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HomeMy WebLinkAboutMINUTES - 12162014 - D.9RECOMMENDATION(S): 1. DECLARE the Board's intent to adopt a FY 2015/16 General Fund budget that balances annual expenses and revenues; 2. ACKNOWLEDGE that the State of California and residents throughout the State continue to struggle to manage the outcomes of the recently depressed economy; 3. 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 times of economic recovery; 4. 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; 5. ACKNOWLEDGE that restoration of the County’s reserve funds, maintaining an improved credit rating, and maintenance of the County's physical assets remain a priority of the Board of Supervisors over the long term; 6. RE-AFFIRM the Board of Supervisors’ policy prohibiting the use of County General Purpose Revenue to back-fill State and federal revenue cuts; 7. 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; 8. ACKNOWLEDGE that the employees of Contra Costa County have been negatively affected as a result of the requirement to balance the County’s expenses with available revenues in the past; however current labor contracts include modest wage increases; APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 12/16/2014 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, 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: December 16, 2014 David Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: Robert Campbell, Auditor-Controller, Laura Strobel, Principal Management Analyst, All County Departments D.9 To:Board of Supervisors From:David Twa, County Administrator Date:December 16, 2014 Contra Costa County Subject:FY 2015/16 Recommended Budget Development RECOMMENDATION(S): (CONT'D) 9. ACKNOWLEDGE that this situation is expected to continue to improve for County employees, as we work to manage and cope with the outcomes of economic recovery; 10. 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; 11. DIRECT the County Administrator to continue to make this information readily available to the residents of the County; 12. 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; 13. DIRECT the County Administrator to return to the Board of Supervisors on April 21, 2015 with a FY 2015/2016 Recommended Budget that meets the above requirements; DESIGNATE Tuesday, April 21, 2015 for FY 2015/2016 budget hearings (including Bielenson Hearings, if needed) and Tuesday, May 12, 2015 for the adoption of the FY 2015/16 County and Special District Budgets; 14. DIRECT the County Administrator to discuss the format of the FY 2015/16 budget hearings with the Board of Supervisors at the Board's annual retreat on January 27, 2015; and 15. 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 FY2015/2016 and improve it in subsequent years. BACKGROUND: The actions recommended in this documentation direct the County Administrator to return to the Board on April 21, 2015 with a Recommended Budget that balances expenses with revenues for FY 2015/16. This action aligns with both the Budget and Reserve Policy of the Board of Supervisors. Continued labor negotiation with the California Nurses' Association, healthcare reopenners with the majority of the County's labor groups as well as the expiration of labor contracts with the CCC Deputy District Attorneys' Association and the CCC Defenders' Association, as well as County actions to develop a Laura's Law program 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. Although the County Administrator continues to believe that there will be growth in local property tax above five percent, other general purpose and program revenues used to fund the baseline cost of services into FY 2015/16 are expected to recovery very slowly. Negotiations recently completed with the majority of our bargaining groups include wage increases. These increases combined with significant pension increases will challenge the County’s fiscal health. The County has sustained most of the structural reductions that balanced the last nine County budgets so that one-time solutions are no longer required to balance the budget. It is imperative that the County's contract settlements continue to alignment with projected revenue growth; otherwise, compensation costs will create a potential gap for FY 2015/16, which must be filled to achieve a balanced budget. There are always 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. The majority of the County's general purpose revenues are generated through property taxes. Information from the Department of Industrial Relations will soon be issued regarding the inflation factor to be used for the 2015 assessment role. We have reviewed preliminary California Consumer Price Index information and anticipate preparing our 2015 assessment roll using an inflation factor of 1.01998. We anticipate using six percent growth on our property tax revenues. As per the norm, 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 13. 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, 2015. As with the last nine 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 2015/16 Budget document will be available to the public on April 7, 2015. Conclusion The County Administrator will return to the Board on April 21 with a FY 2015/16 Recommended Budget that meets the requirements listed above. Tuesday, April 21 will be reserved for FY 2015/16 budget hearings including Bielenson hearings if needed. Additionally, it is recommended that the County Administrator return to the Board of Supervisors on Tuesday, May 12 for adoption of the FY 2015/16 County and Special District Budgets, including any changes the Board makes on April 21. CONSEQUENCE OF NEGATIVE ACTION: Delayed processing of the FY 2015/16 budget and potential impact on the fiscal stability of the County and Special Districts. CHILDREN'S IMPACT STATEMENT: None.