878
01:24:38,150 --> 01:24:43,350
Revisions in the S.J. Sarah funding policy itself will not be required, because they're sort

879
01:24:43,350 --> 01:24:49,530
of looking at what applies to all participating employers and these contributions that you

880
01:24:49,530 --> 01:24:54,770
would make would be in addition to your act where you required contribution and would

881
01:24:54,770 --> 01:24:58,450
be modifiable part of your budgeting process.

882
01:25:02,030 --> 01:25:05,790
And then one of the things you want to look at carefully is to make sure that all of your

883
01:25:05,790 --> 01:25:11,830
state and federal contracts would allow full reimbursement, including your additional

884
01:25:11,830 --> 01:25:17,910
contribute. I understand you have a verbal assurance that's probably correct anyway. However,

885
01:25:20,940 --> 01:25:27,000
with that, that concludes our portion presentation. Thank you.

886
01:25:29,080 --> 01:25:30,360
Thank you so very much for that

887
01:25:30,360 --> 01:25:37,180
informative presentation. Questions and comments from the board? Chair Sapien, we have just kind of some

888
01:25:37,180 --> 01:25:42,260
conclusions. Yeah, we do that and thank you. Appreciate it.

889
01:26:03,260 --> 01:26:04,360
All right, we've got to get back to our

890
01:26:04,360 --> 01:26:04,620
slide.

891
01:26:16,490 --> 01:26:22,030
Acknowledging that paying down this 1.3 billion liability in its entirety is not feasible.

892
01:26:22,610 --> 01:26:28,650
The goal of accelerating the paydown is to put the county in a 75-80% funded ratio range,

893
01:26:29,130 --> 01:26:32,250
which would be about average for the 1937 Act plans.

894
01:26:33,090 --> 01:26:38,170
In recognition of one of the board's top strategic priority of maintaining a structurally balanced

895
01:26:38,170 --> 01:26:42,850
budget, it is the county administration's recommendation that your board adopt a modified

896
01:26:42,850 --> 01:26:47,790
version of option 3 outlined in your staff report by contributing an additional

897
01:26:47,790 --> 01:26:53,870
county contribution ranging from 0 to 5% of payroll for the next 10 years. The

898
01:26:53,870 --> 01:26:57,250
additional contribution rate would be evaluated and determined during the

899
01:26:57,250 --> 01:26:58,670
development of the annual budget.

900
01:27:01,490 --> 01:27:04,450
This table shows the change in funded ratio if

901
01:27:04,450 --> 01:27:08,850
the county was able to contribute 5% each of the 10 years. The additional

902
01:27:08,850 --> 01:27:15,390
Annual contributions of 207.6 million over 10 years improves the funded ratio from a projected

903
01:27:15,390 --> 01:27:21,190
77% to 80% if all the actuarial assumptions of the plan are met.

904
01:27:22,030 --> 01:27:26,850
While this does not seem significant, it does put Samuaking County's funded ratio near

905
01:27:26,850 --> 01:27:29,190
the average of the 1937 act plans.

906
01:27:30,110 --> 01:27:36,470
At the 5% contribution level, the annual additional cost will be 20.8 million with a net county

907
01:27:36,470 --> 01:27:43,150
cost of $7.8 million. For 2016-17, it is anticipated that the additional

908
01:27:43,150 --> 01:27:49,930
contributions would begin January 2017 in conjunction with the 2017 calendarate set

909
01:27:49,930 --> 01:27:51,930
by the SJ Sarah Board.

910
01:27:54,800 --> 01:28:00,900
Estated in the 2015-16 Midyear Report, the June 30, 2016 year-end

911
01:28:00,900 --> 01:28:04,420
General Fund Balance is estimated at 16.4 million.

912
01:28:05,160 --> 01:28:10,660
After the 2016-17 budget is structurally balanced and the contingency reserve level

913
01:28:10,660 --> 01:28:15,860
has been met, a portion of the remaining year-in projected savings will be set aside for

914
01:28:15,860 --> 01:28:17,900
the unfunded retirement liability reserve.

915
01:28:18,840 --> 01:28:25,000
In the year 2016-17, appropriations from the General Fund would be increased to fund the net

916
01:28:25,000 --> 01:28:29,760
county cost portion of the additional contributions to the remaining six months of the fiscal

917
01:28:29,760 --> 01:28:33,320
year. Any necessary adjustments to non-general fund

918
01:28:33,320 --> 01:28:35,600
departments would also be brought to your board at this time.

919
01:28:37,360 --> 01:28:42,720
Once a method of accelerated paydown is approved by your board, the county minister's office

920
01:28:42,720 --> 01:28:47,760
will work with the SJ Sarah Board to establish an agreement with the county and the necessary

921
01:28:47,760 --> 01:28:53,160
processes to keep separate accounting for the additional county contributions to ensure

922
01:28:53,160 --> 01:28:58,660
these funds are credited only to San Joaquin County. Our office and the auditor controller

923
01:28:58,660 --> 01:29:08,500
had discussions with the State Controller's Office requesting affirmation that the recommended method of accelerated paydown would be acceptable for state and federal participation.

924
01:29:09,000 --> 01:29:12,640
The State Controller's Office indicated that it would be acceptable.

925
01:29:13,240 --> 01:29:21,020
Once your board approves a method to pay down the unfunded retirement liability, the county would seek written affirmation from the State Controller's Office.

926
01:29:21,020 --> 01:29:28,040
At this time, it is recommended that your board accept the Kyron Report on funding alternatives

927
01:29:28,040 --> 01:29:34,000
for the San Joaquin County Employees Retirement Association and approve an annual policy to include

928
01:29:34,000 --> 01:29:39,860
as part of the final budget hearing an additional annual county contribution ranging from 0 to 5%

929
01:29:39,860 --> 01:29:48,100
a payroll for the next 10 years effective January 1, 2017 through December 31, 2026 to pay down

930
01:29:48,100 --> 01:29:51,560
the unfended retirement liability in accelerated time frame.

931
01:29:52,000 --> 01:29:53,660
This concludes the presentation.

932
01:29:54,120 --> 01:29:57,300
County Administrator Monica Nino and I are available for questions.

933
01:29:59,440 --> 01:29:59,980
Thank you again.

934
01:30:00,000 --> 01:30:04,300
And Ms. Nino, and to your staff, and the Kyrah. Questions and comments from the board?

935
01:30:08,520 --> 01:30:13,020
First request is from supervisor Wynn. Thank you, Chair.

936
01:30:16,400 --> 01:30:33,720
Obviously, and the calculations as far as our contributions. It's the investment. Return on investments. It's contributions for the employer and contributions for the employees. So those are the three driving forces that would obviously

937
01:30:33,720 --> 01:30:37,300
the rate, whatever, and final liability we have in the future.

938
01:30:37,560 --> 01:30:42,440
So, and you talked about, you know, obviously, with the county

939
01:30:42,940 --> 01:30:49,040
administration, certainly with the bargaining units, we can work on the fine eight numbers, as far as the not contributed.

940
01:30:49,840 --> 01:30:59,940
If I understand you correctly, as far as the investment side, which obviously would contribute to the goal of the increasing

941
01:30:59,940 --> 01:31:02,300
in infant liability at least in the percentage.

942
01:31:02,860 --> 01:31:04,060
That's kind of unpredictable.

943
01:31:04,320 --> 01:31:05,520
Is that what I'm hearing you say

944
01:31:05,520 --> 01:31:09,000
from all the experts who predict the future

945
01:31:09,000 --> 01:31:11,620
of investment returns over the next 10 years?

946
01:31:12,960 --> 01:31:18,500
Yes, I mean, there are two big sources

947
01:31:18,500 --> 01:31:22,500
of uncertainty with regard to the natural health of Earth.

948
01:31:24,220 --> 01:31:25,780
We're really good, as I said,

949
01:31:25,780 --> 01:31:30,280
that is figuring out when people have been in their rates

950
01:31:30,280 --> 01:31:33,860
of debt and ability in all the rest of it.

951
01:31:34,200 --> 01:31:36,700
Outside of California, it dates

952
01:31:36,700 --> 01:31:39,980
with where we governance structures,

953
01:31:40,820 --> 01:31:44,520
where pension contributions are sort of a balancing

954
01:31:44,520 --> 01:31:45,360
item in them.

955
01:31:46,500 --> 01:31:50,740
You've had situations like in Illinois, Michigan,

956
01:31:50,740 --> 01:31:56,720
in Jersey, just not contributed to the fall actuarial costs of the plan.

957
01:31:57,300 --> 01:31:58,180
That's why they're in some way.

958
01:31:59,680 --> 01:32:02,020
The second, so that's one big uncertainty there,

959
01:32:02,660 --> 01:32:04,900
California, where we draw a governance structure,

960
01:32:05,540 --> 01:32:09,380
as at the retirement board, basically write a bill

961
01:32:10,400 --> 01:32:11,960
on string employers' thing.

962
01:32:14,540 --> 01:32:18,020
The second, as you point out, investment returns.

963
01:32:18,020 --> 01:32:29,160
The only way to secure predictable investment returns to invest in assets that basically don't return anything.

964
01:32:30,300 --> 01:32:37,360
And that's usually expensive process, so we have to live with the uncertainty and nobody seems to know.

965
01:32:39,460 --> 01:32:45,540
Well, I see from other pensions funds that they overestimate the return on their investments.

966
01:32:45,540 --> 01:32:50,760
And thereby, reduce the contribution rates, and therefore they get upside down,

967
01:32:50,860 --> 01:32:54,720
because there's not enough revenue coming either from the investment or from the

968
01:32:54,720 --> 01:32:56,680
contribution from the employer or the employee.

969
01:32:57,160 --> 01:33:01,480
That's why, you know, recently we've had tremendous increases in contributions

970
01:33:01,480 --> 01:33:03,780
and some pension funds throughout the state.

971
01:33:05,040 --> 01:33:08,640
The other question regards to the ten years, the 5% over ten years.

972
01:33:09,200 --> 01:33:14,680
Now, you know, I have the expertise you all have, but it would seem to me that if

973
01:33:14,680 --> 01:33:20,240
We talked about 5% because the amount of money contributed over those 10 years is always the same.

974
01:33:20,620 --> 01:33:27,000
It would seem to me that as county budgets and hopefully we continue increase and

975
01:33:27,000 --> 01:33:32,740
sourds increase by virtue of negotiation, et cetera, that that 5% that you're talking about

976
01:33:33,400 --> 01:33:40,480
each year would increase incrementally over those 10 years as opposed to a static amount of the $20 million.

977
01:33:40,480 --> 01:33:47,060
So, I guess my question is, wouldn't that be a more accurate representation of that

978
01:33:47,060 --> 01:33:50,320
ten-year projection by increasing incrementally?

979
01:33:50,520 --> 01:33:53,120
And I understand we don't know what the ten-years hold as far as it.

980
01:33:53,540 --> 01:33:58,020
But it would seem to me that, actually, in the end, there would be an increase in the

981
01:33:58,020 --> 01:34:03,500
contributions annually, which ultimately would affect end results in regards to the

982
01:34:03,500 --> 01:34:03,880
percentage.

983
01:34:04,840 --> 01:34:09,120
I mean, I know you can't predict the future, but I guess I'm saying it probably better

984
01:34:09,720 --> 01:34:14,060
You're correct, Supervisor. There is that. But what we were doing was our status

985
01:34:14,060 --> 01:34:18,460
quote, the assumptions were essentially assumed the same for that projection. But yes,

986
01:34:18,620 --> 01:34:20,440
you are correct, because it's a percentage of payroll.

987
01:34:20,820 --> 01:34:21,500
Right. Thank you.

988
01:34:22,900 --> 01:34:25,400
Thank you, Supervisor Winn. Supervisor Miller?

989
01:34:25,820 --> 01:34:31,880
Thank you. I want to make sure I understand on the option it calls for $125 million,

990
01:34:31,880 --> 01:34:36,040
one-time contribution. Are we talking about pension obligation bond?

991
01:34:36,040 --> 01:34:41,980
You are correct, because we do not have that kind of cash available in the general fund to contribute towards the return.

992
01:34:42,200 --> 01:34:43,520
That's what I assumed.

993
01:34:44,340 --> 01:34:48,580
And then I just want to make sure everybody understands, because I've got,

994
01:34:48,840 --> 01:34:53,920
I have received questions in terms of, welcome, there's only 20 other counties on this list.

995
01:34:54,360 --> 01:35:01,900
Can you just very briefly give a little overview of what in 1937 Act counting me

996
01:35:01,900 --> 01:35:05,940
and why we're not comparing ourselves to every county.

997
01:35:09,160 --> 01:35:15,640
Historically, the 1937 Act asked a single pension plan,

998
01:35:15,860 --> 01:35:23,720
a single set of a pension plan design for 20 counties

999
01:35:23,720 --> 01:35:24,800
that were included.

1000
01:35:26,100 --> 01:35:30,080
And that's the Sackers members and 20 of them.

1001
01:35:30,080 --> 01:35:37,020
Packers is a state association of county retirement systems, and it includes, you know,

1002
01:35:37,080 --> 01:35:38,360
the ones that are on that list.

1003
01:35:38,920 --> 01:35:43,520
So they are all similar in the sense that there are counties, they include both general

1004
01:35:43,520 --> 01:35:51,320
and safety members, they have comparable administrative structures, comparable and not identical

1005
01:35:51,320 --> 01:35:58,260
benefit structures and similar, similar, almost identical governance.

1006
01:36:00,160 --> 01:36:07,640
It excludes a number of other counties that are, for example, within CalPERS, or that

1007
01:36:07,640 --> 01:36:13,520
are completely separate, like the County of San Francisco, or Al-Iars, or it's.

1008
01:36:17,930 --> 01:36:23,350
So it's a good, it's as comparable a group of counties as you find.

1009
01:36:24,210 --> 01:36:25,090
Great, thanks.

1010
01:36:25,190 --> 01:36:27,610
I just wanted to make sure that everybody else up here understood that.

1011
01:36:29,330 --> 01:36:38,570
And then the last thing is I understand that our goal is to get to essentially 80% in 10 years

1012
01:36:38,570 --> 01:36:45,610
and that the projections are based on if we allocate an additional 5%

1013
01:36:46,450 --> 01:36:57,110
every year. So if we don't do that, we will not hit the 80% funded level, correct?

1014
01:36:58,390 --> 01:36:59,450
Okay. Correct.

1015
01:36:59,710 --> 01:37:04,610
So what that means is, as we go forward with labor negotiations, we

1016
01:37:05,610 --> 01:37:11,530
to keep this in mind in terms of what it does to our bottom line so that we can

1017
01:37:11,530 --> 01:37:18,490
make sure we have that additional 5% cheer to pay this down, is that correct?

1018
01:37:18,990 --> 01:37:19,690
That is correct.

1019
01:37:19,990 --> 01:37:20,190
Okay.

1020
01:37:20,470 --> 01:37:20,770
Thank you.

1021
01:37:21,290 --> 01:37:26,570
And that's why we put a range in their supervisor because what we're going to do is

1022
01:37:26,570 --> 01:37:29,090
we'll address this as part of our annual budget process.

1023
01:37:29,490 --> 01:37:36,810
And I would hope that investments that we're able to achieve closer to our assumed

1024
01:37:36,810 --> 01:37:40,850
to return because then hopefully there's a balancing that takes place.

1025
01:37:41,390 --> 01:37:47,130
As Bob said and as I said, there's two primary factors of funding resources here, the employer

1026
01:37:47,130 --> 01:37:53,410
and investment earnings. And so I would hope when we're doing that annual evaluation that there's

1027
01:37:53,410 --> 01:37:58,970
some balancing going on because I don't believe and I will tell you from what I know now even in a

1028
01:37:58,970 --> 01:38:06,790
current budget, I don't know if we could currently fund our 5% for next calendar year, but that's

1029
01:38:06,790 --> 01:38:12,090
our goal. And we have some other factors of board policy, which is excellent fiscal

1030
01:38:12,090 --> 01:38:17,130
policy, that the board has adopted that I need to meet those benchmarks first. And that's

1031
01:38:17,130 --> 01:38:18,670
what's so helpful with having a range.

1032
01:38:21,550 --> 01:38:23,890
Thank you, supervisor Miller. Is Charlie up?

1033
01:38:29,310 --> 01:38:36,270
Thank you, Mr. Chairman. Okay. Staying on this range of percentages here, just a bit more.

