|The County Budget Act requires that the County Administrator transmit a recommended budget for the Board of Supervisors to consider and approve prior to June 30 each year. This item presents the County Administrator’s 2017-18 Recommended Budget as well as the 3rd quarter status of the 2016-17 budget. Within this report, information regarding the current year budget is presented first, followed by discussion of the 2017-18 Recommended Budget.
I. 2016-17 3rd Quarter Budget Monitoring
Year-end projections have been developed by each department based on actual revenue and expenditure data through March 31. Overall, most departments are projecting to end the year within budget. The sections below highlight areas where deficits are projected, or where budget adjustments or other actions are recommended. A detailed summary of the midyear projections for each department is provided in Attachment A.
Countywide Revenues: General purpose revenues are projected to end the fiscal year approximately $1.4 million over budgeted amounts, due primarily to a higher redevelopment pass through and one-time proceeds from the sale of fixed assets. 1991 and 2011 Realignment revenues are projected to end the year with a cumulative surplus of approximately $1 million, due primarily to receipt of growth funds that exceed budgeted amounts.
One area of concern is with Proposition 172 sales tax, which is projected to end the year with a shortfall of approximately $644,000. This deficit is due to slower statewide sales tax revenues and a change in the allocation methodology by the Board of Equalization that results in a one-time impact for Yolo County. Approximately two-thirds of the projected shortfall will be absorbed by the $425,000 Public Safety Contingency, which was funded out of Proposition 172 sales tax in 2016-17. Any remaining shortfall will be a revenue impact for the District Attorney, Probation and Sheriff’s Office. However, all three departments are projecting a year-end surplus and should be able to absorb any reduction in revenue.
Community Services: Community Services has a deficit of $87,892 in the Fleet Service Internal Service fund related to vehicle maintenance costs for the Sheriff and District Attorney, which are paid for by the General Fund. The 2016-17 Adopted Budget included a General Fund allocation for this purpose, but costs are projected to exceed the initial allocation. Staff recommends that the budget resolution presented in Attachment B be approved to allocate General Fund contingency to the Fleet Services Internal Service Fund for this purpose.
County Administrator’s Office: A deficit of $130,000 is projected in Cache Creek Resource Management due to an increase in professional services related to the 20-year plan update. Staff recommends that the budget resolution presented in Attachment B be approved to increase appropriations for this purpose. This increase will be funded by available fund balance.
County Counsel: County Counsel is projecting a year-end deficit of $167,000 due to lower than anticipated reimbursement for legal services. No budget adjustment is recommended at this time; staff will continue monitoring this area and if needed a budget adjustment will be requested once final amounts are known at year-end.
General Services: The Facilities division within the General Services department is projecting a deficit of $138,882 due to an increase in non-billable/non-collectible labor charges. No budget adjustment is recommended at this time; further analysis will be done before the end of the year, and if needed a budget adjustment will be requested once final year-end amount are known.
Health and Human Services Agency: Mental Health continues to project a year-end deficit of $4.5 million, unchanged from the midyear projection. As discussed previously, this overage is primarily due to an unanticipated spike in the need for acute mental health services, including significant increases in hospitalization and Institutions for Mental Diseases (IMD) facility costs. In addition, costs associated with Psychiatrist services have been increasing due to the need to contract for these services and the limited supply of service providers. Current projections reflect the worst-case scenario; once actual amounts are known at year-end, a budget resolution will be brought forward to request available Realignment funds to cover any remaining deficit.
Social Services is currently projecting a surplus of $1.5 million in the operating budget units, primarily due to salary and benefit savings from vacant positions, reduction in contractual costs and CalWORKs assistance payments that were lower than anticipated. While the Adopted Budget was balanced using $3.4 million in fund balance, the department now projects that only $1.1 million will be required due to actions taken throughout the year.
Library: All divisions of Library are projecting a balanced budget. However, a budget adjustment is needed to transfer excess parcel tax revenue from the Library CFD Debt Service to the Davis Cash Available fund (the Library Measure A fund) for use in operations instead of utilizing fund balance. Staff recommends approving the budget resolution reflected in Attachment B to increase appropriations by $63,670.
Probation: Probation is projecting an overall surplus of $1.79 million, including $1.35 million in the Public Safety fund units that are supported by the General Fund. This surplus is primarily due to savings in salary and benefits as a result of vacant positions, as well as lower youth placement costs due to a decline in population. The department is requesting to utilize $17,676 of this surplus for purchase of a commercial grade washer and dryer in the Juvenile Detention Facility. The current washer and dryer are in poor working condition. Staff recommends amending the 2016-17 Authorized Equipment List (Attachment C) to include this purchase.
Public Defender: The department is projecting a surplus of $25,157 due to salary and benefit savings and revenue from charges for services. The department is requesting to use this surplus to replace an aged, high mileage vehicle used by Investigators on a daily basis. No additional funding will be needed; if projected savings do not materialize, the vehicle will not be purchased. Staff recommends that the Board amend the 2016-17 Authorized Equipment List to include a replacement vehicle for the Public Defender’s office, contingent upon sufficient year-end savings.
Contingencies: The table below reflects the balance of 2016-17 contingency funds as of May 31, 2017. As mentioned in the Countywide Revenue section, the projected shortfall in Proposition 172 revenues will likely offset the balance of the Public Safety contingency. It is recommended that current contingency balances remain unallocated to cover unanticipated expenses prior to year-end, or to serve as a resource to balance any year-end deficits. Any amounts that are unspent at year-end will be carried forward and allocated as part of the 2017-18 Adopted Budget.
