When the county auditor presented a final 2012-13 budget to San Benito County supervisors Tuesday, after his completed its review of the document, there were a few unanticipated expenses and revenues that came up that weren’t discussed at the budget hearings over the summer.
One of them was more than a half-million dollars for future healthcare costs.
Auditor Joe Paul Gonzalez said the county had claims submitted after the 2012-13 budget was approved from the last fiscal year, so the amount of money expected to roll forward was less than anticipated. But the county was fortunate to have some one-time money come into its coffers to offset the shortfall.
Gonzalez said the county came up $274,318 short of what had been anticipated at the end of the fiscal year – as officials culminate the process to fill an overall budget deficit of about $5.3 million.
The rollover amount was about $1.8 million – including a $738,200 loan to help the San Benito County Health and Human Services agencies several years ago that has been repaid for the 2012-13 fiscal year.
The county is also faced with an increase to the “other post-employment benefit” (OPEB) liability of $514,280 that was discovered during the auditing process.
Gonzalez explained to supervisors the sources of two one-time influxes of cash and asked them how they wanted to handle the OPEB funding.
One of the infusions of money received to cover the shortfall came as a check from Trindel, the company the county uses to administer its worker’s compensation and liability insurance. Gonzalez said due to staff cuts, the advanced payment exceeded the cost for the year. The county received a check from Trindel for $330,475. Gonzalez said the county could use $56,157 for the general fund contingency account, with the rest used for this year’s insurance needs.
The county also received a one-time payment through the dissolution of the Hollister Redevelopment Agency, as the low and moderate housing fund was returned to the auditor’s office to be apportioned to eligible agencies. The schools received the majority of the funding from the RDA dissolution, but the county received $679,025 for this year.
“It is a one-time deal and is not likely to be repeated,” Gonzalez said.
He said in light of the unexpected revenue, he was suggesting no further cuts to services to cover the rollover shortfall and instead suggested splitting the money between the OPEB account and the general fund contingency account.
Supervisor Jaime De La Cruz asked if the supervisors could choose to de-fund OPEB.
“It has been the policy of the board to fully fund the annual contributions (to OPEB) up until now,” Gonzalez said. “It’s a known expenditure that has to be made, but the board has discretion to hold off.”
De La Cruz supported that idea.
“We already approved the budget and forgot a line item,” he said. “There is not a law we are going to break if we move that forward – move that one year. We are going to take 30 to 40 years to meet the obligation at 1.2 percent.”
Supervisor Margie Barrios said she didn’t want to put the expenditure off on future boards.
“How did we miss this?” Barrios said. “Is this because we have an antiquated accounting reporting issue? That is huge.”
Gonzalez said the software used for the county’s accounting is part of the issue.
“The budget is done outside of the system in a large excel spreadsheet,” he said.
He said he had been meeting with Interim County Administrative Officer Ray Espinosa to discuss other systems and they had plans to visit Turlock to see one software system under consideration.
“We really need to move the technology forward,” Espinosa said.
Supervisors unanimously agreed to move the full amount of $735,182 into the contingency expenditures account, with plans to discuss the OPEB funding before the end of the fiscal year. Gonzalez noted that the OPEB payment is made in July each year so the funding would not need to be in the account until then.
“If we address it before (the next fiscal year) I’m comfortable,” Barrios said.
San Benito County Supervisors will hold a special meeting Dec. 11 at 9 a.m. to further discuss budget issues. The full agenda is posted online at www.cosb.us. Read the meeting next week.
