Financial Highlights County of San Mateo, Fiscal Year Ended June 30, 2007 This publication highlights the significant financial and eco- nomic activities of San Mateo County, California, for the BOARD OF SUPERVISORS fiscal year (FY) ended June 30, 2007. To view this publica- MARK CHURCH tion online, visit www.co.sanmateo.ca.us/controller/pafr. RICHARD GORDON JERRY HILL The information contained in this publication is derived ROSE JACOBS GIBSON from the County of San Mateo’s Comprehensive Annual ADRIENNE TISSIER Financial Report (CAFR). The CAFR contains more in- depth information about the County’s finances. Copies of this report are available at all public libraries in the Coun- COUNTY MANAGER ty and at www.co.sanmateo.ca.us/controller/cafr. JOHN L. MALTBIE CONTROLLER TOM HUENING, CPA, CPFO Visit the county’s website at: www.co.sanmateo.ca.us Pay your property taxes online and see the breakdown of your secure property tax bill at: www.sanmateocountytaxcollector.org Table of Contents Controller’s Message .....2 Who We Are ...................3 Economic Growth ..........4 County Revenues ...........5 County Expenses ............6 County Map ...................7 Financial Summary .... 8-9 Major Initiatives ..... 10-11 Japanese Tea Garden, San Mateo, CA Photograph courtesy of Robert Adler Published by Controller Tom Huening, CPA, CPFO (650) 363-4777 [email protected] 1 Controller’s Message San Mateo County’s local economy is relatively The County’s contribution to the San Mateo Medi- strong overall. Per capita personal income is steadi- cal Center continued to rise and was $69 million in ly increasing, unemployment remained low at 3.9% FY 2006-07. It is budgeted at $72 million in FY in June 2007, and the tourism and technology in- 2007-08 and is projected to reach $115 million in dustries are growing. Three major carriers (JetBlue, five years. The County is conducting a comprehen- Southwest Airlines, and Virgin America) started sive review of its healthcare system to manage the services at San Francisco International Airport this rapidly rising medical costs. year, which is expected to increase airport traffic and related services. Although the number of home sales The new $155 million Youth Services Center opened is declining, median housing prices are slowly in- last year. In the near future, the County needs to creasing. The commercial real estate market is in its implement various other capital projects that re- third year of growth. quire significant long-term funding. Despite the challenge of curbing expenses without “JetBlue lands at SFO…First of 3 major severely impacting the level of services the County low-cost carriers coming to airport” offers, the County’s overall financial position, re- - San Mateo Daily News, May 3, 2007 flected in its financial statements, continues to re- main strong. In FY 2006-07, the County had $1.9 billion worth of This Financial Highlights provides the public with assets and $0.8 billion of liabilities. The County’s an easy to read overview of the County’s financial financial statements reflect revenues of $1.2 billion condition. I hope you will take the time to provide and expenses of $1.0 billion. A major issue facing us with your thoughts or ideas for improvements the County now is that its ongoing expenses have after reading this year’s publication. Drop me a been growing faster than its ongoing revenues. Al- note at the address below, call my office at (650) though the County continues to balance its budget, 363-4777, or e-mail me at [email protected]. this was only made possible by various one-time ca.us. I look forward to hearing from you. revenue sources. Absent these one-time revenue sources, the County would currently be facing a Tom Huening, CPA $25 million deficit. The County’s major challenge Certified Public Finance Officer in the next five years is to ensure its ongoing ex- Controller, County of San Mateo penses do not exceed its ongoing revenues. “The sizzle has fizzled from the Bay Area In FY 2006-07, the County’s salaries and benefits housing market.” increased 10%, which represents approximately - Oakland Tribune, October 18, 2006 58% of County expenses. Staffing increased by 206 full time equivalent (FTE) employees for a total of 5,481 FTE. Tom Huening has served the County of San Mateo as the elected Controller since 1998. 