County Manager’s Office
September 21, 2010
BOARD MEETING DATE:
September 28, 2010
Honorable Board of Supervisors
David S. Boesch, County Manager
Final Budget Changes to the Fiscal Year 2010-11 Recommended Budget
Approve the following actions related to final budget changes to the Fiscal Year 2010-11 Recommended Budget:
1. Adopt resolutions:
a. approving the County of San Mateo budget as to the expenditures for Fiscal Year 2010-11 and making appropriations therefore;
b. approving the County of San Mateo budget as to the means of financing for Fiscal Year 2010-11;
c. establishing appropriation limit for the County of San Mateo for Fiscal Year 2010-11;
2. Adopt an ordinance amending the Master Salary Ordinance for changes related to the Fiscal Year 2010-11 budget; and
3. Accept reports related to budget items discussed during June Budget Hearings and provide direction on budget requests for:
a. Appraisal Services Division
b. Department of Housing
c. Health System
State Budget – Will Bring Back As Mid-Year Adjustments
The recommended changes included herein do not include any State budget reductions with the exception of some formula driven revenues, such as Realignment. This year the State will set a new standard of futility in adopting its budget as the previous record of 78 days was set in 2008 when the Legislature finally passed a budget on September 16, 2008. Our plan is to bring mid-year budget adjustments to the Board once the State budget has been adopted and we’ve had an opportunity to assess the impacts.
What we currently know is that the Budget Conference Committee completed the majority of their work in reconciling differences between the Senate and Assembly to close the $19 billion budget gap. The Committee's plan relies on a more balanced approach that rejects most of the major cuts in state spending proposed in the Governor's May Revision, includes tax increases, and assumes $4.1 billion in additional federal funding, slightly higher than the level assumed by the Governor.
On the spending side, the Conference Committee adopted a Corrections Restructuring Package that would provide counties with funding to incarcerate offenders convicted of wobbler crimes at the local level; convert the revenue source for funding the Youthful Offender Block Grant (YOBG) to the VLF increase; and make the VLF rate increase permanent (scheduled to expire on June 30, 2011), with 0.15 percent of the VLF dedicated to the Local Safety and Protection Account (LSPA). In the areas of health and human services, the Conference Committee rejected the Governor's 10 percent cut to public hospitals; adopted a $250 million cut to the IHSS program pursuant to the development and implementation of a provider fee and consultation with stakeholders to devise policies underlying the additional savings; and the establishment of a stakeholder workgroup to examine other potential policy options to achieve savings in the IHSS program. Finally, the Conference Committee rejected the Governor's proposal to suspend the AB 3632 mandate and voted to continue the mandate on county mental health programs and adopted a new proposal to authorize local governments to securitize future State payments for mandate reimbursement.
On the revenue side, the Conference Committee adopted the Democrats tax proposal which would raise personal incomes taxes on all but the highest income bracket, raise the VLF, and reduce the state's sales tax. Together, the changes would raise approximately $1 billion. The Governor has stated that he does not support higher taxes.
The Multi-Year Government Restructuring Proposal offered by the Senate Democrats in mid-June, with the exception of the corrections components noted above, were eliminated from the Conference Committee plan. Programs no longer proposed for realignment include: several alcohol and drug treatment programs, changes to cost-sharing ratios for various CalWORKS program components, as well as Adult Protective Services and other aging programs.
BACKGROUND AND DISCUSSION:
The Board’s public hearings on the FY 2010-11/2011-12 Recommended Budget were conducted from June 21 through June 23, 2010. The FY 2010-11 Recommended Budget adopted by the Board on June 23 was $1.77 billion with 5,430 positions.
As a result of the County’s financial year-end closing activities and availability of updated information, increases of $49.6 million are proposed to the Recommended Budget, representing a 2.8% increase in the total budget. These increases consist of $47.1 million in final Fund Balance adjustments and a $2.45 million in September Revisions, with a net increase of six positions. The increase in positions is primarily due to the opening of the new Esperanza Clinic at the Ron Robinson Senior Care Center. The revised County Budget with these changes is $1.82 billion with 5,436 positions.
