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County budget shortfall at $1.8 million

July 23, 2014

Kevin Carunchio, County Administrator

As county leaders wade through a messy 2014-15 budget process, county employees are expressing fear and uncertainty about their jobs.
County Administrator Kevin Carunchio said Inyo is facing a $1.8 million budget gap for the coming fiscal year, and has directed staff to participate in “creative budget solutions” and “service redesign” programs to reduce costs without cutting staff or services.
Over the past several weeks, a number of county department heads have presented their annual “Department-Requested Budgets.” Many requests by county department heads came in above the county’s financial means.
In response, Carunchio asked each department head to appear before the Board of Supervisors to discuss what they could do to further trim their budget to ensure a balanced budget can be presented in August. Several department heads said the only step they could take to further reduce costs would be to eliminate a staff member.
In response to those discussions, the Inyo County Employees Association – the union representing county employees – issued a press release defending a labor negotiation that was approved last year that included raises for staff members.
“ICEA members understood there was money earmarked for equity and annual COLA adjustments,” ICEA President Renee Rodriguez said in the press release. “ICEA members were not given clear information that the only earmarked funds were for fiscal year 2013-14.”
Rodriguez said that, had county staff known that money was not in the budget to support the new labor contract, the union “could have swayed a non-approval vote.”
Carunchio said the county was upfront about how any pay increases would impact future budgets. He explained that labor negotiations began in May 2013 and did not end until September. The raises were approved by the Board of Supervisors in October.
In August 2013, Carunchio presented his recommended budget to the Board of Supervisors. He explained that, at that time, there had not been an agreement between the county and union on the labor negotiation, but “we provided for (pay) increases based on some assumptions,” Carunchio said. “It was completely publicized and transparent. Right then, in August, September and out, the cost implications were publicly discussed. The union knew about it, the Board of Supervisors knew about it and the public knew about it.”
Carunchio said that as soon as the raises to county staff were ratified in October, county leaders began planning for the 2014-15 budget, looking at ways to reduce costs without losing staff or reducing services.
Those efforts kicked off the “creative budget solutions” program that solicited ideas about how to trim costs, and the “service redesign” program that looked at ways for departments to pool their resources.
In January, the county hired consultant Dr. Frank Benest, at a cost of $10,000, to help guide department heads in service redesign. That $10,000 in consulting fees resulted in $600,000 in cost reductions, according to Carunchio. That leaves about $1.2 million that still needs to be trimmed to create a balanced budget.
“Redesign has been an initial success” that the county can build on in future years, Carunchio said.
The county also recently approved a “separation incentive” program for county employees. Carunchio said that program allows higher-level county staffers to essentially take an early retirement. That would allow lower-level employees to be promoted, and let the county create vacancies (and budget savings) through attrition, rather than layoffs. The program could create an additional $600,000 in savings. That would leave the county with $600,000 left to cut to balance the budget. However, there is no guarantee any county employees will voluntarily leave their jobs.
Those numbers brought the county to its workshops earlier this month, where several department heads said it would require layoffs to balance their budgets.
“It’s not the board, the CAO or the budget team recommending layoffs,” Carunchio said, adding that county department heads have had “12 months to work through redesign and creative budget solutions” to cut costs and avoid layoffs.
Carunchio also said that the next step in the budget process is the creation of a CAO-recommended budget. Over the next two weeks, Carunchio will review the department-requested budgets to identify further cuts. He said it is too early to say if he will be able to eliminate enough from the department-recommended budgets to prevent layoffs. “We will do everything we can to take the department-recommended budgets and get as close as we can and minimize impacts to staffing,” Carunchio said.
He added that the raises that were approved last year were “the right thing to do. I believe in a fair wage and you build your budget around those costs. That’s what we’re doing.”
The county-recommended budget will be presented to the Board of Supervisors in mid-August, with final consideration by the Board of Supervisors scheduled for Sept. 16.

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