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  Time Set   #   27.    
Board of Supervisors   
Meeting Date: 09/26/2017  
Brief Title:    2017-18 Adopted Budget
From: Patrick Blacklock, County Administrator
Staff Contact: Tom Haynes, Chief Budget Official, Department of Financial Services, x8162

Subject
Receive report on preliminary fund balances as of March 30, 2017; hold a public hearing and adopt County of Yolo budget for fiscal year 2017-18; hold a public hearing as the In-Home Supportive Services (IHSS) Public Authority Board and approve the IHSS Public Authority budget for fiscal year 2017-18 and approve the 2017-18 budgets for Board-controlled Fire Districts. (General fund impact $85,013,773) (Blacklock/Haynes)
Recommended Action
  1. Receive a report on preliminary County fund balances as of 6/30/2017 (Attachment A);
  2. Hold a public hearing on the County budget and IHSS Public Authority budget for fiscal year 2017-18;
  3. Approve 2017-18 County budgets for the Health & Human Services Agency and Countywide departments as reflected in Attachment B, Exhibit 1;
  4. Approve the balance of the 2017-18 County of Yolo budget and adopt the 2017-18 Budget Resolution (Attachment B, including Exhibit 1 and Exhibit 2);
  5. Approve 2017-18 IHSS Public Authority budget as reflected in Attachment B, Exhibit 1;
  6. Approve 2017-18 budgets for Board-controlled Fire Districts as reflected in Attachment B, Exhibit 1;
  7. Adopt amendments to the Authorized Position and Salary Resolution; and
  8. Approve amendments to the 2017-18 Authorized Equipment List.
Strategic Plan Goal(s)
Operational Excellence
Thriving Residents
Safe Communities
Sustainable Environment
Flourishing Agriculture
Reason for Recommended Action/Background
The Department of Financial Services closed the 2016-17 fiscal year on September 6.  State law requires the budget to be balanced at fiscal year-end and all cost overruns addressed.  The Chief Financial Officer completes this process through numerous year end appropriation adjustments, recognition of additional revenue sources, and utilization of fund balances.  As provided in state law, some of these appropriation adjustments must be approved by the Board of Supervisors.  The Department of Financial Services plans to return to the Board in October with these year-end appropriation adjustments and analysis of significant year-end variances for all departments.
 
As required by state law, the Board must adopt a final budget by October 2 of each year.  The attached resolution and exhibits are based on the 2017-18 Recommended Budget as approved by the Board of Supervisors on June 13, and as revised by the recommendations included in this memo. These recommendations have been reviewed with the Chair and Vice Chair in accordance with the Board’s Governance Manual.

A – Preliminary Fund Balance Report

The Fund Balance Report (Attachment A) is a general accounting of the fund balances for all funds as of June 30, 2017. Fund balance used or not available indicates amounts that are either appropriated for use in 2017-18 or are not available for current spending (i.e. prepaid expenses and inventories).  The available fund balances are those remaining amounts that have not been appropriated for use in 2017-18 and are available to be used in the manner outlined in statute.  The Level of Restriction column identifies how much flexibility the Board has in directing the use of those available funds.  It should be noted that the fund balances in this report are preliminary and therefore subject to change.
 
B – 2017-18 Adopted Budget
 
State law requires that the County adopt the annual budget no later than October 2. On June 13 the Board approved the 2017-18 Recommended Budget, which provided appropriation authority until the Adopted Budget is approved. The proposed 2017-18 Adopted Budget incorporates changes to the Recommended Budget based on revised revenue projections, available fund balances, additional department requests and Board priorities.
 
As described in the next section, healthy year-end fund balances in the General Fund have allowed nearly all one-time department requests to be funded.  In addition, modest increases in general purpose revenues have allowed for a limited addition of new positions.  However, the County’s ongoing revenue streams are not sufficient to fund all department position requests.  As a result, staff recommends that new positions only be added where the most critical needs exist.
 
In addition, the recommended Adopted Budget continues to invest in long-term sustainability of County operations by increasing funding for reserves and contingencies.  This prudent investment is all the more important when considering the fiscal challenges facing the County in coming years.  Pension costs continue to climb, driven substantially by the decision of the CalPERS Board of Administration to lower the assumed discount rate.  As a result of this decision, it is estimated that the annual required pension contribution for the Safety Plan may exceed 50% of payroll within the next five years.  In 2017-18, PERS contributions are equivalent to 34% of payroll for the Safety Plan and 23% of payroll for the Miscellaneous Plan, for a total estimated contribution of $27 million.
 
As discussed during the 2017-18 Recommended Budget, unwinding of the Coordinated Care Initiative by the State will result in a significant shift of In-Home Supportive Services (IHSS) program costs to counties.  Under the current agreement, a new county Maintenance of Effort (MOE) will be established in 2017-18, and State assistance will be provided over several years to help counties adjust to the increased cost share.  The current estimate provided by the California State Association of Counties (CSAC) indicates that the County’s IHSS MOE for 2017-18 may require most of the budgeted allocation and dedicated contingency included in the Recommended Budget.  This IHSS cost shift from the State represents an ongoing obligation that increase costs and be required to be funded in future years.
 
