fiscal year 2013-14 county of monterey | county administrative office | june 5, 2013 county of...

Fiscal Year 2013-14

County of Monterey | County Administrative Office | June 5, 2013

County of Monterey Recommended Budget

Historical Perspective

2

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%.

$470.0

$495.8

$528.5

$564.9

$582.6

$591.1

$610.2

$489.8

$507.9 $523.7

$553.8

$541.0$535.3

$544.8

$440.0

$460.0

$480.0

$500.0

$520.0

$540.0

$560.0

$580.0

$600.0

$620.0

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Revenues

Expenditures

Dollars in Millions


3

Moody’s cuts California’s Santa Clara County pension obligation bond

The rating agency alsoaffirmed the county's Aa2general obligation bondrating and its outstandingcertificates of participationand lease obligations ratedA1. The outlook is stable.About $1.5 billion of long-term debt is affected by the rating actions.

"The rating change reflectsMoody’s changed view of thepledge supporting POBs versusgeneral obligation bonds," therating agency said in astatement. "We believe thispledge is relatively less securethan our prior estimates, both interms of probability of defaultand likely losses in the event ofdefault."

REUTERSTue Mar 12, 2013 9:11am EDT

(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.


4

RIVERSIDE COUNTY: Top administrator expects196 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.”

THE PRESS-ENTERPRISEMarch 28, 2012

5

About 100 employees of Santa Cruz Counseling Center on furlough due to federal sequesters

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.

SANTA CRUZ SENTINELMay 31, 2013

Teachers at Santa Cruz County Head Start are facing furloughs

6

STATE BUDGET CUTS FORCE TULARE COUNTY TO CUTThe 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."

June 3, 2013

7

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 withparks, foster care and roads will see cuts in theirbudgets if the Board of Supervisors approve aproposed $494.8 million budget for the coming fiscalyear.On the other side of the ledger, departments dealingwith the courts, Veterans Services and the countylibrary system will see boosts to theirs.Regardless, an analysis prepared through the county’sAdministrative Office says services and staffing shouldremain at current levels because of the relatively smallchanges planned.

THE TRIBUNEMay 14, 2013

County of Monterey: Achieving Structural Balance

8

$470.0

$495.8

$528.5

$551.6 $539.4 $534.7

$520.8

$489.8

$507.9 $523.7

$544.3

$527.7 $531.7$526.3

$400.0

$420.0

$440.0

$460.0

$480.0

$500.0

$520.0

$540.0

$560.0

$580.0

$600.0

$620.0

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Revenues

Expenditures

Dollars in Millions

Purpose of the Recommended Budget

9

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.

County of Monterey Budget Process

10

Forecast & Budget Development Process

Bud

get D

evel

opm

ent

Bud

get D

evel

opm

ent

For

ecas

ting

For

ecas

ting

Conduct forecast & budget training

December April

Build Three-Year Forecast

Begin

November

Prepare 3rd Quarter Update

Dec. - Feb.

Distribute Forecast/Budget

Timeline & Assumptions

Budget HearingsDistribute GFC

Planning Estimates

Late June

Build Recommended

BudgetBudget Adoption

Prepare Requested

Budgets

Early June

End

March April – MayDecember

Analysis of State & Federal Budget Impacts

AprilApril

Budget Appeals

Dept. Heads

Workshop

CAO CAO Departments/CAO

CAO

Departments/CAO

Departments CAO Board/All Board/All

Feb. – Mar.

Present Three-Year Forecast to

Board of Supervisors

CAO

Budget at a Glance – All Funds

11

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.

