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Placer County Investing In Future Despite Budget Challenges

September 01, 2011

Motorists traveling along Highway 65 may have noticed a massive construction project west of the highway at the northern edge of Roseville.

The project is a new jail being built by Placer County at the Bill Santucci Justice Center. Scheduled to be completed next April, it is a symbol of the progress the county is making on critical long-term projects despite its budget challenges.

In this column, I want to update the public on county capital projects, the proposed Placer County Conservation Plan and efforts to reduce the county’s unfunded liability for retiree benefits other than pensions. All three are examples of our intent to invest in the future, rather than be content to simply keep budgets balanced during the economic slowdown and state budget crisis.

Over the last few years, the county has completed several construction projects, including the new Highway 65-Sunset Boulevard interchange, the courthouse at the Santucci Center, a new library in Rocklin and expanded library in Colfax.

By investing in construction projects during the recession, the county was able to bolster the local economy by providing badly needed construction jobs and to save money on many projects when costs came in lower than expected.

Since 1993, the county has spent about $250 million on new buildings with approximately 650,000 square feet of space.

The county has avoided going heavily into debt by saving money for capital projects over the years and creating a facilities fee paid by new developments. That approach has allowed Placer County to rely on debt financing for only 24 percent of the funding for capital projects completed since 1999.

More than 200,000 square feet of unreinforced masonry buildings built during World War II have been demolished at the Placer County Government Center, a complex in North Auburn commonly called the DeWitt Center.

Today, Placer County is able to serve the public in modern, efficient buildings. Large new facilities such as the Community Development Resource Center in North Auburn allow the county to offer many services under one roof and projects such as the Santucci Center bring county services closer to the residents of South Placer’s cities.

Constructing buildings was a priority because the county needed to replace outdated facilities and accommodate population growth. From 2000 to 2010, Placer County’s population grew by approximately 100,000 people, giving it a 40.3 percent growth rate for the decade.

The proposed conservation plan also is a response to population growth. It seeks to help maintain our high quality of life by balancing growth and the conservation of open space, farmland and natural habitats.

In January, board members agreed to send the plan for review by federal and state regulatory agencies.

The PCCP would create a comprehensive framework for complying with federal and state environmental rules. It offers an innovative, cost-effective approach for preserving natural resources, providing local permitting and creating a streamlined review process for development projects.

Properties and easements would be acquired only from willing sellers, and the plan would not change the zoning on any properties.

Another example of the county’s efforts to be as cost-effective as possible is the drive to reduce the unfunded liability for retirement benefits other than pensions, a category that includes medical, dental and vision benefits. Collectively, they are known as other post-employment benefits, or OPEB.

In March, the board learned this year’s unfunded liability is $192 million, down more than 9 percent from two years ago.

Local governments used to handle OPEB on a pay-as-you-go basis each year. In 2006, Placer County decided to begin funding OPEB costs similar to pension obligations, a shift in strategy that will help ensure the costs of employee benefits can be sustained in the future.

As part of its new strategy, the county placed $25 million in an interest-earning trust fund over three budget cycles and had employees pick up more of their health insurance costs.

Much work remains to be done, but we continue to make progress on completing capital projects, developing the PCCP and bringing OPEB costs under control. All three are critical to Placer County’s future.

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