BOARD OF SUPERVISORS

SCORE Recognition Day

• The Board adopted a resolution proclaiming March 19, 2013, as SCORE Recognition Day.
• A representative detailed the organization's role in providing free, confidential mentoring to small businesses.
• The local chapter reported serving over 400 clients in the past year, with two-thirds being minorities.

Cesar Chavez Day

• The Board adopted a resolution proclaiming March 31, 2013, as Cesar Chavez Day.
• A history professor discussed the historical context of the labor movement and nonviolent strategies.
• A month-long celebration at CSU Channel Islands was announced to coincide with the date.

Commendation for Al Meskimen

• The Board adopted a resolution of commendation for Al Meskimen.
• The resolution honors his dedication to designing the Santa Barbara County Fallen Firefighter Memorial.
• Meskimen described the memorial as a tribute to firefighters who died in the line of duty or sacrificed their health.

Professional Social Work Month

• The Board adopted a resolution recognizing March 2013 as Professional Social Work Month.
• The resolution highlights the work of social workers in child welfare, adult protective services, and employment programs.
• Department representatives thanked the Board for the recognition of their services.

Commendation for Kim Densmore

• The Board adopted a resolution of commendation for Kim Densmore upon her retirement.
• Densmore reflected on her 30 years of service in the Probation Department.
• Her career included roles in juvenile hall, gang enforcement, and management.

Commendation for Robert Ritchie

• The Board adopted a resolution of commendation for Robert Ritchie upon his retirement from ADMHS.
• Ritchie discussed his work with high-risk youth and the challenges facing children’s mental health resources.
• A regional manager highlighted Ritchie’s creation of an internship program in partnership with universities.

World Tuberculosis Day

• The Board adopted a resolution proclaiming March 24, 2013, as World Tuberculosis Day.
• A health officer noted a reduction in local TB cases from 82 in 1993 to 24 in the previous year.
• A public speaker advocated for alternative treatment protocols and improved support for homeless populations.

Vessel Speed Reduction Incentive Program

• The Board discussed a request to authorize a letter of support for a vessel speed reduction program.
• The program would use California cap and trade auction proceeds to fund incentives for ships to slow down.
• A public speaker argued the program places a financial burden on local businesses without significantly reducing global emissions.

Kachuma Reservoir Re-roof Project

• The Board reviewed recommendations for construction contract amendments five and six.
• Staff explained that competitive bidding requirements were waived to avoid delays and costs associated with changing contractors.
• The waiver was justified by the need for expediency in the public interest.

Caltrans Transportation Planning Grant

• The Board reviewed a recommendation regarding a Caltrans grant application for the San Ynez Valley Trail.
• The grant would fund planning work for pedestrian circulation and parking in Los Olivos and San Ynez.
• Staff confirmed that the trail would likely be within the existing Caltrans easement along Highway 154.

Goleta Beach County Park Managed Beach Retreat Project 2.0

• The Board reviewed a recommendation to approve a $60,000.24 contract amendment for the AMEC project.
• The funding is intended to complete analysis for the Environmental Impact Report (EIR).
• Staff clarified that the funds come from a federal grant and are for evaluation, not immediate construction.

Special Events Ordinance Hearing

• The Board voted to set a hearing for April 2 to consider amendments to special events codes.
• A motion to postpone the item indefinitely failed, while a motion to set the hearing passed.
• Numerous public speakers urged postponement to consider a "Good Neighbor Policy" instead.

Commission for Women’s History Month Service Award

• The Board accepted a presentation honoring five organizations for their service to women and children.
• Awards were presented to organizations in each district for programs ranging from academic support to crisis intervention.
• The Board recessed for a reception hosted by the Commission for Women.

Santa Barbara County Employees Retirement System (SBCSRS) Presentation

• Staff presented on the roles of the Board of Supervisors versus the Retirement Board under the 37 Act.
• An actuary explained funding basics, including accrued liability, normal cost, and amortization periods.
• The Board discussed GASB standards, contribution rates, and the impact of workforce reductions on budget volatility.

Pension and OPEB Financial Reporting (GASB 68/34 Implementation)

• Staff outlined the county's financial statements and the upcoming requirements for recognizing net pension liabilities.
• The Board discussed the impact of Moody’s rating agency changes and the treatment of OPEB liabilities.
• The Board voted to receive and file the report on pension and OPEB financial reporting.

Appeal of Verizon Wireless Facility at Montecito Switch Station

• The Board approved a revised project proposal resulting from a settlement between the applicant and appellants.
• The design involves a 75-foot faux tree structure for antennas, replacing a previously proposed rooftop installation.
• Conditions of approval were modified to include specific generator noise requirements and RF exposure testing.

Auction of Tax-Defaulted Property

• The Treasurer notified the Board of the intent to auction four tax-defaulted properties.
• The action is taken in accordance with Revenue and Taxation Code Section 3698.
• Staff noted that extensive collection efforts had been made prior to this step.