Please note that the proposed FY 2010-11 Adopted Budget of $1.82 billion and 5,436 positions does not include the proposed San Carlos Law Enforcement Agreement, which is treated as a mid-year budget change due to the timing that the Agreement has been brought to the Board for consideration.
Environmentally Conscious Community
Total All Community Outcomes
Final Fund Balance Adjustments
As adopted by Board Resolution, final Fund Balance adjustments are included in the Recommended Budget and comply with County Reserves Policy guidelines. Following FY 2009-10 year-end closing activities, additional Fund Balances of $50.3 million for all County funds ($24.8 million in the General Fund and $25.5 million in Other Funds) are included in the budget. The net increase in total sources is $47.1 million as the Medical Center has reduced patient revenues to offset increases in final Fund Balance. Of the $47.1 million, $15.1 million has been appropriated for one-time purposes and $32 million has been set-aside in Reserves. These adjustments are summarized in Attachment C.
Final Budget Changes (September Revisions)
Final budget changes for all County funds (Attachments D) result in net increases to the County Budget of $2.4 million and six positions, five of which are for the new Esperanza Clinic at the Ron Robinson Senior Care Center. All of the positions recommended for deletion are vacant. Attachment B contains a summary of position changes.
Key September Revisions
• Health System – New Esperanza Clinic for Developmentally Disabled ($705,140)
• Sheriff’s Office – Bay Area Urban Area Security Initiative Grant ($1,238,022)
• Probation Department – Department Re-Org / IT Desktop Support ($410,293)
• Utilities – Eleanor Drive Sanitary Sewer Rehabilitation Project ($1,575,000)
• Utilities – Crystal Springs / El Cerrito Trunk Line Project ($518,000)
• Information Services Department – Loan from Department Reserves and Non-Departmental Services ($1,896,418)
Net County Cost Adjustments
Ongoing Net County Cost increases by $10,404 for the County’s membership to the ABAG-Bay Area Waste Management Facility Allocation Committee and $14,000 for the Math and Science Project.
Report Back Items Requiring Board Action
Attachment A contains a cover memo and the following reports requested at the June Budget hearings that require Board action:
o Cost Benefit and Workload Analysis in the Appraisal Services Division
o Department of Housing – General Fund Request
o Health System Report Backs:
- List of Priorities, including the HOME Team and SMART Program
- Additional Information on Health System Non-Mandated Services
Report Back Items – Information Only
Attachment A also contains the following reports requested at the June Budget Hearings, including updates on two reports that require additional time to complete and a request to defer the Five-Year Capital Improvement Plan to the FY 2011-12 budget cycle to improve the plan’s usefulness and incorporate new jail/re-entry facility construction and Countywide Facility Master Plan findings into a more comprehensive document.
o Explore Alternatives for Allocating General Fund Discretionary Revenues (Net County Cost)
o Management Staffing and Span of Control Guidelines
o Human Resources Department Management-to-Staff Ratio
o Child Welfare Services Overmatch
o Jobs for Youth Program
o Crisis Management Unit Deputy Sheriff and Community Schools
o After Hours Security at the Youth Services Center
o Electronic Monitoring Program
o Memberships and Contributions – Explanation of Terms of Organization of the Summary Table
o Inventory of School-Based Collaborative Partnerships and Funding Criteria (December 14, 2010)
o Communication Between the County and the Workforce Investment Board (WIB) (October 19, 2010)
o Five-Year Capital Improvement Plan (defer to FY 2011-12)
For FY 2010-11, the impact of all September changes on Total Requirements for all funds is an increase of $49.6 million (the General Fund increases by $27.5 million and all other funds increase by $22 million). County Reserves increase by $29.8 million (the General Fund increases by $15.2 million and all other funds increase by $14.5 million). General Fund Reserves now totaling $224,318,436 represents 21.7% of Net Appropriations. The ongoing Net County Cost increases by $24,404.
Attachment A – Report Back Items
Attachment B – Position Changes Summary
Attachment C – Final Fund Balance Adjustments
Attachment D – September Revisions (Final Budget Changes)