Tuolumne County officials will embark on the tough process of restructuring the government from the ground up while faced with a projected deficit of $3.7 million in the operating budget for the next fiscal year.
County Administrator Tracie Riggs told the Board of Supervisors at a public meeting on Tuesday to brace for some “uncomfortable” decisions between now and September, when the final budget is approved, which is expected to result in reductions to services, programs, and staffing.
“I’m not saying it’s going to be easy,” she said. “It’s going to be a lot of work, and it’s going to be painful when we get to the end.”
Riggs said the process will begin at a zero-based budget and build from there, starting first with only what the county is constitutionally and legally required to provide.
For example, Riggs said the county is required by law to operate a jail — but doesn’t necessarily have to provide law enforcement patrol units.
“Can anyone imagine what it would be like if you were to call 911 and there’s no one to respond? That’s a perfect example of what’s mandated and what’s not,” she said.
The county is taking steps to avoid any immediate layoffs or major cuts that include a countywide hiring freeze that went into effect Monday.
Riggs said people who are in the middle of being hired can continue through the process, but she has recommended telling them what the county is going through.
“I can’t promise anyone anything until we go through this,” she said.
Other measures the county is taking to balance the initial budget that must be passed before July 1 include eliminating all contingencies that are set aside for emergency needs, not adding any money to reserves, reducing overtime and part-time salaries, and constraining spending at all levels.
Riggs said much of the problem lies in the fact that the county’s revenues are not keeping up with increasing costs of doing business, largely driven by changes at the federal and state levels.
Local revenues collected by the county from property, sales, and transient occupancy taxes have risen about 42 percent since 2014, from $20.2 million to $28.9 million, which Riggs said signals that the economy hasn’t been as stagnant or bad as some may believe.
The county’s costs for employee salaries and benefits are projected to go up by $2.5 million in the next fiscal year due to compensation increases, many of which are mandated by contract.
County positions have five “steps” that represent a 5-percent salary increase each time an employee moves up one.
There also an anticipated increase of $1.2 million that the county must pay into the California Public Employees’ Retirement System, or CalPERS, due to changes at the state level that require counties to pay more up front.
The county also must cover a $1.6 million annual payment for a $21 million bond in 2018 that’s helping pay for the construction of a $40-million-plus new jail, technology upgrades, and some costs from the construction of the Mother Lode Regional Juvenile Detention Facility.
Riggs said the county’s only options for creating new revenue would be driven by voters, meaning tax increases or creating new ones.
Increasing the sales-tax rate by a half-cent would provide an estimated $2 million a year, while increasing the transient occupancy tax would provide $700,000 a year.
Other options include creating a tourism tax or a fire parcel tax dedicated to fire services, though estimates on how much revenue those would generate were not available.
Supervisors approved moving forward with the plan to start restructuring, some of whom said it was long overdue.
“I absolutely believe this is the right way to go and wish we had done it a few years ago,” said Supervisor Karl Rodefer, who has been in office since January 2013.
Supervisors elected last year who joined the board this January also said they believed the restructuring is needed.
Supervisor Ryan Campbell said he believes the plan will allow them to focus on what services the community needs as opposed to what departments can be cut back each year, while Supervisor Anaiah Kirk said he would never support a tax increase unless he knew the government had done its due diligence to balance itself as much as possible.
Auditor-Controller Debi Bautista, who has argued in favor of a major overhaul at budget hearings for the past several years, said they should restructure it in a way that’s sustainable.
Bautista said the county has spent more than its collected in revenue for the past five or six years, including $1.5 million more in the current fiscal year that ends on June 30, while carryover money from the previous fiscal years has dwindled from about $4 million on average to $1 million now due to departments tightening their budgets in recent years .
“That’s why we need to change things,” she said. “I wish to heck we would have done it three years ago.”
At the meeting on Tuesday, the board also tabled a scheduled discussion about increasing District Attorney Laura Krieg’s salary from about $161,000 to $178,000.
Part of the reason for the increase is due to the board approving a salary for the new public defender that’s about $5,000 more than Krieg’s.
Krieg declined to comment on tabling the discussion.
Scott Gross, a Sonora attorney and husband of County Counsel Sarah Carrillo, was selected by the board at a special meeting on Friday to serve as the next public defender.
Contact Alex MacLean at email@example.com or (209) 588-4530.