Loading...
HomeMy WebLinkAboutMINUTES - 02231999 - SD4 TO: BOARD OF SUPERVISORS CONTRA FROM: Phut Batchelor �,' COSTA County Administrator °: COUNTY ELATE: FEBRUARY 23, 1999 SUBJECT: SECOND QUARTER BUDGET REPORT SPECIFIC REQUEST(S)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. ACKNOWLEDGE that the Governor's Budget will require greater than expected county financial support for the trial courts in fiscal year 1999-2000 and defer state reimbursements for flood Control repairs. 3. ACKNOWLEGE that the Governor appears willing to discuss the return of property tax revenues to local governments after a study of the net impact of property tax losses and revenue augmentations such as Trial Court Funding and COPS monies. 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 six month period indicated that the overall County budget is in w CONTINUED ON ATTACHMENT: X� YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR_RECOMMENDATION OF B RD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF I OARD ON , q APPROVED AS RECOMMENDED C1 ER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS{ASSENT A&- ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ABSENT: - ABSTAIN. ON MINUTES OF THE BOARD OF - SUPERVISORS ON THE DATE SHOWN. Contact: Torry Enea(5-1094) A CC: Social Servicesr ATTESTED Community Service PHIL BATCHELOR,CLERK-OF Health Services THE BOARD OF SUPER ORS Sheriff-Coroner AND COUNTY ADMINISTRATOR Trial Courts Probation BY e5 » EPUTY 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 seven key budgets for this period and a summary of the proposed Mate budget for 1999-2000. GENERAL COUNTY REVENUE. General County revenues amount to $166 million spread over 55 accounts. The breakout by major revenue source is presented below. Amount Percentage Property Taxes $89,000,000 5410 Motor Vehicle License Fees $39,547,000 24% Licenses, Fees and Charges $14,141,000 8% Earnings on Investments $9,408,000 6% Sales Taxes $8,260,000 5% Cather Taxes $5,644,000 3% At the half-year point, it appears that General County Revenues will meet budget targets. Property tax revenue should slightly exceed budget levels, after adjusting for city redevelopment agencies, no and low city revenue losses, state mandated transfers to school districts, Board directed distributions to Crockett and Rodeo, and the estimated impact of property tax refunds. The other major revenue sources should also achieve their revenue targets, Vehicle license fee and sales tax revenue show continued growth and a clear reflection of strong consumer spending. Property tax transfer and transient occupancy tax revenue are exceeding budget targets and are indicators of a strong real estate market and a high level of business activity and travel in the County. HEALTH SERVICES In the first quarter report, the Health Services Department reported that it was facing a revenue shortfall of approximately $5.2 million, mainly due to employee salary and benefit increases. During the second quarter, the Department reduced the projected shortfall to $3.2 million, primarily as a result of an increase in the Heath Plan's Medical capitation rate ($1,000,000) and current year savings from the refinancing of debt service ($900,000). While the projected shortfall continues to decline, there are several unresolved salary and benefit issues which could further impact the status of the budget. The County is currently negotiating with physician employee organizations whose contract expired January 1, 1999. The Department's approved budget does not currently include funding for COLA increases for physicians. The financial impact on this year's budget will depend on the final agreement. Additionally, the Department will be providing a cost of living adjustment for contract agencies. The Department has budgeted an increase to agencies equivalent to the proportion of General Fund contribution to Health Department employee COLAs in 1998199. Specifically, the Department's employee COLAs for 1998199 totaled almost$6.9 million. The General Fund contributed $2.4 million, or 34.8% toward the COLA increase. The Department has budgeted the same percentage toward a 3.5% salary and benefit adjustment for contract agencies, resulting in an increase of $106,520. The contract agencies have requested full funding of both a salary and benefit COLA and a "Cost of Doing Business Adjustment" on the full contact amount. Any additional contributions to Contract agencies would further increase the Department's projected shortfall. Other major financial issues are presented below: Medical Managed Care - Aid Code 38 As many as 10,550 centra Costa Health Plan (CCHP) members could eventually be discontinued from Medical eligibility as the State proceeds with the redetermination process for members qualified under