Generally speaking, overspending isn’t a good idea – unless it’s a really good party.
But when has anyone ever mistaken county government for a good party? And if you had to choose between the five county supervisors, which one would be the most likely to end the night wearing a lampshade?
Sure, running a little bit over budget isn’t the worst thing in the world, but when that deficit jumps from $173,000 to almost $2.5 million over the course of a year, it makes people nervous.
On Tuesday, Mono County Finance Director Janet Dutcher gave a presentation on the General Fund before the Board of Supervisors that showed that General Fund spending came in over budget for a second straight fiscal year, with the resultant deficit clocking in $2,426,243.
Overall, General Fund revenues dropped by 2.5%, nearly one million dollars, while expenditures jumped 3.43% in FY 2018-2019.
Dutcher also reported that while the California median single-family home price rests at $605,000, the average price for a single family home in Mono County lands just shy of $700,000. That number is 10th priciest for a county in California.
“Mono County’s home values are at times well above our state median price … that concerns us when it comes to affordable housing but from a property tax standpoint, it’s good,” said Dutcher.
Speaking of those same property taxes: revenues were near 6% growth over 2018.
“What I like about this,” Dutcher said, pointing to a graph in her presentation, “is it’s a gradual, controlled slope.” This indicates a measured growth in revenue as opposed a steep slope, the likes of which precipitated the recession in 2008/2009.
Transient occupancy tax, set at 12%, contributed approximately $2.6 million to the General Fund, with a quarter of that total revenue diverted for paying paramedics and funding marketing efforts.
Dutcher explained that other jurisdictions have generally kept their TOT takes in a similar ball park, with the Town of Mammoth Lakes taxing 13%, Inyo County taxing 12%, and South Lake Tahoe and Truckee taking 10%.
Dutcher informed supervisors that a 1% increase in the TOT rate would yield approximately $300,000 in additional revenue.
Another option for “revenue enhacement” could be consideration of increasing the countywide sales tax rate, currently set at 7.25%.
Supervisor Fred Stump inquired about such a possibility, asking Dutcher “If the board were to increase that [tax] to 7.5%, would that .25% come back to the General Fun?” County Counsel Stacy Simon jumped in to note it was possible to do so. If the Board were to pursue that option, it would become a ballot question for the voters.
Further, the board is also tossing around the possibility of instituting a TBID (see last week’s issue) that would create an additional tax within the county.
So why all this focus on raising even more revenue when property tax is up 6% and the economy is strong?
A key part of the drain on the overall budget comes from unfunded pension liability incurred by county. According to Dutcher, every dollar that the county pays towards public safety tacks on another 50 cents for the pension fund while that liability is 30 cents on the dollar for other employees. As it presently stands, the net unfunded pension liability is close to $52 million dollars, a value that remained static this year only because the county tossed in $5.6 million to keep the liability from growing.
Dutcher did include what could be considered a small victory on this front; the auditor-controller’s association is working with the State and CalPERS to separate the court system’s pensions from the county’s pension liability. Those pensions, which currently contribute $1.9 million to the county’s pension liability, have the potential to become the state’s responsibility if that separation were to be successful.
The county also paid out over $1 million in overtime, with Dutcher noting that she found the overtime expenditure to be “Pretty high, but it didn’t increase over the last year.”
“You can never get rid of overtime and you just have to get used to it”, said Dutcher, who noted that personnel turnover raises the hours that remaining employees have to work. Overtime can be especially tricky because it is represents an unstable and “unanticipated” factor within the overall budget.
Altogether, the county paid out close to $24.8 million in combined salary, overtime and benefit.
Speaking of which, The Sheet ran a story in April which highlighted $226,000 in salary increases for upper management approved by supervisors.
The 2019-2020 budget included funds for a 5% increase in salaries; the $226,000 increase came in at 4.6%.
Dutcher noted towards the end of her presentation that “As much as I don’t like that P word—performance evaluation—, I think that is part of the solution to learning to operate more efficiently.”