Will CalPERS Kill Off Monterey County Budget/Push Into Bankruptcy

The Sheriff needs money to provide personnel for a new multi-million jail.  He may not get to, because CalPERS is about to bankrupt the County of Monterey.

“The leading skeptic was Supervisor Luis Alejo, who was also wary of Bernal’s projection that he’ll need 23 new positions total once the expansion is operational – at an estimated cost of more than $2 million annually. What had Alejo even more worried was the county’s latest financial forecast for the next three years that includes projections for jumps in CalPERS pension obligations, leading to a potential $14 million budget deficit in 2019-20, and $36.5 million by 2022.

Another example of how CalPERS corruption, incompetence and mismanagement is making each of us unsafe.  Worse, the same situation occurred in Riverside County.  In the future less law enforcement, less jails, fewer road repairs and fewer library hours, just to keep a failed government agency open.

SACRAMENTO, CA - JULY 21:   A sign stands in front of California Public Employees' Retirement System building July 21, 2009 in Sacramento, California. CalPERS, the state's public employees retirement fund, reported a loss of 23.4%, its largest annual loss. (Photo by Max Whittaker/Getty Images)

County’s financial forecast is less dire this year, but CalPERS and other costs are looming.

Pam Marino, Monterey County Weekly,  3/14/19

Sheriff Steve Bernal stood before the Monterey County Board of Supervisors on Feb. 26 with proverbial hat in hand. A remodeled and expanded jail is set to open this fall, during the 2019-20 budget year, but he needed to hire six new deputies immediately at a cost of nearly $243,000 in the current budget year to staff up now for the fall jail opening. It would take a four-fifths vote by the supervisors to approve the expense, but some were skeptical the extra deputies were necessary. Bernal didn’t have the votes.

The leading skeptic was Supervisor Luis Alejo, who was also wary of Bernal’s projection that he’ll need 23 new positions total once the expansion is operational – at an estimated cost of more than $2 million annually. What had Alejo even more worried was the county’s latest financial forecast for the next three years that includes projections for jumps in CalPERS pension obligations, leading to a potential $14 million budget deficit in 2019-20, and $36.5 million by 2022.

“Those charts are skyrocketing up,” Alejo said. “I’m just doing a warning. I know we like to do everything we want to do, but if it keeps going the way it does – if there’s a recession – our county could be facing a serious financial crisis.”

As ominous as Alejo’s warning was, the financial forecast released at the end of February and presented to the board on March 12 is in some ways less dire than a year ago when cost overruns for electronic payroll system upgrades helped trigger budget cuts and fears of mass layoffs. (In the end, only four out of more than 5,200 employees were let go.)

Thanks to keeping expenses in line this year and strong revenues from property and hotel taxes, the county might be able to replenish its reserve fund by $10 million by June, says County Budget Director Paul Lewis. That fund was partially depleted after repairing damage from the 2017 winter storms. The $10 million will get the fund back up to $47 million – still $20 million below target, Lewis notes.

Even with that padding, there are unknown expenses that kept the Board of Supervisors from approving Bernal’s request. Among them: The new Juvenile Hall is behind schedule and over budget; union contracts expire this year and will have to be renegotiated; South County dams and spillways need to be repaired. On the revenue side, Lewis is still waiting for an estimate on how much cannabis taxes might bring in beyond covering program and enforcement expenses.

Bernal walked away that day with approval to hire six deputies, but without the requested $243,000. He compromised by agreeing to absorb that cost in the department’s current budget. (The board voted 4-1, Alejo dissenting, to approve the additional deputy positions.)

The sheriff’s 2019-20 budget request is expected to include that amount, along with the rest of the $2.1 million for the 23 positions. Departments are required to submit budget requests by April 5, and the board will meet for a day-long budget workshop April 9.

Lewis will then prepare a draft budget, for final approval in June. It’s premature to say whether there will be layoffs. Like last year, the county may leave dozens of vacant positions unfilled to present a balanced budget.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.