Tuolumne County can expect another tough budget season this summer, but the county’s chief administrator says this should be the last of a string of county budgets that containing deep cuts before local government settles into the “new normal.”
CAO Craig Pedro gave the Board of Supervisors his annual five-year budget forecast Tuesday, which predicts long-term relief from annual drops in revenue experienced since the economic downturn in 2008 — but not before a 2013-14 budget that he suggested will likely have to include another “hard adjustment” to cover a $3 million-plus expected budget shortfall.
“I wish we were through this, but we need one more hard adjustment,” Pedro said to the board.
Pedro said next month he’ll offer some suggestions for cost cutting. The board typically tackles formal budget proposals in the early summer.
Pedro said options could include cutting labor costs through collective bargaining concessions, or cuts to county programs or positions.
He said he’s optimistic this will be the last of the most difficult budget seasons, which have forced county leaders to deeply cut pay, staffing and services over the last half-decade.
“It’s getting really, really hard to make any further reductions in this organization without any major impacts,” he said.
Pedro gave a number of reasons for this coming year’s expected budget crunch. Most of the county staff’s multi-year concessions, including furloughs and pay cuts, are set to expire, and the county is expected to see increases in rates for pension and current labor costs.
The loss of one-time funding sources used to cover ongoing expenses and shortfalls in the road and fire funds are also factors, according to the budget forecast.
Board Chairman Randy Hanvelt said he considers even those numbers presented Tuesday to be “optimistic” for what could happen in the coming months.
“I see more downside, if you will, than upside,” Hanvelt said.
But with the tough short-term projection, Pedro also offered what could be seen as hope for the following years. Projections are showing that county property taxes likely will begin growing again at 1.5 percent next year, 2.5 percent the following year and 3 percent after that.
Pedro also said other local taxes like sales and occupancy taxes are also expected to grow in the coming years.
The total shortfall is expected to shrink over the next five years by almost $800,000 in the General Fund, which covers most county departments, Pedro said. And within the same time frame, he said the projections show the county revenues will grow faster than expenses.
With that could come stability, and a “new normal” for county operations long term, Pedro said.
“That’s a tipping point in these numbers,” he said. “We still have to solve the problem.”
In other action, supervisors:
• Agreed on a five-year contract with Ricoh USA for copying, printing, faxing and scanning services. The county will pay $17,464 a month to lease the machines and services for all county business operations.
• Agreed to sell the former Mother Lode Medical Center to the Mi-Wuk Indian Health Center for $900,000. The final selling price is lower than the original asking price for the building of $1.15 million, which reflects changes in the local real estate market over the past year. The 1.28-acre property is located at 22044 Cedar Road in Sonora.
• Approved a five-year agreement with Sycamore Concessions to handle food and beverage services at Standard Park. Under the contract, Sycamore will pay the county $5,000 a year, plus an annual sliding scale percentage of sales.
• Heard an update on the county’s AB 109 programs, which have been working to supervise and place convicts formerly under the supervision on the state prison system before the state law turned the responsibility over to local agencies.
• Voted to send a letter to state legislators asking for a change in the law that would allow the county to sell excess power from New Melones Dam directly to businesses for economic development.