Costs to operate the county hospital are exceeding revenues by tens of millions of dollars, while higher labor and service expenses are certain to leave the sheriff's and fire departments' budgets in the red at the end of the current fiscal year, according to a report Riverside County supervisors will review today.
The Executive Office's midyear 2012-13 budget report identifies positives and negatives, detailing how county finances are shaping up, agency by agency.
The report begins by spotlighting a projected $30 million year-end deficit for the Riverside County Regional Medical Center in Moreno Valley. The hospital, which serves a large number of indigent, uninsured patients, is expected to cover almost $20 million of the red ink, leaving a budget gap of roughly $11 million by June.
Its long-term financial stability remains a growing concern, county CEO Jay Orr noted. He underscored the risks to the medical center with the implementation in January of the Patient Protection and Affordable Care Act, otherwise known as "Obama Care." Demands on the hospital's resources are expected to increase, and thus its expenses, too.
"I am commissioning a specialized consultant to explore opportunities to increase RCRMC's efficiency and effectiveness, develop a strategy for implementing the Affordable Care Act and strengthen the medical center's financial footing," Orr wrote.
The sheriff's department is expected to end 2012-13 with a $6.2 million shortfall, down from the $9 million projected a few months ago. According to county officials, the sheriff's shortfall stems in part from the hiring of 50 deputies in a board-authorized effort to swell county law enforcement personnel.
Higher jail expenses and costs tied to the new Public Safety Enterprise Communication system were also to blame. The system -- the focus of a six-year effort to move county public safety agencies away from decades-old analog communications to a digital network -- is slated to come online next month.
The fire department's PSEC costs, along with higher expenditures tied to servicing the relatively new city of Jurupa Valley, will result in a $5.7 million deficit for that agency, according to the budget report.
Orr said savings wrung out of other departments in the current fiscal year could help offset the budget gaps, but he warned against tapping the county's $155 million reserve pool.
According to the budget report, the county is bracing for a $64 million increase in general labor costs in 2013-14 due to collective bargaining agreements that established across-the-board cost-of-living and merit pay increases. Because of underperforming investments managed by the California Public Employees Retirement System, the county will also be on the hook for higher pension obligations, officials said.
Costs associated with the new East County Detention Center in Indio, scheduled for completion in October 2016, will add $50 million a year to the county's expense column.
Orr did not rule out the possibility of layoffs or other cost- containment measures as part of the 2013-14 budget, which must be enacted by June 30.
According to the CEO, the board should entertain re-instituting a 9/80 work schedule throughout local government in order to boost service to the public and make the county more responsive to businesses. In 2008, the board shifted to a 4/10 schedule, under which the vast majority of employees work 10- hour days, four days a week.
The 9/80 schedule would require employees to work nine hours a day for nine business days, then take a three-day weekend twice a month, in addition to the customary two-day weekends. Under the 4/10 schedule, most county buildings are closed on Fridays. Changing to 9/80 schedules would mean business-as-usual on all weekdays.
The budget report pointed to signs of economic recovery regionally and statewide. According to figures, applications for building permits were up in the last six months, along with sales and use tax receipts.
The county Assessor-Clerk-Recorder anticipated applying the full 2 percent inflation-based increase on property owners' tax bills this year, and property tax receipts were expected to steadily grow over the next four years, the report stated.
County officials were cautiously optimistic about long-term economic expansion but worry that international crises and a lack of visionary national policies could dampen or derail growth.