Contra Costa Herald

News Of By and For The People of Contra Costa County, California

Contra Costa Supervisors approve $4.06 billion 2021-22 budget thanks to federal funds

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Source: CCC Administrator

Balance budget based on keeping 879 positions unfilled

By Daniel Borsuk

The Contra Costa County Board of Supervisors voted 5-0 on Tuesday to approve a $4.06 billion 2021-22 budget that increases staffing especially for public health, the sheriff-coroner and district attorney. It’s an increase of $80 million from the 2020-21 fiscal year budget of $3.98 billion.

During the 2021-22 fiscal year, county officials expect to spend $1.78 billion in local general funds and yet to be determined amount of Measure X sales tax funds that voters approved last November.

Supervisors learned President Biden’s American Rescue Plan will bring to Contra Costa County’s coffers $233 million over the next 24 months of which the first $116.5 million installment will be delivered later this month.

In addition, County Administrator Monica Nino said by keeping 879 positions unfilled the action will save the county $115 million and allows the county to achieve a balanced budget.  Nino cut one position from her staff, a person who was assigned to census outreach and activities, a position that is no longer needed since the census has been completed.

Among other staffing reductions or additions, three vacant positions in the Assessor’s Office will be eliminated, but the District Attorney’s Office will pick up one new position, a District Attorney Senior Inspector for Real Estate Fraud and Prosecution.

Twenty-five unfilled Employment and Human Services positions will be eliminated in Child Welfare and Community Services, but the Sheriff-Coroner can hire 10 deputies to be assigned to acute psychiatric and mental health in detention services.

Next fiscal year, 39 new mental health workers will be hired in Health Service’s to beef up the Mental Health Community Support Unit to enhance conservatorship and guardianship issues.

Source: CCC Administrator

Public Comments, Complaints

Supervisors once again got an earful of complaints from citizens that supervisors still plan to fund Sheriff-Coroner David Livingston’s request to hire 10 deputies to be assigned to mental wards at the Martinez jail and Richmond detention center.

Speakers, including the mother of Miles Hall, who was killed by a police officer in Walnut Creek, requested supervisors not approve Sheriff-Coroner Livingston’s staffing request but to consider donating the funds to the non-profit Miles Hall Foundation.

Dan Geiger of the Budget Coalition objected to the request from the Sheriff-Coroner to hire 10 deputies because Sheriff-Coroner Livingston will have hired 24 new deputies over a two-year span.  “If the Sheriff needs 10 more sheriff deputies, he needs to find the money elsewhere in the budget,” Geiger said.

District 1 Supervisor John Gioia of Richmond responded to the sheriff-coroner’s critics by saying the county is bond by the Prison Law Office settlement to spend $250 million over 5 years to improve jail conditions for prisoners requiring mental health services.

“The reason why 10 deputies are being hired is due to the settlement to improve jail conditions and to comply with the Prison Law Office settlement,” Gioia said.

During the upcoming 2021-2022 fiscal year, Supervisor Gioia requested county officials provide reports on the potential closures of the Marsh Creek Detention Facility that houses 28 inmates and is staffed with 15 sworn and five non-sworn Sheriff’s Office employees, and on the future of juvenile hall.

Countywide Curb Ramp Project Contract Awarded to Second Lowest Bidder

Instead of approving the lowest bid, supervisors approved the second lowest bid of $1,172,074 from Sposeto Engineering Inc. when the lowest bidder, Burch Engineering & Construction, Inc. had given timely written notice to the county of a “mistake made in the filing of Burch’s bid and that it be relieved of the bid.”

Supervisors unanimously approved the Sposeto Engineering bid for the countywide curb ramp project. Burch Engineering & Construction Inc. had submitted a bid of $875,954 for the curb ramp project before alerting the county about an error in its bid.

Three other bids that were submitted for the project were Kerox Engineering Inc., $1,390,408; J.J.R. Construction Inc., $1,398,702; and FBD Vanguard Construction, Inc., $1,406,522.

Pay Respects to County Counsel Anderson and former Public Works Director Shiu

Supervisors paused to pay respects to two county employees, county counsel Sharon Anderson, who passed away on April 28 and former county Public Works Department Director Maurice Shiu, 74, who passed away recently from Stage IV Pancreatic Cancer.

