Budget bomb: Nevada County could be $5.5M in the hole next year | TheUnion.com

Budget bomb: Nevada County could be $5.5M in the hole next year

More than 50 Nevada County employees listened intently as Assistant CEO Joe Christoffel delivered the bad news at a Tuesday meeting of the board of supervisors.

Property tax revenues continue to plummet, down 7.5 percent this year, opening a $1.175 million gap in the county’s budget of nearly $182 million.

The current-year deficit was balanced by payments including reimbursements from the state for costs incurred last year; savings on insurance rates and attorney fees; and higher-than-estimated sales tax revenue, Christoffel said.

But if the overall revenue trend continues, county income for 2011-12 would be $5.5 million less than what the county is collecting this year. Property tax revenues are projected to drop another 2 percent next year, Christoffel added.

“It’s not going to be business as usual around here,” said District 4 Supervisor Hank Weston. “I don’t see it turning around any time soon.”

The supervisors have “three levers to pull” to begin to address the predicted 2011-12 deficit, Christoffel said.

“They can reduce spending, use labor negotiations and their reserves,” Christoffel said.

Board members must make hard choices in coming months, said Chairman Nate Beason of Nevada City’s District 1.

The board has more than $8.5 million in reserves backing up a general fund of nearly $61 million; the general fund consists largely of property, sales and transient occupancy taxes, and pays for many day-to-day functions that are not funded by federal, state and agency grants.

“Clearly we’re going to need to use at least part of” budgeted reserves, Beason said.

Staff cuts in anticipation of next year’s projected deficit already are underway, Christoffel said. He pointed to four layoffs announced nearly two weeks ago designed to save about $250,000 annually in salaries and benefits.

The county’s staffing levels dropped from 913 at the beginning of FY 2009-10 and now stands at 826 employees, according to Tuesday’s budget report.

Payroll accounts for nearly half ($87.2 million) of the county’s expenses. Seven union bargaining units represent county employees, and labor contracts include raises of as much as a 3 percent for some employees this year, although several managers and front-line employees have turned down pay raises.

To contact Staff Writer Kyle Magin, e-mail kmagin@theunion.com or call (530) 477-4239.

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