Wednesday, May 17, 2017

[Shasta County] Grand jury focuses on pension and audit issues

The Shasta County grand jury has a warning for local governments: get your pension funding in order.
In one of two of its reports released over the past week, the 2016-17 Shasta County grand jury warns local governments they are facing potentially severe financial problems — and possible service cuts — due to unfunded pension liabilities and retiree benefits.
Still, it also commended some of those government agencies for recognizing the potential problems and taking steps to try to offset the impacts.
In its report, the grand jury says unfunded pension liabilities has become a :major" problem nationwide. And it could get worse.
"Another large economic (stock market) correction could be catastrophic to the agencies," the report warns.
But it has some advice.
"Shasta County's local agencies must closely monitor their situation and look for ways to reduce their unfunded liabilities without having to drastically cut the vital services they provide to the community," the jury's report states. "Although this is a serious concern, the grand jury found that all four agencies are attempting to be proactive and mitigate future budgetary difficulties."
Nevertheless, the county and the cities of Redding, Anderson and Shasta Lake have their work cut out for them.
The grand jury notes the city of Redding with having about $207 million in unfunded liabilities, while Shasta County's total is about $187 million.
The city of Anderson's unfunded liability is about $8 million, while Shasta Lake's is about $5 million.
The jury is recommending, among other things, that the agencies by Oct.31 look for ways to increase their contributions to the California Public Employees' Retirement System over the next 12 years with minimal loss of key services.
"Options include reducing their current amortization schedules and exploring debt refinancing opportunities." the report says.
It also recommends those agencies looks for ways to increase revenues or reduce other expenditures.
In a separate seven-page report issued last week, the grand jury says the dismantling of a county audit committee that's been around for more than 20 years was improperly done.
That's because, it says, the Shasta County Board of Supervisors never took any action to dissolve the Joint Audit Committee.
"The grand jury has found no evidence that the Board of Supervisors has taken any public action as it pertains to the dissolution of the JAC," the report says.
Although the committee hasn't met since December 2015, the grand jury says that the group technically still exists. And it wants it to get back to work.
The grand jury says it was told last summer by a high-ranking county official that the Joint Audit Committee had been dissolved due to its alleged "duplicative" function. It then launched an investigation into the matter.
The committee was made up of representatives from the Board of Supervisors, two members of the grand jury, CEO Larry Lees, the county's administrative fiscal chief, and the treasurer-tax collector and the county's auditor-controller.
The JAC, which had seen its make-up changed over the years, was created by the Board of Supervisors in 1991 to "ensure that a thorough and objective audit is undertaken each year with regard to the funds, records and accounts of the county," the jury's report says
And, it said, the presence of grand jury members on the committee provided "a measure of assurance to the public that the auditing process is being handled appropriately. ... It reinforces the observance of transparency by county officials during the external audit and provides an effective way for the grand jury and Board of Supervisors to participate in the audit process."
The grand jury is recommending supervisors direct Chairman David Kehoe by June 25 to hold a JAC meeting with the grand jury to discuss the purpose of the committee.
May 16, 2017
Redding Record Searchlight
By Jim Schultz


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