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2011-2012Midyear Budget Report &

2012-2013Preliminary Budget

OutlookMarch 13, 2013

2011-2012 Net County Cost ($ in Millions)

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General Government $25.4 M $24.5 M ($0.9) MCapital Maintenance 10.2 M 10.2 M 0.0 MEnvironmental Protection 5.6 M 4.4 M (1.2) MLaw & Justice 131.9 M 128.7 M (3.2) MRoads & Facilities 1.2 M 1.2 M 0.0 MHealth Services 27.8 M 26.3 M (1.5) MHuman Services 25.3 M 19.9 M (5.4) MEducation 0.4 M 0.4 M 0.0 MParks & Recreation 2.4 M 2.4 M 0.0 M

Total Net County Cost $230.2 M $218.0 M ($12.2) M

*Includes 2010-11 encumbrances carried forward & midyear adjustments.

Adopted Budget*

First Quarter

Projection

Over/ (Under) Budget

2011-12 General Purpose Revenue ($ in Millions)

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Property Taxes $162.3 M $162.3 M $0.0 MPenalty on Delinq 3.1 M 2.6 M (0.5) MRedevelopment Pass-Thru 3.1 M 3.1 M 0.0 M

Sales Taxes 12.2 M 13.6 M 1.4 MTobacco Settlement Funds 5.6 M 5.6 M 0.0 MProperty Transfer Tax 2.3 M 2.1 M (0.2) MVehicle License Fees 0.0 M 1.5 M 1.5 MInterest Income 0.5 M 0.1 M (0.4) MOther 4.5 M 4.5 M 0.0 M

Total GPR $193.6 M $195.4 M $1.8 M

Adopted Budget

First Quarter

Projection

Over/ (Under) Budget

Issues IdentifiedSales Taxes

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Midyear receipts continue to improve

General Purpose Revenue 11-12 receipts at $13.6M $1.4M over budget & $716K better than 1st quarter

Prop 172 Public Safety – ½ cent Statewide Allocation based on local collections 11-12 receipts at $40.0M $2.4M over budget & $1.3M better than 1st quarter

Realignment – Social Services Allocation based on State formula 11-12 receipts at $29.8M $2.5M over budget & $245K better than 1st quarter

Issues IdentifiedSales Taxes ($ in Millions)

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$104.5

$74.0

$83.4

Issues IdentifiedSJGH

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Inpatient census 2.1% below target

Medical Guarded Unit census at 14 by March

Net operating loss thru Dec 2011 = $700K $3 million better than budgeted

Issues IdentifiedHuman Services Agency

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Overall program expenses $28.2M below budget $2.9M NCC savings

Primarily due to State policy/programming changes

CalWORKs – ($8.7M)

Foster Care – ($5.5M)

Administration – ($13.8M)

2011-12 Reserve for Contingencies8

2011-12 Reserve Level $13,795,071

Plus: Excess year-end GF Balance +2,971,018

Adjusted Reserve Level

$16,766,089

Less: LEMA/SDSA Lawsuit -1,808,222

Reserve Balance $14,957,867

Staffing Changes

Organizational Downsizing10

Board proactive actions to minimize service impacts & employee layoffs Feb 2008 – reinstated Admin Hiring Nov 2008 – implemented Hiring Freeze

14.2% smaller workforce compared to FY07-08 Net reduction of 883 positions Overwhelming majority were vacant positions Unable to avoid layoff entirely

Status of Laid Off Employees Nov 2008 to Jan 2012

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Positions Deleted: 883

Layoff Notices Issued: 433

Rescinded: 63

Placed in Lower Positions (163) Retired/Deceased (6)

Re-employed (82) Declined Re-employment (25)

Still in Laid Off Status (94)

Vacant PositionsAs of Jan 31, 2012

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463 positions or 8.6% vacancy rate SJGH Health Care Services Human Services Agency Public Works

Replace Hiring Freeze with Hiring Control Broaden recruitment to include non-County

employees

2012-2013Preliminary

Budget Outlook

One-Time Solutions 2009-10 to 2011-12 Recap ($ in Millions)

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2009-10 2010-11 2011-12

Defunded/redirected capital funds $32.1 $16.6 $14.0

Reduced Reserve for Contingencies 17.1 6.1 6.2

General Fund year-end balances 8.5 3.9 7.3

Fed stimulus funds for operations 10.2 16.0 2.0

Trust funds for operations 0.6 2.5 2.1

Total One-Time Solutions $68.5 $45.1 $31.6

3-Year Total $145.2

2012-13 Preliminary Budget OutlookMajor Revenue Changes – General Fund

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Increase/ (Decrease)

One-time transfers/use of fund balances

$(24.2) M

2% decline in property taxes (2.9) M

Decrease in interest & penalties (0.8) M

Growth in sales tax

General Purpose 2.1 M

Prop 172 public safety 5.3 M

Realignment social services 4.5 M

Net Revenue Changes $(16.2) M

2012-13 Preliminary Budget OutlookGPR ($ in Millions)

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$279.2

$400.7

$261.1

2012-13 Preliminary Budget OutlookChanges in Labor Costs17

Increase/ (Decrease)

MOUs/Resolution $(15.1) M

Negotiated increases 3.2 M

Retirement contribution 3.2 M

Employee health premiums 4.1 M

Net Labor Cost Changes $(4.6) M

2012-13 Preliminary Budget OutlookBudget Planning/Approach

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General Fund NCC shortfall = $14M to $16M

Budget planning Departments to develop “status quo” budget Suspend policy limiting use of General Fund

balance Negotiations concession savings Health plan redesign reduce rate increase Mid-term budget forecast

Recommended Actions19

1. Receive & file Midyear Budget Report

2. Effective immediately, discontinue the Administrative Hiring Freeze and replace it with Administrative Hiring Control