April 8, 2005

County Board of Supervisors

Vacant positions deleted to help balance next year’s budget

By Supervisor Pete McHugh
Special to the Times

The Santa Clara County Board of Supervisors recently deleted 225.5 vacant full time equivalent (FTE) positions in the county’s general fund.

This action achieves a projected ongoing general fund savings of $14.5 million for the fiscal year starting July 1 (FY 2006). It will also save $6.2 million in general fund costs for the remainder of the current fiscal year.

At the same time, the board delayed a decision until April 19 on deleting 12 FTE positions in the sheriff’s office. This delay will allow the sheriff and county executive to develop position deletion options that only involve vacant positions.
The county currently has an authorized workforce of 8,871 FTEs in the general fund. The 225.5 deleted general fund positions represent less than 3 percent of its authorized FTEs.

In addition to the general fund, the county accounts for spending through enterprise funds, such as Valley Medical Center, and internal service funds, such as Information Services. For all enterprise and internal service funds, the board has currently authorized 5,892 FTE positions.

The board also recently deleted 33 vacant FTEs in these funds for a reduction of less than 1 percent of their authorized positions.

Since the positions have been vacant for some time, county residents have already been experiencing the service impacts. Their formal deletion now makes it clear that the impact will last more than just one or two years. The board action, however, will affect the service level capacity of some departments more than others.

The general fund departments with the greatest percentage reduction in staffing include Community Outreach (7.7 percent), Public Health (6.3 percent), Alcohol and Drug Programs (5.8 percent) and the Social Services Agency (3.9 percent).

The combined total of positions deleted in these four departments equals 157 FTEs or almost 70 percent of the 225.5 general fund vacant positions deleted. The non-general fund departments affected the most include Information Services (9.7 percent) and Roads (4.7 percent).

The board, however, did not delete any vacant positions in several departments. In the GF, the Assessor, Procurement, Registrar of Voters, 911 Communications, Mental Health, Custody Health, and the Medical Examiner retained all their vacant positions.

No vacancy deletions occurred in Environmental Services, Vector Control, Parks and Valley Medical Center in the non-GF. Unfortunately, each of these departments will still have to contribute reduction proposals to help the county balance a projected $115.6 million deficit for the next fiscal year.

Although the current projection for FY 2006 has revenues increasing by $82.4 million, county staff has identified five major spending drivers that result in the deficit.

County retirement costs increase from $101 million in the current year to $156.3 million in FY 2006. County staff expects spending on In Home Supportive Services to increase by $31 million due to higher caseloads. To sustain the county’s medical safety net, the General Fund subsidy to Valley Medical Center increases $30 million.

Many labor unions negotiated no cost-of-living increases for this year in return for modest general increases next year. These salary increases may add $28 million to the county’s ongoing costs in FY 2006. In addition to salary increases, staff also projects a combined $19.8 million increase in workers’ compensation costs and health insurance premiums.

When the county adds the savings from the vacant positions in the sheriff’s office, the projected total savings for FY 2006 will be $15.7 million. These savings are one component of a board-approved budget-balancing package that totals $127.3 million.

Although the current deficit estimate is $115.6 million, staff has reported that likely further state impacts of $19 million may raise the deficit to $134.6 million.

The other four components are:

- $40 million in one-time funds to cover ongoing spending. Over the next three years, the county plans to reduce its
reliance on one-time funds by $5 million in each successive year.
- $34.3 million in savings from ongoing departmental spending reductions.
- $20 million in countywide savings that will not affect service levels.
- $17.3 million in reduced retirement costs by spreading payments over a 30-year period.

With no good options available to the Board of Supervisors for FY 2006, county residents will experience more reductions in county services.