Pedro warns of difficult times ahead

By Union Democrat staff April 20, 2009 12:08 pm

Not willing to incur their superiors’ displeasure, many employees charged with getting the facts tend to sugarcoat them. Either that or project any expected troubles so far into the future that no immediate concern is warranted.

Tuolumne County Administrator Craig Pedro, we taxpayers should be happy to know, is not one those employees.

Instead of glossing over or minimizing financial problems facing the county over the months and years to come, Pedro earlier this week presented his bosses on the Board of Supervisors with an an unvarnished, bitter dose of economic reality. It included a hiring freeze, deficits, plunging revenues, curtailed service, furloughs, layoffs and no immediate improvements to the dire situation.

Pedro’s no-punches-pulled projection came in what looks like another dry government report entited “Strategies for Development of the Fiscal Year 2009-10 budget.” It’s a document nobody will go to sleep reading, although it could later bring on nightmares.

“Not since the Great Depression has our world, country, state and county been faced with the magnitude of financial challenges now confronting us,” it begins. 

Then, after ticking off a numbing list of economic setbacks that have hit over the past 12 months, Pedro gets down to the county’s brass tacks. They are sharp and painful.

What will emerge, he warned, will be a “new normal” of services provided by the county. Far fewer services, of course, would be provided under that “new normal.”

Under Pedro’s guidance, county supervisors budgeted judiciously last year and staved off disaster. Doing so won’t be as easy this year.

The CAO warns that local tax revenue and state income will drop, while state program shifts will boost county expenses. He projects a $5.2 million general fund deficit. This could climb to $6.8 million — nearly 11 percent of the entire fund — if revenues are used to eliminate forecast fire and health fund shortfalls.

His proposed plan to deal with the crisis includes: an immediate hiring freeze pending development of a budget plan, curtailed expenses in all departments, deeper cuts in departments like planning and building where business is down, transfer of some county services (like home health and hospice) to the private sector, reducing labor costs via agreements with unions and other labor groups and parallel concessions by management employees (Pedro himself will work some 25 days without pay and forgo leave over the next 15 months, saving the county some $33,000).

Layoffs and program cuts would be the next steps, with “important” services on the chopping block before those deemed “essential” or “mandated.” The “new normal” would thus emerge.

Pedro also urges multi-year budgeting that anticipates cuts two or three years down the line, continued emphasis on economic development, exploration of cutting the mounting costs of employee benefits (which for safety employees can reach 70 cents for every dollar of pay) and an increase in the hotel-motel tax, so visitors can share in the costs of service.

The picture is not pretty and Pedro, citing studies, predicts that sustained economic recovery could be four years out. So he’s properly planned for the worst.

The news our CAO brought the board this week isn’t good. But supervisors and taxpayers as well should appreciate Pedro’s honesty, his comprehensive presentation of the crisis and his thorough research of options available.

No one enjoys navigating today’s treacherous economic seas, but having a steady hand at the helm counts for a lot.