While the state has reduced the major threat to the Riverside County fiscal year 2017-18 budget, the 6.5-percent cuts across all departments were essentially unchanged when the Board of Supervisors approved a preliminary budget last week.
“By holding the 6.5-percent cuts across the departments, our goal is to bring the budget into structural balance,” new Chief Executive Officer George Johnson told the board. He added, “We need to maintain fiscal discipline and need to get the reserve back to acceptable levels in order to weather the next downturn.”
He did recommend restoring the cuts for the District Attorney’s and Public Defender’s offices, and restoring $10 million to the Sheriff’s Department budget, but this is about 60 percent of the 6.5-percent reduction.
Overall, the general fund budget totals about $3.2 billion; however, more than three-quarters of these funds are from state and federal sources. The board’s discretionary share of the budget amounts to about $750 million, which requires reserves for balancing. These are the funds the CEO must balance or provide, and departmental agencies scramble for more money.
Of the total budget, public assistance is about 30 percent and public protection another 27 percent. Of the discretionary funds, public protection consumes about three-quarters.
In January, as preparation of the new budget began, counties were confronting a shift of the responsibilities for in-home support services from the state. Initially, Riverside County estimated that this programmatic change would cost nearly $40 million.
However, the governor revised the plan and provided counties with funding over the next few years as they assume this responsibility. For Riverside County, the cost for next year will be about $4 million.
Despite alleviating the need for another $30 million, the county’s current and future financial demands are growing. Public safety agencies felt the 6.5-percent cuts were too great. In 2018, the county will open and need to staff the new John J. Benoit Detention Center in Indio. This requirement will approach $10 million, according to Johnson.
While the county has reserves, board policy is to maintain a minimum of $150 million for future exigencies and the goal is to have 25-percent annual revenues available. The current budget maintains the $150-million level and the does not project any growth in reserves for several fiscal years.
Since the Great Recession, the county’s ability to create and budget its costs below revenues has been a problem. In 2006-07, revenues were nearly $800 million. That level has plummeted to nearly $600 million in 2011-12 and has been recovering since. For next year, the county estimates revenues will be about $750 million.
Even as most departments were given limited, if any, increases, the demands from the public-safety areas continued to grow as the county population grows.
Consequently, the county sought help from KPMG, an international consulting firm. KPMG has been reviewing the entire budget, from internal programs, such as purchasing and human resources, to the most public, such as the Sheriff’s Department.
The intention is to find savings that improve customer services, reduce costs and continue into the future. KPMG will report on specific recommendations later this summer. Meanwhile, it is conducting pilot tests in cooperation with various agencies throughout the county. (See the accompanying story.)
During last week’s budget workshop, Johnson did recommend restoring about $22.74 million to the budget. About two-thirds were for the Sheriff, the District Attorney and Public Defender. The deficit would then be about $26 million.
But all three departments argued that they needed more funding to provide the service county residents expect for public protection.
On Tuesday, June 20, the supervisors adopted the preliminary budget, including the proposed additions. They will consider other changes, such as the Sheriff’s budget, at the July 25 meeting and approve a final 2017-18 budget in September.
