Gaming the Budget Process by Joe Harn

by admin / Jun 26, 2015 / 0 comments
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By: Sophocles

2015-06-26, 05:57:34 PLACERVILLE CA Part III, The Pending Doom

As stated in Part II, the CAO and Joe Harn recommended to the Board of Supervisors a new approach to the budget.  They decided for the first time in well more than 30 years to put the previous year’s fund balance in reserve rather than using it to budget in the upcoming year.  This approach is absolutely fine.

It is just one of many ways to prepare a budget.  In fact, in years when the fund balance was quite large, the Board decided to put part of the fund balance into capital reserves in order to fund future capital projects.  And, it would be great to take all of that fund balance and put it into capital reserves each year.

The County would have enough money in five years or so to build the new Sheriff’s Admin facility. Unfortunately, that savings would come at a pretty high cost—having to cut current services in order to fund future projects.

How many deputies are you willing to layoff in order to put the surplus “fund balance” at the end of the year into reserves?

How many senior meal sites are you willing to close down in order to budget differently?

A better approach might have been to shift to not using fund balance over the next few years so that current services could be maintained, there wouldn’t be a manufactured “budget crisis”.

Yes, money is tight. It always will be and should be for a local jurisdiction.  There are always more services that constituents want and need than there is funding to provide those services. But, the Board made the decision three years ago to invest in projects that will result in greater efficiency in the long run. A good example is modernizing the HVAC system in Buildings A & B, at a cost of about $7million. The current outdated and inefficient cooling system uses approximately 1 million gallons of water every six months. The county’s facilities experts project that the new system will save all that water PLUS about $2 million a year in energy costs.  A wise decision by the Board!

But, in his usual grandstanding, the County’s Auditor Joe Harn wrote a letter to the Board in early April saying that the general fund cash account is dangerously low. Well, of course it’s low. The General Fund CASH account – different from the general fund budget – is primarily replenished twice a year—December 10th and April 10th, when property taxes are due.  Now that the property tax deadline is passed, ask what the General Fund Cash account has in it.  And, the cash account went to lower levels than in recent past years because the Board decided three years ago to start spending capital reserves on needed maintenance. Once you spend the money, it’s no longer in the cash account. The reduction in the cash balance was a planned event. Everyone knew it was coming.  And, as a matter of fact, nothing new for the county. In the early 2000s, the county routinely borrowed on a short-term basis to cover cash needs between those tax due dates. Borrowing isn’t a good thing –but neither is leaving cash sit in accounts earning less than 1% annual interest while services are being cut and buildings aren’t being maintained.

There isn’t a budget crisis. There is a leadership crisis. The Board has consistently failed to set county-wide priorities and work toward accomplishing those priorities. The Board started down the path of investing in infrastructure three years ago, yet continued to spontaneously spend on items in order to win favor with constituent groups. A new senior day care center in El Dorado Hills, certainly a worthwhile but unplanned venture, added $250K to the operating budget forever. In June of last year, nine new positions were added by the Board to Development Services and two in the Auditor’s office, adding at least $500k to the operating budget annually. The Board gave $800k to the Marshall Foundation for the new cancer center in Cameron Park, another worthwhile but spontaneous move. And then there’s the salary bonuses the Board gave back to the elected officials last December, adding a couple hundred thousand to the budget annually…forever.

If you want to go to a new format for budgeting, fine. Might be nice to be more transparent so the employees and the public understand what’s really going on—that the 2016 campaigns are already starting. 

The budget is a complicated process and is difficult to understand or follow unless you are part of the process. 

The Auditor Controller knows the average person doesn’t understand this complicated process and uses it to try and confuse and fool the general public.  He is a master at manipulating the public on many levels and has been controlling our Board for almost 20 years.  Don’t be fooled.  There is no budget crisis.  Wake up Board!

If the Board of Supervisors is convinced there is a shortfall, I would suggest they ask Joe Harn to throw in the 54M dollars he saved the county when he was running for office? 

That would solve our budget problems with a remaining cash reserve.  

Come on Joe!