Shiu, who was born in Guangzhog, China on Dec. 6, 1946, but moved with his parents to Hong Kong where upon graduation from high school  moved to the United States to attend the University of California at Berkeley where he received Bachelor’s of Science and Masters of Science degrees in Civil Engineering. He met his wife Esther at UC Berkley.

During his distinguished career at Public Works, Shiu’s major accomplishments included the Willow Pass Grade Project and the State Route 4 Bypass Project. He was president of the Contra Costa County Engineers Association.

Shiu retired in 2008.  He is survived by his wife Ester, two children – Perkin and Vanessa and his four grandchildren – Jaden, Justin, Noelle and Gabriella.

“It’s a loss to our county and our department,” said current Public Works Department Director Brian Balbas. “Maurice was very tactful and active in transportation.  He was very good at preparing me for the challenges that I face as Public Works Director.”

“He worked on the Highway 4 widening,” said District 5 Supervisor Federal Glover. “He was so brilliant on that project.  He was very helpful with me and he had a great sense of humor.”

For the past 37 years Sharon Anderson, a resident of Benicia and a graduate from the University of the Pacific’s McGeorge School of Law, has been known as a dedicated and hardworking lawyer for the county. She died on April 30. The cause of death was not released.

“She was such a wonderful person,” said District 4 Supervisor Karen Mitchoff.

Upon recognizing Anderson’s leadership and mentoring skills District 5 Supervisor Glover said the county is in great shape legally and with its successor, most likely Assistant County Counsel Mary Ann Mason.

“Sharon was so well-grounded. What I loved about Sharon was that she did not take herself so seriously,” said District 2 Supervisor Candace Andersen of Danville.  “I am grateful we have Mary Ann Mason.”

 

DeSaulnier to host Congressional Grants Workshop Friday, May 14

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Join me as I host a Congressional Grants Workshop on Friday, May 14th from 12:30 p.m to 2:30 p.m. I have invited federal representatives from the below agencies to attend and share their expertise:

  • Department of Justice
  • Department of Defense
  • Department of Housing and Urban Development
  • National Endowment for the Humanities
  • National Endowment for the Arts
  • Small Business Administration
  • U.S. Department of Labor
  • U.S. Department of Veterans Affairs
  • Institute of Museum and Library Services

Don’t miss this opportunity to find out what grants may be available to you from these federal agencies. I want to offer constituents who represent nonprofits, small businesses, and local community organizations a window into the content and availability of federal grants. Participants will have the opportunity to ask questions concerning grants and find out what services and funding resources may be available to them.

To RSVP, email Grants Coordinator Taylor Kimber at taylor.kimber@mail.house.gov or call (510) 620-1000.

 

Contra Costa Supervisors presented $4.06 billion 2021-2022 budget

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Source: CCC Administrator

Speakers want Sheriff’s requested $7.5 million for inmate mental health services to go to Walnut Creek’s Miles Hall Foundation

By Daniel Borsuk

The Contra Costa County Board of Supervisors will probably act on a proposed $4.06 billion 2021-2022 budget at a May 4 meeting and will listen to another barrage of critics of Sheriff-Coroner David O. Livingston’s proposal that a portion of $54 million in federal Coronavirus Aid, Relief and Economic Security Act (CARES) funds be diverted to an outside nonprofit mental health organization.

Contra Costa County’s proposed 2021-2022 budget surpasses the current fiscal year budget of $3.98 billion and includes $7.5 million designated for the staffing of additional sheriff deputies assigned to protect inmates requiring mental health services.

A contingent of speakers opposing Sheriff-Coroner Livingston’s request for the additional funds for inmate mental health services, argued instead for all or a portion of the $7.5 million be awarded to the Walnut Creek-based Miles Hall Foundation.  The newly established Miles Hall Foundation is named after the Las Lomas High School graduate who was slain by a Walnut Creek police officer in June 2019 while Hall was undergoing a mental health episode.

Lois Thomas of Lafayette was one of the speakers supporting the detouring some or all the $54.2 million in federal Coronavirus Aid, Relief and Economic Security Act (CARES Act) funding designated to the Sheriff-Coroner to the non-profit Miles Hall Foundation. “Keep deputies out of mental health, “Thomas demanded.

