MERCED — The Merced County Board of Supervisors on Tuesday unanimously adopted the county's $462 million proposed 2013-14 budget one that reflected steady growth and recovery, but still posed a challenging deficit.
Though the proposed budget projected a $2 million increase in local revenues, County Executive Officer Jim Brown said the county's expenses still exceed its revenues. There's a $5 million shortfall, Brown said.
"We're not out of the woods yet," Brown said. "There's still many challenges ahead," including health care reform funding.
Despite those challenges, Chairwoman and District 4 Supervisor Deidre Kelsey said the additional income made this budget one of the most promising she's seen in a while.
"I felt that the budget proposed was more encouraging than the ones I've seen in recent years," Kelsey said. "There's a few promising things on the radar screen property values have increased and we've received additional dollars to pay for certain mandated programs."
Brown said the $5 million gap can be closed by using one-time funding or implementing further reductions. District 2 Supervisor Hub Walsh said $5 million is too much to make up in 12 months.
"In regards to the $5 million shortfall, I've heard comments that maybe we can grow our way out of $5 million, I guess that would be my hope also," Walsh said. "However, part of my realism says that's a big number to grow out of in a one-year period. So it seems like it's maybe a combination of endeavors maybe find adjustments as well as possible growth."
Kelsey said the county has enough reserves to make up the $5 million deficit it's money they put away during the good years for a rainy day. The general fund has a subtotal of $18.5 million in reserves, according to county documents.
"We just need to decide whether we will allocate that or not," she said.
The budget is comprised of $352 million in general funds, which is up $12 million from last year. The county's overall budget is up $30 million.
Brown said that growth can be linked to several factors the Atwater-Merced expressway project, a correctional budget increase, and higher contributions to employee retirement plans.
The Human Services Agency's new regional call center, which Brown called "a major effort," added $5.6 million in funding and 42 new county positions.
Those factors were not a part of last year's budget.
The public safety budget, which covers corrections and probation, projected a $2.7 million increase. One of the contributing factors was the board-approved video system for the Public Defender's office.
Brown said the final budget, due for adoption in August, could include several changes because of uncertainties such as health care reform and the costs of Assembly Bill 109, the state's prison realignment law.
The state slightly increased its basic allocation for the AB 109 program, from about $842.9 million in 2012-13 to $998.9 million.
For Merced County, that means a jump in funding from $5.2 million to $6.1 million.
District 1 Supervisor John Pedrozo asked if the county will continue employee furloughs, which are set to expire at the end of the calendar year.
"Are we going to go back out and get input from the different departments and our employees on the furloughs and looking into continuing furloughs?" Pedrozo said.
Brown said it's unclear if furloughs will continue as current labor agreements run through June 2014. However, he said many employees voiced their support of ongoing furloughs, and he is willing to have that conversation.
The proposed budget is a "temporary operating plan" and doesn't include all departments, Brown said, and the final budget may include further reductions.
The final budget is set for adoption Aug. 27. The new fiscal year starts July 1.
Reporter Ramona Giwargis can be reached at (209) 385-2477 or firstname.lastname@example.org.