Expenditures

Salaries & Benefits 468.4$ 486.0$ 499.5$ Services & Supplies 271.2 300.6 302.6 Other Charges 80.2 76.9 83.4 Fixed Assets 27.5 31.0 39.0 Op. Transfers Out 48.6 46.5 112.4 Contingencies - 4.6 5.2 Total Expenditures 896.0$ 945.5$ 1,042.1$

Revenues Taxes 157.6 153.1 162.0 Licenses, Permits & Franchises 14.5 18.0 16.1 Fines, Forfeitures & Penalties 9.8 11.8 12.1 State & Federal Aid 331.1 359.7 373.8 Charges for Current Services 266.0 234.0 254.2 Other Revenues 113.3 120.2 177.1 Total Revenues 892.2$ 896.8$ 995.3$

Use of Fund Balance 3.7$ 48.7$ 46.8$

FTE Positions 4,306.8 4,515.2 4,675.9

2013-14 Recommend

2011-12 Actual

2012-13 Adopted

County of Monterey | County Administrative Office | June 5, 2013

Dollars in millions: detail may not add to totals due to rounding.

2013-14 Recommended Appropriations by Fund/Fund Type

12County of Monterey | County Administrative Office | June 5, 2013

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 legally restricted to specified purposes, such as County 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.

General Fund, $526.6

Natividad Medical Center , $189.7

Behavioral Health Fund, $70.7

Special Districts & Other Revenue,

$107.8

Internal Service, $32.9

Health & Welfare Realign., $39.0

Road Fund, $36.8

Capital Projects, $22.1

Resort Ops, $8.4

Library, $8.1Total: $1.04 billion; amounts may not total due to rounding.

* Includes special revenue funds such as Local Revenue Fund (2011 Realignment), Community Development, & Of f ice of Employment Training.

2013-14 Estimated Revenue by Source (All Funds)


Federal & State Aid, $373.8

Charges for Services, $254.2

Taxes, $162.0

Operating Transfers,

$145.8

Other, $31.3

Licenses, Permits, & Franchises, $16.1

Fines, Forfeitures, & Penalties, $12.1Total: $995.3 million; amounts may not total due to rounding.

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).

General Fund Adopted BudgetIncluding Behavioral Health Fund (Part of General Fund Prior to 2012-13)


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.

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$571.4$560.2 $549.2

$534.4 $526.6

Behavioral Health General Fund

$495.7

$66.0

$560.7$70.7

$597.3

General Fund Strategic Reserve


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.

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$37.3 $37.3 $38.1 $38.1 $38.1 $38.1

$14.2 $14.2 $14.2 $14.2

Strategic Reserve - NMC

Strategic Reserve - General Fund

$52.3$52.3

Millions

$52.3 $52.3

2013-14 Estimated General Fund Revenues by Category


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.

Taxes, $150.1, 29%

Licenses, Permits & Franchises,

$15.6, 3%

Fines, Forfeitures & Penalties,

$9.1, 2%State &

Federal Aid, $202.0, 39%

Charges for Current

Services, $67.4, 13%

Other Revenues, $77.2, 15%

Dollars are in millions and may not total due to rounding.

Total: $521.4 Million

General Fund State & Federal AidIncluding New Behavioral Health Fund (Part of General Fund Prior to 2012-13)


$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$288.7 $294.6 $302.4

$270.0

$206.4 $202.0

MillionsBehavioral Health General Fund

$272.4 $272.8

--------------------------------------Actuals-------------------------------------- Estimate Budget

$66.0 $70.7

--------------------------------------Actuals-------------------------------------- Estimate Budget

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.

Program vs. Non-Program Revenue


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.

Program Revenue, $348.6,

67%

Non-Program Revenue, $172.8,

33%

General Fund Non-Program Revenue


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.

$100.0

$110.0

$120.0

$130.0

$140.0

$150.0

$160.0

$170.0

$180.0

$190.0

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$186.0$182.8

$168.6$165.8 $168.0

$165.3

$172.8

Millions

------------------------------------------Actuals------------------------------------------------- Adopted Recommend

General Fund Non-Program Revenue Sources


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.

Property Tax$120.7 - 70%

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%

Other$10.3 - 6%

Dollars are expressed in millions and may not total due to rounding.