In addition, the County must prepare for operational impacts of current capital improvement projects, chiefly the expansion and remodel of the Monroe Jail.  Due to the size and configuration of the expanded facility, the Sheriff’s Office estimates that eight new Detention Officers will be necessary to adequately staff the anticipated increase in inmate population, at a cost in excess of $1 million.  While the new jail facility is not expected to be operational until 2020, the County must begin preparing for these operational impacts now.  Finally, underlying these upcoming fiscal challenges is the continued prospect of an economic downturn, which would depress general purpose revenues as service needs and expenditure obligations increase. 
 
With these upcoming challenges in mind, the recommended 2017-18 Adopted Budget strikes a balance between funding current needs and preparing for future realities.  The sections below describe the additional appropriations and changes in reserves that are recommended in the 2017-18 Adopted Budget.
 
General Fund
The General Fund ended 2016-17 with a preliminary estimated available fund balance of $10,118,906, which includes $4,531,505 that was used as a funding source in the 2017-18 Recommended Budget.  In addition, the projected 2017-18 general purpose revenues have been revised to reflect an increase of $538,479, due primarily to higher growth in property assessments than was previously assumed.  Combined, these sources result in an additional $6,125,880 that is available for appropriation in the 2017-18 Adopted Budget.
 
The table below provides a summary of the recommended additional General Fund appropriations, followed by a summary of department requests that are not recommended for funding at this time.  Since fund balance estimates are still considered preliminary, a provision for approximately $43,000 was set aside for potential accounting or audit adjustments.
 
2017-18 Adopted Budget Additional General Fund Recommendations
 
Additional Funding Available for Appropriation Expenditure Revenue
  Additional Fund Balance (6/30/17)   $   5,587,401
  General Purpose Revenue Increase   $      538,479
  Provision for Audit Adjustments   ($      42,819)
Total Additional Funding Available   $   6,083,061
     
Recommended Additional Funding Uses Expenditure Revenue
     
One-Time Uses    
1. 2017-18 Rural Initiatives $      335,000  
2. Adult Day Health Center Support $      150,000  
3. 600 A Street (Davis) Remodel $      500,000  
4. Cannabis Enforcement (Misc) $      100,000  
5. Cannabis Enforcement (Sheriff) $      261,965  
6. Election System Replacement $      250,000  
7. Indigent Defense Panel Extra Comp $        97,500  
8. Voter Registration Mgmt System $        35,000  
9. DA Vehicle Replacements $        60,000  
10. GSD Vehicle Replacements $        99,000  
11. Janitorial Invoice Increase $        75,908  
12. Parks Extra Help $        12,000  
13. Parks Grant Match $        50,000  
14. OES Vehicle Replacement $        35,000  
15. PD Trial/Expert Witness Costs $        25,000  
16. PD Vehicle Replacement $        26,000  
17. Sheriff Supplies & Equipment $      500,000  
18. Sheriff Vehicle Replacements $      340,000  
19. Contingencies $      800,000  
20. Reserves $   1,792,464  
Subtotal One-Time Uses:  $   5,544,837  
     
Ongoing Uses (Reflects Annual Cost)    
21. Esparto Park Contract $        20,000  
22. CCP Crime Analyst/CAO Staffing $        73,000  
23. DFS Staffing $      109,585  
24. Public Defender Staffing $      115,597  
25. Facility Maintenance Staffing $        80,042  
26. PG-PA Staffing Contingency $      140,000  
Subtotal Ongoing Uses:  $      538,224  
     
Total Recommended Funding Uses $   6,083,061  
     
Department Requests Not Funded  Expense Revenue
1. Trak-it Software Upgrades $        70,000  
2. Parks Social Media Advertising $        10,000  
3. ACE Staffing $      115,620  
4. ACE Deputy Salary Increases $        55,000  
5. DA Staffing $        75,000  
6. DFS Staffing $      223,623  
7. IT Staffing $      112,262  
8. Probation Staffing $      116,354  
9. Restore Sheriff Salary Savings $      250,000  
Total Department Requests Not Funded $   1,027,859  
  
The following sections provide a narrative description for each of the additional General Fund recommendations included in the 2017-18 Adopted Budget.
 
Rural Initiatives
The Rural Community Investment program is a mechanism for advancing unaddressed programs, policies and initiatives in rural unincorporated areas.  Over the course of 2016-17, staff from the County Administrator’s Office and Yolo County Housing gathered information on the interests of the rural communities in an effort to determine potential County and grant funding resources.  Information was gathered through conducting town meetings in some of the rural areas. Staff also reviewed the needs identified in the action plans of Capay Valley, Clarksburg and Knights Landing, and in the Yolo County Agricultural Labor Study. Common themes among the rural communities were a desire for high speed internet, town hall improvements, equipment for local fire departments, and greater police presence.  
 
