State law, Government Code Section 29009, requires that the County end the year with a balanced budget, whereby funding sources are equal to financing uses. On a countywide basis, 2019-20 operating expenditures (excluding Capital Improvement Projects) ended the year $70.4 million less than budgeted amounts (a positive variance), while operating revenues ended the year $1 million less than budgeted amounts (a negative variance). Altogether, combined year-end operating expenditures and revenues reflect a net positive variance of $69.5 million relative to budgeted amounts, as reflected in Attachment A.
While the overall County budget ended fiscal year 2019-20 in balance, budgetary control is established at the budget unit level, and year-end expenditures for several budget units exceed current appropriations. As a result, year-end appropriation adjustments are required to bring these budget units into balance. These appropriation adjustments are reflected in Exhibit 1 to Attachment B.
While Board action is required only for those budget units that have overdrawn current appropriations, this year-end variance analysis report examines all department variances whether positive or negative. Reviewing all year-end budget variances can be helpful in identifying budgetary trends or operational impacts that may need to be monitored. It also provides the opportunity to review and consider budgetary practices that may be out of line with actual results.
The sections below provide narrative descriptions of the most significant department year-end variances. Emphasis is on explaining departments’ net variance, or the combined result of how actual revenues and expenditures compare to budgeted amounts.
Agriculture – $668,566 Positive Net Variance
Agriculture ended the fiscal year with a net positive variance of approximately $669,000, primarily due to an unbudgeted operating transfer of $394,000 to the Building Replacement fund. This transfer is done annually in order to meet the Agriculture Maintenance of Effort pursuant to State of California Food and Agriculture Code Section 224.5. Additionally, in the Building Replacement fund, the $200,000 in budgeted expenditures were not spent since the construction of the modular building was placed on hold while other options were researched. Within the Equipment Replacement fund, there is a $41,000 surplus due to a delayed vehicle purchase and receipt of unbudgeted revenue.
Assessor/Clerk-Recorder/Elections - $1,111,083 Positive Net Variance
Assessor/Clerk-Recorder/Elections ended the fiscal year with a positive net variance of approximately $1.1 million primarily due to vacancy savings, lower than budgeted costs for professional services, and $540,000 in excess revenues in both the Election and Clerk-Recorder divisions.
Although the department experienced a positive net variance, the Administration budget unit realized a deficit of approximately $795,000; this was due to salary and benefit and services costs that were charged to the Administration budget unit but not allocated to the other divisions at year-end. This deficit is offset by the surpluses in the Assessor, Elections, and Clerk-Recorder budget units as the Administration salary expenses should have been allocated to each division.
Capital Improvement Program - $4,906,006 Negative Net Variance
The Capital Improvement Program (CIP) ended the fiscal year with a net negative variance of $4.9 million. The Historic Courthouse Renovation Project ended with expenditures $1.4 million less than what was budgeted with offsetting revenue budgeted to be bond proceeds. However, available fund balance was used due to bond proceeds already being in fund balance from a 2017 bond issuance. The first year of the election system replacement was completed within budget appropriations, though revenue related to this project will not be received until after substantive completion at the end of the second project year.
It should be noted that many of the County’s capital improvement projects are multi-year in nature. As such, it is not expected that the entire project budget will be expended in a given fiscal year.
Child Support Services - $30,977 Net Negative Variance
Child Support Services ended the fiscal year with a net negative variance of approximately $31,000 primarily due to the purchase of an unbudgeted vehicle. Fleet recommended replacing one of the department’s current vehicles during the fiscal year since the mechanical issues were excessive.
Community Services- $24,565,842 Positive Net Variance
The Department of Community Services ended the fiscal year with a positive net variance of approximately $25 million as a result of both lower than anticipated expenditures and increased revenues. The major variance was in Integrated Waste Management, ($17.1 million), mainly due to delayed and canceled projects including the Waste Management Unit (WMU) G pond upgrade, postponed procurement of budgeted equipment, considerable budgetary savings on the closure of WMU 4&5 due to the project extending into FY2020-21 ($1 million), and less than expected expenses to external vendors.