1034
01:38:38,270 --> 01:38:43,590
Do I understand you to say then that the analysis that would be done as part of the preparation

1035
01:38:43,590 --> 01:38:50,690
of the budget each year would look at also the rate return on market investments, and

1036
01:38:50,690 --> 01:38:56,570
if the investments were doing better than we had expected, then the percentage that we

1037
01:38:56,570 --> 01:39:00,130
would contribute would go lower, that part of.

1038
01:39:00,130 --> 01:39:23,770
So, supervisor Elliott, what I said was, and hopefully I can clarify it better, the range is primarily about affordability, because I need to be able to provide this board with a structurally balanced budget, and I know this board blocks me to continuously meet the appropriation contingency, and thirdly is this range of retirement contribution.

1039
01:39:23,770 --> 01:39:30,730
I would hope, though, if I'm unable to achieve the 5% because I'm not just looking at the general

1040
01:39:30,730 --> 01:39:35,930
fund affordability, I'm also looking at what our state and federal programs and our

1041
01:39:36,810 --> 01:39:38,270
enterprise funds can afford.

1042
01:39:38,710 --> 01:39:44,710
So for me to bring a percentage up to that 5%, I want to know that organizationally we can

1043
01:39:44,710 --> 01:39:45,310
afford it.

1044
01:39:45,810 --> 01:39:52,210
And so in the event I can't meet that 5%, I would also reach out to San Joaquin Sarah to say,

1045
01:39:52,210 --> 01:39:58,810
Okay, where are we in regards to if we don't meet the 5%, I have no idea at the timing

1046
01:39:58,810 --> 01:40:03,590
of when we do our budget, if we know the status of our investment earnings, I know we

1047
01:40:03,590 --> 01:40:09,210
at least have some insight, but I would hope I could tell you also, well, we may not

1048
01:40:09,210 --> 01:40:20,170
achieve in year 2020 our 75% funded ratio, but we might be able to achieve 74% because between

1049
01:40:20,170 --> 01:40:24,970
the combination of our additional contribution and what we're projecting on investment earnings,

1050
01:40:25,230 --> 01:40:29,490
we might still be able to achieve that once the books are closed for San Joaquin Sarah.

1051
01:40:29,910 --> 01:40:37,090
So what I'm saying is I would hope that I could also give you some insight of us not meeting

1052
01:40:37,090 --> 01:40:42,790
our 5 percent, but possibly investments are at least meeting it some way in some fashion,

1053
01:40:42,950 --> 01:40:45,490
or what percentage it's helping us in that regard.

1054
01:40:47,660 --> 01:40:54,600
Okay. So is it correct to say, then, that the goal of this recommendation is to increase

1055
01:40:54,600 --> 01:40:59,780
the contributions by 5 percent, no matter how well the investments are doing?

1056
01:41:00,720 --> 01:41:01,240
Correct.

1057
01:41:02,720 --> 01:41:09,020
That's, and the goal is the operative word because I need to make sure I present a structurally

1058
01:41:09,020 --> 01:41:09,800
balanced budget.

1059
01:41:10,120 --> 01:41:10,240
Right.

1060
01:41:10,520 --> 01:41:14,220
And then the only reason we would not contribute an additional 5 percent would be if we just

1061
01:41:14,220 --> 01:41:15,660
couldn't afford it based on that.

1062
01:41:15,660 --> 01:41:16,940
You are correct.

1063
01:41:17,300 --> 01:41:25,060
Okay. Now, can you elaborate just a little bit more on the timeline of how this all works?

1064
01:41:26,060 --> 01:41:36,440
Basically, what I want to clarify is the relationship of this proposal today to the board action that we passed last year, I believe,

1065
01:41:36,680 --> 01:41:43,640
where we created a separate fund to help counteract the unfunded liability.

1066
01:41:43,640 --> 01:41:50,520
So, are we still doing that, or is this program replacing that reduction?

1067
01:41:51,100 --> 01:41:55,920
So, that goes very much in hand with Supervisor Miller brought up also.

1068
01:41:56,260 --> 01:42:02,020
So, the key would be, is our retirement rates go into place in January of every calendar year.

1069
01:42:02,420 --> 01:42:07,820
So, for the 16-17 fiscal year, our new rates and hopefully a percentage of,

1070
01:42:07,860 --> 01:42:12,240
hopefully 5% would go in place to solve this unfunded liability issue.

1071
01:42:12,240 --> 01:42:17,500
What we would do as part of mid-year, as Chris mentioned, we would come up and say,

1072
01:42:17,640 --> 01:42:20,180
okay, how much is that going to cost the general fund?

1073
01:42:20,620 --> 01:42:26,580
We would dip into that general fund reserve, or if we had capacity within our existing

1074
01:42:26,580 --> 01:42:32,340
budget in order to fund that six months of that unfended liability percentage.

1075
01:42:32,920 --> 01:42:38,880
Our state and federal operated programs, we would also need to meet with them because every

1076
01:42:38,880 --> 01:42:43,940
major are various departments do their urine projections. So we would also look at their

1077
01:42:43,940 --> 01:42:48,980
budgets and what the status was in that regard. So we would essentially take that money

1078
01:42:48,980 --> 01:42:55,160
to offset general fund departments only because all of that money in that reserve was to essentially

1079
01:42:55,160 --> 01:43:01,340
start building a fund in the general fund so that we could offset whether it's increased

1080
01:43:01,340 --> 01:43:07,920
costs in the CAO's office or say increased costs in planning. We would increase that spending

1081
01:43:07,920 --> 01:43:12,320
authority, and we would pull that money from the reserve and put it as part of our operating

1082
01:43:12,320 --> 01:43:18,240
budget in order to offset that additional expense. But take, for instance, my budget. If I

1083
01:43:18,240 --> 01:43:23,800
have savings in my budget, I would not expect this board to co-in and adjust my budget, because

1084
01:43:23,800 --> 01:43:30,180
I would use whatever budget capacity I have for my fiscal year end as of the end of June to

1085
01:43:30,180 --> 01:43:37,480
absorb that increased unfended liability percentage. We would only pull money from that reserve

1086
01:43:37,480 --> 01:43:42,760
for General Fund Departments that we believe could not afford the increased cost

1087
01:43:42,760 --> 01:43:44,440
related to the unfunded liability.

1088
01:43:45,720 --> 01:43:47,340
What reserve are you to?

1089
01:43:47,680 --> 01:43:49,380
The unfunded liability reserve.

1090
01:43:49,700 --> 01:43:55,300
The one that you started setting up last year that we roughly have about 4.1 million.

1091
01:43:55,300 --> 01:43:56,300
4.1 million.

1092
01:43:57,300 --> 01:44:03,260
Okay, so my original question was, are we going to continue to contribute money to that

1093
01:44:03,260 --> 01:44:10,860
that separate reserve in addition to this 5% increase in contribution to the unfunded liability.

1094
01:44:11,340 --> 01:44:11,840
Correct.

1095
01:44:13,500 --> 01:44:18,660
Okay, so the sequence would be we create a structure, a structurally balanced budget.

1096
01:44:19,240 --> 01:44:26,200
Then anybody that's left over, we meet our obligations to try to build up the contingency fund.

1097
01:44:27,000 --> 01:44:28,700
Then what comes next?

1098
01:44:28,700 --> 01:44:33,000
Then we evaluate whether or not we can meet the 5 percent increase.

1099
01:44:34,360 --> 01:44:38,140
Okay, and then we see if we have, after we've done that, if we have any money left over,

1100
01:44:38,360 --> 01:44:44,700
then we put some additionally into this reserve fund to try to meet, to further meet

1101
01:44:44,700 --> 01:44:46,640
any unfunded liabilities in the pension plan.

1102
01:44:46,960 --> 01:44:48,240
You are a direct supervisor.

1103
01:44:48,680 --> 01:44:48,860
Okay.

1104
01:44:49,580 --> 01:44:50,120
All right.

1105
01:44:51,580 --> 01:44:52,760
Different topic here.

1106
01:44:56,000 --> 01:44:59,920
Now, part of the staff report then, right toward the end of the presentation, we were talking

1107
01:45:00,000 --> 01:45:29,980
We're talking about whether state and federal participation, or whether our plan would be acceptable for state and federal participation. Could you explain that just a little bit more state and federal participation regarding what? Federal and state participation is basically when you have a state or federal grant program. And in the grant program, it allows for the county to be reimbursed for salaries benefit.

1108
01:45:29,980 --> 01:45:31,620
that's part of the benefits are retirement.

1109
01:45:32,540 --> 01:45:36,220
So right now it is acceptable, that's an acceptable cost.

1110
01:45:36,880 --> 01:45:38,900
So what we want is written affirmation

1111
01:45:38,900 --> 01:45:42,120
that if we increase our rate for retirement,

1112
01:45:43,080 --> 01:45:46,040
to basically catch up on our infended liability

1113
01:45:46,040 --> 01:45:47,980
if that's acceptable for reimbursement.

1114
01:45:49,330 --> 01:45:51,880
So state and federal programs would also provide

1115
01:45:51,880 --> 01:45:53,340
part of this 5%.

1116
01:45:53,790 --> 01:45:54,120
Correct.

1117
01:45:55,370 --> 01:45:55,860
Thank you.

1118
01:45:57,430 --> 01:45:58,520
Thank you, Vice Chair Elliott.

1119
01:45:58,520 --> 01:46:01,240
It's a few comments and observations.

1120
01:46:02,060 --> 01:46:09,200
I think it's important from the outset to note how very consistent this proposed action is with the board's strategic priorities.

1121
01:46:09,940 --> 01:46:15,360
Back to the first strategic priority of the board that was adopted was to ensure fiscal responsibility.

1122
01:46:15,960 --> 01:46:21,200
And within that was a subset goal of responsibly addressing the county's pension obligations.

1123
01:46:21,200 --> 01:46:30,000
So when we talk about goals, certainly the goal to achieve an 80% funded ratio is

1124
01:46:30,000 --> 01:46:34,720
a ultimate goal within the policy, but also within the context of our board's strategic

1125
01:46:34,720 --> 01:46:35,240
priorities.

1126
01:46:35,780 --> 01:46:41,420
I think it's also important to note that having reviewed the various options available,

1127
01:46:41,620 --> 01:46:50,700
I certainly concur with staff's recommended option, and I believe it provides the type of

1128
01:46:50,700 --> 01:46:55,820
flexibility, the pay-as-you-go method, which

1129
01:46:57,130 --> 01:46:59,920
makes into consideration the volatility and the predictability

1130
01:46:59,920 --> 01:47:01,100
of the markets.

1131
01:47:02,160 --> 01:47:04,400
And I think it makes a meaningful progress

1132
01:47:04,400 --> 01:47:10,780
towards median counties goal of having an 80% funded pension

1133
01:47:10,780 --> 01:47:14,580
fund in 10 years, and also within the context

1134
01:47:14,580 --> 01:47:16,160
of the board's strategic priorities.

1135
01:47:17,560 --> 01:47:21,460
So, are there any additional comments from the board?

1136
01:47:21,980 --> 01:47:23,480
There are no additional comments.

1137
01:47:23,860 --> 01:47:25,120
Are there any comments from the public?

1138
01:47:25,700 --> 01:47:26,020
Thank you.

1139
01:47:26,240 --> 01:47:26,620
Mr. Nguyen.

1140
01:47:29,840 --> 01:47:36,040
In my 30 years, almost I

1141
01:47:39,880 --> 01:47:44,580
was hit and locked up and daughter.

1142
01:47:45,360 --> 01:47:47,360
Almost 30 years.

1143
01:47:47,360 --> 01:47:51,600
So, in the past so many years,

1144
01:47:57,210 --> 01:48:01,010
there's a lot of criminal

1145
01:48:03,060 --> 01:48:08,580
get-should-to-beget-retirement

1146
01:48:08,580 --> 01:48:26,620
women, very? No, I should not. Therefore, women and vice-demon looking to those pre-minor

1147
01:48:26,620 --> 01:48:40,460
population that should be thrown into garbage. Instead of getting young one and

1148
01:48:40,460 --> 01:48:52,260
kick, then force them to fight, that's it, to do criminal, for many of them, oh, too

1149
01:48:52,260 --> 01:49:07,980
many, in segment of the human system, so I might have a list of those criminal that

1150
01:49:07,980 --> 01:49:10,940
should not let me read time and

1151
01:49:10,940 --> 01:49:14,880
verify so that the young one and

1152
01:49:14,880 --> 01:49:21,300
the new one, not have to pay for those

1153
01:49:21,300 --> 01:49:26,180
big enough. Many. I'm going to take

1154
01:49:26,180 --> 01:49:26,720
a list.

1155
01:49:29,020 --> 01:49:30,560
Too many. Thank you, miss

1156
01:49:30,560 --> 01:49:33,840
Noisy. Is there any further public

1157
01:49:33,840 --> 01:49:37,020
comments? Now for the public

1158
01:49:37,020 --> 01:49:38,220
comments, I'll bring the item back

1159
01:49:38,220 --> 01:49:41,510
back to the board, Mr. Elliott.

1160
01:49:43,200 --> 01:49:43,930
Thank you, Mr. Chairman.

1161
01:49:45,670 --> 01:49:50,650
The light of the report that we received here, I think that the staff proposal is just

1162
01:49:50,650 --> 01:49:59,070
a common-sense approach here to try to reduce our unfunded liability, bring our percentages

1163
01:49:59,070 --> 01:50:04,870
up into an acceptable range here, so I would move that we accept the Kyron report and we

1164
01:50:04,870 --> 01:50:07,170
approve the staff recommendation.

1165
01:50:08,290 --> 01:50:09,430
I would second that.

1166
01:50:09,610 --> 01:50:09,850
All right.

1167
01:50:09,970 --> 01:50:10,890
Moved and seconded.

1168
01:50:11,290 --> 01:50:12,710
Supervisors, please cast a vote.

1169
01:50:19,370 --> 01:50:20,810
Motion carries 5-0.

1170
01:50:21,750 --> 01:50:21,790
Okay.

1171
01:50:21,930 --> 01:50:22,490
Thank you.

1172
01:50:22,490 --> 01:50:23,210
Thank you very much.

1173
01:50:23,410 --> 01:50:28,070
Thank you so much, Ms. Nino, and the Kyron Group and the rest of your staff.

1174
01:50:29,970 --> 01:50:37,930
Moving on to our second item in our discussion section, where to consider approving the accounting

1175
01:50:37,930 --> 01:50:53,550
making changes to make the necessary budget adjustments in the airport enterprise fund and general fund beginning in fiscal year 2016 through 2017 to comply with Federal Aviation Administration grant assurances.

1176
01:50:54,430 --> 01:50:58,450
The item will be presented by Ms. Nino and her staff.

1177
01:50:59,240 --> 01:51:02,470
Good morning again, Chair, Ms. APN and board members.

1178
01:51:03,190 --> 01:51:03,950
Thank you again.

1179
01:51:05,150 --> 01:51:19,190
Today's presentation is to explain the recommended accounting changes for the Airport Enterprise Fund for fiscal year 2016-2017 to comply with the Federal Aviation Administration grant assurances.

1180
01:51:19,630 --> 01:51:32,550
The new lease payments, as you'll hear about as part of Mr. Lozier, Ms. Lee's presentation this morning, along with the General Fund contribution, total the same amount.

1181
01:51:32,550 --> 01:51:35,230
And you'll see that on the very last page of the board later.

1182
01:51:35,670 --> 01:51:50,090
I am not asking for the general fund contribution in total between our lease payments in the cash contribution to change from what the airport enterprise fund is currently receiving in the current year for 15-16.

1183
01:51:50,670 --> 01:51:59,950
We are not asking for board action on the six-year lookback of the general fund contribution versus what the county would have paid

1184
01:52:00,710 --> 01:52:05,890
In the new lease payments that we're asking authority for today, we're not asking for

1185
01:52:05,890 --> 01:52:12,070
board action to the airport, which essentially resulted in that six-year lookback, roughly $1.8

1186
01:52:12,070 --> 01:52:18,330
million in an additional general fund contribution. I'm not asking this board to act on that.

1187
01:52:18,730 --> 01:52:23,730
I am also not asking this board to record a liability for that $1.8 million.

1188
01:52:23,730 --> 01:52:42,050
It is important the board be aware that when staff has all the information on parcel B5, which is roughly 31.3 acres of airport land that currently the county along with our partner Catalyst is considering as including as part of our

1189
01:52:42,050 --> 01:52:43,870
our Air Part 599 project.

1190
01:52:44,710 --> 01:52:50,410
When that recommendation, when that comes back, that's when I will make a recommendation

1191
01:52:50,410 --> 01:52:55,810
and give the Board some options on how to address the additional $1.8 million.

