Riverside County supervisors Tuesday approved supplemental appropriations for agencies facing fiscal year shortfalls, reflected in a report that showed the county contending with a $45 million overall deficit because of coronavirus emergency impacts that have disrupted many sectors of the regional economy.
In a 5-0 vote without comment, the Board of Supervisors signed off on the third-quarter 2019-20 budget report provided by county CEO George Johnson and his staff.
“Maintaining fiscal discipline is needed to preserve the county’s fiscal health,” Johnson said in an introduction to the 50-page report. “To align spending with the impact of the severe projected revenue shortfalls, and weather the financial uncertainty during these difficult times, very hard decisions will need to be made.”
Agencies that sought — and were granted — additional appropriations before the end of the fiscal year on June 30 included the Department of Animal Services, the Office of the Registrar of Voters and the Department of Public Social Services.
The latter is contending with increased demand for its general assistance program, which provides relief for the unemployed and others. The board appropriated an additional $1 million to DPSS.
Animal Services will receive an additional $95,000 to cover unexpected costs for equipment, including protective gear connected to COVID-19, and the registrar’s office will receive $2.85 million to reduce overages that developed following elections in Blythe and Rancho Mirage, as well as the May 12 special election for the 28th state Senate District.
According to Johnson, most of the revenue losses in the current fiscal year stem from shortfalls in sales taxes, penalty fee collections and documentary transfer tax receipts.
The red ink will likely require drawing down the county’s $264 million reserve pool, leaving it with a balance of $219 million.
According to the CEO, directives to agencies in March to curb spending in anticipation of financial hits to the general fund mitigated some of the damage. He said $431 million in federal Coronavirus Aid, Relief & Economic Security — CARES — Act appropriations to the county will further alleviating some financial pressure, but none of that money can go to balancing the budget.
The report indicated that no public safety units — the Fire, Sheriff’s and Probation departments, and the offices of the District Attorney and the Public Defender — are projecting year-end gaps that cannot be managed internally, but big question marks hang over 2020-21 revenue and spending forecasts.
Budget hearings are set for June 15, 16 and 23.
According to Johnson, by that time, the county should have a better grasp of how reduced funding streams from the state will adversely affect the county. In his May revision last week, Gov. Gavin Newsom announced a $54 billion budget deficit stemming from state-mandated shutdowns to address the virus.
Johnson is asking the board to consider a “two-phased” budget cutting plan for 2020-21. In the initial phase, agencies would be required to absorb a 5 to 10% slash in appropriations compared to the current fiscal year’s outlays, and in the next phase, they would have to absorb a 5% cut.
The reductions should net about $102 million in savings, according to the executive officer.
It is unknown whether or to what extent the county will have to implement furloughs and layoffs to contain spending.
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