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Home My WebLink AboutMINUTES - 05152001 - C.73 TO: BOARD OF SUPERVISORS _ Contra r-: .; - ,;s FROM: JOHN SWEETEN Costa T` COUNTY ADMINISTRATOR x� County DATE: MAY 15, 2001 SUBJECT: THIRD QUARTER BUDGET REPORT SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: ACCEPT the report from the County Administrator on the status of the County Budget. BACKGROUND/REASON(S) 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 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 impact are also reviewed as part of this period's 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 and is recommending specific actions to insure a year-end balanced budget. What follows is a discussion of the key budgets for this period. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON May 15, 2001 APPROVED AS RECOMMENDED XX OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND ENTERED ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. UNANIMOUS(ABSENT ----- ) AYES: NOES: ABSENT: ABSTAIN: Contact: Tony Enea,5-1094 Cc: CAO ATTESTED May 15, 2001 Auditor JOHN SWEETEN,CLERK OF THE BOARD OFSUPERVISORS Health Services Community Services EHSD BY: DEPUTY dENERAL COUNTY REVENUE: General County revenues amount to $198 million spread over 60 accounts. Based on nine months of experience, it appears that General County Revenues will meet budget targets. Property tax revenue should exceed budget levels by 2%, 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 revenue losses due to property tax refunds. The other major revenue sources should also achieve their revenue targets, but some have shown mixed results over the last four months. These revenue sources include vehicle license fees, transient occupancy taxes and real property transfer taxes. These revenues reflect the local economic condition in terms of vehicle purchases, business travel and current real estate sales.. Sales tax revenue figures, which are reported about three months after the sales transaction, have maintained strength. The nation and state continue to experience a slowdown in the economy. Job cutbacks in the manufacturing and service sectors are troublesome and, if they continue, may erode consumer confidence and consumer spending. An economic slowdown will impact vehicle license fees, transient occupancy tax revenue, and real property transfer tax revenue initially. Prolonged economic slumps of more than a year will impact property tax revenue. HEALTH SERVICES DEPARTMENT: The Health Services Department projects a balanced budget for Fiscal Year 2000-01 . Compared to the first two quarters, the most notable areas of cost increases have been: ➢ a 38% expense increase for pharmaceuticals; ➢ a 34% expense increase for mental health services through Institutes of Mental Disease, and ➢ a 41% expense increase due to expansion of homeless services. In order to balance its budget this fiscal year, the department has had to apply $6 million in bond reserve funds to operations. In addition, the Board's approval of one- time appropriations for the Homeless Program totaling $829,514 helped balance that budget unit. The department continues its efforts to identify cost efficiency measures including increasing outpatient services to reduce inpatient utilization, reviewing staffing guidelines, and searching for new facilities to provide more cost effective treatment for mental health clients. In addition, the department supports enrollment of Contra Costa children and families in the Healthy Families program to ensure that they receive reimbursable and adequate health services. Although great progress was made enrolling more than 6,500 families to date since 1998, one quarter of them have been dis-enrolled. A $4 - $27 State imposed premium that must be paid prior to enrollment and every month thereafter, places a burden on the already strained budgets of these low income families. An additional problem is lack of State notification of the consequences of non-payment of premiums. State regulatory changes are necessary to streamline this system so that more families can have the security of health care coverage. 2 COMMUNITY SERVICES: The department projects a balanced budget this fiscal year. A new online accounting system will allow the department to accrue revenue in a shorter timeframe than before to closer link expenses and reimbursement. Teacher shortages have forced the department to decrease reimbursable services. The Board recently approved salary increases for Community Services Department Child Care Teachers to allow the department to better compete in the job market. In addition, Congressman Miller introduced federal legislation in the House of Representatives on May 1St, 2001 to provide federal dollars for child care teacher stipends and salary increases. Both these actions recognize the need to attract increasing numbers of applicants to the open positions in the department. EMPLOYMENT AND HUMAN SERVICES: The Employment and Human Services Department projects a balanced budget for the current fiscal year. During the third quarter EHSD received new and previously unbudgeted State and Federal revenue. The Workforce Development Board received a $1 million grant from the U.S. Department of Labor for job training in the nursing field and the Children and Family Services bureau received a $1 .5 million augmentation to this year's State Child Welfare Services allocation. The Board authorized 36 new positions in EHSD during the third quarter, including 21 FTEs for a new court unit in Child Welfare Services and 14 FTEs for a new Adult Protective Services/Linkages unit for a total annual cost of $2,077,056. Increases in State allocations are expected to offset the cost of these positions next fiscal year, although the County is obligated to pay a share of costs for both programs (20% for CWS, 15% for APS). EHSD currently has pending appropriation adjustments recognizing new State revenue for implementation of the CaIWIN management information system and Realignment revenue growth to offset expenditures in several budget units. These items will likely come before the Board in the fourth quarter. OUTLOOK FOR FISCAL 2001-2002 BUDGET: The budget forecast for next year's budget remains tenuous. Our latest forecast indicates a $14 million shortfall, although the energy crises and a downturn in the economy can dramatically increase the budget shortfall. Another critical factor for next budget year is the impact which the state budget will have upon the county budget. The Governor's May Budget Revise is expected next week and press reports indicate that the Revise will include budget reductions due to the energy crisis and less than anticipated revenues. . Staff will advise the Board on the state budget situation and the impacts on the county budget later this week. 3