RIVERSIDE – Costs to operate the county hospital are exceeding revenues by tens of millions of dollars, while higher labor and service expenses are certain to leave the sheriff’s and fire departments’ budgets in the red at the end of the fiscal year, according to a report Riverside County supervisors will review Tuesday.
The Executive Office’s midyear 2012-13 budget report provides a snapshot of positive and negative findings, detailing how county finances are shaping up, agency by agency.
The Board of Supervisors will receive a presentation during its meeting Tuesday.
The report begins by spotlighting a projected $30 million year-end deficit for the Riverside County Regional Medical Center in Moreno Valley.
The hospital, which serves a large number of indigent, uninsured patients, is expected to cover almost $20 million of the red ink, leaving a roughly $11 million overage by June. But its long-term financial stability remains a growing concern, county CEO Jay Orr noted.
Orr underscored the risks to the medical center with the pending full implementation in January of the Affordable Care Act, also known as ”Obamacare.” Demands on the hospital’s resources are expected to increase, and thus its expenses will, too.
”I am commissioning a specialized consultant to explore opportunities to increase RCRMC’s efficiency and effectiveness, develop a strategy for implementing the Affordable Care Act and strengthen the medical center’s financial footing,” Orr wrote.
The sheriff’s department is expected to end 2012-13 with a $6.2 million shortfall, down from the $9 million projected a few months ago.
According to county officials, the sheriff’s overage is in part a result of recruiting and hiring 50 deputies in a board-authorized effort to increase county law enforcement personnel. Higher jail expenses and costs tied to the new Public Safety Enterprise Communication system were also to blame.
The system — the focus of a six-year effort to move county public safety agencies away from decades-old analog communications to a digital network — is slated to come online next month.
The fire department’s communication system costs, along with higher expenditures tied to servicing the relatively new city of Jurupa Valley, will result in a $5.7 million deficit for that agency, according to the budget report.
Orr said savings wrung out of other departments in the current fiscal year could help offset the overages, but he warned against tapping the county’s $155 million reserve pool.
According to the budget report, the county is bracing for a $64 million increase in general labor costs in 2013-14 due to collective bargaining agreements that established across-the-board cost-of-living and merit pay increases.
Because of underperforming investments managed by the California Public Employees Retirement System, the county will also be on the hook for higher pension obligations, officials said.
Costs associated with the new East County Detention Center in Indio, scheduled for completion in October 2016, will add $50 million a year to the county’s expense column.
Orr did not rule out the possibility of layoffs or other cost- containment measures as part of the 2013-14 budget, which must be enacted by June 30.
According to Orr, to boost service to the public and make the county more responsive to businesses, the board should entertain re-instituting a 9/80 work schedule throughout local government. In 2008, the board shifted to a 4/10 schedule, under which the vast majority of employees work 10-hour days, four days a week.
The 9/80 schedule would require employees to work nine hours a day for nine business days, then take a three-day weekend twice a month, in addition to the customary two-day weekends. Under the 4/10 schedule, most county buildings are closed on Fridays. Changing to 9/80 schedules would mean business-as-usual on all weekdays.
The budget report pointed to signs of economic recovery regionally and statewide. According to figures, applications for building permits were up in the last six months, along with sales and use tax receipts.
The county Assessor-Clerk-Recorder anticipated applying the full 2 percent inflation-based increase on property owners’ tax bills this year, and property tax receipts were expected to steadily grow over the next four years, the report stated.
County officials were cautiously optimistic about long-term economic expansion, worrying that international crises and a lack of visionary national policies could dampen or derail growth.