Ultimately, investments recommended for 2017-18 funding include projects that address the common needs identified by the communities and projects that were of high priority. Funding for some of the projects are being requested through the Rural Community Investment Fund and some are being requested through the one-time Tribal payment to the County under the new Intergovernmental Agreement with the Yocha Dehe Wintun Nation.  Grant writing assistance is also being provided for a couple projects, particularly to the fire departments through OES.  Attachment G provides a summary of the rural community outreach efforts, including the interests gathered from each of the communities as well as potential grants, lead agencies, and any status of those items. 
 
Staff recommends allocating $335,000 from the General Fund for 2017-18 Rural Community Investment projects outlined in the table below.
 
Rural Community Investment Proposal General   Fund
Farmworker Outreach Coordinator (2-years) $150,000
Rural Sheriff Presence/Community Policing Program $90,000
Historic Dunnigan Church Building Restoration $50,000
Clarksburg Illegal Dumping Mitigation $30,000
Esparto Park & Pool Mitigation $15,000
Total: $335,000
 
Attachment H provides a description of the recommended Rural Community Investment Fund projects.
 
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.  The cap on the amount of loss shared by the County is $150,000, and is included in the Adopted Budget.
 
Remodel of 600 A Street Facility
The proposed Adopted Budget includes $500,000 in General Fund support for the remodel of the 600 A Street building in Davis.  The project is estimated to cost $1 million, and includes interior tenant improvements to provide a Health & Human Services Agency service center and wellness center, which requires relocating the Yolo County District 2 office within the building. Additional funding support is provided by Mental Health Services Act (MHSA) capital funds ($375,000), Workforce Investment Opportunity Act (WIOA) funds ($100,000), and the Accumulative Capital Outlay (ACO) fund ($25,000).  A separate project for replacement of the facility’s roof is funded by the ACO fund.
 
Cannabis Enforcement
Staff recommends that $361,965 be allocated for cannabis enforcement efforts that cannot be funded with cannabis cultivation regulatory fees.  In November 2016 the Board approved a series of regulatory fees designed to recover the cost of administering the medicinal cannabis cultivation program.  However, the use of these funds is limited to activities which provide a direct benefit to the permitted cultivators.  While other revenue streams may be available to pay for law enforcement costs in the future, including enforcement fees, administrative penalties and revenue from a potential tax measure, a General Fund investment is needed now to effectively fund enforcement of illegal grows.  The visibility of these illegal grows has increased with development of the legal grow program.  Due to limitations on the use of fees, staff recommends that General Fund be allocated as described until such time as a tax measure is in place as an alternative means of funding enforcement of illegal grows.  Should the proposed June 2018 cannabis ballot measure not proceed successfully, the Board will need to reevaluate this program.
 
The recommended allocation for cannabis enforcement includes $261,965 for two additional Deputy Sheriff positions and two new patrol vehicles, and $100,000 for anticipated overtime for Sheriff and District Attorney staff.  This allocation assumes that 20% of cost of the Deputy Sheriff positions will be recovered through fees and penalties as enforcement efforts ramp up.
The current Intergovernmental Agreement (IGA) with the Yocha Dehe Wintun Nation includes funding for two new deputies once the expansion project is complete.  With this proposal, staff proposes to fund the positions early to be devoted to cannabis enforcement activities, and reassess the continuing need after six months.  If enforcement takes less time than anticipated, these positions can be converted to the IGA-funded positions. 
 
Assessor/Clerk-Recorder/Elections
The proposed Adopted Budget includes $35,000 in additional general funds for purchase of a new voter registration system. The current system has had issues with updates from the statewide voter registration system (VoteCal) and the department plans to purchase a more uniform system that is able to implement updates more efficiently.  The department also requested an Administrative Services Analyst position at an annual cost of $115,620, and funding for anticipated salary adjustments for several senior positions.  These funding requests are not recommended at this time.
 
Election System Replacement
It is recommended that $250,000 be set aside to begin pre-funding replacement of the County’s election system. Senate Bill (SB) 450 created a new voting center model for elections which counties have the option to implement. Although SB 450 does not include additional funding to implement the new model, proposed legislation (Assembly Bill 668) would allocate potential matching state funds that counties could apply for to upgrade existing election systems. As currently written, the legislation provides higher matching fund amounts for counties that implement the new model than for counties that continue with the existing election model.  Any funds set aside by the County would be used along with the state matching funds to upgrade the county’s current election system.  It is estimated that the County’s share of this cost will be at least $1 million; therefore, it is recommended that funds be set aside incrementally over several years in preparation for the system’s eventual replacement.
 
Indigent Defense Panel Extra Compensation
On May 23, 2017 the Board approved a request for $97,500 in additional compensation for the Indigent Defense Panel. The request for additional compensation was due to two significant criminal trials that were anticipated to result in several conflict panel attorneys working more than the 140 hours per month covered by their contract.  Staff recommends allocating an additional $97,500 for this purpose.
 