2013-15 Fiscal Outlook Report Update

• Staff presented an update to the Fiscal Outlook Report, noting a projected 2013-14 budget gap of $10.8 million.
• Key fiscal issues included pension fund stability, healthcare costs, and workers' compensation liabilities.
• The Board requested additional data on fund balances and specific general fund contributions for departments.

Service Level Reduction Budget Update for Fiscal Year 2014

• The CEO presented proposed service level reductions totaling $8.3 million to address the budget shortfall.
• Reductions impact approximately 55 FTE positions across departments including Probation, Fire, and Public Health.
• The Board discussed concerns regarding privatization of mental health services and impacts on agricultural exports.

Closed Session

• The Board recessed into closed session to discuss CEO employment.
• The session was scheduled to last approximately 10 minutes.

Call to Order and Roll Call

• The Board of Supervisors meeting for Tuesday, March 19th, was called to order. Roll call was taken, and all members were present. The Pledge of Allegiance was recited.

Approval of Minutes

• A motion was made and seconded to approve the minutes of the March 12th meeting. No discussion occurred. The motion passed unanimously.

Public Comment (General)

• Three speakers addressed the board:
• Jeff Bard: Discussed pandemic preparedness, noting the passage of the Pandemic Preparedness Reauthorization Bill. He highlighted concerns regarding a Tamiflu-resistant H1N1 strain and the potential for future influenza pandemics, urging the board to maintain awareness of emergency preparedness.
• Christopher Brown: Spoke regarding fire protection issues, specifically referencing the Paint Fire and recent incidents in Maria Ignacia Canyon. He raised concerns about road access for large fire trucks in narrow canyons and the logistical challenges faced by firefighters during response operations.
• Carol Rowe: Representing the Aurora Ensemble, she urged the board to consider the "Good Neighbor Policy Ordinance" to preserve the events industry in Santa Barbara, citing an estimated $1.4 billion annual economic impact.

Administrative Agenda: Resolutions (Items A1–A7)

• A motion was made and seconded to adopt Resolutions 1A through 17. The motion passed unanimously. The following specific resolutions were presented, read, and adopted:
• Item A1: SCORE Recognition Day
• Action: Resolution proclaiming March 19, 2013, as SCORE Recognition Day in Santa Barbara County.
• Discussion: Bob Vitamonte, Chairman of the Santa Barbara Chapter of SCORE, spoke on behalf of the organization. He detailed SCORE’s role as a volunteer-based mentoring resource for small businesses, noting that the local chapter has served over 400 clients in the last year and that two-thirds of their clients are minorities. He emphasized that all services are free and confidential.
• Outcome: Adopted.
• Item A2: Cesar Chavez Day
• Action: Resolution proclaiming March 31, 2013, as Cesar Chavez Day in Santa Barbara County.
• Discussion: Dr. Frank Barajas, Professor of U.S. History at California State University Channel Islands, spoke. He discussed the historical context of the labor movement in Oxnard and the nonviolent strategies employed by Cesar Chavez. He also announced a month-long celebration at CSU Channel Islands starting March 27.
• Outcome: Adopted.
• Item A3: Commendation for Al Meskimen
• Action: Resolution of commendation honoring Al Meskimen for his dedication to designing the Santa Barbara County Fallen Firefighter Memorial.
• Discussion: Al Meskimen, a retired Santa Barbara County Firefighter, spoke. He described the memorial as a tribute to firefighters who died in the line of duty and those who sacrificed their health and safety. He thanked various individuals and organizations for their support in the project.
• Outcome: Adopted.
• Item A4: Social Work Month
• Action: Resolution recognizing March 2013 as Professional Social Work Month in Santa Barbara County.
• Discussion: Supervisor Wolfe introduced the item, highlighting the work of social workers in child welfare, adult protective services, and employment programs. Several social workers and department representatives, including Edith Gonzalez, Judith Sotelo, Carrie Martin, Mary Allen Baez, Delfino Nera, and Ted Myers, were present. Ted Myers spoke on behalf of the Department of Social Services, thanking the board for the recognition.
• Outcome: Adopted.
• Item A5: Commendation for Kim Densmore
• Action: Resolution of commendation for Kim Densmore, Probation Manager, upon her retirement after 30 years of service.
• Discussion: Kim Densmore spoke, reflecting on her career in the Probation Department, including roles in juvenile hall, gang enforcement, and management. She expressed gratitude for the opportunity to serve and her colleagues.
• Outcome: Adopted.
• Item A6: Commendation for Robert Ritchie
• Action: Resolution of commendation honoring Robert Ritchie, Ph.D., upon his retirement from the Department of Alcohol, Drug, and Mental Health Services (ADMHS).
• Discussion: Michael Kraft, Regional Manager, and Dr. Robert Ritchie spoke. Kraft highlighted Ritchie’s creation of an internship program in partnership with universities. Ritchie discussed his work with high-risk youth and families and the challenges facing children’s mental health resources. The Chair noted that the resolution would be framed to match previous retirement presentations.
• Outcome: Adopted.
• Item A7: World Tuberculosis Day
• Action: Resolution proclaiming March 24, 2013, as World Tuberculosis Day in Santa Barbara County.
• Discussion: Supervisor Lavagnino introduced the item, noting the reduction in local TB cases from 82 in 1993 to 24 in the previous year. Dr. Charity Thoman, Deputy Health Officer and TB Controller, spoke about the public health infrastructure used to track and treat TB, including the identification of contacts and mandatory treatment. She recognized Public Health Nurse Jean Borges for her work in the TB clinic.
• Outcome: Adopted.
• Public Comment: A public speaker addressed the board regarding World Tuberculosis Day, expressing disagreement with the department’s presentation on directly observed therapy. The speaker argued that non-compliance is often due to a lack of support services rather than patient will, citing cases involving homeless individuals. The speaker advocated for alternative protocols, such as weekly medication regimens, improved contact tracing for homeless populations, and the adoption of rapid diagnostic testing.

