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The Daily Journal

 

February 6, 2008

 

By Michelle Durand

 

 

County comes to terms with shrinking budget

 

 

San Mateo County coffers are anticipated to net millions of dollars more than originally expected in extra state funds but four departments — the San Mateo Medical Center, the Sheriff’s Office, the Probation Department and the Assessor/Clerk/Recorder’s Office — will have trouble meeting budget targets for 2008-2009, according to an update delivered yesterday.


Late last year, county officials emphasized the need to halt a growing structural deficit before it hits $86 million by 2013 and implemented a hiring freeze. At the update presented by Budget Director Jim Saco yesterday, he told the board the county is doing much better than many other areas of the state and county but the four departments in particular will be challenging.


Both the Sheriff’s Office and Probation Department are hamstrung by overtime costs although the former is improving, Saco said.


The board approved a transfer of $1,993,343 to the Sheriff’s Office to cover the costs of negotiated raises for its staff.


Dr. Sang-Ick Chang, medical center CEO, is hacking away at a $5 million shortfall by giving all major operating areas a 2.5 percent budget cut mandate by June 30. Coupled with increased revenues and holding positions vacant, Saco said the deficit should be fixed by the end of the year.


While the tactic is a short-term solution, Saco said the county must take a hard look at the long-term through recommendations by consultants Health Management Associates.


The single biggest contributor to the county’s debt, according to finance officials, is labor costs. Salaries, benefits and retirement costs jump by the double-digits each year.


The county already agreed to use $56.9 million in ERAF — or Educational Revenue Augmentation Funds — for one-time costs like retiree health care and capital improvements.


The county is also hit with expenses that may not have been as foreseeable as salaries and benefits.


For example, the state is only reimbursing the county $4 million for hangars at the San Carlos airport although $5 million was anticipated.


The county clerk/assessor/registrar’s office is seeing document reporting fees drop from $3.6 million to $1.8 million because of the mortgage crisis sweeping the nation. Homeowners aren’t selling or buying although the document standstill might pick up if the drop in interest rates spur refinancing, Saco said.


Some of the county’s fiscal realities won’t be known until the state finalizes its cuts. County officials want specific departments to absorb the cuts relative to the state decisions, a move that will most certainly be the hardest felt in health and human services arenas.


The county budget update made no assumptions about the state budget but if it stays as proposed the county will see at least a $6.5 million reduction, Saco said.

The county budget also made no assumptions about looming big-ticket items like Sheriff Greg Munks’ proposal to re-open the men’s facility in La Honda, the North County jail for female inmates and build a completely new re-entry facility at the site of the current Maple Street Women’s Correctional Facility.


State money may be available for a new facility but the county needs approximately $7 million annually to open and operate the two other now-shuttered sites.


Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.