Sheriff Livingston said the additional funding to hire 10 new deputy sheriffs arises at a time the county has a new contract with the Prison Law Office to provide improved acute mental health care while behind bars.

Even though the jails have an average daily population of 785 inmates, Sheriff Livingston said, “We have had a 43 percent decrease of inmates in our jail (about 14,000 inmates) due to COVID-19.”

County Administrator Nino prepared a chart that showed the Coroner-Sheriff’s Office, and the Contra Costa County Health Services are in line to receive over half of the county-produced general-purpose funds with health services picking up 30.5 percent of the general-purpose revenue at $162.5 million while the Coroner-Sheriff collects 19.8 percent, or $104.7 million.

Source: CCC Administrator

Supervisors were told funds from the November voter approved Measure X sales tax increase will not begin to arrive until next fall. The county has yet to hire tax auditors.  “Measure X funding is not anticipated to be received until October 2021 for the first quarter of collections starting April 2021,” Nino wrote in her budget statement.  “The amount of Measure X included in the recommended budget totals $600,000 for the new Department of Racial Equity and Social Justice and $65,000 for the sales tax auditors.”

Expenses the county will need to round up funding for the upcoming 2021-2022 fiscal year is $600,000 for the operation of the Office of Racial Equity and Social Justice, $300,000 for redistricting and $15.3 million for a new finance computer system.

With ongoing efforts to vaccinate every age-eligible county resident with the COVID-19 vaccine, Contra Costa County Health Department Director Anna Roth said one of the biggest hurdles next fiscal year will be the county’s negotiations with the California Nurses Association.  The CNA represents 812 county nurses, and the contract is set to expire on Sept. 30.

The health services are the county’s most expensive department to operate with general purpose funds at $162.5 million or 30.5 percent of overall general fund disbursements.

As for the five elected board of supervisors, the proposed budget designates $7.7 million or 1.4 percent of overall general-purpose funds to cover the salaries and expenses of themselves and support staff.

Board vice chair Federal Glover of Pittsburg said during the budget presentations one item that was missing was further analysis on the potential reuse of the Marsh Creek Detention Facility and “more discussion on the future of the Orin Allen Rehabilitation Center near Discovery Bay and juvenile hall in Martinez.”

Glover’s supervisorial colleagues and County Administrator Nino acknowledged the supervisor’s request that there will be discussion about the fate of the detention facility and juvenile hall.

 

Keller Canyon Mitigation Fund 2021-22 grant cycle opens

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Amounts from $500 to $10,000 available in Bay Point, Pittsburg and Antioch

The Office of Supervisor Federal Glover is pleased to announce that the 2021–22 grant cycle for the Keller Canyon Mitigation Fund is now open. Grant applications ranging from $500 to $10,000 will be accepted via the online application portal beginning April 29, 2021 at 8:00 AM. Applications for services must fall within one of the broad categories previously approved by the Contra Costa County Board of Supervisors:

  • Code Enforcement
  • Community Beautification
  • Community Services
  • Public Safety (Including Public Health)
  • Youth Services

Additionally, services funded by the Keller Canyon Mitigation Fund must be offered in the mitigation area, which includes the unincorporated community of Bay Point, the City of Pittsburg, and the City of Antioch. The target area is divided into a primary area (Bay Point and Pittsburg from its western border to Harbor Street) and a secondary area (Pittsburg from Harbor Street east to the entire City of Antioch). Services may also be provided to organizations outside the mitigation area only when the beneficiaries reside within the mitigation area.

In order to apply for Keller Canyon Mitigation grant funds, organizations must be designated either a 501(c)(3) or 501(c)(6) corporation under the Internal Revenue Code.

MANDATORY BIDDER’S CONFERENCE—THURSDAY, APRIL 29, 2021

To be eligible to apply for Keller Canyon Mitigation funds, nonprofit organizations must have at least one representative attend and remain for its duration a mandatory virtual bidder’s conference on Thursday, April 29 at 9:00 AM. The bidder’s conference is expected to last for approximately 90–120 minutes and will include detailed presentations on the grant process as well as allow for questions and answers. So we may keep a record of attendees, registration for the bidder’s conference is required.

