County holds successful interactive budget meeting; $2 million in cuts to services needed

The Humboldt County budget meeting for fiscal year 2014-2015 held Thursday, March 6, was conducted via Access Humboldt with Humboldt County supervisors, each at a site in their district with their constituents.

Numerous other county and agency meetings were also scheduled for the same night throughout the county, including the Humboldt County Planning Commission in Eureka and the Humboldt Bay Harbor, Recreation and Conservation District meeting in Shelter Cove.

In Southern Humboldt the interactive budget meeting was held in the library at South Fork High School. Supervisor Estelle Fennell was there along with deputy clerk of the Humboldt County board of supervisors, Tracy D'amico. And on the big screen television, live from the Humboldt County Office of Education, Humboldt County administrative officer, Phillip Smith-Hanes was the star.

The idea was that each site would be able to see the people speaking at the other sites, but that did not happen at the Miranda site, though participants could see Smith-Hanes and clearly hear the other commenters.

First district supervisor and chair of the board, Rex Bohn, was at Scotia Elementary School with two members of the public present, third district supervisor Mark Lovelace was at Cooper Union High School in Arcata with 10 members of the public, fourth district supervisor Virginia Bass was at the Humboldt County Office of Education in Eureka with six people, and fifth district supervisor Ryan Sundberg was at Hoopa Valley High School in Hoopa with five members of the public. Along with second district supervisor Fennell at South Fork High School in Miranda were eight members of the public.

After introductions and thanks, especially to Sean McLaughlin of Access Humboldt for all the technology enabling the interactive meeting, Smith-Hanes explained the budget process, fund budgeting, and briefly about the current fiscal year 2013-2014.

He then went into the budget challenges the county is facing in fiscal year 2014-2015, which was the topic of the meeting.

Smith-Hanes said the county lives by two calendars, January through December, and the fiscal year (FY) that starts on July 1 and runs through June 30. He presented the timeline that the county works on the budget to plan for the upcoming year. There are opportunities for public input during the process and this was one of them, though Smith-Hanes said that the county accepts public comment throughout the process.

On June 3 the accounting office will present a proposed budget to the board of supervisors and there is opportunity for public participation again on June 16 when the county holds meetings at 1:30 and 6 p.m.

Smith-Hanes explained that a key principle in local government budgeting is the concept of a fund. He said that money in a household is usually pooled together to cover all the expenses, but governments operate differently. Public money is separated into funds that can be thought of as separate checking accounts. There are restrictions about how money can flow between funds. Most of the time money in each fund stays separate and can only be used for expenses associated with that fund. When money can be moved between funds it is only by action of the board of supervisors, must be consistent with the purpose of the funds involved and only to the extent allowed by state law.

The Humboldt County budget is composed of two main types of funds, the general fund and special purpose funds. Other funds generally have dedicated funding sources that can only be spent on the specific programs within that fund, he said.

The general fund is where local priorities can drive some of the decisions but not all of them, Smith-Hanes went on. About two-thirds of the county's income comes from the state and federal government and one-third is raised locally. Close to two-thirds of the budget is outside the general fund, but there is not a perfect correlation between the source of the money and the fund it is placed in.

The evening's meeting was primarily about the general fund.

Smith-Hanes described some ups and downs that had occurred in the budget last year. He said that property taxes are now expected to increase less than had been forecast, and the state retirement system, CalPERS, had made decisions that increased the county's cost more rapidly. As a result, if no changes are made it is anticipated that the deficit for next fiscal year will consume nearly all the available balance in the general fund by June 30, 2015.

Smith-Hanes said, "I want to be clear, this is not a crisis... but we do need to plan responsibly for the future and that is where we need your help."

Smith-Hanes listed some reasons for the problem. First, Humboldt County is experiencing a slow recovery from the recession. There are pension costs and rising liability and health insurance costs. The savings account has dipped below prudent levels per county policy.

The local property tax is the largest source of income for the general fund. This year due to state accounting, the rate to the county is less than one-half of one percent. That means that increases of that source will rely on new construction and sales of existing homes with low tax values.

Public pensions are anticipated to increase three times what they were 10 years ago, but that cannot be changed due to state law. Sixty percent of the increase the county has experienced over the last decade is attributed to this one cost. For next year, pension costs will increase $650,000 and insurance costs will increase about $1.4 million in the general fund, with only $800,000 in increased income. The county has instigated some pension reform and taken other steps, but those are long-term changes.

Smith-Hanes said county departments have offered some solutions such as re-examining their staffing structures. More department brainstorming will be taking place this week.

Smith-Hanes brought up the recent discussions about tax increases in Humboldt County, such as an increase in sales tax or utility user tax, but even if voted in as would be required by law, the effects would not be felt for several years.

For FY 2014-2015, the issue is that leaving a $100,000 balance in a $100 million fund is not considered responsible, but cutting $2 million to ongoing costs would achieve sustainability. The county has found, Smith-Hanes said, that across-the-board cuts do not work long term. He said the county may need to spend money in some departments (such as technology) to save money.

Smith-Hanes presented a list of about 18 general fund services that may require cuts.

He said the county wanted to hear suggestions from the public about how to achieve the required reductions, what people's priorities were, how to best communicate with people, and evaluation of the county's communication.

Ways to participate can be downloaded from the county's website. The public can interact with the county by attending board of supervisors meetings on most Tuesdays, at 1:30 p.m. at the board chambers at 825 Fifth Street in downtown Eureka or by going to www.co.humboldt.ca.us.

For the next portion of the meeting members of the public from the various sites made comments. Rural area residents expressed concern about lack of law enforcement in the rural areas, noting less law enforcement presence while need is increasing. A man in Hoopa recommended employing other agencies like emergency personnel as law enforcement support. Blake Lehman in Southern Humboldt recommended combining staffing positions and services like the school district does to economize.

Some commenters wanted more health and human services, some thought there should be less money spent on health and human services, prisoners or government. A person asked if there was any outside oversight of the county budget. People asked where marijuana forfeiture money went. Grant Russell in Southern Humboldt tweeted that there was a four-million-dollar error in the numbers presented in the meeting handout in the area of indigent support, thereby potentially saving the county a lot of money. Smith-Hanes said it was a typo and would need to be corrected.

One commenter in Arcata recommended planning responsibly for the aging population of Humboldt County. Several people thought that too much money was spent on the General Plan Update and the planning commission. One person asked how the county could curtail the costs of legal services, settlements and lawsuits. Another person did not like the idea of unfettered development to increase property taxes.

A person in Hoopa said there are taxes that are collected in other states and other counties in California that are not collected here, such as taxes on development. She pointed out the county has a thriving agricultural enterprise and said the county should not be suffering from a lack of money, since private property owners are making a lot of money that could be taxed.

Sean McLaughlin of Access Humboldt asked if utilities pay for using infrastructure.

Smith-Hanes responded to many of the questions and comments with brief explanations or clarifications.

The Humboldt County website can be accessed at ww.co.Humboldt.ca.us, or by typing in Humboldt County homepage on a search engine such as Google.

People can write letters to the county, 825 Fifth Street, Eureka or contact the county offices by phone. The clerk of the board of supervisors phone number is 476-2396 or people can contact their supervisor with their suggestions about the budget or anything else.

REDWOOD TIMES PHOTO BY SANDY FERETTO

Supervisor Estelle Fennell talks to CAO Phillip Smith-Hanes on the television screen via the first interactive

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