2016-17 Contingency Balances
* Funded by Proposition 172 sales tax
||Balance as of 5/31/17
|General Fund (2.5% of total allocations)
|Safety & Security
|HHSA Contingency (1% of operations)
II. 2017-18 Recommended Budget
The County Administrator’s 2017-18 Recommended Budget provides information to assist the Board of Supervisors in deliberating on the budget. The Recommended Budget (Attachment D) includes a department-by-department review of anticipated revenue and expenditures, as well as information regarding the programs that are funded and the measures by which departments will gauge their progress and performance.
State law requires the Board of Supervisors adopt a resolution setting the County’s budget each year, and prescribes the format required for such action. The 2017-18 Recommended Budget resolution (Attachment E) adopts and implements the initial budget for fiscal year 2017-18 as considered and amended by the Board of Supervisors during the budget hearings. This budget will provide appropriation authority until the 2017-18 Adopted Budget is approved in September. The Board may modify this budget at any time between now and at the Adopted Budget hearing by a 3/5 vote. Following approval of the Adopted Budget, a 4/5 vote is required for most budget modifications.
Before approving the 2017-18 Recommended Budget, the Board may make revisions to the recommended appropriations, revenues and staffing allocations. Exhibit 1 to the Budget Resolution summarizes appropriations and revenues by fund and budget unit at the object level. Exhibit 1A reflects the budgeted transfers among various funds and budget units, which are presented separately to eliminate double-counting that would occur if included in Exhibit 1. A notable change in 2017-18 is that the Capital Improvement Program budget is summarized separately from the operating budget in both budget resolution exhibits.
Approval of the Recommended Budget allows the County to begin the fiscal year with a balanced financial plan in place. As discussed further below, there are a number of items that are not included in the Recommended Budget, which staff recommends be considered at the Adopted Budget in September. For the Board’s consideration, the sections below highlight the changes, challenges and risks presented in the 2017-18 Recommended Budget.
The 2017-18 Recommended Budget is balanced, meets State appropriation requirements and aligns with the Board of Supervisors’ adopted financial policies. General purpose revenues are projected to increase approximately 4.1% over current year-end estimates, due primarily to an estimated 4.5% increase in property tax revenues. Marginal growth is projected in state and federal sources, including Public Safety (Proposition 172) and Realignment revenues. As discussed in more detail in the sections below, the majority of department budget are status quo and reflect few additional positions. A majority of the new positions that are included are funded without a net cost to the General Fund and other reductions in vacant positions result in an overall net reduction of 21 positions countywide compared to the 2016-17 Adopted Budget.
In November 2015, the Board approved the 2016-2019 Strategic Plan and Priority Focus Areas. The Strategic Plan included four primary goals, Thriving Residents, Safe Communities, Sustainable Environment and Flourishing Agriculture, which are supported by principles of Operational Excellence. Within each broad Strategic Plan Goal, a number of Priority Focus Areas were identified. The 2017-18 Recommended Budget includes resources designed to further the action items necessary to progress the Priority Focus Area objectives. The following table highlights a few of the notable funded initiatives.
Strategic Plan Initiatives Funded in 2017-18 Recommended Budget
|Strategic Plan Goal
||Priority Focus Area
||Develop and implement strategies to reduce homelessness.
- Develop a coordinated system for identifying and assessing people experiencing homelessness and prioritizing entry into permanent housing and supportive services
||Identify and address service delivery and critical infrastructure needs in unincorporated communities
- Assist Madison and Knights Landing with obtaining funding to ensure safe and adequate drinking water
- Continue project management for North Davis Meadows CSA to consolidate with City of Davis water systems for domestic water uses
- Complete Westucky water/sewer connection to City of Woodland
- Continue evaluation of options to address water quality and quantity issues in Wild Wings CSA
- Repair Cache Creek and CSA 6 levees to acceptable standard
- Implement $1.5M award from Department of Water Resources for the Small Communities Flood Risk Reduction projects in Yolo, Clarksburg, and Knights Landing
- Develop flood solution for Madison’s localized flooding
||Update and implement Climate Action Plan.
- Implement, through the Valley Clean Energy Alliance, Community Choice Aggregation/ Energy to provide renewable energy to residents and businesses and develop a timeline for implementation of remaining Climate Action Plan objectives
||Facilitate connections between growers and buyers.
- Enhance permit processing for agricultural processors
- Develop a fully funded land use planning program to ensure comments are made on projects impacting agriculture
It is anticipated that additional Strategic Plan funding will be recommended in the Adopted Budget in September as further budgetary needs are identified.
Health and Human Services
The 2017-18 requested budget for the Health and Human Services Agency (HHSA) reflected an initial deficit of approximately $4.9 million. While a number of new positions are requested, the Agency’s budget reflects an overall net reduction of 12 positions from allocations approved in the 2016-17 Adopted Budget. The Agency’s budget continues to undergo significant restructuring. In 2016-17, numerous positions and other costs were moved to a centralized Agency Administration division and then allocated back to the operating divisions in accordance with federal cost plan guidelines. For 2017-18, it has been determined that many of these costs, including 30 positions, should be returned to the operational divisions. In addition, the HHSA budget for 2017-18 reflects the addition of the Public Guardian as part of the reorganization that was approved in the current year.
The most significant change in the Agency’s budget is the addition of 11 new positions to establish a countywide Crisis Management Program. As discussed during the budget development update on May 9, the Crisis Management Program will include a Mental Health Urgent Care site and will be fully staffed by the Health and Human Services Agency. Currently, most individuals in need of acute mental health stabilization are assessed by local emergency room staff and many times are then transferred to costly inpatient psychiatric units, which the County in turn must pay for. These hospitalization costs have spiked in recent years. To better manage these expenses, as well as improve outcomes for individuals in crisis through supporting continued community integration, the Crisis Management Program aims to use Agency staff make to an initial assessment of individuals’ mental health needs and, when appropriate, direct them to less intensive and more cost effective supports. The Mental Health Urgent Care location will provide stabilization and support 7 day per week, 9 hours per day at a community-based site and will receive individuals brought in by law enforcement first responders, family or those who are self-referred. In addition, County clinicians will be available 24/7 to respond to the two local emergency rooms to conduct assessments and direct individuals to care specific to meet their presenting concerns.
