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HomeMy WebLinkAboutMINUTES - 06022009 - D.1BACKGROUND: An oral report will be given the day of the meeting. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 06/02/2009 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Susan A. Bonilla, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Larry Theis, (925) 313-2166 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: June 2, 2009 David J. Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: David Twa, CAO, Stephen Ybarra, Audito Controller, Sue Frances, Finance, Marlon Epps, Design D.1 To:Board of Supervisors From:David Twa, County Administrator Date:June 2, 2009 Contra Costa County Subject:budget item CLERK'S ADDENDUM Mr. Twa, County Administrator, presented the report on the discussion of financial concerns at the California State Association of Counties (CSAC) Annual Conference on May 27 and May 28, 2009. Mr. Twa said that experts predict it will be mid-2010 before the economy starts to rebound and housing declines will continue until 2011, with property tax revenues beginning a slow recovery around 2012. He said the CSAC conference focused on likely cuts from the state and noted that of the $25 billion in cuts or cost shifts the state needs to make, counties can expect approximately $8 billion in cuts. He said the state is expected to borrow funds from counties under the provisions of Proposition 1A. Proposition 1A allows the state to borrow 8% of a county’s property tax revenue, to be repaid with interest within three years. Depending on the calculation formula used, Mr. Twa said for this county it would total between $25 million and $33 million. He added legislation does not specify the interest rate or precisely how the funds should be repaid. He noted that Proposition 1A allows for the state to borrow a county’s funds twice within a ten year period. He said there is concern that the state could devise a method in which to not repay the borrowed funds or repay the loan at the end of the three year period and immediately implement the second round of borrowing. Mr. Twa noted that at the end of the first three-year period, the temporary tax increases approved by the legislature will have reached its two year expiration date, placing the state in the position of attempting to pay back loans at a time of another downturn in revenue. Mr. Twa said because of the state’s cash shortfall, it is anticipated that cash payments for health and human services for July and August of this year will delayed, forcing the County to borrow money. Mr. Twa said other proposals by the state included: Borrowing gas tax revenues from the county; Suspending other revenues the county would otherwise receive; Redirecting a portion of the Vehicle License Fee (VLF) increase that would go to public safety back to the state; Charging local agencies for forensic lab services; and Making certain criminal offenses subject only to jail time, thereby shifting a significant number of inmates from state facilities to the County jails. Dr. Walker, Health Services Director, outlined what he characterized as the most harmful proposals affecting health services in the County: Elimination of the Healthy Families Program, which provides low-cost health insurance for children and would affect 13,200 children in Contra Costa County; Reduction of hours or positions and a reduction in the salaries of the 2,274 In-Home Support Services (IHSS) workers, shifting health coverage to the County’s Basic Health Care program and resulting in a decrease in the portion the state contributes toward those healthcare benefits; Reduction of funding to HIV/AIDS programs by 80 percent, affecting a full range of services from medications to case management and layoffs in public health staffing; Elimination of the $10.2 million of remaining General Gund support for Maternal and Child Health programs, from which the Black Infant Health and TeenAge programs in schools derive their funding; and Reduction of $2.9 million (statewide) in children’s dental program, eliminating the program at both the local and state level. Dr. Walker also noted further proposed elimination of funding for outpatient mental health care for children and adults, and alcohol and other drug treatment programs. He reported that the Governor is requesting “flexibility” from the federal government in determining eligibility for Medi-Cal in order to decrease the number of people eligible for benefits, directly in conflict with guidelines for receiving federal stimulus funds. He said that 85% of the funding for health services in Contra Costa County comes from the state and federal government, primarily through Medi-Cal. He said reductions in the number of eligible participants would impact the department in all service areas. He said it is hoped that the federal government refuses the request. Dr. Walker said that implementing the proposals would involve significant layoffs of staff and cancellation of many service contracts with community providers and in many cases a shift of clients from state and federal fund-matching programs to the County’s Basic Health Care Program. Joe Valentine, Employment and Human Services Department Director outlined areas of the greatest impact to the County: Elimination of the CalWORKS program which provides benefits to 10,395 families that meet federal work requirements, ending safety net services to 18,000 children and transferring those families onto general assistance; Elimination of programs for legal immigrants increasing the County’s cost from $93,000 a month to $5.3 million a month in this area alone, and loss of food stamp benefits for those individuals; Reduction of in-home support services (IHSS) to only the most acute cases ( a loss of services to approximately 6,511 people), initially saving the County $15 million annually but in the long-term increasing the likelihood many people would need to enter institutional housing sooner and at greater cost. In addition many of the 2,274 IHSS workers would become eligible for the County health care system as a result of lost or reduced wages; Reduction of child welfare services and foster care home funding by 10%, expected to impact 475 foster children and cut 15 social worker positions; The loss of federal stimulus funds provided to offset increased Temporary Aid to Needy Families (TANF) costs. He said for every dollar cut from the program, the state loses 80 cents in federal dollars. Mr. Valentine said that the County can no longer provide the level of overmatch funds it has in the past to compensate for years of underfunding from the state. He said the proposed cuts would greatly increase caseloads, impede the County’s ability to respond to needs in children’s welfare services, and result in large numbers of staff reductions. He said the state proposes the County use realignment funds to offset costs, and noted that the state is already $400 million dollars behind in providing those revenues now. The County has been using General Fund dollars and reductions in staff to cover the deficit. In effect, he said, the cost has been shifted to the County. Supervisor Gioia updated the Board on the discussions of the Budget Conference Committee, composed of members of CSAC, and noted that many members of the new Urban Counties Budget Task Force are also on the Budget Conference Committee. He said there was a conference call yesterday and another one scheduled because any advocacy will need to take place in the next one to two weeks, as the state attempts to meet the June 15,2009 date for a revised budget. He said items being discussed include the prioritization of cuts and adopting positions on proposals to raise revenues in light of the fact that many cuts are inevitable and Proposition 1A borrowing is very likely. The committee is discussing what it may receive in return, such as a temporary reduction in program requirements or a temporary suspension of some programs versus elimination. He said the committee opposes any additional service mandates and is examining avenues of possible new revenue and flexibility in administering funds in state programs. Options discussed included reducing the 2/3 vote requirement to a simple majority, increasing the vehicle license fee, and increasing gas tax to 12%. He said the relationship between city, County and state governments is broken and cannot be patched any longer, and the opportunity should be taken to rebuild it from the ground up. Supervisor Piepho said the County needs to make the public aware of those services the County provides that will be severely reduced. She further noted that the state has not yet begun to address its pension obligation requirements. Mr. Twa said that the County-State relationship is undergoing a complete restructuring in how it functions. He said the County must look at how it can restructure itself, which may include closing or consolidation of entire departments, significant layoff of employees, and major reductions in services provided. He said the County can no longer do more with less, as in has in past years, in light of the size of the cuts coming from the state. He said it has become critical to look very carefully at how services are delivered and many painful decisions lie ahead. The Board voted unanimously to appoint Chair Bonilla to represent Contra Costa on the California County Welfare Directors Association. Chair Bonilla called for public comment. Rollie Katz, Public Employees' Union Local One, spoke. Chair Bonilla noted that the public image that California is at the top in terms of tax rates is erroneous. Mr. Twa confirmed that the state has large taxes on small bases, and should examine having smaller taxes and fees on larger bases. Supervisor Glover requested that information from the Urban Counties Caucus be disseminated amongst the Board members as quickly as possible.