1192
01:52:56,570 --> 01:53:03,310
It was extremely important to staff to keep this policy decision with the Board of Supervisors.

1193
01:53:03,910 --> 01:53:09,050
The ultimate decision will only remain with the Board of Supervisors if the county's

1194
01:53:09,050 --> 01:53:16,330
cash contribution, remains as such, if it remains, and from the general fund, that will

1195
01:53:16,330 --> 01:53:17,630
keep that decision here.

1196
01:53:18,250 --> 01:53:25,170
Today's recommendation will also provide consistent fiscal policy on how to treat our airport

1197
01:53:25,170 --> 01:53:31,310
enterprise fund consistent with past practices on how we've treated our hospital enterprise

1198
01:53:31,310 --> 01:53:34,410
fund, why there's likeness in this regard.

1199
01:53:34,410 --> 01:53:40,750
As you heard in my midyear report, we previously have given the hospital fund not only our maintenance

1200
01:53:40,750 --> 01:53:44,370
of effort, and we currently do not have a maintenance of effort with the airport.

1201
01:53:44,750 --> 01:53:50,170
We're talking to enterprise funds, but different requirements when it comes to state and federal

1202
01:53:50,170 --> 01:53:56,210
programs, a maintenance of effort is required to pull down state and federal funds for our hospital.

1203
01:53:56,730 --> 01:54:03,170
The hospital, the airport, has been primarily a general fund contribution because of this

1204
01:54:03,170 --> 01:54:07,230
This boards priority of economic development and to see the airport thrive.

1205
01:54:08,170 --> 01:54:15,730
The rest of the report will be presented by Mark Lozier, a staff from the CAO's office, along with Rosalie.

1206
01:54:18,890 --> 01:54:23,030
Good morning, chairs, APN board members, CEO Nino and county council.

1207
01:54:23,590 --> 01:54:25,630
Mark Lozier, senior deputy county administrator.

1208
01:54:26,250 --> 01:54:31,930
Before you today is an item to approve accounting changes in the airport enterprise fund and

1209
01:54:31,930 --> 01:54:36,090
General Fund beginning in fiscal year 2016, 2017.

1210
01:54:36,950 --> 01:54:41,330
Just by way of background, a little bit of history, the Stockton Metropolitan Airport

1211
01:54:41,330 --> 01:54:46,070
has been a county-owned asset since the county accepted sole ownership of the airport

1212
01:54:46,070 --> 01:54:49,530
on July 1, 1956 from the city of Stockton.

1213
01:54:50,070 --> 01:54:55,750
The Stockton Metropolitan Airport operates as an enterprise fund whose revenues are primarily

1214
01:54:55,750 --> 01:55:02,750
from landing fees, rental fees, concessionary fees generated from airport-owned facilities and

1215
01:55:02,750 --> 01:55:08,510
capital grants from the Federal Aviation Administration. In addition, it currently receives general

1216
01:55:08,510 --> 01:55:15,670
fund contributions, including general fund unsecured property taxes and non- airport farm leases.

1217
01:55:17,130 --> 01:55:22,590
The following table is a summary of the net general fund contribution for the current fiscal year

1218
01:55:22,590 --> 01:55:30,230
2015-2016. The 2015-16 adopted budget for the airport enterprise fund, approximately

1219
01:55:30,230 --> 01:55:38,110
4.7 million, with a general fund contribution totaling 1.4 million. Also included in the

1220
01:55:38,110 --> 01:55:44,770
general fund contribution is an annual payment of $132,000, 115 associated with the lawsuit

1221
01:55:44,770 --> 01:55:51,230
settlement related to the development of the current airport 599 project which has been

1222
01:55:51,230 --> 01:55:53,910
the past through cost in the airport's budget.

1223
01:55:54,590 --> 01:55:59,670
This final annual settlement payment will occur in 2029.

1224
01:56:03,330 --> 01:56:07,890
In December 2015, the county administrator,

1225
01:56:08,210 --> 01:56:11,350
the airport director, the FAA regional director,

1226
01:56:11,550 --> 01:56:13,950
and staff meant to discuss the potential development

1227
01:56:13,950 --> 01:56:17,150
of a portion of the parcel on airport land

1228
01:56:17,150 --> 01:56:20,650
as part of the airport 599 master development project.

1229
01:56:21,210 --> 01:56:23,950
At that meeting, the FAA advised

1230
01:56:23,950 --> 01:56:29,350
the county to conduct a six-year look-back of property lease revenues generated on county

1231
01:56:29,350 --> 01:56:34,930
airport own land to be reflected in the airport enterprise fund budget to ensure compliance

1232
01:56:35,540 --> 01:56:41,730
with FAA grant assurances. It's important to note that this look-back does not include all of the

1233
01:56:41,730 --> 01:56:47,170
leases on county owned airport land as there are additional leases which the airport director will

1234
01:56:47,170 --> 01:56:53,110
renegotiate as they come up for renewal. Since that time the county administrator staff completed

1235
01:56:53,110 --> 01:56:59,050
the six-year look-back and recommends that the board consider the following accounting changes going

1236
01:56:59,050 --> 01:57:05,530
forward. The recommended changes will create a greater level of transparency while also achieving

1237
01:57:05,530 --> 01:57:11,830
compliance with FAA grant assurances ensuring that the airport can continue to receive annual

1238
01:57:11,830 --> 01:57:15,430
federal funding to help support operations of the airport.

1239
01:57:28,400 --> 01:57:31,040
So beginning in fiscal year 2016,

1240
01:57:31,040 --> 01:57:40,200
2017 staff is recommending to add the following lease revenues, totaling $636,171 from the General

1241
01:57:40,200 --> 01:57:42,780
Fund to the Airport Enterprise Fund.

1242
01:57:43,320 --> 01:57:47,980
There are three leases, the Arnez lease, the Ag Center lease, the Farm Ag credit lease.

1243
01:57:48,560 --> 01:57:53,660
Each of these leases are based on airport property rental rates approved by the board on June

1244
01:57:53,660 --> 01:57:59,520
June 27, 2013, and those rates are based on undeveloped land.

1245
01:58:00,760 --> 01:58:06,260
With the exception of the Farm Ag Credit Lease Payment, these transactions had not previously

1246
01:58:06,260 --> 01:58:07,840
been included in the county budget.

1247
01:58:08,440 --> 01:58:14,460
Based on the current agreement, the Farm Ag Credit Annual Lease Payment totals $22,436 and

1248
01:58:14,460 --> 01:58:18,960
is currently credit to the Facilities Management Budget in the General Fund.

1249
01:58:18,960 --> 01:58:25,400
Consistent with the FAA's request to record leases on county-owned airport land, the recommended

1250
01:58:25,400 --> 01:58:28,400
changes achieve FAA grant assurances.

1251
01:58:29,680 --> 01:58:37,040
The following slide shows each lease in relationship to the overall county airport parcel.

1252
01:58:38,100 --> 01:58:42,980
The Arnez lease was part of, which is right here, the 25-acre, the Arnez lease was part of

1253
01:58:42,980 --> 01:58:50,700
the settlement associate with airport 599, which gave Arnez development rights for 49 years for the 25 acres.

1254
01:58:51,300 --> 01:58:57,960
The least Arnez will expire in 2053 with an option to extend one additional term of 10 years.

1255
01:58:58,740 --> 01:59:05,620
In addition to the county constructed, in addition, the county constructed the ag center on 10.65 acres.

1256
01:59:06,420 --> 01:59:11,420
As was the farm ag credit facility on 1.23 acres.

1257
01:59:11,420 --> 01:59:17,460
The farm ag credit lease is for the term of 60 years and at the end of the lease the county

1258
01:59:17,460 --> 01:59:23,520
will receive lease payments in excess of 1.9 million because the airport cannot develop

1259
01:59:23,520 --> 01:59:24,740
any of these parcels.

1260
01:59:25,400 --> 01:59:32,180
Staff is recommending to add the lease revenues totaling 636-171 to the airport enterprise

1261
01:59:32,180 --> 01:59:41,320
fund beginning in fiscal year 2016-2017 and if you'll note there are two under undeveloped

1262
01:59:41,320 --> 01:59:45,060
portions, which I'll discuss later in the presentation here.

1263
01:59:48,000 --> 01:59:53,460
So there are five recommended accounting changes beginning in fiscal year 2016-2017 that

1264
01:59:53,460 --> 01:59:54,380
staffs recommending.

1265
01:59:54,380 --> 01:59:59,980
First, is to reallocate the General Fund unsecured property taxes, currently budgeted

1266
02:00:00,000 --> 02:00:08,580
At 470,400, within the boundary of the airport, back to the general fund. Two, to assign non- airport

1267
02:00:08,580 --> 02:00:14,700
farm lease revenues totaling $63,000 from the airport enterprise fund to the facilities

1268
02:00:14,700 --> 02:00:22,760
management budget in the general fund. Three, to allocate the annual payment of $132,015,

1269
02:00:23,460 --> 02:00:29,120
associated with the lawsuit settlement from the airport enterprise fund to the facilities

1270
02:00:29,120 --> 02:00:35,520
Management Fund, which resides in the General Fund, or to add the airport leases

1271
02:00:35,520 --> 02:00:42,340
totaling 636-171 to the airport enterprise fund budget. Then finally five to

1272
02:00:42,340 --> 02:00:50,700
adjust the General Fund net county cost from 874-712-639-826. These

1273
02:00:50,700 --> 02:00:55,200
recommended accounting changes reflect different sources of General Fund

1274
02:00:55,200 --> 02:01:01,840
funding, and we'll ensure the airport enterprise fund will receive an equal amount of funding

1275
02:01:01,840 --> 02:01:07,120
next fiscal year as was received in fiscal year 2015-2016.

1276
02:01:14,140 --> 02:01:22,780
The first right here before you, this demonstrates it over the past six years from 2010-2011-2015-2016.

1277
02:01:23,160 --> 02:01:29,460
The county's general fund, contribution to the airport enterprise fund, total $5.7 million.

1278
02:01:29,460 --> 02:01:44,820
Based on the recommended accounting changes and the value of the corresponding 6-year period the general fund lease payment revenues to the airport enterprise fund would have been totaled 3.8 million.

1279
02:01:45,440 --> 02:01:55,660
The general fund contribution to the airport enterprise fund is 1.9 million in excess of the lease payment value for the same 6-year look back period.

1280
02:01:55,660 --> 02:01:56,440
The

1281
02:01:58,880 --> 02:02:03,900
county administrator is currently negotiating with Catalyst on a revised master development agreement,

1282
02:02:04,120 --> 02:02:15,720
which includes an option to develop parcel B5, which is approximately 31.3 acres on county owned airport land as part of the air park 599 master development project.

1283
02:02:16,420 --> 02:02:23,180
If a determination is made for the county to purchase parcel B5, the county administrator will present the boards,

1284
02:02:23,180 --> 02:02:35,260
or the Board's consideration to proceed with the master development agreement and propose that the excess general fund contribution be considered toward the purchase of Harsal B-5.

1285
02:02:38,020 --> 02:02:50,800
It should be noted on the slide here that the construction of the Ag Center and the Farm Ag Credit facility on the county-owned airport land included the full development and build out of site utilities.

1286
02:02:50,800 --> 02:02:57,820
The site improvements, totaling 2.6 million, were fully funded by the county's general fund.

1287
02:02:58,140 --> 02:03:03,160
When the airport leases the two remaining parcels, which are approximately 9 acres,

1288
02:03:03,740 --> 02:03:06,600
it will realize the value of those site improvements.

1289
02:03:10,260 --> 02:03:17,920
At its February 23rd, 2014 meeting, the airport advisory committee voted to reject the CEO's recommendation

1290
02:03:17,920 --> 02:03:22,320
to reallocate the General Fund unsecured property taxes.

1291
02:03:22,920 --> 02:03:27,540
Subsequently, the Chair of the Airport Advisory Committee sent a letter to the Board,

1292
02:03:27,960 --> 02:03:33,660
outlining its objection to reallocate the General Fund property taxes back to the General Fund,

1293
02:03:33,900 --> 02:03:41,520
the letter in a presentation that the Airport Director presented to the Airport Advisory Committee are included in your Board's packet.

1294
02:03:44,850 --> 02:03:55,250
Unsecured property taxes are part of the county's general fund discretionary revenues and staff recommends that they not be designated to the airport enterprise fund.

1295
02:03:55,670 --> 02:04:08,710
County Council has opined that the county's plan to use the tax revenue generated from personal property located at the airport is not prohibited by the FAA grant assurances, nor is it prohibited by federal law.

1296
02:04:08,710 --> 02:04:21,210
Personal property taxes generated from the airport located at the Stockton metropolitan airport will not be considered a diversion of revenues and violation of the FAA's grant assurances.

1297
02:04:24,190 --> 02:04:33,270
So at this time, staff recommends the board approve the accounting changes to make the necessary budget adjustments in the airport enterprise fund.

1298
02:04:33,270 --> 02:04:42,610
and the general fund beginning in a fiscal year 2016-2017 to comply with federal aviation administration grant assurances.

1299
02:04:43,210 --> 02:04:50,350
The recommended accounting changes will allow the airport to continue to be eligible for federal grant funding

1300
02:04:50,350 --> 02:04:55,290
and continue towards self-sufficiency as an enterprise fund.

1301
02:04:56,030 --> 02:04:59,570
And with that staff is available to answer any questions.

1302
02:05:01,170 --> 02:05:01,730
Thank you.

1303
02:05:01,730 --> 02:05:04,910
Mr. Lozier, Ms. Nino, questions and comments from the board?

1304
02:05:14,840 --> 02:05:15,060
Iceland.

1305
02:05:16,080 --> 02:05:16,740
That's right.

1306
02:05:17,020 --> 02:05:18,020
Go ahead to provide them.

1307
02:05:18,020 --> 02:05:18,380
Thank you.

1308
02:05:18,640 --> 02:05:19,060
Through the chair.

1309
02:05:22,010 --> 02:05:33,410
So we're not proposing to settle up anything on this shortfall, the 1.8 million, until after

1310
02:05:33,410 --> 02:05:35,710
we know what's going to happen with parcel B5.

1311
02:05:36,310 --> 02:05:37,810
You are correct, Supervisor Miller.

1312
02:05:37,810 --> 02:05:43,310
And at that time, when a proposal comes back to us, the discretion lies with the board.

1313
02:05:43,950 --> 02:05:52,170
You are correct, as long as the property tax that you adopt staff recommendation for 16, 17,

1314
02:05:52,170 --> 02:06:02,570
and do it as a general fund contribution. Okay. So at that time then, we have the discretion on either

1315
02:06:02,570 --> 02:06:12,290
are essentially truing up and taking that $1.8 million or not.

1316
02:06:12,750 --> 02:06:13,550
You're correct.

1317
02:06:14,370 --> 02:06:14,630
Okay.

1318
02:06:15,190 --> 02:06:22,170
And there's not going to be any immediate shortfall in the airport's budget.

1319
02:06:22,590 --> 02:06:23,790
You're accurate.

1320
02:06:24,430 --> 02:06:24,670
Okay.

1321
02:06:24,670 --> 02:06:34,650
And so if I understand correctly, the letter we received from the Airport Advisory Committee,

1322
02:06:36,290 --> 02:06:44,730
there were pleased to see that the lease payments would be going to them, but they also wanted

1323
02:06:44,730 --> 02:06:51,530
the unsecured property taxes to continue, which am I correct? That would essentially

1324
02:06:51,530 --> 02:06:58,470
really result in an additional contribution of $636,000 to the airport fund.

1325
02:06:59,850 --> 02:07:05,470
If that happened, if we did not transfer property tax, but we did transfer the lease revenue,

1326
02:07:06,530 --> 02:07:07,250
you are correct.

1327
02:07:08,090 --> 02:07:08,290
Okay.

1328
02:07:09,870 --> 02:07:10,570
All right.

1329
02:07:10,850 --> 02:07:11,570
Those are my questions.

1330
02:07:11,970 --> 02:07:12,350
Thank you.

1331
02:07:12,790 --> 02:07:13,670
Do you supervise your Miller?

1332
02:07:13,890 --> 02:07:14,330
Fistarily?

1333
02:07:20,010 --> 02:07:21,010
Thank you, Mr. Chairman.

1334
02:07:21,010 --> 02:07:33,480
One thing on this lawsuit payment of $132,015, I think it's pretty clear in the last chart

1335
02:07:33,480 --> 02:07:40,680
that we showed there that it will no longer be figured in any way against the airport

1336
02:07:40,680 --> 02:07:41,580
enterprise fund.

