Imperial County is now projecting it will balance its fiscal 2019-20 budget without dipping into its critically low reserves, it was revealed early on during a marathon Aug. 20 budget workshop.
The good news is thanks to the discovery of several million dollars in additional one-time funding that carried over from the previous budget cycle, officials reported.
The board of supervisors had instituted a hiring freeze and other cuts in May amid reports the county would face an $18-million deficit in its general fund for the fiscal year that started July 1.
The general fund is the pot from which most county operations are funded.
The “new” balancing plan still includes cuts in spending for departments paid for through the general fund, a hiring freeze and other one-time funding transfers, said Mayra Widmann, a deputy county executive officer.
Explaining how the extra funds were located, Widmann said once the county closed the books on fiscal 2018-19, the Department of Social Services in reconciling some of its accounts discovered a couple million more dollars in one-time funding that was carried over into the proposed 2019-20 budget.
“We initially thought we were going to carryover $9 million to $10 million,” Widmann said. “But we found after closing the books that number went up to $13.9 million.”
That eliminated the county’s need to use the nearly $3 million in reserves under the its previous balancing plan, she said. That is critical because had that $3 million in general-fund reserves been used, the fund would have been down to about $1.2 million, almost assuring a general-fund budget deficit in fiscal 2020-21.
When the deficit was first discussed there was concern because in recent years the county general-fund reserves had dwindled to just over $4 million heading into fiscal 2019-20. Reserves for the entire budget were around $12 million even though it should be about $32 million, Widmann said previously.
The total proposed budget for fiscal 2019-20 remains at $485.1 million in projected revenues vs. $497.7 million in projected expenditures. The proposed general-fund budget is at $218.2 million in projected expenditures versus $200.1 million in projected revenues.
These totals do not take into account the additional funds officials said could mitigate the deficit because those funds have yet to be added to the official budget projections.
On Sept. 10, the county board will hold a budget hearing to listen to final budget “augmentation” pitches, or increased requests, from individual departments, Widmann said.
Going into that meeting, she said the County Executive Office will bring back its recommendations for augmentations after consulting with the various general-fund departments.
By then, the county board won’t have much time to consider a final proposed budget for 2019-20. The board will just have one more meeting, on Oct. 1, before it has to approve the final budget ahead of the state’s Oct. 3 budget deadline.
Though the recent good news is for the short-term, the Aug. 20 hearing was also about the long game, said board Chairman Ryan Kelley.
“Our budget for this year is balanced … we do not have to borrow reserves,” Kelley said during an interview following the workshop. “But to go forward, we’re going to have to make changes.”
During the session, county department heads discussed how the county might cut costs, improve efficiencies and maximize work productivity.
Noting the supervisors want to do things different this year, Kelley said vital to that is “recognizing inefficiencies in our process … and trying to have a conversation with everyone, whether it’s the community or county employees, to find out if there’s a better way to do some things to save money.”
Another budget workshop is scheduled for Aug. 28 where the county will hear from the Human Resources Department on how the county goes about using professional services, and other departments that did not get a chance to present Aug. 20.
After the meeting, Kelley said he was pleased with how the process went, although he would like to see more input at the next hearing.
“Our directors and deputy directors, every county employee, they all have ideas. It would be great to have more participation,” Kelley said. “I was happy … it’s the first time we’ve done something like this. In the future, we should do this every budget cycle at least once.”