Mono mid-year budget: No crush, but no slush
During its mid-year budget review on Wednesday, Mono County’s Board of Supervisors learned that it’s “so far, so good” when it comes to the bottom line. According to the Finance Department, spending is on track, and so far no departments are forecast to go over budget. In addition, the County is looking at $1.2 million in revenue wondfall, which includes a one-time influx of almost $800,000 in revenue from the finalization of the recent property tax reassessment of Mammoth Mountain Ski Area.
Board reserves were predicted to plunge below zero in 2012-2013, but Finance Director Brian Muir pointed out that current assumptions are likely to change, in that there won’t be as much drawdown needed next year to backfill the Solid Waste Enterprise Fund as with this fiscal year.
Muir suggested that the reserve fund should level out at least around $1.5 million to $2 million, and even with unknowns at the state level, it should be easier to balance the budget next year. He added that the goal, which he thinks is reasonable, is to build the reserves back to the roughly $6 million that the Board prefers. Board Chair Vikki Bauer recalled that when she and Supervisor Byng Hunt were first elected to the Board, there was no reserve fund, but after two years, money had been squirreled away to establish the first incarnation of what the Board now calls its Reserve Fund, even with normal spending and buying new snowplows. “That has made the economic downturn a lot more sustainable for this county as opposed to other counties,” Muir reminded the Board.
Supervisor Hap Hazard said he thinks Mono County has historically lived under conditions in which the County hits bumps in the road every three years or so. “We usually have a chance to see things coming at the state budget level before we get to our budget,” Hazard observed. “This one [the 2009 recession] came up on us rather suddenly … 27% of our revenue disappeared almost overnight.”
Meanwhile, he said, the County acted responsibly, putting projects on hold and not filling vacancies from attrition, among other measures.
“What we didn’t see was a turnaround [economic recovery] at the 3-year mark, but we should be able to get through the next year to 18 months,” he opined. “If everything remains the same, the County hopes to be able to dig back out. Assuming the County doesn’t face any 9/11 or gas crisis issues, we should be at bottom and in a 24-month recovery cycle.”
Hazard said he’s “thankful” for the $1.2 million revenue windfall, but indicated conservative spending and saving measures need to be the priority.
Hunt wasn’t as optimistic, saying he thinks the recession is still on, and doesn’t want the public to think the County is flush with cash. He did, however, agree in principle with Hazard that spending must remain frugal and services must be sustained, as well as jobs. “There are counties that had 35% or 40% in job cuts and reductions in levels of service, but we managed to avoid much of that.” Hunt was quick to point out that the extra cash should be saved for rainy days, and not viewed as a sign that happy days are here again.
Gas prices and their impact on goods and services are a big worry to Supervisor Tim Hansen. “You buy a couple of tomatoes and a head of lettuce and it costs you $20,” he said. “We got some good news here [with the contingency money], and we need to be frugal.”
Bauer said she’s concerned there could be a big crash coming in the California Public Employees’ Retirement System (CalPERS) fund. State projections indicate that CalPERS shortfalls will increase charges from 7-8% to as much as 20% or more. The County, meanwhile, has already taken steps to reduce its contribution to PERS fund by restructuring its debt plan. Muir also was skeptical of any crash, explaining that CalPERS typically has a 20-year “smoothing curve” when it has funding issues.
Johnston was wary of figures indicating the state’s economic indicators are showing a 1% to 3% growth rate, but Muir said he’s been seeing a trend toward some amount of growth. He did acknowledge that the public might not perceive it yet, but that could also be due to the County generally lagging behind the overall curve. Hazard agreed with Muir that it appears growth is occuring, but took Johnston’s point that a 3% growth rate isn’t very robust, and that any impact, no matter how minor, could send the County right back into recession again.
“We’re not out of the woods, and I wouldn’t suggest that we are,” Hazard said. Muir, however, is not as sanguine on the state of things. “There’s nothing in this set of numbers that gives me heartburn,” Muir told the Board. “We’re definitely spending well within budget.”
