El Dorado County working on fixing financial woes
El Dorado County is working on a plan to reduce a significant budget gap in the upcoming fiscal year and potentially save millions of dollars without the need to execute layoffs — action that would otherwise be certain, according to staff.
But it won’t be easy.
If the county continues on its current path, budget projections show a $19 million shortfall in fiscal year 2015-16, a figure partially attributed to a $10 million spike in salaries and benefits that started in the 2013-14 fiscal year and doesn’t appear to be dropping.
However, under revised estimates presented to county supervisors this week, that deficit could be brought down to $4 million or less if certain actions are taken. The reduction would require the immediate implementation of a soft hiring freeze, meaning almost none of the vacant positions in the county could be filled in the near future.
“It’s a good number if your department is fully staffed,” Interim CAO Pamela Knorr said at this week’s board meeting.
Supervisors unanimously chose to support the new strategy and, along with the aforementioned action, directed departments to not refill any positions that become vacant due to turnover as well.
They also directed Knorr to give county departments “cost targets” for FY 2015-16 to further reduce or eliminate the projected general fund deficit, while a budget advisory committee works on ways to improve the county’s financial system and policies.
Chief Budget Officer Laura Schwartz said Thursday that if departments aren’t able to make cuts and help reduce the remaining $4 million deficit after the soft hiring freeze, layoffs would likely be necessary.
Knorr, who took over as CAO after Terri Daly abruptly resigned in November, said the county’s current financial system has certain “complexities and challenges” that make it difficult to understand its financial capabilities.
A limited ability to isolate one-time expenses and general fund positions to prepare solid projections is particularly challenging, she said. For this and other reasons, staff is looking into making modifications to the system so it can be more efficient.
Staff plans to come back to the board with an update in February, when they will present the mid-year financial report.
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