Here’s an article being shared on the internal employees network of the county. Let’s hope the county is more successful in its labor negotiations with the employees’ union than it was the last time around. For all the crowing about our fiscal conservatism, the county and the supervisors could have held a harder line with the unions the last time around, as I’ve written before. The unincorporated county faces many problems in upcoming years, I would argue: declining revenue, a moribund real estate market and increasing costs, such as how to deal with disposing of sewage. Here we go (again):
This past Tuesday we presented a fiscal report to the Board of Supervisors outlining the results of the 2009/10 fiscal year, an update on the 2010/11 fiscal year budget and early estimates for the upcoming 2011/12 fiscal year. I want to share this report with all of you as it is important for you to understand the financial pressures the County team faces as we try and deliver sustained services to our citizens.
Our last fiscal year results once again reflects positive operating results and improved the beginning General Fund fund balances by $788,000. Our budget last year for the General Fund was $63 million so we had a positive operating result of approximately 1.25%. Thank you for your efforts to helping to live within our means.
As you will see when you review the report the County’s property taxes are estimated to decline by 7.5% this current fiscal year. This is significantly more than the 4% decline we assumed when the 2010/11 budget was adopted. The additional 3.5% decline represents a loss of $1,175,000 in General Fund revenue. Thankfully we have experienced some known positive offsets that will keep the budget balanced for 2010/11.
Unfortunately, our property taxes and frankly virtually all revenues throughout the County services have been declining and there is no clear cut signal of economic recovery. This sets up a twofold problem.
First, the decline in revenues will force us to reduce expenditures once again in 2011/12 and second there is no new revenues to pay for cost increases, the largest of which is salary and benefits, which will cause us to reduce expenditures even further in 2011/12. You will see in the report that in the General Fund alone we are now estimating a $5.5 million budget gap for 2011/12.
I have recommended a combination of three tools to address this gap: continued staffing reductions, labor discussions which have already begun with your labor unions, and use of fund balance reserves.
Decisions for the past three years have been difficult. I know we have and will continue to impact individual employee’s lives and incomes.
This upcoming budget year, and the next several, will also be very difficult given the economic environment. Thankfully Nevada County has made some prudent preparations, but the fact is that we did not anticipate the length or breadth of this economic recession.
Once again, thank you for your continued vigilance in keeping the Nevada County government fiscally sound. Together we will weather these times.
Richard A. Haffey
County Executive Officer