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HomeMy WebLinkAboutMINUTES - 05121998 - D3 TO: BOARD OF SUPERVISORS Contra FROM: fi Costa Phil Batchelor, County Administrator County DATE: May 5, 1998 SUBJECT, THIRD QUARTER BUDGET REPORT SPECIFIC AEOUEST(S)OR RECOMMENDATION(S)A BACKGROUND AND JUSTIFICATION R:IECt31V_MENDATIQN: 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 nine 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 key budgets for this period. General County Revenue At the three-quarter year point, it appears that General County revenues, amounting to $181 million spread over 55 accounts, will meet the budget target. Property tax revenue should be slightly above targeted 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. CONTINUER ON ATTACHMENT: --&—YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER IONATURE : ACTION OF BOARD ON_ _ M&Y 1- 1998 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. CC: County Counsel ATTESTED May 12, 199#x_ Auditor-Controller PHIL BATCHELOR,CLERK OF THE BOARD OF Sheriff SUPERVISORS AND COUNTY ADMINISTRATOR Probation Health Services Social Services .382 (,wSommunity Services BY D£pUTY .......................................................................... ................. Page 2 General County Revenue continued The other major revenue sources should also achieve the revenue targets. These revenues include motor vehicle license fees, sales taxes, interest earnings, property transfer taxes, and transient occupancy taxes. All estimates are adjusted for seasonal variations. As noted in prior reports, we have a concern about the high value of appeals of property tax assessments by private industry. Currently, business and industry are appealing approximately$3.5 billion in assessments with the potential loss of millions to various units of local government. Property tax appeals from residential properties have dropped substantially over the last twelve months. The Board has taken positive steps in recent weeks to promote the efficient operation of the Assessment Appeal Board. Social Service A strong economy and job market have resulted in at least temporary reductions in Social Service welfare caseloads and favorable expenditure levels for the third quarter of fiscal year 1997-98. Additionally, the Department has begun implementation of the CaIWORKS program with the goal of increasing employment and decreasing dependency on public aid by shifting their focus to employment based programs including workforce and economic development, job creation and supportive services. The Social Service Department projects a balanced budget by year-end. General Assistance 1. While the GA caseload continues to decline overall, the percentage of unemployables has increased from an average of 48.5% during the first nine months of FY 96-97, to 70.9% by February 1998. Program changes will need to be made to assist this steadily increasing proportion of the caseload, including increased emphasis on job search,job training, and SSI advocacy. The Hunsaker case has a court date with a settlement judge scheduled for May 22, 1998. Categorical Aid 2. Projected shortfalls in Foster Care and Adoptive Assistance Programs (AAP) are expected to be offset by savings in Temporary Assistance for Needy Families (TANF). Support Services and Administration 3. The Department has been supporting a number of additional costs associated with: CWS/CMS automated systems, activities related to concurrent planning in foster care/adoptions, child welfare serve initiatives, employee cost of living and pay equity increases, building renovation and expanded space needs for the CalWORKS program. While administrative costs are projected to be within budgeted appropriations, an intradepartment fund transfer is necessary to meet general fund match requirements. Health $ervices In the second quarter report, Health Services reported that sufficient funding had been received through AB-1139, a disproportionate hospital funding bill, to eliminate the short- fall related to partial county funding of the salary cost-of-living expense. At that time, the Department indicated that it would be balanced by year-end. Currently, revenues and expenditures for the third quarter are consistent with the Department's projections. Health Services is projected to have expenditures of approximately$410.3 million and a $500,000 contribution to the medical liability fund. This Page 3 Health—Services continued is offset by revenues of$373.9 million, with a Net County Cost of$36.9 million. Issues that will continue to have major fiscal impact on the Department throughout fiscal year 1998-99 include: Medi-Cal Managed Cam • The State has conditionally approved Blue Cross as the commercial plan in Contra Costa County as of June 1, 1998. Blue Cross will be taking over from Foundation and will likely be a more formidable competitor for Medi-Cal enrollment, which may effect Contra Costa Health Plan's (CCHP's) enrollment levels. While Blue Cross does not currently have a hospital partner for their Medi-Cal program in Contra Costa County, they have already begun distributing marketing materials to providers and potential Medi-Cal members. • The State has not yet revised the minimum enrollment level and has asked the Department to discuss the issue directly with Blue Cross. The Department has met with Blue Cross to talk about minimum enrollment levels and default protocols. • The State finally announced the capitation rates for the fiscal year that began in October 1997. The rate is essentially unchanged from last year's rate. However, the State is imposing a 1% up-front withholding based on selected performance measures. • The County Organized Health System (OOHS) legislation continues to move through Congress. Once enacted into law, the State will decide which counties will be allowed to participate. There are currently 10 counties that have expressed an interest in the four new slots that would be allowed by the federal legislation. Social HMO • The federal Health Care Financing Administration (HCFA) still