Riverside County’s financial position at the close of the current fiscal year is much better than expected, with increases in revenue that will shore up reserves and keep most agencies out of the red, according to a report that the Board of Supervisors will review Tuesday.
“While the current projected outlook … has improved significantly, we have challenges looming in the coming fiscal year that will need to be addressed,” the Executive Office stated in an introduction to the 30-page third-quarter budget report. “We must continue to work toward structural balance and the development of healthy reserves going forward.”
In June 2020, budget analysts told the board the county could face a $62 million deficit by the end of 2020-21. However, that was before the county received almost $500 million in Coronavirus Aid, Relief & Economic Security Act funding.
The county’s reserve pool had also been expected to shrink from $260 million to $222 million, with money needed to cover spending gaps in multiple agencies. But according to the report, the county will end the fiscal year with a bigger pool — totaling $277 million.
Despite the impacts of the coronavirus public health lockdowns, discretionary revenue has increased an estimated $38 million, for a total of $894 million in receipts. The adopted 2020-21 budget projected revenue would top out at $855 million.
Most of the increase — $23 million — was netted from the disposition of redevelopment agency assets handled by the state under the phase-out of RDA projects that began as part of then-Gov. Jerry Brown’s budget realignment in 2011.
The overall 2020-21 budget, based on both discretionary and programmed funds, is $6.46 billion.
As the impacts of the virus and lockdowns have lessened, some agencies have returned funds to the county treasury, most prominently the Emergency Management Department, which ended up not needing $12 million in contingency revenue, according to the report.
Sheriff Chad Bianco informed budget analysts that he may be returning $7 million to the general fund, thanks to anticipated reimbursements from the state for the months-long housing of jail inmates who were slated to be transferred to state correctional facilities where intakes were stopped as part of a COVID-19 mitigation strategy.
The report did not address shortfalls specifically. However, the county’s midyear update in March contained warnings that several agencies may need to be backfilled.
The Department of Animal Services has been facing hurdles in trying to contain expenses. The midyear report stated DAS was nearly $2 million in the hole. The agency was forced to partially shutter its San Jacinto Valley Animal Campus last summer due to revenue challenges.
Registrar of Voters Rebecca Spencer told the board last week that the ROV will need additional funding for the pending gubernatorial recall election, as well as more money for staffing and equipment to ensure efficient running of elections going forward.
The board postponed action on her requests until the end of July, when another public hearing on the agency’s challenges is planned.
Hearings on the proposed 2021-22 fiscal year budget will get underway in June.