CLICK HERE TO REGISTER FOR THE MANDATORY BIDDER’S CONFERENCE

Should you have any questions, please call the District 5 office at 925-608-4200 or send an email to district5@bos.cccounty.us.

 

Contra Costa Probation Department eliminates collect calling for detained youth

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The Contra Costa County Probation Department has permanently eliminated collect calling for youth detained at the Glenn A. Davis Juvenile Hall in Martinez, and Orin Allen Youth Rehabilitation Facility in Byron. Rather than continuing the practice of charging recipients when a youth makes a call, the Department will now absorb those costs.

“Our primary goals are harm reduction and removing barriers to success for our clients and their loved ones,” said Chief Probation Officer Esa Ehmen-Krause. “Eliminating this additional financial burden and creating a pathway for increased communication with loved ones is the right thing to do.”

The Contra Costa County Board of Supervisors has consistently demonstrated support for justice-involved youth and families. A moratorium was issued in 2016 on the assessment and collection of juvenile probation fees. In 2017, the Board took further action to permanently repeal these fees, and discharge any outstanding fees owed. These forward-thinking actions were ahead of Senate Bill 190, which required counties to eliminate juvenile fines and fees in 2018. This legislation did not include collect calling.

“In these challenging times, it’s more important than ever that everyone stays connected to their families, especially youth, and I applaud the Probation Department for making it easier on families as we pursue the ultimate goal of reunification and living a healthy life,” said Diane Burgis, Chair of the Board of Supervisors.

Additionally, in response to the public health shelter in place order, the Department began utilizing video visitation in 2020, which has created the ability to offer more frequent contact between youth and their family members. The Department plans to continue this service, also provided at no cost, even after on-site visitation resumes. Video visitation affords family members who may have transportation challenges or mobility concerns with another resource to maintain contact with their loved ones.

Over $75 million in COVID-19 rent relief for Contra Costa County

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Tenants and Landlords – application period opened yesterday

(Martinez, CA) – Starting March 15, 2021, Contra Costa County tenants and landlords impacted by COVID-19 can apply for assistance from the COVID-19 Rent Relief program. Over $75 million is Contra Costa County’s allocation of federal Emergency Rental Assistance Program funds from the Consolidated Appropriations Act of 2021, which allocated $2.6 billion to Californians in need of rental relief.

“This funding for COVID-19 relief cannot come any sooner to help provide the hardest hit individuals and families in Contra Costa with financial assistance with rent and utilities payments and help them gain back financial and housing stability,” said Board Chair, Supervisor Diane Burgis. “My colleagues on the Board and I remain committed to helping residents get back on their feet, especially now that we have safe, effective vaccines that will help end this pandemic.”

The program assists income-qualified renters impacted by COVID-19 who need help to pay for rent or utilities. Eligible household income may not exceed 80% of the local median income. Eligible renters whose landlords do not participate in the program can still receive 25% of unpaid rent accrued between April 1, 2020, and March 31, 2021. Eligible renters can also receive future rent assistance equal to 25% of their monthly rent. The program also provides up to 80% rent reimbursement to landlords for unpaid rent accrued between April 1, 2020, and March 31, 2021.

“I am appreciative of the partnership with local governments like Contra Costa for their vote of confidence in our rent relief program,” said Business, Consumer Services and Housing Agency Secretary Lourdes Castro Ramirez. “We have been closely working together to ensure we provide rent relief and support to those communities hardest hit by the pandemic.”

Check eligibility and apply online for COVID-19 Rent Relief and in Spanish Ayuda con la Renta. Tenants and landlords can contact the CA COVID-19 Rent Relief Call Center at 1-833-430-2122 for assistance to apply. To learn more and find state resources, visit Housingiskey.com.

For information on Contra Costa County’s Ordinance on Eviction Protection and Rent Freeze, see FAQs on the County website. For additional resources, call 211 or 800-833-2900, text HOPE to 20121, or visit www.contracosta.ca.gov.

