Costs in wake of October fires strain Sonoma County’s $1.7 billion budget

The Board of Supervisors tried to prevent sharp cuts to mental health and substance-abuse services while also making other much-needed investments and setting enough money aside to pay bills related to the ongoing fire recovery.|

Sonoma County supervisors this week pieced together their most challenging spending plan since the wake of the recession, approving a $1.69 billion budget for the upcoming fiscal year that has little financial wiggle room and many lingering costs associated with last year’s wildfires.

The Board of Supervisors adopted the 2018-19 budget Thursday following a series of difficult decisions, including how to prevent sharp cuts to mental health and substance-abuse services while also making other much-needed investments and setting enough money aside to pay bills related to the ongoing fire recovery.

To make it all work, the board tapped millions of dollars from its general fund reserve, which stood at about $53 million going into the budget hearings. Supervisors used $2.7 million in reserve funds just to balance the books, then earmarked another $8.5 million for fire recovery costs and designated an additional $3.9 million in case the county has to return a portion of the expected reimbursements from the Federal Emergency Management Agency, which are subject to audit.

And to pay for a list of other priorities, such as support for volunteer fire companies, supervisors drew from other discretionary pots, drawing down their catch-all contingency fund and money they have set aside from the former redevelopment agencies dissolved by the state several years ago.

“I wouldn’t really want to go any lower than the amounts that we’re keeping in that final fund balance,” Supervisor Lynda Hopkins said before the board passed the budget Thursday. “(But) I feel like this budget is really a reflection of our values as a board, so I’m really proud of it.”

The county’s financial outlook could have been far bleaker.

In December, staff members estimated the county faced a $21 million shortfall at the end of this fiscal year because of the October fires, which led to millions of dollars in lost revenue and increased expenses. They were able to close that gap as a result of an advance payment from FEMA, funds set aside by supervisors and belt-tightening among various county departments.

Staff members in March projected a $14.2 million shortfall for the fiscal year that begins July 1, but they were able to narrow that to $2.7 million in part by departments reining in costs, according to Niki Berrocal, the county’s budget manager.

Also, the budget passed by state lawmakers Thursday includes $21.8 million to cover property tax losses the fires caused for Northern California jurisdictions and $29.1 million to waive a requirement that affected counties pick up some of the costs for debris removal. Sonoma County and Santa Rosa would otherwise have shouldered an estimated $13 million each for debris cleanup.

But the county’s finances were still tight as supervisors worked this week to finalize the budget.

Before the fires, the county had been planning a four-year transition to a new financial policy where supervisors no longer relied on departments’ savings at the end of each fiscal year to balance the following year’s budget. The fires forced the county to make that transition immediately.

Supervisor David Rabbitt, the board’s vice chairman and a frequent voice of fiscal restraint, stressed to his colleagues Thursday that many of the “strategic investments” they agreed to make were only possible because they tapped into their rainy-day fund. He compared the county’s financial situation after the fires to the budgetary strain imposed by the economic downturn last decade.

“When you have less money, you have more needs, and it makes it that much more difficult,” Rabbitt said. “But you have to actually figure it out, hold the line, or else you’re spending yourself to nothing and not really doing what you need to do going forward. There are a thousand things that need money that this budget will not provide for.”

The county averted many of the controversial cuts that had been proposed for its health department, where staff members were trying to narrow a $19 million shortfall that threatened to slash behavioral health staffing and funding for community nonprofits.

Barbie Robinson, the health department’s director, pulled together ?$16.9 million from various funding sources to help the behavioral health division for the next two years, a plan the board endorsed in the adopted budget

Supervisors also agreed Thursday to support behavioral health programs with an additional $1.6 million in one-time funds.

The board on Thursday added several fire-related allocations to the budget, including $1.2 million to fund five new jobs in a reorganized emergency management division; $200,000 to support volunteer fire companies’ operations; $900,000 for Redcom fire and medical dispatch fees in unincorporated areas; and $500,000 for vegetation management.

County staff members estimate the new budget will pay for about 4,066 county jobs, about 83 fewer than this fiscal year. Most of the jobs slated for elimination are vacant.

You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com. On Twitter @thejdmorris.

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