SANTA CLARA COUNTY, CALIF.—Today, the County of Santa Clara Board of Supervisors unanimously approved a balanced budget for Fiscal Year 2012. The County’s total approved budget including all services, operations, capital improvements and reserves is $4.0 billion. The $2.1 billion General Fund budget reflects the proposed spending plan for all discretionary and many mandated services for the fiscal year beginning July 1, 2011. After all of the actions are considered, the net number of positions eliminated is 309.
“We have had to make tough decisions to close the $219.6 million revenue and expenditure gap, but I am pleased that we were able to do so with ongoing reductions,” said President Dave Cortese, County of Santa Clara Board of Supervisors. “As difficult as some of these decisions were, they were necessary and will allow the County to better prepare for the tough times ahead related to the continuing State budget deadlock.”
The Board’s action represents the culmination of an extensive budget planning and review process, including workshops and public hearings attended by residents, community organizations, and employees who advocated for various services and programs.
Public hearings began on Monday, June 13, when the County Executive presented an update to reflect changes that occurred after the County Executive’s Recommended budget was issued. That budget proposed over $145.2 million in departmental budget solutions (expenditure cuts and/or new revenue), and an assumption that $75 million in savings could be generated from labor concessions as new contracts were negotiated with employee bargaining units. In addition, the Board of Supervisors also had to address over $25 million in State budget reductions the Governor had approved in March of this year.
Spending Controls and New Revenues Ease Problem
Spending controls put in place earlier in the year and a modest improvement in sales tax revenue increased the savings in year-end fund balance and improved the financial outlook by $10.8 million. These fund balance savings, along with $11.1 million in expenditure savings were among the $24.5 million in sources used to both restore some services, and set aside reserves in anticipation of State budget impacts.
The lack of resolution of the State budget problem continues to create uncertainty for counties. The Federal budget problems are also a challenge. To prepare for the uncertainties and mitigate a loss of revenue at the State, Federal or local level, the Board set aside $9.9 million in ongoing reserves, and $5.4 million in one-time reserves for possible bridge funding. Additionally, to improve the County’s cash position, $2.5 million in one-time funds were allocated to a potential cash reserve.
The reserve funds will enable the Board to offset the loss of any planned revenue source and take additional action prior to eliminating services. Fortunately, the County’s discretionary revenues have improved over the past few months, mostly due to improved sales taxes statewide. More than $7.3 million in additional sales tax revenue is expected by the end of Fiscal Year 2012.
Critical Services Maintained
These improved revenues enabled the Board to restore several critical safety net and public safety services that were proposed for elimination.
“Although community based organizations had to take 25% cuts, the Board voted to restore $1,503,066 in funding which was proposed for elimination,” said Cortese, who also serves as Chair of the Board’s Children, Seniors and Families Committee. “This will allow more than 50 community based organizations to continue serving children, seniors and the most vulnerable members of our community.”
Many of the restorations approved at the hearings were in the area of public safety and justice, as this area was deeply cut in the original recommended budget and is likely to be hard hit by state budget reductions. Two positions were added to the Cold Case Unit and one position to the Conviction Integrity Unit of the District Attorney’s office to bring closure to outstanding cases and investigate claims of wrongful conviction. In addition, eight positions were restored for Fiscal Year 2012 in the Probation Recovery Services Unit to address those prisoners to be released from state prisons that become the responsibility of the County under realignment. Four deputies were restored to the Rural Crimes Unit and Unincorporated Patrol to assure the continuation of the current level of service to the unincorporated areas of the county.
“Public safety and justice is always my priority,” said Supervisor George Shirakawa. “I want us prepared for the State’s shift of parolees to Santa Clara County, so more community supervision staff in Probation’s High-Risk Offenders Unit was necessary. Also, even though this was a tough budget cycle, I feel strongly that funding the DA’s Cold Case unit to give closure and justice to over 250 grieving families is well overdue.”
“We passed the best budget that we could, given the circumstances,” said Supervisor Ken Yeager, Chair of the Board’s Finance and Government Operations Committee. “As the realignment of responsibilities from the state to counties becomes more clear, we will be revisiting the budget. More cuts are unavoidable.”
Pharmacy coverage at Valley Health Center in Milpitas and Sunnyvale were restored. The hours will be 9-5 p.m., at Milpitas and 9-9 p.m., at Sunnyvale.
“Reinstating full-time pharmacy service in Milpitas and Sunnyvale, as well as adding evening medical appointments in Sunnyvale will improve access to much needed care and reduce wait times,” said Supervisor Liz Kniss, Chair of the Board’s Health and Hospital Committee.” Both clients and the County will benefit from increased efficiency and additional service hours.”
“The Tax Collector’s Office has a backlog of nearly 23,000 negative supplemental reassessments and 3,000 assessment appeals as a result of the downturn in the real estate market,” said Supervisor Mike Wasserman. “We are adding three temporary positions to address this backlog. We owe it to taxpayers to reconcile the tax bills and get them any refunds due in a timely manner. This will save the County interest payments and taxpayers will have use of their funds sooner.”
Since Fiscal Year 2003, the County will have closed cumulative gaps between revenues and expenditures of over $2.0 billion. Although the economic picture has improved in recent months, the future remains unsettled. The budget is balanced with a $75 million placeholder, expected to be filled once labor negotiations are completed with the majority of its bargaining units. It remains to be seen how soon the $75 million gap will be closed.
“The challenge before us is to balance the budget without totally devastating essential client services,” said County Executive Jeffrey V. Smith. “It was not easy recommending compensation and benefit reductions for employees; however, moving in this direction will enable us to balance the budget without extensive use of one-time funds and reset the base budget to put us in a stronger position going forward.”
State Hits Hard at Local Government Services
In making over $25 million in reductions related to State actions, an additional 17.5 positions were cut, and the impacts to clients are tremendous. The impact of these State budget impacts will be felt most deeply by CalWORKs clients and their children, whose aid payments and services will be reduced significantly. In addition, if the Governor’s “May Revise” proposals for Fiscal Year 2012 were to be enacted, the potential negative impact to the County could range from $20 - $40 million. One factor in the outcome is the disposition of proposed sales tax extensions that fund $17 million in critical public safety programs.
“The County has demonstrated leadership and made some very tough decisions,” said Kniss. “The Governor’s veto of the state budget signals a bumpy road ahead. We will be back at balancing this budget in August and September.”
Background on Position Reductions
A total of 555 positions were deleted and 246 new positions were created for a net reduction of 309 positions. A total of 412 existing employees will be affected in some way. Within that number, 275 will be transferred to other positions in the County with no loss in pay, but could be doing very different work for a different department; and 68 employees will retain County jobs, but in positions that are below their current pay grade, in some cases significantly below. Of the remaining 69 employees, attempts will be made to place them in vacant County vacant jobs; however, some number of these employees will likely not remain employed by the County.
Media Contact: Gwendolyn Mitchell/Laurel Anderson, Office of Public Affairs, (408) 299-5119, Mary Stephens Acting Budget Director, (408) 299-5174
Posted: June 17, 2011