Aid Code 38, In February, an estimated 1,200 CCHP members were disenrolled by the Mate thereby decreasing CCHP revenues by almost $600,000 in the current fiscal year. The majority of this lost revenue may be offset by the fee-for-service Medical contract currently being negotiated, Statewide, Health and Social Service Directors are requesting that the State extend the cutoff date for Medical members requesting redetermination of their eligibility. Any further major adjustments in Medical enrollment could have serious financial ramifications for the continued viability of the County's health care system. Home Health Agency Due to federal reductions in Medicare home health benefits, the Home Health Agency is projecting almost a $2 million decrease in revenues, compared to 1997/93. The Balanced Budget Act reduced Medicare's per diem reimbursement rate and added an annual maximum cap per beneficiary. In response to the new reimbursement policy, the Health Services Department is aggressively working to reduce costs in the Home Health Agency by restructuring staff to a level that increases the probability that they can operate the program within a balanced budget. Specifically, several Public Health Nurses are being reassigned to other Public Health Programs, which will permit the Home Health Agency to hire both Permanent and Permanent Intermittent Registered Nurses (see Personnel Actions) in addition to continuing to utilize Per Diem Nurses. This staffing pattern will allow the agency the flexibility that it needs to balance staffing based on caseload. Other factors that could impact the Health Department's overall financial status in 1998/99 include: • Pending final adjustments to the retirement rates for employees Possible decrease in California Healthcare for Indigents Program (CHIP) Prop 99 funding • Operating costs associated with Richmond's new Center for Health, scheduled to open in March 1999 • Increased utilization of Methadone Services within the State's capitated substance abuse allocation Timing of Tobacco Settlement payments 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 SERVICES The Social Service Department is projecting a balanced budget for fiscal year 1998-99. The Department continues the implementation of the new service delivery model that has transformed the farmer Income Maintenance Bureau to an Employment and Supportive Services Bureau, and has changed the focus from eligibility and benefit determination to a workforce development system. The Department continues to phase-in program expansions that assist participants as they move toward self-sufficiency. The following accomplishments can be reported: Tient Participation - 7,966 participants were originally identified with a Welfare to Work requirement. As of December 31, 1998, 6,598 were enrolled in the Welfare to Work Program. Also as of December 1998, 27.4% of all CaIWORKs families are reporting earnings. The rate for two parent families is 53.4/0. Earnings for CalWORKs participants totaled $2,480,000 in december 1998, resulting in grant savings of $905,000. For the period January through December 1998, 2,074 people entered employment and 1,451 terminated cash aid as a result of employment. During the same period, 28 diversions were processed totaling $34,075 thereby enabling people to stay off aid. Staff Development - Approximately 183 staff were promoted to Social Service Program Assistants to work with participants in their efforts to become self- supporting. Training for both entry-level and higher-skilled employment positions has been enhanced and "fast-tracked" to ensure the achievement of basic skill levels and continued skills development. Because of the significant change in their duties as Employment Specialists staff participated in extensive Welfare to Work training averaging 12 sessions and 62 classroom hours. In addition to technical training, the Staff Development Division continues to prepare and deliver sessions to move the organizational culture farther along the path of focusing on employment as the primary service need for most cash aid applicants and program participants. Resource Rooms - Resource rooms equipped with computers, phone banks, and job referral boards opened in the Antioch and Hercules offices, as well as the Service Integration sites in Bay Point and North Richmond. Additionally, there are plans to open Resource Rooms in the Martinez and Richmond offices. Child Care - All CalWORKS and former AFDC participants were successfully transitioned from Transitional Child Care, AFDC Disregard, Supplemental Child Care, CAIN and NET child care programs to the new Stage 1, II and Ill Child Care System. This year, 3,181 children have been served in the new child care system. Specialized Child Care Units - Specialized child