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, 2018-19 operating expenditures (excluding Capital Improvement Projects) ended the year $57.6 million less than budgeted amounts (a positive variance), while operating revenues ended the year $3.0 million less than budgeted amount (a negative variance). Altogether, combined year-end operating expenditures and revenues reflect a net positive variance of $54.6 million relative to budgeted amounts, as reflected in Attachment A.
While the overall County budget ended fiscal year 2018-19 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 – $1,925,196 Positive Net Variance
Agriculture ended the fiscal year with a net positive variance of approximately $1.9 million, primarily due to over-budget revenues such as $1.6 in Cannabis fund and $300K in Building Replacement fund. In the beginning of fiscal year 2018-19 the Cannabis Program was moved from Agriculture to the department of Community Services; however, approximately $1.6 million in Cannabis Program revenue was posted incorrectly into the former Agriculture Cannabis budget unit. While this revenue posting is reflected in the Agriculture department, it is important to note that it is still within the Cannabis Cultivation Regulation Fund and the revenues are thus still restricted to the regulatory program. In addition, an operating transfer of about $300K from General Fund to the Building Replacement fund was not budgeted. 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.
Assessor/Clerk-Recorder/Elections - $1,496,496 Positive Net Variance
Assessor/Clerk-Recorder/Elections ended the fiscal year with a positive net variance of approximately $1.3 million primarily due to vacancy savings, lower than budgeted costs for professional services, and $200K in higher than expected receipts in election charges for services and miscellaneous revenues.
Capital Improvement Program - $4,957,847 Net Positive Variance
The Capital Improvement Program (CIP) ended the fiscal year with a net positive variance of $4.9 million. The Historic Courthouse Renovation Project ended with expenditures $4.9 million less than what was budgeted, while revenues for various facility improvement projects came in approximately $1.2 million greater than budgeted. In addition, $700,000 was transferred to a newly created project fund for the election system replacement. This funding was budgeted in the General Fund, but was transferred to the Capital Project Fund to be available for project expenditures in future years. Finally, the Monroe Jail Expansion project had a negative net variance of $2 million due to lower state grant reimbursement than was budgeted.
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.
Community Services - $21,022,220 Positive Net Variance
The Department of Community Services ended the fiscal year with a positive net variance of approximately $21 million as a result of both lower than anticipated expenditures and increased revenues. Major variance was in Road Fund about $9 million due to projects spanning over multiple years.
Integrated Waste Management ended with net positive variance of about $11 million, mainly due to revenue from post-closure funding activity, decreased expenditures from not upgrading the G pond during the fiscal year as planned, delayed procurement of budgeted equipment, and salary savings from vacancies.
County Administrator’s Office - $2,196,513 Positive Net Variance
The County Administrator’s Office (CAO) ended the fiscal year with a positive net variance of approximately $2.2 million, primarily due to Cache Creek Area Plan ($595,000), Office of Emergency Services ($507,000), County Administrator ($591,000), and Tribal ($458,000). The Cache Creek Area Plan received higher than anticipated gravel revenue from mining fees and lower expenditures for projects delayed until FY19-20. The Office of Emergency Services Homeland Security Grant was delayed to FY19-20 but reimbursement revenue for prior years was received for Flood Grant expenditures.
The County Administrator division ended the year with an expenditure variance of $941,000 and a net variance of $591,000 due to approximately $427,000 in salary savings and an additional $300,000 for Rural Investment programs that were not completed in FY18-19. Funds for those projects were rolled into FY19-20 for completion. The Tribal division had a positive net variance due to a number of Tribal Rural Initiative projects, $237,000, that were not completed in FY18-19. Funds for those projects also were rolled into FY19-20 for completion.
County Counsel - $363,971 Positive Net Variance
County Counsel ended the fiscal year with a positive net variance of approximately $364,000, primarily due to outside counsel for joinder agreements that did not materialize. Additionally, more legal matters were handled in house so less outside legal consultants were needed.
