Transcript FY 2013-14 Recommended Budget Presentation
County of Monterey
Recommended Budget Fiscal Year 2013-14
County of Monterey | County Administrative Office | June 5, 2013
Historical Perspective
$620.0 Dollars in Millions $600.0 $580.0 $560.0 $564.9 $591.1 $582.6 Expenditures $610.2 $540.0 $520.0 $500.0 $480.0 $460.0 $489.8
$470.0 $507.9
$495.8 $528.5 $523.7
$553.8
$541.0
Revenues $535.3
$544.8
$440.0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 In the February 2009 Forecast, Monterey County staff forecasted a general fund structural deficit of $65.4 million to emerge by 2011-12.
In response, the Board adopted reductions totaling $25.7 million and 209 positions as part of its 2009-10 adopted budget. Over the next four years, the County chipped away at its structural deficit, cutting another 123 positions and reducing General Fund Contributions (GFC) by another $11.7 million, for a four year total reduction of 332 positions and $37.4 million in GFC.
Monterey County’s employees helped minimize impacts of these reductions; miscellaneous employees now contribute 3.5% of salary towards their retirement, while safety employees pay an additional 4.5%.
2
Tue Mar 12, 2013 9:11am EDT
Moody’s cuts California’s Santa Clara County pension obligation bond
(Reuters) Moody’s Investors Service said late on Monday it cut California's Santa Clara County pension obligation bond (POB) rating to A1, from Aa3.
The rating agency also affirmed the county's Aa2 general obligation bond rating and its outstanding certificates of participation and lease obligations rated A1. The outlook is stable.
About $1.5 billion of long term debt is affected by the rating actions.
"The rating change reflects Moody’s changed view of the pledge supporting POBs versus general obligation bonds," the rating agency said in a statement. "We believe this pledge is relatively less secure than our prior estimates, both in terms of probability of default and likely losses in the event of default." 3
March 28, 2012
RIVERSIDE COUNTY: Top administrator expects 196 layoffs
Riverside County’s top administrator said Wednesday that as many as 196 county jobs may have to be eliminated in the coming months because, despite ongoing cuts, expenses still outstrip revenue.
In the first of two days of hearings on budget plans for 2012-13, county supervisors heard that and other unwelcome news, including the possibility of cutbacks in fire protection. The second hearing, covering the Sheriff’s Department and district attorney’s office, is scheduled for 9 a.m. today in the board chambers, 4080 Lemon St., Riverside.
Interim County Executive Officer Larry Parrish said the hearings are intended to provide “an overview of a strategy to handle what we’ve got in the way of an extremely complex and difficult set of circumstances.” Parrish is asking for layoff plans from department heads by May 1. Formal budget hearings are in June.
In a memo to the supervisors, Parrish wrote that despite signs of economic recovery, “the revenue needed to sustain a full fiscal recovery of our county’s budget is not expected for several years.” 4
SANTA CRUZ SENTINEL
May 31, 2013
About 100 employees of Santa Cruz Counseling Center on furlough due to federal sequesters
Teachers at Santa Cruz County Head Start are facing furloughs SANTA CRUZ -- Fewer than 1 percent of the jobs in Santa Cruz County involve working for a federal agency, yet the federal sequester requiring cuts of $85 billion as of March 1 to trim the deficit is hitting home at a local nonprofit.
The pain is being felt at the Santa Cruz Community Counseling Center, which expanded Head Start for children ages 3 to 5 and Early Head Start for those younger than age 3, with federal stimulus funds three years ago.
The two programs locally were operating with a budget of $7.9 million to serve 900 children until a memo arrived in April.
"They issued a memo saying you need to cut 5.19 percent off the top," said Cynthia Sloane, director of child and family development programs at the Santa Cruz Community Counseling Center. "We had only seven months to make up this money because of our fiscal year starting November 1.“ To pare the budget, about 100 employees are being furloughed.
5
June 3, 2013 STATE BUDGET CUTS FORCE TULARE COUNTY TO CUT
The recently signed state budget calls for a 10 percent across the board reduction to Child Welfare Services – a drastic cut that officials announced Thursday will mean unavoidable cuts for local programs run by the Tulare County Health & Human Services Agency.
"Tulare County has done everything within our power to minimize the local impact of the cuts put into place by Governor Schwarzenegger and the Legislature, but layoffs look to be unavoidable," said Phil Cox, Chairman of the Tulare County Board of Supervisors. "The Agency implemented many cost-cutting measures earlier this year in anticipation of the Governor’s actions, such as freezing positions, but the state program reductions are too deep to absorb locally." The State of California budget reductions mean severe cuts to the Health & Human Services Agency's grants and allocations, including a $2 million cut from CWS funding, and an additional $18 million cut from the agency's overall budget. The $2 million CWS cut could mean as many as 55 layoffs.
"We’re going to do everything we can to preserve public services and local jobs," said Cox. "From under filling positions, to moving staff members across departments within the Health & Human Services Agency, we will use every tool we have to save as many positions as possible." 6
THE TRIBUNE
May 14, 2013
SLO
County budget to tap $4.3 million in reserves
Some departments gain, others lose in spending proposal San Luis Obispo County departments that deal with parks, foster care and roads will see cuts in their budgets if the Board of Supervisors approve a proposed $494.8 million budget for the coming fiscal year.
