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HomeMy WebLinkAboutMINUTES - 10091990 - 2.3 2 .3 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA Adopted this Order on October 9 , 1990 by the following vote: AYES: NOES: (See below for vote) ABSENT: ABSTAIN: -------------------------------------------------------------------- -------------------------------------------------------------------- SUBJECT: Status Report on Challenges Facing the County in the Next Two Fiscal Years The Board received from the County Administrator, Phil Batchelor, a status report on the State and County budgets for the balance of the 1990-1991 and 1991-1992 fiscal years, and the feasibility of reopening the Girls- Treatment Center. (A copy of the report is attached .and included as a part of this document. ) Mr. Batchelor commented on the program reductions that have occurred, the economic forecast for the State indicating a recessionary trend, the challenge by school districts and cities to stop the counties from charging booking fees and property tax administrative fees, the budgetary problems of the federal government and the impact on local governments, and the statewide measures on the November 1990 ballot which, if approved by the electorate, would authorize General Obligation Bonds with a repayment schedule of more than $400 million in State General Fund expenditures annually for the next twenty years in order to repay the bonds with interest. Referring to the feasibility of continuing the Girls' Treatment Center, the County Administrator advised that the Center had the capacity to house 19 girls, but an average of only 14 girls per month from the County have been placed at the Center during the past 12 months. He noted that in order to offset the high cost of running the Center, contract commitments from out of the county have been sought to utilize a portion of the excess capacity of which $50 ,000 was anticipated to offset an annual $664, 470 budget or $43 , 890 per bed annually. Mr. Batchelor recalled that when the Board approved the actions necessary to close the Girls' Treatment Center, the savings from the Center were to be used to replace the state reductions that threatened. the closure of the Byron Boys' Ranch, a facility that serves over 400 delinquent boys per year. The County Administrator advised that in keeping with the Board' s decision to close the Girls' Center effective October 1, 1990, the last girl was transferred from the Center last Sunday with staff at the Center ! being retrained and transitioned into other assignments in the Probation Department. Supervisor Fanden expressed the opinion that it was discriminatory to move females out of a locked facility such as the Girls ' Center while keeping detention facilities for males open. She proposed exploring the feasibility of reducing the food budget in adult facilities to generate funds to help keep the Girls' Center open. She also proposed doing a line item budget review in order to identify .funds for the Center. Supervisor Fanden suggested the establishment of a subcommittee comprised of herself , Supervisor McPeak, Judge Minney, and representation from the County Administrator, Sheriff, Probation Department, and Local I to see if the Girls ' Center program can be streamlined to make it more cost efficient. The following persons spoke in support of keeping the Girls ' Treatment Center open; comments included a request that if funding becomes available to open a centerlike facility for girls, and a commitment to work on a subcommittee to develop a revenue source to fund the Girls' Center: Janice Siders, P. O. Box 653 , Diablo; Dr. Gloria Yancy, 250 4th Street, Richmond; Peggy Radke-Rochelle, 1507 Debbi Court, Martinez; Henry Clark, Contra Costa Employees Association, Local I , and Jacque Salvador, Local I , 2222 Golf Club Road, Martinez. At the conclusion of the speakers ' comments, Supervisor McPeak moved that the Board accept the report of the County Administrator, and that should Proposition 134 or Measure D pass (and -not be nullified by the passage of Proposition 136) the Board declares its intent to reestablish a girls ' training program as was embodied at the Treatment .Center and to provide an equivalent program in an efficient manner. Supervisor Torlakson seconded the motion. However, he requested inclusion in the motion referral to the Finance Committee on the issue of follow-up on placement options, support services, and the results of last year' s closure of the Boys' Center including impact on other facilities. Supervisor McPeak agreed to the inclusion of the referral to the Finance Committee in the motion. Supervisor Schroder expressed support for the motion before the Board. However, he recommended that after the November election the Chair of the