Total: $172.8 Million

Property Tax Revenue


$127.6

$131.4

$120.3

$115.8 $116.1

$118.2

$120.7

$105.0

$110.0

$115.0

$120.0

$125.0

$130.0

$135.0

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Millions

-------------------------------------------------Actuals---------------------------------------------------- Estimate Recommend

$16.4

$15.0

$13.0

$13.8

$16.6 $16.6

$18.2

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Millions

-------------------------------------------------Actuals---------------------------------------------------- Estimate Recommend

Transient Occupancy Tax Revenue

Largest Sources of General Fund Non-Program Revenues


General Fund AppropriationsRecommended general fund appropriations total $526.6 million.

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.

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.

Health & Social Services, $237.0,

45%

Public Safety / Criminal Justice,

$170.5, 32%

Finance and Administration,

$85.3, 16%

Land Use/Infra./Environ.,

$28.8, 6%

Education & Recreation, $5.0,

1%

Dollars in millions; amounts may not total due to rounding.

Total: $526.6 million.


General Fund Appropriations for 5 Largest Functional Areas

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

Public Safety Social Services Finance & Admin. (1) Health (2) Land Use, Infrastructure,

Environ.

$157.8 $158.5

$79.0

$66.2

$28.0

$170.5+$12.7

8.1%$166.6

+$8.15.1%

$85.3+$6.38.0% $70.4

+$4.26.3%

$28.8+$0.72.6%

Millions

2012-13

2013-14

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).


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 Transfers Out,

$23.8, 4%Contingencies,

$5.2, 1%

Dollars in millions and may not total due to rounding.


General Fund Appropriations – Salary & Benefits

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$259.3

$278.9

$310.6

$333.2 $333.7 $334.4 $334.8

$313.8

$336.6$28.4

$29.8

Behavioral Health General Fund

$366.4

$342.2

---------------------------------------------Actuals------------------------------------------ Estimate Recommend


General Fund Contributions

Health & Social Services, $1.8, 7%

Public Safety / Criminal Justice,

$83.2, 47%

Finance and Administration,

$64.9, 37%

Land Use/Infra./Environ.,

$16.0, 9%

Education & Recreation,

$2.0, 1%

Dollars in millions; amounts may not total due to rounding.

Total: $178.0 million.

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.



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.

$% of Total $

% of Total

Sheriff $48.7 23.6% $50.4 28.3%

Probation 12.9 6.2% 16.7 9.4%

District Attorney 7.3 3.5% 9.1 5.1%

Public Defender 7.4 3.6% 9.2 5.1%Emergency Comm. 0.7 0.3% 1.3 0.7%

Public Safety GFC $77.0 37.3% $86.6 48.7%

Countywide GFC $206.7 $178.0

2007-08 Adopted: 2013-14 Recommended:


Sources of Financing for Appropriations, by Function

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

Health & Social Services

Public Safety / Criminal Justice

Finance and Administration

Land Use, Infrastructure,

Environ.

Education & Recreation

$225.2

$87.3

$20.4 $12.8 $3.0

$11.8

$83.2

$64.9

$16.0$2.0

Millions


Program Revenue


Requested vs. Recommended Augmentations - Appropriations

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

$10.0


Public Safety/Criminal

Justice

Finance & Admin. Land Use, Infrastructure,

Environ.


$9.1

$6.1

$4.4

$0.9 $0.3

$8.1

$4.6

$2.8

$0.6 $0.1

Requested

Recommended


Requested vs. Recommended Increases to General Fund Contributions

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

Public Safety/Criminal

Justice

Finance & Admin. Land Use, Infrastructure,

Environ.



$4.9

$4.3

$0.9

$1.2

$0.3

$3.5

$2.7

$0.6 $0.2 $0.1

Requested

Recommended


Requested vs. Recommended Position Augmentations (General Fund)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Health & Social Services Public Safety/Criminal Justice

Finance & Admin. Land Use, Infrastructure, Environ.

