The San Luis Obispo County government is slowly but steadily creeping out of the recession it has been in for years, according to a midfiscal year report to the Board of Supervisors from its management staff this week.
“It feels like ... the worst is behind us,” said Assistant County Administrator Dan Buckshi, who deals closely with the county budget.
Things have been looking up since October, when county fiscal managers projected a deficit of $6.5 million in the 2012-13 budget. That number is now between $2 million and $2.5 million, Buckshi said.
The county cut its projected deficit by about $4 million since October by reducing labor-related costs.
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SLO County’s fiscal year runs from July 1 through June 30 of the following year.
Buckshi and County Administrator Jim Grant noted that their report was merely a midyear look at the situation, adding that the figures can and most likely will change.
They also said that this is the fifth year of what they call a “seven-year pain plan” — referring to the long-range planning in which they have been engaged since the recession took hold.
Both administrators, as well as the Board of Supervisors, praised county employees and department heads for actions they have taken to lessen the impact. Nobody has been laid off; all the job losses have been through attrition.
In October, the administrative office told the board it was projecting a $6.3 million gap for 2012-13, Buckshi wrote to The Tribune. “Subsequent to that, we took intentional actions to further reduce that gap,” he wrote. “Over the past several years, we’ve been successful in reducing our workers’ compensation and liability costs.
“As a result,” he wrote, “during December we were able to reduce the charges to departments that pay these costs by $2 million. As of December, the projected gap for (the 2012-13 budget) was $4.3 million,” and today it is $2 million to $2.5 million. Buckshi said the biggest driver is containing labor-related costs.
“The county’s three-point labor plan is really starting to pay dividends,” he wrote. The three points are:
50-50 pension cost sharing between the county and employees.
Reduced pension benefits for new employees — the so-called “two-tier system.”
An updated approach to implementing the voter-approved prevailing wage ordinance.
Other issues raised by supervisors during their budget discussion:
Supervisors Frank Mecham and Paul Teixeira warned against cutting back too dramatically on road maintenance projects. Teixeira said the cost of labor and materials is low now and the county should take advantage.
Supervisor Jim Patterson made essentially the same point about public health programs, saying they are approaching the point where they cannot be cut any further. He and others reiterated their belief that public health is also a public safety issue.
Mecham and Sheriff Ian Parkinson said they have been in touch with the state about the future of the former El Paso De Robles youth correctional facility in Paso Robles. The state advised them to defer local action until it decides what it wants to do with the shuttered facility. “We should just wait and see,” Mecham said.
The supervisors’ top fiscal priorities are financing state mandates, paying off debt and protecting public safety.
Budget hearings take place in June.