County unearths $7.7 million surplus
August 23, 2004
After a year of trimming government fat that included consolidating departments and not filling vacated positions, El Dorado County officials have discovered a $7.7 million surplus after facing a $10.5 million shortfall earlier this year.
The news came as a surprise to many, including County Auditor Controller Joe Harn who informed Chief Administrative Officer Laura Gill that she underestimated the fiscal year budget, which ended June 30.
On Aug. 16, a memo was released to Gill from Harn stating the balance in the general fund is $14.8 million, or about $7.7 million higher than the $7.1 million estimated for the 2004-2005 fiscal year budget.
“The CAO significantly underestimated the year-end fund balance,” Harn said. “In the future, hopefully the CAO will confer with the county auditor when she makes the fund balance estimate. It is better to underestimate, but she should been closer. Much closer.”
Through the course of this year’s budget, El Dorado County opted not to fill about 40 vacant positions and consolidated 16 departments into four. While no pink slips were given, eight employees from the county’s information technology departments were moved to other departments, saving the county about $210,000, according to the El Dorado County Employees Association.
About $1.45 million of the $7.7 million increase is attributed to growth in discretionary revenue sources, $2.7 million attributed to net savings by departments, including department consolidation and salary and benefit savings, and another $2.2 million in revenues, such as sales tax, that were higher than anticipated, Gill said in a Aug. 17 memo to the Board of Supervisors. Gill did not return two phone messages on Monday.
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The surplus has led some leaders to wonder how such an oversight was made.
“It is certainly understandable what happened but no one was more surprised of this element than I was,” said Supervisor Dave Solaro, who represents the Lake Tahoe Basin portion of El Dorado County. “It really puts a negative outlook on the whole process. We had absolutely no knowledge of this whatsoever. We were not very happy last Tuesday.”
Noting the surplus was a “welcomed piece of news,” Solaro said the board spent months making tough decisions – including restructuring and department consolidations – based on what now are spotty figures.
During budget time, it is not uncommon to see fund balances off by 5 or 10 percent. But when it is off almost double what the supervisors had anticipated there is a problem, Solaro said.
“Something like this, 100 percent, is not acceptable,” Solaro said. “We will be working with the CAO to make sure it doesn’t happen again.”
The oversight will be addressed by Gill and Harn, who will look at shoring up whatever accounting procedures went wrong at the department levels to make sure the figures are representative of the budget, Solaro said.
Some members of the El Dorado County Employees Association say they want the board to set aside $2 million of the $7.7 million for salaries and benefits, which may solve a contract dispute over health costs in which the union rejected the county’s last offer.
However, Heidi Weiland, executive director of El Dorado County Employees Association Local 1 said Monday the union hasn’t pinned down a firm dollar amount it will ask of county leaders.
“We believe the county should use a portion of the one-time monies to deal with the immediate health insurance issues and ongoing monies to address compensation and equities,” she said. “We are certainly not looking to take it all but the county is in the middle of a compensation study with 16 comparative agencies and they are going to find that there are huge disparities between El Dorado County employees and their comparators.”
Solaro said that contract falls under areas that supervisors will have to revisit.
“Unfortunately we made some hard decisions based on previous information. That puts us in a bad situation in some areas that we will now have to revisit,” Solaro said.