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HomeMy WebLinkAboutMINUTES - 12171991 - 2.2 a� TO: BOARD OF SUPERVISORS Contra FROM: Phil Batchelor, County Administrator n. 0s Costa O: December 17 , 1991 County�`�, =_ :T� DATE: SUBJECT: CLEAN-UP TO PROGRAM REALIGNMENT LEGISLATION SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1 . In view of the probable shortfall in revenue which was intended to support Program Realignment during its initial year, adopt the following positions on changes which should be made in order for Program Realignment to be workable for the balance of the 1991-92 fiscal year and during the ' 1992-93 fiscal year. 2 . Authorize members of the Board of Supervisors, the County Administrator and County staff designated by the County Administrator to advocate for the following positions in order to allow the County to adjust its expenditures to match the revenue which is likely to be available to support Program Realignment between now and June 30, 1993 . 3 . Request the County Administrator to make reports to the Board of Supervisors on the status of Program Realignment as events warrant such reports . BACKGROUND: One of the potentially most significant achievements of the Legislature in 1991 was the enactment of Program Realignment, which transferred to counties the responsibility for numerous health, mental health, and social service programs . In addition, the Legislature provided a new source of revenue to pay for these programs at the local level by increasing the sales tax by 1/2 CONTINUE[)ON ATTACHMENT: X YES SIGNATURE: � Z RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): U—wa, l Z60 fig ACTION OF BOARD ON December 17, 1991 APPROVED AS RECOMMENDED X OTHER 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. December 17, 1991 CC: Please see Page 3 . ATTESTED PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY DEPUTY M382 (10/88) -2- rent and by increasing the registration fee on vehicles . Counties gained more flexibility in administering these programs and -a more flexible source of revenue with which to fund the, programs . In return, counties essentially assumed full responsibility for the administration and funding of these health and social services programs . There were also increases made in the share of the costs of several programs which the County had to assume, primarily the In-Home Supportive Services Program ( IHSS) and Foster Care Program (AFDC-FC) . The revenue increases which were approved by the Legislature were based on assumptions made by the State Department of Finance. Because of the continuing recession, it is now apparent that the estimates made by the State Department of Finance earlier this year were overly optimistic. The general consensus now is that the actual revenue from the sales tax and vehicle registration fee are going to be between 5% and 10% below the Department of Finance' s estimates. Statewide this will leave counties more than $200 million short of the revenue most counties had counted on to fund the programs for which they assumed responsibility for the balance of this fiscal year. In Contra Costa County, this shortfall could run between $3 million and $6 million. It is clear that the State of California, which is already facing a deficit of perhaps $5 billion to $8 billion over the next 18 months, is in no position to assist the counties in covering this revenue shortfall . We are suggesting that the County must be prepared to cope with this significant shortfall in revenue with .its own resources . This means that we must be in a position to move as quickly as possible and with as few artificial impediments as possible in reducing program expenditures, if that is judged to be necessary. Legislative relief is, however, necessary in several areas in order to make this possible at the local level . It is the advocacy of these needed legislative changes that we are recommending the Board adopt at this time as a part of its effort to adjust Program Realignment expenditures to the available revenue. These include the following: 1 . Suspension of the "Beilenson" hearing requirements which must be followed before reductions in health care services to the indigent can be made. Under current law, an extensive and time-consuming notice and hearing procedure must be followed before the County can made any reductions in health care services to the indigent. The delays which are necessitated by these requirements simply make the eventual reductions all the more severe because there is less time in which to accomplish the reductions . If these requirements can be suspended during the period of time that the Program Realignment revenues are experiencing a substantial shortfall, it will be possible to make reductions sooner and make the reductions less severe than would be necessary if the "Beilenson" requirements had to be followed. There is precedent for such a suspension, which was invoked by the Legislature for a period of several months in 1990 while counties adjusted to the last round of severe health care reductions which were needed in order to balance the State Budget for the 1990-91 fiscal year. 2 . Suspension of all mandated county match requirements for programs involved in Program Realignment. One of the requirements imposed as a part of Program Realignment was that amounts which the county- was already spending for various health and social service programs had to be continued as a condition of receiving the new revenue. In order to provide the Board of Supervisors with the flexibility to truly determine what the County' s priorities are, these artificial match requirements must be suspended during the time that the revenue sources intended to support Program Realignment are falling below projections . To continue such match requirements during the time of such a major funding shortfall ties the hands of the Board of Supervisors and makes it all the more difficult to balance the County' s budget. -3- 3 . Offset of increased vehicle license fee revenue with a transfer from the County General Fund to indigent health care. As one specific example of the match requirements which must be changed is what we believe to be an outright drafting error in the legislation which approved Program Realignment. Because of the Constitutional restriction on diverting the vehicle license fee revenue away from counties, a requirement was imposed on counties as a part of Program Realignment. The State increased the vehicle registration fee, which must be passed on to counties . Since the Legislature could not dictate how that revenue would be spent, the Legislature required as a condition of the receipt of this revenue that an equal amount of County General Fund revenue be dedicated to health care for indigents . Unfortunately, instead of specifying that the match must equal the number of dollars of increased revenue which were received - as we believe was the intent of the Legislature - the language in the statute actually specifies a number of dollars which must be transferred to indigent health care. The amount equals what the State Department of Finance estimated the revenue from the increased vehicle registration fee would be. However, while it is likely that this revenue will be short of projections, the literal language of the statute still requires that a specific number of dollars be transferred to indigent health care. This must be amended to specify that at the most, only the number of dollars which are actually received will be required to be transferred to indigent health care. 4 . The requirement for an individual assessment of the needs of each In-Home Supportive Services ( IHSS) client must be suspended. Current law requires an extensive assessment of what each IHSS client can and cannot do for himself or herself. Specific requirements are placed on the County as a result of this assessment in terms of responsibility to financially meet the specific needs of each client. These requirements, which are both extensive and expensive, must be suspended during , the time that Program Realignment revenues are below projections so that the County can determine the level of services it can afford to provide, based on the revenue which is made available, rather than on the extent of the need which is displayed. There are undoubtedly other, similar, requirements which need to be examined and addressed. Over the coming weeks we will bring these to the Board' s attention and will add to the above list of objectives . However, it appears that the flexibility which would be obtained from passage of these measures would go a long ways toward making it possible for the Board of Supervisors to determine the priorities in the County and identify ways to pay for those priorities . cc: County Administrator Social Services Director Health Services Director Auditor-Controller County Counsel Karen Coker, CSAC Les Spahnn, SRJ. Jackson, Barish & Associates