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The Orange County Sheriff’s Department outspent its revenues by $33 million during the year ending June 30 – prompting the county to pull millions of dollars from other departments like the Health Care Agency to cover the shortfall.

Altogether, the county drew $24 million from other departments to help close the gap, including $4 million in money leftover at the end of the budget year from the Health Care Agency and $2 million from the Probation Department, according to a report county supervisors approved last week without discussion.

“You’ve got to go to where the money is, and those are the departments that have some funds available and in some ways are related to the issues of the sheriff,” county Supervisor Don Wagner said in an interview Monday, pointing to health care in jails and sheriff security for the Probation Department. “We’re pretty much stuck in where we can look and don’t really have much flexibility.”

Many of the decisions that led to this “[predate] my time on the Board [of Supervisors] and decisions I made on the board. But that’s just a timing issue, it doesn’t mean I’m trying to duck anything. It’s up to me now and the current board to grapple with it. We face escalating pressures on budgets,” he added. “We’re increasingly asked to do more in the mental health and the public safety sphere, for example. And it’s just a really tough balance.”

Regarding the sheriff’s cost growth, Wagner said, “We’ve got to keep an eye on it in every decision we make going forward.”

The sheriff’s large spending increases have come as the department’s staffing and service levels have remained about the same, officials say. The ballooning costs are mostly from increasing costs for its existing employees, largely from pay raises for deputies that supervisors approved in 2016, before Wagner and Supervisor Doug Chaffee took office earlier this year.

“We haven’t grown our department. Costs have grown related to salary and benefits, most of which are out of our control,” said Brian Wayt, who manages the sheriff’s finances as the department’s director of administrative services. He pointed as well to growing costs for retirement and health benefits.

“If you look at the salary increases approved by the Board of Supervisors [for] the deputy sheriffs, compared to the other bargaining groups…they’ve gotten significantly larger increases. So that’s a large majority,” Wayt said. He noted the sheriff’s full expected cost increase last year – which far exceeded other county departments both in dollar amount and percentage increase – was not fully funded in the budget.

The money to help cover the sheriff’s shortfall was leftover from the other departments spending less than their revenues for the year, and was unrestricted in how it could be used.

If the $24 million hadn’t been transferred to cover the sheriff overruns, it would have been available for supervisors to designate for any public services during an upcoming November budget update, officials said.

Among the things such unrestricted money can fund are expanding mental health programs, filling some of the Sheriff’s Department’s roughly 300 vacant jobs, speeding up the county crime lab’s processing of evidence, or building permanent supportive housing to address homelessness.

The Health Care Agency also has hundreds of vacancies – about 400 jobs in total. Much of the $4 million transferred to the Sheriff’s Department came from the health agency’s vacancies not being filled.

The transfers came as the sheriff’s costs have soared far beyond its revenues for several years in a row – attributed mainly to the pay raises. Officials attributed about 90 percent of sheriff cost overruns in the 2018 fiscal year to growth in salaries and benefits.

“From [a labor contract] standpoint, that’s 100 percent out of the sheriff’s control. That’s between the Board [of Supervisors] and the labor groups. So from that standpoint there’s nothing we can do to control it,” Wayt said.

In the fiscal year that ended June 30, the Sheriff’s Department spent $24 million more than its budget, while revenues came in $9 million less than planned, according to a final county budget report approved last week.

The escalation in Sheriff’s Department spending comes after years of county supervisors cutting discretionary spending from health and social services and substantially increasing spending at the Sheriff’s Department, largely for salary and benefits for existing employees.

Over the five fiscal years ending in June 2016, county supervisors cut about $39 million in annual funding they control from the county Health Care Agency, which includes mental health services, while at the same time adding $59 million to the Sheriff’s Department’s annual budget.

Even after spending $33 million than it had, the OC Sheriff’s Department had 304 vacant positions at the end of the fiscal year, according to county records.

For the current fiscal year, county supervisors increased the sheriff budget by $65 million to maintain the existing service levels, not including adding deputies or other staff.

No other county department came close to receiving as large an increase to continue providing the same service levels. Two of the largest county departments – the Health Care Agency and Social Services Agency – received no such money to keep existing service levels under the current budget.

In the last fiscal year, Sheriff’s Department had by far the largest overrun of any county department – about six times as much as all of the other departments’ overruns combined.

OC isn’t alone in grappling with this.

