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HomeMy WebLinkAboutMINUTES - 05091995 - 2.1 TO: �. - BOARD OF SUPERVISORS ``� 5• t' Contra c FROM: Costa Phil Batchelor, County Administrator �: . County DATE: May 9, 1995 SUBJECT: THIRD QUARTER BUDGET REPORT SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&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 Revenues At the three quarter point it appears that General County revenues will slightly exceed the budget target. Property tax revenues should be slightly above budgeted levels, after adjusting for city redevelopment agencyand no and low city revenue losses, state mandated transfers to school districts and anticipated adjustments for property assessment appeals. Conversely, as reported in February,property tax refunds are much higher than budgeted. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON May 9 , 1995 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I 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. ATTESTED May 9 , 1995 Contact: Tony Enea, 646-LF094, PHIL BATCHELOR,CLERK OF THE BOARD OF CC: Sheriff SUPERVISORS AND COUNTY ADMINISTRATOR Health Services Social Services Auditor-Controller BY LQ 4 Lo DEPUTY County Administrator Page 2 A review of other revenue sources indicate a mixed performance. Vehicle registration, business license and cable television franchise fees are estimated to be above budget. Sales tax and property transfer tax are projected to be below budget. Finally, interest earnings and jail booking fees should be on budget. Health Services Department Four issues affect the Health Services Department's ability to maintain a positive fund balance for fiscal year 1994-95: SB 910 revenues; drug abuse/methadone services; Prop 99 Tobacco Tax revenues; and the SB 1255 voluntary donation program. SB 9Z 0 SB 910 is a mechanism under which the state allowed the counties to claim federal revenue for eligible Medi-Cal administration. As with many federal programs, the state acted as the fiduciary agency in packaging the claims and receiving and distributing the revenues. County revenues under SB 910 have received a double blow in the 1994/95 fiscal year: • As a means of balancing its fiscal year 1994-95 budget,the state seized$200 million of county SB 910 revenues. Contra Costa County's share of the seizure was $3.28 million,which exceeded total SB 910 revenues for the county in the 1993-94 fiscal year. • Following this action,the federal government suspended all SB 910 payments to the State of California following a finding of discrepancies in an audit of Los Angeles County. No discrepancies were found in two subsequently audited counties. A revised/scaled back claiming methodology has tentatively been approved by the State and the Federal Health Care Financing Administration; based upon the Health Department's preliminary review of the methodology, actual cash payments may be less than 5% of the original program The department currently has submitted claims totaling $14.2 million; $1 million of the claimed amount has been paid. $3.0 million of the claimed amount has been budgeted in Public Health, Mental Health, Clinics and the Health Plan; an additional $3.2 million is "due" the state as a result of the state seizure of the$200 million. In the event limited or no reimbursement is allowed for this program,it is unclear when(1994-95 or 1995-96) or how the state would recapture the$3.2 million. AB 1184 is a bill sponsored by Los Angeles County which will provide a vehicle for counties to negotiate concessions on the$200 million state fee. AB 1184 passed by a vote of 17-0 when it was heard on April 18 in the Assembly Health Committee. The likelihood of this bill receiving final approval is unknown. Total loss exposure in the current fiscal year ranges from a low of$3.0 million to a high of$6.2 million. Drug Abuse/Methadone On December 7, 1994, Contra Costa County Community Substance Abuse Services Division of the Health Services Department received a copy of the Eastern District Federal Court's Order for Permanent Injunction Re: 42 U.S.C. Section 1396a(a)(8) and(10) in the case of Sobky v. Smoley from the Department of Alcohol and Drug Programs. The cover memo states, "The Order requires that all Medi-Cal eligible individuals meeting appropriate, lawful standards for participation in methadone maintenance programs will receive methadone maintenance treatment services with reasonable promptness and will not be placed on waiting lists for such services due to lack of funding for such services." Page 3 A federal suit was filed against the state on behalf of persons receiving or wishing to receive outpatient methadone maintenance treatment. The suit asserted a statewide "right to treatment." The court either found or consented to an agreement between the disputing parties that there existed a requirement for "accessibility and state wideness" in drug Medi-Cal methadone maintenance services. The State Department of Alcohol and Drug Programs' (ADP)response to this court ruling includes elements that seriously threaten counties' ability to carry out their existing range of critical prevention, early intervention and treatment programs. The court order is retroactive to July 1, 1994, and, since that time, methadone maintenance population in our two contract programs located in Pittsburg and Richmond has increased from approximately 225 to 560. Without legislative relief, this increase in capacity will result in cost overruns of approximately $456,000. On Friday,April 7, 1995,the Fresno County Superior Court heard an Order to Show Cause regarding Fresno County's Request for a Preliminary Injunction. The judge denied the application for a preliminary injunction. Fresno County is considering an appeal. Tobacco Funds On March 30, 1995,the Superior Court of the State of California(County of Sacramento) issued a Judgment holding that certain disbursements made by the state from the Cigarette and Tobacco Products Tax Act(a.k.a. Proposition 99) were inconsistent with the Act and were therefore invalid and void. The state was ordered to immediately cease issuing and processing warrants for a list of specific services funded through Prop 99. The funds in dispute account for approximately $60 million of the annual $445 million in statewide Prop 99 collections and represent medical care programs funded with Health Education account and Research account monies. Merrithew Memorial Hospital and Clinics receives California Health care for the Indigent Program (CHIP) funds that are financed from the Hospital Services, Physical Services and Unallocated accounts of Prop 99. These accounts are not directly involved in the above litigation. However, on April 13, 1995, the state notified counties that they were suspending all fiscal year 1994-95 CHIP allocation payments pending their assessment of the impact of this litigation on the amount of funds available for disbursement. It is probable that the state intends to"backfill"any monies it is required to reimburse the Health Education and Research accounts by redirecting monies from the Health Services account and/or the Unallocated account. As of April 28, 1995, the court had not made it clear to the state whether their ruling is effective prospectively only or if they will require payment of monies expended retroactive to July 1, 1994. The potential loss to the department is $.5 to $1.0 million. SB 1255 Voluntary Donation Program On January 25, 1995, the California Medi-Cal Assistance Commission (CMAC) voted to allow disproportionate share hospitals to participate in the voluntary transfer program for fiscal year 1994-95. On March 30, 1995, Contra Costa transferred$5.0 million to the state. While negotiation with CMAC is not final, it is anticipated that the department will net approximately $3 million to a$3.5 million from SB 1255. Social Service Department Overall,the Social Service Department anticipates that they will be able to achieve a positive fund balance by end of year. General Assistance aid is estimated at$2 million higher than budgeted. This deficit will be offset through continued careful control of department expenditures; one time revenue from the Family Preservation Program Incentive Award and IHSS (In Home Supportive Services) program expenditure credit; and realignment revenues $1 million higher than budgeted, based on sales tax forecasts by the State Department of Finance. It should be noted that the realignment revenue is not certain. The state makes year end realignment adjustments which last year resulted in the county receiving almost a half million dollars less than anticipated, based on a straight line projection. Page 4 General Assistance The General Assistance Aids budget is $11 million and projected at $13 million by end of fiscal year, an overrun of approximately $2 million. The reasons for this are primarily due to state legislative action and terms of the Williams case settlement. Effective January 1, 1995 the state legislature allowed sunsetting of language in the Welfare & Institutions Code that provided for reduced shared housing grants. This action by the state eliminated the county's ability to adjust General Assistance grants in cases where a GA recipient was residing with friends or relatives. In addition, settlement of the "Williams" lawsuit changed the county's regulations for progressive sanctions. Progressive sanctions provided a one month, three month and six-month sanction for the first, second and third violation of program regulations. Under the Williams settlement,the slate was "wiped clean" of past sanctions. In addition, the county now "forgives" the first violation, sending out a warning notice only. In addition, the department has concerns about possible increases to the GA client base due to "migration"from counties with lower GA aid monthly payments. Effective June 1, 1995, Alameda County is reducing their standard GA payment from $300/month to $260/month. In addition, Sacramento County has just received authorization from the state to reduce its grants to $212/month. Sheriff-Coroner The Sheriff-Coroner Agency is within acceptable expenditure levels for the third quarter of fiscal year 194-95. In Patrol and Operations, gross expenditures were 73% as were Detention's. The Coroner Division experienced 70% gross expenditures for the reporting period and have exceeded budgeted revenue for the year. Actual revenues received through the third quarter of fiscal year 1994-95 were$19,544,138 in Patrol and Operations and$9,673,941 in Detention,63%and 59%of budget respectively. Sales-Tax Public Protection revenue was budgeted countywide in the amount of$38,183,000 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 28% of the Sheriff's$31,019,669 budgeted for the Patrol and Operations Division. These revenues, which are currently at 68% of budget, will be received by year-end. The department has maintained an aggressive control of expenditures and is expected to achieve a balanced year-end budget.