Mental Health burning a hole in the General Fund
Posted: Wednesday, June 17, 2009
By Ken Paglia, Mountain Democrat
El Dorado County officials spoke Monday about ways to plug the $3 million budget gap left from supervisors’ recent contribution to mental health.
Supervisors on June 9 gave the Health Services Department’s Mental Health Division over $3 million from contingency to help solve its budget and cash flow problems. After a few down years starting in 2006-07, the department could not operate without the supervisors’ payment, officials said.
At a budget workshop Monday, principal county analyst Laura Schwartz suggested two options for rebalancing the county’s budget.
Supervisor John Knight said any cuts should be made now so the county would realize the savings over a full 12 months. If the county waited until final budget hearings in September to make cuts, the savings would only be realized for nine months.
Supervisors must adopt a balanced proposed budget by June 30.
One option was to take $1.8 million from contingency and $1.2 million from savings for capital projects and economic uncertainty.
That option was the recommendation of Chief Administrative Officer Gayle Erbe-Hamlin.
“Given the uncertainty of the times we’re in, this option helps balance the budget by June 30. We may still have to make cuts, but this gives us time to completely evaluate the options,” Erbe-Hamlin told the Mountain Democrat.
The CAO’s proposed budget contained an extra $1.8 million in contingency funds.
“We enriched the contingency knowing we had all these uncertainties before us in a very short amount of time,” Erbe-Hamlin said.
The second option was immediate program cuts of up to $3 million, which could equal eliminating up to 35 county positions.
“We didn’t have a list of positions that could be cut readily identified because of the urgency of the issue, having to pass the proposed budget by June 30. But we did provide the supervisors with a list of programs and net county costs,” Erbe-Hamlin said.
Supervisor Ray Nutting said he didn’t want to touch reserve funds if there were indicators the economic crisis would last longer than three years.
Supervisor John Knight said any cuts should be made now so the county would realize the savings over a full 12 months. If the county waited until final budget hearings in September to make cuts, the savings would only be realized for nine months.
Knight said “tier two and tier three” cuts may be coming.
Supervisors will discuss the options further on Wednesday and may vote on the issue.
A possible “middle ground” option could be using $1.8 million from contingency and making $1.2 million in cuts, Erbe-Hamlin said.
Two weeks of budget workshops began last week and continued Monday.
The county’s $468 million proposed budget was balanced until the $3 million contribution to mental health.
The total proposed budget was reduced by $62 million over last year, with discretionary spending reduced by nine percent.
To achieve those reductions the county cut over 60 full time positions, consolidated and eliminated departments and eliminated programs.
But officials are bracing for actions the state will likely take to close its $24 billion deficit. Gov. Arnold Schwarzenegger may eliminate programs and borrow money from the county - all of which would affect county spending.
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