Supervisors Sign off on Proposed Rate Hikes, Some Services See 50 Percent Increase

By PAUL J. YOUNG, City News Service:

Fees charged by Riverside County agencies to provide legal, custodial, administrative and other services to fellow county agencies must increase in the next fiscal year, the Board of Supervisors decided Tuesday, based a report that the county could no longer afford to keep a cap on fees.

“Rates have been held down for many years now. But the reality is here,” said board Chairman Marion Ashley. “It’s budget time. It’s the will of the board to maintain a structurally balanced budget.”

According to the county Executive Office, “internal service rates” have been frozen at virtually the same level since fiscal year 2010-11 to ease the strain felt by departments struggling with board-ordered spending cuts. However, the rate freeze is no longer feasible because agencies that rely on internal revenue to support operations are facing dwindling reserves and mounting labor, insurance and other expenses.

A Rate Review Advisory Council -- composed of representatives from the Riverside County Assessor-Clerk-Recorder’s Office, Auditor-Controller’s Office, District Attorney’s Office, Sheriff’s Department, Office of the Treasurer-Tax- Collector and other agencies -- examined proposals for internal service rate hikes and determined most were justified.

The council submitted its findings in a multi-part report reviewed by the board, which voted in favor of implementing the rate increases in the coming fiscal year, beginning July 1.

Department heads pointed to higher salary and benefits costs as the chief reason for elevating rates, though in some cases rising supplies and insurance liability costs were factors.

A change in accounting methodology was blamed for a 50 percent hike -- $74 to $174 -- in the hourly paralegal services rate charged by the Office of County Counsel. However, the attorney service rate rose only 6.75 percent, from $163 to $174 an hour, according to the Executive Office.

Another relatively small rate increase was approved for the county’s central mail sorting office, which will charge $9.54 “per day per business address for mail pickup and delivery.” The current fiscal year fee charged to departments is $8.56.

The Economic Development Agency sought and received double-digit percentage rate hikes for handling agencies’ custodial services, building maintenance and repairs, leasing activities and to conduct inspections and plan checks for projects.

Thanks to the board-approved rate increases, the Department of Human Resources will be able to expand its medical malpractice division budget by $2.5 million in 2015-16. The agency’s general and auto liability claims budget will also increase, by $6.7 million, according to the Executive Office.

HR’s workers’ compensation insurance budget will grow $5 million under the new rate regime.

The Department of Information Technology’s higher rates elicited comment from board members and the public. According to documents, the agency will have to charge fees to support a 60 percent increase in its security budget and an 8.3 increase to cover general operations. Making matters worse was a figure that showed total IT staffing stands at 461 -- up from 424 in 2012 -- despite a reorganization plan approved by the board to centralize functions and reduce personnel.

“The IT restructuring was supposed to reap untold savings to departments. Instead county government has become more costly,” Temecula resident Paul Jacobs said. “There was supposed to be savings through consolidation. Why can’t this county tighten its belt? The county is mismanaged, and this board keeps pretending that it isn’t.”

Supervisor John Benoit expressed his own concerns, saying the county appeared to be “going down a path of potentially erasing savings” from having a centralized IT department.

“I’m struggling with how we ended up back with more IT positions than when we started down this path,” Benoit said.

Interim IT Director Chris Hans told the board that he had encountered a number of challenges since taking over from former IT chief Kevin Crawford, who quit last August. Hans described the consolidation as a “multi-year process” that lacked a “good long-term plan” to begin with. He said the county is working with Stamford, Connecticut-based technology research firm Gartner Inc. to iron out issues.

County CEO Jay Orr added that the county is nearing the end of its effort to recruit a new permanent IT chief.

Supervisor Kevin Jeffries suggested the move toward higher internal service rates was a forerunner to overall budgetary challenges going into 2015- 16.

“Revenues are increasing, but not enough to keep up with expenditures,” the supervisor said.

County Chief Financial Officer Ed Corser agreed.

“We’re improving our revenue, but not as fast as we need to keep up with spending,” he said. “We have to make sure we have enough money to cover costs.”

The board will hear a midyear budget report next Tuesday.