Strained VC budget taxes all services


One Valencia County administrator is calling the county's stagnant budget a "perfect storm."

Providing basic services to residents has become harder and harder over the last few years, said Nick Telles, county finance director and interim county manager.

"We are seeing the perfect storm of a weak national and state economy, a recession the likes of which we haven't seen since the Great Depression," Telles said.

In October, Telles updated county commissioners on the health of the budget after the first quarter.

While revenues for the general fund saw little variation from last year, some departments have seen growing expenditures that need to be addressed.

Between July and September, the county was hammered by an unusually strong monsoon season, putting road department employees and equipment out on repair duties for weeks on end. Telles estimated the public works department budget could take a $250,000 hit of unexpected expenses.

Another area of concern is the county's detention center, he said. In 2009, a gross receipts tax specifically for the operation of the jail was lost after a public vote.

That tax brought in about $1.5 million annually. Now all $3 million-plus for jail operations comes from the general fund, leaving other county departments short.

"Losing that jail GRT has been debilitating," Telles said. "Everything in the budget is interrelated. If we have to increase spending for the jail, then another department, like public works or the sheriff's department, will get less."

State statute requires counties pay for the housing of inmates.

The county's budget this year is almost $16.5 million, which sounds like a substantial sum, Telles said, but when you break it down on a per-person basis, it's actually very little.

"That's about $189 for each person to just provide basic services," he said.

Some of those services are highly visible, such as roads and public safety, while others are more behind-the-scenes, like solid waste, corrections and the bureau of elections.

The jail is 20 percent of the budget, just more than $3.2 million, and those costs are going to increase with the award of a new medical contract, Telles said.

"We are looking at an additional $350,000 in costs," he said.

Commissioner Mary Andersen said she favors bringing back the jail tax. In 2009, the last year the tax was in effect, the jail had a budget of $2,448,614.

"Since the correctional tax was defeated, we have taken a minimum of $1.5 million out of the general fund every year," Andersen said.

Her biggest frustration is the funding shortage this creates for the law-abiding citizens of the county.

"It's a domino effect. That's $1.5 million we could not spend on roads or the equipment to build roads. That money would have gone a long way for a revenue stream for an administration building," she said. "All those things have to sit in limbo and we pay the price for it."

Andersen said the county is anticipating increased costs for health care at the jail, along with unions pushing for pay increases for employees.

"We know our employees haven't had a raise in two years. And medical insurance costs are going to increase," she said. "We need that money back."

Telles said the county's portion of employee insurance increased 10 percent this year and he anticipates another 10 percent hike in January.

While she has no problem advocating for a return of the jail tax, Andersen doesn't feel the commissioners could make a push for additional taxes.

"We have the legal right to push through three-eighths (percent) because of the loss of hold harmless, but I don't want to do that," she said. "If we can scrape by this year and maybe dear God, the solid waste lawsuit will come to end. And it appears that our audit is beginning to turn around."

The hold harmless clause was repealed by the state last year. It made up for revenues counties and cities lost because of the removal of gross receipts taxes from food and medications.

Under public work director Kelly Bouska's purview is the solid waste department, which operates Conejo transfer station.

After inking a contract with Waste Management earlier this year to take over curb-side residential trash pick up and the operation of Conejo, county officials thought they were clear of the costs.

However, a competing solid waste vendor filed an appeal and the issue is now tied up in court.

If the county prevails in the lawsuit and is allowed to continue with the contract with Waste Management, the company has told administrators it will need at least three months to bring operations up to speed.

To date, the judge hasn't made a decision on the suit.

So the county is looking for another $106,000 for the next six months to continue running Conejo. The tipping fees pay for part of the operational costs, Bouska said, but aren't even close to covering all the expense.

Bouska has proposed various ways to find the money, including taking money from within the public works budget to increasing tipping fees, all of which have pros and cons.

"We are making the best, hard decisions we can," she said.

That means prioritizing purchase requests for her department; some just have to sit and wait.

Andersen said the county and its residents are "paying for political, 'I'm the smartest one' decisions the commission has made over the years. And the people in the county are paying for it. People want something done for their roads and the equipment is broke and we can't afford to fix the equipment. We have to find stable money, stable programs, and if we can't afford them, we shouldn't be running them."

Telles said across the board, expenses are increasing for everything from fuel to health care.

"Those are always going up and our revenues run flat," he said.

And the state's yield control formula that prevents property taxes from skyrocketing and forcing people out of their homes also keeps a stranglehold on county revenues.

"There are special property taxes, such as the hospital mill levy, that can be used. But 'taxes' is kind of a forbidden word," he said. "We have been doing everything we can to spend wisely, and department heads are extremely careful with their budgets."

One of the fundamental tenets of government is to ensure public safety, Telles said.

While that is a priority, arguably the No. 1 priority, Telles points out that without a well-maintained infrastructure, the residents aren't safe.

"The sheriff's department, fire department, EMS, they all need good roads to drive on to respond to emergency calls," he said.

The flat revenues are only part of the picture, Telles said. After a year of managing the finances, he said it appears in the past, money was spent without fully thinking through the consequences.

"I think there was a bit of overspending in certain departments," he said.

The new software upgrade completed earlier this year has additional controls that will do things like double check purchase orders against available funds in a department's budget. The new system will enable better decision-making, Telles said.

Another strained area in the budget is the public works department, which oversees four departments — buildings and parks, the road department, fleet and solid waste.

Bouska has the task of taking $3.1 million and stretching it as far as it will go. When planning this year's budget, the goal was to not lose ground, she said.

"We at least wanted to stay flat, to have as much money as we did the previous year," she said.

And going into the fiscal year that started in July, the department already had parked equipment for mechanical failures and delayed projects due to budget cuts last year.

And while it is often mentioned what her department and others had to "give up" money from their budgets last year, Bouska looks at the situation differently.

"We kept the county whole and managed our budgets within our means," she said.

But half way through the new fiscal year, Bouska is looking at parked equipment that has been waiting for repair since last year. Those repair costs can range from $500 to $12,000.

"The equipment is old, in disrepair. We have new guidelines on when to park a machine and we need a plan to replace vehicles and equipment," Bouska said. "If the problem will cause more damage, cost more money, it's parked. No more bubble gum and bailing wire fixes."

In the past, equipment and vehicles would be used until they were only good for parts, but there was no plan to replace the machinery.

Bouska's goal for the coming year is to draw up and implement a replacement plan for public works equipment and vehicles.

"I think it's time for some hard realities. My job is not to make people happy — it's to get as much work done with the resources we have for the residents of the county," Bouska said. "People all over the county have the same needs and we need to address them in a consistent way."

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