On the other side of the ledger, departments dealing with the courts, Veterans Services and the county library system will see boosts to theirs.
Regardless, an analysis prepared through the county’s Administrative Office says services and staffing should remain at current levels because of the relatively small changes planned.
7
County of Monterey: Achieving Structural Balance
$620.0 Dollars in Millions $600.0 $580.0 $560.0 $551.6 Expenditures $539.4 $540.0 $520.0 $528.5 $534.7 $531.7
$526.3
$520.8 $507.9
$523.7
$544.3
$527.7
$500.0 $480.0 $460.0 $489.8
$470.0 $495.8 Revenues $440.0 $420.0 $400.0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 8
Purpose of the Recommended Budget
The Recommended Budget provides the residents of Monterey County, the Board of Supervisors (Board), and others a broad understanding of the County’s fiscal condition and recommended spending plan for the next fiscal year. County departments prepare their recommended budgets with the goal of aligning their operating plans with strategic initiatives and objectives adopted by the Board.
Department managers and the County Administrative Office analyze financial results throughout the year to ensure the Board’s adopted spending plan is carried out successfully. 9
County of Monterey Budget Process
Forecast & Budget Development Process Begin November Distribute Forecast/Budget Timeline & Assumptions CAO December Conduct forecast & budget training CAO Dec. - Feb.
Build Three-Year Forecast Departments/CAO Feb. – Mar.
Present Three Year Forecast to Board of Supervisors CAO April Prepare 3 rd Quarter Update Departments/CAO December Distribute GFC Planning Estimates CAO March Prepare Requested Budgets Departments April – May Build Recommended Budget April Dept. Heads Workshop CAO April Budget Appeals Early June Budget Hearings Board/All Late June Budget Adoption Board/All End Analysis of State & Federal Budget Impacts 10
Budget at a Glance – All Funds
2011-12 2012-13 Actual Adopted
Expenditures Salaries & Benefits Services & Supplies Other Charges Fixed Assets Op. Transfers Out Contingencies Total Expenditures $ 468.4
271.2
80.2
27.5
48.6
$ 896.0
Revenues Taxes Licenses, Permits & Franchises Fines, Forfeitures & Penalties State & Federal Aid Charges for Current Services Other Revenues Total Revenues 157.6
14.5
9.8
331.1
266.0
113.3
$ 892.2
$ $ 153.1
$ 486.0
300.6
76.9
31.0
46.5
4.6
945.5
18.0
11.8
359.7
234.0
120.2
896.8
2013-14 Recommend
$ $ 1,042.1
162.0
$ 499.5
302.6
83.4
39.0
112.4
5.2
16.1
12.1
373.8
254.2
177.1
995.3
Use of Fund Balance FTE Positions $ 3.7
$ 48.7
$ 46.8
4,306.8
Dollars in millions: detail may not add to totals due to rounding.
4,515.2
4,675.9
County of Monterey | County Administrative Office | June 5, 2013 Recommended financing uses for all funds totals just over $1 billion and 4,676 positions. Increases countywide appropriations by $96.6 million (primarily accounting changes related to the state county realignment). Increases countywide staffing by 161 positions (154.5 general fund positions).
Included in the recommended position augmentations are 92 positions for Health & Social Services to implement ACA. ACA-related positions are self-funded.
11
2013-14 Recommended Appropriations by Fund/Fund Type
General Fund, $526.6
Natividad Medical Center , $189.7
Behavioral Health Fund, $70.7
Special Districts & Other Revenue, $107.8
Total: $1.04 billion; amounts may not total due to rounding. Library, $8.1
The general fund is the County’s largest fund, with recommended appropriations totaling $526.6 million (51% of total).
Other significant financing uses include Natividad Medical Center and the behavioral health fund). Special District and Other Revenue Funds
,
totaling $107.8 million, include services financed by revenue sources Internal Service, $32.9
legally restricted to specified purposes, such as County Health & Welfare Realign., $39.0
Road Fund, $36.8
Capital Projects, $22.1
Resort Ops, $8.4
Service Areas, sanitation districts, Local Revenue Fund (AB 109 Realignment), In-Home Supportive Services (IHSS), Office of Employment Training (OET), economic development programs, and special districts. * Includes special revenue f unds such as Local Revenue Fund (2011 Realignment), Community Development, & Of f ice of Employment Training. 12 County of Monterey | County Administrative Office | June 5, 2013
2013-14 Estimated Revenue by Source (All Funds)
Charges for Services, $254.2
Federal & State Aid, $373.8
Taxes, $162.0
Operating Transfers, $145.8
Other, $31.3
Total: $995.3 million; amounts may not total due to rounding. Licenses, Permits, & Franchises, $16.1
Fines, Forfeitures, & Penalties, $12.1
County of Monterey | County Administrative Office | June 5, 2013
Top 3 Financing Sources: Federal and State Aid
. The County expects to receive $373.8 million (38% of total) of its revenue from the federal and state government, mostly to administer health, welfare, and public safety programs.
Charges for Services
. This revenue is generated from various fees charged by the County for its services, such as fees charged by the County’s hospital and health clinics, park admission fees, and recording fees. Estimated financing from this revenue source totals $254.2 million, or about a quarter of total County revenue.
Taxes
.
This category includes secured and unsecured property taxes, supplemental assessments, and special district fund taxes. Tax revenues estimated for 2013-14 total $162.0 million (16% of total).