Board and the County Administrator schedule a. retreat for Board members to be held at a location in the County for the purpose of reviewing and prioritizing funding. for all programs, including those administered by the Health Services and Social Services departments. He expressed concern with the bleak fiscal outlook for the County in the next two years and spoke of the need to develop with the County Administrator a budget plan relative to the retention, revision,. or elimination of programs to maintain the fiscal solvency of Contra Costa County. Supervisor Torlakson expressed support for Supervisor Schroder ' s recommendation and including it in the motion. Noting that the Juvenile Corrections Master Plan will be heard by the Board in December, Supervisor Torlakson recommended that the County Administrator distribute copies of the proposed Master Plan to the Youth Services Board, Local I , the Probation Department, and other interested parties .who could attend a workshop on the Plan prior to its presentation to the Board. Supervisor Fanden expressed her support for keeping the Girls ' Treatment Center open to January 1991 and establishing a Task Force to review all options to accomplish this. Supervisor Fanden then offered a substitute motion to reopen the Girls' Center for two months, establish a subcommittee that would include Supervisors Fanden and McPeak, the County Administrator, Judge Minney, and representatives from Local I , and the Criminal Justice System to develop a plan to streamline the Girls ' Center Program with a funding source to continue its operation. The motion died for lack of .a second. The Chair then called for a vote on the original motion as amended. The vote on the motion was as follows: AYES: Supervisors Schroder, McPeak, Torlakson NOES: Supervisor Fanden ABSENT: Supervisor Powers 1 hereby certify that this Is a true and Correct copy of CC• County Administrator an action taken and entered On the minutes of the Board of Supervl date ors on the e shown. Probation Officer rb. 2 �,L� 9 / y y a Sheriff-Coroner ATTESTE_ PHIL BATCHELOR,Cork of the Board of Supervisors and County Administrator Deputy TO: BOARD OF SUPERVISORS Contra FROM: .- r / { •\';f �' ...... ,. t Phil Batchelor, County Administrator ���� - : .,;� Costa October 9 County Y DATE: +.',iii.. SUBJECT: PROSPECTS FOR THE STATE AND COUNTY BUDGETS FOR THE BALANCE OF THE 1990-91 FISCAL YEAR, 1991-92 FISCAL YEAR AND THE FEASIBILITY OF REOPENING THE GIRLS' TREATMENT CENTER SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECONIlMENDATIONS: 1. Receive this financial forecast indicating the very difficult financial conditions facing the County for the remainder of the 1990-91 fiscal year and the 1991-92 fiscal year. 2 . Authorize the County Administrator to continue working with the various departments to monitor on-going expenditures and revenues and bring back status reports indicating any actions that would be appropriate to continue to maintain a balanced budget for the remainder of the fiscal year. 3 . Authorize the County Administrator to continue to participate as a member of the statewide budget task force of County Administrators. 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. This required that devastating reductions be made in critically needed programs. Ironically, the County found itself in the position of reducing child welfare, mental health, drug and alcohol, and criminal justice programs at a time when more attention and more financing should have been devoted to these programs. However, CONTINUED ON ATTACHMENT: YES SIGNATURE: CA _rAa 1'5;S� RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER i" -/J VOTE OF SUPERVISORS IH ER.EBBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT AND CO ECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTEREMONN THE MINUTES OF THE BOARD ABSENT: ABSTAI OF SUPERVISORS OTh.HE DATE SHOWN. CC: ATTESTED PHIL BATCHELOR,CLERK OF-THE BOARD OF SUPERVISORS AND COUNTY ADN1 ISTRATOR BY "•DEPUTY M (10/88) I . in spite of the need for these priority programs, the County is legally required to maintain a balanced budget. As a result, these unfortunate reductions had to be made. These cutbacks came on top of cumulative reductions that have been made almost every year for the last decade. There should no longer be any question as to the validity, need or priority of the programs being reduced. Almost any: program which has been able to survive the budget axe that has been wielded over the last ten years is of sufficient priority . that it should continue to be maintained in order to properly serve the citizens of our community. The following is a partial list of some of the programs that have been substantially reduced or eliminated over the last few years due to lack of state and federal funding: PROGRAM AMOUNT IMPACTED ( In millions of dollars) ' Adult outpatient mental health services 1. 