Board Approves Budget, Denies Additional Funding Request by DA [UPDATED]

RIVERSIDE COUNTY, CA - Following a sometimes heated debate, the Board of Supervisors Tuesday approved additional funds for multiple agencies trying to overcome budgetary challenges in the current fiscal year but stopped short of granting the amount sought by the Riverside County District Attorney's Office, opening up the possibility of layoffs.

"I have inherited a structural deficit that I cannot remedy with belt- tightening," District Attorney Mike Hestrin told the board. "We will bust our appropriations in 2017. Do we begin the process of layoffs, or wait for additional funding from somewhere? Time is of the essence."

To stay within previously set spending parameters, the Executive Office recommended that Hestrin only receive $6 million of the additional $18 million he was seeking to cover a shortfall precipitated by higher labor costs and administrative expenses. The district attorney contended that the EO's appropriations process had not been "honest" and had left him and his staff "muddled and confused."

"We're in a state of limbo, and we need your leadership," Hestrin said.

He pointed out that the D.A.'s office was working with an outside auditor hired by the county in March -- Netherlands-based KPMG -- to identify ways to "bend the cost curve down," but its a months-long effort. Without an additional $6 million -- $12 million total -- the county's top prosecutor insisted that layoffs would be inevitable this fiscal year, though he provided no hard figures.

Board Chairman John Benoit and Supervisor John Tavaglione both questioned the district attorney's management practices and suggested that he was partly to blame for his financial fix. The supervisors cited data provided by the Department of Human Resources showing that the D.A.'s office had in the last 45 days added 18 people, mostly attorneys, to his 700-person workforce.

Tavaglione further challenged the wisdom of the district attorney authorizing more than 40 promotions in the face of lean finances.

"You didn't have enough funding for new hires and a lot of promotions," the supervisor said. "I know you're new, but now it's time to tighten your belt."

Hestrin shot back that the promotions stemmed from collective bargaining agreements, over which he had no control, and the new hires were prospects who had been cultivated and had been made tentative offers going back a year.

"The problem in this county is a lack of communication," Hestrin said. "No one ever calls my office. You're getting information out of context."

Benoit sympathized with Hestrin's dilemma but told him to be prepared to bring his agency into balance through "whatever fashion is necessary."

When county CEO Jay Orr said the only likely means to further backfill the D.A.'s budget would be drawing down reserves more than already proposed, none of the supervisors indicated support. However, Benoit vowed to work with Hestrin and the Executive Office staff over the next 30 days to ferret out possible alternatives to layoffs.

In a 4-1 vote -- with Supervisor Kevin Jeffries dissenting over concerns that the board wasn't taking a broader approach to spending cuts -- the supervisors approved a $5.43 billion spending plan for 2016-17, appearing to heed Orr's recommendation for "substantial restraint" in budgeting, particularly keeping reserves at or above $150 million. The reserve pool was $200 million at the start of the fiscal year on July 1.

More than two-dozen agencies requested increased revenue to meet expenses that will exceed the spending thresholds set by the Executive Office through June 30, 2017.

According to the EO, unanticipated revenue streams, cost savings and accounting revisions netted $23 million in previously uncounted money that will help ease fiscal hardships and meet board objectives. The county will still have to spend down reserves by nearly $40 million, according to Executive Office staff.

The EO's new allocation formula, approved by the board Tuesday, includes $20 million more for the Riverside County Sheriff's Department, $11 million more for the Riverside University Medical Center, $2 million more for detention health services, $500,000 more for the Department of Probation, $200,000 more for the Department of Animal Services, $2.2 million more for the Economic Development Agency, $3.5 million more for the Department of Waste Resources and $800,000 more for the Office of the Public Defender.

Public Defender Steve Harmon told the board in June that he would have to lay off 20 attorneys without an additional $2.1 million in discretionary revenue. It was uncertain whether he will still have to go forward with layoffs.

Discretionary revenue, composed largely of property tax receipts, is projected to go from $678 million to $735 million between the current and next fiscal year, according to the Executive Office.

In its 570-page report to the board last month, the EO pointed to ballooning detention health expenditures, along with cost-of-living adjustments, merit pay increases and other benefits guaranteed to many of the roughly 23,000 employees under collective bargaining agreements as putting a squeeze on the general fund.

The Executive Office identified actions that would help ease the financial burden, including eliminating a number of vacant unfunded positions, which presently number 7,268, as well as keeping new hires to a minimum and "holding firm on negotiations" with labor unions.

— By PAUL J. YOUNG, City News Service.