Recession effects ripple through Mono County
Even fiscally frugal Mono County isn’t immune to the effects generated by the nation’s recessed economy. Mono County Supervisors felt those ill winds blowing during their Tuesday meeting, learning that cuts at the state level will impact the County’s Public and Mental Health departments, and Public Works as well.
Public and Mental Health officials convinced Mono Supervisors to reassign svereal employees to different departments to avert several layoffs. Public Works may not be so lucky.
In his budget update, Finance Director Brian Muir said the County faces reduced Transient Occupancy Tax, building permit fees, and sales and property tax revenues, even with reassessment of Mammoth Mountain, which Muir said would likely take advantage of an optional interest-free payment plan. The state has also made program cuts that will have some effect on the General Fund. Overall revenues, he said, were basically coming in at FY 2007-2008 levels.
All isn’t lost, however. “People aren’t coming in with bloated budgets,” Muir said. “We’ll be able to bring [the Board] a balanced budget. We go through [the line items], look for anomalies and try to get it down to percentages to cut and let the departments defend the decisions they make.”
In department updates, Public Health Director Lynda Salcido reported to the Board that she’s been dealing with numerous cuts to programs. According to Salcido, those cuts forced the elimination of four positions, though she added that three of four employee layoffs have been averted by internal transfers, including one saved due to a retirement. The fourth employee, she said, is still on the job, while the department works to avoid issuing a pink slip.
On the upside: Salcido may be able to continue some programs by moving money around. On the downside, ability to provide matching funds for grants has been all but killed off, and funding for programs such as HIV awareness and prevention have been reduced by four-fifths ($60,000 down to $12,000). Salcido said that it’s too soon to tell what will happen to those dollars. “There may be something left; there may be nothing. I don’t know what else to chop.”
Salcido also sits on the Southern Mono Hospital Board of Directors, which laid off 20 employees earlier in the week, and she said it’s not as simple as going up the street to get another job. “In this economy, there are precious few opportunities in hospitals and other health-related fields as compared to a few years ago.”
“I know you do as well, but I take layoffs very seriously,” remarked Board Chair Bill Reid, who added he’d prefer to explore other options before considering layoffs. “Let’s see what departments can live without. We’ve got $6 million in reserves; maybe we can use less than $2 million for 3 years running, something such as that.” He asked that potential layoffs include names and biographical backgrounds, to put a face on the issue. “I treasure our County families. There are other ways.” Supervisor Hap Hazard said he’d like to take the stress and anxiety involved in layoffs by being up front about it. “If people are on the chopping block, let’s let them know where they stand and not make them wait.”
Mental Health Director Ann Gimpel’s news wasn’t any better. Alcohol and Drug treatment programs are projected to come up short $167,000, and Mental Health faces a projected shortfall just shy of $225,000. More proof things are getting desperate in Sacramento: the state is even going so far as to bill the department for a previously granted 11% funding increase (almost $41,000) that it now says it wants back.
Total deficits amount to a $432,693 shortfall, which may force Gimpel into laying off one employee. “The only reason we’re not looking at more is that we’ve been operating with vacancies we decided not to fill,” Gimpel said. That move, Supervisor Vikki Bauer pointed out, may have been a smart one, all things considered.
Gimpel said that in her department the recessionary effects could take awhile to abate. The 2010-2011 budget cycle may realize a significant decrease in Mental Health Services Act funding. The department has a reserve, but Gimpel said it’s not going to be enough to cover the shortfall. She also isn’t optimistic about the state’s share of federal stimulus dollars, much of which will in all likelihood go to so-called “shovel ready” public works projects and other bigger, louder players, such as Caltrans. “Public and Mental health services just don’t get the same amount of attention,” she said.
Taking the mood up a notch, Department of Social Services Director Ed Zylman said his agency is actually in “very strong shape.” The department, he said, managed to get operational costs down to just 7.34% of budget, which he said is great in any economy. “We leveraged various pots of money to get what we consider the most bang for our buck,” Zylman reported, though he did acknowledge his funding streams are different than those of Public and Mental health.
He did, however, criticize Governor Arnold Schwarzenegger for “grossly overstating” savings that would be realized from the raft of proposed budget cuts being pushed in Sacramento. He was especially hard on Schwarzenegger’s idea to eliminate CalWORKS, the state’s work-to-welfare program for the poorest of families. “Studies show that for every dollar spent in Mono County, $7.35 goes back into the community,” he said.
Zylman allowed that he has two departments with potential for cuts. The Work Incentive Act is funded at about $120,000, but if it were subject to “substantial cuts,” Zylman said the program could be dropped and the single FTEE staffer could easily be absorbed into DSS someplace else. He also said the Senior Meals program could suffer some cuts and still be maintained, though essentially at a zero-growth level.
“Schwarzenegger’s throwing spaghetti at the wall to see what sticks,” Zylman posited, “and prepping Californians for a hefty tax increase.”
The bottom line for Supervisor Tom Farnetti, however, was staving off subsidizing any gaps in revenue from the General Fund. (All of three departments — less so in the case of Zylman’s — said they may need pulls from the General Fund, which Farnetti said he understood, but didn’t like on principle. “These are tough times and they call for tough decisions,” Farnetti said. “The more we subsidize state programs out the General Fund, the more we’re going to be obligated.”
Public Works Director Evan Nikirk is proposing a 13.7% boost in solid waste disposal fees, the first increase since 2006. He also reported the Road fund budget is looking at a $600,000 shortfall. That figure doesn’t include cuts of more than $200,000 in material expenses. Nikirk said the roughly $827,000 gap would be in addition to the $560,000 historical subsidy the Board has provided in recent budget cycles. Without some kind of backfill, presumably from the General Fund reserves, Nikirk estimated 7 employees may have to be laid off.
Much of the Roads shortfall, however, hinges on what happens with the state’s planned withholding of the Highway Users Tax (HUT) account funding, and whether the County will lend its support to possible litigation that would force the state to fully fund the account for counties. The Board said it was reluctant to make a move until the HUT issue is resolved one way or other.
The disposal fee hike will be brought back to the Board for a public hearing in August.
Going forward, the picture will be clearer, Muir said, but he advised the Board they won’t be dealing with certainty, citing assessments that won’t completed by the time a budget needs to be enacted, not to mention a state government with no budget of its own on the horizon.
“Everything’s back on the table,” Farnetti said, who’s also keeping one eye on the County’s nest egg. Farnetti said he’s okay with “some General Fund support,” but is leery about tapping it too much. “We could see our reserves go pretty quickly.”