COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

May 28, 2010

BOARD MEETING DATE:

June 8, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

David S. Boesch, County Manager

SUBJECT:

County Manager’s Report #6

A.

Analysis of the 2010-11 May Revision

RECOMMENDATION:

Accept this report.

BACKGROUND:

May Revision

The Governor released the May Revision last week closing the budget gap through $12.4 billion in additional reductions to social services and health care. The plan also relies upon $3.4 billion in new federal funds and $3.4 billion in revenue shifts to close the $17.9 billion gap and ensures $1.2 billion in reserve with no new taxes. Specifically, the revision would:

• Eliminate CalWORKS program and funding for child care, except for pre-school and after school programs;

• Reduce IHSS through a stakeholder process;

• Shift 60 percent of County Mental Health Realignment Funds to administer Food Stamps and Child Welfare Services;

• Shift non-serious, non-violent, non-sex offenders who receive a sentence of three years or less to local jails;

• Transfer supervision responsibilities for juvenile parolees to county probation; and

• Provide a continuous appropriation of $503 million in General Fund support to local jurisdictions for criminal justice programs that are currently funded using a portion of revenue from vehicle license fees.

The revision would also remove a number of budget proposals, including: the elimination of Healthy Families and IHSS, oil drilling at Tranquillion Ridge and shifting Propositions 10 and 63 funds.

Senate and Assembly Proposals

Senate and Assembly Democrats acted swiftly introducing alternative budget plans. The Senate proposal would:

• Suspend corporate tax breaks scheduled to begin January 1 saving $2.05 billion;

• Extend a .25 percent income tax surcharge scheduled to end December 31 worth $1 billion;

• Raise the vehicle license fee on cars 0.35 percent starting July 1 worth $1.2 billion;

• Extend a $217 per dependent reduction in the state’s dependent income tax credit worth $430 million; and

• Increase the state’s alcohol tax—not raised since 1991—by an inflation-adjusted amount worth $210 million; and

• Suspend corporate tax breaks beyond this budget year. The Senate Plan would increase state revenues by nearly $5 billion and forestall health and human services reductions.

Assembly proposal would create a $10.1 billion Jobs and Economic Security Fund, through the imposition of oil severance tax, securitizing the California Beverage Recycling and the Disability Insurance Funds, and suspending corporate tax loopholes. In addition, the proposal rejects the Governor’s reductions to health and human service programs

Although details of the Assembly proposal are still unfolding, by most accounts it would begin to unwind the "triple flip" agreement: by majority-vote it would reduce the state base sales tax rate by ¼ cent and impose oil severance in an equal amount; the property tax revenues that made up the local sales tax loss to cities and counties would instead funds schools, thereby reducing state general fund education obligations; and finally it would result in an increase to the Bradley Burns’s local sales tax by ¼ cent or $900 million. This proposal also anticipates repayment of $931 million to local governments for deferred mandate payments, thereby reducing future state debt.

DISCUSSION:

Specific May Revision impacts on San Mateo County total an estimated $116 million in reductions to program and service funding, including:

HUMAN SERVICES AGENCY—($76.6 million)

CalWORKS Program ($34 million)

Eliminating the program would leave 1,500 families without assistance and 5,000 children without financial support for basic needs. That would be a loss of $18 million in aid payments to clients and $16 million in single allocation funding to the County.

Cash Assistance Program for Immigrants ($1.5 million)

Eliminating the program would impact 325 low-income aged, blind and disabled, legal permanent County residents.

Requests for General Assistance ($28.5 million)

With other programs eliminated, the Human Services Agency estimates General Assistance payments would rise approximately $28.5 million a year to provide former CalWORKS families and CAPI recipients with support. In addition, there would be a $1 million reduction in funding for Medi-Cal administration, which pays for staffing related to eligibility determination.

Child Welfare Services ($1.6 million)

Extension of the FY 2009-10 reductions to the program. Specific program cuts and amounts have not been specified.

Sharing Ratio Changes ($10 million)

Increased funding ratios for the Foster Care program, Foster Care Administration, Adoption Assistance Program, Child Welfare Programs, and Food Stamps. The funding stream to support these programs would shift from the state to the counties, and would rely on the Mental Health Realignment fund shift, as well as county savings from ARRA-FMAP and Title IV-E ARRA increases and savings in cuts to IHSS. This proposal is problematic as it assumes that all other reductions proposed in the budget will be implemented, including the Realignment shift. HSA estimates that the impact to the County could be as high as $10 million annually in net county cost.

SSI/SSP ($2.3 million)

Extension of the FY 2009-10 cuts to SSI/SSP grants including the withholding of a federal COLA pass-through. Under this proposal direct grants to over 13,000 clients would be reduced from $845 per month to $830 per month.

