Tuesday, Aug. 25, 2008 • County braces for possible furloughs, layoffs

Publisher’s note: This story originally appeared in the Tuesday, Aug, 25, 2008 edition of the Lassen County Times.

The worldwide economic slowdown and the fiscal crisis in California may finally affect some Lassen County employees.

On Tuesday, Aug. 18 County Administrative Officer John Ketelsen asked the Lassen County Board of Supervisors for the authority to notify the county’s employee associations of the need for reductions in force. The board unanimously approved Ketelsen’s request.

According to the staff report presented to the board, the county must give the employee associations up to 90-days-notice before a reduction in force can take effect. The county administration will present any plans for reduction to the board prior to implementation.

The board opened a public hearing on the county budget to be continued at the next meeting on Tuesday, Aug. 25, but didn’t discuss the budget in detail due to time restraints.

The county will face revenue reductions in three areas according to the staff report.

“Grants have been lost in several departments and state funding has decreased in others,” the report reads. “Countywide, there has been a loss in revenue as a result of the elimination of the Williamson Act subvention and other state cuts. In addition, fee revenues have dropped as a result of the slowdown in building and development activity.”

The California Land Conservation Act of 1965 — commonly referred to as the Williamson Act — enables local governments to enter into contracts with private landowners for the purpose of restricting specific parcels of land to agricultural or related open space use, according to a state of California website devoted to the program. In return, landowners receive lower than normal property tax assessments based upon farming and open space uses. Local governments then receive an annual subvention of forgone property tax revenues from the state via the Open Space Subvention Act of 1971.

The website reports the payments to the counties were never guaranteed, and hopefully they will resume once the economy rebounds.

While Ketelsen said he hopes furloughs or layoffs will not be necessary because some of the losses will be absorbed through attrition and by not budgeting for vacant positions that will remain unfilled, county staff anticipates some reductions in force will be necessary.

Ketelsen said within the next 90 days the county should know more about the effect of state cuts on the county budget and if furloughs or layoffs are deemed necessary, the county would be able to move forward.

“We already know as a basis for this budget we will be talking about today, there will be some layoffs,” Ketelsen said. “We will bring specific plans back to the board on where the effect is going to be felt. At the present time we’re not anticipating furloughs, but we are very close.”

Ketelsen said so much of what the state has done affects the county’s cash flow.

“Even though you might have a balanced budget, we don’t know if we can live with all the unknowns in regard to cash flow,” Ketelsen told the board. “We’ll live within the budget if we get all the revenues that are anticipated and planned for, but the timing is what we don’t know. In that case, we’ll have to entertain furloughs.”

Lassen County Supervisor Bob Pyle said the decision to notify the employee associations of the possibility of furloughs or layoffs was recommended by the budget committee that created the county’s budget.

“It’s meant entirely to be proactive instead of reactive,” Pyle said. “Instead of waiting and finding out we have to do it and then it takes 90 days to do it, we’re just basically setting it up so if it happens, we’ve got another tool to work with. Hopefully it will never happen.”

Lassen County Supervisor Jim Chapman said the notification was similar to the one required at school districts when they anticipate possible layoffs of teachers.

“The potential is there,” Chapman said, “and bunch of them get laid off but then most of them don’t when the funding comes in.”

“I think in light of the current state budget situation, they haven’t fixed the problem (with the state budget),” said Lloyd Keefer, chairman of the board. “There are structural problems, and we don’t know when the next shoe is going to fall. It could be toward the end of this year or the beginning of next year.”

Ketelsen said the state plans to defer the gas tax funds “and there is an obligation to pay us, but there is no date certain. So, we don’t know when those funds will come in. It is possible in a situation like that we could have some effects in public works.”

Ketelsen said the county planned on losing four people in the public works department but the uncertainty may cause deeper staff cuts.

The county will lose 8 percent of its property tax funds from Proposition 1A, Ketelsen said, “but again, that is a lending program … These are big gaps in cash flow. The budget assumes we’re going to receive the money, and there’s no reason to doubt we will, but the question is when. In those cases, we’re going to have to come back to you with specific plans.”