In addition to the Crisis Management Program, the Agency’s budget includes the addition of two positions to support the Behavioral Health Quality Management Program and four new positions related to Substance Use Disorder (SUD) and Mental Health Services Act (MHSA) programs. The table below reflects the new positions included in the Recommended Budget.
HHSA New Positions
||Admin Services Analyst
||Mental Health Specialist II
||Admin Services Analyst
||Alcohol, Drug and MH Prog Coordinator
||Alcohol & Drug Specialist II
||Mental Health Specialist II
||Total New Positions
Other significant adjustments include $530,000 in Indigent Health to reinstate funding for County Medical Services Program (CMSP) participation fees, $379,000 related to increased costs associated with County’s Jail Medical service provider and $1 million for construction of a residential treatment program facility, to be funded by MHSA capital funds. The budget also includes full funding for the two Social Worker Practitioner positions that were added in March 2017.
To achieve a balanced budget, a number of cost saving and other strategies were implemented. These strategies include:
The table below shows the available fund balances for select HHSA funds as of June 30, 2016.
- Unfunding 23 vacant positions across a number of areas, including 17 in Social Services
- Eliminating nine filled Employment positions and transferring staff to vacant Public Assistance positions
- Reducing Social Services direct to client services by $3.7 million
- Reducing Public Health service contracts by $786,000
- Implementing 5% vacancy savings in the Social Services and Behavioral Health divisions
- Utilizing $2.6 million in Realignment fund balances
- Increasing projected Medi-Cal revenues by $600,000
- Utilizing $500,000 in Intergovernmental Transfer (IGT) funds to support mental health treatment costs
- Eliminating six vehicle purchases
HHSA Available Fund Balances
||Balance as of 6/30/2016
||0402 - ALCOHOL AND DRUG PROGRAMS
||0405 - MH 1991 REALIGNMENT
||0406 - BEHAVORIAL HLTH SUB ACCT 2011
||0141 - MEDICAL SERVICES FUND
||0142 - PUBLIC HEALTH 1991 REALIGNMENT
||0123 - SOCIAL SERVICES 1991 REALIGNMENT
||0126 - PROTECTIVE SVCS SUB ACCT 2011
Over the past year, HHSA has made significant cost reductions in order to achieve fiscal sustainability, largely through elimination of vacant positions and reduction in contractual services. Reductions reflected in the 2017-18 Recommended Budget continue this trend, along with new strategies to reduce costs and increase revenue. While much progress has been made, the Agency as a whole still has a structural imbalance and further cost reductions or funding enhancements will be necessary to close the remaining gap.
In Home Supportive Services (IHSS) Cost Shift – An ongoing risk to the Health & Human Services Agency and to the County is the unwinding of the Coordinated Care Initiative and elimination of the IHSS Maintenance of Effort (MOE), which shifts a significant portion of IHSS program costs back to counties from the State. Acknowledging the fiscal impact this shift would have on counties, the Governor’s May Revise includes a revised proposal that would limit the total cost shift and provide additional funding to help offset and phase in the remaining cost shift over several years. While it is anticipated that the revised proposal will have a reduced impact on the IHSS program, it may result in the need for midyear adjustments in other areas as Realignment growth funds will be redirected to support the IHSS cost shift. Staff is still evaluating the estimate impact to the County from the revised proposal and will provide additional information in the Adopted Budget. The 2017-18 Recommended Budget includes a $1.5 million contingency to mitigate State impacts resulting from the IHSS cost shift which will cover the deficit in the current year and act as a one-time buffer for future increases. However, the cost shift will be on ongoing obligation that will need to be addressed in future year budgets.
Child Welfare Services (CWS): On May 23 the Board received a staffing update on the Child Welfare Services division. The update highlighted an increase in overall workload over the past year and identified a number of short-term strategies to provide immediate workload relief. These strategies include executing a third amendment to the agreement with CommuniCare to increase 2017-18 funding; seeking any willing provider to execute additional one-year supervised visitation contracts; and overfilling CWS Social Worker Practitioner allocations by five additional positions. It is estimated that implementation of these strategies will result in a fiscal impact of $276,000, which is not currently included in the 2017-18 Recommended Budget. Funding options to support these strategies will be evaluated and included in the Adopted Budget in September.
Planning and Building: Significant budget changes for the Planning & Building division include the addition of a new Permit Counter Technician II and an Office Support Specialist to support increased workload for permit application review and processing. The cost of these positions is offset by a $249,000 reduction in contracted permit tech services. Other significant changes include addition of the Planning, Building and Environmental Health Division Director position in January 2017, which is primarily funded by the Planning and Building division and program revenue declines by $218,000, primarily due to a projected decline in the volume of zoning permits. The division is currently undergoing a comprehensive fee study that could significantly increase future fee revenues; however, no additional revenues from assumed fee increases are included in the 2017-18 Recommended Budget.
The Planning and Building division’s requested budget was balanced by deferring $70,000 for Trak-it software upgrade and $27,000 for a vehicle replacement to the Adopted Budget. In addition, the Sustainability Manager position has only been funded for six months. In an effort to reduce General Fund expenditures and as a result of the short-term need for staff support of the Valley Clean Energy Alliance (VCEA), the department will be reducing this position at midyear.
