Most Riverside County agencies are operating within their allocated budgets, but challenges lay ahead for a few departments, making fiscal discipline a must going forward to prevent accumulating red ink, county administrators told the Board of Supervisors Tuesday.
“We need make sure we have a fiscally sustainable county organization, providing the services that the public expects,” CEO George Johnson said. “We’re trying to balance the competing priorities and fiscal challenges we have.”
Johnson and Chief Financial Officer Don Kent gave a presentation on the midyear 2018-19 budget report, and Johnson pointed out that all but a few agencies are “hitting fiscal targets,” with projected discretionary revenue expected to be higher than previously anticipated.
The Riverside University Health System’s red ink was expected to be the largest near-term loss before 2018-19 comes to an end. Executive Office staff projected a $16 million shortfall due to lower federal reimbursements for healthcare services delivered to the indigent and uninsured receiving treatment at the county’s 10 public health clinics.
According to the Executive Office, plans to improve efficiencies and revise rate schedules will improve revenue prospects in the future, but officials noted in the report that the “process does not allow a quick fix,” and the county may have to absorb the current loss.
Another deficit driver for RUHS is inmate healthcare services, and Supervisor Karen Spiegel wondered why the federal and state governments could not step in and “make up the gap.”
Johnson explained that detention healthcare was entirely a county responsibility, and it would require “some heavy lifting” to change the law so that inmates who enter the correctional system with their own medical insurance are charged for the services they receive.
The Office of the District Attorney is projecting a $3.4 million hole, about 20 percent lower than had been predicted in July. D.A.’s office staff blamed the structural deficit on various factors, including lack of timely state reimbursements for mandated programs.
The Emergency Management Department is wrestling with $1.96 million in unanticipated costs that threaten to tip the agency into fiscal deficit. The overhang stems in part from the 13,000-acre Cranston Fire near Mountain Center in July and the 23,000-acre Holy Fire in the Cleveland National Forest, west of Lake Elsinore, in August, officials said.
The EMD’s Emergency Operations Center was activated for both alleged arson blazes and remained in operation, 24 hours a day, for over six weeks, incurring significant costs. The agency has also been repeatedly called to action due to winter storms and the threat of mud and debris flows that have prompted evacuations of residential areas abutting the eastern boundary of the Cleveland National Forest.
The board voted Tuesday to cover the EMD’s costs with contingency money.
The Department of Public Social Services is faced with $4.4 million in higher costs to manage welfare programs in the current fiscal year, which the board recognized before the end of 2017-18, allocating $6 million to keep DPSS whole. The appropriation, however, fell short due to “significantly increased” caseloads, according to the report.
The board appropriated funds to slash DPSS’ overage, as well.
The Office of the Public Defender entered the fiscal year with a structural deficit approaching $500,000, and more than a quarter million dollars is still needed to put the agency in the black, according to the report. There are no plans to immediately close the gap.
The sheriff’s department, the largest consumer of county discretionary money in the public safety sphere, is, uncharacteristically, projecting a potential surplus of $10 million, according to the report. However, officials pointed out that the John J. Benoit Detention Center in Indio, which is being opened in phases over several years to keep a lid on costs, will continue to require greater allocations, which the board will review as part of its budgeting process for 2019-20.
Executive Office staff said the county ended 2017-18 with nearly $220 million in reserves, thanks largely to fiscal discipline and unexpected revenue streams.
The county’s discretionary revenue pool is now projected to end 2018-19 with just under $800 million, or $15 million more than first estimated. When Proposition 172 public safety sales tax revenue is factored in, the total jumps to $989 million, compared to $963 million under prior projections, according to the report.
“There are challenges that lie ahead, and we have to hold the line as much as possible on a go-forward basis,” Kent said.