The Placer County Board of Supervisors laid the final groundwork Tuesday for adoption of a $765.8 million final budget for the 2011-12 fiscal year on Sept. 27.
Tuesday’s budget discussion was an opportunity for board members to get an update on the proposed final budget and to approve a series of revisions to a proposed budget adopted by the board on June 7. The revisions will be incorporated into a final budget resolution that the board will be asked to adopt at the Sept. 27 meeting.
The proposed final budget is 1.1 percent lower than the final budget for the 2010-11 fiscal year after figures are adjusted for a technical accounting change and 13.4 percent lower than the county’s peak-year budget in 2008-09.
At Tuesday’s meeting, no one spoke during a public hearing on the proposed final 2011-12 budget.
“The county remains financially strong relative to the economic downturn,” county Finance and Budget Operations Manager Graham Knaus told the board during an update on the proposed final budget, giving board members credit for keeping the county on a solid fiscal footing. “Your board has addressed a number of challenges over the last several years.”
Cost-cutting actions approved by the board over the last few years in response to the state budget crisis and economic slowdown include:
A hiring freeze that has been in place since 2007, which has reduced the workforce by 398 positions through attrition;
A move to have employees pay larger shares of their pension and health insurance costs; and
Creation of a two-tier retirement system that will scale back benefits to new employees, but help ensure that benefit costs are sustainable in the future.
Supervisor Kirk Uhler stressed that the board has been successful in reducing spending to keep it in balance with expenses.
“The board has taken steps, as illustrated in the staff report, to implement real reductions in spending - not what we hear out of Washington, which are reductions in anticipated growth of spending - but what are actual year-over-year reductions in spending,” he said, emphasizing that the board actions have set the county up for long-term viability. “That is real and it is meaningful.”
Knaus noted that the board has held 16 discussions on the 2011-12 budget since January.
Key budget policy decisions were made at earlier meetings, including budget workshops held Aug. 18-19.
During the workshops, board members bolstered county budget reserves and contingency funds by more than $5.5 million, gaining more flexibility in dealing with state budget impacts and potential revenue fluctuations during the 2011-12 fiscal year.
Last month’s move to strengthen the county’s budget reserves and contingency funds was in keeping with the board’s long-standing approach of preserving the county’s core services and fiscal stability while setting aside money for costs that arise after the fiscal year begins. The board’s approach is a key reason Placer County is better shape financially than most counties and cities in California.
Some of the more of than $5.5 million set aside during the workshops may be needed to help deal with impacts from the state budget signed by Gov. Jerry Brown June 30, including $1 million in extra costs Placer County will face if state revenue falls below projections.
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. Placer County estimates its costs will increase as much as $1 million if the tier-one cuts go into effect.
During the workshops, board members learned the county ended the 2010-11 fiscal year with a fund balance of $32 million, $5 million more than the county conservatively assumed in the interim spending plan adopted in June. The larger-than-anticipated fund balance was carried over to the new fiscal year that began July 1 and was a critical factor behind the board’s ability to set aside more money in reserve funds.
Placer County develops its budget in two phases each fiscal year.
In June, 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 two-phase approach allows Placer County to wait until September to adopt a final budget that includes updated revenue and expenditure estimates.