Environmental Health (EH): Significant expenditure changes include a $147,000 increase in A-87 charges and $50,000 in contracted inspection services related to the Cannabis program. Other increases include $25,000 for a CUPA-funded replacement vehicle and $16,728 for an electronic document management system server. Additionally, EH is utilizing $380,000 of restricted fund balance to build a storage facility for a Hazmat response vehicle. These cost increases are partially offset by $150,000 in staff costs being funded by the Cannabis program. The Recommended Budget for EH includes a net revenue increase of $137,000, which is largely driven by increased volume in business plan checks, growth in CUPA and land use fees from rate and volume increases, and an increase in the use of restricted fund balances.
Integrated Waste Management (IWM): Significant budget changes for IWM include the addition of four new positions, including two Senior Waste Facility Worker positions (1.5 FTEs), one half-time Senior Solid Waste Attendant position and a full-time Supervising Waste Facility Worker position that was approved on May 9. The cost of these positions is $280,734. In addition, IWM has $1.1 million increase in capital projects that include a variety of repair and maintenance projects, including flood damage repair to Landfill facilities and addition of a new ramp to provide safer access to liquid waste discharge site.
IWM is projecting a $3.5 million increase in revenue due to increased volume of commercial landfill business, growth in sanitation services, power sale to SMUD and an increase in the market value of recyclable materials. Additionally, IWM is using $648,000 additional fund balance to finance its capital expenditures in FY 2017-18.
Public Works and Roads: The significant expenditure increases in the Public Works division are primarily attributable to a $2.1 million increase in capital projects related to road and bridge improvements, including the 2017 Pavement Rehabilitation Project that was approved by the Board on May 23. Other notable changes include increases in salary and benefit costs due to promotions, merit increases and pension costs. In addition, contract engineering services for monument preservation, subsidence surveys and pavement conditioning have declined by $190,000 due to no monument preservations or road subsidence surveys projected for 2017-18. The Recommended Budget includes total equipment costs of $620,000, which includes two replacement pick-ups, a replacement paint truck auxiliary engine, a new semi-tractor and a replacement patch truck. All Public Works equipment is 100% HUTA funded.
Agriculture: The 2017-18 Recommended Budget includes one new limited term Ag & Standards Inspector IV. This position will support increased workload in pest exclusion, particularly related to a European Grapevine Moth (EGVM) contract with the California Department of Food and Agriculture (CDFA) and an increase in commodity exports. This position will be fully funded by department fees and the CDFA contract. The Recommended Budget also includes an increase in seasonal field labor to support the EGVM program and export services, and the purchase of four vehicles (two new and two replacements) funded by the Ag Equipment Replacement Fund.
Other notable budgetary changes include shifting a majority of the Farmbudsman position to the Cannabis Taskforce to assist cultivators in navigating the County permit system, and elimination of funding for Tactical Plan programs (Farm-to-School, Local Food Promotion) due to termination of grant funding.
Cannabis Taskforce: The Recommended Budget for Agriculture also includes a budget of $3.4 million for the Cannabis Taskforce. This budget is based on estimated fee revenues from the known pool of cultivators and primarily represents revenue from annual certification fees which are based on canopy size. The Cannabis budget includes five full-time dedicated positions, including a new Ag & Standards Inspector, as well as $1.3 million for staff costs in various departments that will be funded by the Cannabis program. It should be noted that in most cases these do not represent new staffing costs, but rather the cost of existing staff time that will be spent working on the Cannabis program. The remainder of the Cannabis budget is largely a placeholder for Taskforce expenses that are anticipated but not yet fully known, such as equipment, supplies and IT enhancements such as GIS program development.
Department of Financial Services (DFS): The Recommended Budget for the department includes a new Buyer II position. Previously the Buyer II duties were being handled by an Extra Help position but ongoing responsibilities will require a full time, regular employee. In addition, the Assistant Chief Financial Officer will be retiring before the end of 2017. The budget includes additional salary and benefit expense for the hiring of the new Assistant CFO prior to the departure of the incumbent to allow for adequate training and a smooth transition of responsibilities. The department also requested two additional positions; an Auditor II and a Revenue Collections Specialist. However, in order to submit a balanced budget, these positions have been deferred to the Adopted Budget in September.
County Administrator’s Office: The 2017-18 Recommended Budget for the CAO includes $440,000 related to various grant-funded projects including River Parkways ($200,000) and Westside Tributaries ($120,000). In addition, there is a $150,000 increase in professional services for the Cache Creek Technical Advisory Committee related to the periodic update of the Cache Creek Area Plan. One vacant Management Analayst position has been unfunded in the CAO’s budget.
The Human Resources budget has increased significantly due to a change in the budgeting procedure for Risk Management. In previous years, the Risk Management Budget only reflected the new cost of the County’s insurance premiums after accounting for the insurance charges to County departments. To enhance transparency, this procedure has been changed beginning in 2017-18 to reflect the full cost of the County’s insurance premiums and the offsetting revenue from department charges. Human Resources is working with the Department of Financial Services to evaluate the possibility of turning Risk Management into an Internal Service Fund, consistent with the approach currently used for Unemployment Insurance and Dental Self Insurance.
The budget for County Service Areas reflects an overall reduction of approximately $3.1 million, due primarily to a $2.4 million reduction in the North Davis Meadows CSA related to the water connection project. The project is currently in the design phase, with the County providing a loan of $430,000 for these costs. This loan request will be made of the Board on June 27. The design work will inform the full cost of the project, leading to a Prop 218 fee increases in fall of 2017 to repay a State Revolving Fund loan for the entire project, including repayment of the interim County loan. Once funding is secured (expected Spring 2018), the budget for North Davis Meadows will be adjusted accordingly.
Rural Initiatives: The Rural Initiatives program was formed in 2015 and serves to enhance economic development as well as health and safety for rural communities by addressing critical infrastructure needs in accordance with the Strategic Plan Safe Communities goal. The County has contracted with a grant researcher, Consero Solutions, to explore potential funding opportunities for all of the initiative proposals received for fiscal year 2017-18. This research effort is currently underway. The purpose is to determine if viable alternative funding sources exist, thus allowing the County to better meet the comprehensive needs of the rural communities by leveraging County funding with outside funding sources. A recommended County funding proposal for the submitted initiatives will be included for consideration by the Board with the Adopted Budget in September and is estimated to be around $175,000.
