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HomeMy WebLinkAboutMINUTES - 11011988 - 2.3 BOARD OF SUPERVISORS G�''-' FROM; Phil Batchelor, l=l ra County Administrator Costa DATE: November 1, 1988 SUBJECT: FIRST QUARTER BUDGET REPORT FOR Fiscal Year 1988-89 SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATION• Accept this report and direct the County Administrator to continue to monitor the budget and implement corrective plans, where necessary. BACKGROUND: over the last four years, the County Administrator' s Office has prepared quarterly reports which analyzes the status of the budget and highlights the Departments and budget units which deviate from the budget plan in terms of expenditures and revenues. Actions which are necessary to ensure a healthy budget by the end of the fiscal year are recommended as part of the quarterly reporting process. Other items which have major fiscal impacts are also reviewed as part of this periodic report. The aim of the first quarter report is to identify potential financial problems and initiate actions to correct these problems. Thus, to a large extent, this report sets the budget monitoring agenda for the remainder of the fiscal year. In contrast, subsequent quarter reports will define the magnitude of the problems and discuss the progress in problem resolution. Staff of the County Administrator' s Office have reviewed the first quarter expenditure and revenue reports, in close cooperation with department staff, for all of the various County operating agencies and budget units . As a result of this review, we can report to you that, except as noted below, the status of these various budgets reflect the fact that the adopted budget for Fiscal Year 1988-1989, with the 1. 5% reduction, was a tighter than normal maintenance level budget with little, room for error on either the expenditure or revenue side. Those departments and budget units that will require special attention in the second quarter include the Health Services Department, Social Services Department, Sheriff' s- Department, Probation Department and General County Revenue. More details on these departments and other budget units are provided below. However, it should be noted that none of the problems associated with these departments represents any new problem beyond that discussed during the budget development process itself . CONTINUED ON ATTACHMENT: _ YES SIGNATURE: 2t=, E4,A � RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE S : ACTION OF BOARD ON November 1, 1988 APPROVED AS RECOMMENDED OTHER _ The Board accepted the first quarter Budget report for the 1988-1989 fiscal year and requested .a full report from the County Administrator on all projects funded through the Productivity Investment Fund . VOTE OF SUPERVISORS \ I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT -- AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN OF SUPERVISORS ON THE DATE SHOWN. cc: County Administrator' s Office ATTESTED November 1 , 1988 Auditor-Controller PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382/7-83 BY (/ ,DEPUTY 1. General County Revenue It is too early to determine the overall status of revenues relative to the budget plan. Very limited or no information is available at this time for such major revenues as property taxes, franchise fees and interest earnings. Overall, revenues which are received on a monthly basis are above targeted levels in the first quarter, when compared to the amounts received during the same period last year. Revenues which appear to be stronger than anticipated are motor vehicle registration fees, sales taxes and real property transfer taxes. However, transient occupancy tax revenues received to date indicate that this source will be substantially under-realized this fiscal year. 2. Health Services The Health Services Department is currently projecting a balanced budget for the 1988-89 fiscal period. Achieving the approved expenditure level required a work force reduction of 15 full-time equivalent positions in non-patient care related areas, an internal hiring freeze and careful monitoring of expenditures, curtailment of educational and travel activities, the acceleration of grant revenue collections coupled with the use of $800,000 in Departmental 1987-88 fund balance, and the suspension of staff reorganization plans. Areas of concern for the balance of the year which may have a negative financial impact include: 1 . Continuing major demand for Mental Health Inpatient Children Services. At the Board' s direction, the department is no longer maintaining children on the inpatient psychiatric units of Merrithew Memorial Hospital. Children are now being placed, at County expense, in private psychiatric facilities. The increasing demand for these services is episodic and difficult to predict and quantify. The department will be closely monitoring the usage and expenditure pattern of this activity and report separately to the Board on this item as the situation evolves. 