LAKEPORT – With final consideration of the county's proposed $194 million 2009-10 budget on the table, the Board of Supervisors will meet Thursday for public budget hearings.

The hearings will begin at 8:30 a.m. in the board chambers at the Lake County Courthouse, 255 N. Forbes St., Lakeport. If the hearings aren't finished Thursday, they'll be continued at 9 a.m. Friday.

County Administrative Officer Kelly Cox is taking to the board a $194.3 million budget. That's about $7 million less than last year's budget, and $2 million less than the 2007-08 budget, said Cox.

Cox which the proposed draft budget maintains the county's longstanding policy of fiscal responsibility.

He said the budget is structurally balanced, with ongoing recurring expenses financed by ongoing recurring revenue, not one-time revenue sources.

Most of the decrease from last year's $201 million budget – the first to go over $200 million, Cox said – is to be found in special funds, not the general fund, which in the new budget is $54.1 million, down by $500,000 from last year. He said the general fund was about that same amount in the 2007-08 budget as well.

“There were special projects in last year's budget that were completed,” he said.

Last year's road department budget was $23.3 million, and is $19.9 million in the proposed final budget, Cox said. “A lot of that has to do with projects.”

The county's Mental Health Department will be down by $1 million, with Public Health also scheduled to be down, having already dropped some vacant positions. Lake County Sanitation District also is down due to completed projects, with its 2009-10 budget set at $6.4 million, down from last year's $7.1 million.

This year's budget also proposes to increase the county's general reserves from $5 million to $7 million, which Cox said he thinks the county needs to do to prepare for the uncertainties tied to the state's budget this year and next.

“It's the only responsible thing to do,” he said.

Cox said the county can't look at its budgets only a year at a time, but has to look ahead and longterm.

This year's state budget, the lateness of which created a budgeting challenge for the county, didn't resolve the state's fiscal issues, said Cox.

It also takes a heavy toll on counties. Cox said the state is taking from the county $2 million in property tax. The state also took $764,000 in redevelopment agency property tax increment funds from the county, which also will lose $68,000 in Williamson Act subventions and $357,000 in Proposition 36 drug treatment funds.

The state budget will delay by 11 months the payment to the county of $2 million in gas tax payments, which are used to fund the county's road department and its projects.

The county also won't receive more than $53,000 in reimbursement for the special state election in May, among a handful of other impacts, according to the county's budget documents.

Cox said he expects the county to get hit heavily by the state budget again next year – if not before.

As he's kept the budget structurally balanced, Cox also noted there are no filled positions being eliminated in the general fund.

“This budget won't result in anybody losing their job,” he said.

However, he added, “We're still not entirely finished,” explaining that they're still looking at some budget issues with Social Services and Mental Health.

That, and the uncertainty of the state's budget, means he can't guarantee that nobody will lose their jobs for the rest of the year. But he said the county is looking at every possible way to avoid laying off staff.

There are other challenges ahead for the county, including declining revenue associated with the construction industry, declining sales tax revenues due to the slumping economy, aging infrastructure and the unknown future costs of addressing invasive mussels and aquatic weeds in Clear Lake, according to the budget report.

Despite the uncertainties, Lake appears to be at the top of its class when it comes to fiscal soundness.

A recent report from the California State Association of Counties listed fiscal updates on the state's 58 counties, and only Lake and Tuolumne had no debt service whatsoever, based on 2006-07 figures.

That still remains true for Lake, which even in the challenging economic climate has avoided borrowing to keep its operations going, Cox said.

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