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HomeMy WebLinkAboutMINUTES - 02081994 - 2.3 TO: BOARD OF ;SUPERVISORS FROM: Phil Bachelor, County Administrator Cwtra Costa DATE: February 8, 1994 CO^ SUBJECT: SECOND QUARTER BUDGET REPORT SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & 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 revenues and expenditures. 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 quarterly report process. General County Revenue General County revenues have been significantly reduced by the state raid of property taxes over the last two fiscal years. In fiscal year 1991-92, the County received $246 million in General County revenue while this fiscal year a total of $170 million is budgeted. At the half year, point, it appears that General County revenues will meet the budget target. Property tax revenues should be slightly above budgeted levels, after adjusting for city redevelopment agency and no and low city revenue losses, state mandated transfers to school districts and anticipated adjustments for property assessment appeals. Conversely, as reported in October, interest earnings should be below the budgeted level because of the continuing record low yields on required investments. CONTINUED ON ATTACHMENT: i YES SIGNATURE: j RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): p ACTION OF BOARD ON February 8 i 1994 APPROVED AS RECOMMENDED X _ OTHER VOTE OF SUPERVISORS 1 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. cc: Auditor-Controller ATTESTED February 8 , 1994 PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY0 M382/7-83 DEPUTY Page 2 A review of other revenue sources indicates a mixed performance. For example, the property tax transfer tax and the sales tax revenues are projected to be slightly above budgeted levels while motor vehicle registration fees and transient occupancy tax revenues are projected to be slightly below anticipated levels. New legislation will cut into our sales tax revenue base as the County will be charged $106,300 for sales tax administration by the State Board of Equalization, a 41% increase over last year. Public Safety Sales Tax Revenue A total of $38.2 million of sales tax revenue has been budgeted for public safety purposes as a result of the state's action to extend the one-half cent sales tax for six months and the voter's passage of Proposition 172. The State Department of Finance established the estimate of 1993-94 revenue for the state at $1.4 billion, with the County's share! of revenue at 2.8% of the total - which represents the County and cities within the County's proportion of sales tax revenue relative to all cities and counties in the state. Six months through the fiscal year, the state's revised estimate of County revenue is $37.1 million or$1.1 million less than the original estimate. However, since a two month lag time exists between the collection and distribution of sales tax revenue, the significant Christmas season sales tax figures are not known at this point and may alter this January estimate. We will keep the Board apprised of this revenue situation as more information becomes available. Sheriff-Coroner The Sheriff-Coroner Agency is within acceptable expenditure levels for the second quarter of fiscal year 1993-94. In Budget Unit 0255 (Patrol and Operations) gross expenditures were approximately 49% and Detention's (0300) gross expenditures were 47%. The Coroner Division (0359) experienced 55%gross expenditures for the reporting period and 58% revenue generation. Expenditures for the Agency are expected to be within budget. Cost of Living Adjustments (COLAs) received on January 1, 1994 are expected to quickly deplete salary savings generated during the first six months of the year. Actual revenues received for the second quarter of fiscal year 1993-94 were $9,497,232 in Budget Unit 0255 and $4,617,477 in Budget Unit 0300, 32% and 27% of budget respectfully. Sales-Tax Public Protection revenues was budgeted in the Sheriff-Coroner Agency in the amount of$31,555,072 ($17,670,840 in#0255 and $13,884,232 in#0300). The Sheriff-Coroner's share of the first six months of sales tax was $12,085,272 or 38% of budget. It may become necessary to prepare cut plans if revenues continue to fall behind target (please see write-up of Public Safety Sales Tax). Contract City revenues, which historically lag, generate 26% of the Sheriff's $29,866,505 budgeted for department#0255. These budgeted revenues, which are currently at 39%, are expected to be met by year end. Care of Prisoner revenue rates were unilaterally lowered by the state after the budget was adopted, from $94 and $74 per day to a flat $59 per day. These revenues, budgeted at$1,702,945, are currently at 36% ($607,309) collection and are not likely to meet the budgeted level. Aggressive revenue generation coupled with prudent spending are required to ensure a balanced budget for the Sheriff-Coroner Agency. Probation Second quarter figures for the Probation Department indicate that expenditures are on target. Revenues appear to be under-realized because of the lag time between the claiming and receipt of intergovernmental revenues, which represent most of the department's income. Two quarterly claims were submitted for the new Title IV-A Emergency Assistance Program, however, reimbursement for these claims is not expected before April. Required information was provided to the state for the AB 799 Ranch Subsidy, which continues to be included in the Governor's budget. First quarter ranch subsidy receipts were favorable. Page 3 On January 20, a new unit intended to house serious juvenile offenders was opened at the Juvenile Hall. With the addition of the serious offender unit, the Court-ordered population cap was effectively raised from 130 to 150. The Probation Department's classification system was also amended to place more emphasis on offenses involving firearms and school violence so that juveniles involved in those offenses will more likely be detained. The average daily population (ADP) at Juvenile Hall during the second quarter was 125.2, a 14% increase over the second quarter population last year. Second quarter bookings at the Hall of 580 also show an increase at 7% above last year's bookings for this period. The current Hall population of 162 indicates a continuing trend of increasing population, however, it should be noted that the month of January is typically a peak month for Hall population. The current Hall population exceeds the revised cap of 150 and corrective measures short of forced release are being