Merced County faces a $2.3 million deficit in its proposed budget for 2014-15, a shortfall far less than the $9.3 million county administrators estimated back in March.
“Through reviewing and working with departments, we were able to save about $4 million,” said County Executive Officer Jim Brown. “And our estimate for the year-end carryover is $3 million more than what we thought in March.”
The proposed budget, which will be presented at a meeting Tuesday, shows the county is still struggling to keep up with increased expenses and reduced revenue in some departments. The total budget is $467.8 million, down about a million from last year.
The county’s local revenues, which include property and sales taxes, are projected to be $70.1 million, about $3 million greater than last fiscal year. The county’s cash carryover from the previous year – also known as fund balance – is projected to be $23 million, higher than the estimated $20 million in March.
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The total of those two amounts is the county’s total resources: $93.1 million.
Expenses rise as some revenue falls
However, net county costs are projected to be $95.4 million, outpacing revenue and leaving a $2.3 million deficit. The county’s costs, especially employee salary and benefit accounts, have increased by $7.9 million.
The county saw a $3.7 million increase in personnel expenses through expiring employee furloughs, and its contribution rate to employee retirement plans, health insurance and workers’ compensation.
The proposed budget reflects a $2.7 million decrease in revenue from several departments, including probation, the District Attorney’s Office, Sheriff’s Department, and library.
There are no recommended employee layoffs in the proposed budget. The budget’s staffing overview shows 13 additional positions are recommended.
The county is in labor negotiations with 11 out of 12 employee unions. Depending on whether concessions or raises are approved, the outcome could affect the final budget, Brown said.
The county’s unemployment rate of 14.3 percent is a slight improvement over last year’s 15.7 percent, but Brown warned of the long-term effects related to the drought, especially through layoffs of farmworkers.
“This is a temporary operating plan to allow the county to operate until we know more about the state budget and what our year-end fund balance is,” Brown said. “There could be further recommendations at final budget if the state budget is unfavorable to us, or our year-end fund balance doesn’t come in where we hope it does.”
The state’s prison realignment law and the resulting influx of inmates continues to pose money problems for the county. Through Senate Bill 1022, the county plans to apply for funding to remodel the correctional facility at Sandy Mush Road.
County leaders are also “exploring options” for reorganizing animal control and the Revenue & Reimbursement division, according to the proposed budget documents. Animal control lost its manager earlier this year to retirement, and Revenue & Reimbursement stands to lose one of its largest accounts, court-ordered debt collections, by July 2015.
The proposed budget will be presented at 1:30 p.m. Tuesday inside the Board of Supervisors chamber at the county administration building, 2222 M St. in Merced.
A final budget is expected to be adopted at the Aug. 26 board meeting.