Calaveras County may end this year with a $2 million deficit and its general fund budget is shrinking next year, yet it appears jobs may remain safe.
The mixed outlook comes as county administrators began Tuesday what is likely to be several days of preliminary budget hearings with a broad overview of the county's financial picture.
Calaveras County will close the books at the end of this month on a $38.4 million general fund budget. The fund includes most spending that comes at the discretion of the county's Board of Supervisors while the full $119.6 million budget is made up largely of state and federally funded mandates and spending.
The good news is as of May 31, spending is at just $30.6 million, well short of what was budgeted last fall.
However, revenues came in even lower at $28.6 million.
To close the gap, the Administrative Office recommendation to supervisors is to reduce general fund contributions to several funds in next year's budget.
That will reduce the contingency fund for unanticipated expenditures by $515,429 in next year's budget, the reserve fund that supports the county's credit rating by $250,000, the county's contribution to the Public Employees' Retirement System fund by $500,000, and $367,750 to a liability self-insurance fund.
About $300,000 remaining is to be saved through cutting miscellaneous supplies.
That puts the contingency fund at 2.3 percent of the annual budget, below the board's long-held goal of 3 to 4 percent, but reserves will remain at historically typical levels and sufficient to maintain credit ratings that are often a consideration in grant applications, according to Auditor-Controller Rebecca Callen.
In a May 8 study session, top county staff pointed to a hiring spree of sorts, adding 21.2 full-time equivalent staffers based on one-time funding sources like state and federal grants, for driving up costs and as a result department heads were asked to prepare budgets with a 5 percent cut in addition to previously ordered status quo budgets.
County Administrative Officer Lori Norton, who came on board May 20, midstream in the budget preparations, said the recommendation is to stick with the status quo for now. Norton said vacant positions should not be filled, however, until after the final budget is adopted in September.
"I'm hoping that what we have today is a base from which we can start building," Norton said. "But I don't think we're quite at the building phase yet."
Economic clues are a mixed bag, with the unemployment rate down but the workforce shrunken as well, due to benefits running out for the long-term unemployed.
"Reduced unemployment is not necessarily from people finding new jobs," County Administrative Assistant Zachariah Collom noted.
Countywide property values that have fallen each year since their peak at $7 billion in 2008 now stand at about $5.5 billion. Assessor Leslie Davis said the fall may have finally leveled out, causing her to project an even valuation compared to last year, whereas she previously estimated a 4 percent drop.
Possible stumbling blocks remain that could trip the county up. For example, a new jail is slated to be finished and staffed this fall.
"I think we have a great sense of what that is going to cost but until it's up and running, that's just an unknown," Norton said.
The county was scheduled to begin hearing departmental presentations at 9 a.m. today in the Sequoia conference room of the Calaveras Works and Human Services Agency building, 509 E. St. Charles St., San Andreas.
The presentations will continue from 9 a.m. to 5 p.m. each day this week or until they are completed.