Office of Emergency Services Vehicle Replacement
It is recommended that $35,000 be allocated for replacement of a sport utility vehicle for the Office of Emergency Services.  The current vehicle is experiencing electrical power issues that are a safety concern to County staff, and that have been unable to be repaired by two different mechanics.  The vehicle is used by emergency response personnel, and must have off-road capability and capacity for seven people.  The vehicle replacement is recommended by the County’s Fleet Manager.
 
Community Corrections Partnership Crime Analyst
The proposed 2017-18 Adopted Budget includes funding for a Senior Management Analyst in the CAO’s Office to support the Community Corrections Partnership (CCP) and other public safety initiatives.  The CCP is in need of a dedicated staffing resource to assist with data analysis, program review and administration, including development of a new CCP Strategic Plan.  Over the past several years, Probation staff has taken the lead in administering the CCP, including preparation of CCP meeting agendas and minutes, CCP budgetary and fiscal analysis, and administration of the contract with the Day Reporting Center.  More recently, staff in the Department of Financial Services has also begun to dedicate significant time to CCP matters as a result of projected deficits in the CCP budget.
 
The time commitment and level of effort needed to support the CCP, particularly for coordination of the CCP budget and development of the new Strategic Plan, support the recommendation for a dedicated staffing resource.  This staffing resource may also be utilized to support other public safety initiatives, such as Prop. 47.  For 2017-18, the CCP analyst position is recommended to be funded 50% by the General Fund and 50% by AB 109 planning dollars.  It is anticipated that in future years CCP funding, grant funds or other public safety funds may be available to support this position, which may reduce the General Fund obligation.
 
District Attorney
Staff recommends allocating $60,000 for the replacement of high-mileage sedans in the District Attorney’s Office.  Replacement of these vehicles is recommended by the County’s Fleet Manager.  The District Attorney’s Office also requested a new IT Assistant position at an annual cost of $75,000.  This funding request is not recommended at this time.
 
Financial Services
The proposed Adopted Budget includes funding for a new Accountant II position in the Department of Financial Services (DFS) at an annual cost of $109,585.  This position will provide accounting and financial support services to special districts and County Service Areas.  With the implementation of the INFOR system, special districts do not have the ability to process financial transactions directly in the system, and rely on DFS staff for data entry, budget work, reporting and analysis, and a variety of accounting transactions.  The department is not sufficiently staffed to serve the needs of these customers.
 
The Department of Financial Services also requested two new Auditor II positions at an annual cost of $223,623 to address increasing workload and to help special districts fulfill audit requirements.  These funding requests are not recommended at this time.
 
General Services    
The proposed Adopted Budget for the Facilities division includes $66,000 for two replacement vehicles recommended by the Fleet Manager, $75,908 for service contracts and the addition of two Building Craftmechanic positions at an annual cost of $160,084.  These positions will support the historic courthouse renovation and jail expansion projects during construction, and provide maintenance support to these facilities once they are complete.  It is assumed that 50% of the cost of these positions will be charged to the respective capital projects. 
 
For the Parks division, the proposed adopted budget includes $12,000 for seasonal Extra Help staff, $33,000 for a vehicle replacement that is recommended by the Fleet Manager, $20,000 for care and maintenance of Esparto parks, and $50,000 for the County match for the Grassland Trails grant that was awarded in late 2016-17.
 
Public Defender
The proposed Adopted Budget for the Public Defender includes a new Social Worker Practitioner position at an annual cost of $115,597.  This position will be dedicated to provide auxiliary social work services to indigent adult clients.  In addition, the proposed Adopted Budget includes $25,000 for discovery/trial preparation costs and $26,000 for a vehicle replacement that is recommended by the Fleet Manager.
 
Staff is also recommending the addition of two new Paralegal positions at an annual cost of $181,570.  One of these positions will be funded by revocation funds from criminal justice realignment and the other will be funded by salary savings due to retirements of senior attorneys.  No additional General Funds are required for these positions. These two new Paralegal positions will be responsible for supporting the attorneys, preparing clients for Youthful Offender Parole hearings and supporting the Record Mitigation Clinic.
 
Public Guardian/Public Authority Staffing Contingency
Staff recommends setting aside $140,000 as a contingency for anticipated Public Guardian or Public Administrator staffing requests.  Since the transfer of responsibilities to Sheriff's Office (Public Administrator) and Health and Human Services (Public Guardian), both departments have been reviewing the duties and responsibilities of their new divisions and indicated there may be a need for additional staffing.  In order to preserve the opportunity later in the year to request additional staff, this contingency will allow the departments to request staff from the Board.
 
Sheriff
The proposed Adopted Budget includes an additional $840,000 for the Sheriff’s Office, including $500,000 for various equipment and supplies and $340,000 for replacement of four patrol vehicles and two unmarked vehicles.  These items were requested in the Recommended Budget, but were deferred for consideration in the Adopted Budget.  The Recommended Budget also included $250,000 in salary savings in order to balance the budget.  While the Sheriff’s Office requested that this salary savings be restored, staff believes that this level of salary savings is realistic given the number of current vacancies and the length of time for the hiring process. As such, this funding request is not recommended at this time.
 
