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HomeMy WebLinkAboutMINUTES - 02111992 - 2.2 BOARD OF SUPERVISORS Contra FROM: costa Phil Batchelor, County Administrator a x�, o¢ County DATE: srq co'uK February 11, 1992 SUBJECT: MID-YEAR BUDGET REPORT FOR FISCAL YEAR 1991/92 SPECIFIC REQUESTS)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1 . Accept this report and direct the County Administrator to continue to monitor the budget and implement corrective plans, where necessary. 2 . Direct the County Administrator to continue the freeze on employee hiring and purchasing fixed assets and other major cost items . 3 . Direct the County Administrator to prepare a separate report on Program Realignment analyzing service delivery issues arising from the State 's estimated revenue shortfall . BACKGROUND: This mid-year report has been prepared to inform the Board of the status of the budget, the major issues that impact the budget and any deviations from the budget plan. The County Administrator' s staff have reviewed the second quarter expenditure and revenue reports for all of the various County budget units . As a result of this review, we can report that most budget units are within the budget targets for the second quarter. However, these budget units in the aggregate are very close to their budget levels, which may mean a significant drop in fund balance for next year. Those departments and budget units identified requiring special attention, are noted below. � Q CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON February 11, 1992 APPROVED AS RECOMMENDED OTHER APPROVED the recommendations as set forth above. In addition, the Board REQUESTED the Homeless Advisory Committee to review and recommend procedures for reducing the General Assistance Budget. VOTE OF SUPERVISORS X — — — — I HEREBY CERTIFY THAT THIS IS A TRUE 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. County Administrator February 11, 1992 cc: Health Services ATTESTED Social Services PHIL BATCHELOR,CLERK OF THE BOARD OF Sheriff SUPERVISORS AND COUNTY ADMINISTRATOR Probation Auditor-Controller CommW SeravesB DEPUTY 0/88 me esSxCte.M382 (1 � a t -2- General County Revenues December, 1991 marked the 18 month of a recession which is lasting longer than any since the 1930 ' s . This deep recession has led to a decline in County revenues, even though most large revenue accounts were budgeted at last year' s level or below. Assuming that the economy will not recover before the end of the fiscal year, revenues are estimated to be approximately $1,700,000 below budgeted levels . This estimate is based on six months of actual experience and adjusted for seasonal variations where appropriate. The revenue sources which have been adversely impacted by the recession are the Supplemental Property Taxes, Sales Tax and Vehicle license tax revenue. These revenues are very sensitive to the weak real estate market and the slump in consumer spending. A total of $4,300,000 of revenue was budgeted for property tax collection and jail booking fees . However, these fees have been under litigation by the cities for over a year. If the cities were to prevail with the litigation, it would have a devastating impact on County revenues . A resolution of this matter may not occur this fiscal year. Finally, since revenue is a major contributor to the year-end fund balance, this austere revenue situation causes concern that the availability of fund balance to help finance next year' s budget will drop appreciably from prior years . Program Realignment The state has recently estimated that the County should receive approximately, $54, 113, 000 in program realignment monies this fiscal year. This estimate represents a 6 .4% shortfall in revenues or $3,906,000 from the original state estimate. These monies were to be generated from the one-half cent sales tax plus revenue from increased vehicle license fees . Sixteen programs were to be financed with the monies in the health, mental health, social service and criminal justice areas. Staff has been meeting with the Social Service Director, Health Services Director and Probation Officer to review plans to manage the deficit. Early planning to reduce expenditures has erased a portion of the deficit. However, more expenditure cuts are necessary, and are discussed with the Department Heads on a monthly basis . A series of meetings have been held with the chairs of advisory boards which provide input to programs affected by Program Realignment. Issues which have been discussed with the Advisory Group to assist in the planning for this fiscal year and in future fiscal years include: - Budget reduction plans and program impacts caused by the shortfall in revenue - Potential areas for interagency cooperation and program integration - Changes in state laws and administrative procedures which will provide additional flexibility to the County to improve service delivery - The ways and means of insuring effective public input into the planning process for Program Realignment Social Service Department The General Assistance and Homeless budget has a serious budget overrun of an estimated $2,967,000 . If the projected costs materialize, the County will spend $17,400,000 . Six years ago, the County spent $4,900,000 . -3- A recent court decision is responsible for this projected budget overrun. The decision not only reversed some of the grant level reductions proposed by the County, but required the County to pay full grants to shelter residents who apply for General Assistance. In affect, the decision means that the County will house and feed persons in shelters and pay them for housing and food costs . Last year, the Board approved a multifaceted approach to 'provide additional services to General Assistance clients and to hold the line on G.A. costs . These programs are listed below with an indication of their current status . 