The Napa County Board of Supervisors made quick work of the county’s $452 million budget for the next fiscal year, and approved all major appropriations during a morning session of its first budget hearing Monday.
The budget has a 3.1 percent increase in General Fund costs, compared to last year’s budget, but also has increased revenue from property, sales and property-transfer taxes, reflecting improving economic conditions locally, said Pam Kindig, interim assistant county executive officer.
Kindig said the budget is structurally balanced. The General Fund has a beginning balance of $7.9 million, which is money that can be made available for programs.
Board Chairman Brad Wagenknecht said the increased revenue won’t lead the supervisors to burn through the new-found dollars, as they’ll likely direct the money toward deferred maintenance, or major capital projects like the new jail.
“There’s going to be great pressures on the budgets in the near future,” Wagenknecht said. “It’s fixing things that have been held in abeyance for a number of years.”
The supervisors didn’t make changes to the appropriations Napa County Executive Officer Nancy Watt made in the recommended budget, but highlighted several issues they would like to hold subsequent hearings on. The supervisors will vote on adopting the budget June 25.
The increased expenditures are attributed to rising employee costs, implementing the state’s public safety realignment initiative, covering new costs as federal health care reform takes effect and paying for flood control projects on the Napa River, although that has funding from grants and a special sales tax.
The county has set aside a $7.2 million increase in salary and benefits for county employees, with the General Fund contributing $3.8 million toward those costs. These were negotiated into the employees’ current three-year contract, which expires in mid-2014.
The set-aside covers a 1.5-percent increase in the cost of living adjustment for employees, salary step increases for 27 percent of employees, 8-percent higher insurance costs — which is separate from increases expected from federal health care reform — as well as other post-employment benefit costs. Employees didn’t receive cost of living adjustments from 2009 to 2011 as a cost-cutting move by the county.
The county will also be spending $3.1 million on programs related to the state’s public safety realignment initiative, which include pre-trial programs, alternative programs for probation violations, jail alternatives for sentenced offenders, and post-prison transition programs. The state government is providing funding for these programs, which entails adding eight full-time correctional officers to the budget.
The budget also sets aside $1.5 million to handle any future costs that may arise as federal health care reform is implemented; the county won’t know what the full costs will be until this fall. Health care reform is expected to cause an increase of 3 to 4.5 percent in health insurance premiums, and the county will have to provide health care to employees working more than 130 hours a month starting in 2014.
The county is estimating 3 percent growth in total property tax revenue, a 15 percent increase in sales tax revenue, and a 19 percent increase in property-transfer tax revenue. Its transient-occupancy tax collections are estimated to remain stagnant or slightly decrease, but that could change once the revenue starts rolling into county tax coffers this year, Kindig noted.
Property tax revenue accounts for almost three quarters of the county’s discretionary revenue, while transient-occupancy and sales tax revenue account for 9 and 6 percent, respectively.
The county is issuing a $1.1 million loan to the Napa Berryessa Resort Improvement District, which will be put into reserves as required by the U.S. Department of Agriculture. The USDA is lending the district money to make infrastructure improvements. The county’s $1.1 million loan will be repaid through an assessment district residents approved to pay for the improvements, and repay the USDA.
Supervisor Keith Caldwell said he wants to look at the feasibility of creating a fire substation at the Berryessa Estates community, which would help residents avoid having to pay higher fire insurance premiums, or risk dropping insurance all together.
The budget includes designing replacements for eight county bridges, as well as constructing the replacement for the Oakville Cross Road bridge. Supervisor Diane Dillon said she wanted to hold a hearing on the bridges’ designs, and get input from neighbors who will be impacted.
Public Works Director Steve Lederer said that would not be a problem, given that bridge-replacement projects can take years before they’re completed.
Watt said the county will be looking to make decisions on how to fund construction of a new jail later this year, likely in the fall.