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HomeMy WebLinkAboutMINUTES - 11191991 - 2.1 TO: BOARD OF SUPERVISORS �-sE L _r- °_ Contra 1 :� FROM: Phil Batchelor, County Administrator Costa •; � n. s DATE: November 19, 1991 = -�_"� County sTq-coori'� SUBJECT: FIRST QUARTER BUDGET REPORT FOR FISCAL YEAR 1991-92 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&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: The 1991-92 budget process proved to be the most difficult and challenging since the passage of Proposition 13 in 1978. As a result of the State' s $14 . 3 billion shortfall and the recession, the County was required to cut $12 .7 million from the budget. This compares to a $7 million cutback in 1990-91. Further cuts may be required this fiscal year if federal and state funds cannot be secured or are cutback. 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 issues which require special attention are presented below and include: Program Realignment, the Health Services, Social Services, Sheriff 's and Probation Departments, the State Budget and General County Revenue. CONTINUED ON ATTACHMENT: RYES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON November 19, 1991 APPROVED AS RECOMMENDED X OTHER X In addition to approving the recommendation as noted above, the Board REQUESTED the County Administrator to recommend a position for Board action relative to ACA 35; and also REQUESTED the County Administrator to confer with County Department Heads on seeking legislative relief to assist with handling the reduction in revenues as a result of realignment. VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE XX 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: Auditor ATTESTED November 19, 1991 CAO PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY O � ` DEPUTY M382 (10/88) -2- Program Realignment The State has estimated that the County should receive approximately $58 million in program realignment monies this fiscal year. These monies were to be generated from the one-half cent sales tax plus revenue from increased vehicle license fees. Seventeen programs were to be financed with the monies in the health, mental health and the social service areas. First quarter state sales tax revenues are down by 5.3% . Quarterly data for motor vehicle in-lieu revenue is not available, but is judged to be below target by at least 5% by State Finance. A straightline projection, assuming a 5 . 3% shortfall for all revenues, would mean a deficit of $3 million. However, the State advises that Christmas season sales can account for up to 60% of the annual sales tax revenue and therefore a much clearer picture of the revenue situation will be known early next year. Staff has been meeting with the Social Services Director, Health Services Director and Probation Officer to develop plans to manage this deficit. Moreover, we have also initiated a series of meetings with the chairs of advisory boards which oversee programs affected by Program Realignment. We will be soliciting their input at our November meeting as we confront some of the tough program and fiscal decisions over the next few months. Health Services The Health Services Department was facing a $2 . 7 million deficit after the implementation of Phase II reductions . The department instituted a number of significant cost reduction activities, including the elimination of all but medically required equipment purchases, a forty percent reduction in the medical library budget, curtailment of custodial services in non-patient care areas, and the deferral of all non-mandatory services and supplies purchases for a period of ninety days . As a result of the stringent cost containment efforts, the department has been successful in meeting its goal of reducing the deficit to the $1 . 3 million level . Approximately $1 .4 million of additional financing needs to be identified to insure a balanced budget for the Health Services Department. Several additional sources of revenue are still being pursued, including the voluntary transfer program which provides supplemental Medi-Cal payments to Merrithew Memorial Hospital and a supplemental Medi-Cal payment mechanism which may receive federal approval . While payment is not assured from either one of these sources, it appears likely that additional revenues may be available to the department by January 30, 1992 . Accordingly, the department will continue its strict cost containment and cost deferral efforts pending the outcome of the federal decision. Social Services The General Assistance program continues to grow in both caseload and cost during the first quarter. In 1990-91, the average monthly caseload for the first quarter was 4,686 compared to 5,272 this fiscal year. With 25% of the year completed, the department has expended 28% of the budget. At this rate, adjusting for seasonal variations, the General Assistance program may exceed its budget by approximately $600,000. However, on September 17, the Board adopted a major expansion of existing services to General Assistance clients . These additional services were budgeted at $700,000 and involved: 1 . expansion of advocacy and assistance to clients to gain federal Supplemental Security Income; -3- 2 . expansion of and creation of new employment assistance programs to help clients prepare, obtain and maintain employment; 3 . provision of alcohol and drug diversion services to GA recipients; and 4 . adoption of an early fraud prevention and detection program. It is hoped that these multi-faceted programs will begin to positively impact the General Assistance program in the second quarter. Sheriff ' s Department The average daily inmate population for all the County adult detention facilities for the first quarter is slightly less than the budgeted level. The first quarter average daily population (ADP) was 1,375 as compared to a budgeted ADP of 1,400 . This figure includes the newly opened West County Detention Facility with a current ADP of 311 . During the first quarter the Work Furlough Center was closed and other savings measures were begun. In addition, the Sheriff ' s budget reduction plan, which was incorporated in the adopted FY 1991-1992 budget, depends heavily upon additional revenue to remain in balance. The Sheriff ' s Department anticipates contracts with federal and state agencies which would generate new revenue for the care and custody of inmates from outside the County. If the budgeted revenue does not materialize soon, the department faces a significant year-end deficit. The County Administrator's Office is monitoring this situation. If improvement does not begin in the near future, additional budget reductions may be necessary. Although no problems have been noted in expenditures so far, straightline projections of salaries and benefits indicate future problems which will require careful monitoring and control . Probation This department adopted a budget reduction plan effective October 1, 1991 and is in the process of implementing an early retirement program to assure a balanced budget by year end. The department's expenditure rate through the first quarter of the year is excessive because the budget reduction plan has been recently implemented. However, it is anticipated that future expenditures will be in line with revenues during the balance of the fiscal year. The juvenile population is being controlled through the Juvenile Hall Population Control Plan and is being maintained within the designated level . State Budget Shortfall The Commission on State Finance and the Legislative Analyst have both reported that the State faces a budget deficit this year despite the adoption of major cuts and increased taxes in 'July. The Commission projects a $3 billion revenue shortfall, while the Legislative Analyst projects a minimum of $600 million. Both sources point to lower than expected revenues caused by continued recession and greater than expected increases in welfare and health costs . Staff will closely monitor this serious situation and determine what potential impacts this deficit will have on County services . 1 _4_ 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 and interest earnings . Most revenues received on a monthly basis are on pace with the first quarter target. However, real property transfer taxes and supplemental property taxes are currently below targeted levels but subject to abrupt revenue swings . The two revenues which are below targeted levels are directly impacted by the continued slow down in the real estate market. Building permits throughout the County are down by 18. 1% when comparing January through September of 1991 with 1990 . Likewise, housing sales continue to slump portending future problems with revenue growth from property taxes .