 

Contra Costa Community College District bond sale, refinance saves property tax payers $1.7 million

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By Timothy Leong, Public Information Officer, 4CD

On November 10, 2020, the Contra Costa Community College District (District) sold $110 million of new Measure E bonds and refinanced $35 million of previously sold general obligation bonds originally issued in 2014 following approval of voters by 57.58%.  Due in part to favorable Moody’s and S&P ratings, the refinancing collectively saves Contra Costa County property owners over $1.7 million through 2040, and savings will be passed on in the form of lower property taxes. Voters will see this change reflected in their 2020-21 property tax bills, with annual total savings for our taxpayers of over $150,000.

The new Brentwood Center and new Kinesiology and Student Union Complex at the LMC-Pittsburg campus were the first major District projects completed using Measure E funds. The $110 million sale of new Measure E bonds will help continue the transformation of additional facilities at District sites. These projects include the new Science Center and renovation of the PE/Kinesiology Complex at Contra Costa College, the Arts Complex and PE/Kinesiology Complex at Diablo Valley College (DVC)-Pleasant Hill Campus, and the new Library and Learning Center at the DVC-San Ramon Campus.

“This is the fourth time the District has refinanced previously sold bonds to reduce debt service for our taxpayers,” said Chancellor Bryan Reece. “We will continue to focus on our fiduciary responsibility of managing public funds and want to thank Contra Costa County voters for allowing us to make these critical investments in the community.”

The sales and refinancing transactions were handled by Morgan Stanley.  KNN Public Finance was the District’s financial advisor, and Orrick Herrington & Sutcliffe performed as bond counsel.

The Contra Costa Community College District (District) is one of the largest multi-college community college districts in California. The District serves a population of 1,019,640 people, and its boundaries encompass all but 48 of the 734-square-mile land area of Contra Costa County. The District is home to Contra Costa College in San Pablo, Diablo Valley College in Pleasant Hill, Los Medanos College in Pittsburg, as well as educational centers in Brentwood and San Ramon.  The District headquarters is located in downtown Martinez.

 

Contra Costa County issues $97.42 million in tax-exempt bonds to fund new county facilities

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For redevelopment of former administration building site, build fire stations and fund new airport terminal

Savings of $7.3 million also generated from refunding existing bonds

By Susan Shiu, Director, Office of Communications and Media, Contra Costa County

Thursday morning, Feb. 25, 2021, Contra Costa County sold $97,420,000 of lease revenue bonds with Barclay’s Capital Inc. serving as underwriter. Proceeds from the bond sale will fund infrastructure projects including redevelopment of the former County Administration Center complex in Martinez, a portion of a new Aircraft Terminal at the Buchanan Field Airport in Concord and construction of two fire stations in Pacheco and Bay Point.

In addition, the County refunded $48.4 million of outstanding bonds resulting in significant savings to the County.

The bonds funding the new construction projects have a true interest cost of 2.27% with a term of 20 years. The refunding bonds have a true interest cost of 1.80% and shortens the term of the previous bonds by two years, from 19 years to 17 years. The refunding bonds resulted in a net present value savings to the County of $7.3 million.

“The results from today’s bond sale are proof of the County’s reputation of strong financial management within the municipal market,” said Chair of the Board of Supervisors Diane Burgis. “This allows the County to secure financing for important public infrastructure projects at very attractive rates to better serve our residents.”

According to the California State Treasurer, lease revenue bonds (LRBs) are a type of revenue bond. Lease revenue bonds usually finance the construction of facilities, including government office buildings, correction facilities, courthouses, and fire facilities. However, unlike revenue bonds that use money generated by the project (a bridge toll) to repay investors, lease revenue bonds have a lessee (government agency) that pays rent to use the facility. The rent payments are used to pay back investors who purchased the bonds used to finance the construction of the facility. LRBs are secured by lease payments made by the party leasing the facility (school or office building) that was funded by the bond issue.

“Historically low interest rates and the County’s strong credit profile have allowed us to advance critical projects and refund existing debt for cost savings,” stated County Administrator Monica Nino.

Contra Costa County has been rated “AAA” by Standard and Poor’s since 2012 and, most recently, was upgraded by Moody’s Investor Service to “Aa1” from “Aa2” on February 16, 2021. Both credit rating agencies have attributed their high ratings for Contra Costa County to strong financial management, with policies and practices well-embedded in County operations. They have also pointed to a strong local economy with a large, diverse tax base.