13
General Fund Adopted Budget
Including Behavioral Health Fund (Part of General Fund Prior to 2012-13)
$600.0
$500.0
$400.0
$571.4
Behavioral Health $560.2
$549.2
$300.0
$200.0
$100.0
$0.0
2008-09 2009-10 2010-11 General Fund $560.7
$66.0
$534.4
$495.7
$597.3
$70.7
$526.6
2011-12 2012-13 2013-14 County of Monterey | County Administrative Office | June 5, 2013 The general fund supports most County services including public safety, health, public assistance, land use, recreation, environment, administration and finance. Recommended 2013-14 general fund appropriations total $526.6 million. Effective in 2012-13, funding for behavioral health programs was transferred from the general fund into the new behavioral health fund.
Had this transfer not taken place, the general fund would have totaled $597.3 million. Growth over prior years is centered around the responsibilities resulting from the state-county realignment & ACA Implementation. 14
General Fund Strategic Reserve
Millions $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $ $37.3
2008-09 $37.3
$52.3
$14.2
$38.1
Strategic Reserve - NMC Strategic Reserve - General Fund $52.3
$14.2
$38.1
2009-10 2010-11 2011-12 $52.3
$14.2
$38.1
$52.3
$14.2
$38.1
2012-13 2013-14 County policy provides for a strategic reserve equal to 10% of general fund revenues for the following purposes: To build the County’s capacity for funding settlement of legal judgments that exceed reserves normally designated for litigation; and To offset short-term revenue reductions due to economic downturns, and natural disasters as determined by the County Administrative Officer or the Board.
The 2013-14 recommended budget maintains the general fund strategic reserve at the 2012-13 amount, totaling $52.3 million. County of Monterey | County Administrative Office | June 5, 2013 15
2013-14 Estimated General Fund Revenues by Category
Fines, Forfeitures & Penalties, $9.1, 2% Licenses, Permits & Franchises, $15.6, 3% Taxes, $150.1, 29% State & Federal Aid, $202.0, 39% Other Revenues, $77.2, 15% Charges for Current Services, $67.4, 13% Total: $521.4 Million Dollars are in millions and may not total due to rounding.
County of Monterey | County Administrative Office | June 5, 2013 Estimated general fund revenues total $521.4 million for 2013-14.
The largest source of general fund revenue is aid from the federal and state government. These funds are generally restricted to health and social programs and, to a lesser extent, public safety functions.
The second largest category is
Taxes
, which provides the bulk of the County’s discretionary revenue. These revenues are primarily used to enhance public safety resources and to support general government functions. 16
General Fund State & Federal Aid
Including New Behavioral Health Fund (Part of General Fund Prior to 2012-13)
Behavioral Health Millions $350.0
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$0.0
$288.7
2008-09 $294.6
2009-10 $302.4
2010-11 General Fund $270.0
2011-12 $272.4
$66.0
$206.4
2012-13 $272.8
$70.7
$202.0
2013-14 Historically state & federal aid provided over half of general fund revenue.
However, state & federal revenues for behavioral health programs, previously part of the general fund, now reside in the new behavioral health fund. The decline over the last two fiscal years reflects the loss of federal stimulus monies and state budget reductions.
County of Monterey | County Administrative Office | June 5, 2013 17
Program vs. Non-Program Revenue
Program Revenue, $348.6, 67% Non-Program Revenue, $172.8, 33% Approximately two-thirds of the County’s general fund revenues is legally restricted to specific activities. Examples include federal & state aid for health & social services programs, charges supporting planning & building programs, and entrance fees for support of parks operations & maintenance. Non-program revenues comprise the other one-third of general fund revenue and are the County’s only true source of discretionary funds.
Primary sources of non-program revenue include property taxes, TOT, & sales and use tax.
The Board appropriates these revenues as general fund contributions (GFC) to supplement departments’ program revenues. County of Monterey | County Administrative Office | June 5, 2013 18
General Fund Non-Program Revenue
Millions $190.0
$180.0
$170.0
$160.0
$150.0
$140.0
$130.0
$120.0
$110.0
$100.0
$186.0
2007-08 $182.8
2008-09 $168.6
2009-10 $165.8
2010-11 $168.0
$165.3
2011-12 2012-13 $172.8
2013-14 ------------------------------------------Actuals------------------------------------------------ Adopted Recommend County of Monterey | County Administrative Office | June 5, 2013 Discretionary revenues fell sharply during and after the recession, declining by $18.0 million (9.7%) from 2007-08 to 2011-12.
During this time, property taxes fell from $127.6 million to $116.1 million, for a loss of $11.5 million.
The budget includes estimated non-program revenue of $172.8 million, an increase of $7.5 million (4.5%) over the estimate in the current year budget. Although non-program revenue remains well below pre-recession levels, the County is beginning to see mixed, but overall positive, improvement in its discretionary revenues. 19
General Fund Non-Program Revenue Sources
Total: $172.8 Million Property Tax $120.7 - 70% Dollars are expressed in millions and may not total due to rounding.
Other $10.3 - 6% TOT $18.2 - 11% VLF $9.2 - 5% Sales & Use Tax $6.8 - 4.0% Franchise Fees $4.1 - 2% Tobacco Settlement $3.4 - 2% Major sources of non program revenue include: Property tax revenue comprises the bulk of non program revenue, totaling an estimated $120.7 million (70%) in 2013-14.
