County Budget Projections Optimistic, but Guarded

For the first time in years, Ventura County officials are projecting that departments will not need to cut staffing or slash services to balance the coming budget, thanks to an improved local and state economy.

However, administrators caution that preliminary estimates could change dramatically by the summer due to such factors as funding to implement welfare reform and a state Supreme Court ruling affecting county pension funds.

“I’ve been labeled as a pessimist, and I feel pretty comfortable right now compared to years past,” said Auditor-Controller Thomas Mahon. “On the normal, standard indicators--the economy, property taxes, sales taxes--things are looking very good.

“But there are some factors that could change things,” he added. “Somebody in Sacramento could pull a switch up there and everything would change down here.”

Not everyone is feeling so upbeat about the budget, however.

Supervisor Frank Schillo said county officials should be looking to further tighten their belts rather than resting on their laurels.

“I don’t agree with the present attitude,” Schillo said. “I think we have to be careful with this budget, because things can change in a split second. The attitude in the county seems to be, the economy is turning around, so we can return to our old ways, and that is the worst thing we can do.”

Schillo also criticized Chief Administrative Officer M. L. Koester for what he saw as an effort to discard a bench mark program the supervisor advocated. Schillo wanted to compare Ventura County’s staffing and spending to other counties in an effort to make more informed budget decisions.

“I had no idea of the stiffening of the bureaucracy when it comes to this,” Schillo said. “This is not the way the public would like to see its money spent.”

Koester was unavailable for comment Friday. But Chief Deputy Administrative Officer Marty Robinson said the majority of supervisors did not support continuing with Schillo’s bench mark plan.

“I do believe the board was polled on whether it wanted to include benchmarking [in the coming budget], and they were not interested,” Robinson said. “I believe it was a pretty informal thing.”

In a report that will be presented to the Board of Supervisors on Tuesday, county officials are projecting $512.7 million in financing sources for the county’s next general fund budget--up from the $487.5 million for the current budget year. The report stressed, however, that the projection was reached before departments have developed their own budget estimates.

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The general fund makes up about 59% of the county’s overall budget, which includes special funds for fire protection, roads and libraries. The current overall budget totals $894 million.

The report predicts that as of this month, the county looks as though it will have enough money to meet its operational costs next budget year without having departments prepare cost-reduction proposals.

That is a significant change from preliminary budget projections the last several years in which Koester has warned of potential layoffs and the need to slash spending to avoid a deficit.

The projection is based on assumptions that property tax revenues will increase by 5%, the county will be able to carry over between $10 million and $14 million from its current budget, and implementing CalWORKS, the state’s welfare-to-work program, will not cost the county more money.

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But Mahon said county officials are still not sure exactly how much money they will receive from the $1 billion the state has to spend on CalWORKS. And Robinson noted that earlier this budget year, county officials expected to carry over as much as $20 million from their current budget, so projections can change quickly.

“At this point in time, things are not perfect, but they seem less drastic than what we have had to deal with in the past,” Robinson said. “But it’s very early.”

Moreover, county leaders must still decide how to deal with a 1997 California Supreme Court decision that severely affects the way Ventura County and 19 other counties around the state calculate retirement benefits.

As a result of the ruling--spurred by a case involving the Ventura County Deputy Sheriff’s Assn.--counties must include non-salary benefits such as automobile allowances and bonuses into retirement pension formulas. That presents an unanticipated cost that counties now have to factor into their future budget equations.

But that is not the only effect of the ruling. Because current and former county employees could attempt to sue to make the court decision retroactive, the county may be forced to pay millions in retirement benefits that officials were not prepared to pay.

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A judge has ruled that for the 700-member Deputy Sheriff’s Assn., the ruling is retroactive to 1995, and for the three retirees who brought the original suit against the county, the increased benefits should be applied dating back to 1992.

“It’s a never-ending issue,” said Treasurer-Tax Collector Hal Pittman, whose office was struggling to issue a report on how much the ruling will cost the county. “We would really like to know how this applies to everyone.”

The budget rate for salaries and retirement pensions is determined a year in advance, so the ruling would not necessarily affect the coming budget.

Not wanting to wait until the lawsuits start flying, however, Schillo is proposing that the county work with other local governments to bring labor representatives together and settle the dispute as soon as possible. That could well affect the coming budget, Schillo said.

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“This is the time to make a settlement,” he said, adding that the county’s pension fund currently has a surplus that could be used to pay out at least some of the extra money. “Only bad things can happen if we wait.”