1337
02:07:41,800 --> 02:07:42,840
I think that was the intent.

1338
02:07:43,440 --> 02:07:50,680
There's another chart here that shows accounting changes, that shows a plus that says lawsuit

1339
02:07:50,680 --> 02:07:56,860
payment to the general fund. Are we still saying that that that payment is going

1340
02:07:56,860 --> 02:08:02,080
down separately from the airport enterprise fund? Is that the intent of those?

1341
02:08:02,520 --> 02:08:10,120
You are correct, Supervisor Lynn. Okay. I'm glad to see that our intent is to keep

1342
02:08:10,120 --> 02:08:14,920
the the level of support to the airport at about the same level.

1343
02:08:19,560 --> 02:08:20,860
But to me it seems

1344
02:08:20,860 --> 02:08:29,400
a little bit counterintuitive here to say that it increases transparency if we take the

1345
02:08:29,400 --> 02:08:35,760
unsecured property taxes that are now going to the airport enterprise fund and we put those back

1346
02:08:35,760 --> 02:08:44,860
in the general fund and then we contribute an amount equal to that or including that as a general

1347
02:08:44,860 --> 02:08:50,180
fund contribution to the airport it seems that if we really want the airport to be an enterprise

1348
02:08:50,180 --> 02:09:09,180
then the clearest most transparent way to do that would be just to leave the revenues that are associated with the airport in the enterprise which would mean those unsecured property taxes would just continue as part of the airport enterprise fund.

1349
02:09:09,720 --> 02:09:17,780
And then we could just reduce the amount of general fund contribution that would be needed to make up that difference.

1350
02:09:17,780 --> 02:09:25,600
So, for example, in the table that we're showing in the staff report on the last page, which

1351
02:09:25,600 --> 02:09:33,760
shows, or 2016, 2017, a proposed general fund contribution of $639,000,000 in $26,000.

1352
02:09:33,760 --> 02:09:42,540
If we just continue the practice of keeping the unsecured property taxes as part of the airport

1353
02:09:42,540 --> 02:09:49,180
enterprise fund, move that over into that column, then we could reduce the general fund contribution

1354
02:09:49,180 --> 02:09:55,980
that's showing there by the amount of the insecure property taxes so that the general fund contribution

1355
02:09:55,980 --> 02:10:04,820
then would show as a total of 169,000 or 26. The net result would still be the 1.2 million

1356
02:10:04,820 --> 02:10:19,440
in terms of funding revenue going to the airport enterprise fund, but it just seems to me that would be a more transparent way of showing whether the airport is actually self-sufficient or not.

1357
02:10:20,120 --> 02:10:33,800
Because the reason those unsegured property taxes are able to be collected is because the airport is there, and there are tenants and users of the airport facility who have equipment there, and therefore they pay those taxes.

1358
02:10:33,800 --> 02:10:39,660
But why not just roll that into the enterprise fund, it just seems that would really give

1359
02:10:39,660 --> 02:10:43,900
a clearer picture of whether the airport is supporting itself or not.

1360
02:10:44,560 --> 02:10:51,320
So supervisor Elliott and Rosa might even want to chime in here with prior to the airport

1361
02:10:51,320 --> 02:10:55,780
receiving that revenue, it was in general purpose revenue as property taxes.

1362
02:10:56,920 --> 02:11:02,420
Traditionally, in counties, property taxes you always want to remain the integrity of your

1363
02:11:02,420 --> 02:11:07,640
your base property tax revenue as general-purpose revenue, because as you know, as a board

1364
02:11:07,640 --> 02:11:12,280
member and our entire board knows, that's primarily the dollars that this board has

1365
02:11:12,280 --> 02:11:17,280
discretion over when it comes to meeting those general fund obligations, whether

1366
02:11:17,280 --> 02:11:23,080
it's law enforcement, whether it's DA, you know, whether it's other governmental-related

1367
02:11:23,080 --> 02:11:23,700
services.

1368
02:11:24,080 --> 02:11:32,400
So, losing the integrity of your entire general-purpose property tax pool is what is a

1369
02:11:32,400 --> 02:11:47,020
essentially occurred since 2003, and so that's why the transparency argument, that's why we're using the transparency piece of it because what it does prior to 2003, it was a general fund general purpose revenue.

1370
02:11:47,580 --> 02:11:58,640
2003, my understanding as a result of the airport coming onto a financial crisis, that money got diverted from the general fund to the enterprise fund.

1371
02:11:58,640 --> 02:12:04,900
Typically, when a general fund contributes to an enterprise fund, you don't divert the revenue.

1372
02:12:05,200 --> 02:12:10,820
You typically would do an operating transfer in if you're truly doing some accounting practices.

1373
02:12:11,240 --> 02:12:17,760
Because what it does is keeps the integrity of the general fund contribution to a non-general

1374
02:12:17,760 --> 02:12:18,840
fund operation.

1375
02:12:19,640 --> 02:12:25,700
And so the reason why that is so important, say, for instance, typically our federal and state

1376
02:12:25,700 --> 02:12:31,480
programs require a match. They typically want it to come from the general fund. I know there's a

1377
02:12:31,480 --> 02:12:39,320
little bit of different FAA requirements when it comes to discretionary grants that our airport

1378
02:12:39,320 --> 02:12:47,220
manager is able to apply for. And that match comes from that budget, that match. But if the feds ever

1379
02:12:47,220 --> 02:12:53,900
asked for a general fund contribution, not only would we be giving them already the airport tax if we

1380
02:12:53,900 --> 02:13:00,660
We chose to give that revenue directly, but we would have to increase our cash match as a result to making that transaction.

1381
02:13:01,300 --> 02:13:09,880
But I also want to share with you from a bigger picture perspective that comparison between the hospital, I have two short points.

1382
02:13:10,280 --> 02:13:12,840
The comparison between the hospital and the airport.

1383
02:13:13,420 --> 02:13:19,240
When we, as part of the 1617 budget, you heard as part of the mid-year, I am doing away.

1384
02:13:19,240 --> 02:13:26,860
I am going to be recommending to this board to no longer give the hospital enterprise fund a general fund contribution.

1385
02:13:27,240 --> 02:13:36,280
But I am required in order to pull down state and federal funds because medical, whatever additional programs they require a county match.

1386
02:13:36,800 --> 02:13:43,040
That does not mean in the future that the enterprise for the airport may eventually require that also.

1387
02:13:43,040 --> 02:13:53,880
So, 16-17 since the hospital is doing well financially, I am pulling back 100 percent of that $3 million in that general fund cash contribution.

1388
02:13:54,400 --> 02:14:02,780
We have consistently in this organization shown it very appropriately that it was a cash contribution to the enterprise fund for the hospital.

1389
02:14:03,060 --> 02:14:10,220
When the enterprise fund for the hospital was not doing well, we took money out of general fund reserves and gave it to the hospital.

1390
02:14:10,220 --> 02:14:15,420
We have yet to ask that hospital to give it back, and I am not recommending that.

1391
02:14:15,660 --> 02:14:22,340
It's the same thing I'm not recommending on the 1.8, 1.9 million in the 6-year lookback.

1392
02:14:23,640 --> 02:14:31,220
If this Board considers today to give the unsuffered property tax to the airport,

1393
02:14:31,560 --> 02:14:36,460
we give up that 6-year lookback of that $2.6 million.

1394
02:14:36,460 --> 02:14:42,960
and dollars. Why would we want that policy decision to be pulled out of the board's hands?

1395
02:14:43,520 --> 02:14:48,160
Because that would no longer be included as part of the six-year look back.

1396
02:14:48,620 --> 02:14:52,960
And that source-to-revenue originated out of the county's general fund.

1397
02:14:53,400 --> 02:14:59,200
It did not originate from distribution purposes out of the enterprise fund.

1398
02:14:59,200 --> 02:14:59,900
I.N.

1399
02:15:00,000 --> 02:15:06,760
You understand your logic relative to where it's generated, but typically property taxes in county

1400
02:15:06,760 --> 02:15:12,700
government remain in the general fund. And when the, when the board makes a fiscal policy

1401
02:15:12,700 --> 02:15:19,660
decision to make a contribution to a fund outside of the general fund, it is done through

1402
02:15:19,660 --> 02:15:24,280
net county costs. It's done through a cash transfer, not a diversion of revenue.

1403
02:15:25,300 --> 02:15:27,680
That's where the transparency comes into play.

1404
02:15:27,680 --> 02:15:27,740
Okay.

1405
02:15:28,700 --> 02:15:29,300
Okay.

1406
02:15:29,620 --> 02:15:37,300
So are you saying that for all of our enterprise funds, none of them have unsecured taxes

1407
02:15:38,760 --> 02:15:45,320
allocated to them directly as a form of revenue to help them balance their budgets?

1408
02:15:45,720 --> 02:15:46,080
You know what?

1409
02:15:46,200 --> 02:15:46,940
I look at Rosa.

1410
02:15:47,240 --> 02:15:49,700
I'm almost sure that they aren't.

1411
02:15:49,740 --> 02:15:54,640
We have our landfill, which is 100% self-supporting, and we have our hospital.

1412
02:15:54,640 --> 02:15:57,940
Those are the two I'm most familiar with, but Rosa could you respond?

1413
02:15:58,780 --> 02:15:59,180
Good morning.

1414
02:15:59,560 --> 02:16:00,020
That's correct.

1415
02:16:00,640 --> 02:16:06,420
And I want to add that only one department besides the airport receiving an allocation

1416
02:16:06,420 --> 02:16:08,460
of general fund property tax.

1417
02:16:08,780 --> 02:16:10,580
That's the shift voting safety.

1418
02:16:11,860 --> 02:16:14,580
However, that's a required match from the state.

1419
02:16:15,160 --> 02:16:19,860
That actually require the county in order to draw down the state grant for voting safety.

1420
02:16:19,860 --> 02:16:26,900
The county actually had to allocate unsecured property taxes raised on boats to that program.

1421
02:16:27,720 --> 02:16:32,860
No out of county departments receive direct allocation of general fund property tax revenues.

1422
02:16:34,740 --> 02:16:39,700
Supervisor Elliott, the way this board is able to contribute to non-general fund departments

1423
02:16:39,700 --> 02:16:43,000
is through our county's net county cost process.

1424
02:16:43,360 --> 02:16:48,840
When you see when we introduce the budget and we talk about general purpose revenue, that's

1425
02:16:48,840 --> 02:16:54,880
essentially the pot of money that this board approves or disapproves on how those dollars

1426
02:16:54,880 --> 02:16:59,960
are used in non-general fund departments. And a good example with that, we always pointed

1427
02:16:59,960 --> 02:17:04,380
out when we were recommending that $3 million for the hospital, and it was much greater

1428
02:17:04,380 --> 02:17:10,260
a years back, that that was clearly a general fund contribution, and it was not a permanent

1429
02:17:10,260 --> 02:17:16,440
solution. Because an enterprise fund is in its effort to become self-sustaining, it's

1430
02:17:16,440 --> 02:17:23,220
primarily through user fees and those in leases, those kinds of charges.

1431
02:17:23,900 --> 02:17:30,280
So for the hospital, next year, for this next budget you're going to recommend that we

1432
02:17:30,280 --> 02:17:34,980
don't provide any general funds to the hospital, any general fund support.

1433
02:17:35,620 --> 02:17:39,440
The $3 million cash contribution, we always had two pieces.

1434
02:17:39,800 --> 02:17:42,320
We have a maintenance of effort, which is required.

1435
02:17:43,680 --> 02:17:46,200
That's required for their state and federal programs.

1436
02:17:46,580 --> 02:17:52,200
We could not pull down certain state and federal programs for the hospital's benefit for

1437
02:17:52,200 --> 02:17:55,200
services we deliver without 2.1 million.

1438
02:17:55,720 --> 02:17:58,960
And we have had that maintenance of effort for multiple years.

1439
02:17:59,500 --> 02:18:03,860
It's a little bit similar when we talk about maintenance of effort of the maintenance of

1440
02:18:03,860 --> 02:18:07,620
effort the general fund contributes to the courts across the street.

1441
02:18:08,520 --> 02:18:09,700
Those are required.

1442
02:18:09,700 --> 02:18:14,020
Those are typically agreements we have with the state or federal agencies.

1443
02:18:15,040 --> 02:18:21,040
But there was always an additional $3 million plus that we were giving to the hospital above that.

1444
02:18:21,660 --> 02:18:27,740
These last few years, we've asked the hospital administrator to dedicate it towards capital.

1445
02:18:28,420 --> 02:18:30,480
And that's primarily what they've used that money for.

1446
02:18:30,860 --> 02:18:37,840
But in this current year, since our hospital is getting back on its feet and has a level of fiscal stability,

1447
02:18:37,840 --> 02:18:44,480
We are pulling that $3 million, but we cannot pull that $2.1 million because of the MOE requirement.

1448
02:18:44,940 --> 02:18:50,940
We do not want to jeopardize the other hundreds of thousands of dollars that that hospital receives as a result of it.

1449
02:18:52,140 --> 02:18:57,380
Okay, so continuing with the hospital, just so I can understand the comparison a little better.

1450
02:18:58,020 --> 02:19:07,460
So the 2.1 maintenance of effort, that is something that the county is required to pay just as part of the county's

1451
02:19:07,460 --> 02:19:09,700
effort to continue to support the hospital, is that so?

1452
02:19:09,700 --> 02:19:11,180
That's not my understanding.

1453
02:19:11,400 --> 02:19:11,920
Go ahead, Rosa.

1454
02:19:13,280 --> 02:19:17,200
I would call it, the county need to put in $2.1 million

1455
02:19:17,200 --> 02:19:20,440
to the hospital enterprise so that we can actually draw down

1456
02:19:20,440 --> 02:19:23,600
roughly over $20 million of federal and state dollars.

1457
02:19:24,800 --> 02:19:27,000
So you have to put in at least $2.1 million

1458
02:19:27,640 --> 02:19:31,960
and so that you'll be eligible to get federal and state money.

1459
02:19:31,960 --> 02:19:39,080
So they often hear the term minimum match requirements.

1460
02:19:40,160 --> 02:19:46,400
It's not just a 10%, it's typically a fixed dollar amount and it typically stays the

1461
02:19:46,400 --> 02:19:49,060
same and it remains static from year after year.

1462
02:19:49,480 --> 02:19:54,320
Okay, so it has nothing to do with the needs of the hospital just a contractual requirement

1463
02:19:54,320 --> 02:19:55,700
that we pay that amount.

1464
02:19:56,120 --> 02:19:56,440
Correct.

1465
02:19:57,240 --> 02:19:57,380
Okay.

1466
02:19:57,380 --> 02:20:03,180
Okay. And then the other three million, that is, I guess discretionary.

1467
02:20:03,720 --> 02:20:04,360
You are correct.

1468
02:20:06,160 --> 02:20:09,160
Is that include unsecured property taxes?

1469
02:20:09,960 --> 02:20:12,500
When it does is it gets funded as a result.

1470
02:20:12,740 --> 02:20:17,300
The bulk of our revenue in general-purpose revenue is unsecured property taxes.

1471
02:20:17,900 --> 02:20:23,660
So part of our total pool, we have unsecured property taxes, sales tax.

1472
02:20:23,660 --> 02:20:26,420
I don't think we have any more vehicle license fees.

1473
02:20:26,580 --> 02:20:31,200
Do we, any more, Rosa, interest, all of those various pools?

1474
02:20:31,480 --> 02:20:34,920
So there would be, but it does not get diverted over there.

1475
02:20:35,140 --> 02:20:37,880
It comes in through a cash transfer.

1476
02:20:38,380 --> 02:20:39,480
That's the big difference.

1477
02:20:39,940 --> 02:20:42,740
That's where the consistency with the airport comes into play.

1478
02:20:47,290 --> 02:20:55,470
If we were doing something along those lines in terms of allocating unsecured

1479
02:20:55,470 --> 02:21:02,110
property taxes that are brought in due to the hospital's operations, if we're allocating

1480
02:21:02,110 --> 02:21:08,770
those unsecured property taxes to the hospital, would that negate the requirement to pay

1481
02:21:08,770 --> 02:21:10,790
that $3 million that we've been paying?

1482
02:21:16,020 --> 02:21:23,800
Our plan for 1617 is that we no longer provide that additional $3 million to Samuikin General

1483
02:21:23,800 --> 02:21:31,340
a hospital and if we were to allocate and secure property taxes generated by the hospital

1484
02:21:31,340 --> 02:21:38,420
campus as county contribution that would not count toward the $2.1 million required

1485
02:21:38,420 --> 02:21:38,820
match.

