County officials warns of looming fiscal threats

Rebecca Neipp

News Review Staff Writer

County officials warns of looming fiscal threatsUnprecedented plunges in crude oil, along with ongoing economic uncertainty during the global COVID-19 pandemic, herald another grim budget cycle for Kern County — which just recovered from the devastating oil crash of 2015.

For decades the county has enjoyed robust revenues drawn from property values of the vibrant oil industry. Five years ago the cost of a barrel of oil plummeted from $100 to $35. The supervisors took a multi-year approach combining reliance on reserve funds, streamlined services, and the reduction of staff through attrition.

Last year County Administrative Officer Ryan Alsop announced that Kern had completed its recovery, and moved forward with a diversified revenue portfolio.

On Monday, WTI crude oil prices were listed in the negative. Most analysts attribute this to a surplus in inventory — driven in part by foreign nations cranking up production, and compounded by a steep decline in use during shutdowns to contain coronavirus outbreaks.

County assessor-recorder Jon Lifquist addressed those reports at Tuesday’s Kern County Board of Supervisors meeting.

“I have no crystal ball, but obviously oil is suffering right now.”

First he clarified that property assessments are based on valuations as of Jan. 1. “So what happens today is not going to impact our assessment on July 1.”

He also pointed out that California stopped using WTI as a benchmark years ago because of the volatility in that company. “Their prices fluctuate wildly.”

That said, the more reliable Midway Sunset listing for crude oil was $16 a barrel on Monday, and $14 on Tuesday.

This year’s oil valuation was based on the $50-per-barrel price in January. “If this continues Jan. 1 … it will affect our roll dramatically,” said Lifquist.

“Is it fair to say, as a lay person with the oil market … that’s not what we build our budget on? It’s not cause for panic yet?” asked 1st District Supervisor Mick Gleason, who represents the Indian Wells Valley.

“That’s correct — there is no immediate impact, and it will not affect the roll being prepared,” said Lifquist. “But it is cause for concern. One thing we do look for is an excess of inventory.”

However, he said, oil is not the only concern in Kern County. “We are seeing huge impacts from economic shutdown. We need to be prudent looking to the future.”

Third District Supervisor Mike Maggard presented to the board a referral to form a COVID-19 task force, made up of business, public health, community and county leaders. Maggard and 2nd District Supervisor Zack Scrivner, as board delegates to the Kern Economic Development Corporation, could represent the supervisors on the task force.

“The coronavirus pandemic we are enduring is not only destroying the very lives of our loved ones and our countrymen, but it’s also on the verge of destroying our economy and our way of life,” said Maggard.

“We must be prepared, when the time is right to reopen our economy, and stem the destruction.”

He acknowledged that the supervisors should not relax protocols before advisement of medical experts, but stressed that beginning now to formulate a plan for transition and the reinvigoration of the workforce is critical.

“As I’m sitting here listening, I was thinking the very same thing,” said Scrivner. “We need to do just that.”

He said that he also believed the board needed to aid Kern County Department of Public Health Director Matt Constantine in advising businesses on how to comply with governor’s directives on what qualifies as an essential operation.

For those businesses that don’t fit neatly into the lists coming out of D.C. or Sacramento, the county should be giving guidance on how they can operate safely, with appropriate hygiene and social distancing.

“This would help us on two fronts,” said Constantine. He noted that the county is not working with a list, but a 14-page directive that outlines criteria that is open to interpretation. “The list is specific to some, but not to others.

“Providing a consistent approach is important, but time-consuming. We would appreciate the involvement of others in providing that guidance.”

Pictured: County Assessor-Recorder Jon Lifquist

Story First Published: 2020-04-24