BISBEE — Even though county revenues are holding steady, the Cochise County Board of Supervisors was informed during a work session Tuesday that some drastic steps may have to be taken in order to make ends meet in the next fiscal year.

County Administrator Mike Ortega said the state is looking for the counties to help with the budget deficit.

One of the items being considered by Arizona is a reduced disbursement of Highway User Revenue Funds, money that is used by counties and cities for road improvement and repair, Ortega told the supervisors.

“No dollar amount has been given for what they may take away,” he added. “If we also get a slow down in sales tax money, we may be in trouble. We’re better off than most counties, but we still need to address the problem.”

Board of Supervisors Chairman Richard Searle asked, “If property values were dropped to 2003 levels, what happens?”

Searle was speaking of an initiative in Arizona to roll back property taxes to 2003 levels.

Ortega said such an impact has yet to be determined.

Just how the county will respond if revenues are reduced may portend hard times for county departments.

Ortega suggested departments leave vacant positions unfilled unless filling them is critical to county operations. Right now the county has openings for two department heads — one in Highways and Floodplains and one in the Planning and Zoning Department. Those would be considered critical positions and would be filled.

“We’ll just have to do this on a case-by-case basis,” Ortega said. “But if it looks like state revenues will go down, my suggestion is to leave the vacancies unfilled for six months, or maybe indefinitely.”

Some counties have already initiated a hiring freeze, and Supervisor Paul Newman suggested at a meeting on the mid-year state of the budget last week that Cochise County follow suit.

But, Tuesday, he said, “It would be prudent to ask all the departments for a 5 percent cut this year. I fully expect housing to drop more and we will be hit.” That will not be an easy task. Some departments’ budgets are millions of dollars.

Supervisor Pat Call said that to cut just 5 percent off the bottom line would be impossible without laying off employees.

“You cannot achieve a 5 percent reduction by saving reams of paper,” Call said. “Of course, we’ll try to maintain without layoffs, but I don’t know where we can get a 5 percent cutback.”

The county employs around 2,000 people. Some of those positions are grant funded and do not come out of the general fund, Call added.

He furthered reasoned that if HURF money is reduced, the county may have to reduce the number of employees since “it will take fewer employees to maintain fewer road repairs. There’s an upside to this, though. This is an opportunity to get lean and mean as we come through this.”

Still, Call feels Cochise County would come out of the doldrums quicker than other Arizona counties.

“We are committed to doing better than any other county in the state as far as customer service,” he    said.

“We have improved our efficiency. But the more we get online and get people to use the Web site the fewer employees will be needed.”

Some of the expenses for the 2008-09 fiscal year budget are already known, such as retirement and health care benefits. Ortega said those increases will shrink the general fund.

When Newman said he did not want to stifle the new recycling program, Ortega told him the program could be expanded, but it would be at the cost of some other project or some other department.

Call suggested looking at critical needs of a department so the level of service to the taxpayers is maintained.

Ortega hopes department heads can hold their budgets at 2007-08 levels and not ask for increases. That may help some.

“We’re all going to have to be cognizant of the problem,” Ortega added. “We can’t cut the sheriff’s department budget. That has to be maintained. But a 5 or 10 percent cut is jobs. It will take deep cuts. We have some hard decisions facing us in the near future and we need to start taking about that.”

The financial woes have been caused by the housing slump and its effect on satellite industries. Whether or not that turns around may have the biggest influence on what happens budget-wise in the county, Call said.

Call agreed and said he was willing to drop the contract with the SouthEast Arizona Governments Organization.

“I’m committed to the staff. I’d rather have the money go to the staff rather than contracts with agencies. There’s no question we have a storm coming towards us. This will take a team effort to move through this challenge,” Call added.