The Placer County Board of Supervisors will hold a final series of budget workshops Thursday and Friday in preparation for a adopting a final 2011-12 budget next month.
Both workshops will be take place at 9 a.m. in the Board of Supervisors Chambers at the County Administrative Center, 175 Fulweiler Ave. in Auburn.
During the workshops, the county budget team will give board members an overview of the remaining fiscal issues facing the county, departments will make presentations on their operations and the board will provide direction on key policy issues so staff can proceed with drafting a final budget.
Placer County develops its budget in two phases each fiscal year.
On June 7, the board adopted a $720 million proposed budget so the county had a spending plan in place when the 2011-12 fiscal year began July 1. The proposed budget is down 4.9 percent from the county’s final 2010-11 budget because of revenue losses caused by the economic slowdown and state budget crisis.
At this week’s workshops, board members will receive revenue and expenditure projections that have been updated to include year-end figures from the county’s 2010-11 budget, new estimates of income expected from property taxes and other sources, and the latest information on state and federal budget impacts.
The two-phase approach allows Placer County to wait until September to adopt a final budget that includes the updated revenue and expenditure estimates.
The board’s 2011-12 budget discussions began in February. Board members have set aside time at its regular Aug. 23 meeting to consider any budget issues that remain after this week’s workshops.
At a regularly scheduled meeting on Aug. 9, board members got a clearer picture of the budget challenges created by a state-mandated realignment program that will shift responsibility for many adult parolees and criminal offenders from the state to counties beginning this fall.
Principal Management Analyst Bekki Riggan told board members the best-case scenario is that Placer County’s new costs will exceed anticipated state revenue by $1.7 million in both of the first two years. The worst-case scenario: the funding gap could be as high as $47.1 million if the influx of criminal offenders cannot be handled at the county jail in Auburn, potentially requiring the county to move as quickly as possible to open the new jail being built at the Bill Santucci Justice Center in Roseville.
First-year costs for the Roseville jail are projected to be $42 million: $14 million in one-time start-up costs and $28 million in annual operating expenses.
Placer County expects to receive about $3.5 million from the state for the realignment program during the 2011-12 fiscal year, including about $3.1 million for operating costs and $360,000 in one-time funds for training and planning.
Staff told board members that Placer County should be able to avoid the worst-case scenario during the 2011-12 fiscal year by bringing the Auburn jail to capacity.
A state-mandated group called the Community Corrections Partnership Advisory Committee and its Executive Committee are drafting Placer County’s plan for implementing the realignment program.
The chair of both committees is county Chief Probation Officer Marshall C. Hopper. The Advisory Committee includes representatives from several county departments: Probation, the District Attorney’s Office, Public Defender, Sheriff’s Office, Health and Human Services and County Executive Office. It also has representatives from the Placer County Superior Court, Placer County Office of Education, local police agencies, community-based organizations and crime victims.
The committees are scheduled to bring an implementation plan to the Board of Supervisors for approval next January.
The state, on the other hand, intends to begin shifting parolees and offenders it considers low-level and nonviolent to counties in October. State officials estimate Placer County will be responsible for an additional 429 offenders and adult parolees on a typical day when the realignment program is fully operational in four years.
At the Aug. 9 meeting, board members also learned that Placer County may face $1 million in additional costs next January if state revenue falls below projections in the budget signed by Gov. Jerry Brown June 30.
The state’s 2011-12 budget contains two tiers of cuts that will automatically go into effect next Jan. 1 if state revenue falls below specified trigger points.
“Although some revenues, particularly sales taxes, have begun to show some signs of recovery, the statewide economy remains volatile,” explained the county management team in a report to the board. “At this time, the most likely scenario is that the tier-one cuts will go into effect Jan. 1, 2012, shifting an estimated $1 million in costs to the county.”
Options discussed earlier this year for helping deal with state budget impacts include drawing down General Fund reserves, reducing funding for capital projects and using trust and reserve funds that are within the board’s purview.
As a result of the board’s early and continued efforts to control costs and focus on core services, the county remains on strong financial footing. Actions approved by the board over the last few years in response to the state budget crisis and economic slowdown include putting a hiring freeze in place; having employees pay larger shares of their pension and health insurance costs; creating a two-tier retirement system that will scale back benefits to new employees, but help ensure that benefit costs are sustainable in the future; and redirecting some funding to preserve the county’s core operations.
At the Aug. 9 meeting, the board also:
Voted to temporarily suspend a revenue-sharing program that distributes $100,000 each year to help community-based nonprofit organizations, and
Reviewed a report that compares how much Placer County employees receive in compensation with the earnings of their counterparts in other local governments and the private sector.
Supervisor Jack Duran proposed suspending the revenue-sharing program.
“I think the whole program itself has very noble roots,” he told his board colleagues, saying he believes the program should be halted temporarily because of the many budget challenges facing the county.
The suspension will remain in effect until the board has a chance to discuss the future of the program and alternative approaches for distributing the funds.
Key points from the compensation report include:
Placer County’s ratio of employees to county population is smaller than the ratios for most comparable counties;
The salaries and benefits received by Placer County employees generally are in line with compensation earned by employees at comparable counties; and
Comparisons with private-sector companies are challenging for several reasons, including the difficulty finding matching job categories in organizations comparable to Placer County and the reluctance of companies to provide compensation data for use in a report to be discussed in public.
In a survey of seven comparable counties in Northern California, Placer County’s ratio of 6.35 employees per 1,000 residents was the second smallest behind only Solano County. Staff emphasized that counties in California generally provide similar services, indicating that Placer County’s low ratio is a sign that its operations are lean and efficient.
Placer County also has received some good budget news in recent weeks.
Earlier this year, the board directed staff to rein in 2010-11 spending where possible, hoping to save money that could be carried over to the new fiscal year. Doing so continues the board’s successful strategy to meet resident service demands while also responding to outside impacts driven by the state. The county budget team reported at the Aug. 9 meeting the effort was successful, saying it expects the year-end fund balance to be larger than originally anticipated. The fund balance will be available to help offset state budget impacts, as well as provide additional flexibility to the board as it prioritizes resources to keep the county fiscally sound.
Placer County also learned recently that property tax rolls are down less than anticipated, meaning that property tax revenue will be approximately $1.8 million higher than projected in the proposed budget adopted in June.