care units were established in all four district offices. Workshops are offered twice a month by the Child Care Council as part of the Job Club Job Search curriculum to assist participants in making wise child care choices which will support their new working lifestyle. Collaborations -The Employment Services Analyst continues to work Countywide with partners and collaborate with the business sector, CBOs, government agencies, and providers of education to adults. Examples of these successful collaboration include Retail Works, Sunrise health Care, Laidlaw Bus Training and NUIVIIVII. The Department is working to increase collaborations with supportive services including substance abuse and mental health service providers. The goal is to integrate services by developing collaborations that create a seamless workforce development system. Workforce Investment Act- The federal Workforce Investment Act of 1998 is, like welfare reform, driving monumental changes in the workforce development system. Both have changed the service mandates of the Social Services Department and Private Industry Council (PIC), as well as the community colleges, adult education and other employment and training agencies. The challenge for all these agencies is to create a workforce delivery system that meets the needs of job seekers, incumbent employees and employers, and supports economic development within the County. Social Services has been a leader with PIC in working with the Workforce Development Advisory Panel in the development of its strategic plan; i with the ad hoc committee in investigating organizational options to increase the efficiency and effectiveness of the workforce development system; and in the creation of the new one-stop career centers. The expansion of these new programs continues to brine increased challenges to the Department's infrastructure Including office space, management information systems (MIS), and administrative services. For example, the East County facility at Delta Faire needs landscape furniture to accommodate the space needs of new employees focusing on employment activities. Additionally, the shift to employment activities brought new requirements for MIB to track and report client participation and outcomes. In response, the Department developed the Master File Extract Project and supplemental training programs for staff as they integrate new program guidance into data collection systems. Program expansion has also created staffing pressures with the need to rapidly bring new staff on board and retain existing staff. Entry level staffing shortages persist as staff who moved to specialized employment positions leave vacancies in other benefit programs. Maintaining staff at allocated levels is a priority and may necessitate requests for additional trainee positions. Overall, the Department continues to transition through phases as they create a new organizational system, supports and culture for its CaIWORKs employment focus. The status of each of Social Service divisions can be summarized as follows Adult and Senior Services The Division is currently operating within acceptable budget parameters. The Department recently received a $937,000 augmentation for Adult Protective Services (APS), $241,667 for start-up funding for the Multi-Senior Support Services Program (MSSP), and $146,242 for the Linkages Program through the Area Agency on Aging. (see Appropriation Adjustments). The Department is also expanding BSI Advocacy Services to CalWORKs adults who are permanently disabled or who have long term impairments. Additional Advocacy Social Workers are being hired and will begin working with CalWORKs adults. Children and FamilySere ces The Department has receives! $4.63 million of additional funds for child care and $1.32 million for Child Welfare Services workload relief. Child Welfare Services are running tightly staffed programs due to worker attrition and limited availability of new hires. The implementation of new programs throughout the Department has resulted in many internal personnel transfers for positions offering better career advancement. Employment Services Year-to-date expenditures for Ca1WORKS Eligibility and Employment Service are $10.6 million, or 48% of the $21.7 million single allocation. The Department has added staff and plans to fill approximately 80 positions before the end of the year. The Department estimates that they will spend all the single allocation. A portion of the incentive funds may be available to rollover into the next fiscal year. Financial Support Overall the financial support of clients on cash assistance is within acceptable expenditure levels for the second quarter of fiscal year 199€3-99. The Department and County Administrator's {office will continue to keep the Board