Code Red: County Considers Reserve Funds To Save Law Enforcement

Riverside County’s financial position is stronger thanks to austerity measures and spending discipline — moving the county closer to a balanced budget — but there are plenty of challenges ahead, officials told the Board of Supervisors today.

“We’re not declaring victory yet,” said Executive Officer Bill Luna. “The board recognized the problem and took the steps necessary to manage it. Now we’re seeing the fruits of that.”

In a third-quarter budget update for the 2010-11 fiscal year, the Executive Office reported that a roughly $47 million deficit projected seven months ago had been reduced by almost half.

Small increases in property and sales tax revenue, lower labor costs and operational fine-tuning contributed to the reduction, according to the report.

Chief Financial Officer Ed Corser described the budget picture as generally “positive,” expressing confidence that the county’s double-A bond rating should hold, with no impact to its borrowing power.

The report indicated that public safety agencies were facing year-end shortfalls totaling $19.2 million, just over half of that in the Sheriff’s Department.

In a letter to the Executive Officer, Sheriff Stan Sniff asked that the county appropriate $10 million to cover his department’s lingering budget gap, largely a result of higher personnel costs tied to the opening of new jail pods at the Larry D. Smith Correctional Facility in Banning.

The board is expected to address the overage during budget hearings slated to begin in mid-June.

Supervisor Marion Ashley advocated tapping reserve funds to eliminate a $5 million deficit in the District Attorney’s Office budget.

“We shouldn’t make the D.A. make up for something he didn’t cause and give him a break,” the supervisor said, alluding to the actions of D.A. Paul Zellerbach’s predecessor, Rod Pacheco, who left office in December.

If the board elects not to absorb the sheriff’s, D.A.’s and fire chief’s budget shortfalls by drawing down reserves, those deficits will roll over into the next fiscal year, which begins July 1.

The county is expected to end the current fiscal year with $184.1 million in reserves — down from $360 million three years ago.

Outside of public safety, only the Department of Public Social Services is projecting a sizable deficit in the current fiscal year — $5.6 million — stemming from expanded caseloads. However, state and federal funds were expected to help the agency meet its commitments, according to the report.

Supervisor John Tavaglione, president of the California State Association of Counties, suggested putting off budget hearings until there’s clarity on “where the state is going.”

Luna replied that it was pointless, saying, “We can get our job done and then prepare for the worst.”

Questions remain about the governor’s realignment plans, which call for shifting more state-run services — such as adult parole and child welfare — to counties. Budget analysts also weren’t able to confidently estimate the potential impact of an “all cuts” budget at the state level.

Gov. Jerry Brown has been pressing for a continuation of the elevated tax rates established by his predecessor’s 2009 emergency budget resolution. But the idea has met resistance in the Legislature.

Brown signed bills in March that cut $11.2 billion from the state’s $26 billion deficit by siphoning money from voter-created programs and cutting funds for welfare, education and taxpayer-subsidized health care services.

Going into 2011-12, the Sheriff’s Department is projecting a deficit of $26 million to $81 million without increased appropriations from the general fund.

Sniff told the board last month that he would be forced to cut up to 300 patrol and correctional deputies, deactivate special investigative units and close several facilities without more money.

Supervisor John Benoit said that non-public safety agencies had had to brook “very painful” cuts as part of the county’s three-year cost-containment strategy and exempting the Sheriff’s Department from spending cuts would mean downsizing other departments further — something he opposed.

Board Chairman Bob Buster reiterated his desire for the sheriff to provide a detailed explanation of his department’s organizational structure to help the board understand how cuts will affect operations.

“A lot of assumptions are institutionalized,” Buster said. “We need more information … What’s the actual workload of the folks out there?”

According to the third-quarter budget report, the value of the county’s property tax roll is expected to slip another half-percent in the next fiscal year. Assessed values countywide declined 15 percent over the last two years as foreclosure activity surged.

Discretionary revenue is expected to drop from $592 million this year to $582 million in 2011-12.