2010-2011Midyear Budget Report

& 2011-2012

Budget Outlook UpdateMarch 1, 2011 1

2010-11First Quarter Report Current Year Budgetary Actions

Continue Administrative Hiring FreezeExceptions

24-hour institutions & assigned to health/safety functions

Grant-funded/revenue offsetFill vacancies with existing workforce

Limit business-related travel/training Postpone fixed assets/capital expenses Restrict fund transfers for unbudgeted

expenses Preserve Reserve & limit its use

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2010-11 Net County Cost(in Millions)

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General Government $22.6 M $21.9 M ($0.7) MCapital Maintenance 6.1 M 6.1 M 0.0 MEnvironmental Protection 6.9 M 6.5 M (0.4) MLaw & Justice 133.0 M 134.3 M 1.3 MRoads & Facilities 0.3 M 0.3 M 0.0 MHealth Services 20.3 M 20.1 M (0.2) MHuman Services 25.6 M 20.4 M (5.2) MEducation 0.4 M 0.4 M 0.0 MParks & Recreation 2.7 M 2.7 M 0.0 M

Total Net County Cost $217.9 M $212.7 M ($5.2) M

*Includes 2009-10 encumbrances carried forward & midyear adjustments.

Adopted Budget*

Midyear Projection

Over/ (Under) Budget

2010-11 General Purpose Revenue(in Millions)

Property Taxes $165.1 M $166.6 M $1.5 MPenalty on Delinq 3.8 M 3.4 M (0.4) MRedevelopment Pass-Thru 2.5 M 3.2 M 0.7 M

Sales Taxes 11.1 M 11.9 M 0.8 MTobacco Settlement Funds 5.1 M 5.1 M 0.0 MProperty Transfer Tax 2.2 M 2.2 M 0.0 MWilliamson Act Subvention 0.0 M 0.0 M 0.0 MInterest Income 0.5 M 0.5 M 0.0 MOther 4.6 M 4.5 M (0.1) M

Total GPR $194.9 M $197.4 M $2.5 M

Adopted Budget

Midyear Projection

Over/ (Under) Budget

4

Issues IdentifiedSales Tax Revenue

General Purpose Revenue 10-11 receipts at $11.9M $810K over budget & $550K better than

09-10

Prop 172 Public Safety – ½ cent Statewide Allocation based on local collections 10-11 receipts at $36M $2.5M over budget but $400K less than 09-

10

Realignment – Social Services Allocation based on State formula 10-11 receipts at $26.5M $2M over budget & $200K better than 09-

10

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Issues IdentifiedSales Tax Receipts (in Millions)

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$17.1 $16.9 $15.5 $14.7 $11.4 $11.1 $11.9

$46.8 $52.0$46.1

$40.4$36.4 $33.5 $36.0

$28.9$35.6

$32.9

$28.1$26.3

$24.5$26.5

$0

$20

$40

$60

$80

$100

$120

2005-06 Actual

2006-07 Actual

2007-08 Actual

2008-09 Actual

2009-10 Actual

2010-11 Adopted Budget

2010-11 Midyear

Projection

General Purpose Revenue Prop 172 Realignment Social Services

$104.5

$74.1 $74.4

Issues IdentifiedLaw & Justice

Court Assigned Counsel 1st quarter experience

550 “overflow” cases per monthProjected $680K overrun by year-end

Midyear experience477 “overflow” cases per monthActual expenditures $2.1M; 44% of budget

Exceed budget $140K by year-end7

Issues IdentifiedLaw & Justice

Sheriff-Coroner-Public Administrator $3.6M over allocated NCC

Unbudgeted separation costsRetirement rate increasesHigher Patrol vehicle usage

Delay in COPS Hiring Recovery grant Custody overtime $100K better than 1st

quarter Overage will be partially offset by Prop

172 Budget adjustments prior to year-end

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Issues IdentifiedAnimal Control

November 2010 Board actions Deleted 1 vacant ACO Funded remaining 7 positions &

emergency after-hour services thru June 2011 with Rabies Treatment fund balance ($101K)(1 Manager, 5 ACOs, & 1 clerical)

Depleted Rabies Treatment Fund to $17K

9

Issues IdentifiedAnimal Control

Sheriff’s proposal Consolidate AC functions under

Sheriff’s Patrol Division Replace Manager with 1 ACO New organization = 6 ACOs & 1

clerical with supervision by Patrol staff

Dispatch & support by various Sheriff’s units

New structure yields significant programmatic cost savings by utilizing existing Sheriff staff

10

Issues IdentifiedAnimal Control

Prelim 2011-12 AC budget shortfall $160K Fund balance used to sustain

current year’s operations

General Fund augmentation is not recommended due to NCC budget shortfall

AC operations remain with Ag Commissioner

CAO continues efforts on regional operations

APL report in April

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Issues IdentifiedSan Joaquin General Hospital

Midyear operating loss of $5.8M $380K less than budgeted

SJGH cash deficit Dec 31st = ($29.8M); $16.1M better

than budget Increased Medi-Cal inpatient per diem, one-time Hospital Fee Program & additional Medi-Cal Waiver payments

