Fresno County can reasonably assume between $150 million and $325 million in bond debt over the next 10 years, according to a report presented Tuesday to the Board of Supervisors by its independent financial adviser.
David Leifer of KNN Public Finance praised the county for "exemplary" debt management. His company was paid $35,000 for the report.
The report marked the first time the county explored its bond debt in such detail, officials said. The report will be used to plan the county's capital projects and other budget issues.
Leifer pointed to a number of "prudent" county practices, such as using a debt advisory committee, a financial adviser and a range of revenue sources to pay bond debt, among other things. They're practices that bond buyers look for when considering a government agency's bond, he said.
The practices will help the county get better bond rates despite factors out of its control, such as the recession and the state's budget problems, Leifer said.
He also praised the county for reducing its costs in response to reduced revenues.
But county Supervisor Susan Anderson said Leifer gave the county more credit than it deserved. Most of the cuts in this year's budget were made to unfilled positions that had not been funded for years, she said.
Leifer urged caution in considering the debt estimate.
The debt-capacity estimate is broad because a number of factors will change over time, Leifer said.
He suggested the county use the lower end of the estimate -- $150 million in debt over 10 years -- as it plans capital expenses in the short term, given the county's recent financial difficulties.
The county has nearly $600 million in bond debt, 85% of which goes toward its employee pension plan, according to the report. The rest pays off debt for the Juvenile Justice Campus and a cogeneration plant downtown.
Leifer's recommendations include managing growth of fixed costs, in particular pension expenses. The county's obligation to the retirement fund will increase in part because of last year's stock market losses.
He also suggested that the county establish a policy for developing a reserve fund and "do everything possible to build county reserve levels" to handle emergencies.
The county has $9 million in reserve, and $264 million in its general fund budget.
Vicki Crow, the county's auditor-controller/treasurer-tax collector, said she would like to see the county have $30 million in reserve.
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