Riverside County government’s financial position going into the second half of the current fiscal year is moderately stronger than anticipated due to higher revenues, though a few agencies are contending with fiscal challenges, according to a report the Board of Supervisors will review Tuesday.
“Current midyear financial data suggests a modest overall increase in projected General Fund discretionary revenue,” the Executive Office said in a statement posted to the board’s agenda for Tuesday. “Discretionary revenue for fiscal year 2023-24 maintains stable growth and continues its positive trajectory, with a projected increase of $60.7 million, representing a 5% growth over the adopted budget.”
The report showed an estimated year-end gain of $20.4 million in property taxes, a $20 million increase in interest earnings on county treasury pool investments and an $8.6 million jump in motor-vehicle-in-lieu of property tax receipts, among other gains, which offset projected losses in other revenue streams.
Estimated year-end discretionary revenue is now at $1.2 billion, compared to an earlier estimate of $1.14 billion. The board generally has a free hand in allocating discretionary funds, as opposed to programmed, or non-discretionary, appropriations, which are earmarked for a range of social, health and other budget mechanisms.
The 2023-24 budget is roughly 15% larger than 2022-23’s, which was about $7.45 billion. Close to half of the appropriations are comprised of state and federal “pass-through” funds.
Executive Office staff noted the county’s share of statewide Proposition 172 Public Safety Sales Tax revenue will likely decline this fiscal year because receipts are $7 million lower than originally anticipated.
At midyear, a few county agencies were contending with higher cost pressures, requiring elevated outlays to deal with them. However, none of the costs appeared to be unmanageable.
District Attorney Mike Hestrin informed the Executive Office that almost $1 million more would be needed to cover “one-time improvement projects” before the end of the fiscal year. Thanks to state and federal infusions, mainly grants, the expenses would not splatter red ink on the D.A.’s financial plan, officials said.
The picture may be slightly different for the Emergency Management Department, which is predicting $977,606 in larger outlays, mostly stemming from ongoing obligations tied to Tropical Storm Hilary last August. Some of the recovery costs have not qualified for state or federal reimbursement, so the county could be on the hook for them, officials said.
The Department of Purchasing & Fleet Services is requesting the board’s approval to draw down internal funds to cover an additional $6 million in expenses before year-end.
“As of mid-year, fuel prices are higher compared to the same period last year,” according to an Executive Office statement. “Additionally, fuel sales countywide are up due to employees returning to work sites following COVID-related closures and telecommuting.”
The EO pointed to “several significant factors” that could negatively impact the county’s fiscal blueprint.
“Foremost among these are the escalating costs associated with maintaining service levels and fulfilling current labor negotiation demands,” the agency stated. “Also the pressing need to maintain or replace our aging facilities is adding to our financial pressures.”
Reserve funds are projected to reach $555 million by the end of the fiscal year, compared to an estimated $537 million reserve pool at the close of the last one in June.
The county received almost $500 million in 2020 Coronavirus Aid, Relief & Economic Security Act allocations and another $480 million in 2021 American Rescue Plan Act money. County Chief Executive Officer Jeff Van Wagenen acknowledged in June that just under 10% of the federal infusions had been applied to “budget stabilization” in 2022-23.
The funds have been used for homeless and rental assistance programs, along with other social welfare efforts, but they’ve also been appropriated for capital improvement projects.
Hearings on the proposed 2024-25 fiscal year budget will be held on June 10-11.