Transient occupancy tax, often referred to as a hotel or room tax, is estimated at $18.2 million.
Vehicle license fees are estimated at $9.2 million. Other significant sources of non-program revenue include sales and use tax, tobacco settlement monies, and franchise fees. County of Monterey | County Administrative Office | June 5, 2013 20
Largest Sources of General Fund Non-Program Revenues
Property Tax Revenue Transient Occupancy Tax Revenue Millions $135.0
Millions $20.0
$131.4
$18.2
$130.0
$125.0
$120.0
$115.0
$127.6
$18.0
$120.3
$115.8
$116.1
$118.2
$16.0
$120.7
$14.0
$12.0
$16.4
$15.0
$13.0
$13.8
$16.6
$16.6
$110.0
$10.0
$105.0
2007-08 2008-09 2009-10 2010-11 2011-12 -------------------------------------------------Actuals--------------------------------------------------- 2012-13 Estimate 2013-14 Recommend $8.0
2007-08 2008-09 2009-10 2010-11 2011-12 -------------------------------------------------Actuals--------------------------------------------------- 2012-13 Estimate 2013-14 Recommend County of Monterey | County Administrative Office | June 5, 2013 21
General Fund Appropriations
Total: $526.6 million.
Public Safety / Criminal Justice, $170.5, 32% Finance and Administration, $85.3, 16% Health & Social Services, $237.0, 45% Recommended general fund appropriations total $526.6 million.
Land Use/Infra./Environ., $28.8, 6% Education & Recreation, $5.0, 1% Almost four-fifths of recommended appropriations provide for three key functional areas: public safety/criminal justice, health, and social services. Public safety and criminal justice programs, with $170.5 million in recommended expenditures, comprise about one-third of total general fund appropriations. Dollars in millions; amounts may not total due to rounding. Recommended appropriations for Social Services, totaling $166.6 million, represent another one third of the general fund budget. Health Department general fund appropriations total $70.4 million (13.4% of total), but this does not include the $70.7 million that now resides in the behavioral health fund. County of Monterey | County Administrative Office | June 5, 2013 22
General Fund Appropriations for 5 Largest Functional Areas
Millions $180.0
$160.0
$140.0
$157.8
$170.5
+$12.7
8.1% $158.5
$166.6
+$8.1
5.1% 2012-13 2013-14 $120.0
$100.0
$80.0
$60.0
$79.0
$85.3
+$6.3
8.0% $66.2
$70.4
+$4.2
6.3% $40.0
$20.0
$28.0
$28.8
+$0.7
2.6% $0.0
Public Safety Social Services Finance & Admin. (1) Health (2) Land Use, Infrastructure, Environ.
1. Includes $41.4 million in countywide (non-departmental) costs such as funding for trial courts, grand jury, contingencies, short term borrowing, and contributions to other agencies (e.g., Proposition 172 allocations to fire agencies).
2. Excludes $70.7 million in the behavioral health fund (previously part of the general fund). County of Monterey | County Administrative Office | June 5, 2013 23
General Fund Appropriations by Expenditure Category
Salaries & Benefits, $336.6, 64% Services & Supplies, $125.7, 24% Other Charges, $31.8, 6% Fixed Assets, $3.5, 1% Operating Contingencies, Transfers Out, $5.2, 1% $23.8, 4% Dollars in millions and may not total due to rounding.
County of Monterey | County Administrative Office | June 5, 2013 24
General Fund Appropriations – Salary & Benefits
Behavioral Health General Fund $400.0
$350.0
$300.0
$310.6
$333.2
$333.7
$334.4
$334.8
$342.2
$28.4
$313.8
$366.4
$29.8
$336.6
$278.9
$259.3
$250.0
$200.0
$150.0
$100.0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 ---------------------------------------------Actuals----------------------------------------- County of Monterey | County Administrative Office | June 5, 2013 Estimate Recommend 25
General Fund Contributions
Public Safety / Criminal Justice, $83.2, 47% Finance and Administration, $64.9, 37% Land Use/Infra./Environ., $16.0, 9% Total: $178.0 million.
Dollars in millions; amounts may not total due to rounding. Education & Recreation, $2.0, 1% Health & Social Services, $1.8, 7% General Fund Contributions (GFC) represent discretionary funding appropriated by the Board to supplement department’s program revenues. The Board allocates almost half of available GFC to support the public safety function and has taken significant steps to protect this function to the extent possible during the last four years of budget reductions. As a percent of the countywide total, GFC for the public safety function has grown from 40.6% in the 2008-09 adopted budget, before budget reductions took place, to 48.7% in the 2013-14 recommended budget. During the same time period, most other functional areas have seen significant declines due to the County’s loss of non-program revenues. County of Monterey | County Administrative Office | June 5, 2013 26
General Fund Contributions Sheriff Probation District Attorney Public Defender Emergency Comm.
Public Safety GFC Countywide GFC 2007-08 Adopted: $ % of Total $48.7
23.6% 2013-14 Recommended: $ % of Total $50.4
28.3% 12.9
7.3
7.4
0.7
$77.0
$206.7
6.2% 3.5% 3.6% 0.3% 37.3% 16.7
9.1
9.2
1.3
$86.6
$178.0
Note: 2013-14 GFC for the Sheriff's Office includes a $3.0 million transfer of health realignment monies for inmate medical services. Not shown in the table are amounts for Child Support Services, which is supported by federal & state funding and has a negative (surplus) GFC of $0.4 million.