June 30th projection = ($6M); $8M better than budget

12

Issues IdentifiedHuman Services Agency

Overall program expenses $18.3M below budget NCC savings $3M Adoptions Assistance IHSS programs Administration Foster Care Community Services Block Grant

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2010-11 Reserve for Contingency(as of February 28, 2011)

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2010-11 Reserve Level $10,600,000

Excess year-end GF balance 2,759,081

Replace GF contribution to SJGH with unbudgeted Hospital Fee

6,014,766

Reserve Balance $19,373,847

Staffing Changes

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Organizational Downsizing

Board proactive actions to minimize service impacts & employee layoffs Feb 2008 – reinstated Administrative

Hiring Control Program Nov 2008 – implemented Hiring Freeze

13.8% smaller workforce compared to FY07-08 Net reduction of 854 positions Majority were vacant positions Unable to avoid layoff entirely

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Status of Laid Off Employees Nov 2008 to Jan 2011

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Placed in Lower Level Positions, 123 Employees

Still in Laid OffStatus,

91 Employees

Re-employed,44 Employees

Declined Re-employment9 Employees

Retired, 6 Employees

Preliminary Outlook

Tightening of overall job market => limited placement options

SJC Dec 2010 unemployment rate 18%1% higher than last year

Vacancy rate 6.8% vs. 10% normMajority (74%) in health & human

services programs – vulnerable to federal/State cuts 1

8

2011-2012Budget Outlook

Update

19

2011-12 Preliminary Budget OutlookMajor Revenue Changes – General Fund

Increase/(Decreas

e)

One-time transfers/use of fund balances

$(23.5) M

3% decline in property tax (3.2) M Modest growth in sales tax

General Purpose 1.0 M Prop 172 public safety 3.6 M Realignment social services 2.5

M Misc net adjustments 0.1

M

Total Major Revenue Changes $(19.5) M

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$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2005-06 Actual

2006-07 Actual

2007-08 Actual

2008-09 Actual

2009-10 Actual

2010-11 Adopted Budget

2010-11 Midyear

Projection

2011-12 Prelim

Estimates

Property Tax Sales Tax Others Prop 172 & Realignment Fund Balance/Transfers

$278.4

$311.3

$366.2

$303.9

$271.3

2011-12 Preliminary Budget OutlookGeneral Purpose Revenue (in Millions)

$251.8

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$400.7

$295.9

2011-12 Preliminary Budget OutlookMajor Known Cost Increases

22

Negotiated salary & benefits adjustments

$4.2 M

Retirement contribution 13.0 M

Employee health & dental premiums

11.8 M

Unemployment insurance 1.1 M

2012 elections 2.4 M

Public assistance program – FMAP 3.2 M

Total 2011-12 Known Cost Increases

$35.7 M

2011-12 Preliminary Budget OutlookNCC Budget Shortfall

Gen Fund NCC shortfall = $36M to $38M; $2M worse than 1st quarter – local issues onlyAvailable GPR down $19.5MNet S&B cost up $13.2M2012 election costs as much as

$2.4M Public assistance ARRA funds end

$3.2MMisc expenditure adjustments

down $1.1M

Support to SJGH remains at $11.9M

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2011-12 Preliminary Budget OutlookBudget Planning

Started departmental budget planning & preparation in Jan 2011 – a month earlier

NCC cuts:Most GF-supported operations – 15%Public safety – 10%Detention operations – 5%

Continue to explore cost saving alternatives

Initiate discussions with employee groupsEmployee benefits – health

insurance & retirement plans

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2011-12 Preliminary Budget OutlookCommunity-Based Organizations

10-11 County support =$683K

Notification letters to CBOs – eliminating County support in 11-12

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Governor’s January 2011 Budget

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Governor’s January ProposalsMajor Components

Projected $25.4B deficit by June 30, 2012 $8.2B current year $17.2B structural imbalance

Key budget components: Expenditure reductions Major State/local realignment Tax extensions – subject to voters’

approval Elimination of redevelopment

agencies & enterprise zones27

Governor’s January ProposalsHighlights

Special election – possibly June 2011; however, no funds to reimburse counties

Tax extensions/funding transfers – $11.2B 0.5% VLF – 2011 Realignment 1% State sales tax – 2011

Realignment 0.25% personal income tax

surcharge Dependent exemption credit

Funding shifts Proposition 10 – $1B 11-12; $800K

thereafter Proposition 36

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Governor’s January ProposalsHighlights

2011 Realignment – $5.9B

Local public safety funds

Court security

Low-level offender/adult parole/juvenile detention

Mental health/substance abuse

Foster care/child welfare/adult protective

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Governor’s January ProposalsImpact on County

Eliminate 10-11 & 11-12 Williamson Act subventions

Suspend State mandate reimbursements

Eliminate funding for County VSOs & Operation Welcome Home Program

Cut Medi-Cal benefits & provider rates

Redirect Prop 10 First 5 funds Reduce CalWORKs grants & limit

benefits Reduce IHSS services

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Recommendations

Receive & file Midyear Budget Report

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