apprized of issues as they develop within the Department. COMMUNITY SERVICES The Community Service Department is currently projecting a balanced budget for fiscal year 1998-99. All five of the Department's programs are operating within expected budget parameters. The Head Start Program completed its contract year on December 31, 1998, with expenditures within budget and contract limitations. The non-federal funding share was met and did not require any additional County funds. The Child Development Program typically experiences some under-enrollment in the first two quarters of the year. Subsequent efforts to increase enrollment at all sites and control expenditures will likely result in a small reserve by the end of the fiscal year. SHERIFF-CORONER The Sheriff Coroner Agency is within acceptable expenditure levels through December 31 of fiscal year 1998-99. Patrol and Operations grass expenditures were 49% and Custody Services' were 47%. Figures for the Custody Services' division include in excess of $5 million in bailiff costs that are Trial Court Funding eligible expenses reimbursed by the Courts. As a trial court eligible cost, any overexpenditure in this area is a matter of Court concern and not a general fund obligation. The Coroner division has stayed within 47% in net expenditures for the reporting period and exceeded targeted revenue for the period. Actual revenues received through December 1998 were $11,462,711 for Patrol and Operations and $8,394,064 in Custody Services, 29% and 35% of budget respectively. Sales-Tax Public Protection revenue was budgeted County-wide in the amount of $44,003,223 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 27% of the Sheriffs $38,948,273 budgeted for Patrol and Operations. These revenues, which are currently at 20% 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. It should be noted that there is no provision in the current year's budget for a COLA, which is currently under negotiation, PROBATION Expenditure data for the first six months of the fiscal year show that the Probation Department is 48% expended. However, the lag time in the finance reporting for certain expenditures such as private placements and interdepartmental charges mask the fact that the Department is spending at higher than anticipated levels. The high rate of spending is primarily due the excessive population at the Juvenile Hall; the ADP at the Hall has been 175, while the budgeted population level is 160. Since about one third of the Hall population is awaiting placement at the OAYRF (Boys' Ranch), crowded conditions at the Hall are expected to be mitigated in the second half of the fiscal year with the February 1 opening of the new dormitory at the Ranch, which added 26 beds to the overall capacity. The boys' transition program slated to open at the old Pride House beginning in May is also expected to alleviate crowded conditions at the Hall. Additionally, the department continues in its efforts to reduce the population by placing appropriate juveniles on home detention. In addition to juvenile detention costs, juvenile placement costs are expected to exceed budgeted levels. These overruns can be mitigated by savings in other expenditure categories. However, because of excessive juvenile detention and placement casts in the first half of the fiscal year, the County Administrator will work closely with the County Probation Officer to measure the budget impact of the new facilities on the Juvenile Hall and to take any corrective action where necessary to ensure a balanced budget. Actual revenues 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 reimbursement claims. Although the Probation Department anticipates receiving $4.4 million in TANF funds and $1.4 million in Round 2 Challenge Grant funds over a 30-month period, revenues earned in these categories are behind schedule. Projections based on second quarter reimbursement claims indicate that revenues will be realized at slightly higher than budgeted levels. The Department, during the last quarter, was successful in securing a grant award of $110,000 per year for three years to enhance the Domestic Violence Unit. The Department is also applying for new Challenge Grant funds to add community-based day treatment services and an independent living skills program for girls. It is intended that these programs, if the grant application is successful, will "wrap around"those services to be provided through the Chris Adams Girls' Treatment Program, scheduled to open in late 1999. The Probation Department is also working closely with the County Administrator to develop an application for the State Board of Corrections Construction Grants program, which has made available a total of$177,437,630 for local detention facilities. This total is made up