9.4% 5.1% 5.1% 0.7% 48.7%
County of Monterey | County Administrative Office | June 5, 2013 27
Sources of Financing for Appropriations, by Function
Millions $250.0
$11.8
$200.0
$150.0
$83.2
General Fund Contributions Program Revenue $225.2
$100.0
$50.0
$0.0
Health & Social Services $64.9
$87.3
$20.4
$16.0
$12.8
Public Safety / Criminal Justice Finance and Administration Land Use, Infrastructure, Environ.
County of Monterey | County Administrative Office | June 5, 2013 $2.0
$3.0
Education & Recreation 28
Requested vs. Recommended Augmentations - Appropriations
$10.0
$9.0
$8.0
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0
$9.1 $8.1 Health & Social Services $6.1 $4.6 $4.4 $2.8 Requested Recommended $0.9 $0.6 Public Safety/Criminal Justice Finance & Admin.
Land Use, Infrastructure, Environ.
County of Monterey | County Administrative Office | June 5, 2013 $0.3 $0.1 Education & Recreation 29
Requested vs. Recommended Increases to General Fund Contributions
$5.0
$4.5
$4.0
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
$4.9 $3.5 $4.3 $2.7 Requested Recommended Public Safety/Criminal Justice $1.2 $0.9 $0.6 $0.2 Finance & Admin.
Land Use, Infrastructure, Environ.
Health & Social Services County of Monterey | County Administrative Office | June 5, 2013 $0.3 $0.1 Education & Recreation 30
Requested vs. Recommended Position Augmentations (General Fund)
120.0
100.0
80.0
105.0 105.0 Requested Recommended 60.0
40.0
39.0 37.0 20.0
0.0
18.5 12.5 2.0 0.0 Health & Social Services Public Safety/Criminal Justice Finance & Admin.
County of Monterey | County Administrative Office | June 5, 2013 Land Use, Infrastructure, Environ.
31
Self-Funded vs. GFC-Funded Position Augmentations (General Fund)
Department Social Services Health Sheriff-Coroner District Attorney Emergency Communications County Administrative office Public Defender Probation Self Funded 55.0 41.0 0.5 7.0 4.6 1.0 0.0 0.0 Supported by General Fund Contributions Assessor-County Clerk – Recorder Economic Opportunity Human Resources Information Technology 0.0 0.0 0.0 2.0 Auditor-Controller County Counsel Resource Management Agency Clerk of the Board TOTAL FTEs: 0.0 0.0 0.0 0.0 111.1 County of Monterey | County Administrative Office | June 5, 2013 6.0 0.0 13.5 4.0 0.4 3.0 4.0 3.0 2.0 2.0 2.0 0.0 1.0 1.0 1.0 0.5 43.4 Total 61.0 41.0 14.0 11.0 5.0 4.0 4.0 3.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 0.5 154.5 32
Augmentation Highlights – Health & Social Services
Adds 92 positions within the health and social services function to implement the Affordable Care Act (ACA), including: 51 positions for Social Services for eligibility determinations and other activities associated with ACA implementation; and 41 positions for the Health Department to increase capacity for clinic services under the ACA.
The ACA will bring 27,000 additional people into Medi-Cal as of January 1, 2014, and an additional 27,000 people will be eligible to purchase health insurance through the State Health Insurance Exchange Program. The cost of these positions would be fully supported by federal and state funding.
Adds three employment & training workers, requiring no GFC, to better comply with the SB 1041 mandates for providing employment services to CalWORKs families.
County of Monterey | County Administrative Office | June 5, 2013 33
Augmentation Highlights – Public Safety
Provides an increase of $2.2 million in GFC and 14 positions for the Sheriff’s Office to improve the safety and security of staff, the community, and inmates housed in the County Jail, including: Adds 12 custody and control positions to staff the jail’s control towers, which will allow the Sheriff’s Office to redeploy deputies to other critical functions appropriate for their level of skill and training. Provides funding to cover the full cost of mandated medical services to inmates; Re-establishes the Corrections Emergency Response Team (CERT) team and associated training and equipment; Adds two positions to oversee development, improvement, and implementation of various programs in the jail aimed at helping inmates become successful members of society and reducing recidivism; and Provides funding for technology upgrades and improvements, including video surveillance in the jail.
County of Monterey | County Administrative Office | June 5, 2013 34
Augmentation Highlights – Public Safety (Continued)
Provides $489,618 for Probation to restore 2.0
Silver Star Gang Prevention and Intervention
probation officers, retain an Adult Placement Program position, and to cover Next Generation Radio (NGEN)operations costs; and Adds 5.0 dispatch positions in Emergency Communications at a GFC of $43,313 to reduce employee overtime and improve service levels. Provides additional funding for the District Attorney and Public Defender, including: $403,521 and 11 positions for the District Attorney to combat real estate fraud, investigate gang activity, support efforts related to forensics, and provide victim and witness assistance. Of the 11 positions, 7.5 are funded by new revenue while the remaining 3.5 are supported with GFC; and $464,389 to the Public Defender to restore four positions at risk due to departmental cost pressures. County of Monterey | County Administrative Office | June 5, 2013 35
Augmentation Highlights – Public Safety (Continued) Criminal Caseloads
20,000 18,000
18,177 18,146 17,797 18,153 16,450
16,000 14,000
14,953 14,885 14,257 14,303 12,887 18,391 13,905 16,966 12,498
12,000
17,935 13,560 15,548 12,467 14,377 14,365 11,788 11,611 13,426 10,819
10,000
12,049 9,318
8,000
Felony Misdemeanor Total
6,000
4,486 4,468 4,375
4,000
3,224 3,261 3,540
2,000
3,850 3,563
0
2000 3,081 2,589 2,754 2,607 2,731 Source: CJIS data provided by the Monterey County District Attorney’s Office 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 The Board has made considerable effort to protect public safety functions, including the District Attorney & Public Defender budgets, from the impacts of the recession.