2. Patient load is up across the department including Hospital Inpatient Census, Ambulatory Care visits, the Health Plan Enrollment, Children Services, and Home Health visits. The department' s ongoing ability to respond to the increased activity is predicated upon the maintenance of a strong third-party payor mix; e.g. , Medi-Cal/Medicare. Decline in these revenues may create a need for additional County subsidy. 3 . A potential decline in Health Plan enrollment based on rate increases and competitive actions of other health plans and loss during the "open" period. 4. Physical plant changes to Merrithew Memorial Hospital required by State and Federal Licensing Standards. 3 . Social Services Department - General Assistance In the first quarter of 1988-89, 230 of funds budgeted for General Assistance were expended, while 220 of budgeted funds were expended in the first quarter of 1987-88. This indicates that costs may exceed budgeted levels, if expenditure patterns follow the 1987-88 experience. Additionally, in October, General Assistance grants will be augmented by a 4.7% cost-of-living adjustment (COLA) , further increasing the possibility of a deficit in this budget. The Social Service Department is currently examining General Assistance programs and procedures in an effort to avoid budget overexpenditures. 4. Sheriff-Detention The average daily population (ADP) of the County' s adult correctional facilities for the first quarter of Fiscal Year 1988-89 is 1, 308 . This compares favorably with a budgeted ADP of 1,410. If this trend continues, we can anticipate some savings in the detention budget as a result. However, at this point there is no clear evidence one way or the other as to what the trend will be for the rest of the fiscal year. This office will carefully monitor detention system population so that a more definitive analysis can be given in the Second Quarter Budget Report. 5. Probation - Juvenile Hall Juvenile Hall overcrowding emerged as a significant budget problem during last fiscal year. Reports on first quarter status warn of a similar situation this year. The average daily population in Juvenile Hall during the first quarter 1988-1989 is about 15% higher than last year. If the ADP remains at this rate the entire year, it would produce an estimated deficit of $250,000 . In fact, historical trend predicts this first quarter to have the lowest ADP during the year. That means the deficit resulting from overcrowding will likely be higher than the projection based on first quarter experience. Anticipating this, staff is working closely with the Probation Department to monitor budget impact and recommend action if necessary, including the diversion of resources from other probation services to the Juvenile Hall. Probation is preparing a status report that will more fully assess the potential problem and identify alternative strategies for handling it. 6 . Trial Court Funding Under the provisions of SB 612 and AB 1197, the County may opt into this state funding program, effective January 1, 1989 . The County has until January 15, 1989, to opt into the program for the latter portion of fiscal year 1988-89. The option to participate in fiscal year 1989-90, must be exercised by March 1, 1989. The decision to participate requires a resolution jointly signed by the Board of Supervisors, the presiding judge of the Superior Court, and the presiding judge of the Municipal Court. The County' s position is that all new funding should be allocated to staff to operate the new jail facility. Meetings with the judges are planned to discuss funding priorities and the Board will be briefed on the status of negotiations during a Committee of the Whole meeting on November 14. 7. General Services - Building Maintenance and Occupancy Costs The costs associated with maintaining county buildings and ground and rents and leases of non-county buildings appear to be within budgeted levels. One area which is exceeding budgeted levels is utility costs, particularly water costs due to higher than anticipated rate increase. Likewise, greater than anticipated rate increases for refuse collection have resulted in cost overruns in this budget account. Building maintenance and occupancy costs are monitored monthly and more will be known about rents and leases of non-county buildings in the second quarter. Looking Ahead Next year' s budget outlook is complicated by the opening of the West County Justice Center and the increased costs require to oper4te the facility. Therefore, the need to secure as much fund balance as possible is essential to balance next year' s budget. The primary tool to achieve this objective is to work closely with departments to tightly control and monitor expenditures while exploring avenues to increase revenues. In December, the Board will receive a report on our efforts to generate revenues through charges for service and fees. Productivitv Another tool to stabilize this budget as well as future budgets is to continue efforts to improve productivity. On November 8, the Board will be presented with the third year of computer programs funded through the Management Information System or M.I .S. Fund. These programs