The Los Angeles County Sheriff’s Department ran a $63 million general fund deficit this past fiscal year, prompting two LA County supervisors last week to propose requiring the sheriff to reimburse the money to the county general fund and control future costs. Their plan is up for a vote today.

The OC sheriff’s deputies’ union that negotiated the raises is the largest funder of county election campaigns.

In the run-up to Supervisor Andrew Do’s tight 2016 re-election, the Association of Orange County Deputy Sheriffs funded $10,000 in ads attacking him ahead of the June primary election. Do then voted for the deputy raises three months later in September, and the union spent $100,000 on mailers supporting him ahead of the November general election. Do ended up winning by 0.4 percent of the vote.

Last year, the deputies’ union spent $150,000 opposing Supervisor Doug Chaffee’s opponent Joe Kerr, who lost in the June primary.

Before the raises, OC deputies’ compensation was more than in neighboring San Diego County, which has the closest total population to Orange County among California counties.

In 2015, before the raises went into effect, the median total compensation for an Orange County sheriff’s deputy was about $194,000, compared to $134,000 in San Diego County, according to county data published online by Transparent California.

OC’s compensation included roughly $114,000 in median total pay and $80,000 in median total benefits, according to the data.

In 2017, the year after Orange County’s increase, the median total compensation for an OC sheriff’s deputy grew to about $218,000, including $132,000 in pay and $86,000 in benefits, according to the data.

In the 2019 fiscal year, most of the large county departments got a 1 or 2 percent increase in unrestricted money. The Sheriff’s Department received a 18 percent increase – or $31 million – and it was known from the outset that it would not be enough to cover its costs.

It ultimately needed another $33 million – on top of the $31 million increase approved at the start of the year.

Wagner, the county supervisor, said it was not his place to say whether the 2016 contract was fair, and noted negotiations are ongoing for a new labor contract with sheriff deputies.

“We’re in the middle of contract negotiations right now, so we’re gonna have a new deal in place soon I hope,” Wagner said. “[It’s] not my place, not productive to talk about the 2016 deal. It is what it is, and we are dealing with it as best we can right now.”

As for the $33 million in sheriff expenses exceeding revenues last fiscal year, the sheriff executive who oversees finance disagreed with calling it “overrun,” which is how the county CEO’s finance officials describe it.

“They didn’t completely full fund us to start the year,” Wayt said.

“We were definitely short…in the 20 to 30 million [dollar] range to start the year. And that’s a strategy that the [county] CEO’s incorporated in the budget the last number of years…[while] hoping that revenues come in a little better, expenses come in a little less, hoping that some of that shortfall washes out.”

Another factor driving the sheriff’s cost overruns is state funding not keeping pace with rising costs for court security, Wayt said.

“The growth in that money is not keeping up with the cost of doing business,” he said.

To help contain costs going forward, sheriff officials are trying to reduce their overtime costs, including by filling vacant jobs. But some of those savings has been counteracted by the growing salaries, Wayt said.

“We’re trying to do a lot of things to reduce our overtime usage,” Wayt said. “We made a push over the last [few] years to fill a lot of our sworn vacancies coming out of the recession…But as salaries increase, the cost of overtime increases as well.”

Those costs “don’t always get clearly spelled out or addressed…when [labor contracts] are created,” Wayt said. “When [salary] costs go up, the [cost] of overtime goes up.”

When it comes to tough budget decisions, the Sheriff’s Department will continue to be a priority, said Wagner, the county supervisor.

“Ultimately the first responsibility of a government is public safety. And so we’ve got to make sure the Sheriff’s Department is one funded adequately,” and ensure “that it’s spent wisely…we’ve just got to keep a close eye on it.”

To help control the costs, he wants the county to explore switching to from a one-year budget cycle to two years.

“Rather than lurch from year-to-year and find stopgap spending measures, pick our heads up a little and take a longer look at things,” Wagner said.

“Structurally that may help us provide a little more continuity. But in terms of specific things that can be hone, it would very much be my hope that the Sheriff’s Department would work to make sure that overtime doesn’t get out of hand, and make sure that it anticipates down the road issues that are going to be coming up with respect to staffing, and address them in a more long term, rather than a week to week, paycheck to paycheck, or budget cycle to budget cycle period.”

Wayt said the department is doing what it can.

“The sheriff takes our budget very seriously [in] trying to make sure that we can control costs, but also that we provide a high level of service to the community,” Wayt said. “That balance is difficult at times, but that’s what our main goal is every day.”

Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.