105.0

39.0

18.5

2.0

105.0

37.0

12.5 0.0

Requested

Recommended


Self-Funded vs. GFC-Funded Position Augmentations (General Fund)

Department Self Funded

Supported by General Fund Contributions Total

Social Services 55.0 6.0 61.0 Health 41.0 0.0 41.0 Sheriff-Coroner 0.5 13.5 14.0 District Attorney 7.0 4.0 11.0 Emergency Communications 4.6 0.4 5.0 County Administrative office 1.0 3.0 4.0 Public Defender 0.0 4.0 4.0 Probation 0.0 3.0 3.0 Assessor-County Clerk –Recorder 0.0 2.0 2.0 Economic Opportunity 0.0 2.0 2.0 Human Resources 0.0 2.0 2.0 Information Technology 2.0 0.0 2.0 Auditor-Controller 0.0 1.0 1.0 County Counsel 0.0 1.0 1.0 Resource Management Agency 0.0 1.0 1.0 Clerk of the Board 0.0 0.5 0.5

TOTAL FTEs: 111.1 43.4 154.5


Augmentation Highlights – Health & Social Services

Adds 92 positions within the health and social services functionto 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.


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.

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.


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.


Augmentation Highlights – Public Safety (Continued)

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.

Criminal Caseloads

3,224 3,261 3,5403,850

3,563

4,486 4,468 4,375

3,0812,589 2,754 2,607 2,731

14,953 14,88514,257 14,303

12,887

13,905

12,498

13,560

12,467

11,788 11,611

10,819

9,318

18,177 18,14617,797

18,153

16,450

18,391

16,966

17,935

15,548

14,377 14,365

13,426

12,049

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Felony Misdemeanor Total

Source: CJIS data provided by the Monterey County District Attorney’s Office


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.


Staffing Trends – All Funds

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.

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

4,847.5

4,639.1 4,630.4

4,306.84,515.2

4,675.9


Staffing Trends – Overtime (All General Fund Departments)

2011-12 Actual

2012-13 Adopted

2013-14 Recommended

Sheriff $4,578,551 $3,253,917 $3,392,400 $36,874,625 9.2%

Probation 109,972 362,000 342,000 20,699,948 1.7%

District Attorney 73,640 80,000 75,000 13,130,933 0.6%

Public Defender 2,580 10,000 5,000 4,389,467 0.1%

Emergency Comm. 560,095 1,367,439 1,150,188 4,753,988 24.2%

Total 5,324,838 5,073,356 4,964,588 79,848,961 6.2%

Overtime Expenditures:

Total Salaries

% of Total

Salaries

Staffing Trends – Overtime (Public Safety/Criminal Justice)

2011-12 Actual

2012-13 Adopted

2013-14 Recommended

Public Safety $5,324,838 $5,073,356 $4,964,588 $79,848,961 6.2%

Finance & Admin. 48,552 60,000 77,000 37,770,589 0.2%

Land Use, Infrastructure, Environ. 56,223 135,598 66,653 15,630,430 0.4%

Health & Social Services 592,823 532,399 519,783 82,941,307 0.6%

Education & Recreation 23,193 20,757 8,500 1,914,219 0.4%

Totals $6,045,629 $5,822,110 $5,636,524 $218,105,506 2.6%

Overtime Expenditures:

Total Salaries

% of Total

Salaries


Employee Retirement Costs

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$19.8

$29.5

$35.5 $35.2

$38.9$40.8 $40.9 $40.8

$37.2

$32.7

$36.5

MillionsOver 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.


PERS Retirement Unfunded Liabilities

Actuarial Liability, $1,169,800,000

Actuarial Asset Value, $1,047,600,000

Unfunded Liability, $122,200,000

Miscellaneous Plan Funded Status

Actuarial Liability, $444,400,000

Actuarial Asset Value, $336,300,000

Unfunded Liability, $108,100,000

Safety Plan Funded Status


PERS Policy Changes

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.

