Monday, February 12, 2007

Bright Budget

Bright Budget
Solano County Looking Toward Good Fiscal Year
By Erin Pursell/Staff Writer

Solano County is in good financial shape, and may gain even more ground by year's and if money continues to flow in at the pace county leaders predict.

"When we look at the mid-year review, we're in really great shape," County Administrator Michael Johnson said as he released the latest fiscal report for the 2006-07 year that ends June 30.

The Board of Supervisors will review the report Tuesday.

The county's current $887.8 million budget features a $243.6 million general fund. If things stay on course, the county expects to end the fiscal year with $47.5 million left over to build on.

That figure includes the $33.6 million contingency fund designed to cover unexpected expenses. So far it hasn't been tapped this year - an unusual occurrence, Johnson said.

"This is the first year in my 34 years that we haven't transferred even $1 to a county agency from contingencies," he said. "From July 1, 2006, to Jan. 31, 2007, each department has lived with the money that was approved by the board. There have been no 'oops' or contingency needs."

Not only have there been no unexpected expenses, county departments have actually spent $1 million less than planned. If that continues, there will be $2 million in savings by June. More than half of that savings has come from the public safety departments, which have been bringing in more revenue than anticipated, said Assistant County Administrator Quang Ho.

The county also is poised to bring in an extra $11.8 million, thanks to greater property tax returns, higher interest income on county investments and higher-than-expected reimbursements from other government agencies.

Looking ahead to next fiscal year, Johnson is proposing that the board of supervisors take some of that savings and begin building a bigger reserve fund for emergencies.

Currently the county has two such funds: A smaller contingency fund, which can be tapped during the year by agreement of 4 of the 5 supervisors, and a larger reserve fund, which cannot be touched unless both the county and state have declared an emergency.

While the contingency fund seems to be sufficient, officials are worried that in a disaster, such as an earthquake, flood or terror attack, the reserve fund would be lacking.

In a meeting with The Reporter's editors last week, Supervisors Mike Reagan and John Vasquez said they hope to increase reserves to 10 percent of the total budget. At present, only 5.4 percent, or $39.1 million, has been set aside.

A larger reserve would "correspond to what it would actually cost in an extreme emergency," said Reagan.

"We think these goals will be well-justified," said Johnson, who put the budget together.

Supervisor Vasquez echoed the importance of building the funds. "It gives us the greatest amount of flexibility," he said.

Supervisor Barbara Kondylis, who acknowledged the importance of maintaining a prudent reserve, cautioned on Wednesday that increasing that fund could be cause for debate.

"I think it's going to be pretty hard to tell taxpayers to pay when we have all that money sitting around," she said. Also, she said, sitting on the funds "doesn't do homeless people or sick people any good."

The overall budget has more than doubled in the last decade, largely because categories such as capital improvement and Office of Emergency Services funding that used to be separate are now included in that figure, Ho said.

While county officials paint a financially sound picture, they still must search for cash to complete several major construction projects, including an expansion of the county jail in Fairfield, the building of a south county government center in Vallejo, and improvements at Nut Tree Airport in Vacaville and Lake Solano Park just outside Winters.

There are still other uncertainties in the operational budget as well, including any state shifts that could force the county to pick up more health-care costs or to house sentenced inmates in local jails instead of sending them to prison.

These possibilities are not factored into the current budget.

"The assumption is that there will be no change in state contributions," Ho said.

Erin Pursell can be reached at

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