After several years of expanding public services with a budget surplus, San Luis Obispo County is back to recession-era tactics —tightening its belt to close a modest budget gap caused by increased labor costs and a slowing economy.
Even with moderate financial woes, the county Board of Supervisors still crammed new program spending to the tune of $2.3 million for jail medical services and $1.5 million for Cayucos fire services into the proposed 2018-2019 budget with a general fund of $521.7 million.
County financial analysts expect relatively flat budgets in the next few years, and anticipate losing more than $8 million in revenue from the Diablo Canyon nuclear power plant closure. Revenues from the power plant have already declined.
Supervisors surveyed departments' expenditures on Monday and debated priorities during the first day of budget hearings.
On Wednesday, they will consider how much they'll give to which outside agencies, such as community nonprofits. The final budget will likely be adopted June 19.
Here are the major takeaways from Monday's meeting.
1. The budget is balanced.
Even with a projected $3.6 million budget gap, the county, led by budget director Emily Jackson, plans to maintain status quo public services and pay for a few new things. It will do that by cutting $1 million from county roads spending, dipping into building replacement reserves for $2.5 million, cutting certain departments' requested budgets by a total of $1.9 million and implementing a "hiring chill" to slow down recruitment for open positions.
"We're living within our means," board chairman John Peschong said.
Supervisor Bruce Gibson said "it's a measure of our financial strength" that the county can expand services while other jurisdictions struggle with pensions costs.
"Because previous boards of supervisors did the hard work, the county now benefits from its financial strength so it could take on things like jail medical and Cayucos fire," Gibson said.
2. Jail medical services will change, but how?
The board proposed spending $2.3 million to expand medical services in the jail after the high-profile death of inmate Andrew Holland in 2017, but the allocation is essentially like writing "a blank check," according to Supervisor Adam Hill, because the board and the public haven't been made aware of what the changes to the system will look like.
"We know the why, we don't know the exactly how," Hill said.
The budget includes the cost of a new chief medical officer, but it's unclear how the rest of the money will be spent. The board is expected to have a full discussion about it in late summer, including whether to outsource health care services in the jail.
3. These parks and pool will get a boost.
In a hand-shake deal between supervisors Lynn Compton and Adam Hill, the board agreed to fulfill a long-standing county promise to spend $600,000 to build restrooms at the Octagon Barn in San Luis Obispo for the Bob Jones Trail project and promised $400,000 of public facilities fees to Nipomo Parks. The board will discuss on Wednesday which Nipomo park or parks could get those funds.
Supervisor Debbie Arnold successfully convinced the board to pull $10,000 a year from the general fund to increase the county's contribution to a community pool at Creston, which she said is the only recreation opportunity for children within 15 miles.
4. Managing groundwater is expensive.
The county continues to spend significant money to pay for the costs of a state-mandated program to sustainably manage groundwater — $2.25 million in 2018-2019 — some of which will likely be reimbursed by the state.
The funds will pay for the development of groundwater sustainability plans and administration of the local agencies.
5. Roads are still a priority.
The county increased its spending on road maintenance in the last few years. In 2018-2019, that contribution will reduce to $7.1 million, but the county is expecting to receive $6.5 million from SB-1 gas tax funds. That money will be used to keep up with the ever-increasing degradation of more than 1,300 miles of county roads.