The Sept. 9 Inyo County Budget Hearings proceeded smoothly until the final hour, when the Inyo County Board of Supervisors found itself grappling with a proposal from Board Chair Linda Arcularius to consider finding a source of funding for Bishop’s Chamber of Commerce. Until Arcularius’ suggestion, Supervisors and County staff appeared to be in accord, if a weary accord, over the County Administrator, Kevin Carunchio’s Recommended FY 2013-14 Budget. The Recommended FY 13-14 Budget remained balanced, in spite of rising personnel costs and plateauing revenues, at about $81.4 million in expenditures and $76.9 million in revenues. $3.8 million from the General Fund Balance available from FY 2012-13 covered the deficit.
According to Carunchio’s presentation, the Recommended Budget would continue to provide core County services and programs, as well as setting aside $375,000 toward the construction of a new County Animal Shelter, supporting limited new position requests and avoiding layoffs, among other things. Yet the Recommended Budget did not: include any additional funding to repair roads damaged by the Gully Washer emergency in July, set aside any funding for possible legal challenges between the County and Los Angeles Department of Water and Power over the proposed Solar Ranch project near Manzanar, contribute additional funding for the Computer System Fund that would address the County’s technology needs, or identify more than $430,000 in funds for salary and benefit cost increases that may result from labor negotiations. Labor costs represented one of the largest challenges to a balanced County budget, Carunchio reported. Last year, labor costs composed 51% of the total County Budget.
This year, Sheriff’s Department personnel costs increased $486,788 compared to last year’s Budget. Health insurance premium costs increased $648,675, with the County covering as much as $394,525 of that sum. Retirement benefit costs increased $174,357, and a new labor contract with the Inyo County Employees Association may cost about $235,391 to the County, Carunchio said. Currently, an average County salary plus benefits comes to about $80,000, Carunchio said. “Staggering personnel cost increases are likely over the next two years,” he added. He noted that the same assumptions of labor cost increases would result in a $1.9 million increase in General Fund expense in the FY 2014-15 Budget, and $4.1 million General Fund cost increase in the FY 2015-16 Budget.
This projection includes neither CalPERS (Public Employees’ Retirement System) costs nor potential escalations in healthcare costs, both of which remain outside of County control. To temper the impact of rising labor costs, this year’s Recommended Budget left several General Fund positions, primarily in Administration, vacant for the entire year. Carunchio’s presentation implied that this use of money on one set of ongoing expenses, vacant positions, to offset the increases in expenses for filled positions, couldn’t continue indefinitely. Eventually the County may have to eliminate altogether some of these vacant positions. The County has resorted to this in the past, eliminating 23 vacant positions over the last three years, Carunchio said. The FY 2013-14 Recommended Budget proposed eliminating five vacant positions this year. But, according to Carunchio’s Budget Introduction, “Inherent in this recommendation is the recognition that reducing the size of the County workforce when vacancies arise will likely result in departments having to scale back programs and services.”
Into this grim contemplation of a shrinking County workforce with rising work costs arrived Board Chair Arcularius’ suggestion that the Board look to funding sources to provide staff for the Bishop Chamber of Commerce. Arcularius pointed out that the Bishop Chamber currently directs visitors toward activities in the larger area, acting as a visitors center for other agencies, including the Forest Service, that have scaled back their own operations to permitting.
Supervisor Matt Kingsley questioned whether these government agencies couldn’t provide funding to the Bishop Chamber, considering it was taking over some of their traditional operations, instead of the County supporting the Chamber. He argued that the other County Chambers of Commerce in Lone Pine and Death Valley are also struggling to provide services with their existing funding, none of which is provided directly by the County.
“The thought will be, the Bishop Chamber is getting money because they’re Bishop,” he said.
Supervisors questioned whether the Bishop Chamber might not be eligible for the $100,000 Community Project Sponsorship Program (CPSP) grant funds. The County already allocated $20,000 to the Lone Pine Film Festival, Millpond Music Festival, Eastern Sierra Fall Classic Trout Derby and Playhouse 395 production of Pirates of Penzance, among others, in the first grant cycle. The County will open the second grant cycle application period in November.
“That $100,000 can get diminished quickly,” countered Kingsley. “I think we have to be careful.”
Other Board members floated the idea of taking funding from an additional $142,000 in General Fund Balance certified at the Budget Hearing; however, CAO Carunchio recommended that $142,000 be put toward the Other Post Employment Benefits (OPEB) Trust to cover retiree healthcare costs, as well as the Accumulated Capital Outlay and Economic Stabilization trusts. “Let’s not have a free-for-all, loosening the yolk,” he advised.
Attempting to placate the Board, however, he proposed either a one-time allocation of $15,000 from the extra General Fund Balance revenue, or even the creation of a $20-30,000 contingency budget to reserve funding out of budgets already established for advertising, the High School Rodeo and Fair, and CPSP. Supervisor Griffiths disagreed with the latter proposal, calling such an appropriation of grant funds, “Robbing Peter to pay Paul.”
As the Board vacillated between options for funding, Carunchio took off the kid gloves. “You’re looking at fiscal disaster in the next two years,” he said. “Are we in the advertising business [via the Chamber], or are we fixing potholes and putting police on the street?”
Chair Arcularius concluded that the issue might be better brought back before the Board during the opening of the CPSP grant application process, so as not to hold back an adoption of the Recommended FY 13-14 Budget. The Board might also consider whether to rethink the CPSP program altogether, she said, characterizing the CPSP as having three times the amount of applicants as funding. “Are we just perpetuating the dream that all these agencies have a shot?” she wondered.
The Board of Supervisors voted unanimously to approve the CAO Recommended FY 2013-14. Final adoption is set for Sept. 17.