Since 2007-08, total GFC for support of departments has fallen $28.7 million (13.9%).
During this same period, GFC for the DA & PD each increased by $1.8 million.
The recommended budget provides $9.1 million in GFC for the DA & $9.2 million for the PD. Although caseloads have declined since the pre recession years, overall staffing levels for both offices have increased as part to the Board’s commitment to public safety. County of Monterey | County Administrative Office | June 5, 2013 36
Augmentation Highlights – Finance & Administration
Restores two positions, requiring a GFC of $138,891, for the Assessor-County Clerk-Recorder to meet increased workload needed to ensure accurate assessment of property values. Restores two Economic Opportunity positions, including a Redevelopment Analyst III and a Housing Manager, requiring a GFC of $276,987.
Adds four positions and a GFC of $507,512 to the County Administrative Office for support of a gang task force coordinator, emergency planner, and two administrative secretaries.
Adds an additional $411,816 and two positions, including an assistant director and a principal employee relations specialist, and funding for employee relations consulting work. County of Monterey | County Administrative Office | June 5, 2013 37
Staffing Trends – All Funds
5,000 4,500 4,000 4,847.5
4,639.1
4,630.4
4,306.8
4,515.2
4,675.9
3,500 3,000 2,500 2,000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 County of Monterey | County Administrative Office | June 5, 2013 The Recommended Budget includes 4,676 positions, increasing by 161 positions (3.7%) since adoption of the 2012-13 budget.
Many of the recommended position augmentations support areas that leverage federal and state funding, particularly in the health and social services function which is preparing to implement ACA.
However, overall staffing levels remain below pre recession levels while, at the same time, the County has been required to take on additional responsibilities from the State under “realignment” and ACA. 38
Staffing Trends – Overtime (All General Fund Departments)
Overtime Expenditures: 2011-12 Actual Public Safety Finance & Admin.
Land Use, Infrastructure, Environ.
Health & Social Services Education & Recreation Totals $5,324,838 48,552 56,223 592,823 23,193 $6,045,629 2012-13 Adopted 2013-14 Recommended Total Salaries $5,073,356 60,000 135,598 532,399 20,757 $5,822,110 $4,964,588 77,000 66,653 519,783 8,500 $5,636,524 $79,848,961 37,770,589 15,630,430 82,941,307 1,914,219 $218,105,506 % of Total Salaries 6.2% 0.2% 0.4% 0.6% 0.4% 2.6%
Staffing Trends – Overtime (Public Safety/Criminal Justice)
Overtime Expenditures: Sheriff Probation District Attorney Public Defender Emergency Comm.
Total 2011-12 Actual 2012-13 Adopted 2013-14 Recommended % of Total Salaries Total Salaries $4,578,551 109,972 73,640 2,580 560,095 5,324,838 $3,253,917 362,000 80,000 10,000 1,367,439 5,073,356 $3,392,400 342,000 75,000 5,000 1,150,188 4,964,588 $36,874,625 20,699,948 13,130,933 4,389,467 4,753,988 79,848,961 9.2% 1.7% 0.6% 0.1% 24.2% 6.2% County of Monterey | County Administrative Office | June 5, 2013 39
Employee Retirement Costs
Millions $45.0
$40.0
$35.0
$35.5
$35.2
$38.9
$40.8
$40.9
$40.8
$37.2
$32.7
$36.5
$29.5
$30.0
$25.0
$20.0
$15.0
$19.8
$10.0
$5.0
$0.0
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Over the past decade, PERS retirement costs doubled, rising from $19.8 million in 2003-04 to $40.9 million by 2009-10. Since that time, salaries have flattened in the absence of pay raises and through staffing reductions achieved through attrition.
In addition, employees now contribute towards their retirement. The combination of these factors reduced general fund PERS payments to $32.7 million in 2012-13.
