A modest windfall swelled Riverside County’s revenues in the first half of the current fiscal year, but the money will have to spent to cover future bills and conservative budgeting will be necessary to contain costs going forward, according to a report that the Board of Supervisors will review Tuesday.
“Maintaining fiscal discipline is needed to preserve the county’s fiscal health, as anticipated costs continue to increase at levels greater than revenue,” county CEO George Johnson said in the 40-page midyear 2019-20 report. “The county must stay the course by strategically curbing expenses while also making priority investments … and ensuring the highest levels of service to our residents.”
According to the report, $52.7 million in unanticipated revenue filled county coffers in the first quarter of 2019-20, mostly as a result of unspent general fund money coming back to the treasury after it was not needed for recruitment and other needs.
Roughly $33 million of that total will be deposited into reserves, while the remainder will go to meet contingencies for the rest of the fiscal year, provided that is what the board desires, Johnson said.
Appropriations are needed to cover $9 million in new obligations stemming from the board’s recent approval of a five-year collective bargaining agreement with the Riverside Sheriffs Association, which represents deputies, District Attorney’s Office investigators and others in the public safety sphere.
Without the infusion, Sheriff Chad Bianco would be contending with a year-end deficit, officials said.
Another $1.4 million will be required for technology upgrades, and about $300,000 is needed to support the Department of Code Enforcement, which has been among the hardest hit agencies over the last few years because of budgetary belt-tightening.
The report noted that, with only one or two exceptions, agencies are generally staying within budgetary constraints, likely to end 2019-20 in the black.
Even the District Attorney’s Office, which has been plagued by shortfalls for the last decade, is projected to end the current fiscal year on target, thanks largely to a board-approved $5 million boost in appropriations in June.
The county’s 10 public health clinics, which operate under the Riverside University Health System umbrella, are projected to end 2019-20 about $7 million in the red.
Officials have blamed the red ink mostly on inadequate federal reimbursement rates for healthcare delivered to the indigent and uninsured, as well as rising labor and pension costs for employees.
Discretionary revenues are predicted to creep up nearly $6 million, and sales tax receipts, interest earnings on county investments and other revenue sources were positive, according to the report.
However, ongoing increases in general assistance, In-Home Supportive Services and John J. Benoit Detention Center expenses were forecast to be a drag on the budget.
Pension obligations remain another major imposition on the county budget, and Johnson warned of the need to prepare for ever-growing demands on the general fund because of pension costs, which may reach almost $1 billion annually before the end of the current decade.
Reserves, which will total about $235 million at the end of this fiscal year, will have to be spent down — nearly $100 million, according to an Executive Office estimate — over the next five years to cover escalating expenses.