County budget approved

By From page A1 | June 28, 2017

The El Dorado County Board of Supervisors approved a $536 million budget at the June 20 meeting, allowing the county to continue funding its operations between the start of the new fiscal year, July 1, and when the board approves the final budget in September.

The new budget is $12.8 million less than the 2016-17 budget even though the county added $3.7 million more from General Fund sources, $2.75 million more in projected property taxes and $228,000 more in sales and use taxes.

Salaries and benefits make up 39 percent of total expenses; services, supplies and other charges are another 31 percent; transfers between funds is 19 percent; and fixed assets, contingencies and reserves/designations make up the balance.

Divided into functional areas, general government/non-department appropriations will be $102 million, a decrease of $5.2 million. Law and justice get $147 million, an increase of $739,375. Land use and development services get $103 million, an increase of $3.4 million. Health and Human Services appropriations will be $155 million, a decrease of $842,904. A contingency fund is almost $20 million, an increase of $2.35 million. Reserves and designations are set at almost $9 million, a decrease of $13.2 million.

The new budget includes funding for 1,857.92 full-time positions, a decrease of 40.3 positions due to staffing reductions and/or not filling vacant positions. The county is already planning to layoff a few people at the end of the month.

At the same time, it was announced that the county has hired a new Human Resources director with county Chief Administrative Officer Don Ashton assigned to negotiate the director’s salary and benefits.

The budget also includes funding for road repairs. The SB1 funds are expected to be allocated by the state halfway through the fiscal year. The amount the county will receive is not certain at this point, but transportation staff estimates it at around $2 million. Projects include work on El Dorado Hills Boulevard, several roads in South Lake Tahoe, South Shingle Road, Grizzly Park Road and others although not all the projects are expected to be completed in the next fiscal year.

Local funding for road maintenance will be increased by $3 million in FY 2017-18 due to additional local discretionary funding. Projects include Marshall Road, El Dorado Business Park, roads in the Camino Hills subdivision and culvert repairs in Placerville, Rescue and Mosquito.

The county is also putting some big money into replacing its aging buildings and has set aside funding for the initial stages of the new sheriff’s facility and matching funds for the West Slope Juvenile Hall. Other facility projects include the El Dorado Center in South Lake Tahoe and the district attorney’s offices.

Ashton noted budget policies set previously by the board guided his funding priorities, including the pursuit of operational efficiencies, “right-sizing” budgets and setting setting certain targets for contingency and reserve funds.

Other priorities guiding funding decisions included additional road maintenance funding; spending $804,500 on IT deferred infrastructure and maintenance; reimbursing the public safety facility payment reserve as funds were withdrawn to cover the county’s contribution to the new sheriff’s facility as required by the USDA for approval of a loan; funding a business park financing plan study; purchasing a new property tax management system; increasing the salaries of public safety officers; making capital outlays to meet ADA required improvements; providing $125,000 as a county match to address tree mortality; and funding more staff in the Human Resources.

Tough decisions in the future

At the same time, Ashton warned that the county will face some significant challenges in the future that are tied to its demographics, the local economy and changes being made by the state.

As background, Ashton noted that in 2017 the population of the county is 185,000 people. Some 51 percent are 45 years of age or older and 83 percent live in the unincorporated areas. Taxes collected per person come to $643, which is lower than surrounding counties. Tax leakage is a major problem as the tax drain affects the ability of the county to deliver services. As such, residents should be encouraged to shop locally, he said.

Looking ahead, county staff noted they did not recommend any additional reserves be set aside for CalPERS, the state-run retirement system that county employees are enrolled in. In the future the county will need to address this as significant cost increases are expected soon.

According to a staff report, due to lower than expected investment returns and other changes being made to the retirement fund, El Dorado County may be required to increase its contributions to CalPERS by $4.4 million in 2018 with similar increases expected in 2019 and 2020. This is on top of the almost $26 million the county contributed in 2015-16 and the expected contribution this fiscal year of almost $28 million, a $2 million increase in one year.

Another cost increase to the county is the elimination of the Coordinated Care Initiative by the state. County staff estimate the shift will increase costs by approximately $1.6 million in the new fiscal year, which is on top of program growth-related cost increases.

At the same time, multi-year budget projections show revenues only increasing nominally or flat in the next five years while expenditures grow.

In 2018-19 the shortfall is expected to be $5.6 million; in 2019-20 it’s estimated at $9.18 million; in 2020-21 at $10.4 million; and in 2021-22 at $11.6 million.

With a lot of numbers to digest, Chair Shiva Frentzen announced she couldn’t support the budget as the five-year projections showed a shortfall in revenue, with CalPERS contributing significantly to it.

Some of those in the audience also questioned several expenses.

Sue Taylor asked why the board gave a $110,000 increase over two years to one contractor while Lori Parlin questioned spending $150,000 on a public information officer.

A representative of the employees union also noted the budget didn’t account for any increases in salaries or benefits. The county is currently negotiating nine contracts with different employees’ groups.

When it came to a vote, all the board members approved the recommendations attached to the budget but only three voted to approve the budget with District 2’s Frentzen and District 1 Supervisor John Hidahl voting no.

The final budget will be back in September for approval once any state or federal actions affecting the budget are known.

Dawn Hodson


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