of$98,500,000 appropriated in the State Budget and $78,937,630 in federal funds made available through "exigent circumstances"for distribution by the Board of Corrections under the Federal Violent Crime Control and Law Enforcement Act of 1998. The federal funds may not be used for the confinement of adjudicated violent offenders and may only be used for modification or improvement projects that add beds. The state funds may be used for a wide variety of construction and maintenance needs, however, counties were advised that priority would be given to "add-bed" projects. The availability of these Federal and State funds through the State Board of Corrections may enable this County', for the first time since 1949, to build a modern juvenile hall and possibly renovate the old Juvenile Hall. A planning team was assembled last year to develop an application for the grant funds. The team developed a two-phase Juvenile Detention Plan using an updated juvenile hall program design that resulted from the work of JSPAC and the Value Engineering Team. The application is due on March 17 and will be brought to the Board for consideration on March 2. 1999-2000 STATE BUDGET Presented below is an overview of the Governor's budget for next fiscal year. Staff attempted to select data which will have a substantial bearing on the preparation of the County Budget for 1999-2000. 1. State of the Economy The population increase is projected at 1.7% for the 1999-2000'fiscal year. The projected population for the State in July 1999 is 34.1 million and July 2000 34.7 million. Nonfarm employment is expected to grow 2.1% in 1999 and 2.4°;x, in 2000. The unemployment rate is expected to be 5.8% in 1999 and 5.8% in 2000. Personal income is projected to increase 5.1% in 1999 and 5.5% in 2000, slightly less. than 1998s 6.4%. The economic forecast underlying the budget assumes that both the U.S. and California economies will slow in 1999 and 2000 relative to the recent past. The slowdown is related to the continued economic and financial problems in Asia, and their associated effects on U.S, exports. 11. Overall Budget Changes-Expenditures State General Fund expenditures are projected at $60.5 billion, a 3.8% increase over 1998-99, and are distributed as follows: 55.2% to Educations',27.1%to Health & Welfare; 7.6% to Corrections, and; 10,1% for all other State programs. The General Fund expenditure level is $200 million higher than revenues, but with the carry-over fund balance, this amount is funded as well as reserves and encumbrances. III. Overall Budget Changes-Revenues State general Fund revenues are projected at $60.3 billion, a 7.1% increase over 1098-99, and are derived as follows: 50.1% from Personal Income Tax; 32.7% from Sales Tax; 10.4% from Sank.& Corporation Tax, and; 6.8% from all other sources. The budget assumes the receipt of$562 million from the Tobacco Settlement. The settlement is projected to result in payments to California of 25 billion through 2025 and be split between the state and local governments without restrictions on the use of the money. IV. Educational Revenue Augmentation Fund(ERAF9 The governor's budget does not include an amount to offset or mitigate the transfer of property tax revenues shifted to fund the ErAF. However, it does state that the Governor supports mitigation and that the Office of Planning and research will be charged with starting a dialogue with local governments to determine the "net impact". It also cautions that it will likely take a period of years to further complete this transaction. V. health Programs The 1999-00 budget includes total expenditures of$23.5 billion for Department of Health Services. The governor has directed the secretary of the State Health and Human Services Agency to develop a plan for the expansion of publicly funded health care for uninsured low-income Californians through expansion of the Healthy Families Program and for potential expansion of the family planning program. The budget includes $199.4 million for Healthy Families ($67.5 million general Fund). This will serve 304,000 children - a 166,000 increase from the end of the 1998-99 budget year. Spending for the Medi-Cal program is projected to fall slightly, from $7.4 billion in the current year to $7.3 billion in 199900. This reflects a deficiency of$507 million due to higher caseloads than previously anticipated, increased costs per eligible recipient, increased drug costs, and funding for prenatal care for undocumented persons. The 1999-00 budget assumes decreased Prop 99 revenue due to reduced tobacco consumption because of the enactment of Prop 10. To address the declining revenues, the budget directs the secretary of the health and Human Services Agency to work with stakeholders to reevaluate priorities and investigate