SOUTH LAKE TAHOE, Calif. — The El Dorado County Board of Supervisors approved the Chief Administrative Office’s recommended budget, along with a set of projects and cost-offsetting allocations, during a special budget meeting on June 7.

Chief Administrative Officer Don Ashton set the recommended budget at $864 million for fiscal year 2022-23, a $93.1 million increase from last fiscal year’s budget.

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The appropriations break down to $266.6 million for salaries and benefits, $275.2 million for services and supplies, $50.1 for fixed assets, $144.9 million for transfers, $121.4 million for contingencies and $6.7 million for additions to reserves and other designated funds.

County staff predicts property tax revenues will increase by 4.75% and a 2.4% increase in sales and use tax revenue in 2022-23.

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Budget priorities include road maintenance (for which the county has set aside $7 million from discretionary revenues), $6 million to the capital projects reserve, $2.9 million for contingent funding for future CalPERS cost increases, $2.145 million for the next public safety facility loan payment and $900,000 for snow removal equipment.

Additionally, $2.5 million from the transient occupancy tax will go to fire districts to offset costs, $1 million will go toward the community park planned for Diamond Springs, $250,000 for the Chili Bar park project, $300,000 to establish the Office of Wildfire Preparedness and Resilience and $20 million will go toward construction of the new Mosquito Bridge. 

Other budget priorities include $9.8 million for ongoing maintenance of county-owned buildings, $18.4 million from state and federal revenue to address homelessness, nearly $4 million to fund the sheriff’s helicopter with an additional $800,000 in ongoing operation costs, $76,500 for Placerville city pool maintenance and $2.2 million in support of Caldor Fire recovery costs. The Board of Supervisors also approved to offset maintenance costs for the Placerville Aquatic Center for fiscal years 2020-21 and 2021-22.

The county is adding $6 million to capital projects designations, totaling an ending balance of nearly $27 million, and adding $450,000 to the General Reserve, which is expected to end the 2022-23 fiscal year with nearly $10.8 million.

Inflation was presented as a major budget challenge. CAO analyst Emma Owens said it will be hard to determine what impacts inflation will have to each county department, including those with contracts for services and supplies. 

“You make an estimate on a budget on what those costs will be next year. But if those figures go up, we can have an appropriations issue when we look at the budget midyear,” Owens said. 

District 1 Supervisor John Hidahl acknowledged inflation forecasters predict inflation will grow to 10% in the near future. He suggested putting consumer price index inflators in service and supply contracts to help offset unexpected cost increases.

“It is a natural correction,” Hidahl said. “In the past couple of years we’ve been able to impose those, which is legal, to try to make sure we don’t fall way behind then recognize we got a big change and have to start providing additional funding because (the contract) hasn’t been adjusted for inflation.”

Owens told the board due to a change in CalPERs risk mitigation policy, the county’s discount rate went down .2%.

“That doesn’t seem like a lot but it actually is when you take that over our 20-year projection of our unfunded accrued liabilities,” she said. 

Regarding facility needs, high-cost projects — the new Placerville juvenile hall, the South Lake Tahoe El Dorado Center, a new Shakori Drive storage facility in South Lake Tahoe and renovation of county facilities on Spring Street in Placerville will cost about $95.5 million. These projects have an overall funding gap of $47.1 million, according to county staff. 

“This is a large budget challenge. We will need to find the funding for that gap at some point,” Owens said.

The Spring Street renovation makes up more than half of that revenue gap at a cost estimate of $25 million. 

County staff said the county is better prepared for a coming recession compared to 2008, when the county had to cut 333 employee positions due to a dip in county property tax roll values, which is a record of all assessable property discovered and valued in the county. 

Staff showed that the county hired more county staff when property tax revenues were going up from 1998 to 2008, before the latter year’s recession.

“We have stabilized over these last 10 years, which tells me we are about where we should be as an organization in size relative to our revenues,” said deputy CAO Sue Hennike. “At the same time the property tax has rebounded and continued to grow.” 

All recommended changes were board approved with no changes.