As discussed in the section on Cannabis Enforcement above, the proposed Adopted Budget for the Sheriff’s Office includes two new Deputy Investigator positions and two new patrol vehicles for Cannabis-related enforcement activities. 
 
Finally, it should be noted that the Recommended and Adopted Budgets were not balanced through the additional use of the Sheriff’s special funds.  One of these funds, the Small and Rural fund, continues to build a sizeable fund balance.  Based on preliminary discussions, the Sheriff and CAO recommend that this special fund balance be allowed to build to eventually fund replacement of the Tiburon case management system. 
 
Contingencies
The proposed Adopted Budget includes $800,000 in appropriation for various contingencies, as outlined below.  Use of any contingency funds will require subsequent approval by a 4/5 vote of the Board of Supervisors.
 
Public Safety Contingency – The proposed Adopted Budget includes $500,000 as a contingency for Public Safety.  The County’s Policy on Fund Balance and Reserves provides for annual appropriation for contingencies in specific funds as a first line of defense against uncertainty and to cover unanticipated needs of a non-recurring nature that may arise throughout the year.  The recommended Public Safety contingency is approximately 0.8% of total Public Safety Fund expenditures.
 
Safety & Security Contingency – In 2016-17 a Safety & Security Contingency of $100,000 was established to provide funding for initiatives that support and enhance the safety and security of County buildings, staff and the public.  Projects funded include installation of protective glass at the Financial Services Treasury/Tax Collector counter, boundary fencing at the Juvenile Detention Facility, security lighting at General Services 120 West Main building, Public Defender security upgrades, and key entry updates at various department locations.  Staff recommends continuing to provide a contingency of $100,000 for this purpose.
 
CSA Operating Contingency – Staff recommends that $100,000 be utilized as a contingency for one-time County Service Area operating needs.  Over time, a number of issues have arisen with CSA administration that require a certain level of staff support and expertise.  In order to more effectively provide service to our dependent service areas, staff contracts with specialists in areas such as engineering.  Since the issues are related to the lack of attention paid to CSAs over time, it is not reasonable to charge the cost of these resources back to CSAs.  This contingency will allow staff to request a transfer of contingency from the Board as needs arise.  $40,000 of this contingency is being appropriated with the Adopted Budget to fund a CSA System Audit.  The work that will be conducted will be a review of processes and systems related to the CSAs with the goal of understanding the challenges and critical issues, and ultimately make recommendations to improve the overall management of CSAs.
 
Operational Excellence Contingency – The 2016-2019 Strategic Plan is supported by the principles of Operational Excellence.  Over the past several years, substantial investment has been made in achieving the Board’s Strategic Plan Goals and Priority Focus Areas.  However, additional investment is needed to support the efficiency and effectiveness of County operations.  As such, staff recommends establishing a contingency of $100,000 to provide funding for initiatives that advance the principles of Operational Excellence.  Such initiatives may include, but are not limited to, enhancing financial transparency, providing additional audit support and oversight, implementing audit recommendations, increasing public engagement and access to County services, strengthening internal controls and financial accountability, and increasing operational efficiency. 
 
Reserves
To safeguard against future economic downturns and set aside funding for County needs and liabilities, it is recommended that additional funding be allocated to various reserves as detailed below:
 
General Reserve – It is recommended that an additional $992,464 be allocated to the General Reserve.  The County Policy on Fund Balance and Reserves establishes a General Reserve target of 5% to 15% of average General Fund expenditures.  The 2017-18 Recommended Budget included $514,432 in additional funding to just maintain the reserve at the minimum 5% level.  The recommended additional funding would increase the reserve level to 5.5%.
 
CIP Reserve – It is recommended that $500,000 be allocated to the CIP reserve for future capital needs.  While the County is moving forward with several significant projects that are partially funded with the recently-issued CIP bonds, additional projects continue to have funding needs, including the Yolo Library, Animal Shelter, and Adult Day Health Center. In addition, remodel of the Historic Courthouse is not fully funded as costs are expected to exceed initial estimates. Another potential use of the CIP Reserve that was recommended by the Chair and Vice Chair during their budget review is an update of the Board Chambers including potentially collaborating with Yolo Arts to highlight Yolo County within the chambers. 
 
Road Maintenance Reserve – It is recommended that $300,000 be allocated to the Road Maintenance Reserve.  In 2016-17, the $1.5 million balance of the Road Maintenance Reserve was allocated to the Community Services Department for the Pavement Preservation Project.  As a result of SB 1, the County is estimated to receive an additional $66 million for road improvements over the next 10 years.  Nevertheless, staff believes it is prudent to continue allocating funds to address the County’s $375 million unfunded road maintenance liability. 
 
Non-General Fund
Additional 2017-18 funding requests have been received that can be met through non-General Fund resources.  A summary of these requests are provided below.
 
