Despite revenue increases — including $6.5 million in new Measure Z funding — the Humboldt County budget for the upcoming fiscal year has a $4.9 million deficit and supervisors have approved waiving a balanced budget policy to cover expenses.
A proposed budget deficit that’s more than double than what was forecasted two months ago is part of a draft budget presented to the Board of Supervisors at its June 8 meeting.
The $352 million budget is $33.4 million more than the budget that ends on June 30, with the increase mostly due to grants and capital projects.
Measure Z sales tax revenue amounts to $11.7 million in the budget, with $5.2 million of it carried forward from last year’s allocations.
Supervisors approved several measures to close the budget gap, including waiving the balanced budget policy to allow dipping into the General Fund’s balance, fund transfers and authorizing department heads to approve voluntary employee furloughs.
Displaying a graph showing a General Fund forecast, Deputy County Administrative Officer Cheryl Dillingham said some actions — such as placing money in trust funds, a reserve account and the county’s contingency [emergency] account — reflect additional assets that aren’t included in budget projections.
“It may look like it’s going down in an unsettling way but we actually are setting funds aside to be proactive, including taking care of our facilities, which we haven’t done for a long time,” she continued.
Additional spending requests for the General Fund include coverage of jail medical services, administration of medical marijuana permitting and inspections and additional funding for the Public Defender’s Office.
Contributions to the county’s emergency and reserve accounts have added $750,000 and $433,000 respectively but those accounts are still far below policy-recommended levels.
County Senior Administrative Analyst Elishia Hayes reported on Measure Z spending in the current fiscal year, including firefighting equipment purchases and staffing for the Sheriff’s Office.
Hayes said that with Measure Z-funded staffing increases, arrests in the county have significantly increased. She said there were 890 arrests from January through May, an increase of 111 arrests compared to the same timeframe last year.
She added that the Department of Public Works has improved 34.3 miles of county roads with the support of Measure Z funding.
Measure Z sales tax revenue is spent on public safety services, which adds to General Fund expenses. According to a written staff report, “By increasing funding for public safety departments, this has had a trickle-down effect, increasing the workload for already-understaffed departments that provide internal support service.”
The county also has “looming expenses” such as ADA and other facility improvements and a $204 million employee pension payment debt.
Board Chair Mark Lovelace noted that $3.6 million of Measure Z revenue is going to cities and other agencies outside of the county. He also said that Measure Z’s tax-funded service enhancements are not liability-free, as hiring more staff creates ongoing administration and salary and benefit costs.
“While it’s been a boon for the county, it’s also, in its own way, creating a need for us to take some pretty extraordinary measures on our part to help out other jurisdictions and other entities, and it’s adding to long-term liabilities,” Lovelace continued.
Public hearings on the budget are set for June 20 at 1:30 p.m. and 6 p.m. in board chambers. The budget is set for adoption on June 28.