HEALTH SYSTEM ($31.2 million)

Mental Health Realignment Funding ($25 million)

Shifts 60 percent of Mental Health Realignment funding to pay for the state’s share of Child Welfare programs and Food Stamp administration. This shift represents a loss of $15 million in funding to Behavioral Health and Recovery Services, a loss of $9.7 million federal matching funds and would impact 3,800 residents currently receiving services through a network of community based organizations.

AB 3632 ($4.7 million)

Suspension of the AB 3632 mandate to provide mental health services for special education students. Currently, 561 clients receive services. Under federal law, responsibility to provide mental health services to special education students would fall back to schools.

Health Families (Unknown)

Increased monthly premiums starting in September for families with incomes from 200 percent to 250 percent of poverty by $18 per child with a $54 maximum per family per month. The premium increase will impact approximately 12,000 children enrolled in the Healthy Families and Healthy Kids programs. A $35 increase in co-payments for emergency room visits and the addition of a $100 per day co-pay for hospital in-patient services. This co-pay increase will affect 16,000 children enrolled in the Healthy Families and Healthy Kids programs.

In-Home Supportive Services (Unknown)

The May Revise proposes to cut the IHSS program in half and to consult with stakeholders to develop cost containment measures by July 2010. These actions would affect 3,120 IHSS clients and 3,130 providers in the County.

Medi-Cal

Drug Medi-Cal ($790,518)

Elimination of all Drug Medi-Cal programs, except the Perinatal and Minor Consent programs. This represents a loss of $790,518 in funding for Alcohol and Other Drug narcotic replacement (methadone) services to 350 clients by the SMMC operated methadone clinic and 30 adolescent clients who receive services at Our Common Ground. This reduction could force the closure of the SMMC clinic.

Elimination of Cal-WORKS ($737,364)

The proposed elimination of the CalWORKS program would result in a loss of $466,761 in funding for services provided to 60 HSA clients by Alcohol and Other Drugs services. An additional $176,603 in funding for two mental health clinicians serving 216 HSA clients would also be eliminated, as would $94,000 in funding to Family Health for services provided to 45 clients through the Cal Learn Program.

Shift of Inmates (Unknown)

Would require that offenders convicted of non-serious, non-violent, non-sex felonies that receive a sentence of three years or less to serve their sentence in local jails instead of state prison. In exchange, counties would receive $11,500 per inmate. Estimates are that this new block grant would not fully cover the costs of providing services to these inmates.

SHERIFF’S OFFICE ($8.2 million)

Shift of Inmates ($8.2 million)

Shifting inmates to county jails will increase the County’s jail population. It is estimated that approximately 150 inmates will be sent to the County at an additional annual cost of $8.2 million.

PROBATION (Unknown)

Shift of Division of Juvenile Justice Parolees (Unknown)

The May Revision proposes to transfer responsibility for supervising wards released by the Department of Corrections to county probation departments. Counties would receive $15,000 per juvenile parolee to service this population. Estimates are that 26 current DJJ juveniles would be returned to the County.

PUBLIC WORKS (No impact)

The May Revise does not propose any further cuts to transportation funding beyond the HUTA deferrals and transportation tax swap adopted by the Legislature in March.

Performance Measure(s):

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Federal/State Measures analyzed and acted on

25

35

FISCAL IMPACT:

The May Revise results in an estimated reduction of $116 million in FY 2010-11 to County programs and services.

B.

Assembly Bill 2337 (Ammiano), Public retirement system: predatory investment practices

RECOMMENDATION:

Adopt a resolution in support of Assembly Bill 2337 (Ammiano), Public retirement system: predatory investment practices.

BACKGROUND:

The California Pension Protection Act of 1992 provides that the Legislature may prohibit or limit retirement board investments if it is in the public interest to do so and provides that the prohibition satisfies the standards of fiduciary care.

Assembly Bill 2337 (Ammiano), the Socially Responsible Investment Act, would prohibit retirement boards from investing in “predatory equity” schemes that displace tenants.

AB 2337 would require all retirement systems to adopt and implement, a policy prohibiting investments in companies that engage in predatory investment practices that result in excessive rent increases imposed upon, or the eviction or displacement of, persons residing in rent-regulated housing in order to generate profit by June 30, 2011.

Retirement systems would be required to report to their respective boards on the on existing private equity investments that involve companies engaged in predatory investment practices, on the impact these investments are having on tenants and to recommend a strategy to address and mitigate these impacts. The bill would also require that these reports be provided to the Legislature annually starting in 2012.

Approval of this resolution contributes to the Shared Vision of 2015 of a Collaborative Community by introducing greater transparency and accountability into California’s pension fund investment decisions. The Resolution has been reviewed and approved as to form by County Counsel.

Performance Measure(s):

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Federal/State Measures analyzed and acted on

25

35

FISCAL IMPACT:

None.