Cannabis Taskforce
The proposed Adopted Budget for the Cannabis Taskforce includes a new Code Enforcement Officer and a Code Enforcement Officer Supervisor, at an annual cost of $219,706.  In addition, the proposed Adopted Budget includes an increase of $130,000 for a GIS Service Contract which will provide analytics and support for the Taskforce, and $99,617 in cannabis-related charges from other County departments.  These increases are funded by an additional $348,511 in assumed fee revenues due to an increase in the number of approved growers.
 
Community Services
The proposed Adopted Budget includes $8,270,000 in additional Roads funding for the 2018 Pavement Preservation Project.  Funding for this project will be supplemented with $1,380,000 in Road Maintenance and Rehabilitation Account revenues from SB 1 – the Road Repair and Accountability Act of 2017.  The remaining $6,890,000 will be HUTA funded.  Enacted this year, SB 1 provides funding for transportation infrastructure maintenance and repair, including the maintenance of local streets and roads. As part of the SB 1 requirements, the County must include a list of projects to be approved by the Board with the Adopted Budget.  This list of projects is provided in Attachment F.

Criteria used to select the road projects includes the following:
  • Use the County’s Pavement Management System to quantitatively identify candidate projects and treatments
  • Give priority to corridors that serve the most traffic and that are not eligible for federal funding
  • Give priority to segments that presently require excessive road repairs
  • Identify better quality pavements whose life can be extended with low cost treatments, to spread limited maintenance dollars farther
  • Schedule projects in a given year within the same general proximity to reduce mobilization costs and achieve economies of scale
  • Select methods and sequencing to allow material recycling, where feasible, to enhance sustainability.
Additionally, staff recommends the addition of two Senior Road Maintenance Worker positions and $91,000 in additional Roads funds for equipment, which will be used to purchase a low-rise trailer (approved by the board on August 1, 2017) and two replacement trucks.  The new positions will be partially funded by the reduction of a Construction Inspector position. The proposed Adopted Budget also includes additional Roads funding for supplies and services for an increased contract for storm related repair and road maintenance ($200,000) and the El Macero Pavement Rehab project ($120,000), which is being reimbursed by the El Macero Community Service Area.
 
The proposed Adopted Budget for Integrated Waste Management (IWM) includes $255,000 for the purchase of hydroseeding equipment and a security and monitoring system for the Landfill.  Staff also recommends the addition of a part-time Supervising Solid Waste Attendant (0.5 FTE).
 
For Building and Planning, the proposed Adopted Budget includes an addition of $75,000 for an update of the Esparto Area plan, which is funded by General Plan Cost Recovery fees.  The division also requested $70,000 for upgrades to the Trak-it system; however, this additional funding request is not recommended at this time.  IT Innovation Contingency funds may be available should the need for any urgent upgrades arise.
 
District Attorney
The proposed Adopted Budget for the District Attorney’s Office includes the addition of one Programmer Analyst IV position at an annual cost of $165,894, to be funded by the ESCARS grant awarded by the California Office of Emergency Services (OES) ESCARS grant.  Other recommended additions to be funded by the ESCARS grant include $218,160 in contracted services for software development, $12,000 in server equipment, and $19,699 in phones, tablets, and miscellaneous consumer electronics.
 
Community Corrections Partnership (CCP) realignment revenues in the amount of $98,965 were added in the Adopted Budget which will be primarily funding Extra Help positions in the High Tech Crime Unit and a Victim Service Advocate that was funded in the Recommended Budget by the Victim Services Grant.
 
Other significant changes include addition of $160,061 for an Extra Help Consulting Specialist to support the Cannabis Program, removal of a Worker’s Compensation Paralegal ($86,991) as grant funding for the program did not come through, and inclusion of two new building leases ($27,238), one for additional space at the existing 414 4th Street location in Woodland, and the other for a new office location at 2560 Halyard Drive in West Sacramento.The District Attorney intends to start a community prosecutor program in the City of West Sacramento in late 2017. He has discussed this intention with the CAO, Supervisor Villegas and City officials, all of whom have expressed support.  The proposed new space will be a convenient workplace for the new division and will allow the DA to work through the most common issues that the community prosecutor division expects to address, such as gang injunctions; elder abuse investigations, consumer fraud investigations; and, other pressing local matters. The space will also be used to work on large multi-jurisdictional matters with the Attorney General, the California District Attorney Association, and dozens of other District Attorney/City Attorney Offices throughout the State. The conference room will host dozens of meetings a year for the community prosecutor, the CFEPD, and could be made available to other County Departments when not in use by the DA.