For 2013-14, expenditures increase due to higher PERS contribution rates and increases in staffing related to the filling of vacancies and position augmentations. County of Monterey | County Administrative Office | June 5, 2013 40
PERS Retirement Unfunded Liabilities
Miscellaneous Plan Funded Status Safety Plan Funded Status Actuarial Asset Value, $1,047,600,000 Unfunded Liability, $122,200,000 Actuarial Liability, $1,169,800,000 Actuarial Asset Value, $336,300,000 Unfunded Liability, $108,100,000 Actuarial Liability, $444,400,000 County of Monterey | County Administrative Office | June 5, 2013 41
PERS Policy Changes
In April 2013, CalPERS adopted changes to its rate smoothing & amortization policies. The new policies will accelerate rate growth to pay down unfunded liabilities at a faster pace. The effect will be an increase in general fund expenditures of $2.8 million in 2015-16, ramping up to a $14.3 million annual increase over the following four years before leveling off. CalPERS is also studying two additional changes that will increase rates beyond the higher amount described above, including: Lowering its discount rate from 7.5% to 7.25%, effective in 2015-16. The effect would be an additional $3.0 million impact in 2015-16, growing to a $5.8 million increase after a five year phase in period. Increase the life expectancy assumptions used for actuarial valuations. This change would increase expenditures by another $2.5 million in 2015-16, with a $5.2 million impact by the end of the five year phasing-in period. County of Monterey | County Administrative Office | June 5, 2013 42
Forecasted PERS Expenditures
Millions $60.0
$55.0
$50.0
$45.0
$40.0
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$32.7
$32.7
$34.4
$42.8
$40.3
$37.3
$34.5
$47.1
$43.9
$40.3
$34.6
$51.4
$47.5
$43.1
$34.6
$55.5
$50.9
With Increased Life Expectancy (Likely) $59.5
$59.4
$59.3
$59.1
With Discount Rate Lowered to 7.25% (likely) $54.3
$54.3
$54.1
With April 2013 Rate Change (Adopted) $53.9
$45.8
$48.5
$48.5
$48.3
$48.1
$34.4
Status Quo (without PERS policy changes) $34.2
$34.2
$34.1
$33.9
Includes terms of cost sharing agreements/MOUs in effect as of April 2013. 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 In total, PERS expenditures will grow between $2.8 million and $8.3 million in 2015-16, ramping up to an annual increase of $14.3 million to $25.3 million over the five-year phase-in.
This level of rate growth could consume the potential growth in the County’s discretionary revenue over the next five years.
The estimated impacts are modeled on 2012 actual salaries.
Actual impacts will be higher to the extent payrolls grow. County of Monterey | County Administrative Office | June 5, 2013 43
County-Paid Employee Health Insurance Costs
Millions $40.0
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$0.0
$30.5
2007-08 $32.7
2008-09 $32.1
2009-10 $32.9
2010-11 $34.3
2011-12 $34.9
2012-13 Estimate $38.8
2013-14 County of Monterey | County Administrative Office | June 5, 2013 Expenditures for employee health insurance are budgeted to increase $3.9 million in 2013-14 due to a 16% increase in premiums as of 1/1/2013. Assuming premiums continue growing at a more conservative annual rate of 5.6% (the 2000-2010 average), the County’s health insurance costs would rise by another $2.3 million in 2014-15 and an additional $2.5 million in 2015-16. These increases will add significant pressure to operating budgets. 44
Other Funds
County of Monterey | County Administrative Office | June 5, 2013 45
Natividad Medical Center
Natividad Medical 2012-13 Adopted Center
Net Patient Revenue: $ 142,773,989
2012-13 Estimate 2013-14 Recommended
Government Revenue: 41,118,000 44,481,445 37,749,867 Other Revenue: -
Total Revenue: 183,891,989 173,325,361
Operating Expenses: 175,230,966 165,144,422 Capital Expenditures: 21,442,471 21,442,471 19,060,583
Total Expenditures: 196,673,437 186,586,893 Use of Fund Balance: $ (12,781,448) $ (13,261,532) $ (17,191,079)
NMC is a 172-bed acute care hospital owned and operated by Monterey County.
NMC is designated as a safety-net hospital, with an emphasis on care for women, children, and families.
NMC provides inpatient, outpatient, emergency, diagnostic, and specialty medical care, and is the only teaching hospital on the central coast.
NMC expects to use $13.3 million in fund balance in 2012-13 (including capital expenditures) and $17.2 million in 2013-14, for a combined consumption of $30.5 million in operating and capital expenditures that operations are unable to fund. County of Monterey | County Administrative Office | June 5, 2013 46
Road Fund
Road Fund
Beginning Fund Balance Revenue: Cancellation of Reserves: Expenditures: Provisions for Reserves:
2012-13
$ 2,828,255 28,912,655 28,357,766 $
2012-13
3,540,309 27,949,404 28,088,111 -
2013-14
$ 3,401,602 27,382,006 30,783,608 Ending Available Fund Balance: $ 3,383,144 $ 3,401,602 $ (0) The road fund is a special revenue fund to account for revenues dedicated to County road and bridge construction & related maintenance. The road fund is primarily funded by state and local fuel taxes & grants. The general fund provides funding to support the Pavement Management Program, as well as the County’s Storm Water Management Program.
The recommended budget for the road fund shows erosion of fund balance due to projected road fund contributions towards construction projects in the current year and in 2013-14. County of Monterey | County Administrative Office | June 5, 2013 47
Monterey County Library
Monterey County Free Libraries Fund Adopted 2012-13 Estimated 2012-13 Recommended 2013-14
Beginning Fund Balance $ 1,244,110 $ 1,244,110 $ 1,149,112 Revenue: 6,927,537 7,091,337 7,153,402 Cancellation of Reserves: Expenditures: 7,896,166 7,186,335 8,076,335 Provisions for Reserves: Ending Available Fund Balance: $ 275,481 $ 1,149,112 $ 226,179 The Monterey County Free Libraries (MCFL) provide a network of information centers that serve the diverse communities of Monterey County. The fund’s operations are primarily financed through its share of property tax.
The fund has worked to stabilize expenditures, while seeking to shore up other revenue to offset the decline in property tax revenues since the recession.