Administrative Agenda: Specific Items

• Item A29: Vessel Speed Reduction Incentive Program
• Action: Request to approve and authorize the Chair to execute a letter of support for a plan to fund a vessel speed reduction incentive program off the Santa Barbara County coast using California’s cap and trade auction proceeds.
• Discussion: Supervisor Lavagnino asked why this item was not part of the recent Climate Action Plan discussion. CEO Waller explained that the item was brought to the Board via the Legislative Committee on a separate track and was not initially assumed to be part of the County’s direct action plan. Supervisor Lavagnino noted that successful implementation could significantly reduce greenhouse gas emissions. Supervisor Wolfe expressed support, noting that while the County has limited control over state/federal regulations, expressing support is appropriate.
• Public Comment: A speaker representing COLAB commented on the item regarding funding for ships to slow down in the Santa Barbara Channel. The speaker argued that the program, funded by fees on California businesses, was ineffective because it only addressed emissions from the final 100 miles of a long journey. The speaker contended that the program placed a financial burden on local businesses to subsidize foreign shipping companies without significantly reducing global greenhouse gas emissions.
• Outcome: No vote recorded in this segment; item discussed for potential letter of support.
• Item A13: Kachuma Reservoir Re-roof Project
• Action: Recommendation regarding construction contract amendments number five and six for the Kachuma Reservoir re-roof project.
• Discussion: Supervisor Adam asked about the waiver of competitive bidding requirements. A staff member explained that under the California Public Contract Code, bidding requirements may be waived if in the public interest, specifically for health, safety, and welfare. The waiver was justified by the need for expediency and to avoid delays/costs associated with bringing in a new contractor while work was already in progress.
• Outcome: No vote recorded in this segment.
• Item A19: Caltrans Transportation Planning Grant
• Action: Recommendation regarding the Caltrans Transportation Planning Grant application for the San Ynez Valley Trail and Township Pedestrian Circulation and Parking plans.
• Discussion: Supervisor Adam inquired if easements from private parties were required. CEO Waller stated that the trail would likely be within the Caltrans easement along Highway 154 and that no private property easements were currently contemplated. He noted the grant would help fund planning work for pedestrian circulation in Los Olivos and San Ynez.
• Outcome: No vote recorded in this segment.
• Item A20: Goleta Beach County Park Managed Beach Retreat Project 2.0
• Action: Recommendation to approve Amendment Number One to the AMEC environmental and infrastructure contract for an additional $60,000.24 to complete analysis for the Environmental Impact Report (EIR).
• Discussion: Supervisor Adam commented on the County’s deficit and the cost of the project. Supervisor Wolfe clarified that the funding is for the EIR stage to evaluate alternatives, not for immediate construction, and that the funds come from a federal Department of Interior Fish and Wildlife Service CIAP grant, not general funds.
• Outcome: No vote recorded in this segment.
• Item A28: Special Events Ordinance Hearing
• Action: Request to set a hearing for April 2nd to consider amendments to the County and Montecito Land Use and Development Codes regarding temporary uses and special events.
• Discussion: The Chair noted that public comment was limited to whether to set the hearing, as the substantive discussion would occur at the future hearing.
• Public Comment: Eleven speakers addressed the board.
• Mary Harris (San Ynez Valley Hotel Association): Urged postponement to consider the "Good Neighbor Policy."
• Hans Deuss (Solvang resident/business owner): Requested postponement and consideration of the "Good Neighbor Ordinance," citing legal problems with the current proposed amendments.
• Dorothy Lawson (Homeowner): Opposed Item A28 and supported the "Good Neighbor Policy."
• Jessica Cuppers (Bijou Events): In favor of postponement and the "Good Neighbor Special Events Ordinance."
• Reverend Miriam Lindbeck: Opposed the amended ordinance, favored postponement and the "Good Neighbor Special Events Ordinance."
• Lynette Lemire: Asked for delay of adoption, citing errors in the amended ordinance and supporting the "Good Neighbor" policy.
• Leigh Rosenberg: Supported the "Good Neighbor Special Events Ordinance" and requested a 3-4 month postponement to allow for public education and analysis.
• Jeff Alexander (Santa Barbara County Film Commissioner/Conference and Visitors Bureau): Requested removal of the hearing from the agenda.
• Bonnie Hope (DJ service owner/wedding fair producer): Asked for postponement and support for the "Good Neighbor Special Event Ordinance."
• Nanette McIntyre (Life cycle celebrant): Supported the "Good Neighbor Special Events Ordinance" and urged postponement of the current ordinance hearing.
• Motions and Votes:
• A motion was made and seconded to postpone the item indefinitely. Several supervisors expressed opposition to the postponement, arguing that setting a hearing would allow for public comment and potential policy decisions, while others supported the postponement due to resource constraints. The motion to postpone indefinitely failed by a vote of 2-3.
• Subsequently, a motion was made and seconded to set the hearing as stated in the staff report. This motion passed by a vote of 3-2.