Integrated Waste Management’s Debt Service Fund was never budgeted since this fund was not established until after the 2019-20 Adopted Budget with the issuance of the 2019 Solid Waste Revenue Bonds. Additionally, at the beginning of the budget year, Use of Fund Balance was budgeted under Waste Management Unit (WMU) 6&7, however, it should have been budgeted under WMU 4&5
Finally, the Road Fund experienced a $6.3 million surplus due to the construction phase of the 2020 rehabilitation and CR 95 bridge projects being postponed until 2020-21.
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County Administrator’s Office - $2,010,848 Positive Net Variance
The County Administrator’s Office ended the year with net positive variance of about $1.5 million, mainly due to lower than budget expenditures by $2.3 million. Part of the positive variance is off-set by the negative variance in revenue by $813K.
The major negative variance in revenues $729K is due to less than budgeted Water Resources grant revenue as the balance of the budgeted grants is rolled over to the next fiscal year. Other below budget revenues are: Water Delta grant in the Office of Emergency by $342K; and Housing and Community Development grants revenue being over budget by $371K as the grants were closed out in 18-19. Other below budget revenue is due to the Federal Aviation grant ($300K) at the Yolo Airport; the completion of the Grant was pushed back to the next fiscal year. Negative variance in revenues was offset by positive variances in many areas. Some of the major positive variances are, Risk Management ($365K), higher than expected interest income in Cache Creek Plan and Rumsey Tribal Mitigation fund respectively by $110K and $120K . Another major above budget revenue is in Dental Self Insurance ($185K).
The department’s total expenditures positive variance is mainly due to lower than budgeted grant expenditures in Water Resource and Rural Community Initiative Program grants ($1.2 million). Other major below budget expenditures are due to Area Restoration grants ($841K) and the Office of Emergency Grant ($500K) that are rolled over to the next fiscal year. Part of the positive variance is offset by the negative variance in Yolo Electric by $1.4 million. A major part of the Yolo Electric’s variance is due to the posting of the Depreciation ($846K), non-cash expense. Remainder is due to PG&E rate increase and an unbudgeted transfer to General Fund allocating Grassland Solar Production profit from last year. The negative variance in Yolo electric will be recovered through departmental charges in the coming years.
County Counsel - $71,560 Positive Net Variance
County Counsel ended the fiscal year with a positive net variance of approximately $72,000, with Indigent Defense accounting for approximately $104,000 of the surplus while County Counsel ends the year with $38,000 deficit. Indigent Defense reduced the number of contracted attorneys during the fiscal year, resulting in $67,000 of savings, and had a reduced number of claims presented for expense reimbursement. County Counsel has a $111,000 deficit in Salary and Benefits primarily related to two promotions and a retirement buyout, which was partially offset by $73,000 in unbudgeted CARES Grant reimbursements.
County Service Areas - $901,774 Positive Net Variance
County Service Areas ended the fiscal year with a positive net variance of approximately $902,000, with Wild Wings (WW) Sewer accounting for approximately $416,000 and Wild Wings (WW) Water nearly $437,000. In the last two fiscal years, there have been significant expenses in repairing the WW Sewer Treatment Plant. There were further repairs needed in 2019-20, however, the costs were not as extensive as originally budgeted. WW Water budgeted an antenna project, a water rerouting project and arsenic projects that were not completed in 2019-20, and instead have been delayed until 2020-21. Wild Wings Golf Course had an expenditure deficit of $53,000 due to the purchase of a John Deere Mower that was not originally budgeted and COVID-19 closures for part of the year that impacted course revenues.
The North Davis Meadows’ water connection project litigation is still ongoing resulting in a large expenditure and revenue variance of approximately $4.5 million.
El Macero Water also had an expenditure deficit of $141,000 due to a City of Davis utility bill that was not accrued in the prior year.
Countywide - $11,036,510 Positive Net Variance
The Countywide department ended the fiscal year with a positive net variance of $11.0 million, due primarily to lower General Fund transfers to other funds ($3.4 million), and unbudgeted development impact fee revenues ($4.3 million). In addition, the County collected approximately $2.1 million in Measure K cannabis tax revenue, which was not budgeted. These revenues are not budgeted by design and only appropriated after receipt of funds.
Board Controlled Penalties ended the fiscal year with a net deficit of $29,000 due to a deficit in expenditures. The deficit is due to an unbudgeted transfer to the general fund. Excess revenues from penalty assessments and existing fund balance will be used to balance this appropriation.
