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Politics & Government

Riverside County Facing Nearly 200 Job Cuts, CFO Says

"We've tried hard, but revenue keeps dropping."

Nearly 200 jobs may have to be cut from Riverside County payrolls to support cost-reduction plans in the face of an $80 million deficit in the upcoming fiscal year, the county's chief financial officer told the Board of Supervisors today.

"We've tried hard, but revenue keeps dropping," CFO Ed Corser said when delivering a report on activity in the 2011-12 fiscal year, which ends June 30. "If you want to make sure the budget is balanced structurally ... we'll either end up balancing with one-time money, or play hardball and say it's going to happen this year (with austerity measures)."

According to Corser, lower discretionary income will leave the county $80 million in the red by the start of 2012-13, and to remedy that, across-the-board spending cuts will be necessary.

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He and county Executive Officer Larry Parrish outlined a deficit-reduction plan that calls for non-public-safety departments to absorb cuts to their respective budgets averaging 28 percent, while 3 percent cuts would be imposed on public safety agencies.

With the spending cuts, attrition, savings from pension reform and other measures, the county should be able to whittle its $80 million overage down to $10 million, according to Corser.

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"That's spitting distance to balance this budget next year," he said.

The cuts would translate to around 180 layoffs, Corser said, adding that a number of variables continue to weigh on the county's immediate financial future, including the state budget process and whether statewide tax hike initiatives proposed on the November ballot pass muster with voters.

He also noted that if property tax rolls lose another 2 percent in value, as Assessor-Clerk-Recorder Larry Ward has projected, the 2012-13 deficit could widen to $20 million -- even with the current proposed spending cuts.

According to Ward, while declines in residential property values have slowed, commercial property values continue to sink, dragging down the county's largest revenue stream -- property taxes. Ward said commercial properties, including retail outlets, office space and warehouses, make up 23 percent of the county's property tax base.

"We've been taking millions and millions off the rolls of commercial properties," Ward told the board.

The assessor disagreed with projections of "moderate" economic growth that Beacon Economics executive Chris Thornberg predicted for Riverside County over the next five years. Ward said his data wasn't pointing to signs of a rebound.

Corser's mention of using contingency funds to cover some part of next year's budget shortfall prompted Supervisors John Benoit and Jeff Stone to reiterate their preference for leaving rainy day funds alone.

"I would be very reluctant to dig deeper into that hole," Benoit said.

"We've tried to negate personnel changes in the county by tapping into healthy reserves that were once over $300 million," Stone added. "I don't want to touch reserves anymore."

The county's reserve pool, including funds set aside for specific programs, is around $160 million.

Stone said the "economic storm" was not over and department heads should be preparing for a "worst-case scenario" on cash flow.

However, Supervisor Marion Ashley struck an optimistic note, subscribing to Thornberg's forecast and saying "the recovery is coming."

"I think we're in good shape," Ashley said. "But the future is now. If we structurally balance the budget now, future balancing will be relatively easy. The state may throw some bomb shells at us. But we can manage."

The budget report indicated that the fire and sheriff's departments, as well as the Office of the Registrar of Voters, were expected to end the current fiscal year in the red. The two public safety agencies began 2011-12 with deficits, which they managed to pare down.

County fire is facing a $1.7 million shortfall, while the sheriff's office is anticipating a $2.5 million deficit, according to the Executive Office.

County officials expected that both agencies would be able to trim the overages. However, the ongoing concern from the sheriff's perspective was the impact of Assembly Bill 109, which made local public safety agencies responsible for imprisoning criminal offenders who fall into the non-violent, non-sexually-oriented category.

AB 109 advocates, most prominently the governor, argued the move would increase efficiency while reducing overcrowding in the state's 33 correctional facilities. However, the change in the law has led to a surge in the sheriff's inmate population, reducing available capacity to less than 3 percent, according to county documents.

With no long-term funding promises from the state, county officials are worried about the near- and long-term budgetary impact of AB 109.

County Chief Probation Officer Alan Crogan will present a situation report to the board on Feb. 28.

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