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One of the legs in the county’s efforts to balance the budget despite decreasing revenues is reducing operating expenses. The Los Alamos County Council examined several proposals floated by staff during its Tuesday meeting.
Councilors generally supported staff recommendations, with a few exceptions. Concerns centered around potential impacts on citizens and staff, as well as county infrastructure.
“The fundamental first priority is providing those operational services. The community expects certain services, and I think this will be painful as it is,” Councilor David Izraelevitz said. “Reducing that even further would be unacceptable to our customers. Take any additional operational costs off the table.”
Deputy County Administrator/Chief Financial Officer Steven Lynne highlighted cuts that could bring up to a $4.8 million in reduction in budget, which is about 10 percent lower than FY2013.
One change that could affect customer service is reducing staffing levels through attrition and reorganization. Council agreed with County Administrator Harry Burgess and his recommendation that more drastic measures such as countywide layoffs or furloughs should be avoided if possible, so impacts on customer service are minimal.
“The reduced workforce could result in an extended day or two in receiving permits through the CEDD, as one example. We’ve looked at contracting out for certain services related to the indigent fund, so we can pay a lower rate for those services rather than having an individual in house. It could be a longer period of time for claim payment in that scenario,” Burgess said. “It’s those extensions in time that are probably going to be the primary thing experienced by our customers.”
“We’re trying to minimize the impact on customer service as much as possible in FY2013. As we look forward to what’s projected in FY 2014, there will be some negative service impacts,” Lynne said.
“We realize that’s the business we’re in: to deliver service. So part of the balance here is being as sensitive as possible to that and looking for ways to minimize those impacts. But given the magnitude, we don’t think it’s necessarily realistic to expect moving forward without some impacts in that area.”
Burgess also recommended eliminating all FY2014 salary increases, which would result in a $700,000 savings and lower overall salaries by that percentage in following years. He argued that this was a more equitable way to reduce salary expenditures than other options such as increasing employees’ share of insurance costs, which has more of an impact on lower wage workers and no impact on those who opt out.
Council was not comfortable with totally eliminating pay adjustments. Councilors Frances Berting and Kristin Henderson argued for at least a one to two percent increase.
“One thing I am pretty sure of about this community is that they really like to have great services. They appreciate when they call the county and they get a good response and people are helping us,” Henderson said. “And I think going down a route of we can build a bunch of new buildings but we can’t give you a raise is not going to go over well with anybody, nor should it.”
Council changed the wording in the staff proposal to “reduce” rather than “eliminate” salary adjustments.
Staff will be working to find another 10 percent expense reductions across the board. To achieve that, low use and/or high cost programs could be eliminated, Atomic City Transit routes with low ridership could be cut and progress toward council goals could be slowed down. Placeholders for school and county projects may drop from $1.5 million to $500,000 in FY2015.
Council was most concerned about a 10 percent cut for infrastructure and road maintenance, which will mean some maintenance projects get deferred.
Recalling the loss of the municipal building and golf course club house due to long-deferred maintenance raised red flags.
“Have you calculated a percentage that if we go below, we end up like we did in the mid-’90s, actually losing ground?” Council Chair Geoff Rodgers asked.
“No, but in preliminary discussions with departments there was the sense that we improve slower but not necessarily start deteriorating,” Lynne replied.
“One of the things we’ve done over the past five years is try and appropriately budget and reinvest in our infrastructure. We think reducing that 10 percent is not unreasonable given the circumstance.
”Even at these reduced amounts, the deferrals will just mean that some things occur a little bit more slowly. But I think we’ll be able to manage and get to the most significant and important items in a timely manner. Even at this lower amount we’re doing much more than we did 10 years ago.”
Some councilors argued for restoring the revenue stabilization fund to its target of five percent of revenues as quickly as possible, but decided in the end to follow the staff recommendation to maintain the Unassigned Balance fund at 20 percent of revenues, use up to 100 percent of the Revenue Stabilization fund through FY2016 and return that to its target by the end of FY2017.
Staff will also work to refinance existing general county debt to realize an annual debt service savings of $770,000.
Staff will use the amended recommendations to adjust the FY2014 budget, which comes before council in May.