Inyo County is looking to shave $2 million from its operating budget for the 2014-15 fiscal year.
With an already lean budget of $76.9 million for the current budget year, the fear among county employees is that the budget savings may have to come in the form of layoffs, reduced hours and other personnel cuts.
County Administrative Officer Kevin Carunchio said eliminating staff members is “probably the easiest approach to cutting $2 million” from the budget, but he added that he hopes more creative solutions to the bleak budget outlook can be found.
The concerns rippling through the county workforce come on the heels of the Board of Supervisors approving cost of living increases last month for a majority of county employees.
Based on current labor cost projections, the county is looking at a $1.8 million General Fund increase for the 2014-15 budget year, and as much as a $4.5 million increase the following year.
“I don’t see revenue going up that fast,” Carunchio said. “Before next year, I want to look at some creative budget solutions.”
To that end, the Board of Supervisors has scheduled a workshop with Dr. Frank Benest, a former Palo Alto city manager who has taken his presentation on creative budgeting on the road, appearing before a number of government entities throughout the state.
“We’re trying to look at ways to reduce costs before looking at personnel cost cuts,” Carunchio said. “That’s everything we want to avoid. Over the next few months, we’re going to look at ways to prepare (for rising personnel costs) in advance. You don’t turn the county budget around on a dime.”
Carunchio said that all county department heads have been invited and are being encouraged to attend the workshop. He added that he also extended an invitation to the city of Bishop to attend.
“I’m excited about it,” Carunchio said about the upcoming workshop. “It’s a tremendous opportunity.”
Next month’s creative budget workshop comes on the heels of a series of cost of living increases provided to county staff in October when the Board of Supervisors approved an updated Memorandum of Understanding between the Inyo County Employees Association and the county.
Per the agreement, ICEA employees began receiving a 2 percent cost of living allowance increase on Oct. 10, the first full pay period of the month. The MOU also calls for additional COLA increases to be given in July 2014 and 2015.
In addition to the MOU, the board also approved a resolution that provides the same benefits ICEA represented employees receive to non-represented and management employees. Non-represented employees include the Board of Supervisors clerk, county department heads and other management staff.
Inyo County Labor Relations Administrator Sue Dishion said in October that the MOU and resolution are three-year contracts and represent the first time non-represented county employees have received a COLA increase since 2009.
Carunchio said the county staff’s bargaining units went into negotiations with the county with the full knowledge of the county’s budget constraints.
“The situation isn’t anything new,” Carunchio said, explaining the first 10 pages and last 10 pages of his budget message were dedicated to addressing concerns about future budgets and increases to personnel costs.
“This year’s Recommended Budget is, in many ways, the most difficult I’ve prepared in the past eight years; not so much because of what it includes or does not include for this year’s spending program, but because of what it portends for next year’s budget and the foreseeable future,” Carunchio’s budget message states.
Inyo County does have a reserve fund of about $4 million that can be used to close budget gaps or handle emergency situations, but Carunchio said applying that money to future budgets to close projected shortfalls would be a short-sighted, temporary fix.
“You can’t take one-time funds for ongoing costs and hope next year things are coming up rosy,” Carunchio said. “You can use reserves, but it’s a one-time fix to an ongoing problem.”
Carunchio hopes that a long-term fix can be developed through the creative budget solutions workshop. “I’d don’t know if we can get (costs) down the whole way” through creative budget solutions, Carunchio said. “We need to pull together and find out where we’re going.”