The Madera County Board of Supervisors opened its three-day budget hearings Tuesday, facing a $6.2 million short fall for the 2012-2013 fiscal year that started July 1.
In June, the anticipated shortfall was $8 million, but Eric Fleming, county administrative officer, said the shortfall has been reduced over the past two months by $1.8 million due to a slight increase in property and sales tax and what the county is allowed to charge state and federal programs for internal services such as human resources, information technology, accounting and necessary legal services.
Although these state and federal reimbursements have been on the decline, this year's reduction is going to be less than earlier projected.
Fleming will recommend further reorganizations and outsourcing resulting in additional layoffs to make up for the shortfall.
Fleming anticipates the new general fund budget to be about $167.6 million. Last year's general fund budget was $170.3 million.
Fleming said that although a sluggish and unpredictable economy the last three years has had a negative impact on the county, a series of strategic fiscal decisions by the board of supervisors has reduced expenditures while maintaining public service.
"Current fiscal trends, coupled with rising salary and benefit costs for the remaining work force and increasing health insurance costs for retirees, indicate that the county's extremely tight fiscal situation will continue," Fleming said.
Ronn Dominici, board chairman, is "cautiously optimistic" about the new budget.
"The 2011-2012 year finished better than we expected thanks in large part to revenue growth spurred by a recovering housing industry and an uptick in retail taxable sales throughout the county," Dominici said. "County staff worked hard to successfully contain expenses last year and without a doubt we will be asking them to do the same this year. Those two successes, bearing unforeseen changes, present an opportunity for the board to adopt a long term plan that eliminates the deficit, pays off the county's debt and protects vital public services."
During the hearings, Fleming will present a three-year cost reduction and containment plan to regain full fiscal health by the county by the end of the 2014-2015 fiscal year.
"We have spent the last two years reorganizing and cutting costs and I feel we are in a good position to recommend the three year plan," Fleming said. "We have spent two years making changes consistent with the board's vision and direction and this plan will continue the same course."
Previous budget-cutting measures have included a reduction in work force, departmental reorganizations, a hiring freeze and the continuation of unpaid furloughs to reduce the county's cost of operation.
District 5 Supervisor Tom Wheeler commended Fleming and his staff and county department heads and employees for "stepping up to the plate to again help cut costs."
"Although our staff is definitely doing more with less, we're managing to contain costs and stay afloat," Wheeler said.
Fleming said the county economy is no longer declining as in previous years but remains somewhat stagnant with little to no growth.
"The new budget will continue with cost cutting strategies as needed while maintaining essential public services," Fleming said.
County revenues will continue to be evaluated and if there is not a significant increase by the start of January 2013, the county could be forced to make additional cost cutting measures according to Fleming.
The County's fiscal crisis peaked in 2010-2011 when the shortfall was projected as high as $12.3 million. The board has declared a fiscal emergency each year since.
According to Fleming, the county work force has declined 21% (282 employees) over the last four years from 1,333 to 1,051. The subvented department, those funded with state and federal dollars had a 16% reduction (97 positions), public safety had an 18% reduction (69 positions) while general government had a 34% reduction (116 positions).