The Merced County Board of Supervisors on Tuesday unanimously adopted a proposed budget for 2014-15, a plan that projected a $2.3 million shortfall, increased expenses and a decline in revenue of some departments.
District 5 Supervisor Jerry O’Banion was not present, but the adoption required only a majority vote.
The anticipated $2.3 million deficit wasn’t as steep as the $9.3 million shortfall county leaders estimated in March, but the county is struggling to keep up with increases in operating cost, especially from employee benefit packages.
According to the proposed budget, the cost for employee benefits rose $7.9 million because of an increase in the county’s contribution rate to employee retirement plans, health insurance and workers’ compensation. The county is paying $30,000 more on average for each employee, according to budget documents.
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The total county 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. The county’s cash carryover from the previous year – also known as fund balance – is projected to be $23 million.
The total of those two amounts is the county’s total resources: $93.1 million.
The cost of doing business still outpaces growth in the economy, said Assistant County Executive Officer Scott De Moss. The net county costs are projected to be $95.4 million, leaving behind a $2.3 million deficit.
County Executive Officer Jim Brown said the county will use “one-time funding” to close the gap, though it’s unknown if the money will come from reserves. The county has about $18 million in reserves, according to the budget.
There are no recommended employee layoffs in the proposed budget. The budget’s staffing overview shows 13 additional positions from last year.
Several departments saw a loss in revenue. The proposed budget reflects a $2.7 million decrease in revenue from probation, the District Attorney’s Office, Sheriff’s Department and library.
The District Attorney’s Office lost a little more than $200,000 in revenue from last year. District Attorney Larry Morse II said his office used settlement awards from two consumer protection lawsuits to fund the office’s operations but that money has run out.
“With the economic collapse in the county the last several years, we’ve been faced with deficits every budget season and looking at layoffs,” Morse said. “In order to avoid that, we’ve given the county that money to fund what should have come from the general fund.
“We ended up giving them all that we’ve got,” he said.
Chief Probation Officer Scott Ball said his department’s loss in revenue resulted from a change in how it receives federal funding for hours the probation officers work with juveniles at risk of going to foster care.
A statewide audit led to new criteria for “at-risk” youth along with a delay in funding for part of 2014-15. These two factors had major effects on the department’s funding, Ball said, estimating a $1.4 million loss.
“It will reduce even further the number of minors eligible to claim, which further reduces our revenue,” Ball said. “We’re estimating that it’s going to be cut in half from the previous budget.”
The county library system felt the sting of losing close to $1 million in funding from the now-dissolved Redevelopment Agency. The Sheriff’s Department saw the ending of a federal COPS grant that funded five deputies.
During the regular board meeting Tuesday, county supervisors voted to allow the Sheriff’s Department to apply for another federal grant to fund four additional deputies. The proposed budget did not call for adding any additional officers.
District 4 Supervisor Deidre Kelsey said the homicide rate in unincorporated communities is unacceptable and advocated for more officers on the street regardless of the outcome of the grant request.
“We may or may not get that grant, but we still have the problem,” Kelsey said. “We have an obligation to the public to provide a healthy and safe community, and that’s not happening. I was willing to reach into the bag and pull out enough money to hire now, and that’s the main reason I’m unhappy with the budget.”
District 1 Supervisor John Pedrozo, who also represents several unincorporated communities, echoed Kelsey’s sentiment. The proposed budget showed public safety, which excludes fire, represents 52.5 percent of net county costs.
Brown also alluded to restructuring the county Animal Control after the retirement of a manager, including the possibility of having the Sheriff’s Department run it. The department is currently under the agricultural commissioner.
“Sometimes retirements present opportunities,” Brown said. “We’re looking at all options ... maybe putting a higher-level manager or finding another home for it.”