Riverside County’s balanced budgets for 2012-13 and next fiscal year are in jeopardy, according to County Executive Jay Orr. In a mid-year budget report to the board of supervisors, Orr wrote, “Several issues burdened by multi-million deficits or unexpected costs threaten that delicate balance and make next year’s budget a challenge.”
Among those issues are a continuing operating deficit at the county’s Regional Medical Center in Moreno Valley and the Sheriff’s Department, although both organizations have reduced their estimated budget deficits since this fall. The county fire department estimates its budget overrun will still be about $5.7 million.
The medical center is projecting an $11 million shortfall, which is nearly $20 million less than its initial projection. The sheriff’s department has also reduced its initial estimate by one-third. The current $6.2 million excess is a result of increased labor costs and the board’s approval last year of hiring an additional 50 deputies.
Many of these budget problems will continue in the future, so efforts to balance the budget for 2013-14 (starting July 1, 2013) remain difficult. For example, labor costs will increase by $64 million and PERS contributions will increase one percent for all employees.
The hospital issues are complicated by the impending implementation of the federal Affordable Care Act. Orr plans to bring a special medical care consultant to “increases RRMC’s efficiency and effectiveness, develop a strategy for implementing the Affordable Care Act, and strengthen the medical center’s fiscal footing.”
In developing the 2014 budget, Orr has already instructed county department heads to plan on absorbing negotiated labor cost increases and pension obligations.
Additional funds will be needed to operate the county’s new public safety enterprise communication system and planning for a new correctional facility. Orr made it clear that “the board’s top priority for capital projects remains the 1,250-bed East County Detention Center expansion in Indio.” Later this spring, Orr and County Sheriff Stan Sniff plan to present a jail strategic plan to the board.
Beginning July 11, Orr also recommended that the County discontinue Friday office closings. He wants to improve the county’s customer service through a full five-day week. The county saved nearly $900,000 on utilities in the two years between September 2009 and August 2011 with a four-day work-week.
Riverside County’s revenue forecast is no longer catastrophic. Both sales and use tax receipts are beginning to grow. Consequently Orr is optimistic that no changes in revenue projections for this year will be needed. Property tax revenue, which has fallen drastically in the past four years, may increase two percent next year, Orr told the board.
The number of property recordings has increased about 10 percent in the second quarter and default notices declined about 40 percent from the same quarter last year. This fiscal year, building permits have also increased 19 percent compared to the first two months of fiscal 2011-12.
County department budgets are to be submitted to Orr by March 14. He will schedule budget workshops in April and submit a recommended county budget to the Supervisors on June 17.