Administrative Agenda Approval

• A motion was made and seconded to approve the administrative agenda. The motion passed unanimously.

Agenda Item 1: Commission for Women’s History Month Service Award

• The board received a presentation from the County of Santa Barbara Commission for Women honoring five organizations for their service to women and children. The following awards were presented:
• District 1: Girls Inc. of Carpinteria (Eureka Program) for providing academic support, mentoring, and college readiness programs to middle school girls.
• District 2: California Youth Connection Santa Barbara Chapter for engaging foster youth in leadership, advocacy, and the policy-making process.
• District 3: Women’s Independent Giving Society (WIGS) for pooling resources to fund human services for disadvantaged youth and families in the Santa Ynez Valley through the organization People Helping People.
• District 4: One Heart for providing educational workshops and programs focused on bullying prevention, suicide prevention, and nonviolent communication for teens and youth in the justice system.
• District 5: North County Rape Crisis and Child Protection Center for providing crisis intervention, counseling, and preventative education services regarding sexual assault and child abuse in North Santa Barbara County.
• A motion was made and seconded to accept the presentation and recess for a reception hosted by the Commission for Women and Supervisor Wolf. The motion passed unanimously. The board recessed for 15 minutes.

Agenda Item 2: Santa Barbara County Employees Retirement System (SBCSRS) Presentation

• The board convened to hear a presentation from SBCSRS staff regarding the county’s employee retirement rate setting and contribution process. The presentation covered the roles and responsibilities of the Board of Supervisors versus the Retirement Board under the California Employees Retirement Law of 1937 (the 37 Act). Key points included:
• The Board of Supervisors has the authority to adopt the 37 Act, determine employee compensation (which forms the basis for pension calculations), select benefit levels (subject to recent restrictions by PEPRA), and appoint four members to the nine-member Retirement Board.
• The Retirement Board holds plenary authority and fiduciary responsibility for the investment and administration of the system, with a primary duty to provide benefits to participants.
• The Retirement Board determines retirement allowances, pensionable income, and has exclusive authority over system assets.
• Actuarial studies are required by law to determine contribution rates. The Retirement Board conveys actuarial recommendations to the Board of Supervisors 45 days before the start of the fiscal year, and the Board is required to adjust contribution rates within 90 days of the fiscal year start, unless doing so would reduce benefits.
• The external actuary presented on actuarial funding basics, explaining concepts such as accrued liability, normal cost, unfunded liability, and amortization. The actuary discussed the financing plan elements, including the normal cost method, amortization periods (noting the 37 Act allows a maximum of 30 years for amortizing unfunded liabilities), and asset smoothing to mitigate the volatility of investment returns. A clarification was made during the presentation that the 30-year amortization period is a maximum limit allowed by law, not a requirement, and the county’s current 17-year period is within legal limits.