2 Alcohol and Drug Abuse Prevention Programs . 3 Ambulatory care in the hospital and clinics .7 Public Health (AIDS and Sexually Transmitted Diseases) . 5 Sheriff ' s Marine Patrol . 5 Sheriff ' s Investigation Division . 3 Reduction of Operation Clean Street . 2 Delay in Opening West County Justice Center 4. 0 Girls ' Treatment Center . 5 Boys' Treatment Center .7 Probation Services to the Municipal Court .. 5 Social Services: In-Home Supportive Services . 3 Social Services: Information & Referral . 4 Greater Avenues for Independence (GAIN) . 1 Justice System Programs (AB 90) . 4 Juvenile Court Prosecution & Defense Youth & Family Services (Brentwood) District Attorney' s Pre-Trial Diversion Probation Home Supervision This list of program reductions would be even longer if it were not for the innovative leadership that has been shown by the Board of Supervisors and county departments during the last few years in generating revenue. Not only has the County maintained a stable budget during the. last six years, but it has been able "to obtain the highest credit rating possible for its short-term financing. This has enabled the County to realize millions of dollars in arbitrage earnings. All of the long-term debts the County has outstanding on its buildings have been refunded and reissued at a lower rate, thus 3 positively benefiting the general fund. Utility contracts have been prepaid saving millions of dollars each year. County operations have been reorganized to establish the . revenue generation capability of the Office of Revenue Collection and to avoid significant expenses that. would have resulted had not a risk management office been established to handle county insurance processing in-house. The County has made significant efforts to automate and- thus leverage the capability of its existing resources. However, in spite of these many changes and hundreds of others which have served to finance programs that would have `otherwise been reduced, the County' s business-like approach to handling its operations could not overcome the state and federal government' s lack of sufficient funding. Questions have been asked continually by individuals involved in various programs whether something could be done to restore their program which had been cut by previous Board actions. The answer is a resounding and unfortunate NO! The Board has been asked to consider the $2 - million plus reductions in Social Service, the reductions in Mental Health Treatment Specialists, to restore the Marine Patrol, to open the . new jail to alleviate the intense overcrowding conditions that currently exist, and to restore the cuts experienced from AB 90 and the Trial Court Block Grant funding that have hurt the Probation Department, District Attorney and Courts significantly. The Board has also been asked to reconsider closure of the Girls Treatment Center. However, there is no logical or responsible way that this can be done considering what we understand of the State' s financial condition. While the Legislative Analyst' s most optimistic scenario calls for a $549 million budget problem for the state in 1991-92,. no one expects that all of , the assumptions which are required to hold the deficit to this level will be achieved. The latest and most realistic estimates from Sacramento indicate that the $3 .6 billion deficit experienced this year may grow to over $5 billion for 1991-92 . If the counties were to receive the same proportionate cuts as experienced this year, they would be facing a billion dollars in additional reductions. This clearly would be absolutely devastating to the Medically Indigent Services. Program, and mental health, child welfare and criminal justice programs. If the State' s 1991-92 deficit proves to be $5 billion, the $13 . 8 million problem that the County has faced this past summer could grow to over $19 million. To that must be added the cost of complying with the requirement to open the new West County Justice Center at an annual cost of over $12 million. Opening the West County Justice Center can no longer be postponed. Another problem that can no longer be postponed is the need to make some dramatic improvements or renovation in the county hospital facilities. The state and federal licensing authorities have indicated that if we want to maintain our licensure and ability to receive Medicare and Medi-Cal funds, changes must be made in the immediate future. If the County were to begin a scaled down building program for the hospital facilities, it would mean an extra $2 . 5 to $3 . 