The Santa Barbara County Board of Supervisors got a peek Tuesday at the ugly fiscal year that lies ahead for the county in 2010-11.

Tuesday’s meeting was the first in a series of budget workshops. The meeting focused on defining the problem, which seems to stem from the fact that salaries and benefits are the county’s largest expenditures — more than half of its operating budget.

Even though staffing has been reduced, the cost of salaries and benefits is still growing.

In fact, that cost amounts to about $119,000 per county employee per year — after salary and benefit increases. That number is up from $109,000 last year, according to Theo Fallati, the county’s assistant auditor-controller.

To maintain current staffing levels, the county would need to shell out nearly $39 million in additional costs in 2010-11. Staff salaries would increase $14 million, and employee benefits would increase $25 million.

The most significant component of the benefits increase would come from maintaining the current level of retirement benefits — about $20 million. Decreasing revenues also are expected in the next year.

Most of the county’s discretionary revenue comes from property taxes, but those monies, along with county sales and bed taxes, are expected to decrease about $3 million in the next fiscal year.

Based on historical trends, sales-tax revenue should be the first to improve, Fallati said, and could begin to go up by April.

Most of the county’s unions have contracts that provide for the salary increases. In addition, there are “step increases” that take effect as employees take on roles with more seniority.

SEIU Local 620 has allowed for step increases of $7.1 million, the Deputy Sheriffs’ Association $2 million and all others $4.4 million.

Only four people, including two representatives of county unions, spoke during Tuesday’s public comment period.

One recommendation came from Bruce Corsaw, the interim executive director of SEIU Local 620. That group represents more than half of the county’s employees — “the lowest-paid half,” he said.

Corsaw said the county should consider changing its amortization schedule to 30 years instead of 17 years — as it is currently — and that doing so could shave $15 million off total retirement costs.

The retirement board offered the county the option of spreading out the debt over a 30-year period to address “this perfect financial storm our county is facing,” Corsaw said. “But the county CEO insisted on a 17-year schedule and refused to tell the retirement board that the schedule would cause a hardship on the county,” adding that the schedule could be changed once a year.

A representative of SEIU Local 721 also encouraged the board to adopt the 30-year plan, and said it could switch back when the economy improves.

County CEO Mike Brown said the board considered the amortization very carefully, and that the supervisors and retirement board both adopted it.

“The bigger the mortgage and the longer the mortgage, the higher the interest ultimately over time,” Brown said. A 30-year plan would have added $1 billion in debt, and “we felt that your board took a prudent, middle-ground step” in approving the 17-year term, he said.

Supervisor Janet Wolf expressed concern when a yearly increase for managers and executives was mentioned.

A total of $700,000 in pay increases were detailed, of which about $50,000 is allotted for bonuses.

Wolf was adamant that those increases be eliminated. “There’s no place for executive bonuses ever, and particularly in this climate,” she said.

Though Supervisor Salud Carbajal said he agreed that bonuses would “send a terrible message,” but that the contracts negotiated with the county’s employee unions needed to be honored.

“Not only did management take the furlough, but they didn’t receive any pay increases,” he said of the past two years. “Obviously this climate is tough. I just want us to be fair.”

The county must close the budget gap by July 1, and the budget session on Feb. 22 will look at potential service effects.

Noozhawk staff writer Lara Cooper can be reached at

Lara Cooper, Noozhawk Staff Writer | @laraanncooper

— Noozhawk staff writer Lara Cooper can be reached at Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.