Agenda Item 2 (Continued): Presentation on Actuarial Funding, GASB Standards, and Budgeting Implications

Discussion on GASB Standards and Funding Policies

• The actuary presented an overview of changes in Government Accounting Standards Board (GASB) requirements, noting that GASB is removing terminology associated with annual required contributions and no longer determining funding contribution standards. The presentation highlighted guidance from the Government Finance Officers Association (GFOA) and the California Actuary Advisory Panel (CAP). The CAP document outlines five policy objectives for financing plans: fully funding benefits, maintaining generational equity, managing contribution volatility, ensuring accountability and transparency, and addressing principal-agent issues. The CAP categorizes funding practices into levels, including "model," "acceptable," "acceptable with conditions," "non-recommended," and "unacceptable."
• The actuary detailed Santa Barbara County’s current policies:
• Actuarial Cost Method: Entry age normal, classified as a "model" policy by the CAP.
• Asset Smoothing: Five-year smoothing with a 20% corridor, classified as a "model" practice.
• Amortization: Rolling 17-year level percentage of payroll. The CAP views rolling amortization of gains/losses as acceptable but is less favorable toward rolling amortization of benefit improvements, encouraging shorter fixed periods to avoid negative amortization.
• Assumptions: The current nominal return assumption is 7.75% (composed of 3.25% inflation and 4.5% real return). The actuary noted that recent trends show a reduction in return assumptions, primarily driven by lower inflation expectations compared to the plan’s current long-term assumption.
• Board members questioned the accuracy of long-term inflation predictions, noting that market predictions for the next 10 years are lower than the plan’s 3.25% assumption. The actuary explained that actuarial assumptions are long-term estimates, not short-term predictions, and that the process is self-correcting through annual re-measurements and triennial experience studies.

Discussion on Amortization and Contribution Rates

• Board members inquired about the difference between rolling and fixed amortization periods. The actuary explained that moving from rolling to fixed (closed) amortization would not significantly change the current contribution rate but would ensure that existing unfunded liabilities are paid off within a specific timeframe. "Layered amortization" was discussed as an alternative where new unfunded liabilities are amortized over a new fixed period while existing liabilities continue on their current schedule.
• Regarding salary spikes, a board member asked how significant late-career salary increases affect actuarial assumptions. The actuary explained that liabilities are re-measured annually, and such patterns are considered in the triennial experience study. It was noted that PEPRA (Public Employees Pension Reform Act) addresses some benefit structures, and while salary spikes can occur, they affect a small percentage of individuals.

Discussion on Workforce Reductions and Volatility

• The actuary explained that workforce reductions increase the volatility of contribution rates as a percentage of payroll. While the dollar amount of the unfunded liability payment remains constant, a smaller payroll base results in a higher percentage rate, making budgeting more volatile.

Presentation on Budgeting Process and Contribution Trends

• The Auditor-Controller’s representative presented on how actuarial rates are used in the budgeting process:
• Salary Model: A bottom-up budgeting tool that applies retirement rates to specific positions. Salaries and benefits account for 56% of county operating expenditures.
• Contribution Rates: The general plan average contribution rate is 31.7% of payroll, with approximately 57% of that amount going toward unfunded liabilities. The safety plan average contribution rate is 56.8% of payroll, with approximately 57% going toward unfunded liabilities.
• Historical Costs: Retirement costs increased from $37.5 million in 2003-04 to an anticipated $105 million in 2012-13, driven largely by the absorption of $772 million in investment losses from 2008-09.
• Future Projections:
• The 2013-14 budget currently loads approximately $114 million for retirement contributions based on the salary model.
• A separate projection using actuarial percentages applied to 2012-13 payroll estimates $108 million for 2013-14.
• The 2014-15 budget assumes a decrease in the rate of return from 7.75% to 7.50%, which would increase contributions by approximately $9.9 million (3.5% of payroll) in that year.
• PEPRA is projected to reduce contributions by nearly $2 million in 2016-17 and $5 million in 2021-22.
• Combined impacts are projected to reduce total contributions from approximately $120 million in 2014-15 to $86.4 million in 2022-23.
• Board members requested clarification on the discrepancy between the $108 million, $114 million, and previously cited $122 million figures. The representative explained that $114 million is the precise number loaded into the financial system (FIN) based on the bottom-up salary model, while $108 million is a macro-level projection using overall percentages. The $122 million figure was from a previous year’s budget hearing and is no longer accurate. The board requested a written explanation reconciling these figures.

Discussion on Fiduciary Responsibility and GASB Reporting

• The Auditor-Controller noted that the Board of Supervisors previously had more control over pension funding, but current law places fiduciary responsibility on the Retirement Board. The Retirement Board representative confirmed that the board takes its fiduciary duty seriously.
• The Auditor-Controller discussed upcoming GASB standards (GASB 67 and GASB 68) that will require new accounting and financial reporting for pensions. GASB 67 will require the county to report its specific portion of the pooled liability and assets, along with additional disclosures. The implementation date for the plan is the fiscal year ending June 30, 2014, with county reporting following in the subsequent year.

