County shows signs of fiscal healing in temporary budget

As county struggles with growing pension liabilities, state action adds to burden

Rebecca Neipp

News Review Staff Writer

County shows signs of fiscal healing in temporary budgetA temporary budget adopted this week by the Kern County Board of Supervisors shows improvement on the county’s plan for fiscal recovery, according to County Administrative Officer Ryan Alsop.

“What’s before you is a placeholder budget until the board can review the final budget in late August,” Alsop said at Tuesday’s morning session of the weekly board meeting.

In 2015 the plummeting price of oil — which drives the county’s most significant revenue source — yielded a $44.5-million structural deficit in the county’s general fund. The board adopted a longterm strategy that phased departmental cuts and used reserves to alleviate immediate impacts.

According to Alsop, that deficit has been reduced to about $18.8 million. He added that the county also used $6 million less than planned from the reserve fund this year.

“Progress continues to be made, and the board’s four-year mitigation plan remains on target,” he said.

“The budget recommendation before you prioritizes community safety by maintaining Sheriff Department and Fire Department operations and staffing levels countywide,” he said.

The county also backfilled some departments with one-time funds, in order to retain efficacy of critical services.

“But costs continue to rise, again challenging our efforts to reduce deficits and maintain service levels in other areas of the county.”

Among those rising costs are public pensions, he said.

Although Kern Medical Center is no longer under the direct authority of the county, state actions solidified this week may have also increased the pension liability on the local institution.

“The state legislature jammed through a provision that will directly interfere with the financial operations of Kern Medical and harm its fiscal health,” said Assemblyman Vince Fong.

“It forces employees into retirement plans that will increase Kern Medical’s unfunded liabilities that will have significant financial repercussions to Kern County’s only public hospital.

“There was no input allowed from Kern Medical or the county of Kern and no public input. We should all be concerned about the longterm fiscal health of Kern Medical — our county’s trauma center and an important provider of health care in our community.”

“Russell Judd didn’t know it, but a key point in his contract talks with workers at his Bakersfield hospital would be settled by lawmakers 300 miles away in Sacramento,” Sacramento Bee Reporter Adam Ashton wrote last Friday.

“Instead of negotiating across the table, the union when to legislative leadership in Sacramento — not our legislators — and without a heads-up or notice, came out with this legislation mandating our employees be members of the Kern County Employee Retirement Association,” said Judd.

In 2013 county leadership discovered that KMC was bleeding at a rate of $3 million a month and took swift corrective measures to save the institution.

The Kern County Hospital Authority was established to take over management and oversight, and KCERA rolled over into the new agency.

“This was a traditional pension plan, and it was what county employees had at the time,” said Judd. “But I’m sure you’ve heard how pension plans have ruined a lot of companies.” The unfunded liability that came with KCERA was $300 million.

“We were under negotiations to offer alternative plans that we felt our employees would have liked,” he said. Instead, union officials turned to Sacramento.

KMC officials stumbled across the trailer bill — a clause that gets slipped into the budget at the 11th hour, and typically goes unnoticed — requiring KCERA membership for all current and future employees.

Judd and his team fought it alongside Fong, but the legislature passed it anyway. And Gov. Jerry Brown signed it into law Wednesday.

“Assemblyman Fong did all he could to help us,”said?Judd.

“We, as managers, are going to keep this place open. But what this does is takes money away from the raises we would have liked to have given our employees and money away from the equipment we need. It’s an unnecessary cost.”

Judd said he wants to focus on the positive steps he and his team are taking to preserve services. “We have to — what we do is too valuable, too important, to lose.”

Alsop said that the proposed budget may be adjusted before August, but county officials are awaiting more information on the performance of projected revenue streams.

For information on future board meetings and agendas, as well as videos of prior procedings, visit https://www.kerncounty.com/bos/AgendaMinutesVideo.aspx.

Story First Published: 2018-06-29