Delta Advocacy: The 2017-18 Recommended Budget includes approximately $821,000 to support Delta/Flood/Habitat activities and projects. These costs are partially funded by $465,000 in grant funds, with the remaining costs supported by the General Fund.
Assessor/Clerk-Recorder/Elections: The Assessor/Clerk-Recorder/Elections department has undergone a department-wide reorganization along with position reclassifications. The most notable change is movement of staff from Administration to other divisions based on position functions. The division has an overall cost increase of $502,195 in salary and benefits that can be primarily attributed to reclassifications, cost of living adjustments and pension costs. The other significant expenditure increases are for technology service contracts ($42,900), which includes projects to create electronic data repositories and allow the Assessor parcel data to be paperless.
The Recorder Upgrade Fund has $44,500 in cost reductions that are largely related to a $22,000 reduction in salary costs and $51,070 in elimination of the automatic indexing component of the AtPac Criis software contract. Additionally, the division has budgeted $15,400 for procuring security cameras and funding transfers to Equipment Replacement Fund.
Overall expenditures in the Elections division have declined by $336,000, primarily due to a reduction in election-related services and supplies as no major election is scheduled for 2017-18. The division’s 2017-18 Recommended Budget includes $35,000 for a software program that will provide the County with paperless management of political candidate profiles and campaign contributions. Other significant increases are related to County IT charges, postage machine lease costs and volume-driven storage costs.
County Counsel: The 2017-18 Recommended Budget for the County Counsel’s Office is largely unchanged from 2016-17. There are no significant expenditure changes other than regular adjustments in salary and benefits costs due to cost of living adjustments, merit increases and increases in pension costs. The budget includes $50,000 in staff costs to be funded by cannabis regulatory fees. Legal services charges to Public Guardian have increased by approximately $85,000 based on current trends.
Library: The 2017-18 Recommended Budget for the Library is balanced. The budget includes the purchase of an Express Lane kiosk type station for the Clarksburg, Esparto, Knights Landing and Yolo branches for self checkout ability. Stations will be added to the remaining rural branches in the following fiscal year. The Express Lane stations will also have the ability for eCommerce and allow visitors to make payments toward their fines. Other significant expenditures in the Recommended Budget include an increase in Extra Help for the new Saturday hours at the Knights Landing branch, the purchase of 48 replacement computers to be used throughout the various branches and a capital lease payment on the new automatic sorter at the Davis Library. In order to maintain a balanced budget, the Library is holding a Library Branch Supervisor and an Outreach Specialist II vacant and have increased their use of fund balance.
The 2017-18 Recommended Budget also includes a number of special projects within the Library Archives division. The largest is the Discover It Yourself History program. This project consists of a website where historic documents are scanned and transcribed. Volunteers can set up online accounts to assist in the transcription process. Other projects include digitization efforts to preserve historic information regardless on the conditions of the documents and to also allow access to people all over the world.
General Services: The General Service’s Requested Budget resulted in a budget gap of $247,372. The Recommended Budget was balanced through a combination of reductions in Parks expenses (consultant contract and a direct mailer promotion), reduction in salary and benefits (including deferring the request for a Building Craftsmechanic and a Technical Support Specialist to the Adopted Budget and the reduction of Parks Extra Help) and deferring the purchase of two Facilities vehicles and one Parks vehicle.
In the Parks division, the recommended budget includes the assumption that the County will be awarded three pending grants: an Off Highway Vehicle (OHV) Planning grant for the future development of an in-County OHV park ($218,600 over two years); a Grasslands Park Trail grant ($193,480 for one year) for the creation of trails, viewing platforms, benches, shade structures, informational kiosks, a paved parking area, and a City of Davis dog park ($193,480 for one year); and a Knights Landing Boat Launch Facility grant for the construction and improvement of the boat ramps, which was recently awarded to the County ($1,674,600 over four years). Construction will begin in 2017-18 and continue until 2021.
In FY2017-18, the PC Replacement ISF fund will be purchasing approximately 184 computers in agreement with the ISF replacement program. Departments that participate in the program set aside funds in a restricted account on an annual basis in order to comply with GSD ITTD policy to upgrade computers and devices every four years.
During 2016-17, work groups were assembled for the Facilities and IT divisions for the purpose of identifying process improvements and budgeting efficiencies. Most of the progress in the Facilities division was made in the accounting functions, which has resulted in improved budget processes. In the IT division, research was done to determine rate comparisons against other counties and to evaluate reasons for the shortfalls in revenue collection and full cost recovery. These work groups will continue in 2017-18, with the ultimate goal of maximizing cost recovery for these divisions.
Accumulated Capital Outlay (ACO) Fund – The 2017-18 Recommended Budget for the ACO fund is $3.4 million, including $704,000 for a number of significant maintenance projects as reflected in the table below.
|ACO 2017-18 Maintenance Projects
|600 A Street Roof
|Sheriff Admin/Morgue Roof
|Monroe Jail Flooring in B-pod
|Total 2017-18 ACO Capital Projects
In addition, the ACO budget includes $1.7 million in estimated debt service related to the forthcoming CIP bond issuance. Exact debt service amounts will not be known until the bond is issued, currently scheduled for late June/early July. Any necessary adjustments to the debt service amount will be reflected in the Adopted Budget. Other significant expenditures in the ACO fund include $372,000 for the HHSA West Sacramento lease payment, and $144,000 for Yolo Emergency Communications Agency capital contributions.