 
Health & Human Services Agency (HHSA)
The proposed Adopted Budget for HHSA reflects a net increase of $1.0 million from the 2017-18 Recommended Budget, due primarily to $640,000 increase in funding for Child Welfare Services (CWS).  In May 2017, the Board received an update on CWS staffing, which outlined three short-term strategies to provide immediate workload relief.  Those strategies are implemented in the Adopted Budget through the following appropriation changes:
  • Addition of two Admin Clerk II positions that were unfunded in the Recommended Budget
  • Addition of seven Extra Help positions, including five Social Services Assistants and two Social Worker Practitioners
  • Increase in contracts for supervised visitation by $317,000
  • Increase in substance abuse contract by $55,000
  • Addition of $30,000 for a CWS Coaching training.
The increase in CWS funding is partially funded by salary savings from 20 vacant positions that will be filled at a lower salary step than the prior incumbents.  In addition, the CalWORKS allocation for 2017-18 has come in approximately $690,000 higher than previously anticipated, though partially offset by a $348,000 decline in the CalFRESH allocation.  Finally, the County Medical Services Program (CMSP) Governing Board has announced that County Participation Fees would again be waived for 2017-18, allowing General Fund dollars to be reallocated to cover the balance of the CWS funding increase.  It is recommended that the remaining portion of the funds previously budgeted for the CMSP Participation Fee, approximately $450,000, be redirected to the HHSA contingency.
 
Other significant adjustments in the Adopted Budget for HHSA include a $400,000 increase in the CalWORKS Housing Program, a federal grant of $125,000 to provide low cost fruits and vegetables to CalFRESH clients, and the addition of two limited terms Outreach Specialist positions as part of an Office of Traffic Safety grant.
 
Tribal Funding
The new Intergovernmental Agreement between the County and the Yocha Dehe Wintun Nation provides for $1.5 million in one-time payments to the County.  On April 25, 2017 the Board approved a policy for allocating this one-time payment equally to three accounts devoted to the following purposes:
  • State Route 16 Corridor Improvements
  • Rural Initiatives
  • Grant Matching Contingency
In accordance with this policy, the CAO’s Office has worked with the Tribal Ad Hoc Subcommittee to identify an initial list of projects for the use of this funding, as detailed in the table below.
 
TRIBAL ONE-TIME FUNDING AMOUNT
State Route 16 Corridor Improvements
Guinda Hall $50,000
Madison Hall $50,000
Rumsey Hall $50,000
Madison Alley Cleanup $60,000
Madison Infrastructure Assessment/Grant Applications $50,000
Esparto Speed Bumps $40,000
Esparto Alley Cleanup $60,000
Total SR-16 Corridor Improvements    $360,000
 
Rural Initiatives
Zamora Hall $50,000
Dunnigan Hall $50,000
Clarksburg Historic School House $50,000
Knights Landing Drainage $100,000
Archives Digitization $25,000
Library Chromebooks & Mobile Hotspots $50,000
HHSA Service Kiosks $30,000
OES Wildland Fire Response Plan $40,000
Total Tribal Rural Initiatives   $395,000
TOTAL ONE-TIME TRIBAL FUNDING ALLOCATIONS $755,000
 
Attachment I provides a description of each of the projects recommended to be funded with one-time Tribal Funds.
 
Library
The proposed Adopted Budget includes $52,436 for upgrade of Davis AV equipment. The additional expenses are offset by the use of fund balance, a slight decrease in salaries and benefits, and additional grant funding.
 
Probation
The proposed Adopted Budget for Probation includes two new Deputy Probation Officer positions at an annual cost of $213,018.  One of these positions will be funded by Proposition 47 grant funds, while the other is funded by Proposition 172 sales tax revenues.  
 
The proposed Adopted Budget also includes $71,746 in AB109 Planning dollars to partially fund a Case Management System ($17,746) and for 50% of the 2017-18 cost of the CCP Crime Analyst position ($54,000), as discussed in the section above.
 
Probation’s Adopted Budget includes an increase in CCP funding, which will primarily fund $94,240 in existing Mental Health and Alcohol and Drug monitoring service contracts that were being absorbed by other programs in the Recommended Budget. Other significant changes include $29,647 in lease costs for a facility in West Sacramento, $14,400 for extra help, $10,000 for mandatory training related overtime costs, and $73,423 for CCP position costs that were being previously absorbed by other areas.
 
Finally, the proposed Adopted Budget for Probation includes $25,409 in Youthful Offender Block Grant (YOBG) fund balance to primarily fund $20,150 in extra help interns to meet the program needs of the department.
 
Reserves and Contingencies
As discussed in the sections above, the 2017-18 Adopted Budget allocates additional funds to various reserves and contingencies.  An additional recommended change to reserves do not require additional resources, but should be noted for Board consideration. 
 
In December 2016 the Board approved a strategy to begin addressing the County’s unfunded pension liability through establishment of a dedicated pension reserve or trust.  A key element of this strategy was to begin prepaying the unfunded liability portion of the annual PERS contribution, which is estimated to generate annual savings of approximately $400,000 to be placed in the pension reserve.  In addition, for several years the County has maintained an $800,000 OPEB reserve to guard against department budgetary challenges in implementing the OPEB prefunding plan.  Now that the OPEB prefunding plan has been in place for several years and department budgets have stabilized, staff recommends that this reserve be redirected to the pension reserve.
 
The tables below summarize the reserve and contingency amounts included in the 2017-18 Adopted Budget.  
 
