Loading...
HomeMy WebLinkAboutMINUTES - 12021997 - C143 TO: BOARD OF SUPERVISORS s ;? ...... Contra FROM: \ Phil Batchelor, County Administrator Costa County DATE: �sr---- ----•, c December 2, 1997 SUBJECT: FIRST QUARTER BUDGET REPORT SPECIFIC REQUEST(S)OR RECOMMENDATION(S)6 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: Since 1984, the County Administrator's Office has prepared quarterly reports which analyze the status of the budget and highlight the budget units which deviate from the budget plan in terms of expenditures and revenues. Actions which are necessary to ensure a healthy budget by the end of the year are recommended as part of the quarterly reporting process. Other items which have major fiscal impacts are also reviewed as part of this period report. The Administrator's Office review of budgets'over this three month period indicated that the overall County budget is in a positive position. The Administrator's Office is working with Departments to bring all Departments in compliance with their budget authorizations. What follows is a discussion of eight key budgets for this period. General County Revenue It is too early to determine the overall status of revenues relative to the budget plan. The status of property tax revenues, which make up 56% of general county revenues, will not be known until January when distributions are made to all taxing agencies. Nearly all major revenue sources are at or above their budget targets for this period time, seasonally adjusted. These revenues are motor vehicle registration fees, property transfer tax, CONTINUED ON ATTACHMENT: YES SIGNATURE: J l RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE (S): ACTION OF BOARD ON Decem er APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS X 1 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. CC: County Counsel ATTESTED December 2, 1997 Auditor-Controller PHIL BATCHELOR,CLERK OF THE BOARD OF Sheriff SUPERVISORS AND COUNTY ADMINISTRATOR Probation Coordinated Trial Courts Health Services M382 Social Service BY DEPUTY Community Services Community Development Page 2 General County Revenue continued transient occupancy tax, interest earnings and sales tax. Only the supplemental property taxes are below the budget target for the first quarter. Since this revenue is a future indicator of property tax revenue growth, it would be tracked closely in the future. A continuing concern about property tax revenue remains the significant amount of property tax assessments being appealed by private industry. Approximately $3.5 billion in property assessments are currently under appeal by business and industry which has the potential of millions of dollars in revenue losses to various units of local government. The Assessor reports that the volume of assessment appeals has improved slightly over last year as the business environment has turned more positive. Over the last two years, the Assessor has allocated significantly more resources to assessment appeals and is carefully monitoring this critical area. Sheriff The Sheriff-Coroner Agency is within acceptable expenditure levels for the first four months of fiscal year 1997-98. Patrol and Operations gross expenditures were 33% and Custody Services'were 32%. Figures for the Custody Services' division include$5,414,585 in bailiff costs. Bailiff costs are Trial Court Funding eligible expenses which are reimbursed by the Courts. As a trial court eligible cost, any over-expenditure in this area is a matter of Court concern and not a general fund obligation. Please see write-up on the Courts for more information. The Coroner Division has stayed within 33% in net expenditures for the reporting period and have significantly exceeded targeted revenue for the first four months of the year. Actual revenues received through October 1997 were $5,436,834 for Patrol and Operations and $3,079,081 in Custody Services, 13% and 17% of budget respectively. Sales-Tax Public Protection revenue was budgeted County-wide in the amount of $43,754,826 and is expected to be realized by year-end. The Sheriff-Coroner Agency receives 82.6% of this revenue and the District Attorney receives the balance. Contract City revenues, which historically lag, generate 26% of the Sheriffs $40,603,946 budgeted for Patrol and Operations. These revenues, which are currently at 15% of budget, will be received by year end. The Department is maintaining control of expenditures and is expected to achieve a balanced year-end budget. However, continuing increases in costs such as salaries will continue to provide budgetary challenges throughout the year. Probation Probation Department expenditures are at anticipated levels for the first quarter of fiscal year 1997-98. Actual revenues, however, appear low due to the customary lag time in the receipt of state and federal revenues. For example, several grant revenues are received late because of the need to submit ad-hoc reimbursement claims. However, all of these revenues are anticipated to be received before the end of the fiscal year. Also skewing the revenue forecast is the inclusion of an estimated $800,000 in Round 2 Challenge Grant revenues. Challenge Grant appropriations were eliminated from the state budget shortly before its adoption, but were maintained in the Probation Department budget in anticipation of mid-year restoration by the state. The revenues are currently unobligated and will have no negative impact on the budget should they not be realized. Although the Department's budget is currently on target, the County Administrator and Probation Department will continue to closely monitor expenditures in light of some noticeable program factors which have traditionally been the harbinger of budget problems. Of foremost concern is the average daily population at the Juvenile Hall which, despite the Probation Department's efforts to control it, has been hovering in the mid-170s since April. The current budgeted capacity of the Hall is 160. In an effort to manage the population . l�3 C . Page 3 Probation continued level, the Department is availing itself of detention alternatives. The Department currently has 105 youths on electronic monitoring and home supervision, but are finding that these measures are not allowing them to keep pace with the Court's need to detain youths in a secure environment. Bookings into the Hall were high during October at 199, while releases were slightly greater at 206. There are currently 29 youths in the Hall awaiting placement at the Orrin Allen Youth Rehabilitation Facility (OAYRF) and 41 youths awaiting private placement. The number of juveniles in private placement is also on the rise. Placements need to be maintained at an average of 100 to adhere to budget constraints, yet the average level of juveniles in placement for the first quarter was 130. The Department has limited discretion over placement decisions but maintains a steady dialogue with the Juvenile Court effort to ensure placement decisions are necessary and appropriate. Despite the Department's efforts, however, the Court occasionally orders that a juvenile be placed against the recommendation of the probation officer. The Department and the County Administrator will continue to monitor this situation and its effect on the budget. Beginning January 1, 1997, the California Youth Authority began assessing board and care fees for youths placed at the CYA. The basic monthly fee for youths classified as Level 1 through 4 was increased from $25 to $150 per month per placement. However, youths classified as lower risk levels 5, 6 or 7 will result in higher fees based upon a sliding scale. Legislation which would have eased the strain of new CYA fees by phasing them in over a two-year period failed to pass. Moreover, counties were recently advised that the CYA intends to increase its fees to counties due to the abrupt drop in CYA commitments resulting from the levying of the fees. Probation departments across the state have protested the fee increase and are exploring more feasible alternatives to CYA incarceration. It is too early to know the impact of the CYA fees on the Probation Department budget. Once a juvenile is committed, the CYA has 90 days to finalize the classifications, making cost estimating prone to error. Based upon the historical number of Contra Costa County youths placed at CYA of 180, we can estimate that the lowest possible annual cost the County might incur is $324,000 (180 youths @ $150/mo.). At the time the sliding scale fees were being deliberated in the legislature, we estimated that the potential impact of the fees, based upon a one-day snapshot of County youths at CYA, was $1.1 million. Although we are unable to precisely identify the impact of the CYA fees at this point, they remain another factor of concern regarding the budget. The influx of$4.4 million this fiscal year in TANF funds for probation services allowed the Department to add 39 positions and set up construction projects to expand the Boys' Ranch and house a girls' treatment program. The Social Service Department will administratively combine its TANF claim with that of Probation and submit one claim to the state for reimbursement. The time studies required by Probation to receive TANF funds for the first half of the year have been completed and Probation's claim will be submitted in January. The County Administrator will continue to take a cautious approach to monitoring the Probation Department budget and will work with the Department to maintain a balanced budget. Coordinated Trial Courts of Contra Costa County The Lockyer-Isenberg Trial Court funding Act of 1997, which was signed into law in October, significantly reformed the Trial Court Funding Program and redefined the fiscal and budgetary relationships between the County and the Coordinated Trial Courts beginning July 1, 1997. The Act not only removes the coordinated Trial Courts from the County budget process but caps the County's contribution to the Trial Courts at the fiscal year 1994-1995 level. The County Administrator has been working with the Coordinated Trial Courts and the County Auditor-Controller to implement necessary budgetary, fiscal, accounting and other changes that are required by the Act. C43 Page 4 Coordinated Trial Courts of Contra Costa County continued The Act consolidated all court funding at the state level, giving the Legislature authority to make appropriations and the Judicial Council responsibility to allocate funds to state courts. Counties'financial obligation is capped at the fiscal year 1994-95 level for fiscal year 1997- 98 and will be decreased to an equalized statewide pro-rata share of 42% beginning fiscal year 1998-99. The Act requires the state to fund all future growth in court operations costs and authorizes 40 new judgeships statewide, contingent on an appropriation made in future legislation. The financing mechanism to enable the state to absorb the growing court costs is the enactment of new filing fees. California cities will also benefit from the Act through the redirection of 100% of the base of all traffic fines written within city jurisdictions effective fiscal year 1998-99; currently, the state receives 50% of city traffic fines. For Contra Costa County, the Act capped County subvention to the courts at approximately $27.3 in fiscal year 1997-98, comprising the amount spent by the County to fund court costs plus the 75% of County fines and forfeitures transferred to the state in fiscal year 1994-95. In conjunction with the cap, however, the county will continue to be responsible for those court-related costs that are outside the definition of"court operations" including the maintenance of court facilities, enhanced revenue collection, indigent defense, pretrial release and probation services. There is still concern over the Legislature's intent to continue to define "court operations" as currently established in law; changes in that definition could result in increased financial responsibilities for counties. On or before February 15, 1998 Contra Costa County is required to submit to the Department of Finance a report of the amount it expended for trial court eligible operations between July 1, 1997 and January 1, 1998. This amount will be deducted from the amount the County is required to remit to the state for the entire fiscal year. Staff from the Courts, Auditor-Controller's Office, and County Administrator's Office are working closely together to track and isolate these expenditures. In order to begin to facilitate the changes required by the Act, the Sheriffs Department has begun to charge the Courts for bailiff services on a monthly basis, the Auditor-Controller's Office is researching the legal requirements regarding adding court positions and is establishing the new revenue distribution formulas required by the Act. Additionally, the County Administrator's Office is analyzing those costs contained in the 1994-95 base to determine if all eligible costs are included and if not,.to work with the courts to add them to the base. Health Services The Health Services Department