Finance Director Jennifer St. John delivered the bad news via a PowerPoint presentation: Santa Cruz County faces a $3 million hole in its 2010-2011 budget and may have to lay off 15 employees in January and close its parks.

Treasurer Caesar Ramirez (left) takes a seat as county personnel get down to business in a budget session on Nov. 10. Next to him, from left, are Supervisor John Maynard, Sheriff Antonio Estrada, Justice of the Peace Mary Helen Maley, Supervisor Manuel Ruiz and Senior Deputy Attorney Leslie Spira. Behind them are Capt. Ruben F. Fuentes of the Sheriff’s Office, Deputy County Manager Carlos Rivera, and Maj. Ramon Romo of the Sheriff’s Office. Photo / Denise Holley

What’s more, the county may not be able to afford to move its courts personnel into the new courthouse, now under construction, when the building is finished in December 2010. First, the county has to come up with the money for furnishings and utilities.

St. John and County Manager Greg Lucero outlined the dilemma for county personnel and supervisors during a three-hour study session on Nov. 10. Board Chairman John Maynard moved the meeting to the Nogales Unified School District No. 1 boardroom so staff and elected officials could face each other in a U-shaped configuration.

“We’re using over half our rainy day fund ($6.3 million) to balance the 2009-2010 budget and we’re coming up short for next year,” St. John said. Since the fiscal year began July 1, “we’ve collected $6.6 million in revenue, but we have spent $9.2 million.”

The county general fund, currently budgeted at $30.6 million, depends on sales and property taxes. Shared sales tax revenue from the state has declined, but local sales tax revenue dropped even more, St. John said.

Property tax revenue is now flowing into the treasurer’s office. But only about 24 percent comes to the county general fund, St. John said. The rest is apportioned to school, fire and flood control districts.

Grants pay for some county positions and expenses but the county has to spend its general fund monies and then wait to get reimbursed, St. John said.

“We’re now looking at close to $2 million in unforeseen expenditures,” Lucero said. He worries that the state will make the counties pay the hefty salaries for their judges.

In Phase I of its budget cuts, the county laid off eight people in August and slashed travel and other expenses to the bone. Now the only other place to cut is salaries, St. John said.

“Is Phase II (cut 15 jobs and close the parks) definitely going to happen?” asked County Attorney George Silva. That plan would also eliminate Justice of the Peace Precinct Two in the east county and its constable.

“That’s up for debate,” Lucero answered. “That was my recommendation, but the board hasn’t acted on it yet.”

Response from the department heads was nearly unanimous: make the cuts quickly and let everyone share the pain, they said.

Waiting will “just postpone the inevitable,” said Tivo Romero, chief probation officer. He questioned whether Phase II would be enough.

Judge James Soto agreed. “If we don’t start taking action now, it’s only going to be more painful later,” he said. “It should be fair and across the board.”

Superior Court Clerk Juan Pablo Guzman asked the supervisors to act quickly “so we can let our staff know what’s coming.”

Mary Dahl, director of community development, asked how much the county would save if it furloughed employees or temporarily cut salaries across the board.

A furlough (cutting hours) wouldn’t work for the sheriff’s office, where deputies and detention staff must be on duty 24 hours a day, Lucero said.

“I have advocated a salary reduction,” he said. If the county cut two hours of pay per week for each employee, it could save about $426,000 a year. A four-hour cut could save $852,000.

Supervisor Rudy Molera said he would stand with Supervisor Manuel Ruiz and vote “no” on filling vacant county jobs. “We have to honor the hiring freeze,” Molera said.

Justice of the Peace Keith Barth said the county could get an inmate crew from the state Department of Corrections to take over some of the maintenance tasks. The low-risk inmates could remove brush, maintain vehicles, and perform some skilled trade work, he said. DOC would provide training for county staff.

Lucero didn’t like the idea of the county laying off workers and replacing them with inmates, he said.

“It hurts me to think the parks could be closed,” said Justice of the Peace Mary Helen Maley. Many of the people she sees in court can’t pay their fines but could perform community service hours to maintain the parks.

Then Maley brought up the courthouse expenses.

“How are we going to pay for furniture and utilities in the new building?” she asked.

The county has not budgeted the moving-in expenses yet, Lucero said. “But if the jail is fully utilized, it’ll put money back into the general fund.”

Maynard suggested leasing out the new jail to another entity, under the sheriff’s supervision. Ruiz and Sheriff Antonio Estrada shook their heads.

“You lose control,” Estrada said.

With a capacity for more than 300 inmates, the jail can earn money by housing federal prisoners from the U.S. Marshal’s office. The marshal wants to transfer at least 100 inmates, but does not want to lease the new jail, reported Capt. Ruben F. Fuentes.

Maynard asked each department to figure out how to cut another 15 percent of its budget and return to the same room for another meeting on Dec. 1.