Law and Justice
Child Support Services: Child Support Services’ revenues remain flat in FY 2017-18; however, the department’s salary and benefit expenditures are rising considerably due to cost of living adjustments, leave buyout and pension costs. These significant increases in salary and benefit costs are being absorbed by the department by eliminating three vacant positions, including a Child Support Officer II, a Supervising Child Support Officer and a Senior Child Support Officer. The department has indicated that there will be no negative service impacts from the vacancy eliminations.
District Attorney (DA): The District Attorney’s requested budget resulted in an initial budget gap of nearly $1.1 million. A significant portion of this deficit was due to not including any Community Corrections Partnership (CCP) funding in anticipation of potential cuts as a result of a projected deficit in the CCP budget. In addition, the DA’s requested budget included two new positions, an Information Technology Assistant and a limited term Deputy District Attorney IV; a number of anticipated promotions; and two vehicle replacements. The requested budget also included a $175,000 increase in the Multi-Disciplinary Interview Center related to an Office of Emergency Services grant being passed through to Empower Yolo to establish the Family Violence Coordination Pilot Project, $17,000 for the purchase of a high-tech forensic computer to extract digital evidence that will be funded by seized funds, and reduction of the IHSS Investigator position due to the loss of funding from Health & Human Services.
The 2017-18 Recommended Budget for the DA was balanced in part by deferring the requested IT Assistant position and the two vehicle replacements to the Adopted Budget, and pro-rating the anticipated promotions and merit increases to reflect partial year adjustments. In addition, the Recommended Budget includes $378,000 in CCP funding as a placeholder until the 2017-18 CCP budget is approved. This allocation is based on a budget recommendation that was discussed by the CCP on May 8 and reflects a $200,000 reduction in funding for the DA. This reduction is being temporarily offset by salary savings from vacant positions. Any further changes to the DA’s funding allocation resulting from the CCP budget once approved will be reflected in the Adopted Budget in September.
Probation: The requested budget for Probation reflected a deficit of approximately $326,000. The department requested four new positions, including an Administrative Services Analyst to support Prison Rape Elimination Act (PREA) compliance; two Deputy Probation Officers for Proposition 47; and one Detention Officer for the Work Program. The 2017-18 Recommended Budget was balanced by deferring the two Deputy Probation Officers and the Detention Officer to the Adopted Budget in September.
Other notable expenditure increases include $66,000 to fund two replacement vehicles, $42,411 in communication costs, $40,885 in food costs and $52,815 in cost of contracted services for the Juvenile program. In addition, the recommended budget presented to the Community Corrections Partnership (CCP) on May 8 reflected the elimination of $330,000 in CCP funding for local Police Departments. This funding allocation, which flows through Probation’s budget, is reflected in the 2017-18 Recommended Budget. Approval of the 2017-18 CCP budget was deferred until the July meeting; and changes in funding allocation resulting from the CCP budget once approved will be reflected in the Adopted Budget.
Budgeted SB 678 revenues are projected to decline by $53,406 from last fiscal year primarily because the Yolo County Probation Department did not qualify for the Prison Sentencing Avoidance Incentive in FY 2017-18. This incentive is based on FY 2016-17 probation statistics, which reflect that more parolees were sent to prison in that year. Probation is utilizing fund balance to bridge the funding gap caused by SB678. On the Juvenile side, the department is anticipating a $217,000 increase in Federal funding due to an increase in the youth population, which includes the Federal Child Nutrition Program, Office of Refugee Resettlement (ORR) grant and general Juvenile Probation program expenditure reimbursements.
Public Defender: The Public Defender’s Requested Budget had a deficit of $308,130. Significant expenditure increases are primarily due to personnel costs including pension and merit increases, and the increased cost of expert witnesses. The 2017-18 Recommended Budget was partially balanced by postponing the request for a new Paralegal position to Adopted Budget and reducing the requested increase in extra help. The Public Defender also requested two replacement vehicles that have been deferred to the Adopted Budget. Even though the cost of expert witness expenses has increased over the years, operating expenses for the department have been reduced in an attempt to reduce the deficit as much as possible.
Sheriff: The 2017-18 requested budget from the Sheriff’s Office reflected a deficit of approximately $2.8 million. No new positions were requested; however, the budget included four positions that were added to the Sheriff’s Office during 2016-17, including three Deputy Sheriffs for trial court security and an Assistant Public Administrator as part of the restructuring of the former Public Administrator-Public Guardian department. In addition, the requested budget included replacement of 12 vehicles, and a variety of other supplies and equipment.
The 2017-18 Recommended Budget for the Sheriff’s Office was balanced through a variety of measures, including deferral of six vehicle replacements and $500,000 in various supplies and equipment such as cameras, radios and other law enforcement supplies to the Adopted Budget; including salary savings in Court Security due to anticipated retirements, utilizing additional 2011 Public Safety Realignment fund balance and implementing additional general salary savings that may be achieved through current vacant positions or by allocating current staff costs to the Cannabis program. As mentioned in the Cannabis Taskforce section, the Sheriff’s Office did not include any staff costs to be funded by cannabis fees. In addition, the recommended CCP budget that was discussed by the CCP on May 8 included an additional $171,000 for the Sheriff’s Office, which offset the deficit in the Sheriff’s AB 109 unit.
While the Recommended Budget is balanced, a number of items will need to be addressed in the Adopted Budget, including vehicle replacements and supplies and equipment that were removed from the Recommended Budget. In addition, a structural imbalance exists in Court Security, resulting from two primary factors. First, the unit is currently staffing two Deputy Sheriffs that are not funded by the State and have instead utilized fund balance over the past few years to cover the deficit. The Sheriff’s Office has indicated that these positions may be moved to the new Capay Patrol positions that will be funded by additional Tribal funds under the new Agreement. Second, in May 2016 the California Department of Finance approved Supplemental Trial Court Security funding for three additional Deputy Sheriff positions. However, the State funding formula subsequently changed to provide just $100,000 for each position, which is insufficient to cover the full cost of the new positions. As a result, the unit continues to have a deficit that will need to be addressed in future years.