is currently facing a revenue shortfall of approximately $5.2 million, down from $10 million when the Board of Supervisors adopted the Recommended Budget. The $10 million shortfall was due to a variety of factors, including contractor COLAs, employee COLAs, pay equity, other salary and benefit increases, workers compensation, medical liability premiums, general liability premiums and maintenance costs for the new hospital. The shortfall reduction can be attributed to: • AB 1139 (Chapter 723, Statutes of 1997) a disproportionate share funding bill which may provide an additional $1 - 3 million in revenue. Approval by the Federal Health Care Finance Administration is anticipated, but not certain and will not be known until mid-January or February 1998. • The local initiative appears to be performing at appropriate fiscal levels with a projected revenue surplus of approximately $1.1 million. This projection is still "soft" due to the lack of time with this patient population and state delays in changing the reimbursement rate (originally scheduled for October 1997). • The County Administrator's Office provided funding of$1.2 million to partially offset COLA related increases. Page 5 Health Services continued • On the negative side, anticipated changes in Medi-Care reimbursement such as diagnosis related group (inpatient DRGs) and medical education are anticipated to reduce revenues by approximately $500,000. The Health Services Department and County Administrator's Office will continue to monitor expenditures and revenues and provide the Board of Supervisors with appropriate recommendations for corrective action as necessary. Social Service The Social Service Department is currently projecting a balanced budget for fiscal year 1997-98. However, there are a number of unresolved issues which could affect the budget status significantly. These include: • New juvenile court - seven social work positions plus two deputy county counsel positions will be required to support the new court. The total cost of these positions is $827,512, of which $145,685 is the required County match. A supplemental funding request of $339,870 is pending before the state, which if not approved, would become a County cost. • Child Welfare Services/Case Management .System (CWS/CMS) - The state's original estimate of the time and cost of implementing CWS/CMS was grossly underestimated. Since the system is mandated by the state, the department has no alternative but to provide the necessary enhanced and extended levels of support for successful implementation of CWS/CMS. The County cost of this support could be substantial; however, a supplemental state funding request is pending. • Emergency response funding - The state buy-out of the federal IV-A funding for emergency response replaced the 50% open ended funding with a capped state funding allocation. This cost the County $980,000 in federal pass through funds. The County Welfare Directors Association is lobbying the state to backfill this funding loss. There is also a possibility of surplus state funds being reallocated to the overmatched counties, including Contra Costa County. • CalWORKS - The true cost of CalWORKS is unknown at this time; however, the required County "maintenance of effort" is $700,000 less than budgeted. Depending on expenditures, these funds may be available to offset other budgetary requirements. • Medi-Cal allocation - The state allocation is lower than previous years. Consequently, the department is working on redirecting staff out of Medi-Cal programs to avoid an administrative overmatch. • General Assistance - General Assistance *is currently running within budget. However, the Hunsacker court decision, which limited our ability to screen and refer clients for substance abuse treatment, could result in retroactive payments to recipients affected by this decision. Costs of up to $10 million have been cited for those payments. • Categorical Aids - Categorical Aids budget is currently running a small deficit, approximately$150,000. AFDC and Foster Care- Seriously Emotionally Disturbed are running surpluses, while Foster Care, Adult Programs and In Home Supportive Services (IHSS)are running a deficit. The IHSS deficit is approximately $340,000 as a result of recalculation of the impact of minimum wage increases. O.ii3 Page 6 Social Service continued The Social Service Department and County Administrator's Office will monitor the department's budget and provide the Board of Supervisors with appropriate recommendations for corrective actions as necessary. Community Services The Community Services Department is currently projecting a balanced budget for fiscal year 1997-98. Four of the five divisions are operating within expected budget parameters, while the Child Development division has a shortfall of approximately $70,000 (5% variance). The shortfall is due to expenditures greater than state revenues. Division management is confident that the shortfall will be contained and resolved by the end of the fiscal year. The Community Services Department is also in the process of working with the State Department of Community Services to resolve the findings resulting from the audit review of state contracts for 1994, 1995 and 1996. Agreement has been reached on 44 of the 53 original findings. Questioned costs resulting from the state audit continue to be negotiated with resolution on the remaining nine findings expected by the first of the year. The Community Services Department and County Administrator's Office will continue to monitor the expenditures and revenues and will provide the Board of Supervisors with recommendations for corrective action as necessary. Community Development The Community Development Department is 98% revenue offset and has significantly reduced reliance on the General Fund over the last seven years. However, over the last several years, the Department has relied on its reserves to maintain a balanced budget. The current Planning Division is the one area of the Department with the least ability to charge off its services. If current trends continue, the Department will exhaust its reserve at the end of the fiscal year, leaving the 1998-99 budget in a probable deficit position. Over the last two months, the Finance Committee has reviewed the budget of the Department, with particular emphasis on the fee structure and the impact of unfunded mandates. The Committee will present a report to the Board on December 9 and propose some short and long term initiatives which will assist in balancing the budget.