The Riverside County sheriff's and fire departments are headed toward budget overruns in the current fiscal year—and the county hospital's operating expenses will leave it well in the red—all amid a backdrop of flat revenue projections, according to a report the Board of Supervisors will review Tuesday.
The county's first-quarter budget update warned of another tight budgetary cycle as the 2012-13 fiscal year nears its midpoint.
"We are proactively planning for the challenges we will confront next fiscal year and beyond," said county CEO Jay Orr. "We foresee property values stabilizing and the decline in discretionary revenues leveling off ... Even so, we continue to project growth in discretionary revenue to be comparatively modest, at best, for the foreseeable future."
According to the budget report, already the sheriff has estimated a $9.2 million overage in his budget, due in part to the recruitment of 50 additional deputies and costs associated with the Public Safety Enterprise Communication System, a new voice and data wireless network that will enable enhanced digital transmissions.
Fire Chief John Hawkins is expecting a $5.7 million deficit because of changes in fire services contracts with area cities, as well as the increased expense of operating the PSEC, according to the report.
The document noted that the Riverside County Regional Medical Center in Moreno Valley was estimating a $14 million to $36 million shortfall by the end of 2012-13. Negotiated benefits increases for hospital personnel and unpaid bills from emergency room visits and uninsured medical care were cited as reasons for the red ink.
County planners expressed concern over the growth in general labor costs, which will begin steadily rising in the next fiscal year and continue until they total $188.3 million by 2015-16. About 20 percent of the increase will be covered by general fund revenue. The increases stem from collective bargaining agreements approved by the board over the last 18 months.
The report also pointed out that county contributions to the California Public Employee Retirement System will be rising -- 2 percent for each general employee, and 3 percent for each public safety employee. The increases are to make up for CalPERS investment losses over the last several years.
"The modest growth projected in discretionary revenue will not be sufficient on its own to cover these rapidly expanding (cost) burdens," according to the report.
Orr said county managers have been put on notice to make due with existing resources and not expect "one-time" money to carry individual departments into 2013-14. There has been no mention of layoffs yet.
Assessor-Clerk-Recorder Larry Ward continued to predict a marginal half- percent increase in the property tax roll in 2013. Property taxes accounts for more than 80 percent of the county's discretionary income.
According to the report, expenses tied to the Indio Jail expansion continue to swell, with around $25 million in additional funding needed to complete the project by 2015, and $50 million in annual operating revenue needed thereafter.
There was no recommendation of dipping into county reserves -- which total around $155 million -- to cover higher costs.
The budget report identified a few positives, including a 9 percent bump in sales tax receipts countywide, refinancing opportunities on county debt thanks to lower interest rates and the passage of Proposition 30, which guarantees long-term funding from the state to counties for assuming more public safety responsibilities under the governor's 2011 realignment plan.
General fund discretionary revenue is expected to total $569.8 million in the current fiscal year, about $500,000 more than earlier estimated, according to the report.
Appropriations for 2012-13 total $4.67 billion, compared to $5.1 billion in 2011-12, about a 9 percent drop. Those expenditures are covered through federal and state "pass-through" funds, county discretionary money and revenue from special districts.