1486
02:21:40,300 --> 02:21:44,500
Okay, so the hospital is doing well enough that they don't need that and secure property

1487
02:21:44,500 --> 02:21:48,880
tax to be able to balance their budget next year.

1488
02:21:49,160 --> 02:21:50,040
Is that what I'm hearing?

1489
02:21:50,960 --> 02:21:51,580
You're correct.

1490
02:21:52,020 --> 02:21:52,260
Right.

1491
02:21:52,260 --> 02:22:03,200
Okay. Okay. So part of the argument then is that we want to reallocate unsecured property taxes into the general fund just to be consistent.

1492
02:22:07,240 --> 02:22:07,480
Okay.

1493
02:22:07,800 --> 02:22:13,820
And it provides truly what the county is contributing to the airport through the cash contribution.

1494
02:22:15,320 --> 02:22:17,640
That's where the transparency comes into play.

1495
02:22:19,040 --> 02:22:26,620
because if ever they asked for a general fund contribution and it was say a 10 or 20% match,

1496
02:22:27,080 --> 02:22:29,900
we could meet potentially that requirement.

1497
02:22:32,840 --> 02:22:35,700
But the key is to provide some consistency

1498
02:22:35,700 --> 02:22:40,520
on how our enterprise funds operate within our bigger organization.

1499
02:22:41,800 --> 02:22:47,660
Now are you saying that if we were to allocate unsecured property taxes to the airport

1500
02:22:48,400 --> 02:22:57,540
that we could not account for that in a way that would make it obvious that that's where those contributions came from.

1501
02:22:58,460 --> 02:23:05,060
And that they would not count as any kind of a matching fund for grant purposes.

1502
02:23:05,960 --> 02:23:11,640
Oh, I think that Airport could probably use it as a matching fund, but it would no longer filter through the General Fund.

1503
02:23:11,640 --> 02:23:17,680
When you take general-purpose revenue out of the general fund, the key is understanding

1504
02:23:17,680 --> 02:23:21,180
the difference between a general fund and an enterprise fund.

1505
02:23:21,800 --> 02:23:25,280
Completely two different animals when it comes to governmental accounting.

1506
02:23:25,860 --> 02:23:31,240
That's why it's so important to keep the integrity of general-purpose revenue where all the taxes,

1507
02:23:31,460 --> 02:23:37,660
whether it's sales tax, whether it's property tax, but no supervisor, the airport could use the

1508
02:23:37,660 --> 02:23:43,820
the unsecured property taxes as match, but it comes in as enterprise revenue.

1509
02:23:43,820 --> 02:23:46,600
It does not come in as general fund revenue.

1510
02:23:47,000 --> 02:23:49,520
That's what I'm trying to make sure that this Board understands.

1511
02:23:50,080 --> 02:23:55,200
There's a clear distinction when you have revenue coming from the general fund to the enterprise fund.

1512
02:23:55,500 --> 02:23:59,920
It looks very differently in regards to state and federal funding.

1513
02:24:01,450 --> 02:24:09,330
Okay. I also got lost a bit in your explanation of the look back on the 2.5 million,

1514
02:24:09,650 --> 02:24:14,410
that if we allocated the unscored property taxes to the airport enterprise fund,

1515
02:24:14,890 --> 02:24:20,030
we would lose this 2.5 million. How would we lose that?

1516
02:24:21,090 --> 02:24:25,310
Because what it does is it would it went directly to the airport.

1517
02:24:25,310 --> 02:24:33,950
So even though it originated as general fund revenue, and it was always part of the general fund contribution,

1518
02:24:34,470 --> 02:24:41,050
if you're now, if this board considers making a policy decision to completely on a permanent basis,

1519
02:24:41,250 --> 02:24:46,950
divert that property tax revenue, we could not include that as part of our six-year look back.

1520
02:24:51,500 --> 02:24:55,460
It lost me there. I mean, if you know what happened, how could we not account for it?

1521
02:24:55,460 --> 02:24:58,540
because it was going directly to the enterprise fund.

1522
02:24:58,800 --> 02:25:02,160
And Rosa has the history of why we even did it

1523
02:25:02,160 --> 02:25:04,440
because it originated in the general fund.

1524
02:25:05,700 --> 02:25:08,500
Again, if the board met the policy decision to say

1525
02:25:08,500 --> 02:25:11,480
that we're going to permanently allocate the portion

1526
02:25:11,480 --> 02:25:15,040
of the general fund property tax to the airport enterprise,

1527
02:25:15,500 --> 02:25:17,260
then follow that logic.

1528
02:25:17,560 --> 02:25:19,180
When you do the six-year lookback,

1529
02:25:19,660 --> 02:25:22,400
you would exclude it out from the reconciliation.

1530
02:25:23,860 --> 02:25:30,080
So, therefore, you lose the ability, your flexibility, on that $2.6 million, you already provided

1531
02:25:30,080 --> 02:25:31,660
to the airport from the General Fund.

1532
02:25:38,150 --> 02:25:38,470
Okay.

1533
02:25:42,200 --> 02:25:48,540
Perhaps this will all become clearer later, but in your right, Mr. Chairman, I would also

1534
02:25:48,540 --> 02:25:55,260
like to ask, you know, we've got a unanimous opposition to this plan from the Airport Advisory

1535
02:25:55,260 --> 02:26:01,800
commission and I'd like to just hear from one of their representatives or from the

1536
02:26:01,800 --> 02:26:07,760
airport director as to just in light of this discussion that's taken place this morning.

1537
02:26:08,220 --> 02:26:12,500
Are there any changes in their positions or?

1538
02:26:12,860 --> 02:26:17,980
Yes, however, I will have to defer your request for the time being because there are still

1539
02:26:17,980 --> 02:26:20,720
requests from board members to ask questions.

1540
02:26:20,720 --> 02:26:24,540
So for the time being, let's finish up board questions and comments.

1541
02:26:25,400 --> 02:26:28,020
Do you have any further comments on Vice-Chair Lea?

1542
02:26:28,560 --> 02:26:29,100
No.

1543
02:26:29,380 --> 02:26:29,520
Okay.

1544
02:26:30,020 --> 02:26:31,860
Moving on to Supervisor Viyapugla.

1545
02:26:32,180 --> 02:26:32,440
Thank you.

1546
02:26:32,560 --> 02:26:32,940
Through the chair.

1547
02:26:33,600 --> 02:26:44,920
So Monica, as we compare the hospital and the airport, talked about, we were trying to make

1548
02:26:44,920 --> 02:26:54,100
sure that the hospital is stable enough, so then we will look at the airport and this

1549
02:26:54,100 --> 02:26:56,000
is a question to both you.

1550
02:26:58,240 --> 02:27:03,610
And after reading this letter from the FAA,

1551
02:27:05,950 --> 02:27:10,050
are we jeopardizing anything,

1552
02:27:12,250 --> 02:27:13,510
I still don't

1553
02:27:13,510 --> 02:27:21,250
see that the airport, even though we've invested, and we continue to strive to make that,

1554
02:27:21,250 --> 02:27:26,690
you know, a jewel of a county, are we stable?

1555
02:27:27,710 --> 02:27:39,270
And changing this funds over back to the county, jeopardize our relationships with the FAA.

1556
02:27:39,270 --> 02:27:46,190
And I was just looking at the, you know, I read the letter and it just seems clear that,

1557
02:27:46,370 --> 02:27:52,790
you know, making these changes would probably hurt that relationship for me.

1558
02:27:53,530 --> 02:27:56,850
I know we worked so hard to build on that.

1559
02:27:57,570 --> 02:28:06,870
And I think at the end of the day, this board still will make and control any type of funding

1560
02:28:06,870 --> 02:28:09,190
that the report has?

1561
02:28:10,610 --> 02:28:21,670
Well, Supervisor Philip Houdra, I think the board has less policy authority when we give the

1562
02:28:21,670 --> 02:28:25,550
unsecured property taxes to the airport, especially in the six-year lookback.

1563
02:28:25,950 --> 02:28:28,930
I think that's the important piece of this discussion today.

1564
02:28:29,350 --> 02:28:32,830
I don't believe this jeopardizes the FAA funding, I really don't.

1565
02:28:33,430 --> 02:28:39,750
I received a call last week in advance because Mr. Lohman did let me know that our airport

1566
02:28:39,750 --> 02:28:44,090
director had forwarded him today's board letter prior to board action.

1567
02:28:44,830 --> 02:28:47,330
So he gave me a call that he was going to respond.

1568
02:28:47,930 --> 02:28:54,190
He knew the FAA, he was well aware of what the six-year look-by looked like because I had

1569
02:28:54,190 --> 02:29:01,890
given him a preview of that when we met in December and he knew when they asked me, this was

1570
02:29:01,890 --> 02:29:10,790
was very much directed from the FAA about getting our county airport land related leases in the appropriate

1571
02:29:10,790 --> 02:29:17,930
accounting. So he knew I was going to go forward with it because he knows we're currently looking at B5 as part of

1572
02:29:17,930 --> 02:29:24,790
airport. And what was extremely important to me is that he knew what beyond just our general fund cash

1573
02:29:24,790 --> 02:29:30,090
contribution the airport was receiving, but to answer your question in regard to jeopardizing

1574
02:29:30,090 --> 02:29:34,610
our relationship with FAA, they mentioned then that they were going to come out and

1575
02:29:34,610 --> 02:29:37,010
audit our airport at that time.

1576
02:29:38,050 --> 02:29:44,890
What appeared yesterday, their letter in that regard, I have no problem sharing with

1577
02:29:44,890 --> 02:29:48,630
them our six-year look back, and I believe it is sound.

1578
02:29:49,230 --> 02:29:54,670
That's why also he was well aware, I got a legal opinion from our county council that it

1579
02:29:54,670 --> 02:29:59,790
was not considered a diversion of airport revenue, he acknowledged that on the phone on Friday.

1580
02:30:00,780 --> 02:30:30,720
So, I do not believe of anything. I would say on Airport 599, we have worked better with FAA than what I've heard previously, and Rosa couldn't respond to that, also with historic, because we've been able to move the needle sooner, quicker as a result of Mr. Lomans' interaction with the CAO's office. But it has not helped when our airport is in the behind the scenes.

1581
02:30:30,720 --> 02:30:35,660
essentially giving a little different direction relative to B5 because I've

1582
02:30:35,660 --> 02:30:41,560
got to share this board. B5 right now as a result of the various hoops we're

1583
02:30:41,560 --> 02:30:45,220
having to go through as a result of the kind of the twist and turns and

1584
02:30:45,220 --> 02:30:52,680
dealing with the airport on B5. FAA already knows B5 might not in the end even

1585
02:30:52,680 --> 02:30:54,280
being included as part of the project.

1586
02:30:54,280 --> 02:30:55,180
But

1587
02:30:57,520 --> 02:31:02,600
it just seems that, I mean, we've been driving our feet on B5 for years.

1588
02:31:02,980 --> 02:31:04,560
Oh, I agree with you, Supervisor.

1589
02:31:05,320 --> 02:31:09,880
And it just seems that, you know, I look back, I've been here for seven years, and I've

1590
02:31:09,880 --> 02:31:14,940
seen airport directors come and go, this is the first time we have an airport director

1591
02:31:14,940 --> 02:31:24,040
who comes from an economic background that has moved, you know, this airport to make it

1592
02:31:25,920 --> 02:31:31,860
and we're still, I feel, unstable, unstable, but we need to make this stable.

1593
02:31:31,980 --> 02:31:40,060
And I just think that if we're taking away where maybe the FAs are going to look at our

1594
02:31:40,060 --> 02:31:43,740
books and say, hey, you know, are these stable or not?

1595
02:31:44,660 --> 02:31:51,580
I mean, I just don't want to mess up anything that's been worked so hard with the aviation

1596
02:31:52,130 --> 02:31:52,920
board that's worked.

1597
02:31:52,920 --> 02:31:59,620
I mean, it's so much work into this, I mean, it just seems like we're moving in the right direction.

1598
02:31:59,800 --> 02:32:02,500
And I just don't want to jeopardize that at all.

1599
02:32:03,040 --> 02:32:07,860
In today's recommendation does not jeopardize that because as I think one of the other supervisors,

1600
02:32:07,860 --> 02:32:14,640
I think supervisor Miller stated, the very last page, this is a revenue neutral impact to the airport.

1601
02:32:15,360 --> 02:32:21,480
They're currently receiving $1.2 million, we are recommending $1.2 million for $16.17.

1602
02:32:23,060 --> 02:32:28,500
And also the airport did not appear in front of this board as a result of overexpending their

1603
02:32:28,500 --> 02:32:31,060
budget after mid-year as they appeared last year.

1604
02:32:31,460 --> 02:32:33,680
So they're clearly doing better financially.

1605
02:32:34,080 --> 02:32:39,220
I'm not saying that they're truly and operating as an enterprise fund because the county's still

1606
02:32:39,220 --> 02:32:41,680
giving them a general fund contribution.

1607
02:32:42,360 --> 02:32:45,720
They're not right now in the classification of where the hospital is.

1608
02:32:45,720 --> 02:32:58,460
But what I'm recommending to this board is before making a decision today, think about what happens as a result of the six-year lookback if those property taxes are given to the airport.

1609
02:33:01,000 --> 02:33:01,580
Thank you.

1610
02:33:01,860 --> 02:33:09,380
Thank you, Supervisor Riapudo, Supervisor Miller, then Supervisor Wen, and then we will finish up with Vice-Serialiates, and then we'll go to public comment.

1611
02:33:10,180 --> 02:33:16,200
So my question goes to the six-year lookback, and I want to make sure that I understand the ramifications of what we're looking at today.

1612
02:33:16,200 --> 02:33:22,460
The way I understand it is, we're being required by the FAA to do a six-year look back and

1613
02:33:22,460 --> 02:33:31,260
true up the leases. Correct. But that means $3.8 million to the airport enterprise fund.

1614
02:33:33,430 --> 02:33:41,610
What we're saying is we want to offset that amount by the unsecured property tax, which has been

1615
02:33:41,610 --> 02:33:47,310
going to the airport enterprise fund, but has not been required to be diverted to go there.

1616
02:33:47,850 --> 02:33:55,090
Clear saying, we voluntarily done that, but it counts as a general fund contribution, correct?

1617
02:33:55,470 --> 02:34:06,130
So my question is, if we today make the decision we want to continue diverting the unsecured property tax to the airport,

1618
02:34:06,130 --> 02:34:11,270
It doesn't just impact next year's contribution, correct?

1619
02:34:11,610 --> 02:34:17,770
We will still owe $3.8 million to the airport enterprise fund, and we will have to come

1620
02:34:17,770 --> 02:34:19,850
up with a way to fund that.

1621
02:34:20,670 --> 02:34:21,210
You are correct.

1622
02:34:21,710 --> 02:34:28,610
And that's where Mr. Lohman in the letter yesterday said once Ford takes action and also once we resolve

1623
02:34:28,610 --> 02:34:33,610
B5, whether it's in the project or out of the project, they will look at how we've come

1624
02:34:33,610 --> 02:34:38,530
up with our general fund contributions, and I feel very confident in what we've come up with.

1625
02:34:38,970 --> 02:34:46,670
And we will, they will also look at the receipts, the lease agreements, this 3.8 to make sure

1626
02:34:46,670 --> 02:34:48,790
that County has calculated that correctly.

1627
02:34:49,010 --> 02:34:51,210
So they'll look at both sides of the equation.

1628
02:34:51,590 --> 02:34:58,790
So I just want to make sure, if we opted today to continue and making it permanent to direct the

1629
02:34:58,790 --> 02:35:08,870
unsecured property tax, we're basically giving up any credit for that $2.6 million that's already gone and we will

1630
02:35:09,690 --> 02:35:17,710
having already directed it to the airport. We will now owe it again to the tune of $3.8 million to the airport enterprise fund.

1631
02:35:18,130 --> 02:35:23,830
What we would owe would essentially the way you would come up with the calculation, it would be the $5.6 million

1632
02:35:23,830 --> 02:35:33,630
that currently shows up in the general fund, you would subtract that number from the 2.6 and it turns the county into owing the airport.

1633
02:35:34,170 --> 02:35:43,530
So not only would the county have to pay back that money, but if B5 showed up as part of airport, the county would also have to pay for that.

1634
02:35:44,050 --> 02:35:44,770
Got it.

1635
02:35:45,050 --> 02:35:45,850
Okay, thank you.

1636
02:35:49,030 --> 02:35:50,410
Thank you, Mr. Chair.