Agenda Item 2 (Continued): Pension and OPEB Financial Reporting (GASB 68/34 Implementation)

• Discussion: Staff presented an overview of the county’s financial statements under GASB standards, distinguishing between governmental fund statements (budgetary focus) and government-wide statements (long-term focus, including assets, debt, and long-term pension/OPEB liabilities). Staff explained that the county currently discloses a total pension liability of $828 million, with the county’s estimated proportionate share of the unfunded liability at approximately $769 million and pension expense at $113 million. Staff noted that implementing GASB 68 will require recognizing the net pension liability on the balance sheet, which will initially result in negative unrestricted net position, to be amortized over a 17-year period.
• Q&A:
• Staff clarified that GASB standards do not apply to non-profit organizations.
• Staff explained that the "reasonable period" for funding the unfunded liability is determined by the Retirement Board and actuaries based on asset projections, not by the Board of Supervisors.
• Staff addressed the impact of Moody’s rating agency changes, noting that Moody’s is not a standard-setting body and uses its own discount rates for rating purposes. Staff stated that Moody’s expects fewer than 2% of local governments to face ratings reviews for possible downgrades due to these changes.
• Staff discussed OPEB (Other Post-Employment Benefits), noting that $50 million of the current liabilities are OPEB, with an additional $102 million to be amortized over nine years. Staff indicated that GASB may soon require OPEB to be treated similarly to pensions, potentially increasing the total liability.
• Staff confirmed that unfunded road maintenance liabilities are not included in the current pension/OPEB liability figures.
• Public Comment:
• A representative for the Santa Barbara County Taxpayers Association expressed frustration with the technical nature of the discussion and argued that the government should not be managing retirement plans, suggesting instead that the county focus on creating a competitive enterprise economy.
• A representative for Colab argued that defined benefit plans are unsustainable, questioned the realism of the 7.5% return assumption, and requested that the board consider pressure on the state to allow exit from these plans.
• Motion and Vote:
• A motion was made to receive and file the report.
• A second was provided.
• Supervisor Adam expressed a wish for a future meeting to delve deeper into the feasibility of the pension plan, specifically regarding investment return assumptions and Moody’s standards.
• Supervisor Wolf stated that the Retirement Board is protecting retiree pensions and that the Board of Supervisors has been increasing contributions to ensure actuarial soundness.
• Vote Outcome: The motion to receive and file the report passed unanimously.

Agenda Item 3: Appeal of Verizon Wireless Facility at Montecito Switch Station

• Discussion: Staff presented a revised project proposal resulting from a settlement between the applicant (Verizon) and the appellants (Mary Goolsby and Martha Goolsbey Kaye). The revised project involves locating the equipment shelter next to the existing AT&T facility and installing antennas on a new 75-foot faux tree structure, replacing the previously proposed rooftop installation. Staff noted the design complies with telecommunications standards and received favorable conceptual review from the Montecito Board of Architectural Review.
• Condition Changes: Staff read into the record two requested changes to the conditions of approval:
• 1. Condition 6: Strike text regarding a permanent on-site generator; add language requiring the use of the quietest commercially available generator and compliance with county noise thresholds during emergency use. 2. Condition 12: Add a requirement for a one-time RF electromagnetic exposure field test within the first five years of operation, upon request by the director.
• Public Comment:
• The appellants’ attorney expressed support for the revised project, citing it as a better outcome for the community.
• The applicant’s representative thanked staff and the appellants for the collaborative process, describing the outcome as a "win-win" that improves coverage and allows for future co-location.
• Co-appellant Martha Kaye expressed gratitude for the board’s engagement but requested that the board not refer to the outcome as a "win-win," describing the appellants as "survivors" of the process. She asked the board to support the tree pole alternative over the rooftop installation.
• Motion and Vote:
• A motion was made to approve staff’s recommendation, including the settlement, the modified conditions 6 and 12, the CEQA exemption, and the conditional use permit for the faux tree design.
• A second was provided.
• Vote Outcome: The motion passed unanimously.

Agenda Item 4: Auction of Tax-Defaulted Property

• Discussion: The Treasurer notified the board of the intent to proceed with a public auction of four tax-defaulted properties subject to the power of sale, in accordance with Revenue and Taxation Code Section 3698. Staff noted that extensive collection efforts had been made prior to this step.
• Motion and Vote:
• A motion was made to approve the item.
• A second was provided.
• Vote Outcome: The motion passed unanimously.

