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Nevada County budget increases: Revenue struggles to keep pace with expenses

 

Nevada County’s revenue is growing, but so are its expenses.

“Our fiscally prudent budget policies have kept us in good financial shape,” said Martin Polt, chief fiscal officer/deputy county executive officer. “Our staffing remains 20% under pre-recession levels, and we know we have a sustainable budget looking ahead past fiscal year ‘22-23.”

The total budgeted revenue for next fiscal year is $322 million, an increase of 8.5% or $25 million. Total budgeted expenses are $330 million, an increase of 10.3% or $31 million.



The Nevada County Board of Supervisors discussed and passed the budget at its Tuesday meeting.

Polt said financial management policies developed over the past year developed budgets key to the stability of fiscal prudence and fund balance. The county will work toward maintaining services at least at the level of the past year while streamlining services, particularly in the recreation and community development agencies, in view of the current total deficit balance.



Expense increases are largely focused on budgets that target board objectives and core service delivery by county departments.

“That includes Behavioral Health, which is the department most involved in the CalAim program to improve the health of our citizens,” said Polt. “Also, expenditures in the Solid Waste Division for McCourtney Road Transfer Station improvements, as well as planning in our housing division for another low income housing project similar to the Cashin’s Field project that is currently underway in Nevada City.”

Other impacts to the total revenue deficit were attributed to lower than expected cannabis business tax revenues and a flat-lining of the transfer tax with fewer property sales and/or lower property values.

“We are seeing stronger revenue returns, but it’s also reflected in expenditures,” said Polt.

County salary and benefits rose 9.3%, with health care being the largest increase. Also, increases in service supplies are up 20%. The Information Systems Department will see an increase in four more full-time equivalent employees, as well as more employees for the Office of Emergency Services and for cannabis enforcement.

POTENTIAL BUDGET THREATS

Federal and state revenue increased by $11.7 million dollars, largely in the Health and Human Services Agency, including revenue related to the new CalAIM Medi-Cal program, which is a more coordinated approach to maximizing the good health of Medi-Cal participants. Other revenue such as sales tax and property tax are budgeted to show moderate growth.

“County fund balances, including the general fund and other operating funds, remain healthy, with funds as a percentage of expenditures overall remaining above the 30% target,” said Polt. “The county recognizes several potential threats to the budget and finances, including the threat of a recession, costs of wildfires and other emergencies, pension costs, and our continued reliance on state and federal budgets. We are positioned to meet those threats and are monitoring them closely.”

CEO Alison Lehman said wildfire and economic development are central to the pandemic recovery. She noted the county retained industry through help from the American Recovery Plan Act and the Community Resiliency Act. The latter has provided $5.8 million and she praised supervisors for allocating more than 30% of the CARES and ARPA funding to support local businesses.

Officials say the county remains on course for its housing objective. It reduced homelessness by 35% and veteran homelessness by 40% last year. Also, 175 units of affordable housing were added.

“We’ve hit major milestones in affordable housing, with 300 units since 2017 and over 100 more for next year,” said Lehman. “And our focus on broadband increased connectivity by the county approving the programmatic environmental impact report to expedite the work of internet providers by connecting more homes to the internet.”

William Roller is a staff writer with The Union. He can be reached at wroller@theunion.com


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