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HomeMy WebLinkAboutMINUTES - 01172012 - SD.4RECOMMENDATION(S): DECLARE THE Board's intent to adopt a FY 2012/13 General Fund budget that balances annual expenses and revenues; 1. ACKNOWLEDGE that the State of California and residents throughout the State continue to struggle to manage the negative outcomes of the current economy; 2. ACKNOWLEDGE that significant economic issues continue to challenge the Board of Supervisors in its effort to finance services and programs which Contra Costa County residents need, or expect will be provided to them by the County, especially in a time of economic downturn; 3. ACKNOWLEDGE that, in addition to the effects on the provision of services for residents, these State and local economic issues have challenged the maintenance of the Board of Supervisors' reserve policy; 4. ACKNOWLEDGE that restoration of the County’s reserve funds and an improved credit rating remain a priority of the Board of Supervisors over the long term; 5. ACKNOWLEDGE that the State’s significant deficit projections and structural budget imbalance are expected to mean additional and sizable reductions in State revenues to county government; 6. 7. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 01/17/2012 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 Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Lisa Driscoll, County Finance Director (925) 335-1023 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: January 17, 2012 David Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: Robert Campbell, County Auditor-Controller, Ted Cwiek, Human Resources Director SD.4 To:Board of Supervisors From:David Twa, County Administrator Date:January 17, 2012 Contra Costa County Subject:FY 2011/12 Recommended Budget Development RECOMMENDATION(S): (CONT'D) RE-AFFIRM the Board of Supervisors’ policy prohibiting the use of County General Purpose Revenue to backfill State revenue cuts; DIRECT Department Heads to work closely with the County Administrator to develop a Recommended Budget for consideration of the Board of Supervisors that balances expenses with revenues, minimizes net County cost and maintains core service levels; ACKNOWLEDGE that the employees of Contra Costa County have already been negatively affected as a result of the requirement to balance the County’s expenses with available revenues; ACKNOWLEDGE that this situation is expected to continue for County employees, as we work to manage and cope with the outcomes of this lengthy economic downturn; DIRECT the County Administrator to continue to meet with the County’s union representatives and employees to explain the size, scope and anticipated length of the County’s fiscal challenges and to gain their input/suggestions; DIRECT the County Administrator to continue to make this information readily available to the residents of the County; DIRECT Departments, in cooperation with Labor Relations and Union representatives, to begin, if necessary, the meet and confer process with employee representatives about the impact of potential program reductions on the terms and conditions of employment for affected employees; DIRECT the County Administrator to return to the Board of Supervisors on April 24, 2012 with a FY 2012/2013 Recommended Budget that meets the above requirements; DESIGNATE Tuesday, April 24, 2012 for FY 2012/2013 budget hearings (including Bielenson Hearings, if needed) and Tuesday, May 15, 2012 for the adoption of the FY 2012/13 County and Special District Budgets; and DIRECT the Clerk of the Board to publish notice of the budget hearings and the availability of the Recommended Budget documents. FISCAL IMPACT: None at this time. However, the result of the recommendations herein, if implemented, are designed to maintain the County's fiscal stability in FY2012/2013 and improve it in subsequent years. BACKGROUND: The actions recommended in this documentation direct the County Administrator to return to the Board on April 24, 2012 with a Recommended Budget that balances expenses with revenues for FY 2012/13. This action aligns with both the Budget and Reserve Policy of the Board of Supervisors. Expiration of labor contracts with many County employees and the subsequent resumption of labor negotiations as well as State actions to manage the reoccurring budget deficit will be taking place in the same time-frame as development of the Recommended Budget. The outcomes of all these events have the potential for significant impacts on the County’s financial situation. Recommended Budget Development There are many challenges that the County will continue to face to create a balanced budget in the coming fiscal year, including the State’s recurring budget deficits. Although the County Administrator continues to believe that there will be little if any further decline in local property tax, other general purpose and program revenues used to fund the baseline cost of services into FY 2012/13 continue to decline. Significant wage concessions were negotiated for the majority of County employees through the 2012/13 fiscal year. However, several large unions have expired MOUs: California Nurses Association; Contra Costa County Defenders Association; Contra Costa County Deputy District Attorneys' Association; District Attorney Investigators Association; Physicians and Dentists Organization of Contra Costa County; Probation Peace Officers of Contra Costa County; and United Chief Officers Association. Although the County has sustained most of the structural reductions that balanced the last seven County budgets, significant one-time solutions were used to balance the last two fiscal years. It is imperative that the County achieve contract settlements similar to those achieved from other unions from its remaining labor unions; otherwise, compensation costs will continue to create a potential gap for FY 2012/13, which must be filled to achieve a balanced budget. Additionally, there are factors over which the County has little or no control (such as federal and State budgets shortfalls, economic changes, and demographics) that will affect the size of the baseline budget and ultimately the County’s budget challenge. Department Heads will be expected to work closely with the County Administrator to design a balanced budget that restricts the growth in net County cost while minimizing service delivery cuts. Wherever possible, categorical/program revenues will be increased to offset the increased cost of doing business. Restrictions on increases in net County cost needed to balance the budget may result in the loss of federal and State program revenues, and this added loss may cause program reductions. Meet and Confer Departmental budget requests are due to the County Administrator’s Office on February 15. At that time Department Heads will know which, if any, positions may be affected by reductions necessary to balance the budget. Departments, in cooperation with Labor Relations, will if necessary, begin the meet and confer process with employee representatives regarding the impact of potential program reductions on the terms and conditions of employment for affected employees. Early planning will allow Departments a reasonable period of time to meet and confer, and permit them to implement all budgetary required actions prior to July 1, 2012. As with the last six fiscal years, this progress will allow the County to adopt a budget that is balanced from the first day of the new fiscal year. Public Notice The County Budget Act requires that the Board of Supervisors publish a notice in a newspaper of general circulation throughout the county, stating when budget documents will be available and the date of Budget Hearings. The FY 2012/13 Budget document will be available to the public on April 10, 2012. Conclusion The County Administrator will return to the Board on April 24 with a FY 2012/13 Recommended Budget that meets the requirements listed above. Tuesday, April 24 will be reserved for FY 2012/13 budget hearings including Bielenson hearings if needed. Additionally, it is recommended that the County Administrator return to the Board of Supervisors on Tuesday, May 15 for adoption of the FY 2012/13 County and Special District Budgets, including any changes the Board makes on April 24. CONSEQUENCE OF NEGATIVE ACTION: Delayed processing of the FY 2012/13 budget and potential impact on the fiscal stability of the County and Special Districts. CHILDREN'S IMPACT STATEMENT: None.