1637
02:35:52,010 --> 02:35:55,810
Actually, I was going to wait to make comments until after we heard from some of the members

1638
02:35:55,810 --> 02:36:00,690
of the airport advisory group that I'll just make a few comments and then wait to see what

1639
02:36:00,690 --> 02:36:01,490
they have to say.

1640
02:36:05,560 --> 02:36:13,640
A couple of areas that concern me that have been mentioned, this reconciling process obviously

1641
02:36:13,640 --> 02:36:25,260
as was just stated, if we agree that the unsecured property tax idled to the enterprise fund,

1642
02:36:25,780 --> 02:36:31,060
that does not give us the credit of the 2.6 million already given premium.

1643
02:36:32,400 --> 02:36:40,820
The other part of it is that, you know, I had two meetings yesterday involving groups,

1644
02:36:40,820 --> 02:36:45,320
So I'm sure my fellow supervisors have had similar meetings over the last few weeks.

1645
02:36:47,040 --> 02:36:54,980
And focus those discussions was money, revenue for their particular agendas, which is

1646
02:36:54,980 --> 02:36:55,140
fine.

1647
02:36:56,820 --> 02:37:02,420
One of the things that always concerned me in regards to this board and going through

1648
02:37:02,420 --> 02:37:07,400
the budget hearings last year, and for those who were here obviously, it was very challenging

1649
02:37:07,400 --> 02:37:12,760
based upon the number of requests as opposed to the money's available.

1650
02:37:14,220 --> 02:37:25,140
And so I'm always concerned with the prothra of agencies that need to do their job serving

1651
02:37:25,140 --> 02:37:25,740
our residents.

1652
02:37:26,040 --> 02:37:32,660
I'm always a little bit protective of this board's ability to use whatever funds we receive.

1653
02:37:32,660 --> 02:38:01,100
certainly general fund revenues, as they do go to a major portion of our law enforcement and so I virtue of that, I'm a little reluctant to release any amount of what I consider general revenue funds to albeit for good purposes, but to another organization that that

1654
02:38:01,100 --> 02:38:06,960
It may not appreciate that benefit of having those funds under their control.

1655
02:38:08,040 --> 02:38:13,240
So, more importantly, I guess what I'm concerned about with this forward's decision is that

1656
02:38:14,500 --> 02:38:20,800
and I've had conversations with Monica and I've had conversations with Airport Director

1657
02:38:20,800 --> 02:38:28,500
and I've, in my conversations, have stated that I don't want to jeopardize as supervisor

1658
02:38:28,500 --> 02:38:31,360
Federal Food Service on the Report Advisory Commission with me,

1659
02:38:32,280 --> 02:38:34,360
jeopardized the good work that's already transpired.

1660
02:38:34,620 --> 02:38:38,380
We are essentially making tremendous headway

1661
02:38:38,380 --> 02:38:40,320
in regards to the future of the airport

1662
02:38:40,320 --> 02:38:41,560
and certainly the county.

1663
02:38:42,800 --> 02:38:46,000
It's interesting because in that same presentation or speech

1664
02:38:46,000 --> 02:38:49,140
I gave last week, I did talk about the airport

1665
02:38:49,140 --> 02:38:53,260
and there was a lot of positive comments

1666
02:38:53,260 --> 02:38:56,180
about what we're doing and what the future holds for the airport

1667
02:38:56,180 --> 02:38:58,120
and certainly for residents.

1668
02:38:58,840 --> 02:39:05,560
So I'm a little bit concerned about losing or I should say,

1669
02:39:05,760 --> 02:39:09,020
but it's turning over control of, for example,

1670
02:39:09,220 --> 02:39:12,400
over the past six years, 2.6 million.

1671
02:39:12,560 --> 02:39:14,480
And of course, the future that we'll continue.

1672
02:39:16,480 --> 02:39:20,220
I would like to see this board and future boards

1673
02:39:20,220 --> 02:39:23,500
because I'm always protective of future councils

1674
02:39:23,500 --> 02:39:28,360
and their discretion to make decisions as to what comes before them.

1675
02:39:29,840 --> 02:39:35,280
When I was on the council, I was always opposed to anything that was saddled.

1676
02:39:35,460 --> 02:39:39,440
Future councils were the mandate that they had to do certain things because the times

1677
02:39:39,440 --> 02:39:41,080
change, the finances change, et cetera.

1678
02:39:41,620 --> 02:39:43,220
I have the same view on this board.

1679
02:39:43,980 --> 02:39:50,120
I'm reluctant to make any policy decisions or changes that would hamper future board supervisors

1680
02:39:50,120 --> 02:39:59,500
to make discretionary decisions based upon what the financial environment holds for them in those particular challenges.

1681
02:40:00,340 --> 02:40:18,640
So I'm a little bit reluctant and I'm certainly hoping to hear from those who have different, maybe different perspective on what we can do to maintain the upward climb and the increased activity of the airport.

1682
02:40:18,640 --> 02:40:25,700
And I think Supervisor LePoodle and I have talked about, you know, certainly the great things that have happened and what will happen.

1683
02:40:26,540 --> 02:40:45,600
And Mr. Maverick-Genesis is a fantastic job. I think everybody agrees to that because I've talked individuals who were more knowledgeable in what's happened in the past and there's been tremendous changes in improvements that have taken place over the past few years.

1684
02:40:45,600 --> 02:40:50,200
So I do not want to see that direction change, I want to see it to get to you.

1685
02:40:51,020 --> 02:41:00,340
This is a very small, although it's important, I know to the participants, but it's a challenge

1686
02:41:00,340 --> 02:41:05,200
for me from the standpoint of wanting to see the airport and the advisory board certainly

1687
02:41:05,200 --> 02:41:11,820
get what they believe is necessary to continue their climb and improving the airport and its

1688
02:41:11,820 --> 02:41:13,180
service to our community.

1689
02:41:13,760 --> 02:41:19,440
At the same time, I don't want to necessarily release any kind of discretion that sport has for future.

1690
02:41:20,060 --> 02:41:31,380
As I just say, and I know you all know this, but this year is going to be even more challenging last year as far as budgeting limited amount of resources we have available.

1691
02:41:32,100 --> 02:41:43,160
Though I'm a little bit protective of that, but having said that, I essentially would like to air from the members of board and the director and see what their comments are before.

1692
02:41:43,160 --> 02:41:44,060
or obviously we may.

1693
02:41:45,820 --> 02:41:47,180
Thank you, supervisor, when?

1694
02:41:47,780 --> 02:41:48,340
Vice Chair Elliott?

1695
02:41:49,320 --> 02:41:53,380
Yes, one last question on the FAA position

1696
02:41:53,800 --> 02:41:56,880
on the unsecured property taxes and the six-year look back.

1697
02:41:57,360 --> 02:42:00,860
In reading that letter, I didn't see anywhere in there

1698
02:42:00,860 --> 02:42:04,700
where it said that the FAA, if we were to continue

1699
02:42:05,140 --> 02:42:07,140
to allocate the unsecured property taxes

1700
02:42:07,140 --> 02:42:09,220
to the airport enterprise fund.

1701
02:42:09,640 --> 02:42:13,280
I didn't see anywhere where they said that if we did that,

1702
02:42:13,280 --> 02:42:18,720
then we could not take credit for having made those contributions over the past six years.

1703
02:42:19,300 --> 02:42:22,480
Did the FAA representative say that?

1704
02:42:24,880 --> 02:42:33,560
They didn't. They didn't say that. But what it does is it puts fiscal policy in place and we're going forward.

1705
02:42:34,400 --> 02:42:41,980
It's going to be a hard argument to make that because what we're going to do is we're going to continue what our past practice has been.

1706
02:42:43,360 --> 02:42:48,700
And it's essentially been a diversion of property tax that's out of general purpose revenues

1707
02:42:48,700 --> 02:42:53,060
to the enterprise fund, but you are correct, Supervisor Elliott, it's not in that letter.

1708
02:42:53,700 --> 02:42:59,840
Right, and if we did continue to divert those from the general purpose funds, then logic

1709
02:42:59,840 --> 02:43:04,400
would say that they are still general purpose funds that we have just decided to allocate

1710
02:43:04,400 --> 02:43:10,160
to the airport, so there shouldn't be any – there shouldn't be any problem with looking

1711
02:43:10,160 --> 02:43:16,560
back and saying yes, that was in fact a contribution from the general fund.

1712
02:43:17,300 --> 02:43:22,420
You're getting, and I'm going to have Rosa speak, also, you're getting my 29 years of

1713
02:43:22,420 --> 02:43:27,400
experience, typically if your past practice and then your board takes action to continue

1714
02:43:27,400 --> 02:43:33,640
that past practice, typically outside agencies look that, and especially if the revenue did

1715
02:43:33,640 --> 02:43:38,160
not filter through the general fund, it's considered revenue and the enterprise fund.

1716
02:43:38,160 --> 02:43:41,080
So, I think that's a real hard argument to make.

1717
02:43:42,540 --> 02:43:44,020
I can go ahead, yes.

1718
02:43:48,780 --> 02:43:54,360
If the board were to make a decision to continue to divert property tax to the enterprise fund,

1719
02:43:54,640 --> 02:44:00,680
essentially, when you talk to the FAA, you need to negotiate when you look at those six-year look back,

1720
02:44:01,020 --> 02:44:04,580
rather than in a position to say that that's the general fund dollars,

1721
02:44:04,580 --> 02:44:11,080
and we are using it to reconcile the, on the least payments, is a very different discussion

1722
02:44:12,380 --> 02:44:15,340
depending on what the board's policy is going to be.

1723
02:44:16,160 --> 02:44:18,340
All right, okay, thank you, we'll leave it there.

1724
02:44:18,980 --> 02:44:19,920
Thank you, Vice Chair.

1725
02:44:20,940 --> 02:44:26,320
Now's the time for public comment, I have a request to speak from Mr. Bill Treza.

1726
02:44:38,370 --> 02:44:39,770
Appreciate your patience, Mr. Treza.

1727
02:44:42,970 --> 02:44:43,490
Good

1728
02:44:46,110 --> 02:44:48,630
morning, ladies and gentlemen, thank you.

1729
02:44:50,520 --> 02:44:55,060
Monica, we disagree, but we'll always be professional friends.

1730
02:44:55,200 --> 02:44:56,200
I just want you to know that.

1731
02:44:57,160 --> 02:44:59,700
I've been on the airport commission since 10.

1732
02:45:00,000 --> 02:45:29,900
It was one of the first members on the current chair, and so I've volunteered, I've been elected to speak on behalf of the board. You heard a lot of information. This has been a very rewarding trip. A lot of frustration in the beginning because we were charged with, let's make this thing a business enterprise, a positive, not a cash drain on the county, no sufficiency. And as you all know, since Harry and

1733
02:45:29,900 --> 02:45:36,020
We want to have been here, things have flipped, they know FAA, they know aviation, they know

1734
02:45:36,020 --> 02:45:38,000
our airport, and they know how to work the markets.

1735
02:45:38,320 --> 02:45:42,580
So we're very pleased with where we're going, where we've been, the port we got from

1736
02:45:42,580 --> 02:45:45,800
COG on helping us get ready for the future.

1737
02:45:49,280 --> 02:45:53,960
Transparency and clarity have not always been something we've benefited from.

1738
02:45:53,960 --> 02:46:01,480
We can never understand where our money came from how we spent the parts but not the whole picture and finally

1739
02:46:01,480 --> 02:46:02,800
I think we're getting close.

1740
02:46:04,980 --> 02:46:06,440
I don't see

1741
02:46:08,060 --> 02:46:09,600
Settling on the

1742
02:46:10,920 --> 02:46:11,600
FAA

1743
02:46:13,300 --> 02:46:17,580
Least revenue if if we did if we did had that money

1744
02:46:17,580 --> 02:46:24,240
We wouldn't have needed as much subsidy. I'd like to think that the general subsidy funds

1745
02:46:24,240 --> 02:46:39,080
we can almost wash that. We can walk away from this thing saying that there's not a lot of debt owed to somebody and we can convince FAA that there can be a payment plan either way to settle that.

1746
02:46:39,340 --> 02:46:46,580
I don't see the back side of this transaction as a risk. I see going forward as they see.

1747
02:46:47,320 --> 02:46:53,480
We would definitely like to benefit from the revenue that comes off airport property,

1748
02:46:53,620 --> 02:46:56,980
airport to fine property, rents, leases, etc.

1749
02:46:58,140 --> 02:47:03,900
And I have to disagree with Monica, that $400,000 a year means a lot more to us.

1750
02:47:04,640 --> 02:47:09,080
Simply because in our general aviation and public side of the airport,

1751
02:47:09,080 --> 02:47:12,500
we have horrible maintenance issues.

1752
02:47:12,500 --> 02:47:17,480
and blame the airport for all these years for never dealing with it.

1753
02:47:18,640 --> 02:47:21,740
Prior administrations, the airports never been a big revenue maker,

1754
02:47:22,220 --> 02:47:24,060
so it never worried about deferred maintenance.

1755
02:47:24,980 --> 02:47:28,160
That fund could be very valuable for two reasons.

1756
02:47:28,480 --> 02:47:34,640
Number one, once we get where our revenues exceed our operating expenses,

1757
02:47:34,860 --> 02:47:37,440
we can start using that fund for deferred maintenance.

1758
02:47:38,260 --> 02:47:39,400
The other is incentive.

1759
02:47:39,400 --> 02:47:41,460
I've got him running out of time already.

1760
02:47:42,060 --> 02:47:44,860
Instead of, I'll allow you additional time

1761
02:47:44,860 --> 02:47:46,080
just because it's complex.

1762
02:47:47,280 --> 02:47:50,940
Incentives, we have the ability to go out

1763
02:47:50,940 --> 02:47:54,080
and rent more of that property or to convince

1764
02:47:54,080 --> 02:47:58,680
our subtenance to maybe invest more and generate

1765
02:47:58,680 --> 02:48:00,600
more property tax revenue.

1766
02:48:01,260 --> 02:48:03,800
And I know this is a diversion from policy,

1767
02:48:04,140 --> 02:48:07,580
but that 400,000, not a big number

1768
02:48:07,580 --> 02:48:13,060
When you look at the property taxes collected in this county, I know you don't like exceptions.

1769
02:48:13,060 --> 02:48:20,860
We're asking you to move your cheese, but we are and the reasons are we need the money number one.

1770
02:48:21,500 --> 02:48:27,580
Number two, if there's an economic fallback and say sales taxes go away and things like that,

1771
02:48:27,940 --> 02:48:32,080
then maybe the general fund can't give us what we need. It's going to be a regular

1772
02:48:32,080 --> 02:48:40,940
whereas with property tax, even with property valuations, it's never that dramatic fall and revenues, and that's important to us.

1773
02:48:42,840 --> 02:48:57,540
And thirdly, that incentive that we can go out and know that if we can do more business, we can help make our tenants live in a much stronger, safer environment, fire protection roads, et cetera, et cetera, et cetera.

1774
02:48:57,540 --> 02:49:18,640
So it seems like the property tax is the big issue and that's where we stand and that's my opinion there may be more information I could filter on to that but that's the way we see it and greatly appreciate your spending this much time on our little airport, which we're all very proud of.

1775
02:49:18,940 --> 02:49:21,420
Thank you, if you have any questions, I'd be glad to answer them.

1776
02:49:22,900 --> 02:49:24,940
Thank you, Mr. Treason, questions from the Board.

1777
02:49:28,490 --> 02:49:29,430
Thank you so much, Mr. Treason.

1778
02:49:29,590 --> 02:49:29,770
Thank you.

1779
02:49:30,010 --> 02:49:33,010
I appreciate your hard work and diligence on the Advisory Committee.

1780
02:49:34,970 --> 02:49:40,890
Is there anybody else who would like to provide comment at this time from Avergenies?

1781
02:49:53,300 --> 02:49:54,600
Well, thank you for the opportunity.

1782
02:49:57,780 --> 02:50:04,680
Basically, overall, I think, the one issue that separates us is this unsecured property

1783
02:50:04,680 --> 02:50:05,040
tax.

1784
02:50:05,780 --> 02:50:11,020
It's an important source for us because it is essentially something we can count on.

1785
02:50:11,280 --> 02:50:13,680
I can leverage and do a lot more with.

1786
02:50:14,520 --> 02:50:19,140
If we turn it around the other way where we get a backhand subsidy, it's never a sure

1787
02:50:19,140 --> 02:50:19,460
of thing.

1788
02:50:19,880 --> 02:50:21,560
But it depends on what's left over.