1 . Expansion of advocacy and assistance to clients to gain federal Supplemental Security Income; Contract approved by Board for $60,000 to Hawkins Center and Rubicon for fiscal 1991-92 . 2 . Provision of alcohol and drug diversion services to G.A. recipients; and The General Assistance Alcohol and Drug Diversion Services program has become fully operational and has received 276 referrals through December 31, 1991 . 3 . Adoption of an early fraud prevention and detection program The Department is in various phases of hiring staff for this program. 4 . Expansion of and creation of new employment assistance programs to help clients prepare, obtain and maintain employment. All staff hired at the end of January, operational planning underway. A portion of the General Assistance deficit is expected to be offset by the savings in other programs in the Department due to strict expenditure controls and aggressive revenue securing efforts . Health Services Department The Health Services Department was facing a $2 . 7 million deficit after the implementation of Phase II budget reductions . The ' Department instituted a strict cost containment and reduction effort with a goal of generating savings of approximately $1 . 3 million. To date, the Department is successfully meeting its targeted goal . The balance of the deficit, $1 . 4 million, was to be addressed through the voluntary Medi-Cal transfer program for Disproportionate Share Hospitals . The mandatory Medi-Cal transfer program, for Disproportionate Share Hospitals, has been approved at both the State and Federal level . While full details regarding implementation date impact and the calculation of reimbursable days is still outstanding, it does appear reasonably certain that the Department will receive enough funds to offset a substantial portion of the current projected deficit. Since our last report, new State forecasts indicate that Health Department Realignment revenues will be down by $1 .5 million in Sales Tax and $1 . 3 million in Vehicle license fees . The combined funding need for the Department, is $4 .2 million. The County Administrator will prepare a separate report to the Board reviewing the service delivery issues arising from the forecasted deficit. -4- Sheriff ' s Department The average daily inmate population (ADP) for all the County adult detention facilities for the first half of fiscal year 1991-92 is less than the budgeted level . The ADP has been 1,370 as compared to a budgeted ADP of 1,400 . During the first half of 1991-92 the Department' s budget reduction plan was fully implemented. The Sheriff also took additional steps to manage and control departmental overtime. These steps along with decreased expenditures, due to low ADP, and an aggressive revenue policy has allowed the Department to bring its budget under greater control . Although anticipated revenues from contracts with state and federal agencies for care of inmates have not materialized, efforts to make-up the revenue shortfall are underway. The County Administrator' s Office is reviewing the Department ' s expenditure and revenue accounts to determine if additional budget reduction measures will be required this fiscal year. If needed, further recommendations will be submitted to your Board for consideration. Probation The high population at Juvenile Hall continues to be a program concern and budget issue this fiscal year. The daily population was a quarterly high of 150 in December, and this trend continued into January. Although the County Probation Officer set an administrative cap of 130 on the Hall population to ensure maintenance of the budget and quality of life in the Hall, the population exceeded 130 on 49 occasions or more than half of the time in the second quarter. Use of additional, non-budgeted sleeping units occurred on 42 occasions . Since the population is historically high during the Spring and early Summer months, the overcrowded condition is not anticipated to decrease in the second half of the year. The County Administrator, Juvenile Court Judge and Probation Department management have had ongoing discussions to explore alternative solutions to the overcrowding and funding problems, but efforts to date have not been successful . The Probation Department continues to incur unbudgeted costs which, at the current rate, may result in a year-end deficit of $420,000 if not curtailed. Further significant budget reductions are needed this year to balance the department' s budget. The County Administrator will be meeting with the Probation management team to discuss the budget problems and develop a balancing plan. 1992-1993 State Budget Governor Wilson' s proposed budget was presented in early January and can be characterized as hopeful and optimistic. The budget was developed assuming a current year deficit of $1 . 3 billion and that the recession ends in mid 1992 . The Governor proposed no tax increases and targeted cuts in the Welfare and Health areas . More recent estimates of the State' s current and future budget year deficit range from $2 to 6 billion. This estimates also forecast slower growth in revenues for 1992-93, compounded the budget deficit next fiscal year. We will be closely tracking the state budget process and will be presenting status reports in the future. Hiring and Purchasing Freeze The Board imposed freeze of May, 1989 on hiring and ordering non- critical fixed assets and other major purchase items continues . The freeze must continue because of potential budget shortages this fiscal year. 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 .