Supervisors to wrestle with budget woes in June

RIVERSIDE – The Riverside County Board of Supervisors last week scheduled hearings in June to iron out spending priorities and decide whether some agencies should be spared cuts and receive appropriations to fill holes in their budgets.

“We have less and less flexibility as we draw down our reserves, so we must do more to make sure everyone hits their targets,” Chief Financial Officer Paul McDonnell told the supervisors.

The county’s CFO ran through the highlights of a third quarter 2016-2017 report indicating mounting challenges as the fiscal year comes to a close.

McDonnell reinforced the fretful tones of Chief Executive Officer Jay Orr, who submitted the third quarter report but was absent from the meeting due to family obligations.

“Given the competing priorities for limited resources, it will not be possible to maintain the status quo,” Orr said in a preface to the budget update. “Integrating cost-saving efficiencies is crucial to opening the capacity to meet future service demands within existing resource constraints.”

Orr said general government departments may have to manage a 6.5-percent cut in general fund allocations in order to maintain discretionary reserves at the board-mandated level of $150 million going into 2017-2018.

Too many variables threaten to overwhelm the county’s commitments, making fiscal discipline a must, according to the budget report.

“We need to do triage on this budget and remember that not every department is the same,” Supervisor Kevin Jeffries said. “I do not want to see a single front-line deputy cut from patrol. There are certain front-line services that have to be preserved. They come with a big price tag, so there’s no easy answer.”

The board set the first budget hearing for June 19 and another the day after, with additional days available if needed.

In the third quarter report, executive office staff, as has been the case since the midyear report in February, sounded the alarm about the likelihood that In-Home Supportive Services programs will be the sole obligation of counties throughout California, as the governor and Legislature seek to take ballooning IHSS expenses out of the state’s sphere of responsibility.

IHSS is a Medi-Cal program that provides direct assistance to low-income seniors and the disabled who are living independently, including meal preparation, bathing, medication dispensation and other on-site care.

If the program is shifted entirely to counties, Riverside County could be on the hook for more than $43 million in additional expenses in 2017-2018 and $165 million in higher costs by 2023, according to the executive office.

The budget report noted that sales tax revenue is going flat and “property tax revenues are still trending lower than expected,” although the assessment roll is projected to grow about 5 percent in the next fiscal year.

“It is worth remembering the county’s constrained discretionary revenues may be vulnerable to cyclic recessionary forces,” Orr said. “Due to the need to maintain a minimum level of reserves, for the foreseeable future, any expansion of discretionary spending in one area must be offset by cost saving in another.”

Multiple agencies are projecting deficits going into 2017-2018, including the Riverside County Department of Animal Services, District Attorney’s Office, Fire Department, Office of the Public Defender and Sheriff’s Department.

The numbers were fluid and too early to nail down in a few instances, though the board has already begun the process of applying corrective measures on the fire department’s ledger. Fire Chief John Hawkins announced a projected $12 million deficit in March, and several proposals were embraced that will shave the deficit by half, mainly by scaling down operations at a firehouse and dissolving a hazardous materials unit.

Labor expenses are the biggest cost drivers for almost every agency. The district attorney’s office will end the current fiscal year about $5 million over budget, while the public defender’s office will not be able to pare down the $2.4 million in red ink with which it began the current fiscal year, according to the report.

The Department of Animal Services, due primarily to decreasing contract revenue, is facing a $1 million shortfall heading into 2017-2018, while the Office of the Registrar of Voters is seeking an additional $5 million to cover an anticipated gap associated with the 2018 election cycle.

As has been the practice for the last few years, the board intends to implement a spending blueprint by June 30 and formally ratify the budget in September.

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