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HomeMy WebLinkAboutMINUTES - 11061990 - 2.2 TO: BOARD OF SUPERVISORS S.; Contra FROM: Phil Batchelor, County Administrator =' Costa ot s lJ County DATE: November 6, 1990 c�Tra coU v� SUBJECT: FIRST QUARTER BUDGET REPORT FOR FISCAL YEAR 1990-91 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: 1. Accept this report and direct the County Administrator to continue to monitor the budget and implement corrective plans, where necessary. BACKGROUND: The 1990-91 budget process that the Board has gone through in the last three months is perhaps the most difficult and challenging ever experienced since the first year following passage of Proposition 13 in 1978. As a result of the State' s $3 . 6 billion deficit and the County' s inability to continue to fund programs which have been mandated but inadequately funded by the State, the County' s shortfall totaled approximately $13 .8 million. The State authorized the counties to impose jail booking and property tax administrative fees to help offset these cuts to the extent of $6. 8 million. However, this required the County to cut $7 million. The magnitude of this cutback creates serious problems for departments to meet demands for services with a smaller budget. Given this serious budget situation, the task of budget monitoring becomes more important. It is anticipated that a greater amountof staff time and skill will be required in identifying and correcting budget problems. CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATUREM: ACTION OF BOARD ON November 6 , 1990 APPROVED AS RECOMMENDED X &OTHER X DIRECTED County Administrator to continue to work with the State Association of County Managers and also with ABAG on efforts to resolve budget concerns . 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: (AQ. ATTESTED 0 ` ice'" /990 Auditor-Controller PHIL BATCHELOR,CLERK OF THE BOARD OF General Services SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) BY ' DEPUTY -2- This first quarter report involved an analysis of each budget unit. As a result of this review, we can report to you that most budget units are within the budget targets for the first quarter. 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 are provided below. However, it should be noted that most of the problems associated with these departments were discussed during the budget development process itself. 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. Most revenues received on a monthly basis are below targeted levels in the first quarter, when compared to the amounts received during the same period last year. These revenues include supplemental property taxes, real property transfer taxes, sales taxes and transient occupancy taxes. However, vehicle registration fees received to date are on pace with the first quarter target. The much publicized slow down in the economy is reflected in the first quarter revenue figures. The real estate market has slumped as the number of housing sales drop, reducing supplemental property tax revenues and real property transfer tax revenue. Retail sales have slacked off, resulting in a reduction in sales tax. Also, hotel activity and related travel business have softened as reflected in lower revenues from transient occupancy taxes. Health Services Department The Health Services Department was facing up to a $3 . 8 million funding shortfall for fiscal year 1990-91. That was the estimate prior to the State budget cuts being known. During the adoption of the 1990-91 Final Budget, a $1.5 million reduction was made. This reduction did not take into account the massive cuts made to balance the State budget. The balance of the shortfall of $2. 3 million was to be made up with internal actions by the department. The total of the State cuts was not known until the State approved the allocation formulas to distribute the reductions to the counties. To anticipate the State reductions, a second phase of cuts totalling . $1. 4 million was made. The Board also earmarked Property Tax Administrative Fees to minimize the level of reductions necessary. The total cuts made by the State were $3 . 5 million from the Medically Indigent Services Program and $2. 5 from Mental Health. The Health Services Department was also impacted by the State' s reduction in the AB-90 funding. All of the required Beilenson hearings from Phase I and Phase II have been completed and the reductions have been made. Since the cuts were not completed until October, the total expected savings in FY 1990-91 is $2. 2 million. A progress report regarding the $2. 3 million internal adjustments will be made to your Board in November. Although the average daily census for the first three months was below the budgeted average of 142, the census is on the rise in the month of October. This will be closely monitored in the remaining months. Sheriff ' s Department The average daily inmate population for all the County adult detention facilities for the first quarter is slightly more than the budgeted level. The first quarter ADP averaged 1,471 as compared to a budgeted ADP of 1,457 . t -3- During the first quarter the County parole and electronic home surveillance programs continue at a high level of operation. These programs have a positive impact on inmate population. On the other hand, a continuing law enforcement emphasis on drug enforcement contributes to a high jail ADP as well as crowded court calendars. The Sheriff ' s Department budget presents a positive trend for the first quarter. The West County Detention Facility is scheduled to open March 1, 1991 without a booking and intake component. This date, however, might be affected by the current construction schedule. In addition, a raised ADP would have a negative impact upon thedepartment' s budget. Clear trends for the year will be apparent by the time of the second quarter. Social Services The General Assistance program continues to grow in both caseload and cost during the first quarter. In 1989-90, the average monthly caseload for the first quarter was 3,900 compared to 4,686 this fiscal year. With 25% of the year completed, the Social Services Department has expended 30% of the budget. At this rate, adjusting for seasonal variations, the General Assistance program may exceed its budget by approximately $1 million. Currently, the Social Services Department is implementing new programs and expanding existing programs to reduce costs and provide clients with employment and money management services. The Department' s budget reduction plan included the elimination of 43 permanent and 9 temporary positions. Management achieved these reductions by offering early retirement to some employees and by placing employees subject to layoff in positions not impacted by budget cuts. All employees who wished to remain with the department in some capacity were able to do so. Probation Department The Probation Department' s budget status for the first quarter shows some early indications of potential problems. Permanent salaries appear to be on target despite earlier budget reductions. However, higher than expected levels of temporary services and overtime have been utilized to meet the juvenile hall population needs. The average daily population (ADP) has at times exceeded 170, making it necessary for the department to sleep juveniles in the previously closed Boys' Treatment Center. The opening of the Monticello Unit, which corresponded with the closure of the- Girls; Treatment Center, is expected to reduce, but not completely eliminate, the overflow to other facilities. The Unit opened on October 15, 1990 without incident and its 20 beds have been fully occupied since opening. The department has also experienced remarkably high costs for support and care of juveniles awaiting private placement who do not qualify for AFDC. Probation staff are meeting regularly with Social Service Department staff to monitor this situation and ensure that costs are controlled, to the extent possible. Departmental revenues appear to be under-realized primarily because State and Federal monies will not be received until December. However, budgeted levels of revenues are expected to be realized by the end of the fiscal year. CAO staff will continue to monitor the Probation Department' s budget situation closely and work with Mr. Buck and his staff to identify and mitigate problems early in the year. . Hiring and Purchasing Freeze On April 17 , 1990, the Board imposed a freeze on filling permanent and temporary positions and in ordering non-critical fixed assets and other major purchase items. The freeze was -4- imposed because of anticipated budget shortages this fiscal year and the need . .to mitigate the adverse effects of a budget shortfall. Over the last six months, a variety of service disruptions have occurred because of the freeze and department managers have adjusted work schedules and priorities to overcome these obstacles. In spite of the problems which the freeze causes, we are recommending that the freeze not be lifted because of continued budget uncertainties. The Property Tax Administrative Fee and Jail Booking Fee were adopted to raise $6. 8 million of the $13 .8 million - cutback by the State. However, these fees are expected to be challenged in court by the cities and schools. Also, as noted above, revenues are below budget because of a slumping economy.