County remains confident on budget despite challenges
EL CENTRO — County departments are being asked to do more with less as a result of budgetary concerns anticipated for coming fiscal years, but officials don’t expect a need to take any drastic measures.
County officials have known challengers were ahead after nearly exhausting all of the county’s revenue stabilization funds to make up an $8 million deficit.
In a document used by the General Services Administration to help county departments prepare budget requests for 2018-2019, it’s made clear the county is in a tough spot financially.
“Our expenditures have outpaced our revenue and we have dug deep into our one-time money reserves. We faced a similar situation in 2008 and by working together; we were able to weather the storm. The storm is here again and only this time we need to dig into the trenches even more. Our Rainy Day fund will not support another year like 2016-2017 nor 2017-2018,” the GSA document states.
One of the directives being given to country departments for the upcoming and in previous budgets is to continue to seek ways to reduce department expenditures by 15 percent annually.
The four areas the county is seeking to reduce expenses are office expenses, special department expenses, professional and specialized expenses, and travel out of the county.
The document further instructs departments that if reductions cannot be met, a detailed justification needs to be included in each department’s budget package.
Chairman of the Board of Supervisors Ray Castillo said those reductions are a good place to start in order to allow each department to determine what expenses they can eliminate without affecting the overall operation. He said he is confident no major shakeups will be needed for the upcoming year.
“I’m very confident I don’t see any risk of drastic measures that will need to be taken such as layoffs or pay reductions. I don’t see that happening,” Castillo said.
The difficult fiscal situation the county is in is due to increases in the retirement rates in addition to increases in the cost of healthcare and state minimum wage increases.
The GSA document states that in the past five budgets, there has been an increase in spending and over-reliance on revenue stabilization funds to cover the shortage.
Last year, nearly $7.5 million from those rainy day funds had to be used to balance the current budget, but that reserve fund’s balance has dwindled down to just $800,000, meaning the county will not have the ability to make up another big shortfall.
Castillo said he hopes county departments will be able to reduce some of the unnecessary spending. He added that a percentage of departments have surplus funds, and at times some of those departments feel they have to spend those monies.
Although he said he is confident about the county’s ability to find a solution, Castillo said a plan B is in the works.
Additional challenges identified by the GSA document include potential impacts of a repeal of the Affordable Care Act at the federal level, the continuing increase of the state’s minimum wage by a dollar per year until 2022 and cuts in state funding of the In-home Support Services program.
Since all of the IHSS workers get paid at minimum wage levels, the future increase in salary will continue to have an impact on the county’s finances. Though the state funds the majority of the program, for 2017-2018 the county had to fund $14 million of the total $65 million necessary for the program, with the county’s contributions projected to increase up to 19 percent in five years.
County departments have until April 6 to submit their budget requests and documentation.
The county is tentatively scheduled to discuss the 2018-2019 budget at its June 26 Board of Supervisors meeting.
Despite the current budgetary concerns, the county has also been under pressure to increase its compensation to employees. In recent months IHSS workers have spoken during various Board of Supervisors meetings requesting a 70 cent per hour increase, but due to current financial constraints, the request has not been addressed.
Also during Tuesday’s board meeting Teamsters Local 542 representative Ruth Duarte told the board her bargaining unit had tried to initiate negotiations with the county to revise salaries a year ago. She said to date she has not received any counterproposal.
“Employees are getting restless. Inflation has gone up faster than wages,” Duarte told the board. “The working environment has changed for the worse with increasing workloads and stress. They are demanded to do more with fewer tools, less training and fewer workers. Employees are retiring due to exhaustion because they don’t want to come to work anymore.”