HomeMy WebLinkAboutMINUTES - 05071996 - D2 r
TO: BOARD OF SUPERVISORS �,ti..s E.•L•.o�
FROM: Phil Batchelor
COct f d
County Administrator Costa
DATE: May 7, 1996 N County
T'9COl7K�
SUBJECT: Third 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. SCHEDULE the 1996-97 Budget Hearings during the week of July 22 through July 26, 1996
and adoption of the Final Budget on August 6, 1996.
3. ACKNOWLEDGE the Probation Department's loss of $4.1 million in federal Title IV-A
emergency assistance monies for fiscal 1996-97 and DIRECT the County Administrator to
work with the Probation Department staff on a budget balancing plan.
4. DIRECT the County Administrator to work with the Community Services Director and his staff
to identify the full extent of the Department's projected deficit, now estimated at as much as
$250,000 to $300,000, and to take corrective actions as soon as possible.
CONTINUED ON ATTACHMENT: _YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR_RECOMMENDAT N OF BOARD COMMITTEE
APPROVE OTHER
h.
SIGNATURE(S):
ACTION OF BOARD ON may 7, APPROVED AS RECOMMENDED X OTHER--X
IT IS FURTHER ORDERED BY THE BOARD that the process of departmental
tracking and reporting of in-kind matching funds is REFERRED to the
Finance Committee for review.
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
X UNANIMOUS(ABSENT --------- 1 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:Tony Enea,646.4094
ATTESTED May 7, 1996
cc: CAO PHIL BATCHELOR,CLERK OF
Probation OARD:AD
PERVISORS
Community Services - COUNTTRATO
Health Services
Social Service
Sheriff-Coroner
QACKGROUND/REASON) FOR RECOMMENDATION(S):
Since 1984, the County Administrator's Office has prepared quarterly reports which analyze the status
of the budget and highlight the budget units which materially 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 nine month period revealed that all Departments are projected to comply with their budget
authorizations, except as noted below:
STATUS OF CURRENT YEAR BUDGET
-General County Revenue
At the third quarter, it appears that General County revenues will meet the budget target. Property tax
revenues should be right at the budgeted levels, after adjusting for city redevelopment agency and no
and low city revenue losses and state mandated transfers to school districts. Additionally, this revenue
source has been impacted negatively by property tax refunds which are forecasted to be higher than
budgeted.
As mentioned in February, a major concern about property tax revenue is the significant amount of
property tax assessments being appealed by private industry. The Assessor is addressing this concern
by enhancing resources in the assessment appeals area by securing funds from a state loan program
designed to improve the administration of property taxes.
The other major revenue sources are showing mixed results. Motor vehicle registration fees, interest
earnings and business license fees are all above targeted levels, and above last year's level for this time
of year. On the other hand, sales taxes and supplemental roll property taxes are below target and below
last year's level for this period of time.
Sheriff-Coroner
The Sheriff-Coroner Agency is within acceptable expenditure levels for the third quarter of fiscal year
1995-96. In the Patrol and Operations Division, gross expenditures were 73%, while the Detention
Division experienced a 74% expenditure level. The Coroner Division experienced 73% gross
expenditures for the reporting period and have met budgeted revenue for the year thus far.
Actual revenues received through the third quarter of FY 1995-96 were $21,547,966 in Patrol and
Operations and $10,331,749 in Detention, 50% and 60% of budget, respectively. Sales Tax Public
Protection revenue was budgeted county-wide in the amount of $39,503,149 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
Sheriff's $36,746,526 budget for patrol and operations. These revenues, which are currently at 71%
of budget, will be received by year-end. The department has maintained aggressive control of
expenditures and is expected to achieve a balanced year-end budget.
Community Services
The Community Services Director has indicated that the Department has a projected FY 95-96 deficit
that could be as much as$250,000 to $300,000. Preliminary investigation has revealed problems in four
areas: 1) contracts approved without sufficient funding for the full contract period; 2) unbudgeted,
unanticipated expenditures in the Head Start program; 3) double budgeting of anticipated revenues; and
4) expenditures in excess of revenues in the Weatherization program.
The County Administrator will be working with the Community Services Director and his staff to identify
the full extent of the problems. Actions are now being taken to begin to address the projected shortfall.
Probation
Third quarter budget projections indicate that the net County cost for probation services is on target.
Despite budget cutbacks in recent years, the department, as a result of careful fiscal management, is
expected to end the fiscal year with a fund balance.
