Title
a. Direct and authorize the County Administrative Officer to immediately implement a hiring freeze for positions funded by General Fund discretionary revenue; and
b. Provide authority for the County Administrative Officer to develop hiring freeze exemption administrative guidelines. (ADDED VIA ADDENDA)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Direct and authorize the County Administrative Officer to immediately implement a hiring freeze for positions funded by General Fund discretionary revenue; and
b. Provide authority for the County Administrative Officer to develop hiring freeze exemption administrative guidelines.
SUMMARY/DISCUSSION:
Despite efficient management and stewardship of County of Monterey fiscal resources, the County faces significant challenges including impacts from the inflated housing market, growing response to emergencies with delayed reimbursement, dwindling state and federal one-time and grant resources, and increased labor costs. On March 12, 2024, the County Administrative Office (CAO) presented the countywide financial forecast to the Board of Supervisors (Board), which indicated continued growth in discretionary revenues. However, the growth is not sufficient to keep up with the increased cost of doing business. Updates about the County’s financial condition were provided to the Board during its April 2, 2024, budget workshop and the budget hearings held on May 29, 2024.
The County faces multiple challenges including the high cost of living, which impacts all county residents and workforce. The critical shortage of affordable housing for working families compounds this challenge resulting in difficulty hiring, finding and maintaining a home in our community. During the financial forecast in March 2024, the County projected a deficit of more than $20 million in Fiscal Year (FY) 2025-26. Although the FY 2024-25 Adopted Budget was balanced, results from the ongoing inflated housing market, growing response to emergencies with delayed reimbursement, and increased labor costs coupled with the impending base wage studies, which ensure the County’s workforce is paid a competitive wage, will create an imbalance. Lastly, dwindling state and federal one-time and grant resources have impacted the County’s ability to sustain the existing service levels.
As a result, the County Administrative Office is recommending that the Board implement a hiring freeze for positions funded by General Fund discretionary revenue. In addition, approval of the recommended actions will authorize the CAO to develop hiring freeze exemption administrative guidelines. These guidelines will be presented to the Board on October 22, 2024, with a request to remove vacant positions collaboratively identified by offices and departments to enable the County to rebalance its FY 2024-25 budget.
OTHER AGENCY INVOLVEMENT:
The Office of County Counsel has reviewed this report. With approval of the recommended actions, the Human Resources Department and the CAO will work to implement a hiring freeze for positions funded by General Fund discretionary revenue and develop the related exemption administrative guidelines, and meet-and-confer with employee groups, as required.
FINANCING:
Implementation of the recommended actions will generate significant cost reductions, which will provide financial flexibility to mitigate and address the projected deficit for FYs 2024-25 and 2025-26.
BOARD OF SUPERVISORS STRATEGIC INITIATIVES:
The County of Monterey, under the Board’s direction promotes an organization that practices efficient and effective resource management and is recognized for responsiveness, strong customer orientation, accountability, and transparency. An important objective of this strategic initiative is achieving a balanced budget that sustains core services and efficiently allocates resources. Actions in this report help fulfill this objective.
__Economic Development
X Administration
__Health & Human Services
__Infrastructure
__Public Safety
Prepared by: Ezequiel Vega, Assistant County Administrative Officer, ext. 3078
Approved by: Sonia M. De La Rosa, County Administrative Officer