SANTA CLARA COUNTY, CALIF. – The County of Santa Clara Board of Supervisors approved a balanced budget for Fiscal Year 2011 today. The County’s total approved budget including all services, operations, capital improvements and reserves is $4.4 billion. The $2.2 billion General Fund budget reflects the proposed spending plan for all discretionary and many mandated services for the fiscal year beginning July 1, 2010, closing a $223.2 million revenue and expenditure gap.
“The County continues to be challenged by crippling declines in discretionary revenues that have led to a ninth consecutive General Fund deficit,” said President of the County of Santa Clara Board of Supervisors Supervisor Ken Yeager. “Unfortunately, more reductions are likely once the State legislature takes action on the Governor’s proposed budget.”
The approved budget reflects priorities set by the Board early in the budget development process: maintain County services to the greatest degree possible; make every effort to maintain the County’s most valuable asset – employees; strive to maintain services provided by community based organizations; and prepare the County for future challenges and opportunities by balancing the budget in ways that maximize flexibility in the future.
Since Fiscal Year 2003, the County will have closed cumulative gaps between revenues and expenditures of $1.8 billion. The financial projection for the years ahead is bleak and daunting. If all of the Governor’s proposals for Fiscal Year 2011 were to be enacted, the potential negative impact to the County could be as high as $249 million.
“Of necessity, we began a new budget development process this year,” said County Executive Jeffrey V. Smith. “Departments rose to the challenge to look across organizational lines for efficiencies and to question whether business could be done in fundamentally different ways. We also have adjusted the way departmental base budgets are developed to restrict discretionary spending and capture savings, and we have eliminated 172 positions.”
“The bottom line is we have tightened our belts and found ways to deliver services differently,” said Supervisor Don Gage. “We’ve cut our services back in every area that we thought we could. The County will never provide the same level of services that we have in the past because of a lack of funds. This is a new day.”
When the hearings began this week, County Executive Smith outlined changes that occurred after the Recommended Budget went to print. Increased savings in fund balance, resulting from spending controls put in place earlier in the year and reduced debt service expenditures, among other things, improved the County’s financial picture by $4.2 million. Those funds enabled the Board to make some budgetary adjustments and set aside a small reserve in anticipation of State budget impacts.
Although the use of $138 million in one-time revenue solutions to balance the budget delays the pain for another year, Smith reasoned that it was the right course of action to minimize the impact on services and families.
The one-time solutions are comprised of American Recovery and Reinvestment Act Revenue (ARRA) which is expected to be extended for six months and bring in an estimated $33.8 million for the County; $27 million in one-time funds from the San Jose Redevelopment Agency after coming to an agreement; and a Hospital Fee that would be imposed on hospitals by the State to gain additional federal funding to increase State Medi-Cal resources. Santa Clara County’s share would be $49.2 million.
The Social Services Agency will close and decentralize the Clover House Visitation Center and reduce Foster Care expenses to reflect the State’s adjustment to group home rates. These changes and other changes will result in $27.8 million in savings.
“The Board focused on maintaining as much of our community services as possible, including restoring $921,000 in funding for services contracted by the County with community based organizations,” said Supervisor Liz Kniss, Chair of the Health and Hospital Committee. “An additional benefit is that this will save a total of 90 jobs in the community at a time when economic recovery is slow.”
The current budget deficit drove the restructuring of several redundant functions currently carried out by the Sheriff’s Office and the Department of Correction. The restructuring is projected to save $5.8 million by eliminating duplication in units such as Internal Affairs, Human Resources, and other administrative areas.
“Wherever we have duplication in administrative functions, it makes sense to look at restructuring,” said Supervisor George Shirakawa, Chair of the Public Safety and Justice Committee. “We also have to look at unintended impacts of these budget decisions to be sure that cutting back in one department or program will not cost us more somewhere else.”
The Board restored staff which will allow the Probation Department to retain four positions for one of the important alternatives to detention for juveniles, the Community Release Program. Shirakawa argued that the cost of potential re-incarceration could be much greater.
The approved budget included additional funding for the Public Health and Drug and Alcohol Departments, which had endured several years of cutbacks. The Mental Health Department was spared cuts beyond the across-the-board service and supply reductions.
“The additional health resources allow us to further the Health Agenda,” said Yeager. “This initiative is a comprehensive program to help improve the community’s health, not only because it is the right thing to do, but because taxpayers carry the financial burden for diseases that could have been prevented.”
“We’ve restored funds for civil legal services for those people who cannot afford attorneys,” said Supervisor Dave Cortese, Chair of the Finance and Government Operations Committee. “Legal representation is such a fundamental part of our democratic system, the ability to pay should not determine whether someone receives critical legal assistance in their time of need.”
“Support from many of the County’s unions to hold contracts at prior year levels gave us a solid foundation and makes it possible for us to make needed changes incrementally,” said Yeager. “We have averted disaster for the time-being, and we are bracing ourselves for the impact of reductions the State is likely to pass on to counties with the passage of its budget later this summer.”
Media Contact: Gwendolyn Mitchell/Laurel Anderson, Office of Public Affairs, (408) 299-5119; Leslie Crowell, Budget Director (408) 299-5173, Cell (408) 421-8501
Posted: June 18, 2010