'State of Budget' address outlines plans, risks

The May 10 San Diego County Board of Supervisors vote to set a budget hearing for June 6 included the official action of receiving the Chief Administrative Officer’s proposed operational plan for fiscal years 2005-06 and 2006-07. The action was also an occasion for CAO Walt Ekard to make his “State of the Budget” address.

“We will be living within our means and doing what is most important first,” Ekard said. “We will continue to look for ways to send resources to front-line services that make a difference.”

The county’s budget includes both dedicated revenue and general-purpose revenue. The anticipated $721 million of general-purpose funding for fiscal year 2005-06 is a nine-percent increase over fiscal year 2004-05. That revenue consists of approximately $400 million from property tax revenue, $200 million of vehicle license fee replacement funds, $47.6 million of sales tax revenue, and $72.4 million of other revenue. The bulk of that general-purpose revenue, or $400 million, would be spent on public safety if the supervisors adopt the proposed budget without changes.

The 2005-06 and 2006-07 operational plans contain more than financial figures. One difference from past budget plans is information on plans to connect services with users; the operational plan is intended to measure outcomes rather than activity. Instead of measuring miles of streets cleaned, for example, the plan will measure the amount of debris removed (the projected 2004-05 figure is 42,000 cubic yards, which equates to a line of dump trucks from the County Administration Center to Encinitas).

“We will continue to sustain operational excellence. That’s our commitment,” Ekard said. “We’ll stay focused on our mission.”

Unfortunately for many residents seeking county services, the County of San Diego has two missions. The county provides services for residents of unincorporated areas, but it is also an agent of the state for many functions provided to residents of both unincorporated areas and cities.

“Unlike cities, we have very little control over our revenue stream,” said Supervisor Pam Slater-Price. “We are really a local arm of state government.”

Slater-Price noted that the county has another fiscal disadvantage compared to cities; because many unincorporated areas are rural the county’s Transient Occupant Tax revenue is approximately three percent of the City of San Diego’s TOT funding.

Funding for county programs is dependent on state funding, and the 2005-06 state budget remains to be adopted. “We don’t know what Sacramento has in store for us,” Slater-Price said. “We are taking responsibility to the extent that we can.”

Ekard noted the need to acknowledge the State of California’s fiscal problems. “We know that challenges remain ahead,” he said. “Nothing we face is more threatening than the condition of the state budget.”

The three bond rating companies recognize the county’s dependence on the state, which prevents the county from obtaining higher ratings despite the county’s own strong fiscal health. Both Fitch and Standard & Poor have given the county AA ratings while Moody’s has designated an A1 rating for the county. No county in California has higher ratings than the County of San Diego.

“Our fiscal house is in order, but at the same time we have risks,” said Supervisor Dianne Jacob. “They never leave us alone.”

Jacob and Slater-Price are the longest-serving supervisors; both were elected in November 1992. Ron Roberts and Bill Horn were elected in November 1994; in that same election Supervisor Brian Bilbray was elected to the US House of Representatives and his vacancy was filled with the selection of Greg Cox.

The County of San Diego faced the prospect of bankruptcy in the mid-1990s, but various fiscal reforms put the county in the black by the end of the 20th century. Slater-Price notes that solutions will require political fortitude as well as innovation and that multiple measures will likely be needed for a government to regain fiscal stability. “It’s not a one-step process,” she said.

“Ours is a healthy county, but it is not a wealthy county,” Ekard said.

The county’s operational plan is based on three priorities: providing opportunities for youth, protecting and preserving the environment, and providing safe and livable communities. “Our priorities are absolutely right: kids, the environment, and protecting the public,” Cox said.

Although the loss of some of the money from the state, including a property tax shift and the suspension of gasoline sales tax revenues, has hindered the county’s ability to fund capital improvements to the extent of the late 1990s, facilities will continue to be a priority for the county. “We maintained our commitment to build the capital improvements our communities need,” Ekard said.

The county is not averse to re-engineering improvements, and three pilot re-engineering projects are included in the 2005-06 plan which will cover building permits, the county’s accounting system, and health care.

Plans for 2005-06 include unveiling of the Childhood Obesity Action Plan, implementation of self-checkout at County Library branches, Regional Communications System enhancements, and completion of the county’s general plan update and of the North County Multiple Species Conservation Program as well as developments of sports fields, parks, and open space preserves.