will provide departments with tools to handle increased workloads, with the same level of staff. Additionally, new projects are being solicited by the Productivity Investment Fund and recommendations are expected to be presented to the Board in December. A progress report of current projects funded through the Productivity Investment funds is attached for your information. SUMMARY REPORT OF PROJECTS PRODUCTIVITY INVESTMENT FUND 1. Sheriff's Department - Inmate Baking Program - $32,028 The objective of this program is fourfold. First, to reduce outside purchases of baked products by 800, a savings of $79,061 annually. Second, to increase to 100% the Sheriff ' s utilization of free U.S.D.A. commodity flour. Third, to provide marketable job skills to the inmate population. Fourth, to explore the expansion of this service to other County Departments (Juvenile Hall, County Hospital) . Bakery production at the Marsh Creek Detention Facility utilizes one civilian cook and six inmate workers. They have eliminated 700 of the bread purchased and replaced it with products baked on the premise using. donated government flour. Cost savings to the County are currently $1, 800 per month. With the receipt of the delivery truck, full implementation of this project has been completed and includes the Main Detention Facility. 2. Superior and Municipal Courts Jury Management Program - $66,000 The Court Jury Management project proposed to streamline the labor-intensive jury summonsing process. Municipal Courts are tied to the Superior Court jury data base by terminals and can make changes directly to the juror list. Also, the new process would require only one mailing of affidavits and summonses, resulting in a substantial savings in postage. The Courts have completed full implementation of the one-step summonsing procedure. To date, $66,000 has been expended on computer equipment, software, installation and personnel training. Jury operations have improved by enabling the Municipal Courts to have complete control over all aspects of juror service in their courts. The new procedures have also eliminated the need for transmitting handwritten changes to the Superior Court for entry into the data base. The Superior and Municipal Courts have repaid the full $66,000 of Productivity Investment Funds borrowed from the fund. The financial impact is that the Superior Court expects to save $28,00 over a 12 month period. 3. Health Services Department - Word Processing Program - $20,906 The Health Plan' s PIF project was to acquire IBM PC' s and a laser printer for the secretarial and finance unit staff to improve clerical efficiency and reduce outside printing costs. The equipment was delivered in May and was installed by mid-June. The networking system which allows each PC user to access all printers on the system was installed in August. This project was justified by the belief that they could reduce the Health Plan' s clerical staff by one filled and funded position, through improved clerical efficiency, and that they would eliminate the need for much of the outside typesetting and printing required by their marketing and member services activities through the use of word processing and improved printing capability. In fact, the clerical position was eliminated in April of this year in anticipation of having word processing available. Also, the Plan has processed no requests for outside printing since the system was installed. They expect to exceed the savings anticipated in their original project justification. 4. General Services Department - Print Production Program - $19,134 The purpose of this Productivity Investment project is to obtain equipment that will reduce production costs to County departments, reduce turnaround time for printing jobs, and provide Central Service with a capability to do work that is now being sent to commercial firms. The Itek 430 camera/platemaker obtained through the Productivity Investment Fund has performed superbly since installation in April of this year. The number of negatives produced has been less than anticipated, reaching only 400 of the projected 130 per month. 5. General Services - Juvenile Hall Boiler Modification - $20,000 The objective of this project is to reduce the quantity and hence costs, of natural gas consumed for heating of water at Juvenile Hall. Using data from 1986, Pacific Gas and Electric (PG&E) estimates an annual decrease in consumption of 18 ,490 therms, with an accuracy factor of 850. Dollar savings are estimated at $8,959 per annum. The project to interconnect piping, pumps and controls to the Juvenile Hall boiler has experienced implementing problems. General Services staff had to seek new estimates for a contractor which delayed the process. It is anticipated that the department will have completed full implementation in the next three to four months as they have now resolved their difficulty. Because of the delay in undertaking the project, the department is requesting that the Productivity Investment Board approve or substitute. the old payback plan schedule with a new one.