Agenda Item 5: 2013-15 Fiscal Outlook Report Update

• Discussion: Staff presented an update to the Fiscal Outlook Report originally presented in November 2012. The update focuses on changes in fiscal issues and the projected 2013-14 budget gap.
• Tier 1 Issues (Estimable, Expected to Occur):
• Pension Fund Stability: The largest item. The estimated impact for 2013-14 remained stable at $17.8 million. For 2014-15, the impact increased to $19.7 million, primarily due to a reduction in the assumed rate of return from 7.75% to 7.5%.
• Concessions: Ending in June 2013.
• Healthcare Costs: Projected 12% increase in 2014-15, with a 15% increase recommended for 2014-15 due to ACA uncertainties, resulting in a $2 million increase to $28.4 million total.
• Workers' Compensation: Unfunded liability for tail claims increased to approximately $7.8 million. A plan to address increases is being implemented, including a new dashboard report.
• Assessor Gap: No change. Structural imbalance due to declining revenues and increasing workload.
• North Branch Jail Operating Fund: General fund allocation increased by $1.3 million annually, totaling $3.3 million in 2013-14 and $4.6 million in 2014-15.
• Retiree Healthcare (OPEB): Funding increases planned to reduce unfunded liability, adding approximately $700,000 per year.
• Tier 2 Issues (Probable, Difficult to Estimate):
• Social Service Mandate Match: Reduced general fund allocation expected in 2013-14 due to improved fund balance.
• Property Tax Administration Fee: Expected to be paid out soon; recommendation to use one-time RDA funds remains.
• Mental Health/MediCal Billing: No change; liability reserved.
• MHSA: Removed as an issue for 2013-14 due to increased state funding.
• Deferred Maintenance Backlog: No change in the report, but staff noted the total backlog is approximately $297 million. A $2 million placeholder is included for increased funding needs.
• Public Health: Impacted by declining Medi-Cal revenues; ACA uncertainty remains.
• FEMA Disallowance: $1.1 million disputed amount; department has fund balance to cover potential assessment.
• Fire Department: Structural imbalance due to expiring salary deferrals; reserves will be exhausted in 2014-15.
• ADMHS Cost Settlements: Placeholder for audit exposure risk.
• ACA: Uncertainty regarding new client numbers and implementation costs.
• Budget Gap: The projected 2013-14 budget gap decreased from $12.4 million (November estimate) to $10.8 million (March estimate). Revenue changes were relatively stable ($7.9 million vs. $8.1 million), while expenditure changes were slightly lower ($17.8 million vs. $17.9 million). Use of one-time funds improved by $1.7 million.
• Q&A:
• Supervisor Wolf asked about the Assessor funding gap and the use of the $1.6 million allocation. Staff clarified this is an identified issue to be addressed in future budget proposals, not a current solution.
• Supervisor Adam asked about the growth rate of the deferred maintenance backlog. Staff stated the number is large ($297 million) and that a detailed plan with prioritization is being developed.
• Supervisor Lavinino asked why the Fire District property tax transfer decreased despite increasing property tax revenues. Staff explained this is a complex calculation based on individual contribution rates and is currently loaded into the financial system.
• Supervisor Wolf asked for clarification on the RDA revenue figure. Staff explained that the $2.7 million figure represents the change from the previous estimate of $1.5 million, bringing the current estimated ongoing funding to $4.2 million.
• Supervisor Carbajal suggested presenting the total revenue figures (e.g., $4.2 million) rather than just the incremental change to improve public understanding. Staff agreed to include a revenue table in future reports.
• Additional Discussion:
• Staff clarified that a new revenue source of approximately $4.3 million was identified, of which $2.7 million was previously unbudgeted. This incremental revenue affects funds available for future balancing. Staff noted that the 2012–2013 results, including a projected positive general fund balance of approximately $5.2 million to $5.5 million, were not included in the current slides to maintain conservative projections, as these funds may be utilized for other purposes such as property tax administration fees.
• Supervisors inquired about the availability of various funds for the 2013–2014 budget gap. Staff confirmed that the strategic reserve stood at approximately $23 million to $24 million after accounting for jail contributions. A committed fund balance of $5.1 million from the 2011–2012 fiscal year remains available for use in 2013–2014 or for addressing rate of return changes. Staff indicated that approximately $2 million in Proposition 172 funds for public safety may remain for the next fiscal year, while Fire Department reserves are expected to be fully utilized to balance the 2013–2014 budget, leaving no reserves for 2014–2015.
• Supervisors requested additional information, including a schedule of current balances, a summary of funds used versus available, and specific general fund contribution figures for individual departments. Staff agreed to provide this data in future updates.
• Motion and Vote:
• A motion was made to accept the report. The motion was seconded. No further discussion occurred. The motion passed unanimously.