While the Court MOU ended the fiscal year with a net positive variance of $696,000, expenditures were in a deficit by $32,000 due to the payment made to the State for their portion of court related revenues. Record and index fees collected exceeded budget by $72,000. The excess revenue collected adjusts the calculation to the State (which receives 50% of fees and fines above a minimum threshold) and increases the payment to government agencies causing the deficit in expenditures. The surplus revenues will be used to balance this appropriation.
Debt Service - $12,404,448 Positive Net Variance
The Debt Service department ended the fiscal year with a positive net variance of $12,404,448. The function experienced a $4 million expenditure deficit due to delays in the acquisition and closing of the Child Support Building and had savings in the current budget year due to not expending the full amount of the Trane project proceeds as this project will continue into fiscal year 2020-21 ($9.1 million). This deficit is offset by receipt of unbudgeted revenues for bond proceeds related to the financing of the Gonzales and Child Support Services buildings ($16 million).
District Attorney - $530,523 Positive Net Variance
The District Attorney’s Office ended the fiscal year with positive net variance of approximately $530,000. A net expenditure surplus of $3 million was due mainly to numerous vacancies, and grant work not materializing as budgeted. This expenditure surplus was offset by a net revenue deficit of $2.5 million due to a reduction of realignment and other state and federal funding and a reduction in grant funding from what was originally anticipated.
Within the public safety fund, the Criminal Prosecution division had numerous vacancies and retirements during the year. Some of the positions were under filled for a portion of the year, and provided some salary savings. Also contributing to the surplus was not filling all budgeted extra help positions with the exception of the Real Estate segment of Criminal Prosecution where an extra help position was filled in lieu of a regular full time employee. Other divisions within the public safety fund, including Neighborhood Court and Special Investigations, also had vacant positions. Within Special Investigations, the Auto Insurance Fraud and Workers Compensation grants were awarded less than anticipated, causing a reduction in expenditures and also a reduction in reimbursement revenue.
Special revenue funds including the DA COPS and Consumer Fraud Environmental Protection were also unable to fill vacant positions, contributing to the expenditure surplus. In addition, Consumer Fraud Environmental Protection and the Multi-Disciplinary Intervention Center (MDIC) had surpluses in professional services due to less interviews related to cases and other contracted services. Consumer Fraud had also budgeted to purchase a vehicle, but it was determined it was not needed at this time.
The DNA ID special revenue fund ended the fiscal year with a net deficit of $29,861 due to unanticipated overtime while working on a cold case. The investigation hours resulted in an arrest.
Financial Services - $630,504 Positive Net Variance
The Department of Financial Services ended the fiscal year with positive net variance of approximately $630,500, primarily due to salary savings from vacant positions ($448,000). A portion of the savings was offset by lower than anticipated expense transfer reimbursement however, additional revenues ($148,000) and reimbursement related to the CARES Act ($87,000) increased the positive net variance.
General Services - $1,299,802 Positive Net Variance
General Services ended the fiscal year with a positive net variance of $1.3 million, due to surpluses in various divisions. Of the total net surplus, Facilities and Parks contributed $940,000. The Tuli Mem Park and Pool has been added to the General Services department and was the only budget unit to end the fiscal year with a material deficit, $65,000.
The Facilities division ended the year with a positive net variance of $495,000 with an expenditure surplus variance of $1.4 million. Due to COVID, there has been a reduction in work orders. This has positively affected extra help, overtime and the salary allocation charged out to projects. But this has negatively affected the revenue reimbursements for work charged to the departments. In addition to lower salary expenses, Facilities has been able to identify expenses that should be charged to the departments (janitorial and landscaping expenses) instead of being absorbed within their budget. This improvement is reflected as an expenditure reduction. Also contributing to the positive net variance were delays with multiple roof replacements and the Administration Building key card system projects.
Parks ended the year with a positive net variance of $445,000 with an expenditure surplus variance of $1.6 million. The Knights Landing Boat Launch project was budgeted in FY19-20 but more than $1.4 million in work was not completed, and has been budgeted to be completed in FY20-21. The expenditure surplus is offset by the corresponding reduction of reimbursement. The Grasslands Park project re-budgeted approximately $56,000 to FY20-21 for completion of the project.