C.

Assembly Bill 2456 (Torrico) Emergency medical services regulation.

RECOMMENDATION:

Adopt a resolution in opposition to Assembly Bill 2456 (Torrico), Emergency medical services regulation.

BACKGROUND:

Existing law establishes the California Emergency Medical Services Authority (EMSA), for the coordination and integration of all state activities concerning emergency medical services (EMS) including the minimum standards for the policies and procedures necessary for medical control of the EMS system. It also establishes the EMS Commission within the Health and Human Services Agency that advises state EMS. State law also authorizes counties to develop an EMS program and to designate a local emergency medical services agency (LEMSA) with the responsibility for planning and implementing the EMS system.

Assembly Bill 2456 (Torrico) would modify the EMS Act to specify that guidelines issued by state EMSA, including those dealing with medical control, would require mandatory compliance by local EMS agencies when establishing local policies and procedures. The bill would also require that LEMSAs secure the approval of the state EMSA director and the EMS Commission before they implement any additional policies.

Approval of this resolution contributes to the Shared Vision of 2025 of a Collaborative Community by ensuring that local and regional EMS agencies retain control of pre-hospital patient care so as to better deliver services in the state’s 58 diverse counties. The Resolution has been reviewed and approved as to form by County Counsel.

Performance Measure(s):

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Federal/State Measures analyzed and acted on

25

35

FISCAL IMPACT:

Unknown, but potentially substantial as the bill would impose a state-mandated local program by requiring local EMS agencies (counties) to comply with new requirements.

D.

Senate Bill 920 (Yee), Alphabetical telephone directories: distribution

RECOMMENDATION:

Adopt a resolution in support of Senate Bill 920 (Yee), Alphabetical telephone directories distribution.

BACKGROUND:

Under current order of the California Public Utilities Commission, telephone directory producers must allow customers to opt out of receiving future directories and requires telephone directory publishers to print on the inside of the first page of the directory a toll-free number that a recipient can call to discontinue further directory deliveries. The existing rule applies only to producers of “white page” directories listing residential customer information, although “yellow page” producers allow customers to opt out. Existing law establishes a minimum content requirement for entities that use newsprint in commercial printing to use at least 50 percent recycled-content newsprint and a waste diversion goal that 50 percent of telephone directories distributed in California is recycled.

Senate Bill 920 (Yee) would require telephone corporations and third party producers of telephone directories to allow customers to opt out of receiving future directories. The bill would require directory producers to place information on the cover of the directory giving customers information about how to opt out and would require directory producers to demonstrate compliance with existing law requiring the use of recycled newsprint.

Approval of this resolution contributes to the Shared Vision of 2025 of a Collaborative Community by strengthening the opt-out requirement to receive telephone directories and help reduce waste and consumer utility costs while conserving resources and protecting the environment. The Resolution has been reviewed and approved as to form by County Counsel.

Performance Measure(s):

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Federal/State Measures analyzed and acted on

25

35

FISCAL IMPACT:

De minimums loss of revenue for the Department of Public Works from an anticipated reduction in telephone directories waste.

E.

Senate Bill 1333 (Yee), Airports: avigation easements

RECOMMENDATION:

Adopt a resolution in support of Senate Bill 1333 (Yee), Airports: avigation easements.

BACKGROUND:

State law governs the creation and operation of airports. It provides for the establishment of county airport land use commissions to carry out various requirements including the formulation of a comprehensive land use compatibility plan to provide for the orderly growth of the airport and the area surrounding the airport within the jurisdiction of the commission, and to safeguard the general welfare of the inhabitants within the vicinity. California airport noise regulations have established 65 decibels (dB) as the standard acceptable level of aircraft noise for persons living in the vicinity of an airport and have deemed that new development of residential and other facilities within a noise problem airport are incompatible unless the airport obtains an avigation easement for aircraft noise.

Senate Bill 1333 (Yee) would require an airport to acquire an avigation easement prior to the issuance of a building permit that allows for construction of a residential project with the airport’s 65 dB or higher noise boundary. The easement would be immediately recorded and must include a termination clause if the project is cancelled or the building permit is revoked or expires. The bill would also require the local government that issued the permit to notify the airport with 30 days of a permit’s expiration, and the airport would be required to record a notice of termination of the easement with the county recorder within 90 days of the notification.

Approval of this resolution contributes to the Shared Vision of 2025 of a Collaborative Community by allowing for better public notice of avigation easements, streamlining the easement issuance process and making for better land use decisions. The Resolution has been reviewed and approved as to form by County Counsel.

Performance Measure(s):

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Federal/State Measures analyzed and acted on

25

35

FISCAL IMPACT:

None as the author will amend the bill to explicitly authorize the county recorder to charge a fee sufficient to cover the recordation costs imposed by the legislation.