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Board of Supervisors Adopts Proposed 2012-13 Fiscal Year Budget

June 07, 2012

The Placer County Board of Supervisors adopted a proposed 2012-13 budget Tuesday, a move that ensures the county will have a balanced spending plan in place when the new fiscal year begins July 1.

At Tuesday’s meeting, board members also received a progress report on the county’s drive to develop a five-year budget strategy for keeping county revenue and costs in balance year by year.

Development of the five-year strategy is part of the board’s ongoing efforts to protect the county’s fiscal health and preserve core services despite revenue losses caused by the economic slowdown and state budget crisis. The strategy also will seek to ensure that board priorities are met over the next five years.

The board directed county staff to begin work on the budget strategy in March. A draft strategy will be presented to the board in the coming weeks.

County Finance and Budget Operations Manager Graham Knaus briefed board members on the work done so far on the plan.

“It sounds like it has been a very useful tool,” Supervisor Jack Duran said.

“It has been a very useful tool to see what lies ahead not one or two years out, but five years down the line,” Knaus said in response.

The plan will look at ways to:

  • Reprioritize revenues to more fully implement board priorities;
  • Pursue strategies that will allow the county to best meet resident needs with limited resources;
  • Reduce the use of one-time revenues for ongoing operations; and
  • Increase the General Fund reserve to position the county to withstand the next economic downturn.

The board has taken a series of proactive cost-cutting actions to offset revenue losses over the last few years. The cost-cutting moves include a hiring freeze and increased cost sharing with employees for health and pension benefits.

By adopting the proposed budget, board members completed the first of the county’s two-phase budget-development process. The board is scheduled to hold budget workshops Aug. 16-17, hold a public hearing on a proposed final budget Sept. 11 and adopt a final budget Sept. 25. The two-phase approach allows the county to wait until September to adopt a final budget that includes updated revenue and expenditure estimates.

During Tuesday’s meeting, board members thanked the county budget team for its work on the 2012-13 spending plan. “You do a great job of assimilating policy comments from all of us and reflecting that and communicating that in a budget that is very complicated and, during times like this, extremely challenging,” said Supervisor Robert M. Weygandt.

Board members also praised department heads for helping keep costs under control and the entire county workforce for its efforts to maintain county services despite staff reductions.

“I just want to thank our department heads and all our county staff for hanging in there during this tough time and doing the jobs that had to be done. It is greatly appreciated,” Vice Chair Jim Holmes said.

Chairwoman Jennifer Montgomery echoed her colleague’s comments, pointing to budget and staffing reductions over the last few years. “It has been a real challenge, and I’m not sure how many of the public realize how much of a challenge it has been,” she said.

In a report for Tuesday’s meeting, Interim County Executive Officer Holly Heinzen emphasized the $690.1 million proposed budget will preserve core services to the public, but notes the county continues to face budget challenges in such areas as library services, fire protection, deferred building maintenance and capital infrastructure needs.

The proposed budget is $59.2 million or 7.9 percent lower than the 2011-12 budget, largely due to a $53.9 million reduction in the county Infrastructure Budget. Infrastructure funding was higher a year ago because of two major projects: a seismic retrofit and paint job under way on the Foresthill Bridge and construction of a jail at the county’s Bill Santucci Justice Center in Roseville.

Property tax revenue, the county’s leading source of discretionary revenue, is projected to drop by 1.1 percent next fiscal year. That would result in a cumulative loss of $16.4 million, or 12.4 percent, in property tax revenue since the 2007-08 fiscal year.

Knaus told the board Tuesday that property tax revenue is expected to bottom out and begin a slow recovery over the next few years. “But we’re not quite there yet,” he said. “Talking about the economy, it remains delicate, but determined, whereby there are some positive signs that are occurring in the economy.”

Since 2007, the General Fund budget has dropped $17.8 million, or 4.8 percent, and the size of the county workforce is down 15.4 percent to approximately 2,150 filled positions as a result of the hiring freeze.

The staff report noted that revenues are on the rise in some areas. The county, for example, anticipates a $4.0 million increase in Public Safety Sales Tax revenue during 2012-13.

The proposed budget includes funding for several capital projects, including Applegate sewer improvements, Dry Creek Park and a new animal shelter in Auburn.

During Tuesday’s meeting, the board also voted unanimously to approve contracts with organizations and private providers that deliver state-mandated mental health services to approximately 600 children and adults in Placer County annually.

In a report to the board, the Health and Human Services Department noted the county provides psychiatry, counseling, crisis-intervention, social skills training and other mental health services to both adults and children in community, clinic and residential settings.

"To meet this mandate, Placer County employs a nationally recognized model that utilizes a network of private counselors, therapists and psychologists to maximize the availability of necessary specialty services while limiting the need for more costly hospitalization and residential care whenever possible," explained Director Richard S. Knecht of the Children’s System of Care in his report.

Under the umbrella contracts, the county will provide:

  • Up to $550,000 to group homes for specialized mental health services and
  • Up to $470,000 to private providers of outpatient mental health services.

Federal and state funding will cover nearly 85 percent of the costs for these mandated services. This year's agreements are less costly than prior years, due to improving prevention programs in the county and to more effective partnerships with community agencies.

At Tuesday’s meeting, the board also received an update on proposed state legislation that could impact Placer County. County staff currently is monitoring about 30 bills in consultation with Peterson Consulting, the company that serves as the county’s advocate in Sacramento.

Many of the bills being tracked by Placer County deal with the dissolution of redevelopment agencies, public safety realignment and pension reform.

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