2 COUNTY OF SAN MATEO Organization Chart Who We Are (as of June 30, 2007) San Mateo County Residents County Board of Supervisors Counsel Elected Officials Thomas F. ~~~~~~~~~~~~~ Casey III Assessor- County Clerk- Recorder Warren Slocum Controller Tom Huening District 1 District 2 District 3 District 4 District 5 Mark Church Jerry Hill Richard Gordon Rose Jacobs Gibson Adrienne Tissier Coroner (President) (Vice-President) Robert Foucrault District Attorney/Public County Manager/ Private Defender Administrator Clerk of the Board John Digiacinto Jim Fox John L. Maltbie (Bar Association) Sheriff/Office of Emergency Services Assistant County Manager Greg Munks David Boesch Treasurer-Tax Collector Lee Buffington Deputy County Deputy County Deputy County Manager Manager Manager (Administrative (Community (Intergovernmental Services) Services) and Public Affairs) Reyna Farrales Peggy Jensen Probation Mary McMillan (appointed by Judiciary) Loren Buddress Human Planning and Child Support Department of Resources Building Communications Services Public Works Donna Department Iliana Rodriguez * Jim Porter Vaillancourt Lisa Grote Superior Court (appointed by Judiciary) Human Services Information Parks Housing John Fitton Agency Legislative Services Department Department Beverly Beasley Chris Flatmoe * David Holland Duane Bay * Johnson * First 5 San Mateo San Mateo Health Budget and Public Safety County Strategic County Library Department Performance Communications Tammy Moss Planning JPA Charlene Silva * Jim Saco Jaime Young Vickey Johnson Retirement San Mateo Economic Office Medical Center Shared Services Development/ LAFCo (SamCERA) Special Projects Sang-ick Chang * Peter Tocchini Real Properties Martha Poyatos David Bailey (Interim) Services Steve Alms * Direct report to the County Manager Fire Services John Ferreira (As of June 30, 2007) (Cal Fire) San Mateo County is governed by an elected Board of Supervisors, which sets policy and administers County government by ordinances and regulations. In addition to the five Board seats, the County has six elected officials: the Assessor-County Clerk-Recorder, Controller, Treasurer-Tax Collector, District Attor- ney/Public Administrator, Sheriff, and Coroner. All other department heads are appointed. 3 Economic Growth... Employment Unemployment Rate • The County’s unemployment rate was 4.3% in 7.0% 2005, remained very low at 3.7% in 2006, and 6.0% was 3.9% for June 2007. 5.0% In contrast, California’s unemployment rate was 4.0% • 3.0% 5.2% for June 2007. 2.0% • The County’s two largest employers are United 1.0% 0.0% Airlines with 9,600 employees and Genentech 2001 2004 2007 Inc. with 7,845 employees. Income Per Capita Personal Income • The per capita personal income increased 4.4% to $60,000 $59,213 in 2005 (latest data available). $58,000 Residential Real Estate $56,000 $54,000 • Home sales in the San Francisco Bay Area con- $52,000 tinue to decline at the fastest pace in 12 years, pri- $50,000 marily due to a tightening of the mortgage market $48,000 and increasing inventory. 2001 2004 2007 In the first six months of 2007, the median price of • Median Home Price a single-family home in the County was $930,000, (Dollars in Thousands) $1,000 compared to $594,280 for California and $223,800 $900 for the U.S. Commercial Real Estate $800 $700 • The vacancy rate for office space continues its downward trend. At the end of FY 2006-07, it $600 $500 was 11.1%, the lowest in six years. This decline 2001 2004 2007 is caused by the expansion of technology and bio- Sales and Use Tax technology industries. Taxable Transactions • With the diminishing supply of higher quality (Dollars in Millions) $1,100 available space, average asking rental rates have $1,000 jumped to $3.60 per square feet from $2.75 last year, representing a 31% increase since 2006. $900 Tourism and Technology $800 $700 2001 2004 2007 • The County has a diversified economic base, but 2001 2004 2007 its major industries are in the tourism and technol- ogy sectors. SFO Passengers San Francisco International Airport (SFO) is lo- (In Millions) • 45 cated within the County’s boundaries. Jet Blue started services at SFO in May 2007. Southwest 40 Airlines and Virgin America started services in 35 August 2007. These new carriers are expected to 30 bring in more tax revenues to the County. 25 2001 2004 2007 4 ...Drives County Revenues The momentum of the economy fuels the County’s signifi- Total Revenues & Expenses cant revenue sources, which are comprised primarly of pay- (In Millions) $1,400 ments from state and federal governments, taxes and charges $1,200 $1,000 for services. $800 $600 $400 Total Revenues $200 $- Revenues for the County increased by 4.8% to $1,156 2001 2004 2007 • Revenues Expenses million. Intergovernmental• (Federal and State) Revenues Federal & State Revenues (In Millions) $600 • As an arm of state government, these multiple program $500 resources represent 45% of County funding and are tied $400 to various mandated services such as social services, pub- $300 $200 lic assistance and mental health. $100 • Total intergovernmental resources increased 9% to $529 $- 2001 2004 2007 million. Charges for Services • Charges for services include candidates filing fees, re- Charges for Services (In Millions) turned check charges, tax administration fees, private $300 $250 defender fees, geotechnical fees, agricultural inspection $200 fees, fingerprinting fees and lab fees. $150 • Charges for services revenues decreased 4.7% to $240 $100 $50 million. $- Property Tax Revenue 2001 2004 2007 • Property tax revenue is the most important tax source for the County.