Finally, it should be noted that the Recommended Budget was not balanced through additional use of the Sheriff’s special funds. One of these funds, the Small and Rural fund, continues to build a sizeable fund balance. However, based on preliminary discussions, the Sheriff has indicated that this special fund may be used to fund replacement of the Tiburon case management system.
Community Corrections Partnership (CCP): The CCP is facing a deficit in 2017-18 due to slower growth in statewide sales tax revenue and a smaller than anticipated share of overall growth being allocated to Yolo County. Compared to prior estimates, the Governor’s Proposed 2017-18 Budget reflected a 40% reduction in statewide CCP growth for 2017-18 and these estimates were further reduced in the May Revise as sales tax continues to slow. In addition, a new methodology for allocating growth funds among counties did not benefit Yolo County in the first year of implementation. Under the new methodology, growth funds are allocated to counties based on five performance factors that are tied to criminal justice data. In 2016-17, Yolo County received growth funds based on improvement in only one of these performance factors. Attachment G provides an overview of the performance factors and the data that was used to calculate Yolo County’s allocation.
On May 8, a balanced recommended budget was presented to the CCP for consideration and as a starting point for further budget discussions. Notably, the recommended budget included a $200,000 reduction in funding for the District Attorney and eliminated $330,000 in funding for local Police Departments. This is reflected in the table below.
Community Corrections Partnership Funding
* Allocations to local Police Departments flow through Probation’s budget.
|Beginning Fund Balance
| Local Police Departments*
|Total Funding Allocation
|Ending Fund Balance
While the funding scenario above is included as a placeholder in the 2017-18 Recommended Budget, the CCP deferred approval of the budget to the July meeting. Any changes in funding allocations resulting from the approved CCP budget will be reflected in the Adopted Budget in September.
Capital Improvement Program
The 2017-18 Recommended Budget includes a Capital Improvement Program (CIP) budget of $37.3 million. This budget includes funding for six major projects, four of which are being partially financed from the proposed CIP bond. The table below provides a summary of the CIP budget.
2017-18 Recommended CIP Budget
* To be partially financed with CIP bond proceeds.
||Total Project Cost
||Estimated Expenditures as of 6/30/17
||2017-18 Recommended Budget
|Library Archives Remodel*
|Monroe Jail Expansion*
|Juvenile Detention Center
Pending Board approval, it is anticipated that the CIP bond will be issued in early July. Other sources of funding for the CIP projects include State grants, development impact fees and Accumulated Capital Outlay (ACO) funds. As discussed at the April 25 Board Meeting, the Yolo Library project was removed from the bond financing project list due to California Environmental Quality Act requirements not being complete in time for the bond issuance. The 2017-18 budget for the Yolo Library funds the remaining work on the Environmental Impact Report; however, additional financing sources have not been identified at this time.
Other Budget Assumptions and Issues
External Funding Requests
Each year, the Board utilizes discretionary funding to assist partner agencies in providing services to vulnerable populations. One source of funding, Pomona Funds, allocates $300,000 each year. This year, the County received $482,614 in funding requests from external non-profits, as reflected in Attachment H.
The 2017-18 Recommended Budget includes the following funding for programs that are not one time in nature and for which the Board has previously approved funding:
Recommended 2017-18 External Funding Request Allocations
|Yolo Crisis Nursery
||Emergency Childcare & Wraparound Services
|Family Violence Coordination Pilot Project
||One-stop services for victims of crime
||Art and Ag program and new initiatives
|Total 2017-18 Recommended
There are also funding requests for programs that were funded in 2016-17 through County sources that are no longer available or that were considered to be one-time requests. The table below reflects these remaining funding requests:
Remaining 2017-18 External Funding Requests
* $62,000 previously funded by HHSA through IGT to allow time for sustainability plans to be developed.
|Yolo Food Bank*
||Food distribution to low income families
|Yolo County Children's Alliance**
|Total Other Requests
** Funded in 2016-17 with Pomona Funds that was considered to be one-time support.
In accordance with Board-approved guidelines that County allocations be used for one-time or short-term expenditures, organizations that requested funding for 2017-18 were asked to provide additional information on their plan to sustain operations in the absence of County funding. Suicide Prevention responded to clarify that their funding request for 2017-18 is a one-time request for funding to implement a crisis chat/crisis text program. YoloArts and Yolo County Children's Alliance also responded with additional information on sustainability of the programs for which funding is requested. This is included as Attachment H.
Adult Day Health Center: In May 2016, the Board approved an amendment to the contract with Dignity Health to continue their operation of the Yolo County Adult Day Health Center (ADHC) for an additional year ending June 30, 2017, with the option to extend for one additional year. The amended contract also provided that the County would share in the cost of operating losses for the ADHC up to a maximum of $150,000 per year. County staff continues to work with Dignity to secure an expanded facility that would allow sufficient participation for the ADHC to maintain a balanced budget. However, it is estimated that additional General Fund support will be needed in 2017-18 until the ADHC is able to transfer operations to a new facility. Additional funding for this purpose will be addressed in the Adopted Budget.
Infor Project: The 2017-18 Recommended Budget includes approximately $857,000 for continued implementation of the Infor System. Of this amount, $254,000 is funded by existing loan proceeds from the project financing, primarily related to the Workforce Management and Budget modules. The remaining amount is budgeted as a contingency for potential additional project work, including continued improvement of the Finance/Procurement and HR modules, implementation of the Talent Management module and other potential change order, training and licensing costs.