Information Technology (which was budgeted as part of General Services in the 2019-20 budget but separated January 1, 2020) ended the year with a positive net variance of $211,000. Expenditures for the department reflect a deficit of $338,000 while revenues had a surplus of $548,000. Vacant positions, unused retirement payout, training savings, and programming projects not needed, contributed to a reduction of expenses. In addition, network switches were not purchased and a portion of the project has been rolled into FY20-21. These expenditure savings were offset by the purchase of the countywide OKTA security program and other security software in response to COVID changing the work environments for county employees. The largest expenditure reduction was the decrease in Expense Transfer Reimbursement for IT services of $2.0 million.
The revenue surplus of $548,000 is due mainly to CARES Act reimbursement, unanticipated Department Systems revenue of $610,000 from Probation, HHSA, Sheriff, and DA for additional dedicated staffing and project work, and a shift in accounting practices between an expense reimbursement and revenue. A portion of the surplus was offset by less ERP revenue due to vacancies and $35,000 in uncollectible charges. In future years, it will be shown separately and distinctly from General Services.
Telecom ended the fiscal year with a positive net variance of $205,000. This is due mostly to the delay in completing the countywide telephone project which will complete now in fiscal year 2020-21. Also, contributing to the surplus was the unused portion of on-call services with Quest and VOX and other purchased services for the departments. These expenditure surpluses were partially offset with lower communication services revenue due to a change in billing processes.
Health & Human Services Agency - $7,929,517 Positive Net Variance
HHSA-Administration ended the year with lower than budgeted expenditures by $508K due to the long term space planning project not materializing as a result of Covid-19. Respective revenue, a transfer in from IGT is lower than budget as well by $535K. The division overall had a net negative variance of $27K.
HHSA-IGT total expenditures are below budget by $40K which is insignificant compared to the total annual budget of $4.1 million. Total revenues exceed the budget by $5.4 million, mainly due to the current year’s receipts not being budgeted.
HHSA-Behavioral Health division ended the year with net positive variance of $4.7 million, mainly due to lower than budgeted expenditures in the Mental Health Services Act (MHSA)–Community Services and support program ($8 million). The lower expenditures are primarily attributable to the MHSA three year spending plan. The plan requires community stakeholder engagement which was prolonged due to COVID. The Board has approved a new three year spending plan (2021-2023), and the balance of the funds has rolled forward to the newer plan. Other major drivers behind the variance are vacancy savings of $1.8 million, and lower than budgeted contract expenditures ($3.9 million) in Adult and Child services, transfers to MHSA inter-programs ($2 million). Other major positive variance is in Alcohol and Drug Program ($1.8 million), mainly due to lower salary and benefits ($980K) due to vacancy saving and under-utilized contracts ($953K). Some of the positive variance is offset by above budget expenditures ($1.7 million) in Mental Health Services, Prevention and Early Intervention ($427K), and in Innovation ($290K).
HHSA-Public Guardian- The division ended the year with lower than budgeted expenditures by $135K, mainly due to lower than budgeted salary and benefits expense allocations from the Administration division. The revenues were lower than budget due to lower than anticipated Public Guardian fee revenue by $54K and a pushed back transfer in from IGT by $52K due to delayed purchase of a vehicle. Overall the division ended the year with a net positive variance of $35K.
HHSA-Public Health- The division ended the year with net positive variance of $2.8 million, mainly due to lower than budgeted expenditures ($5 million). Major part of the lower than budgeted expenditures is due to unused IGT transfers out budget ($2.5 million), the activity was moved to a new fund and the budget was supposed to have moved as well. Public Health Realignment Trust fund has lower than budget expenditure due to unused transfer out budget to the operating fund. Other major positive variance ($527K) is due to unused medical emergencies budget. Some of the total positive variance is offset by the negative variance in the Jail Medical Services contract by about $95K due to CPI increase. The positive variance is offset by below budget revenue ($2.3 million). Major drivers behind the revenue variance is lower revenue in Public Health Administration ($2 million), mainly due to lower than budgeted transfer in from Public Health Realignment Trust fund by $1.1 million, since the operating fund had fund balance to be used.
