County Administrator Kelly Cox has prepared the review, which looks at all the county's departments and makes adjustments to keep the county's $196 million budget on track.
Cox, who has spent decades keeping the county's books balanced, says the county has a very strong budgetary position, with its budget still in balance.
However, he pointed to several factors which make it necessary to make line item adjustments.
The most significant budgetary shortfall, Cox said, is being felt by the county's Mental Health Department.
Since last July 1, the state has delayed issuing Medi-Cal reimbursement payments to Lake and other counties, claiming its computer system isn't working, said Cox. “It's a big problem.”
The county had to loan Mental Health $1.4 million to keep going, which the department is unable to repay without the state's reimbursements, said Cox.
“It's the single-biggest issue that we're dealing with right now,” he said.
The economic downturn also is causing county budgetary repercussions, especially in areas tied to the housing market and construction.
Cox said the county's construction permit revenue is running 20 percent below where it was at this time last year.
“Building and planning permits, zoning, recorder's office recording fees when property changes – all of those are down,” said Cox.
He added, “These are the kinds of things that happen in a recession,” and is beyond what can be controlled at a local level.
Cox said his other concerns revolve around what the state is going to do next.
One state proposal that has him worried is a suggestion to withhold payments to counties for other programs for a period of five months so that the state can use that money in the short term. Some of the money that could be withheld comes from the gas tax, which goes for county road maintenance.
Withholding that money, he said, will put counties into the position of drawing down their financial reserves and or having to borrow money.
“In effect the state is forcing us to do what they can't do anymore, because they've borrowed so much,” said Cox.
He also doesn't trust that the state will make good its promise to catch up on those five months of payments it proposes to withhold. “They've done this kind of thing before and we'll never catch up.”
There are also the 10-percent, across-the-board reductions in state general fund programs that Cox estimated could hit county health and law enforcement services. While it's a significant cut, Cox added that he things the county can handle it.
Cox said the state needs to deal with its budget deficiencies – an estimated $3.3 billion this year and $14.5 billion next year – because delaying has put the state in its current condition.
“They have some things they need to be doing immediately,” he said. “We're always worried about how it's going to impact us.”
One of the first things the state could do, he said, is pass a balanced budget on time, as counties are required to do.
Cox emphasized that the county's budget is still in balance and there are some pluses, including higher-than-anticipated property tax revenue and no danger of staff job cuts.
The line item adjustments the board will consider Tuesday won't reduce the county's reserve or contingency budgets, which would be a concern for him.
“The county is still in a pretty strong financial position,” he said.
With this year's midyear budget review complete, Cox said he's already looking at next year's budget, which takes months of preparation before it's approved in the summer.
E-mail Elizabeth Larson at
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