County expects tight finances |

County expects tight finances

With general fund revenues flattening, Nevada County supervisors were advised Tuesday to tighten their fiscal belts.

Nevada County has enjoyed an increase in revenues over the last few years, said Assistant County Executive Officer Rick Haffey.

“That trend has stopped,” he said.

Haffey’s comments came during a financial report for this year and projections for fiscal year 2002-03.

Due to a downturn in the economy, the Sept. 11 terrorist attacks and actions by the Federal Reserve Board, Haffey said, the county’s discretionary revenues have not grown.

Sales tax and Transient Occupancy Tax, or bedroom tax, revenues are down 3.7 and 3.6 percent respectively so far this fiscal year, Haffey said.

He said the county’s property tax revenues, however, remain strong and have offset shortfalls in other revenue sources.

Overall, Haffey said expenditures are within the county’s $125 million budget and the current level of services should be maintained.

Haffey said it’s anticipated that next year’s projected revenues will be sufficient to maintain services at current levels, but told the supervisors it would be prudent not to add programs and services to next year’s budget.

Despite the decline in the county’s discretionary funding pool – which stands at $25 million – Haffey said the county is solvent, its reserves are at a healthy $6 million, and the recession is reported to be over with a slow recovery expected.

Haffey cautioned, however, that Gov. Gray Davis’ May 15 state budget revisions could threaten the county’s solvency.

Though Davis said he will not balance the state budget on the backs of local governments, Haffey said May’s revised budget will tell the tale.

Cuts at the state level could reduce the county’s discretionary revenues – such as motor vehicle in-lieu fees – and lead to unfunded state mandated programs, Haffey said.

In other business, the supervisors leaned toward taking the county’s share of tobacco settlement payments in yearly increments rather than one lump sum.

The California State Association of Counties has established the Tobacco Settlement Payment Securitization Program by which California counties may turn their annual installments into a single up-front payment.

The county’s payments are expected to average $1.6 million a year through 2021 for a total of $22.1 million, said Michael Castelli, a special counsel with the County Counsel’s Office.

If the county chose to participate in the securitization program, it would receive a one-time payment of $12.5 million, Castelli said.

Castelli recommended that the county not participate in the program at this time.

But that could change if a better plan comes along, he said.

In other business, the supervisors directed staff to move forward with establishment of a In-Home Supportive Services Public Authority.

In-home supportive services and the public authority are state-mandated services and all counties are required to establish a public authority by Jan. 1.

Rural counties, however, are struggling to meet the deadline due the added costs associated with creating a public authority.

It would cost the county an additional $500,000 over what it’s spending now for in-home supportive services just to get a public authority up and running, said Supervisor Peter Van Zant.

In January 2000, the board approved the establishment of an employer of record and a public authority advisory committee. On Sept. 25, 2001, the board held a first reading of an ordinance establishing the Nevada County Public Authority.

“People are always asking me why we’re dragging our feet,” said Supervisor Elizabeth Martin, who’s also a member of the county’s Long Term Integration Committee. “The community needs to understand there’s going to be a budget impact.”

County officials support establishment of the public authority and the increase in caregiver wages and improvement in care it will bring, but are searching for funding sources.

Staff will report back to the board April 23 with funding options.

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