1789
02:50:22,580 --> 02:50:31,080
In terms of payback, you're requiring with this action that we pay back things.

1790
02:50:31,080 --> 02:50:35,700
For what I heard, for the hospital, you're not going to require them to pay back.

1791
02:50:36,460 --> 02:50:38,040
I don't know what the difference is there.

1792
02:50:40,100 --> 02:50:47,260
The letter from FAA that came in my mind indicates a very strong reference from FAA.

1793
02:50:47,920 --> 02:50:55,160
Even though there's no prohibition for reallocation of the unsecured taxes, they strongly suggest

1794
02:50:55,160 --> 02:51:00,680
that the taxes continue to be used for the maintenance and operation of the airport as they

1795
02:51:00,680 --> 02:51:01,560
have been in the past.

1796
02:51:03,740 --> 02:51:07,480
So this is and this is consistent with the grant

1797
02:51:07,480 --> 02:51:13,820
insurance is also so they feel strongly about it too. I think it will enhance

1798
02:51:13,820 --> 02:51:19,320
our relationship with FAA and I strongly urge you to consider and I appreciate

1799
02:51:19,320 --> 02:51:24,120
all the effort the administration has made to write the ship but when I look at

1800
02:51:24,120 --> 02:51:33,240
what's left with having to pay back $1.8 million plus all the other negatives, we're

1801
02:51:33,240 --> 02:51:39,000
worse off financially now under this plan than we were before and without the guaranteed

1802
02:51:39,000 --> 02:51:39,540
subsidy.

1803
02:51:40,480 --> 02:51:45,860
So, I would ask you to consider leaving the unsecured property taxes with the airport.

1804
02:51:46,480 --> 02:51:46,740
Thank you.

1805
02:51:49,660 --> 02:51:52,620
Mr. Merver, Jeannies, would you hold on one moment?

1806
02:51:52,700 --> 02:51:53,520
I believe there are questions.

1807
02:51:59,370 --> 02:52:04,870
That's one point eight million payback. I'm not quite sure because I haven't had any conversations

1808
02:52:04,870 --> 02:52:11,870
that require the airport to pay back that money. I'm sorry. You've talked about a one point eight

1809
02:52:11,870 --> 02:52:18,630
million dollar payback. Right. To the county. It's your fund. I haven't had any conversation with anybody

1810
02:52:18,630 --> 02:52:24,990
that's talking about having the airport payback one point eight million dollars. That's the negative

1811
02:52:24,990 --> 02:52:31,250
to this left over at the end of the day from the past and secured property passes.

1812
02:52:31,790 --> 02:52:32,510
I understand.

1813
02:52:32,710 --> 02:52:34,050
I have to be handled some way.

1814
02:52:34,870 --> 02:52:37,650
I may be handled with a property sale later.

1815
02:52:38,110 --> 02:52:38,550
It may not.

1816
02:52:39,230 --> 02:52:40,730
But how is it going to be handled?

1817
02:52:42,210 --> 02:52:42,650
Well.

1818
02:52:42,850 --> 02:52:45,630
Is the board willing to waive that?

1819
02:52:45,990 --> 02:52:47,010
That would be fine.

1820
02:52:47,450 --> 02:52:49,270
But if not, it's a liability.

1821
02:52:49,810 --> 02:52:52,750
One fashion or another, it's something that we have to carry.

1822
02:52:53,710 --> 02:53:06,470
Well, I think you're right in regards to, you know, this board has to make a decision but I don't think anybody, I haven't talked to many of the board members about this but I don't think anybody's including myself has made a statement that we expect the airport to pay back $1.8 million.

1823
02:53:08,710 --> 02:53:20,470
And I guess my further point is until we make this decision on regards this particular position as to the funding and whether it goes enterprise fund or general fund,

1824
02:53:20,470 --> 02:53:24,450
And I don't think we can have that discussion until after that's the decision that made.

1825
02:53:25,390 --> 02:53:29,210
And I know there's been talk in regards to B5, you know, those types of discussions have

1826
02:53:29,210 --> 02:53:29,830
taken place.

1827
02:53:30,770 --> 02:53:41,230
But I, this might experience obviously limited, but various departments I dealt with, I know

1828
02:53:41,230 --> 02:53:48,730
that the, whether it be that the board itself or the CEO have been very open to, to talking

1829
02:53:48,730 --> 02:53:53,550
about these issues to ensure that whatever department we're dealing with remains whole and maintains

1830
02:53:53,550 --> 02:54:00,030
their mission and all that has all the resource they need to complete that I don't think anybody

1831
02:54:00,030 --> 02:54:05,250
is talking about payback at this point in time and I may be wrong maybe somewhere down the road but

1832
02:54:05,850 --> 02:54:12,190
I certainly don't have any inclination to require their report to pay any money back that they've

1833
02:54:12,190 --> 02:54:18,190
already received. And the other question in regards to the maintenance issue and I get it

1834
02:54:18,730 --> 02:54:23,990
I see the property, you know, I go out there and I've a 10-year meetings and I've heard

1835
02:54:23,990 --> 02:54:25,690
your presentation, and I think you do an excellent job.

1836
02:54:26,350 --> 02:54:30,770
I think the board does an excellent job, ain't Bill and Bill, and the rest of the board

1837
02:54:30,770 --> 02:54:32,210
are passionate about the airport.

1838
02:54:33,410 --> 02:54:37,230
Most have been there since the beginning, I believe, since the advisory board started.

1839
02:54:37,830 --> 02:54:43,690
So they obviously have a good view of what's been happening in some cases, not happening

1840
02:54:43,690 --> 02:54:44,510
over the years.

1841
02:54:45,170 --> 02:54:46,650
And I think we're making tremendous strides.

1842
02:54:46,650 --> 02:54:57,150
I think they're making tremendous strides, but I guess for my vantage point and maybe I'm a little more simplistic, but a dollar is a dollar.

1843
02:54:57,630 --> 02:55:05,590
That the dollar comes from obscure property tax or the dollar comes from the general fund or the dollar comes from the federal government or wherever.

1844
02:55:06,470 --> 02:55:14,970
I would certainly think that the money as you received based on you and what Ron do on a daily basis would be your decision to make.

1845
02:55:14,970 --> 02:55:26,990
I think I certainly have never offered any direction to either your board or to you in regards to what you do, and I think that's been pretty apparent, especially with the job you're doing.

1846
02:55:27,570 --> 02:55:42,090
I don't think anybody is. We've had discussions about COG. I pushed that and my fellow members of the board pushed that loan, and you know how that started and opposition that we received from the county.

1847
02:55:42,090 --> 02:55:46,290
So I don't think you can say that this Board of Supervisors,

1848
02:55:46,290 --> 02:55:49,470
certainly members of COG and the others have done anything

1849
02:55:49,470 --> 02:55:53,030
but try to do everything possible to make your operation

1850
02:55:53,030 --> 02:55:53,730
more successful.

1851
02:55:54,530 --> 02:55:57,610
And I thank you and Ron and the Board are an integral part of that.

1852
02:55:57,850 --> 02:55:59,730
So I think we're on the same team.

1853
02:56:00,270 --> 02:56:02,110
I think we're trying to copy the same goal.

1854
02:56:02,450 --> 02:56:06,930
It's just a matter of semantics, it's a matter of policy

1855
02:56:07,510 --> 02:56:09,550
that ultimately this Board will have to decide.

1856
02:56:12,950 --> 02:56:17,270
But I appreciate what you're doing. I appreciate your working hard on this.

1857
02:56:18,270 --> 02:56:24,350
Thank you. I appreciate that. The little confused about the 1.8 million if you're saying we don't have to pay it back.

1858
02:56:25,250 --> 02:56:30,310
That makes a big difference. I'm not saying that. I can't say that. I'm only one board member.

1859
02:56:30,950 --> 02:56:35,350
What I'm saying is that I have not had any conversations after this point.

1860
02:56:35,350 --> 02:56:39,810
of anybody saying that the airport has to pay back the $1.8 million.

1861
02:56:41,070 --> 02:56:49,090
And having said, I can't say that won't happen, I can't predict the future, but I'm certainly not implying to make that requirement.

1862
02:56:49,430 --> 02:56:51,350
So that would have made my part.

1863
02:56:52,570 --> 02:56:54,810
Could Supervisor Winn vice-Charlie?

1864
02:56:55,390 --> 02:56:56,790
Thank you, Mr. Chairman.

1865
02:56:58,830 --> 02:57:06,790
Just on that topic of $1.8 million, my understanding of what this staff report says is that the

1866
02:57:06,790 --> 02:57:16,770
only way that is being factored into any calculations on how it would be accounted for is if we

1867
02:57:16,770 --> 02:57:24,850
were to purchase that parcel known as B5, then the county would want to consider that $1.8 million

1868
02:57:24,850 --> 02:57:29,750
that had already been contributed through past general fund contributions as part of the purchase price.

1869
02:57:30,150 --> 02:57:36,990
But otherwise, the way I read this effort, that's the only calculation that's being considered.

1870
02:57:37,290 --> 02:57:40,110
We're not considering any payback, is that correct?

1871
02:57:42,430 --> 02:57:48,310
Correct. That's why we put the word consider because we don't have all the facts on B5 yet.

1872
02:57:48,710 --> 02:57:48,850
Right.

1873
02:57:49,290 --> 02:57:53,090
We are not asking for board decision on the 1.8.

1874
02:57:53,090 --> 02:57:57,990
or are we asking the board, or am I asking the board,

1875
02:57:58,130 --> 02:58:02,350
or recommending a liability to go on the airport's books for the 1.8?

1876
02:58:03,210 --> 02:58:08,350
Okay, thank you. And then Mr. Maverick-Gennis, I've heard the argument,

1877
02:58:08,590 --> 02:58:12,710
and I think I read it in one of those communications that we received as well,

1878
02:58:13,250 --> 02:58:16,730
that under this reallocation proposal here,

1879
02:58:17,390 --> 02:58:22,390
the airport would be losing $2 for every dollar it receives from the new lease revenue.

1880
02:58:22,390 --> 02:58:24,290
So how would that work?

1881
02:58:24,490 --> 02:58:33,770
That analysis was done on the basis of receiving 636,000 in lease revenues, but we're giving

1882
02:58:33,770 --> 02:58:40,690
up 1.2 million between the 870,000 and the 470,000.

1883
02:58:41,170 --> 02:58:51,390
And as in my mind, the other back end contribution was not a guarantee likely property fax is.

1884
02:58:51,390 --> 02:58:56,750
not a sure thing. It may change from year to year based on the portions of the county.

1885
02:58:57,610 --> 02:59:00,690
So as far as sure things, that's the way I looked at it.

1886
02:59:01,170 --> 02:59:07,670
Okay, well, of course the unscored property taxes are likely to change from year to year as well, either going up or down or.

1887
02:59:08,690 --> 02:59:13,090
Right, go up, if we do improvements, if we fix the area up, it will go up.

1888
02:59:13,410 --> 02:59:14,990
Right, okay, thank you.

1889
02:59:17,010 --> 02:59:18,970
Thank you, Vice-Tralia, Supervisor Miller.

1890
02:59:18,970 --> 02:59:28,150
Thank you. Mr. Maverick, if I look at this little chart that basically says, in the 2015-16

1891
02:59:28,150 --> 02:59:35,550
budget, total the airport received a net of $1.00, almost $3 million. And that what is being

1892
02:59:35,550 --> 02:59:42,970
proposed is that in the 2016-17 budget, the airport will also receive the exact same amount just

1893
02:59:42,970 --> 02:59:51,770
under $1.3 million, but what I understand you to say is, you'd prefer that that formula come in

1894
02:59:51,770 --> 02:59:58,890
the form of unsecured property taxes at $470,000 to move into that column. Doesn't it stand to

1895
02:59:58,890 --> 02:59:59,970
The reason that then the...

1896
03:00:00,050 --> 03:00:07,790
Proposed general fund net county contribution would go down in a corresponding amount so that it's still ended up with $1.3 million?

1897
03:00:10,050 --> 03:00:28,090
Yes, but this would be a, it's a more secure funding source, and that's why I prefer it. It's something that I can count on. In use, we can leverage I think much better. No, it's there. Okay. I understand what you're saying. Thank you.

1898
03:00:28,090 --> 03:00:32,200
Thank you so much, Mr. Maverick, just a

1899
03:00:38,090 --> 03:00:40,070
couple of comments and observations.

1900
03:00:43,640 --> 03:00:49,080
I think it's important to put this in the context of the government accounting principle.

1901
03:00:50,340 --> 03:00:55,600
I think that's helpful to understand what exactly we're trying to accomplish here specifically.

1902
03:00:56,340 --> 03:01:03,720
I understand that there are a variety of subjects that we can delve into relating to how we

1903
03:01:03,720 --> 03:01:07,660
might be able to better enhance the self-sufficiency

1904
03:01:07,660 --> 03:01:08,420
of the airport.

1905
03:01:09,440 --> 03:01:12,120
But I think that discussion is a much larger one

1906
03:01:12,500 --> 03:01:14,340
that will require additional information

1907
03:01:15,000 --> 03:01:19,060
that we don't have on hand, particularly important

1908
03:01:19,060 --> 03:01:20,840
to note that the scope of what we're trying

1909
03:01:20,840 --> 03:01:24,100
to accomplish here is FAA grant assurance component.

1910
03:01:25,420 --> 03:01:29,840
And from that respect, having reviewed all the information

1911
03:01:29,840 --> 03:01:33,120
that has been provided to me by both staff

1912
03:01:33,120 --> 03:01:38,320
enough, and certainly the dedicated members of the advisory committee, and of the opinion

1913
03:01:38,320 --> 03:01:43,220
that that recommendation is consistent with the AA grant assurance principle.

1914
03:01:44,260 --> 03:01:55,200
In terms of the $1.8 million what we are terming as liability, at the moment I concur with the

1915
03:01:55,200 --> 03:02:00,440
consensus of the board that we are not providing with direction at the moment, how to treat

1916
03:02:00,440 --> 03:02:03,780
that whether in fact we are treating it as a liability or something else.

1917
03:02:04,960 --> 03:02:11,940
So I think that should press and concerns that there may be by members of the advisory

1918
03:02:11,940 --> 03:02:17,620
committee, whether or not we are acquiring and payback or structuring that as some type

1919
03:02:17,620 --> 03:02:24,840
of your debt on the airport, because that is not the case with me, at least the consensus

1920
03:02:24,840 --> 03:02:26,420
that I'm hearing from the board moment.

1921
03:02:29,120 --> 03:02:34,080
So, I've been said that if there are any additional comments from the board, I would entertain

1922
03:02:34,080 --> 03:02:41,250
in motion, and there is an additional comment, so I will refer to supervisor one.

1923
03:02:43,820 --> 03:02:44,360
Thank you, Mr. Chair.

1924
03:02:45,420 --> 03:02:51,280
From, I understand we're, we're, uh, airport director and, and their board are coming from,

1925
03:02:51,460 --> 03:02:52,160
I get it.

1926
03:02:52,160 --> 03:03:01,140
And Mr. Rivera-Jones mentioned a couple of times the leveraging of a certain amount that can be guaranteed.

1927
03:03:01,940 --> 03:03:09,940
Also, the advantage of having property tax to indicate, although I put it otherwise, it normally goes up,

1928
03:03:10,460 --> 03:03:16,340
which means you have a greater amount to work with for future projects, maintenance, so such a things.

1929
03:03:16,340 --> 03:03:21,420
So, I understand the advantage of having control over the unscruperable tax.

1930
03:03:22,620 --> 03:03:31,180
So, I guess from my vantage point, I appreciate certainly the hard work and the dedication and the vision

1931
03:03:31,180 --> 03:03:37,980
that the airport staff, Ron, and Bri have, but also the advisory board.

1932
03:03:39,880 --> 03:03:44,840
I can't predict the future, and as I said earlier, I would never settle a future board

1933
03:03:45,760 --> 03:03:51,560
requirements or mandates that they couldn't follow or have to make sacrifices in other areas that may have a higher priority.

1934
03:03:52,420 --> 03:04:04,340
But I would offer this because whether the unsecured property tax and under the control of the airport and the enterprise fund,

1935
03:04:05,440 --> 03:04:14,380
and then the on top of that subsidy that the general fund provides, which is totally discretionary in regards to any future

1936
03:04:16,740 --> 03:04:26,220
economic changes. I can only offer this, because I've been somewhat closer than others on

1937
03:04:26,220 --> 03:04:30,640
the board because of the Reserville Food and myself being part of the advisory committee.