Pension Funding: The 2017-18 Recommended Budget includes $27.7 million in employer pension contributions, an increase of $2.7 million from the 2016-17 Adopted Budget. Employer contributions for 2016-17 were determined in the CalPERS Annual Valuation Report as of June 30, 2015. Beginning in 2017-18, CalPERS has implemented a significant change whereby the unfunded liability portion of the required employer contribution is a flat dollar amount instead of a percentage of payroll. This change was made to address potential funding issues that could arise from a declining payroll or reduction in the number of employees. If these situations were to occur, funding the unfunded liability as a percentage of payroll could lead to underfunding the plan.
To continue charging departments as a percentage of payroll, the unfunded liability contribution has been converted into a rate based on total estimated payroll for 2017-18. It should be noted that there is some inherent risk in this methodology. If actual payroll is less than estimated, then pension charges to departments may not be sufficient to cover the required unfunded liability contribution. To guard against this possibility, staff used a conservative payroll estimate in calculating the unfunded liability rate. Conversely, if payroll is higher than estimated, then department charges will be greater than the required payment. Should this occur, any surplus amounts will be placed in the pension stabilization reserve authorized by the Board on December 12, 2016.
Other Post-Employment Benefits (OPEB): The 2017-18 Recommended Budget includes $8.8 million in OPEB charges to departments, an increase of $748,000 from the 2016-17 Adopted Budget. The OPEB rate remains unchanged at 8% of payroll. In May 2011, the Board approved the creation of an irrevocable trust to accumulate assets for the purpose of reducing the OPEB liability. In December 2014, the Board approved an OPEB pre-funding plan to phase in full funding of the OPEB liability over 15 years. The 2017-18 Recommended Budget reflects the third year of this pre-funding plan. It is estimated that the OPEB trust will have a balance of approximately $6.9 million at the end of 2016-17, and increase to nearly $10 million based on estimated contributions in 2017-18.
In addition to funding the OPEB trust, significant progress has been made in lowering the overall OPEB liability through the implementation of benefit caps for most employee units. As a result of these efforts, the OPEB liability declined by $67 million in the June 30, 2016 valuation. The table below shows the OPEB liability in each of the last three valuation reports.
|OPEB Unfunded Liability
|June 30, 2012
|June 30, 2014
|June 30, 2016
As a result of the significant reduction in the unfunded liability, the current OPEB rate of 8% is very close to the actuarial required contribution (ARC). It is anticipated that the County may achieve paying the full OPEB ARC within the next few years, well in advance of the 15 years originally contemplated in the pre-funding plan.
Contingency and Reserves: In accordance with the Board Policy on Fund Balances and Reserves, the 2017-18 Recommended Budget includes the following reserves balances:
General Reserve....................................................... $9,924,643
OPEB Trust ……………………………………………..$9,952,685*
OPEB Reserve............................................................ $800,000
CIP Reserve............................................................. $3,000,000
Reserve for Unfunded Liabilities.................................. $890,000
Road Maintenance Reserve.................................................. $0**
Audit Disallowance Reserve...................................... $2,000,000
* Reflects the estimated balance based on additional contributions projected to occur in 2017-18.
* *The Road Maintenance Reserve was utilized to fund the Pavement Rehabilitation project. Staff will recommend a reinvestment in this fund in the Adopted Budget if sufficient funding is available.
The General Reserve amount reflected above includes an additional 2017-18 contribution of $514,423, which would bring the General Reserve to 5.0% of the General Fund including the Public Safety fund. The Board Policy on Fund Balance and Reserves requires that the General Reserve shall be maintained between 5% and 15% of average General Fund expenditures. The County will continue to make progress toward the recommended reserve of 15%. A summary of reserve balances and contributions is provided as Attachment J.
The 2017-18 Recommended Budget also provides appropriations for the following contingencies:
General Fund Contingency........................................ $2,000,000
HHSA/ IHSS MOE Contingency………………………... $1,500,000
Information Technology Contingency........................... $500,000
The General Fund Contingency represents 2.5% of general purpose revenue allocations and is crucial in safeguarding against known risks and uncertainties that are not addressed in the 2017-18 Recommended Budget, including:
It is anticipated that additional contingency funds will be included with the Adopted Budget.
- Federal Legislative changes (ACA repeal)
- State budget (IHSS MOE Shift, declining Social Service caseload)
- Natural disaster related costs (levee maintenance, fire risk)
- Water related analysis and advocacy
- Marijuana regulation
- Child Welfare Services caseload
Items for Consideration in Adopted Budget
The Recommended Budget does not allocate funds to several areas which will need to be addressed with the Adopted Budget. Many are mentioned in the details above and a summary of those items follows:
Strategic Plan Funding........................................................... $200,000*
Major Fund Contingencies (Public Safety, HHSA)........................ $TBD**
Safety & Security Contingency................................................ $100,000
Road Maintenance Reserve.......................................................... $TBD
CIP Reserve................................................................................. $TBD
Community Services Trak-it System Upgrades........................... $70,000
Community Services Vehicle Replacement................................. $27,000
DA Staffing.............................................................................. $75,000
DA Vehicle Replacement........................................................... $60,000
Financial Services Staffing...................................................... $197,000
General Services Staffing........................................................ $191,000
General Services Vehicle Replacement..................................... $99,000
General Services Parks Mailer................................................... $10,000
Probation Staffing.................................................................. $326,000
Public Defender Staffing........................................................... $86,000
Public Defender Vehicle Replacement...................................... $51,000
Sheriff Vehicle Replacement.................................................... $340,000
Sheriff Services & Supplies..................................................... $500,000
Rural Initiatives........................................................................ $175,000
Adult Day Health Center.......................................................... $150,000
Child Welfare Services Support............................................... $276,000
* May be revised based on specific funding requests from the Strategic Plan working groups.
** Policy for major fund contingencies is based on Adopted Budget. The recommended amount will be determined with the Adopted Budget.