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


Forecasted PERS Expenditures

$34.4 $34.5 $34.6 $34.6 $34.4 $34.2 $34.2 $34.1 $33.9$32.7 $32.7

$37.3

$40.3

$43.1

$45.8$48.5 $48.5 $48.3 $48.1

$40.3

$43.9

$47.5

$50.9

$54.3 $54.3 $54.1 $53.9

$42.8

$47.1

$51.4

$55.5

$59.5 $59.4 $59.3 $59.1

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

$50.0

$55.0

$60.0

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

Millions

Includes terms of cost sharing agreements/MOUs in effect as of April 2013.

With Increased Life Expectancy (Likely)

With Discount Rate Lowered to 7.25% (likely)

With April 2013 Rate Change (Adopted)

Status Quo (without PERS policy changes)

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-Paid Employee Health Insurance Costs

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.

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$30.5$32.7 $32.1 $32.9

$34.3 $34.9

$38.8

Millions

------------------------------------------Actuals------------------------------------------------- Estimate


Other Funds


Natividad Medical CenterNMC 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.

Net Patient Revenue: 142,773,989$ 128,843,916$ 134,787,140$

Government Revenue: 41,118,000 44,481,445 37,749,867

Other Revenue: - - -

Total Revenue: 183,891,989 173,325,361 172,537,007

Operating Expenses: 175,230,966 165,144,422 170,667,503

Capital Expenditures: 21,442,471 21,442,471 19,060,583

Total Expenditures: 196,673,437 186,586,893 189,728,086

Use of Fund Balance: (12,781,448)$ (13,261,532)$ (17,191,079)$

Natividad Medical Center

2012-13 Adopted

2012-13 Estimate

2013-14 Recommended


Road FundThe 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.

Road Fund

Adopted 2012-13

Estimated 2012-13

Recommended 2013-14

Beginning Fund Balance 2,828,255$ 3,540,309$ 3,401,602$

Revenue: 28,912,655 27,949,404 27,382,006

Cancellation of Reserves: - - -

Expenditures: 28,357,766 28,088,111 30,783,608

Provisions for Reserves: - - -

Ending Available Fund Balance: 3,383,144$ 3,401,602$ (0)$


Monterey County LibraryThe 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.

Beginning Fund Balance 1,244,110$ 1,244,110$ 1,149,112$

Revenue: 6,927,537 7,091,337 7,153,402


Expenditures: 7,896,166 7,186,335 8,076,335


Ending Available Fund Balance: 275,481$ 1,149,112$ 226,179$

Monterey County Free Libraries Fund

Adopted 2012-13

Estimated 2012-13

Recommended 2013-14


Behavioral Health FundThe 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).

Behavioral Health Fund

Adopted 2012-13

Estimated 2012-13

Recommended 2013-14

Beginning Fund Balance: -$ -$ -$

Revenue: 65,314,411 66,017,361 70,724,468


Expenditures: 65,235,162 66,017,361 70,676,926


Ending Available Fund Balance: 79,249$ -$ 47,542$


Water Resources AgencyThe 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.

Water Resources AgencyAdopted 2012-13

Estimated 2012-13

Recommended 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


Ending Available Fund Balance: 12,408,413$ 13,629,545$ 12,805,783$


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


Current & Future Challenges – Capital Needs

$145.0 million total capital improvement plan need over next 5 years.$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$52.4

$40.3

$31.0

$7.1$3.0$3.0$8.1

Millions

Other

Old Jail Partial Demolition

County Parking Structure

Public Defender Office Building

East & West Wing Renovations

Jail Housing Addition

New Juvenile Hall (Phase I)


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.


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.


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.

fiscal year 2013-14 county of monterey | county administrative office | june 5, 2013 county of...

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