However, expenditures continue to exceed available revenue, resulting in continued use of fund balance. The MCFL has implemented its “Financial Plan” with the future goal of maintaining a positive fund balance, reserves and contingency.
County of Monterey | County Administrative Office | June 5, 2013 48
Behavioral Health Fund
Behavioral Health Fund 2012-13 2012-13 2013-14
Beginning Fund Balance: $ $ $ Revenue: 65,314,411 66,017,361 70,724,468 Cancellation of Reserves: Expenditures: 65,235,162 66,017,361 70,676,926 Provisions for Reserves: Ending Available Fund Balance: $ 79,249 $ $ 47,542 County of Monterey | County Administrative Office | June 5, 2013 The Behavioral Health Fund is a special revenue fund effective July 1, 2012. Behavioral Health provides a range of mental health services, such as inpatient, social rehabilitation, supportive housing, & outpatient services. Behavioral Health also provides various alcohol & drug programs, including residential, transitional housing, perinatal residential, outpatient, prevention, early intervention, narcotic replacement, drinking driver programs, drug court, and drug diversion.
Revenues & expenditures for the fund continue to increase due to implementation of the Affordable Care Act (ACA). 49
Water Resources Agency
Water Resources Agency 2012-13 2012-13 2013-14
Beginning Fund Balance: $ 13,615,202 $ 14,917,534 $ 13,629,545 Revenue: 21,236,227 25,404,760 23,275,267 Cancellation of Reserves: 60,000 Expenditures: 22,443,016 26,752,749 24,099,029 Provisions for Reserves: Ending Available Fund Balance: $ 12,408,413 $ 13,629,545 $ 12,805,783 County of Monterey | County Administrative Office | June 5, 2013 The Monterey County Water Resources Agency (WRA) is responsible for management of groundwater resources and flood control protection for the County. The WRA budget includes a total of 25 funds. The table to the left summarizes the 12 major funds, including WRA Administration, Pajaro River Levee, Nacimiento & San Antonio water programs, Castroville Seawater Intrusion Project (CSIP), Reclamation Ditch Operation and Maintenance, Salinas River Diversion Facility, and the Salinas Valley Reclamation Project.
The WRA expects to use $0.6 million in fund balance in 2013-14 and is working towards the goal of a structurally balanced budget.
50
Current & Future Challenges - ACA Operational Challenges - ACA Fiscal Challenges Governor’s May Revision Proposal to Redirect 1991 Health Realignment Funding from Counties to the State - Audits & Settlements/Lawsuits - Lower-than-budgeted COWCAP Recoveries - Expiring Labor Contracts - PERS Retirement Increases - Health Insurance Premium Increases
County of Monterey | County Administrative Office | June 5, 2013 51
Current & Future Challenges – Capital Needs
Millions $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 $7.1
$31.0
$40.3
$52.4
$8.1
$3.0
$3.0
County of Monterey | County Administrative Office | June 5, 2013 Other Old Jail Partial Demolition County Parking Structure Public Defender Office Building East & West Wing Renovations Jail Housing Addition New Juvenile Hall (Phase I) $145.0 million total capital improvement plan need over next 5 years.
52
Recommendations It is recommended that the Board of Supervisors:
1. Hold a Public Hearing on June 5, 2013 at 9:00 a.m. to adopt the Fiscal Year (FY) 2013-14 Appropriation Limits pursuant to Article XIIIB of the California State Constitution.
2. Commence Budget Hearings with the County Administrative Office summary presentation of the FY 2013-14 Recommended Budget on June 5, 2013 at 9:00 a.m. and continue Budget Hearings on June 6 & 7, 2013 beginning at 9:00 a.m. if necessary.
3. Authorize the County Administrative Office and Auditor-Controller to prepare the FY 2013-14 Adopted Budget Resolution reflecting changes made by the Board during budget hearings, to make any changes in budget units to reflect any position and/or account adjustments approved by the Board during or prior to budget hearings.
County of Monterey | County Administrative Office | June 5, 2013 53
Recommendations (Continued)
4. Authorize the County Administrative Office and Auditor-Controller, in the event that any unbudgeted fund balance is available as determined through the final audited year-end FY 2012-13, to allocate such fund balance in the following order of priority: a) Increase the Public Safety Sales Tax assignment by $376,910 which totals the amount of FY 2012-13 Public Safety Sales Tax contributions delayed due to agreements with County fire districts.
b) Increase Strategic Reserve, to equal established Board policy of 10% of estimated FY 2013-14 General Fund revenue.
c) Increase Accrued Leave Assignment not to exceed 30% of FY 2012-13 reported Compensated Absences liability to provide gap funding for retirements and payroll buyouts that exceed the ability of General Fund departments to cover within current operations.
d) Capital Assignment for all remaining unbudgeted fund balance.
County of Monterey | County Administrative Office | June 5, 2013 54
Recommendations (Continued)
5. Authorize the County Administrative Office to adjust the FY 2013-14 Adopted Budgets for the Other Funds under the authority of the Board of Supervisors to reflect the FY 2012-13 year-end final Available Fund Balance.
6. Direct the County Administrative Office, after adoption of the FY 2013-14 State Budget, to return to the Board of Supervisors, if necessary, with a modified County Budget that takes into account the impacts of the State Budget and realignment of State responsibilities to counties. County of Monterey | County Administrative Office | June 5, 2013 55