Agenda Item 6: Service Level Reduction Budget Update for Fiscal Year 2014

• Discussion: The CEO presented anticipated service level reductions (SLRs) resulting from the implementation of board-approved budget policies. The presentation outlined a projected $10.8 million shortfall for fiscal year 2013–2014. To address this, the county proposes $8.3 million in service level reductions, impacting approximately 55 full-time equivalent (FTE) positions. The ongoing general fund cost to restore these reductions is estimated at $4.9 million, a figure lower than the total reduction amount due to anticipated operational efficiencies and matching state/federal revenues.
• The CEO detailed specific SLRs by department:
• County Executive Office: Reduction of one-time funding for staff transition, as the transition is considered complete.
• County Counsel: Proposed reduction of two FTEs due to decreased anticipated need for legal services compared to the previous year. A $500,000 legal contingency fund remains budgeted.
• Probation: Proposed reductions include the elimination of gang intervention officers and supervisors due to potential state funding cuts (SB 678), elimination of standby transport staff between South County and Santa Maria Juvenile Hall, and reduced staffing at Santa Maria Juvenile Hall due to declining daily population (currently averaging 84, below the 90-person threshold requiring additional staff).
• Fire Department: Proposed reductions for Engine 11 and Station 22, previously funded by one-time concessions that have expired. General fund allocation for the Fire Department increased from $3.3 million in 2011–2012 to $5.9 million in 2012–2013.
• Sheriff: Proposed reductions include three custody deputies (previously restored for half a year with one-time funding) and four FTEs in custody staff to offset mandated increases in inmate healthcare and pharmaceutical costs. The Sheriff’s office noted that the Corizon medical contract is under negotiation, with a projected 3.4% cost increase. Discussions are ongoing regarding rebidding the contract and consolidating pharmaceutical services. Asset seizure forfeiture funds were discussed, with staff noting approximately $250,000 to $350,000 in annual revenue, subject to specific usage restrictions.
• Public Health: Proposed changes include eliminating winter ocean water testing (with a potential $15,000 contract to maintain service), reducing staff at Santa Maria and Santa Barbara Health Centers due to an 11% system-wide decline in clinic patients, and reducing five FTEs in health information management due to the implementation of electronic health records.
• Alcohol, Drug, and Mental Health (ADMHS): Proposed reductions include the elimination of one-time funding for inpatient beds and a recommendation by Probation to contract with Corizon for mental health services in the juvenile justice program. This would result in the elimination of approximately 8.3 FTEs within ADMHS.
• Agriculture Commission: Proposed reductions include the elimination of an ag biologist position due to the expiration of a one-time revenue contract and the elimination of the UC Cooperative Extension Service program, which has been funded by one-time fund balances. The Ag Commissioner emphasized the necessity of the biologist position for phytosanitary inspections required for perishable agricultural exports and for managing invasive pests such as the Asian citrus psyllid. The department also discussed the elimination of a wildlife services contract, which provides free assistance to homeowners for nuisance wildlife management.
• Planning and Development Department: The CEO presented proposed staff time eliminations for three projects: the Climate Action Plan implementation, Hollister State Improvements, and the 09-14 Housing Element implementation. The CEO noted that Public Works would take over the Hollister State Improvements project. A Supervisor inquired about the transfer of the Hollister project to Public Works and whether Long-Range Planning would continue to assist. Staff clarified that Public Works would lead the project study report, while Planning’s role was limited to assisting with the streetscape plan and complete streets concept. Staff explained that these items were removed from the current work plan because they are existing projects lacking resources, rather than new potential projects. The work plan is scheduled for Board consideration on April 2.
• Community Services Department: The CEO presented proposed service level reductions, including:
• 1. Elimination of one-time funding for the Conference and Visitors Bureau. 2. Elimination of one-time funding for shelter services. 3. A $42,000 increase in maintenance costs for Orcutt Park.
• A Supervisor asked if the shelter services reduction specifically affected warming centers. Staff confirmed the reduction applies to shelter services county-wide and is not specific to warming centers.
• A Supervisor inquired about the timing of the Orcutt Park maintenance transfer, noting the development was not fully built out. Staff explained that the developer’s agreement to maintain the landscape was for a fixed five-year period, which expires in August, at which point responsibility transfers to the County Parks Department. Staff confirmed this was a condition of the original development approval.
• A Supervisor expressed concern about the specific impact on Orcutt Park compared to other parks and suggested looking for broader reduction methods rather than targeting this specific new park.
• Supervisors expressed concerns regarding the privatization of mental health services for juveniles, the impact of reduced staffing on public safety and agricultural exports, and the long-term costs of outsourcing services. The CEO noted that these proposals are preliminary and subject to further evaluation, including consultant reports and additional funding sources, before the final budget is presented in May.

CEO Operational Plan Update / Budget Discussion

• Discussion: The CEO concluded the presentation by summarizing the total proposed reductions, noting that many are efficiencies rather than direct service cuts. The CEO stated that these reductions would exacerbate low staffing levels and that further reductions would likely be needed in future fiscal years to balance the budget. The CEO outlined the next steps: working with departments to refine revenue/expenditure estimates, seeking mitigation solutions (such as year-end fund balance or grants), and preparing the final CEO proposed operational plan for the Board in May 2013. The CEO indicated that departments would be asked to review areas of specific Board concern for additional potential cuts.
• Timeline: The CEO proposed budget is expected in mid-May (around May 15), with budget hearings scheduled for June.
• Motion and Vote:
• A motion was made and seconded to accept the report.
• The motion passed unanimously.

Closed Session

• Action: The Chair recessed the Board into closed session.
• Topic: The matter was identified as CEO employment.
• Timing: The Board agreed to enter closed session for approximately 10 minutes, with a target return time of 10 minutes to 6:00 PM.