Increasing labor costs and flat revenue require Riverside County to adhere to a conservative spending plan for the rest of the current fiscal year and into 2014-15, according to a report being reviewed by the Board of Supervisors.
The Executive Office’s midyear analysis of county finances shows that most agencies are on track to end 2013-14 in the black, but pressure on the treasury remains an ongoing concern as the county faces an estimated $77 million in higher labor expenses over the next year.
The rising costs stem from collective bargaining agreements reached over the last three years with labor unions that represent more than 90 percent of the county workforce. A sheriff’s recruiting drive – undertaken at the Board of Supervisors’ direction – to add 500 deputies to the county payrolls is also lengthening the expense column, according to the midyear report.
The Sheriff’s Department and the Riverside County Regional Medical Center projected the largest deficits by year end – $35 million for the sheriff, and $84 million for the medical center. The latter is in the early stages of a major restructuring that county officials hope will curtail cost overruns and make the facility more competitive.
County CEO Jay Orr pointed out that assessed property valuations are predicted to increase a meager half-percent this year, leaving property tax income virtually unchanged, while sales tax revenue and receipts from building permits are likely to be
The county’s discretionary income at midyear is projected to be $625 million, compared to $591 million in fiscal year 2012-13. Though the modest increase is encouraging, county officials cautioned that future revenue growth remained tied to uncertain variables, such as the length and strength of the real estate market recovery.
Orr said non-public safety agencies will have to absorb labor cost increases through the end of the current fiscal year, though there would be exceptions.
The county is holding about $194 million in reserves.
According to documents, agencies projected to end the fiscal year with money to spare include the Office of the Assessor-Clerk-Recorder and the Office of the Treasurer-Tax Collector.
The first hearings on the 2014-15 fiscal year budget are tentatively set for April 2.