County budget afflicted by declining revenues

Rebecca Neipp

News Review Staff Writer

County  budget  afflicted by  declining  revenues“It is undeniable that COVID-19 has, and will continue to have, a profound effect on our county,” Kern County’s Chief Administrative Officer Ryan Alsop told the board of supervisors on Tuesday.

Kern County had barely recovered from the financial crisis triggered by the crash in oil prices in 2015 when the pandemic plan introduced new crippling losses to our communities, along with those in California and in most of the nation.

“In addition to the medical, mental and emotional toll [coronavirus] has taken on our residents, it will continue to cause long-term and dramatic implications on our budget.”

Following an in-depth presentation of the county’s financial situation (link available at kerncounty.com/government/board-of-supervisors), the $3.1 billion proposal from staff was unanimously adopted, with little board discussion, by supervisors.

In his report to the board, Alsop said that the proposal by staff reflected the board’s “unwavering belief in fiscal responsibility, departments’ knowledge and expertise and commitment to serving our residents in a manner that demonstrates our ability to respond to global crisis while never losing focus on their individual needs.”

The budget was developed with those priorities, and resident needs, in mind. The budget has adopted conservative estimates of future revenues to ensure that the county will be well-positioned to manage and continue recovery from ongoing financial and economic impacts of the pandemic, said Alsop.

“While we continue to struggle with nearly non-existent year-over-year growth in property tax and sales-tax revenue, the county’s two primary revenue sources, the cost associated with providing essential services continues to increase, primarily driven by the cost of labor,” said Alsop.

“This foundational fiscal challenge is compounded this year by the extraordinary economic impacts of COVID-19 and the prolonged contraction in oil production and related services, which results in revenue losses to the county.

“Both the COVID-19 pandemic and the downturn in the oil economy locally will present significant fiscal issues for the county going forward, depending on their duration.”

Alsop noted that in spite of challenges, the proposed budget continues funding for essential services while meeting debt-service obligations and maintaining a minimum level of infrastructure.

“As your board maintained throughout the previous financial crisis and deficit mitigation plan, the budget places an absolute priority on critical public safety budgets, including a focus on recruitment and retention issues.”

The budget also authorizes a permanent transfer of property tax base revenue from the General Fund to the Fire Fund — which is a separate funding source for fire services.

“The Fire Chief and I have developed a short-term plan to eliminate any service-level impacts,” said Alsop. However, that plan will require the use of one-time resources, which may be unsustainable for future years.

“The pandemic has changed how the county delivers public services. We will continue to evolve, examining new ideas that have resulted from our adaptation to the stay-at-home order. However, the county’s core function and mission remain the same — to serve our residents.”

Alsop said that he and his team will continue to focus on revenue resources and identify challenges early enough to take corrective action in order to mitigate future financial instability.

The board assembled an ad-hoc committee to find innovative ways to minimize the economic hardship during pandemic-related closures. Supervisor Mike Maggard, who chairs the committee, did not have a report this week.

However, Kern County Public Health Department Director Matt Constantine reported to the supervisors that, although Kern remains on the state’s “watch list” mandating increased restrictions, our numbers have begun to improve in the last week.

“Clearly, we have some work to do, but I think we are moving in the right direction,” said Constantine.

Story First Published: 2020-08-28