However, the possible revenue loss we reported to the Board in the second quarter report has
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unfortunately become a reality with the recent elimination of Title IV-A Emergency Assistance funds from
the federal budget. The elimination of these funds translates to a $4.1 million loss of revenues claimed
by the Probation Department annually. The possibility of emergency assistance revenues being passed
through to the counties a part of a welfare block grant does not appear promising. The loss of revenues
will not impact this County this fiscal year because the lag time in which the reimbursement payments
are made to the County will ensure that four quarters of revenues will be received by the end of the year.
However, unless new revenues can be identified, the Title IV-A loss will require significant program and
staff reductions in FY 1996-97.
The County Administrator is in the process of developing a budget balancing plan with the Probation
Department which will be presented to the Board at the 1996-97 Proposed Budget hearings in July.
Health Services Department
The Health Services Department began the fiscal year with an anticipated shortfall of$6 to $12 million.
This shortfall stemmed, primarily, from two causes:
• reducing net county costs by $2 million below 1994 level;
• absorbing the cost of service and supply price increases, retirement expenses,
interdepartmental charges, merit increases and step increases.
Over the past five years, the County subsidy to the Health Services Department has been declining, both
in absolute and percentage terms:
FY 91-92 FY 95-96
Approved budget $248.5 million $329.6 million
Net subsidy $ 41.7 million $ 34.2 million
% subsidy 16.79% 10.37%
The subsidy includes a state required maintenance of effort of$24.6 million in FY 95-96. The remaining
$9.6 million of County subsidy includes $5.5 million for detention health services.
In the Health Services Phase I, Phase II and Phase III budget reductions, the Board approved
expenditure reductions in the hospital and clinics, public health, mental health and substance abuse.
Based on these reductions, and aggressive actions taken by the Department to control expenditures and
avoid costs, the projected shortfall is now estimated at $1.5 million.
The projected shortfall reflects additional anticipated revenue of approximately $2.5 to $3.0 million from
SB 1255 (voluntary Medi-Cal donations). It does not, however, include payment of the Department's
share of long-term general county interest expense of$831,702.
The shortfall also includes projected over-expenditures of approximately $500,000 for medical and
psychiatric care of detention inmates. This projected overrun reflects an 11% increase in the inmate
population. Health care for detention inmates has historically been a function of the Sheriff's Office and
under state mandate, the Sheriff has responsibility for inmates.
The Health Services Department is continuing to aggressively control expenditures through operational
adjustments of its service level mix and types. The Department plans to continue to take such
administrative action as possible to control costs, including, but not limited to, use of paid overtime.
Social Service Department
The Social Service Department currently anticipates ending FY 1995-96 within overall budget.
Administration - At this time, the administrative unit is projected at a deficit of approximately $1,527,000.
The deficit in this budget unit has grown with each of the quarterly reports due to a variety of factors.
In part, the projected budget overrun is due to program augmentations directed by the Board, such as
the additional staffing in the adoptions program and children's services. Also, as noted in the second
quarterly report, the GAIN program was approximately $740,000 over budget due to under-allocations
by the state and over-expenditures, primarily in child care. The department has carefully controlled
expenditures, reducing its funding needs down to $476,000. The state has informed the department that
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it will definitely receive an increase in its allocation of$439,757. If other counties cannot use all of their
allocations, the Department may receive additional state monies. In addition, the department is incurring
unbudgeted expenses for the county's share of the state-mandated CWS/CMS office automation project
for child welfare services.
Categorical Aid - The categorical aid budget is currently projected at a surplus of approximately
$1,117,000, primarily due to improvements in realignment revenue and flattening of the AFDC and IHSS
caseloads. It should be remembered, however, that the state adjusts the realignment revenue
allocations at year-end based on relative caseload among the counties. Consequently, flattening of our
caseload may result in lower than projected realignment revenue.
General Assistance -The General Assistance budget unit began the year with a projected multi-million
dollar deficit. Each quarter, the department has been able to report a declining projected deficit due to
Board approved program modifications. At this time, the General Assistance budget unit is expected
to be within budget by end of year.
1996-97 Budget Budget HearingSchedule
On December 5, 1995, we advised the Board that budget hearings for the 1996-97 fiscal year should
be held in July or August. At this point in time, we are recommending that the Board schedule budget
hearings during the week of July 22 through July 26 and adopt the Final Budget on August 6.
This time frame should allow staff time to analyze the impact of the state budget on the County. It is
assumed that major federal restructuring of health and welfare programs will not take place until after
the November elections.
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