Riverside County Executive Officer Jay Orr began his mid-year review report to the Board of Supervisors describing the optimism in Gov. Jerry Brown’s recent 2014-15 budget submission, but didn’t portray the same enthusiasm for the county’s next budget.
The county’s fiscal situation, while better than the past five years, only improves at a snail’s pace. Even though broader economic indicators, such as the county unemployment rate, slowly improve, Orr said, “Factoring out on-time receipts from solar projects and other anomalies, next year’s projected sales and use tax revenue is also flat. Consequently, my office has tempered our revenue projections for the next four years.”
Orr projected the value of assessed properties, the basis for the property tax revenue, will increase less than half a percent from this year. Halfway through the fiscal year, recording of documents is 13 percent less than a year; but new building permits have grown 20 percent.
Besides the tepid revenue growth, Riverside County still faces three expanding drains on current and future revenue. The deficit for the county’s Regional Medical Center in Moreno Valley continues to grow — from $50 million in October to the current estimate of $55 million in January.
In early November, the Board of Supervisors approved an agreement with Huron Consulting Services to advise the hospital management on potential savings and efficiencies. In its first report, Huron said it had identified several changes that would save millions. A workshop for the board was scheduled for this past Tuesday, Feb. 25 to discuss possible actions to place a tourniquet on the bleeding facility, which will eventually lead to its full recovery.
“From a bean counter’s point of view, I don’t feel good until I have a plan for when the funds will arrive,” Chief Financial Officer Ed Corser told the board. “What happens after breaking even with Obamacare? We have to build a competent structure to compete as an ongoing concern.”
Orr stressed that the consultant would offer recommendations on changing and improving the center’s payer mix. “It’s one of the worse payer mixes,” he charged.
Even without the medical center issue, Orr said, “We could have a very substantial obligation — $50 million or more. If we weren’t doing this, the problem is not going away.”
A commitment to fund public safety programs is another demand on the county’s limited resources. Bringing the ratio of sheriff’s deputies to 1.2 deputies per 1,000 residents in the unincorporated areas of the county, such as the Hill, will eventually cost another $21 million for 148 new staff.
Besides future staffing, the Sheriff’s Department is projecting a $35 million deficit this fiscal year, a $4 million improvement from October. But Corser reminded the board that it is not a surprise and will ultimately depend upon the ability to hire more deputies. The Executive’s Office is prepared to fix the budget later in the fiscal year when the size of the deficit is more certain.
Building new jail capacity and then staffing it is already on horizon. Corser assured the board that the public-safety sales tax revenue, authorized by Proposition 172, is being reserved for the costs ($50 million) associated with opening and staffing the East County Detention Center in Indio, which is expected to be completed in 2016.
The new facility, for which the county received a $100-million state grant to partially pay for its construction, will increase the number of beds from 353 to 1,626.
With a county staff level of nearly 20,000 employees, the projected salary increase for 2014-15 is estimated to exceed $77 million. Already Orr and Corser have told department heads, with the exception of the sheriff and fire, to plan to absorb these increases next fiscal year.
“But it’s difficult to rebuild programs when they have to absorb salary increases,” Corser acknowledged.
“It’s important for me what that means and how it impacts residents in the unincorporated areas,” Supervisor Kevin Jeffries (1st District) responded.
