The county has used up all the money in the general fund and is now dipping into its reserve, Churches said. In November Churches asked supervisors to allow borrowing from the reserve to get through what´s known as the “dry period” for property tax revenue.
From now until the end of the fiscal year, June 30, the county has seven pay periods totaling $3.78 million, which will be paid for in part by property tax revenues expected between now and then n about $3.4 million. “It´s real close,” Lyn Norfolk, county tax collector/treasurer said.
Other revenue coming into the county, such as $375,000 from the PG&E franchise fee and $450,000 of tobacco settlement money, could help close the gap.
But, Churches said, “I really, really think they need to do something right now. It´s time to figure out what we have to do to end this year on a positive note and not start next year by making cuts.”
If supervisors do nothing, they´ll have to cut $4 million, 13 percent, from somewhere next fiscal year, she said.
A couple of weeks ago supervisors thought the county was on target for the year, Churches said. Now “it seems they understand there is a cash situation,” she said.
Churches said she began alerting the board in January about the situation. But since Tom Mitchell, county administrative officer, is the one responsible for keeping the board informed, he was asked to explain what´s happening with the budget.
Mitchell will hold a study session for the board at 9 a.m. March 29 when he will lay out his conclusions and make recommendations, Churches said.
In addition to the end of the year looking tight, Churches said she is concerned about the county spending $3.5 million in cash carried over from last year. The board budgeted the cash in the hopes it wouldn´t be spent and that some other unanticipated revenue would take its place, Churches said. That revenue hasn´t come through.
When creating this year´s budget, expenses were estimated at $29,537,161 while revenue was only estimated to be $26,071,461. The $3.5 million carryover created a balanced budget.
“If you budget your cash, you´re going to spend it,” Churches said. Current year spending versus prior year spending is up $1.9 million, she said.
So, where´s all the money going?
Churches said the bulk of it is going toward payroll. Cost-of-living increases, promotions, reclassifications, benefits and longevity increases add up exponentially, she said.
A significant amount of cash is being used to fund current obligations for employees, Mitchell told the board this week. Churches also anticipates an increase in the rate for the Public Employee Retirement System, which would increase payroll by $2 million for fiscal year 2004/2005.
Making matters seem worse, “county department heads are reporting a shortfall in receiving funds from various state and federal agencies as branches of government are trying to manage cash flow and are delaying and slowing the disbursements of cash,” Mitchell said.
The delays in funding are just that, delays, the funds will be received, he said. It´s earlier than usual to be into the reserves, Supervisor and Board Chairman Tom Tryon acknowledged.
Since the board passed a balanced budget and revenues are going to be received “there should be a significant cash carry since there are many open positions,” Tryon said. “There has not been data that expenditures are over budget.”
There are a lot of options the board has, Churches and Norfolk said. Possibilities include a hiring freeze, furlough days, suspending expenses like training, meals and travel, a four-day workweek and increasing fees.
The board could also decide to borrow money from other designated funds such as the computer trust, which is set aside for upgrades, and the land use trust, a supplement fund for the Building and Planning departments.
There is $4 million in existing designated funds, Churches said. However, if supervisors choose that option, they would need to pay it back within a year.
Calaveras Enterprise story by Vanessa Turner. For more Calaveras news, click: calaverasenterprise.com