implemented. A non-budgeted overflow unit is being utilized, however, and forced releases may be necessary to avoid budget overruns and maintain Hall safety if other population control measures do not result in decreased population. Since July, the Probation Department has been aggressively pursuing alternatives to private placements in a formal program in cooperation with the Social Service Department. The Board recently adopted a placement diversion proposal which added staff in the Probation Department in conjunction with placement reduction goals. As a result of the program, the number of juveniles in placement at the end of the second quarter was 144, which surpasses the reduction goal prescribed by the proposal. Savings in Probation placement costs currently accrue to the Social Service Department. As directed by -the Board, the County Administrator is working with the Probation and Social Service Departments to develop an agreement by which savings achieved through the placement diversion efforts of the Probation Department may be applied towards the cost of enhanced placement diversion and the operation of the serious offender unit recently opened at the Juvenile Hall. Computer programming continues for the department's electronic probation report program which will be implemented sometime in 1994. The program, funded through a grant from the County's Productivity Investment Fund, is intended to improve efficiency between the department and the Courts and reduce the amount of typing and hand delivery of probation reports. Health Services Currently, the Health Service's budget is projected to be balanced by year end. Both the Mental Health state hospital diversion and the $11 million revenue goals appear achievable. Mental Health has already reduced its utilization of the Napa State Hospital from 71 beds to 43 beds. Within 60 days, utilization is expected to drop to 39 beds. State hospital patients have been transferred to a variety of facilities, all of which place the patient closer to home and in a less restrictive setting. As appropriate, some patients are also receiving life skill training to help them transition to more independent living environments. Of the $11 million revenue goal, $8 million is confirmed from a contribution of sources, including prior year Medicare cost settlements, realignment, SLIAG (state legalization and immigration assistance grant), and the Title XIX Rehab Option for Mental Health. The outstanding $3 million is budgeted in the SB 910 and SB 855 programs. SB 910 is budgeted at $2 million. Claims have been submitted to the state and approval is anticipated. For SB 1255, the California Medi-Cal Assistance Commission staff has indicated that another round of payments is likely, although no formal announcement has been made to date. A decision by the Commission is expected within 90 days. Should revenues not be realized as expected by April 1, 1994, the Health Services Department and County Administrator will recommend remedial action for the Board's consideration. .3 Page 4 Social Services The fiscal year 1993-94 budget of the Social Service's Department was balanced with $1.6 million of one-time revenue. Consequently, the Department and County Administrator have carefully monitored expenditures and revenues. The Department has also worked to thoroughly apply the Personal Care Services Program (PCSP) in order to access federal funds and to vigorously implement self-sufficiency programs in General Assistance, as directed by the Board. Overall, Social Services is within budget targets after accounting for normal delays in state reimbursements. PCSP current estimates indicate that the additional net county cost for administration will be offset by net county cost savings in categorical aid, due to the shifting of costs to the federal government . The Governor has proposed shifting all state costs for IHSS and PCSP to the counties, consequently, these programs will require continued close monitoring. The County Administrator and Social Service Department continue to work closely to encourage self-sufficiency among General Assistance (GA) recipients. Overall, the caseload is down, from 4587 in January, 1993 to 4037 in January, 1994. This decline can be attributed to a number of programs including workfare, training, Job Club, GAADS, early fraud and AFFIRM. Workfare program participants are contributing to the community by picking up debris and litter along roadsides and by processing recycled materials at the! Recycling Center. Currently, the Center processes about 2.5 tons of material weekly. In addition, the General Services Department operates training in painting, custodial services and grounds maintenance. Health Services continues to help GA recipients through drug and alcohol diversion services. The Social Services Department's Job Club also helps GA recipients search for employment. Social Services is also continuing its early fraud activities: a recent investigation of 108 claims of homelessness found 54 false claims. AFFIRM is also being implemented, to assure that there is no "double dipping" for aid payments. With the expansion of programs in GA, it is becoming more and more important to automate GA. The Department is currently reviewing alternatives, and will be reporting to the Board on the matter in the near future. Governor's Proposed Budget On January 18, 1994, we reported to the Board on the Governor's Proposed Budget for fiscal year 1994-95. The Governor's Budget does not recognize the estimated $5 billion budget deficit this fiscal year and includes revenue generation and expenditure saving assumptions which are extremely optimistic such as: 1. $2.3 billion in federal reimbursement for immigration costs; 2. $460 million in savings from welfare reform legislation to be passed on a fast track by April 1, 1994; and 3. a $600 million potential loss involving the unitary tax lawsuit is not included. A component of the Governor's Budget proposes a major restructuring of the state-local fiscal relationship, including transfer of a portion of the state sales tax to counties along with a shift of $1.1 billion in property taxes back to counties. This transfer would be accompanied by an increased county share of cost for AFDC and Medi-Cal and full financial responsibility for certain other social services programs. The proposal expands the realignment program and involves complex financial and programmatic issues which require significant analysis and discussion. A request to refer the realignment proposal to the Finance Committee is included on today's agenda.