While Riverside County officials are prepared to adjust the budget for fiscal year 2015-16, which ends June 30, the concerns for the next fiscal year and the following years may affect county services for a while. By the beginning of the third decade of the 21st century, expectations are more optimistic.
According to County Executive Officer Jay Orr, eight departments are still “projecting year-end deficits relative to their board-approved net cost allocations.” Consequently, he recommended that the Board of Supervisors use $13.8 million from its contingency to fund these programs.
Orr has told all departments that, beginning July 1, the start of fiscal year 2016-17, spending levels will not increase from the current year’s final results. Nevertheless, 15 county departments have requested about $135 million of additional funding.
“My staff has been working with those departments … and I can report that we have made progress in reducing that number to a more manageable amount,” Orr told the board in his May 16 Third Quarter Budget Report.
Looking ahead, Orr said, “Structural balance can only be achieved by containing public-safety spending at currently recommended levels, and maintaining General Fund reserves above $100 million, well below the minimum board-policy target of $187 million. Growth in estimated discretionary revenues is not projected to be sufficient to cover escalating costs for several years.
Supervisors Marion Ashely (4th District) and Kevin Jeffries (2nd District) are very reluctant to reduce the reserves to this level.
“I’m not prepared now to go down under $180 million,” Ashely said. In support, Jeffries advocated re-assessing next year’s budget in order to maintain the reserve level. “If you pull out $80 million [from] reserves, you have a bad budget problem going forward,” he warned.
“Cuts to non-public safety expenditures are not proposed at this time, since even severe cuts to those mission-critical functions could not yield enough savings to close the gap, and would severely reduce core services that support quality of life across the county,” Orr added.
One exception for next year was made for the Sheriff’s Department. Consistently, its initial allocation has underestimated the full-year costs.
During the year, the Sheriff’s Department scrambles to try to reduce total spending. For example, this year the department has reduced its projected deficit to about $25 million. For next year, Orr recommends the board add this amount to the sheriff’s budget eliminating this persistent problem. Essentially, the board would fund the sheriff’s budget at the same level as the re-adjusted 2015-16 total.
Board Chair John Benoit stressed that more than 60 percent of the county’s General Fund is for public safety, “… as it should be. [But] if you’re in a place where you can make changes, that’s where you focus.”
Future county spending will continue to grow without expansion of services in order to fund labor agreements and pension obligations. One major new cost will be the implementation of an agreement settling a lawsuit to improve the health and mental health services to county inmates. This cost approaches $40 million annually, according to Orr.
Eventually, staffing for the East County Detention Center also will affect expenditures, but is being postponed until fiscal year 2018-19. Also, hiring to enhance the unincorporated patrol ration will be eliminated.
In order to control future costs, Orr has told the county’s department head “to curtail any hiring unless they have firm, ongoing departmental revenue sources adequate to cover those costs in coming fiscal years.”
While he rejected an across-the-board hiring freeze, Orr wants managers to limit hiring to positions for which the funding exists, rather than requesting it.
Also, Orr and the supervisors are confident that consulting firm KPMG will present budget recommendations that will improve future efficiencies and reduce spending.
“We’re facing a very challenging budget cycle the next couple of years,” Treasurer Paul MacDonald told the supervisors.
Third District Supervisor Chuck Washington responded, “I’m encouraged by the path going forward and eventually we’ll get where we want to be.”