Yuba County supervisors take $4.7M from reserves to balance budget

After expressing surprise and anger a month ago when the county's reserve fund appeared to have been eaten up by an ongoing budget crunch, Yuba County supervisors acknowledged Tuesday some of the problem could've come from when they set up the fund three years ago.

Though the fund was intended to be separate from other county funds, and only tapped into with expressed direction from the board, supervisors and county officials who were there at the time said it's possible those nuances were lost in translation.

"The intent was to declare a general reserve, but it stopped at that point," said County Administrator Robert Bendorf.

On a 5-0 vote, the board made an emergency declaration to use about $4.7 million in a general reserve and a capital reserve fund to meet the county's financial obligations through the rest of the fiscal year, which ends June 30.

When supervisors discovered at a budget hearing last month there was no reserve fund because it was commingled with spoken-for General Fund dollars during the fiscal year, some of them demanded an explanation.

County Auditor-Controller Dean Sellers was particularly singled out, and was so again Tuesday during a separate agenda item over an audit of county finances for the fiscal year ending June 30, 2009.

The auditing agency noted the source of some county funds wasn't well described, nor were management reports of how money was disbursed.

Sellers defended his office, saying he had a longtime assistant leave the county's employ in the last year without sharing how certain procedures were done.

"You're saying because you don't have an assistant, you can't function as an office?" asked Supervisor Andy Vasquez.

"I'm the head of the department, but I can't do everything," Sellers replied.

Bendorf pointed out the county's fiscal problems stem more from a decline in revenue than any actions taken by Sellers. Last week, the county issued 37 layoff notices, which won't be official until supervisors vote on them next week.

Going forward, Bendorf said the county should be able to re-establish a reserve fund for the 2010-11 budget, along with language stipulating it be considered separate from the county's General Fund.

"With the use of the reserves, I'm deeply saddened we have to use them," he said. "But it's good that they exist so that we're able to use them."

Supervisor Roger Abe said in the future, less should be left to guesswork.

"The board can't assume staff will always know the board's desire," said Abe, who like Vasquez came to the board after the reserve fund was established.