has not officially released an approved risk adjusted reimbursement methodology. The Department may need to examine the final methodology, as it may not be as advantageous as the one originally proposed. The Department is going forward with restructuring their cost contract program, to include selected Social HMO benefits, and "best practice" programs, such as the use of an extensive case management program and geriatric protocols. Mental Health Managed Care. 10 The Department's request to delay the startup of Medi-Cal Mental Health Managed Care for outpatient services until June 1, 1998, due to a reduction of funding from $530,000 to $428,000, was denied. As a result the Medi-Cal Mental Health Managed Care program began implementation on April 1, 1998. The County's contribution to mental health services is projected to double, from $1.6 million to $3.3 million. Community Service The Community Services Department's Net County Cost is projected to be within approved budgetlevels for FY 1997-98. All five of the Department's Divisions are operating within expected budget parameters. The Child Development Division has significantly increased program enrollment in the third quarter. This, in conjunction with reduced program expenditures, has eliminated the $55,000 shortfall estimated in the second quarter report. Page 4 �5heriff The Sheriff-Coroner Agency is within acceptable expenditure levels through the third quarter of fiscal year 1997-98. Patrol and Operations gross expenditures were 75% and Custody Services`were 73%. Figures for the Custody Services' division include in excess of$5 million in bailiff costs which are Trial Court Funding eligible expenses 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 69% in net expenditures for the reporting period and has significantly exceeded targeted revenue for the year. Actual revenues received through March 1998 were$23,518,624 for Patrol and Operations and $10,956,380 in Custody Services, 58% and 60% 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 67% of budget, will achieve the budget target by yearend. The Department is maintaining control of expenditures and is expected to achieve a balanced year-end budget. Probation Probation Department expenditures are at anticipated levels for the second 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 and, although the Probation Department anticipates receiving $4.4 million in TANIF funds and $1.4 million in Round 2 Challenge Grant funds over a 30-month period, revenues earned in these categories are behind schedule. Although the Department's budget is currently within target levels, 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. Placement costs are expected to exceed budgeted levels by about$175,000. Juvenile Hall costs are also expected to exceed budgeted levels. These overruns can be mitigated by savings in other expenditure categories and to some extent by TANF revenues. At this time, it appears that the Department will be balanced by the end of the fiscal year. We are pleased to report that the two Probation construction projects, the Boys' Ranch Expansion and the remodel of Lion's Gate for a girls' program, are proceeding according to schedule. Discussions continue between the Probation Department and the Health Services-Mental Health Division on the configuration for the girls' program. Itisthe goal that both programs be open for operation in January 1999. Qoodinated Trial Courts As was mentioned in previous quarterly reports, 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 removes the Courts from the County budget process and caps the County's contribution to the Courts at the FY 1994-95 level. As was required by the Act, in February the County submitted to the Department of Finance a report of the amounts it expended for trial court eligible operations and the fines and forfeitures it remitted to the state between July 1, 1997 and December 31, 1997. . .. . .......... ......................................................................................................................................................... ............................. Page 5 CoordinatedTrialCourts continued These amounts will be reduced from the "maintenance of effort" amount the County is required to remit to the State for the entire fiscal year. The County also submitted several appeals to the State Department of Finance to correct errors andlor omissions in the County's base year(FY 1994-95) costs. Staff from the Courts, Auditor-Controller's Office, and County Administrator's Office worked closely together to identify the needed adjustments, and all of the appeals were endorsed by both the County and the Courts. Although the State was to advise counties as to the status of the appeals by April 1, as of the date of this writing, counties have still not received any feedback as to their declarations and appeals. This is problematic in that it prevents counties from accurately evaluating their current budget position and also adds more variables to the Courts' budget process for next year. In order to facilitate the procedural changes required by the Act,the County and the Courts have been discussing the development of a Memorandum of Understanding (MOU) outlining the new roles and responsibilities of the County and the Courts under the Act. County staff continue to work with the staff of the Courts to transition the Courts out of the County budget and into their own fund. In the last quarterly report, the Courts had indicated that their FY 1997-98 budget allocation from the state would not be adequate to support Court operations at their current levels and that they would seek a deficiency appropriation from the state. Since then, the Courts did receive some financial relief from the state which will partially offset the anticipated overruns. At the Board's direction, the County will provide staffing assistance, if requested by the Courts to develop emergency response plans in the event that the Courts are required to curtail services that affect the public and other justice agencies.