Napa County’s budget is in stronger shape than expected, as revenues outpaced costs by $1.6 million in the last fiscal year, and staff predict the county budget should be balanced through 2017.
County Assistant CEO Britt Ferguson said the primary reason for the rosier financial picture is that the county’s major revenue funds performed better than a forecast last April predicted them to. That forecast estimated about a $1 million deficit this year, he said.
Ferguson will give a presentation on the budget at the county Board of Supervisors meeting Tuesday.
Those funds ended the fiscal year with balances that were up or slightly down from their end balances the previous year, according to a Napa County news release. All funds have substantial reserves, according to the release.
“Where we’re better is primarily the general fund,” Ferguson said. “We are seeing our discretionary revenues are better than they were back in April.”
Ferguson said the county was also able to control costs better than the April forecast predicted, as it negotiated a 1.5 percent cost-of-living raise with both of its unions. The unions wanted a 2.5 percent raise.
He said the county was also able to curb future retirement costs, as it negotiated a two-tier retirement system with the county general employees’ union, which put newly hired employees on a less-generous pension plan.
Napa County’s financial situation is in better shape than other California counties because Napa property values have withstood battering from the recession, and because the county exercised fiscal restraint before the recession hit, officials said.
Whereas the state government committed extra money to fund long-term programs when times were flush, the county didn’t, Ferguson said.
“We did the opposite of what the state did,” Ferguson said. “The board here didn’t spend all that money. We didn’t see the net decline in assessed values that some of the other counties have.”
Ferguson said the county’s financial situation could change if the economy worsens or if the state’s realignment initiative costs more money than the county receives from the state.
That initiative gave the counties responsibility for housing low-level offenders in their jails, as opposed to having offenders finish their sentences in state prisons.
Given the uncertainty, Ferguson said county leaders are requesting that department heads submit budgets this year with no increased spending or costs, and identify how their budgets would be impacted by a 5-percent decrease in general fund money.
Ferguson said the biggest boon to county tax coffers would be for the real estate market to pick up locally and for assessed property values to grow. Property tax revenues, the county’s biggest money source, remained static in the last fiscal year, and aren’t showing signs of increasing in the future, according to the news release.
Despite the economy’s sluggish recovery from the recession, staff predict the county should be able to balance its budgets through 2017, Ferguson said. There’s a chance that won’t be able to happen, but the current trends have minimized that risk, he said.
“There’s always the risk,” Ferguson said. “Unless the economy takes a turn for the worse, I don’t think it’ll be a huge risk.”