More county employee layoffs and service level changes will occur in order to balance the 2012-13 fiscal year budget, which starts on July 1, said Larry Parrish, interim Riverside County executive officer.
Nearly five months before the fiscal year begins, Parrish and Ed Corser, county finance officer, told the board to expect an $80 million deficit. Both said plans are being developed to eliminate the projected loss, but the consequences will affect employees and residents.
“What we do now can mitigate some of the impacts that would be particularly negative,” Parrish said at the Tuesday, Feb. 7, Board of Supervisors meeting.
The plans include reducing public safety budgets three percent. Managers for nonpublic safety agencies have been instructed to plan for reductions approaching 28 percent, Corser said. Consequently, he is estimating about 180 employees will lose their jobs.
“There is no list of public safety layoffs,” he stressed to the board. “We won’t start the budget process with pink slips and station closings.”
County Assessor Larry Ward told the board that he expects property assessments to continue to decline next year. Despite the beginnings of sales tax growth, an indication that consumers are spending, Ward advised the board that outside estimates of a similar property tax reversal were unlikely.
During the current fiscal year, Ward’s staff has had to reduce the assessment of many large commercial properties. Since these changes will not be apparent until next year, and commercial tax collections are about 25 percent of the total, Ward is pessimistic about anticipating any property tax increase in 2012-13. If his prediction comes true, county revenues could fall $10 million more, he said.
Another warning came from 3rd District Supervisor Jeff Stone regarding the current assumptions about county jails and the probation department. He argued that the county is more likely to underestimate the impact of state decisions, primarily the realignment of inmates between state prisons and county jails, than see state funding arrive to offset the increased costs.
“The big elephant sitting in the room and we’re not recognizing is the higher cost of realignment,” was Stone’s description of the issue. “For nine months, we may already be looking at a $40 million shortfall,” he said.
Current county jail bed spaces are fully occupied, Corser said. A new jail or expanding current facilities will be needed, but that could take four years to accomplish.
This and other possible state actions could increase the projected deficit. After four years of trying to protect staffing levels at the expense of the county’s reserve funds, Stone strongly urged his colleagues to avoid using reserves another year.
Several years ago, county reserves approached $300 million; they are now currently about $140 million. Stone pointed out that this level of reserves is equivalent to four county payrolls and the county’s credit rating has been cut in recent years.
“I believe we need to right-size the organization commensurate with our revenue stream,” he concluded. “This is going to be an illustrious year, where we can no longer depend on our reserves to keep as many people as we would like employed in Riverside County.”
Although Riverside County has not announced any agreement with the Service Employees International Union Local 721, the union says it has reached a tenative settlement with the county.
“The … Bargaining Team is pleased to announce they have reached a tentative settlement agreement with Riverside County which accomplished all of the goals set forth by the members at the start of these contract negotiations,” according to SEIU’s website.
“Namely, to restore step/merit increases, obtain Cost of Living Adjustments (COLA), and increase FLEX medical benefits to offset the rising cost of health care.”