What seems like a slam-dunk discussion by the county’s Board of Supervisors on a proposed budget for the next fiscal year could yield some fireworks.
The $5.5 billion proposed budget for the 12 months starting July 1 is the largest yet for the county and marks a shift from the austere budgets after the 1990s bankruptcy and the state’s financial mess four years ago.
The proposed budget would reverse a hiring freeze and some staff cuts that began in 2002 as a way to deal with the fallout from Sacramento’s budget woes.
The fireworks could come by way of John Moorlach, the county’s treasurer-tax collector who won election to the Board of Supervisors last week and starts his term in January.
Moorlach won’t be voting on the proposed budget. But he said he does plan to offer his input to supervisors.
“I will be involved in some way,” Moorlach said of the budget hearings set to start this week.
The budget relies on investment returns from Wall Street, which hasn’t been inspiring of late, Moorlach said.
“You’ve seen what has happened to the Dow Jones Industrial Average,” he said. “We are relying on the investment portfolio to be a key component on how we balance the budget, which is a very scary thing.”
Moorlach is credited with sounding alarm bells before the county’s investment-related bankruptcy in 1994. He’s also taken aim at added pension benefits for county workers that were approved two years ago by a 3-2 board vote.
The vote raised retirement pay and lowered the retirement age for most employees.
Moorlach made unfunded pension liabilities resulting from the expanded benefits a major issue in his campaign, warning of a possible financial crisis for the county.
There doesn’t seem to be a sense of alarm among county officials.
The issue of unfunded pension liabilities seems to have eased, contends county budget director Steve Dunivent and other officials.
A year ago, they worried that the more generous benefits would spur a wave of retirements the county couldn’t afford. That hasn’t happened, they said.
“It will be some time before any firm conclusions can be drawn about changed retirement behavior,” said Keith Bozarth, chief executive of the Orange County Employees Retirement System.
The county also opted to do a $115 million pension obligation bond issued in January to help pay down the unfunded liability, according to Dunivent.
The proposed budget includes 3% higher spending on departments and nixes a hiring freeze imposed for the past few years.
“We’ve held departments level on spending for two years in a row,” Dunivent said. “Going into next year, we’ve allowed 3% growth based on our longer-term outlook for how property taxes might grow over the next five years.”
The housing boom has helped fill the county’s coffers.
The county has been collecting more taxes as homes are sold and assessed at record prices.
“Property taxes have been coming in better than what we had projected,” Dunivent said.
The budget contains a “position count” work force of 18,114 people.
Budget planners are recommending the county add 183 workers, an increase of less than 1% from last year. The hiring aims to keep pace with the economy and population, according to budget planners.
The county now has 16,484 filled jobs, up 11% from the low of more than a decade ago.
California’s improved finances also are helping the county’s budget outlook.
“The last couple of years have been challenging years for the county because the state was solving its budget problem in the traditional fashion of diverting money from the county,” said Rob Richardson, assistant chief executive for the county.
“The fundamentals of the state budget appear somewhat stronger than they have been in the past. The revenue picture is a little bit brighter,” Richardson said.
The county’s budget for the year through June was $4.9 billion when approved last year.
Of the proposed $5.5 billion budget for the next year, about $2.9 billion is general fund money over which supervisors have discretion in funding decisions. The rest is for programs funded by state or federal money and is earmarked for specific uses.
The budget calls for spending $31.4 million on a power plant in Santa Ana that will allow the county to generate some electricity and cut its costs.
John Wayne Airport has plans to build a similar $16.8 million power plant. Both are seen as moves to avoid outages and save millions of dollars annually in electricity costs.
_________________________________________________________
Growing John Wayne
John Wayne Airport is set to see a 13.5% rise in its operating budget as part of a planned expansion at the county-run facility.
The airport’s budget is set to be $160.3 million for the fiscal year starting July 1. The extra money is set to go toward hiring and some projects.
Part of the airport’s expansion costs are set to be backed by a $4.50 passenger fee that runs through 2022.
The fee is expected to fund about $321 million of the airport’s $437 million expansion plan.
The rest is set to come from a construction fund set up in April from reserves built up over the years, according to airport director Alan L. Murphy.
The airport’s expansion is slated to start in November with some logistical work to make way for construction of a 2,500-space parking garage in mid-2007.
In late 2007, the Thomas J. Riley terminal is set to be renovated, followed by demolition of the existing southwest parking structure in late 2008.
In the final stage, construction of a new terminal to the south of the Riley terminal is set to start in mid-2009. The entire expansion is set to wrap up in 2011.
,Pat Maio