1938
03:04:31,380 --> 03:04:42,800
Also our challenge with COG and the success that Harry was instrumental in achieving, I can

1939
03:04:42,800 --> 03:04:49,600
committed as a board member, I have talked to any number of residents and constituents

1940
03:04:49,600 --> 03:04:54,420
who are excited about, you know, what's happening in the airport and what the future holds

1941
03:04:54,420 --> 03:05:00,640
in regards to a hub, regards to international travel, and I can't, I couldn't in good

1942
03:05:00,640 --> 03:05:06,940
conscience do anything but continue to support, and if possible, even increase support through

1943
03:05:06,940 --> 03:05:11,740
the airport in its future because I think we're on the right track and I think we're close

1944
03:05:11,740 --> 03:05:15,760
to success, some of the major goals that have been promised.

1945
03:05:16,500 --> 03:05:25,860
So I get it, but again, I have to be very cautious in regards to the control of general

1946
03:05:25,860 --> 03:05:32,840
fund revenues for this board, probably maybe even this in June and certainly for the future.

1947
03:05:33,740 --> 03:05:40,940
And I don't think, the honest with the, I don't envision this year next year maybe in the future

1948
03:05:40,940 --> 03:05:48,640
that I can see, any decrease in the money is available as Supervisor Miller indicated it's

1949
03:05:48,640 --> 03:05:52,960
the same amount from year to year, and I can't see any reason that can't continue with

1950
03:05:52,960 --> 03:05:56,400
this board support, and certainly the support of the advisory board.

1951
03:05:57,240 --> 03:06:06,080
So dollars are dollars, and I guess I'm sure Mr. Mavagenis would need is go out and talk

1952
03:06:06,080 --> 03:06:17,640
to entities, whether it be airlines or other business operators, I have X number of dollars

1953
03:06:17,640 --> 03:06:22,920
that I'm guaranteed. Therefore, we will continue to maintain our facility and improve it

1954
03:06:22,920 --> 03:06:32,100
and all those other things. I get it, but I still think that dollar amount, and I don't

1955
03:06:32,100 --> 03:06:36,800
I want to say guarantee that certainly it adhered to as much as possible for the future.

1956
03:06:36,960 --> 03:06:43,160
To not inhibit his programs, his recruiting of businesses and airlines and those types of things.

1957
03:06:43,740 --> 03:06:48,780
And I would only say from this board that I think we have given him total support in the past.

1958
03:06:48,920 --> 03:06:52,520
And I think he can use that support in his discussions with anybody.

1959
03:06:53,180 --> 03:06:57,660
But the committee, the mayor's office, et cetera, are committed to make this airport.

1960
03:06:58,120 --> 03:07:00,720
The best it can be, and I think by virtue of that.

1961
03:07:00,720 --> 03:07:04,060
But you can take that to the bank, at least my vantage point.

1962
03:07:05,960 --> 03:07:11,960
Again, I'm not inclined to go any other direction other than the recommendations from this.

1963
03:07:12,920 --> 03:07:13,440
So.

1964
03:07:14,400 --> 03:07:15,380
Thank you, supervisor.

1965
03:07:15,380 --> 03:07:21,280
One, and just to briefly illustrate your point of support, I think it's good to note the

1966
03:07:21,800 --> 03:07:25,360
amount of general fund contribution over the past several years.

1967
03:07:25,360 --> 03:07:34,540
and how we have consistently provided support every year in an amount that exceeds various

1968
03:07:35,560 --> 03:07:40,260
amounts, but nevertheless, I think that certainly demonstrates the commitment of the

1969
03:07:40,260 --> 03:07:48,950
sport to the airport and is predictive of a trend in being on to Supervisor Miller.

1970
03:07:49,510 --> 03:07:49,830
Thank you.

1971
03:07:49,830 --> 03:08:00,770
So I agree with our director that he's concerned with the stability of the airport enterprise

1972
03:08:00,770 --> 03:08:00,990
fund.

1973
03:08:01,210 --> 03:08:03,230
And I understand that very much.

1974
03:08:05,010 --> 03:08:11,570
And he and his advisory commission, that's what they're charged with doing, is focusing

1975
03:08:11,570 --> 03:08:16,010
on the airport operations and the stability of that enterprise fund.

1976
03:08:16,010 --> 03:08:22,210
But this board, we are charged with the stability of the entire county

1977
03:08:22,210 --> 03:08:24,710
organization. And so, for me,

1978
03:08:27,530 --> 03:08:30,930
what this is more about, it's two things. The first one

1979
03:08:30,930 --> 03:08:36,850
is that the discretion and the decision making process remains with the board

1980
03:08:36,850 --> 03:08:44,070
because we have access to information on the entire county organization. And it's

1981
03:08:44,070 --> 03:08:49,290
always important for us to make our decisions based on that perspective, but the second thing

1982
03:08:49,290 --> 03:09:00,450
is this is based on public accounting principles. And I will just say, having come through a pretty

1983
03:09:00,450 --> 03:09:12,170
brutal tutorial on public financing and accounting, it is a very, very specialized unique field and a

1984
03:09:12,170 --> 03:09:35,170
different kind of accounting and between just just two of the members making this recommendation here we're looking at over 60 years of specialized experience in public accounting and so I have a lot of faith in that experience and I have learned the hard way that

1985
03:09:35,170 --> 03:09:42,130
when you don't pay attention to those, that kind of experience and those sort of recommendations

1986
03:09:42,130 --> 03:09:50,410
can be very problematic and there can be a lot of unforeseen and unintended consequences

1987
03:09:50,410 --> 03:09:52,230
from decisions that are made.

1988
03:09:52,510 --> 03:10:00,150
So, from my standpoint, I think all of us have said many occasions in public

1989
03:10:00,150 --> 03:10:27,510
how strong our support is for the airport, and for seeing it become self-sufficient, and really, it just has so much potential for our county, and yes, supervisor win commented on the advocacy that some of us provided through COG to make sure that our airport director has financial wherewithal to move into the future and make some decisions.

1990
03:10:27,510 --> 03:10:36,950
So, I also agree, I do not see any reason why that support would waver in the future and why the funding would be jeopardized.

1991
03:10:37,190 --> 03:10:41,070
So, I'm inclined to support this recommendation as well.

1992
03:10:41,510 --> 03:10:41,730
Thank you.

1993
03:10:42,450 --> 03:10:44,210
Supervisor Miller, Vice Chair Alia.

1994
03:10:45,170 --> 03:10:46,190
Thank you, Mr. Chairman.

1995
03:10:47,050 --> 03:10:57,490
I'd also just like to thank the Airport Director and the Airport Advisory Commission for their diligence here in trying to

1996
03:10:57,490 --> 03:11:00,270
to make sure that the airport enterprise fund

1997
03:11:00,270 --> 03:11:01,510
does become self-sufficient.

1998
03:11:01,970 --> 03:11:05,110
I think we've made great strides in that regard.

1999
03:11:05,750 --> 03:11:09,430
I can clearly see the argument for maintaining

2000
03:11:09,430 --> 03:11:11,490
the unsecured property taxes

2001
03:11:11,490 --> 03:11:16,430
as part of the revenues for the airport enterprise fund.

2002
03:11:17,750 --> 03:11:22,110
However, I am also swayed here by the arguments

2003
03:11:22,110 --> 03:11:26,830
of consistency and creating all of our enterprise funds

2004
03:11:26,830 --> 03:11:35,150
the same way and making our accounting practices be uniform in the way that we handle our budget

2005
03:11:35,150 --> 03:11:37,190
negotiations and our budget deliberations.

2006
03:11:38,010 --> 03:11:45,710
So based on that, while I can certainly see the logic and the benefits of keeping those

2007
03:11:45,710 --> 03:11:54,610
unsecured property taxes permanently allocated to the airport, I am going to support this recommendation

2008
03:11:54,610 --> 03:11:55,150
today.

2009
03:11:55,150 --> 03:12:02,870
However, I would recommend that we also conduct further discussions with the FAA, and I'm

2010
03:12:02,870 --> 03:12:10,830
sure that will happen as a result of this audit, but we should also just make that point

2011
03:12:10,830 --> 03:12:16,110
to the FAA that we are not attempting to create any obstacle, and make it very difficult

2012
03:12:16,470 --> 03:12:21,030
for the airport enterprise fund to balance its budget or to be self-sufficient.

2013
03:12:21,030 --> 03:12:30,990
That is, in fact, the goal, but we're doing this particular exercise here in terms of maintaining consistent accounting practices.

2014
03:12:30,990 --> 03:12:34,590
And I think that's more important in terms of our fiscal responsibility.

2015
03:12:35,390 --> 03:12:42,170
So that being said, keep up the good work in terms of the management of the airport and the airport enterprise fund.

2016
03:12:42,590 --> 03:12:45,590
However, I will support this recommendation today.

2017
03:12:47,050 --> 03:12:49,770
Vice Chair Elliott, any further comments from the board?

2018
03:12:52,340 --> 03:12:52,740
Very well.

2019
03:12:52,940 --> 03:12:56,560
I will entertain a motion and a second to approve

2020
03:12:56,560 --> 03:12:59,200
staff's recommendation, the item, the move.

2021
03:13:00,240 --> 03:13:00,620
Second.

2022
03:13:01,220 --> 03:13:02,160
Moved and seconded.

2023
03:13:02,480 --> 03:13:03,780
Supervisors, please cast your vote.

2024
03:13:11,960 --> 03:13:13,820
The motion carries, four to one.

2025
03:13:16,410 --> 03:13:17,010
Thank you all.

2026
03:13:17,390 --> 03:13:20,970
Again, so very much for the hard work and diligence that you guys put into

2027
03:13:20,970 --> 03:13:25,810
to advising us and providing us with service to the airport in our community.

2028
03:13:26,350 --> 03:13:39,270
Chair Zapien, this is the last board presentation that Miss Lee will be conducting in her career of over 37 years with San Joaquin County.

2029
03:13:39,450 --> 03:13:43,930
She would not have allowed me to do this if I would have told her I was going to do it.

2030
03:13:43,930 --> 03:13:52,350
But as Supervisor Miller mentioned, we're talking in her career alone, 37 years.

2031
03:13:53,850 --> 03:13:55,410
Here was San Joaquin County.

2032
03:13:55,810 --> 03:13:58,270
It has been very fiscal related.

2033
03:13:58,690 --> 03:14:06,090
She has come up from working in the Public Works Department to be in the Assistant CAO here

2034
03:14:06,090 --> 03:14:07,130
in San Joaquin County.

2035
03:14:07,130 --> 03:14:15,310
She has provided this organization such a level of sound fiscal policy that passports

2036
03:14:15,310 --> 03:14:22,790
along with this board have been able to consider solid staff work and just a level of integrity

2037
03:14:23,120 --> 03:14:26,350
and competence that is just incredible.

2038
03:14:27,010 --> 03:14:32,370
And I just want to personally thank her because in almost my three years here she has made

2039
03:14:32,760 --> 03:14:34,650
my life so easy.

2040
03:14:34,650 --> 03:14:41,310
I love what I do, but as you guys can all see, we have to make sure we have roughly a

2041
03:14:41,310 --> 03:14:46,850
department of 10 people that we manage along with all of our department heads and their

2042
03:14:47,350 --> 03:14:53,910
finance staff, and Rosa has been instrumental to the end degree in leading that effort.

2043
03:14:54,110 --> 03:14:59,370
So I want to acknowledge her and thank her because this organization has benefited greatly

2044
03:14:59,370 --> 03:14:59,970
from her.

2045
03:15:00,000 --> 03:15:00,520
Thanks for your expertise.

2046
03:15:16,610 --> 03:15:37,350
Thank you, Chair. Very briefly. It's been a wonderful, wonderful experience and journey with San Joaquin County. It truly, truly is the employer of choice and opportunities. You know, Ann, thank you. Thank you, Miss Lee. Any additional comments from the board?

2047
03:15:40,960 --> 03:15:48,000
Moving on in our agenda. Our next item is communications. Is there a motion to receive and refer all board communications?

2048
03:15:48,000 --> 03:15:50,820
the state has outlined on the communications distribution listing.

2049
03:15:51,020 --> 03:15:51,760
No moved.

2050
03:15:52,800 --> 03:15:54,000
Moved and seconded.

2051
03:15:54,720 --> 03:15:56,080
Supervisors, please cast your vote.

2052
03:16:01,380 --> 03:16:02,660
Motion carries five to zero.

2053
03:16:03,280 --> 03:16:06,740
Moving on to supervisor comments and committee reports.

2054
03:16:07,820 --> 03:16:08,220
Any requests?

2055
03:16:08,980 --> 03:16:09,540
Supervisor Miller?

2056
03:16:09,820 --> 03:16:10,800
I have just a real quick one.

2057
03:16:11,000 --> 03:16:14,680
I just want to say it's a pleasure to see our new logo popping up.

2058
03:16:15,020 --> 03:16:18,580
Our Samuakine County greatness grows here.

2059
03:16:18,580 --> 03:16:24,020
It's starting to appear on a lot of the presentations and I think it's great to see.

2060
03:16:24,440 --> 03:16:25,660
So nice.

2061
03:16:26,100 --> 03:16:26,700
Thank you.

2062
03:16:30,130 --> 03:16:30,570
Thank you.

2063
03:16:30,670 --> 03:16:31,250
Supervisor Miller?

2064
03:16:31,870 --> 03:16:32,710
Supervisor Wynn.

2065
03:16:33,790 --> 03:16:38,390
We're a quick, I have a couple of meetings in the last two weeks in regards to homelessness.

2066
03:16:39,430 --> 03:16:42,650
It is a problem that will not go away.

2067
03:16:43,590 --> 03:16:50,730
I was at low IPD for a group meeting in regards to a suite that they were going to make the following two days later.

2068
03:16:50,730 --> 03:16:57,970
Also, I had an opportunity with Chief Jones, Stockton PD, and some of the things they're doing.

2069
03:16:58,350 --> 03:17:01,810
And I know, surprise Miller is working with the homeless task force.

2070
03:17:03,010 --> 03:17:05,590
I think there's opportunities, based on what I've seen.

2071
03:17:06,010 --> 03:17:12,870
I am really impressed by the efforts made by just any number of organizations, including police departments,

2072
03:17:13,110 --> 03:17:18,770
the Sheriff's Department, the railroad business owners, homeowners, and

2073
03:17:18,770 --> 03:17:25,510
And it goes on and on, and hopefully we can kind of not just maintain it, but we can kind of make some progress.

2074
03:17:26,470 --> 03:17:38,150
And I know there's been a lot of innovative ideas and I hope that maybe Supervisor Miller and I can get together, and she can share some of the things going on, and I can share some of the conversations I had.

2075
03:17:39,050 --> 03:17:47,030
And where the rest of the year work on, I know we'll never eliminate it, but at least dramatically reduce it in our county.

2076
03:17:48,770 --> 03:17:51,250
Thank you, supervisor Wynne.

2077
03:17:51,610 --> 03:17:57,170
There being no further board comments, we'll turn it over to county council to announce

2078
03:17:57,170 --> 03:17:57,890
our closed session.

2079
03:17:59,370 --> 03:18:01,430
Two items on for a closed session.

2080
03:18:01,610 --> 03:18:08,970
We have a conference with legal council, anticipated litigation, and we also have a public employment

2081
03:18:10,010 --> 03:18:11,730
item also, public defender.

2082
03:18:13,130 --> 03:18:14,370
Thank you so much, Mr. Flores.

2083
03:18:14,770 --> 03:18:15,930
The board will stand in recess.

2084
03:18:16,430 --> 03:18:17,330
Thank you also very much.

2085
03:18:17,330 --> 03:18:17,750
All

2086
03:18:42,100 --> 03:18:43,760
right. Ready?

2087
03:18:47,480 --> 03:18:52,440
We're back on the record for the meeting of March 29,

2088
03:18:54,840 --> 03:18:55,820
2016.

2089
03:18:56,220 --> 03:19:05,040
All right. We reconvene the closed session at 130. There were interviews of the applicants for the public defenders office.

2090
03:19:05,540 --> 03:19:12,520
The Board of Supervisors has authorized the CAO's office to begin negotiations with one of the applicants.

2091
03:19:14,420 --> 03:19:19,420
We are here by adjourned to Tuesday, April 12th, 2016 at 9 a.m.

2092
03:19:19,920 --> 03:19:20,440
Thank you so much.

2093
03:19:20,840 --> 03:19:21,500
Thank you.

2094
03:19:21,500 --> 03:19:22,260
Thanks.

2095
03:19:22,560 --> 03:19:23,300
Thanks very much.