5 million a year for the next twenty years. As we begin to approach the 1991-92 budget, the likely cuts from the State, opening the West County Justice Center and making even a reduced effort at rebuilding the hospital will require the Board to deal with an additional budget requirement in excess of $30 million prior to giving a single dollar to any employee for additional salaries. The devastating news on the expenditure side is not the end of this tale of woe. The other two major sources of revenue, local taxes and federal subsidies, also appear to be jeopardized at this time. Local general purpose revenues such as property tax, property transfer tax, motor vehicle in-lieu tax and sales tax are sensitive to the economic conditions in the community. y J Recent reports from our finance departments and the State of California indicate that there is a recessionary trend that may have the effect of significantly reducing the amount of growth that can be expected by the County during the next fiscal year. The new source of local revenues, booking fees and property tax administrative fees which were used to balance the budget this fiscal year are also being aggressively challenged by the school districts and cities. They have filed suit to stop the counties from charging them for these fees. If the state were to lose this lawsuit and not backfill the loss of this revenue source, the County will be required to make additional, and this time truly draconian, budget reductions prior to the end of this fiscal year. The federal government is also caught up in the quagmire of budget balancing. They are struggling to overcome the largest deficit in history. From listening to the debate in the House of Representatives last Thursday evening on the adoption of a Budget Resolution, it becomes amply clear that any and all subventions from the federal government are subject to significant reductions. The full impact of these . reductions on local governments cannot be determined at the writing of this report due to the fact that Congress and the Administration have not been able to work out a successful compromise and produce a budget on which they can agree, much less one which is balanced. Some people have pointed to the November 1990 ballot as a possible solution to some of our local problems. Unfortunately, a closer examination will readily indicate that this is not a realistic expectation. The Legislature placed ten ( 10) bond measures on the ballot. If all are approved by the voters, these bond measures would authorize the sale of $3 . 572 billion in additional bonds. Even if it is assumed that the $400 million in Cal-Vet bonds will be fully repaid from mortgage payments, there is still authority for an additional $3 . 172 billion in bonds which must be repaid from the State General Fund. In addition, four of the initiative measures provide authority for additional general obligation bonds for a wide variety of purposes. Taken together these four measures would add $2. 082 billion in additional bonding authority. All together, the 14 measures on the ballot which authorize bonds total $5 . 654 billion. These will require more than $400 million in State General Fund expenditures each year for the next twenty years in order to repay the bonds with interest! STATEWIDE MEASURES WHICH AUTHORIZE GENERAL OBLIGATION BONDS AND REPAYMENT SCHEDULE: MEASURE AMOUNT OF BONDS ANNUAL REPAYMENT* Proposition 128 $300 Million $22, 000 , 000 (The Environmental Protection Act of 1990) Proposition 129 $740 Million $55,000,000 (The Comprehensive Crime Reduction and Drug Control Act of 1990) Proposition 130 $742 Million $55,000,000 (The Forest & Wildlife Protection & Bond Act of 1990) Proposition 138 $300 Million $22, 000, 000 (The Global Warming & Clearcutting Reduction, Wildlife Protection & Reforestation Act of 1990) Proposition 142 $400. Million $37,000,000** (Veterans ' Bond Act of 1990) Proposition 143 $450 Million $34,000, 000 (The Higher Education Facilities Bond Act of November 1990) Proposition 144 $450 Million $34;000,000 (The New Prison Construction Bond Act of 1990-B) Proposition 145 $200 Million $26,000,000 (The California Housing Bond Act of 1990) Proposition 146 $800 Million $60,000,000 (The School Facilities Bond Act of 1990) Proposition 147 $225 Million $17,000,000 (The County Correctional Facility Capital Expenditure & Juvenile Facility Bond Act of 1990) Proposition 148 $380 Million $22,000,000*** (The Water Resources Bond Act of 1990) Proposition 149 $437 Million $33 ,000,000 (The California Park, Recreation, & Wildlife Enhancement Act of 1990) Proposition 150 $200 Million $15, 000,000 (The County Courthouse Facility Capital Expenditure Bond Act of 1990) Proposition 151 $ 30 Million $ 2, 300,000 (The Child Care Facilities Financing Act of 1990) TOTAL ( Including Proposition 142 ) $5. 654 Billion $434, 300,000 TOTAL (Excluding Proposition 142) $5. 254 Billion $397, 300, 000 * Assumes all authorized bonds are sold at 7 . 