County in decent fiscal shape... for now
Mono County is still in relatively good financial shape compared to most counties in California, but its emergency reserve fund is down sharply since 2008.
On top of that, current anemic property tax revenues mean tight times ahead.
“We are in pretty good shape, but since the housing crisis hit in 2008, we have cut the reserve from $5.8 million to its current number of $1.6 million and I believe it’s time to begin rebuilding,” said Brian Muir, the county’s finance director.
“It’s all right that we have done this; that’s what the reserve is for. But it is time to rebuild.”
Muir spoke before the Board of Supervisors this week. The supervisors are entering the county’s budget review process for the 2012-13 fiscal year.
Muir also said the county’s “cash on hand” fund was solid, sitting at about $560,000 going into the three-day hearings.
“I like to see the cash on hand fund be about one percent of the entire general fund expenditures, “ he said. That would be about $360,000, he said,—a number he urged the county to aim for as a final contingency fund.
Unlike the emergency reserve fund, which requires a four-fifths vote to access it—and a declaration of an emergency—this contingency fund can be more easily accessed by the supervisors to fund projects that are considered important to the county
Muir spoke at the beginning of the review by the county supervisors, where everything, from air service subsidies to June Lake subsidies to the fate of the Dog Sled Adventures home, was on the table.
Mono County has required between $60 million and $70 million a year to operate over the past several years, with this year’s budget at $71 million (compared to last year’s $64 million) according to Muir.
That number typically goes up or down several million dollars a year, depending on whether there are any large, one-time capitol improvement projects scheduled for that year. For example, this year, the county will be putting in a $2.4 million runway project in Bridgeport.
Muir said that despite the county’s relative financial health, it was no time to get complacent.
He said property tax revenues are still anything but robust, even though they have improved since the housing bust hit Mono County in the years after 2008.
He also said the county is likely to lose about $100,000 in transient occupancy taxes because of the closing of the June Mountain Ski Area for the winter.
The state, meanwhile, has asked the 58 counties in California to do more with less money since the recession began.
Finally, the county’s solid waste program continues to be a problem, with an estimated $450,000 deficit that can only be erased by increasing rates or cutting elsewhere.
In the end, the reserve was increased to $1.7 million and the cash on hand fund was cut to $360,000.
The supervisors also agreed two weeks ago to access the contingency fund to help June Lake survive the winter, to the tune of $100,000.
On Wednesday, after many months of contentious discussion, they agreed to fund air service with $85,000 (see story on P. 1).
They also allocated $111,000 out of the contingency fund to bolster the emergency reserve fund .
“We need to consider adding at least $100,000 a year to this fund,” said supervisor Byng Hunt.
The other supervisors agreed, in general, noting the volatility of the state and national economies.
These actions, along with other adjustments such as cutting some vacant positions, added up to the reserve and contingency fund numbers noted above.
Also, as of Thursday, the supervisors were considering giving approximately $40,000 to $50,000 toward improvements at the Dog Sled Adventures business, located on county land, but that issue is still under discussion.
In the end, the supervisors left the budget hearings relieved things were not worse, pleased they had managed to begin rebuilding the emergency reserve fund and that they could help June Lake—and clear that things could easily get worse.
“Things are just so volatile out there right now,” said supervisor Larry Johnston.
“We need to be ready.”