County Service Areas - $564,404 Negative Net Variance
County Service Areas ended the fiscal year with a negative net variance of approximately $564,000. The majority of this variance is due to the North Davis Meadows’ water connection project, which was included in the budget but is on hold pending ongoing litigation. The project was anticipated to be funded by a state loan that has not yet been received. This negative variance is partially offset by smaller positive variances in other CSAs, including $250,000 in El Macero due to a credit received from the City of Davis for overpayment of sewer bills over the past few years, and $183,000 in Wild Wings Water due to an unbudgeted repayment of a loan from the Wind Wings Sewer CSA.
Countywide - $17,638,586 Positive Net Variance
The Countywide department ended the fiscal year with a positive net variance of $17.6 million, due primarily to lower General Fund transfers to other funds ($3.4 million), unused contingency appropriations ($4.1 million), unbudgeted development impact fee revenues ($4.2 million) and lower than anticipated project expenditures in the Accumulative Capital Outlay fund ($60K). In addition, the County collected approximately $786,000 in Measure K cannabis tax revenue, which was not budgeted.
District Attorney - $ 1,610,735 Positive Net Variance
The District Attorney’s Office ended the fiscal year with positive net variance of $1.6 million, primarily due to variance in Consumer Fraud & Environmental Protection. The Consumer Fraud & Environmental Protection Unit had a net positive variance of $1.5 million, primarily due to $558,000 in higher revenue receipts for settlements and investigations, $235,000 in investment earnings, and an additional $68,000 from the State to investigate cases. Additionally, expenditures for contracted services, such as lab testing of retail products, outside Attorney services, investigation services, and a vehicle ordered but not delivered until FY19-20 were $486,000 lower than budget.
Other divisions within DA, including Neighborhood Court, Criminal Prosecution, Special Investigation, and Victim Assistance where awarded grants and were not able to complete the grant, were unable to hire personnel timely or were not awarded the full grant amount budgeted. For Neighborhood Court, a position was unfilled resulting in salary savings and Prop 47 funds were received but not fully spent. Criminal Prosecution, Electronic Child Abuse Reporting grant had issues moving forward, The Real Estate Fraud unit had salary savings with a vacant position and other positions were underfilled including two Deputy District Attorney IV and the retirement of the Chief Fiscal Administrative Officer along with a vacant Legal Secretary. The Special Investigations unit were awarded less in Auto Fraud and Workers Compensation grants than anticipated. Also, the DA’s office did not receive an Alcohol & Beverage Control grant from state of California that was budgeted. Vacant positions in the Welfare Fraud unit due to retirements and delayed hiring provided salary savings. In the Victim Assistance unit, hiring personnel in the Violence Against Women Act grant from Cal OES, in the Elder Abuse grant, and in the mass victimization unit was delayed providing for salary savings.
Financial Services - $217,632 Positive Net Variance
The Department of Financial Services ended the fiscal year with positive net variance of approximately $218,000, primarily due to salary savings from vacant positions ($328,000). A portion of the savings was offset by unbudgeted extra help expense ($28,000), and higher than anticipated IT department systems ($24,000) and auditing and accounting ($104,000) costs primarily related to the transition of banks during the fiscal year. These additional banking costs are recovered from Treasury investment revenues to the extend allowed by state law.
General Services - $1,792,062 Positive Net Variance
General Services ended the fiscal year with a positive net variance of $1.8 million, due to surpluses in various division. The Telecommunications Internal Service Fund ended the year with a net positive variance of $739,000 due mostly from savings in the Conduit and Fiber cabling project. Budgeted expenses were not necessary when Wave Cable contributed to the project for an estimated savings of $530,000. In addition, a portion of the phone system implementation was delayed to FY19-20. The savings from the Conduit and Fiber cabling project will be used to fund FY19-20 project expenses for the phone system implementation.
The Parks division ended the year with a positive net variance of $244,000. Salary savings due to vacant positions and filling positions of retired, high seniority employees with new employees attributed to $104,000 of the variance. The remaining variance is due to the two grant projects, the Knights Landing Boat Launch Improvement project and the Grasslands Trail Project. