Riverside County Escapes Budget Disaster Amid COVID-19

RIVERSIDE COUNTY, CA — Riverside County government revenue will not be in the dire condition anticipated earlier in the current fiscal year, thanks mostly to federal coronavirus-related reimbursements, giving the Board of Supervisors Tuesday reason for optimism.

"We're doing pretty good, given what we're contending with," Supervisor Kevin Jeffries said in response to the 2020-21 midyear budget report. "Revenues seem pretty strong ... with the infusions of state and federal funds."

The biggest takeaway from the 40-page report was the Executive Office's prediction for aggregate year-end reserves — $244 million. The estimate put forward in November was $222 million, with officials believing a combination of lower general fund revenue and greater needs would shrink the pool on a more significant level. It started the fiscal year at close to $260 million.

"It looks like we've come through this smelling like a rose," Supervisor Jeff Hewitt said. "But we still have to prepare for the worst. There's a lot of crazy stuff still going on, bubbles in real estate, and we could find ourselves behind the eight ball."

Hewitt advanced the idea of a two-year budgeting process, instead of year-to-year, in order to "even out the highs and lows" in county finances.

Jeffries supported the concept, saying it would enable the supervisors to "dive into some departments" and better establish what their actual "baseline needs" are in the budgeting process.

County CEO Jeff Van Wagenen said he would take it under advisement.

"While the current projected outlook for this fiscal year is stable, we have challenges looming," Van Wagenen said in an introduction to the midyear report. "This is a time for prudent spending and increased focus on fiscal stability and transforming how we deliver services for our constituents. In this way, the county will continue to work toward structural balance."

The county received nearly $500 million in federal Coronavirus Aid, Relief & Economic Security Act money last year, which provided an enormous cushion, and on top of that, additional federal infusions are coming available to cover expenses that, all or in part, can be tied to the public health closures, according to officials.

Discretionary revenue is expected to exceed $1 billion at the end of 2020-21, boosted by $45 million in unforeseen income, including $20 million in redevelopment "pass-through" money from the state, according to the report.

It mentioned no need for layoffs, which had been anticipated at the outset of the fiscal year.
The overall 2020-21 budget, based on both discretionary and programmed funds, is $6.46 billion.
Multiple agencies indicated need for supplemental allocations before 2021-22 begins on July 1.

However, virtually all of the funding requirements appear to qualify for federal CARES reimbursements, relieving pressure on the county general fund, according to the report.

The Department of Animal Services was the one agency that appeared to be facing significant headwinds containing outgo. The report indicated DAS is nearly $2 million in the hole. It was unknown whether or how much that gap might be closed with federal backfill.

The agency was forced to partially shutter its San Jacinto Valley Animal Campus last summer due to revenue challenges.

Other public safety agencies indicated that budget targets would be met in 2020-21, including the largest consumer of public safety discretionary appropriations — the Sheriff's Department.

"The department is projecting a balanced budget once the necessary CARES reimbursements are made," according to the report. "The department is actively working ... to evaluate all COVID-19-related expenses and identify available resources, including FEMA funds, to fully reimburse the department."

Dozens of jail inmates and correctional deputies were diagnosed with coronavirus last year. Two deputies died from complications stemming from the virus, according to Sheriff Chad Bianco.

The report noted that even though the sheriff may end the current fiscal year in the black, next year and beyond remain question marks, as operational expenses continue to climb and staffing in the unincorporated areas remains difficult.

The John J. Benoit Detention Center in Indio has yet to fully open.

Among the largest budgetary adjustments sought in the midyear narrative was in the Riverside University Medical Center. The Moreno Valley hospital said an additional $71 million will be required to "align the department budget with projected expenditures ... associated with increased patient volume."

But the medical center will not need to tap the general fund, relying instead on an internal account where the money is already available, according to the report. The board authorized use of the funds and signed off on the budget report without revisions.