Lift Up Richmond coalition strongly opposes Mayor Butt’s budget proposal

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Saying “Richmond’s residents deserve better”, community and labor groups united in the Lift Up Richmond coalition reject Mayor Tom Butt’s consultant’s budget proposal as vague, misguided, anti-democratic, and bad for Richmond’s residents

Richmond, California – Consultant group Management Partners is scheduled to present a set of so-called budget guidelines at Richmond’s City Council meeting on Tuesday, February 23: the Lift Up Richmond coalition of community and labor groups is demanding these guidelines be scrapped and calling on the Mayor to start the process of creating a fiscal policy from scratch, this time, beginning with input from the community, including City Council, labor unions, small businesses, and community organizations.

The proposal prioritizes cutting City spending and building up reserve fund balances, a year into a global health and economic crisis that has killed millions and put countless people out of work. Developed without collaboration with Richmond’s City Council, small businesses, community members, and labor organizations, the policies are vague, leaving terms like “significant” completely undefined, and where the policies are clear, they are poor, such as giving the City Manager blanket authority to make cuts, and leaving City Council powerless to invest in much-needed services for Richmond residents.

According to Ballotpedia, Richmond voters overwhelmingly approved Measure U in November, “authorizing a business tax of 0.06% to 5% of gross receipts, with higher rates being assigned to marijuana businesses, firearm businesses and big businesses, generating an estimated $9.5 million per year for city services including emergency response, street repair, homeless services and youth services.”

“Budgets are not just numbers in a spreadsheet,” said Gregory Everetts, a Parks and Landscape Division worker with the City of Richmond and president of the Richmond chapter of SEIU Local 1021, “Budgets show what our values really are. The City of Richmond needs a fiscal policy, but the residents of Richmond need that policy to reflect their needs, not just the administration’s desire to fatten up the reserve fund while the people of Richmond are suffering. Richmond’s residents deserve better than this.”

The undersigned individuals and organizations call on City Council to reject this proposal and begin crafting a common-sense fiscal policy that puts services for residents first, over building up reserve funds, and is built collaboratively, inclusively, and transparently, with input from the community members with a stake in Richmond’s budget and the values it puts into action.

The Lift Up Richmond coalition is made up of Richmond community and labor groups, including ACCE Action, APEN, IFPTE Local 21, the Richmond Progressive Alliance, RYSE, and SEIU Local 1021.

Allen Payton contributed to this report.

Moody’s upgrades Contra Costa County’s Issue Rating to Aa1 reducing cost for floating bonds

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Also upgrades LRBs’ to Aa2 and POBs to Aa3; assigned Aa2 to 2021 LRBs; outlook is stable

By Susan Shiu, Contra Costa County Office of Communications & Media

On Tuesday, February 16, 2021, Moody’s Investors Service upgraded the Issuer Rating, an indicator of general creditworthiness, of Contra Costa County from “Aa2” to “Aa1”. In its press release, Moody’s cites the County’s “…strong and sustained financial position supported by robust reserves and liquidity.” On Moody’s credit scale, “Aa1” is just one notch below the coveted “Aaa” credit rating.

The rating upgrade is especially complementary of the County’s efforts since Moody’s has placed the U.S. Local Government sector, as a whole, on negative outlook due to the coronavirus pandemic. The upgrade comes in advance of the County’s planned issuance of lease revenue bonds for the construction of an aviation terminal, fire stations, and a new office complex. In addition, the County will be refunding existing bonds for an estimated net present value savings of $7.8 million, or 16.2%.

Board of Supervisors Chair Diane Burgis (District 3) commented that “The upgrade from Moody’s is a testament to the strong financial management practices that have become a tradition in Contra Costa County.”

County Administrator Monica Nino stated that “Contra Costa County has been a leader throughout the State in prudent financial and budget management, and we plan to continue that into the future.”

