Tensions were rising at the board of supervisors as the budget process gets underway. The situation wasn’t made any easier knowing that the county’s budget shortfall is estimated to be much larger than it has been in recent years at this point the process.
Two members of the board squared off against the other three members June 13 over whether to move ahead with using biomass to heat a county building.
Other matters addressed at the June 13 board meeting included unsafe conditions for pedestrians in East Quincy, responding to changes in building regulations that have come down from the California Board of Forestry and Fire Protection and finding a temporary replacement for the county librarian, who resigned.
The “recommended” budget
The county adopts a “recommended budget” in June of each year to act as a starting point in the process of coming up with a budget for the next fiscal year, which begins July 1.
The recommended budget consists of the budget for the current fiscal year, updated with newer data where available.
A budget shortfall
Susan Scarlett, longtime budget consultant for the county, started out her presentation to the board by saying, “It has been an interesting start to this year’s budget season.”
Scarlett brought in a recommended budget for the 2017-2018 fiscal year, which has a budget shortfall of $4.2 million, which was almost twice as high as at this point in the budget process last year.
Scarlett attributed most of this increase in the budget shortfall to rising wages, retirement costs and group and worker’s compensation insurance costs.
Scarlett said salaries and benefits have increased 27 percent over the past four years. Retirement and worker’s compensation costs have increased 42 percent and 45 percent, respectively.
Preliminary budget shortfalls generally decrease as the board moves toward the final budget. Budget shortfalls in the final budget for the last five fiscal years have been $0, $0.2 million, $1 million, $0.8 million and $1.9 million, respectively.
Both beginning and final budget shortfalls have generally increased from fiscal year 2012-2013 to fiscal year 2016-2017.
Roberta Allen, county auditor-controller, said later, “This shows that the county has flat revenues and rising costs. And we are not alone in this, other governments are facing the same issue.”
Scarlett pointed out that some departments and accounts have large beginning budget shortfalls for 2017-2018. These include the sheriff’s department ($792,000); the facility services department ($720,000); money set aside for a county administrative officer, if one should be hired ($270,000); planning ($185,000); jails ($164,000) and the flood control district ($132,000).
Public entities are not allowed to have a budget shortfall. Therefore, the board had to add $82,000 to balance the budget for the flood control district.
Flood control district expenditures include money paid to the California Department of Water Resources each year for water the district does not use.
There was a discussion on how to stop this loss of money every year without losing the rights to the water in the future, should it be needed.
One idea was to lease the water to agricultural interests until it is needed.
Reactions to the shortfall
Scarlett and Supervisor Sherrie Thrall stressed that preliminary department budgets were going to change.
Members of the board also stressed that department heads were not allowed to spend money on capital assets, fixed assets or to reorganize their departments until the budget for 2017-2018 is finalized, which won’t happen until mid-September at the earliest.
The budget is a work in progress and the numbers and the budget shortfalls will change continuously as new information comes in and the budget process continues.
Board president Lori Simpson noted that she had been through many budget processes before and offered a note of calm, “There is this pot of money and you have to make decisions on it,” she said, “and you get through it.”
Scarlett advised that it might be a good idea to look at a two to three year budget to keep an eye on revenue and expense trends. Board members agreed, though it wouldn’t be ready for this year’s budget negotiations.
Supervisor Jeff Engel voted against adopting the recommended budget. The rest of the board voted for adoption.
The facility services department was singled out for particular attention because of its large budget shortfall, if all projected projects are built, and because there was an item on the agenda to dedicate $400,000 for one of the department’s projects. The money represents the county’s share of a $2.5 million project to replace the failing heating system at the county’s health and human services building with a boiler and heating system fueled by local biomass.
Because heating systems cost hundreds of thousands of dollars, organizations have tended to get cold feet at the last minute in deciding to switch to biomass for heating, despite its environmental and promised monetary savings.
However, on June 13, before a discussion of the issue even began, Engel abruptly put forth a motion to deny the $400,000 for the biomass project and Thrall immediately seconded the motion.
At this point, it was required that the board take a vote on the motion. Engel and Thrall voted yes. Supervisors Simpson, Kevin Goss and Michael Sanchez voted no.
Then a motion was made to include the $400,000 in the recommended budget to keep the biomass project active and the vote was 3-to-2 in favor.
The second vote passed because setting aside the $400,000 in the 2017-2018 recommended budget didn’t require a four-to-one majority. If the board actually decides to spend the money, it will require a four-to-one majority.
At this point, Simpson said that the board had been working on getting a biomass project in Plumas County for years and that if the county loses out on funding for the $2.5 million project, and the jobs it could bring, it would be on the heads of Supervisors Engel and Thrall.
Thrall responded by saying to Simpson that she was surprised that Simpson was responding that way because she had let it be known from the beginning that she would vote against the project.
Engel later said that he was in favor of thinning the forest to reduce catastrophic fires and then utilizing the biomass to heat buildings. However, he was growing tired of waiting for the project to get completed.
The current heating system in the county’s health and human services building utilizes heat from geothermal wells and can’t be made to work.
Fire escape for the courthouse
Before the board turned to the biomass issue, however, it discussed how to deal with the $1 million required to add two enclosed fire escapes to the courthouse. Both county employees and the county grand jury have stressed the need for safe egress from the courthouse in the event of a fire or other disaster.
Board members agreed that at least one fire escape was needed immediately for the safety of staff and visitors, particularly from the fourth floor.
They discussed shutting off the fourth floor and moving offices and the law library to other buildings.
Lynn Sheehy resigned as county librarian. Simpson, who worked at the library for many years before becoming county supervisor, said it was necessary that the library have one person who can negotiate with the board during upcoming budget negotiations.
She said they were unable to find a retired supervisor to come in as acting librarian. Therefore, she volunteered to supervise the two library employees currently running the library system in Plumas County and to represent the library system at negotiations.
Simpson said she will not be receiving any salary for being the acting librarian.
Besides, being familiar with the library system, Simpson joked that she has always wanted to be county librarian. To which Thrall joked, “Oh, then you should be paying us.”