2017-18 Appropriation for Contingencies
(Recommended and Adopted)
General Fund* $2,000,000
Public Safety $500,000
Health & Human Services** $2,090,000
IT Innovation $500,000
Safety & Security $100,000
County Service Areas $100,000
Operational Excellence $100,000
 
2017-18 Budgeted Reserve Levels
(Recommended and Adopted)
General Reserve (5.5%) $10,917,107
Pension Reserve $1,200,000
Capital Improvement Program $3,500,000
Road Maintenance $300,000
Audit Disallowance $2,000,000
Unfunded Liabilities $890,000
Election System Replacement $250,000
               * Current balance of $1,817,944.
               * Includes Public Guardian/Public Administrator staffing contingency.
 
Carryforward Appropriations
The 2017-18 Adopted Budget includes $1.1 million in unused appropriations from 2016-17 that were carried forward into 2017-18.  These appropriations are for one-time purchases that have been ordered but not yet paid for, or for specific one-time projects or initiatives that were not completed by year-end.  Examples include vehicle purchases that have not yet been invoiced, or contingency funds awarded for a specific project that had not yet been completed.  The purpose of carryforward appropriations is to ensure sufficient budgetary authority to meet contractual obligations and to carry out Board directives.  A summary of carryforward items and amounts by department is provided in Attachment J.  All carryforward appropriations have been incorporated into the 2017-18 Adopted Budget, and are included in the budget totals reflected in Attachment B, Exhibit B1.
 
C – 2017-18 Recommended Budget Follow-up Items
During the Recommended Budget hearing, the Board requested information and additional action on the following items:
 
Public Defender Staffing Comparisons
At the 2017-18 Recommended Budget hearing, it was requested that Public Defender comparative statistics be provided at the Adopted Budget.  Staff in the Department of Financial Services Department has worked with the Public Defender to provide various metrics, which are presented in Attachment K. 
 
External Funding Requests
In the 2017-18 Recommended Budget, the Board approved $457,600 in funding requests by external agencies.  Of this amount, $300,000 was funded by the Pomona Fund, while $157,600 was funded by the General Fund.  During the discussion some Board members expressed a desire to look at improving the process for evaluating and awarding external funding requests in the future, including use of performance measures and comparison with other County priorities.
 
Separately, as noted in the Annual Report on Ceres, Demeter and Pomona Funds for June 30, 2017, de-allocations from Tobacco Securitization investments have declined over the past several years, and in 2016-17 resulted in just $252,709 being available for the Pomona fund.  While adequate fund balances are available to cover the anticipated decline in revenue for 2017-18, the assumptions behind the current financial model are no longer valid, and will need to be revisited.  Staff intends to return to the Board in the near future with an updated model and revised recommendations for the distribution of funds.  Given that the Pomona fund has been the primary funding source for External Funding Requests, staff recommends that options for program improvements be developed and brought to the Board for consideration in conjunction with the revised funding models.
 
 
Collaborations (including Board advisory groups and external partner agencies)
All County departments were provided the opportunity to submit additional budget requests. Department of Financial Services staff worked with department heads and fiscal officers in reviewing and analyzing additional budget requests. The recommended Adopted Budget was reviewed with the Board Budget Ad-Hoc Subcommittee.  County Counsel reviewed the adopted budget resolution as to form. 
Competitive Bid Process
Not applicable

Fiscal Information
Fiscal impact (see budgetary detail below)
Fiscal Impact of this Expenditure
Total cost of recommended action $441,709,789
Amount budgeted for expenditure
Additional expenditure authority needed $441,709,789
On-going commitment (annual cost)
Source of Funds for this Expenditure
General Fund $85,013,773
Fund Balance $29,659,848
Public Safety $20,062,980
1991 Realignment $25,044,145
2011 Realignment $28,638,236
Other Revenue $253,290,807
Further explanation as needed
TBD
Attachments
Att. A. 2016-17 Preliminary Fund Balance Report
Att. B. 2017-18 Adopted Budget Resolution
Exhibit B1. Budget Resolution Report - Operations
Exhibit B2. Budget Resolution Report - Transfer
Att. C. Position Resolution
Att. D. 2017-18 Equipment List
Att. E. 2017-18 Reserve Balances
Att. F. SB1 Road Projects
Att. G. Rural Community Outreach Summary
Att. H. Rural Community Investment Project Descriptions
Att. I. Tribal Funds Project Descriptions
Att. J. 2016-17 Carryforward Appropriations
Att. K. Public Defender Comparative Data
Att. L. Public Defender Workload Data
Att. M. Presentation

Form Review
Inbox Reviewed By Date
Mindi Nunes Mindi Nunes 09/21/2017 12:01 PM
Patrick Blacklock Patrick Blacklock 09/21/2017 01:31 PM
Phil Pogledich Phil Pogledich 09/21/2017 02:53 PM
Form Started By: Tom Haynes Started On: 08/24/2017 05:35 PM
Final Approval Date: 09/21/2017

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