Most Riverside County agencies are poised to finish the current fiscal year within spending limits, but an overall year-end deficit will be unavoidable because of increased welfare expenses and healthcare services provided to the indigent, according to a report the Board of Supervisors will review Tuesday.
“Budget requests far exceed projected revenue, and as such, hard decisions will need to be made,” county CEO George Johnson wrote in an introduction to the third quarter budget update for 2018-19. “Not all departments will receive what they are asking for. Indeed, we are approaching some level of reductions in our forthcoming recommended 2019-20 budget. And to maintain critical needs and services, some departments will receive more cuts than others.”
Johnson said a total $46 million in new budget requests had been submitted, even though the county’s discretionary revenue will likely grow about $20 million by the end of the fiscal year on June 30.
Agencies with the greatest red ink are the Department of Public Social Services and the Riverside University Health System, according to the Executive Office.
DPSS’ General Assistance program was budgeted at $2.2 million at the start of the fiscal year, but its outgo has ballooned over 550 percent to nearly $14.5 million in the last nine months, according to the county.
General Assistance includes some unemployment relief, cash for undocumented immigrants and other county-funded obligations.
The Executive Office said DPSS’ overages are being covered with general fund allocations.
Meantime, RUHS is projecting a $16 million deficit due to ongoing losses at the 10 county-run public health clinics. The shortfall was first noted in the Executive Office’s midyear report, which warned that no quick fixes were available to stem the flow of red ink.
Officials blamed the losses mostly on inadequate federal reimbursement rates for healthcare delivered to the indigent and uninsured, as well as rising labor and pension costs for employees. A restructuring plan is in the works.
Public safety agencies, most often the most challenging for the board to sort out financially each fiscal year, were largely operating within spending constraints by the close of the third quarter, according to the Executive Office.
Sheriff Chad Bianco indicated that he would end 2018-19 with $6 million to spare, while District Attorney Mike Hestrin said he had narrowed his previously projected $4.3 million deficit to $1.7 million, with hopes of further reductions by the time of budget hearings in mid-June.
Hestrin was netting savings through attrition and delays in personnel replacements.
County fire Chief Shawn Newman was confident of achieving fiscal balance, and for the first time since his appointment in 2013, Public Defender Steve Harmon projected no fiscal year deficit.
However, Department of Animal Services Director Dr. Allan Drusys estimated a $1.3 million shortfall for the agency, mainly stemming from a drop-off in fee collections.
Johnson said the county is likely to end 2018-19 with an overall deficit of $22 million, which will have to be backfilled with reserves, reducing the pool to $212 million.
According to Executive Office staff, composite revenues, which include property tax receipts, sales taxes, collections from fines and penalties and other components, will top out at just over $1 billion — $20 million more than predicted last June.
Johnson warned that growing expenses lay on the horizon, including swelling pension obligations and costs to complete the John J. Benoit Detention Center in Indio, making it vital for the county to enforce discipline.
The Executive Office further noted that, at some point, the economy will “turn,” and a recession of unknown duration will hit, resulting in unplanned changes to payrolls and outlays.