Updated at 4:45 p.m. Tuesday
Riverside County is expected to meet its budgetary targets in the current fiscal year—without tapping reserves—though rising healthcare, public safety and other costs will weigh on the county's financial future, Chief Financial Officer Ed Corser told the Board of Supervisors Tuesday.
"We see some sunlight on the horizon. But we need to be conservative and hedge our bets," Corser told the board during a midyear update on the 2012- 13 budget.
"There are so many game-changers in the works," he said. "We can use one-time money to fill gaps and not touch reserves. But we have to look several years out rather than focus on the current fiscal year."
Corser said the county should be able to scrounge up $40 million to cover current-year shortfalls, balance the budget and add to the county's $150 million reserve pool. The CFO said the financial picture had improved over last year, with home prices climbing and the unemployment rate dropping.
However, he was less sanguine about what may lay ahead, noting the potential impact of the Patient Protection and Affordable Care Act -- otherwise known as "Obamacare" -- the ongoing costs of Assembly Bill 109, which shifted many state public safety obligations onto counties, and increasing labor costs.
Corser anticipated a $40 million deficit in 2013-14.
"We're building a budget stabilization fund to pay off debts where we face them," he told the board. "We're really reaching to find these dollars."
The 85-page midyear report projected a $30 million year-end deficit for Riverside County Regional Medical Center in Moreno Valley. The hospital, which serves a large number of indigent, uninsured patients, is expected to cover most of the red ink, leaving a roughly $9.5 million shortfall by June.
RCRMC Director Doug Bagley explained that county budget cuts and the fact that the state has intercepted federal subsidies to the hospital, effectively swallowing money that would otherwise cover the medical center's operational costs, have resulted in financial hardship.
Bagley said disparities in the state's Medi-Cal reimbursement program have led to the county hospital being shortchanged. He pointed out that under a formula favored by Bay Area counties, Riverside County receives reimbursements of about $391 per patient, while the state average is $620 per patient.
The reimbursement formula hasn't changed in more than 20 years, even while the county's population has soared, according to Supervisor John Tavaglione.
Board members expressed dismay over the state's behavior, prompting county CEO Jay Orr to promise research into possible solutions, including a civil suit against the state.
"Let's go to war over this if we have to," he said.
Orr said he also planned to hire a consultant to "explore opportunities to increase RCRMC's efficiency and effectiveness" ahead of the full implementation in January of the healthcare overhaul law.
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 shortfall stems in part from the hiring of 50 deputies in a board-authorized effort to swell county law enforcement personnel.
Higher jail expenses from having to house more inmates because of AB 109 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 in the next several months.
The fire department's PSEC 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.
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.
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.
The CEO asked the board to entertain re-instituting a 9/80 work schedule throughout local government in order to boost service to the public and make the county more responsive to businesses. 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.
Board members will take up the matter in the next two months.