HHSA-Social Services division ended the year with negative variance of $4.9 million. Total expenditures were lower than budget by $3 million, but revenues were lower than budget by $7.8 million. The major revenue variance is in Public Assistance Administration ($2.3 million) because of the declined Federal revenue, and unused transfer budget from Realignment funds. The lower than budget revenue ($3.6 million) in the Public Assistance Aid is mainly due to CalWORKs’ declined revenue from the Social Services Realignment funds. A major part of the lower than budget expenditures is attributable to $2.4 million in unused transfer out from the Social Services Realignment fund to the Social Welfare program. Other major positive variance in expenditures is in Public Assistance Aid ($2.3 million) due to over budget in Foster care. Public Assistance Admin division’s total expenditures are lower than budget ($1.8 million) mainly due to actual operating expenditure including salary and benefits coming in lower than the budget. Part of the lower than budget expenditures were offset by the above budget expenditures in realignment funded social welfare entitlement programs ($5.1 million), mainly due to larger than expected caseload growth as a result of the Covid-19 economic downturn.
Library - $1,470,595 Positive Net Variance
The Library ended the fiscal year with a positive net variance of approximately $1.5 million, with Library Operations accounting for approximately $1 million and Library Services Measure A fund, nearly $422,000. Library Operations realized $493,000 in vacancy savings among various positions at the Davis branch and Central Services branch including unused Extra Help hours related to the COVID-19 closures. Services and Supplies was also reduced because of the branch closures including utilities, office supplies, security, and maintenance. Measure A is used to pay debt service costs and subsidize costs for the Davis Branch. The significant surplus in Library Operations resulted in a reduction of the transfer out of the Measure A fund into the Operating division.
Gibson House ended the fiscal year with a $2,580 deficit due to higher than expected Salary and Benefits. This deficit will be offset by additional Use of Fund Balance.
Probation - $2,637,272 Positive Net Variance
Probation ended the year with a positive net variance of $2.6 million, due to $5.2 million expenditures savings. Major areas of savings in expenditures are: $2.4 million in lower expenditures related to reductions in services provided to clients in light of the COVID-19 pandemic, reductions in IT services, and termination of the Office of Refugee and Resettlement (ORR) program. Additionally, the department experienced $1.8 million in savings from vacant positions in all divisions. The expenditure savings are offset by $2.6 million in less than budgeted revenues, including State and Federal program revenues and special revenue fund transfers into various programs such as Youth and Juvenile Placement, Juvenile Detention, and Probation Service Units.
Public Defender - $59,591 Positive Net Variance
Public Defender ended the year with a positive net variance of $59,000 due to the Public Defender departmental budget surplus of $99,000. The departmental budget received $30,000 in CARES Act reimbursement and had budget surpluses of $152,000 for Professional Services and DA Discovery Fees and $32,000 in Extra Help. These savings were partially offset by deficits of $43,000 related to IT development and testing of the Public Defender Record Management System (RMS) and $60,800 in costs for building and facility repairs. The surplus in the departmental budget offset the reduction of realignment revenues in Community Corrections Partnership (CCP) and the Revocation funds, each with a deficit of $14,000 and $26,000 respectively.
Sheriff - $2,679,409 Positive Net Variance
The Sheriff’s Office ended the year with a positive net variance of almost $2.6 million with approximately $1.9 million from special revenue funds. Vacancies in Patrol, Detention, Public Administrator and Management division contributed to much of the positive variance. The COVID pandemic reduced expenses in the Animal Services division, travel and training expenses in the Training department and expenses in Detention, like food costs, due to a lower inmate count.
With court closures and reduced services, COVID also effected services performed by the Civil division, like court orders, reducing revenue. Despite a lower inmate count and salary savings due to vacancies, Detention exceeded budget in overtime by $239,000 as a result of maintaining mandatory staffing levels.
Court Security continued to exceed budget in salary and benefits by $363,000. The budgetary deficit of salary and benefits was partially offset by a lower workers compensation expense of $160,000.
The Sheriff’s Community Corrections Partnership division ended the fiscal year with a deficit due to the reductions of realignment revenues as a result of COVID-19.
Due to COVID, the Records Management/Jail Management (RMS/JMS) replacement project, funded by the Small and Rural fund, is behind schedule. A surplus of $1.4 million has been budgeted for continuation of the project in FY 2020-21. |