Complete Press Release

New York, February 16, 2021 — Moody’s Investors Service has upgraded Contra Costa County’s (CA) issuer rating to Aa1 from Aa2, lease revenue bond rating to Aa2 from Aa3 and pension obligation bond rating to Aa3 from A1. The amount of debt affected is $232.4 million and $85.7 million, respectively. We also assigned a Aa2 rating to the Contra Costa County Public Financing Authority’s $62.4 million Lease Revenue Bonds (Capital Projects and Refunding) 2021 Series A (Capital Projects) and $37.2 million 2021 Series B (Refunding). The outlook is stable.

RATINGS RATIONALE

The upgrade to Aa1 incorporates the county’s strong and sustained financial position supported by robust reserves and liquidity. The Aa1 rating incorporates the county’s large and diverse tax base poised for ongoing solid growth, residents’ favorable income levels and moderate long-term liabilities. The rating also factors the recent increased general fund subsidy for the county’s hospital enterprise because of higher operating costs unrelated to the pandemic. The subsidy will remain manageable when compared to the county’s operating revenue. In addition, the county will benefit from a recently approved sales tax measure that expires in March 2041. These funds can be used to support general operations, providing additional financial flexibility. The county’s strong governance, as demonstrated by management’s prudent fiscal practices and adopted policies, is also factored into the rating.

The Aa2 ratings on the county’s lease revenue bonds are one notch lower than the county’s Aa1 issuer rating, reflecting both the absence of California GO (General Obligation) bond security features, which provide uplift to the GO rating, and the weaker legal structure of standard abatement leases, despite the “more essential” nature of the pledged asset, which is the Contra Costa Regional Medical Center.

The legal provisions for the Lease Revenue Bonds, 2021 Series A and 2021 Series B include that the city will provide rental interruption insurance for 24 months, title insurance, and will not require a debt service reserve fund, which is a negative credit factor. This negative credit factor is mitigated by the county having earthquake insurance that covers the pledged asset, a protective feature that is rare for California abatement leases. The county is not legally obligated to have earthquake insurance, however management expects to renew its policy when it expires next month.

The Aa3 rating on the county’s pension obligations bonds is two notches lower than the county’s issuer rating, reflecting the lack of strong legal features of California GO Bonds. The notching also reflects the relatively poor performance of POBs in Chapter 9 bankruptcies compared to other types of municipal obligations. The POBs are unsecured debt paid by general operating revenues.

RATING OUTLOOK

The stable outlook reflects our expectation that the county will maintain a strong financial position supported by management’s prudent fiscal practices. In addition, we expect that the county will continue to navigate through the economic, operational and financial challenges caused by the coronavirus without materially impacting its long-term credit quality.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS

– Improved income and wealth levels

– Material reduction in long-term liabilities and fixed costs

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

– Sizeable reduction in reserves and liquidity

– Material increase in long-term liabilities and fixed costs

LEGAL SECURITY

The issuer rating is equivalent to what would be the county’s general obligation bond rating. In California, GO bonds are secured by the levy of ad valorem taxes, unlimited as to rate or amount, upon all taxable property within the county.

The lease revenue bonds are secured by lease payments made by the county for use and occupancy of various leased assets which we view “more essential”. Lease rental payments are payable from any source of legally available funds of the county.

The county’s obligation to make all POB payments of interest and principal are imposed by law and are absolute and unconditional. The POBs are payable from any source of legally available funds of the county, including the county’s general fund.

USE OF PROCEEDS 2021

Series A bonds will finance improvements at the county’s Buchanan Field Airport, the construction of two fire stations and a new county office building. 2021 Series B will refund outstanding lease revenue bonds for savings and there is no extension in maturity.

PROFILE

Contra Costa County is located in the eastern portion of the San Francisco Bay Area, just east of Berkeley and Oakland in northern California. The county seat of Martinez is approximately 24 miles northeast of downtown San Francisco. The county has a population of 1.1 million and the largest industry sectors that drive the local economy are health services, retail trade, and professional/scientific/technical services.

METHODOLOGY

The principal methodology used in the issuer rating was US Local Government General Obligation Debt published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx? docid=PBM_1260094. The principal methodology used in the lease and pension obligation bond ratings was Lease, Appropriation, Moral Obligation and Comparable Debt of US State and Local Governments published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx? docid=PBM_1260202. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx? docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.