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Supervisors Take $7.1 Million Tobacco Money

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Tuolumne County Supervisors voted this morning to accept the $7.1 million dollar tobacco litigation revenue in one sum.

Instead of receiving money annually over a 20 year period, the board, in a 3-to-2 vote, went with the guaranteed pay-off amount, hoping to use it to fund some large ticket items needed for the county.

The decision was made at the end of the second of two public hearings on the topic. Supervisors Laurie Sylwester and Mark Thorton were the two opposing votes.

“We really have one golden egg for the next 20 years that we can count on,” said Thorton. “Lets not squander this money.”

Sylwester told the other board members she was not ready to make a 21-year committment. “I have a knot in my stomach,” she said.

Supervisor Larry Rotelli made the motion to approve the plan; Supervisor Dick Pland seconded the motion.

County administrator C. Brent Wallace was pleased with the board´s decision.

“The board´s action today is really a first of its kind for this county,” Wallace said. “The board has effectively established seed money that will be available over an extended period of time.”

He said there will now be a series of recommendations that fall out of this decision, but, Wallace said, the county can now effectively begin to create its own internal fund for the purchase of big ticket items such as fire engines and a county telephone system.

“These are the kinds of things that need to be purchased to improve our service level,” the county administrator said Tuesday morning.

The approved securitization plan will now be formed into a concise resolution for the board at a May meeting.

The litigation funds Tuolumne County and other counties within the state receive are based on tobacco use, and according to Assistant County Administrator Craig Pedro, the revenue amount distributed to the counties is uncertain.

The original settlement was based on the cost of smokers on each county´s health care system.

In the past three years, Tuolumne County has directed the money received to Tuolumne General Hospital´s operations. The $7.1 million sum would not have to be solely directed to health care services,according to Tuolumne County Counsel Gregory Oliver.

Supervisor Dick Pland said in a recent tobacco settlement, an individual received $150 million dollars. Court decisions such as these could cause the current tobacco litigation revenues to be cut back or stopped.

If certain investments and repayments within county departments are achieved from the pay-off approved by the board Tuesday, the county could see that initial $7.1 million sum leveraged to more than $18 million of “effective revenue over a long period of time,” Wallace said.

Wallace added if the supervisors didn´t take this action today, the board would have been asked in the near future to borrow $2.8 million dollars to buy public works equipment, fire engines, computer equipment and hospital CT scanners.

“That would have been much more expensive over the long term and the short term than what we´ve done today,” he said.