consolidating programs. The budget also reflects an assumption of $332 million in savings related to increased federal funds, specifically, a $210 million increase in the federal medical assistance percentage (FMAP) paid to California and $122 million to Family Planning Program. V1. Social Service Programs CaIWORKs: The Budget meets California's $2.907 billion maintenance-of-effort requirement and proposes General Fund spending of$1.8 billion, a 10.8% decline from the current year. This reflects continued caseload declines in the program. In addition, General Fund spending for CaIWORK's is held down in 98/99 and 99/00 by the carryover of over$800 million in unexpended federal Temporary Assistance for Needy Families (TANF) funds from the prior year. Cather budget items affecting CaIWORKs: 1) a July 1999 COLA of 2.08% based on the California Necessities Index; 2) provide funding for counties as a block grant that may be used to divert recipients from public assistance or to provide employment services, child care, and other transition aid (County Mock Grant); 3) $479 million in incentive payment for counties. These incentives will provide flexibility for local officials to reinvest these savings into services that contribute to program success. Other gams: it is estimated that General Fund expenditures in the Foster Care program will increase 7% in 1999-00. These projected increases are due to 5% caseload growth and statutory COLAs for group homes and foster family homes. This 2.08% COLA is effective 7/1/99. SSI/SSP Program caseload is projected to increase 2.2% over 98/99. The budget proposes $2.4 billion in General Fund spending in 99/00, and 8.1% increase from the current year. This is primarily related to the modest caseload increase and the COLA. The budget includes: $23.8 million ($15.3 million General Fund) augmentation for Adult Protective Services (APS); $539 million, a 2.2% increase, General Fund for In-Dome Supportive Services (IHSS) and a 3.3% increase in caseloads, and; $22.7 million to fund the Cash Assistance Program for Immigrants (CAPI). V11. Administration cf.lus#ice Under trial court financial restructuring legislation enacted last year, the state i scheduled to provide $98 million in additional fiscal relief to mid- and large-size counties beginning in 1999-00. The budget proposes to postpone $48.3 million of this scheduled relief. Contra Costa County's MOF was expected to be decreased by $1.3 million. However, it is only going to be reduced by 2 that amount, according to the California State Association of Counties, January 11 Legislative Bulletin. $201 million in Temporary Assistance to Needy Families (TANF) is budgeted for probation funding. This is the same as last year and includes a continuation of the $33 million for county camps and ranches. It appears that counties may use these funds for a wide range of programs, including probation, gang intervention, substance abuse prevention and counseling. The proposed budget includes $5.7 million to reimburse local government for costs related to the transportation of inmates, the return of fugitives, and court costs and county charges primarily related to hearings and trials of inmates. The budget continues the Citizens' Option for Public Safety (COPS) by providing $100 million in funding. V111. Cather Programs The budget proposes $1.1 billion in capital outlay spending in 1999-00, excluding that for highways and K-12 schools. Slightly more than one-half of this total is for higher education, with the remainder divided between corrections, resources, state buildings, and a variety of ether purposes. In terms of funding sources, about$582 million comes from general obligation band funds, $262 million is from lease payment bonds, $195 million is from direct appropriations from the General Fund, and $60 million is from special and federal funds. Debt service is projected to increase approximately 6.8%, partly reflecting the recent increase in bond authorizations. Cather programs/costs are projected to increase about 4.7% per year. Included in this category are contributions to the state employee's and teachers' retirement systems, subventions to local governments to offset the Vehicle License Fee (VLF) reduction, and state operations. Request o Speak Form THREE (3) MINUTE LIMIT fann wW pirce ft in Ow box Mar the wag rostm before the Bim, be-,,ckej 7— S- S � • �rrw�irrr ri I am XwAdnx for my"K.—or 116 1 to on ftm my C10011 Ifl, w91 be „ to gpe& bit kave &m calww* for tfa Mwd to Request to Speak Form (THREE ) MIN UTE LIM1 WV,ete tMS fo n ateplace it In the box now the m bei a0radng the Board. t a, Addrewa I am R for �'� � own of a ONE KM� I �wb to Wea c A�e� My * wDl b Send .for. .M* I'wj* to 4wak on the ; 0( I do not w!h to XwA btd Ieve dwse OwwneWs #ter $Owd