GILROY
– Santa Clara County Board of Supervisors Chairman Pete McHugh
gave the annual state of the county address Tuesday, only days
after the governor’s budget proposal cut $53 million out of the
county’s 2004-05 spending plan.
GILROY – Santa Clara County Board of Supervisors Chairman Pete McHugh gave the annual state of the county address Tuesday, only days after the governor’s budget proposal cut $53 million out of the county’s 2004-05 spending plan.
Typically held during a special evening session, this year’s state of the county address was done during the regularly scheduled meeting of the board of supervisors. The county called the lack of fanfare “an indication of the theme of McHugh’s address.”
McHugh lauded his colleagues for prudent fiscal management during the flush and flat economic times. And he called for a “sustainable county” that spends money at the same rate it earns money.
“I was encouraged. He sounded like a Republican,” District-1 Supervisor Don Gage said. “He talked about saving money, keeping expenditures down and anytime we add a dollar to spending, we put another dollar toward our contingency reserves.”
McHugh’s “sustainable county” plan will not be easy to maintain. As McHugh pointed out in his speech, costs for county services grow at an annual rate of 7 percent, while revenues are only expected to grow at the rate of 5 percent.
“We will not and should not expect to achieve a sustainable county in one year. The impacts on our stakeholders have the potential to be immense,” McHugh said. “We should take several years to spread those impacts as we move toward a sustainable county.”
Other highlights in the state of the county address include:
• Establishing an early retirement incentives program that could reduce the county’s workforce from 9,770 to 8,670.
Gage said he had mixed feelings about the program because he is not convinced it will produce a more cost-effective county.
“You can’t force someone to leave their job, so you never know what you’re going to get,” Gage said. “You can replace workers with cheaper, less experienced labor, but if you lose all of your best workers then the county isn’t necessarily ahead.”
• Rebuilding the county’s “rainy day” funds to 5 percent of the general fund budget by 2008. Currently, reserves are supposed to be 2 percent of the budget.
“It’s a big task. At 2 percent we’re talking about $96 million,” Gage said. “So 5 percent is a very aggressive goal.”
