Santa Barbara County’s combined response and recovery costs for the Thomas fire and 1/9 Debris Flow in Montecito is now at $46 million and rising, according to a report delivered to the Board of Supervisors on Tuesday.
While most of that may be reimbursed by state and federal disaster funds, the county’s budget is expected to take a hit in revenues for several years, according to the report delivered by Jeff Frapwell, assistant county executive officer.
To help cover immediate costs, supervisors voted 4-0, with 3rd District Supervisor Joan Hartmann absent, to transfer $6.25 million from strategic reserves to the General Fund departments involved with response and recovery for the twin disasters.
“I want the employees and department heads and others to understand, we just took out 20 percent of our strategic reserves, and it’s not over yet,” 5th District Supervisor Steve Lavagnino said.
“This is going to be a significant financial hit to the county,” he said, adding, “This is the new normal right now.”
Frapwell said it will “take multiple fiscal years” to fully recover from the financial impacts that began when the Thomas fire in December stripped the mountain slopes of protective vegetation, setting up the Jan. 9 flow of debris that devastated swaths of Montecito and left 21 dead and two missing and assumed dead.
He said general revenue this fiscal year could be as much as $2.8 million less than expected for the 2017-18 fiscal year, with property taxes down $1.3 million and the transient occupancy tax down $1.5 million.
However, the staff believes unanticipated revenues from redevelopment agency dissolution, interest income and a number of other sources will offset those losses.
But the 2018-19 budget could experience $3.1 million less growth in revenue than the $10.5 million projected in the five-year forecast.
“Obviously, this will be a key factor in planning next year’s budget,” Frapwell said.
The Federal Emergency Management Agency may cover 75 percent of the county’s current $46 million estimate cost for disaster response and recovery, and the California Office of Emergency Services may pick up 18.5 percent, Frapwell said.
That would leave the county holding a bill for about $10 million.
But assuming the county will be reimbursed nearly 94 percent of its costs is optimistic and may not be realistic based on previous history,
“One of the most alarming numbers is, even though this is what the reserve (fund) is for, the number is growing,” Board Chairman and 1st District Supervisor Das Williams said.
“We know from experience not all reimbursement will happen,” he said.
The total cost of disaster response for the Sheriff’s Office is currently estimated at nearly $6.02 million, while the County Office of Emergency Management cost is estimated at $3.88 million.
Of those totals, the amounts that may be reimbursable are $2.75 million and $3.28 million, respectively.
Of the $6.25 million supervisors agreed to transfer, $2.75 million will go to the Sheriff’s Office and $3.5 million will go to the County OEM to cover their potentially reimbursable costs until reimbursement is received from state and federal agencies.
“This is what the strategic reserve is for, and I fully support (the transfer),” 4th District Supervisor Peter Adam said.
Williams wanted to know why more than half of the Sheriff’s Office’s $6 million in costs would not be reimbursable.
“It relates to staff costs on regularly scheduled work times,” Frapwell said.
While those are the two departments with the highest estimated General Fund costs so far, there are others with special revenue funds that are even more.
The County Fire Department’s special revenue costs are estimated at $3 million, but all of that may be reimbursable.
Special revenue fund costs for the Public Works Department are estimated at $12.92 million for emergency work, with $10.58 million of that reimbursable, and $18 million for permanent work, all of which may be reimbursable.
County staff will try to get as much of the reimbursable funds as possible, but until reimbursement actually arrives, the county will be out that money.
“We are focused on getting the maximum reimbursement and we’ll do everything possible to get there,” Frapwell said.