5% interest and are paid off over 20 years. ** These bonds are supposed to be repaid by mortgage payments from the veterans. They are, however, backed by the full faith and credit of the State. If the mortgage payments do not cover the bond repayments, the State General Fund would be liable to make the payments. *** A portion of the payments on these bonds will be made by repayment of loans by agencies who receive loans for various public and private water projects. The estimated value of these repayments has been taken into account in these figures, reducing the total cost of repayment by $230 million, from $735 million to $530 million. The annual estimate of $22 million is based on the $530 million figure. The Legislative Analyst has already reported to Assemblyman Isenberg that the 1991-92 State Budget will have a $549 million deficit in the most optimistic scenario they can visualize; namely: . The State' s economy continues to expand through 1992 at its current pace. Consumer price rate of inflation remains in the 5 percent . range through 1992 . None of the budget threats identified materialize. _ 6 1990-91 expenditures are adjusted for workload and cost-of-living in order to maintain service levels in 1991-92 . No additional legislation with General Fund cost implications is enacted in' 1990, 1991, or 1992; and None of the November ballot measures with General Fund cost implications are approved by the voters. (emphasis added) The interests of counties, cities, the education establishment, state prisons and every other program which fights for state support will have to face the reality of the additional demand on the State budget from these bond measures. As if the demands on the State Budget from additional bonding authority were not enough, the initiative measures which are on the November 6 ballot do perhaps more to threaten the fiscal stability of the State of California and its counties than any -ballot since 1978 . Let us look at only a few notations made by the Legislative Analyst' s Office in their financial analysis of the ballot measures (and remember that the State Budget for 1990-91 is already delicately balanced and facing a substantial deficit in 1991-92 without any of the following factors) : * The passage of Proposition 129 would require the transfer of $102 million from the General Fund to the California Anti-Drug Superfund by January 1, 1991 and an additional $459 million by July 15, 1991. * The passage of Proposition 128 would result in annual state administrative and program costs of approximately $90 million, decreasing in future years and partially offset by $10 million in increased annual fee revenue. * The passage of Proposition 135 would result in a one-time State General Fund cost of approximately $4 million and annual costs of approximately $5. 5 million, a $1 . 5 million annual revenue loss to the state, one-time State General Fund cost of approximately $20 million and unknown annual costs thereafter to fund collection and disposal of unregistered pesticides, $5 million per year costs for five years to fund pest management research and additional state administrative costs ranging from $200, 000 to several million dollars for other programs. In addition to these pressure which will make it even less likely that we will be able to maintain programs which were continued in the current year, there are many potential negative impacts on the County from the November 6 ballot, as follows: * The passage of Proposition 136 may preclude not only the passage of Propositions 129, 133 and 134, but any future efforts to impose non-ad valorem taxes on such tangible personal property as liquor and cigarettes. In addition, after November 6, 1990, the imposition of any future local tax or increase in an existing local tax would require approval by the voters. * The passage of Proposition 127 would exempt earthquake safety improvements from reassessment for property tax purposes, thereby reducing the growth in the property tax. * The passage of Measure "F" .would negatively impact future growth of the property tax in the unincorporated area of the County and erode the existing property tax base of the County by encouraging the incorporation of new cities and the annexation of existing unincorporated areas to existing cities. Feasibility of Continuing the Girls' Treatment Center We readily acknowledge the value of the intensive care given to the average population of 14 girls at the Girls' Treatment Center and the importance of the one-to-one contact with the staff which has been so valuable to many girls in the past. However, the devastating fiscal forecast outlined above should make the reopening of the Girls ' Treatment Center totally impractical in and of itself. But on top of this analysis, there is additional information that must be considered in deciding whether or not to continue to fund this facility. First, it is necessary to recall that the reason the Girls' Treatment Center was closed was due in part to the state reduction of 490 of the County' s AB 90 revenues. This resulted in a massive reduction in the source of funds currently used to keep the Byron Boys' Ranch operational. The Ranch is a critical component of the criminal justice system and serves over 400 delinquents per year. In order to save this vital facility, the Probation Department and the County Administrator' s Office recommended that the only major non-mandated program in the Probation Department, the Girls' Treatment Center, be closed. At that time, it was noted that Contra Costa' s Probation Department was operating the only locked program for girls in Northern California. The Girls' Treatment Center had the capacity to house 19 girls, but an average of only 14 girls per month from the County have been placed at the Center during the past 12 months. In order to offset the high cost of running this facility, contract commitments from out of the county have been sought to utilize a portion of the excess capacity. The 1990-91 appropriation for the Girls ' Treatment Center was $664,470 and the revenue anticipated from the contract commitments from out of the county total $50, 000 . Therefore, the net cost of the Girls ' Treatment Center for 1990-91 equals $614,470 ( $664, 470-$50,000) , or $43 ,890 per bed annually. It was estimated that if the Girls' Treatment Center were to be closed effective October 1, 1990, cost savings for 1990-91 of $460, 000 could be realized. This would provide sufficient savings to keep the Boys ' Ranch open. When the Board approved the actions necessary to close the Girls ' Treatment Center, they also agreed to use the savings from the Girls ' Treatment Center to replace the state reductions that threatened the closure of the Byron Boys ' Ranch. The Board also allocated booking fee revenues to add four positions to increase the resources available in the Pre-Placement Unit which were needed to find additional placement opportunities for female delinquents. In summary, the Girls' Treatment Center had to be closed due to the devastating reductions imposed on the County by the State of California. The critical need to keep the Byron Boys Ranch- open, the need to increase staffing at the Placement Unit, the fact that the Girls ' Treatment Center is a non-mandated program (we are the only county in Northern California with such a facility) , and the fact that at a cost of $43 ,890 per bed annually, it would not have been a sound decision to maintain the Girls ' Treatment Center - regardless of finances. Finally, in keeping with the Board of Supervisors ' previous decision to close the Girls' Treatment Center effective October 1, 1990, we should note that the last girl was transferred out of the Girls' Treatment Center last Sunday and the staff are in the process of being retrained and transitioning into other assignments in the Probation Department. i a 8 Appropriating money from the Contingency Reserves is unwise for several reasons: * The earthquake damage last year should remind us that if a similar strength earthquake takes place on the Hayward fault we could have thousands of people killed or injured and billions of dollars of damage in the East Bay alone. A Contingency Reserve is for this type of natural disaster - not to maintain programs for which there are otherwise insufficient funds. * Maintaining the Girls' Treatment Center is an ongoing operational cost for which we do not have the funds. If the Board of Supervisors were to appropriate a portion of the Contingency Reserve to maintain the Girls ' Treatment Center for the balance of the 1990-91 fiscal year, its continued funding would simply add to all of the funding pressures noted above and result in its being closed next year. * Maintaining even the level of reserves we have in this County saves the County millions of dollars by allowing the County to qualify for the highest credit rating, thus holding down the interest costs on money the County borrows. Starting to appropriate a part of the Contingency Reserves for an ongoing operational program cost like the Girls' Treatment Center would almost certainly have an immediate and negative impact on the County' s credit rating. As painful as the closure of the Girls' Treatment Center has been, unless the. voters, the Legislature and the new State Administration provide some new sources of revenue for counties, we are going to find ourselves confronted repeatedly in the next year with additional equally painful and even more illogical program reductions than the closure of the Girls' Treatment Center.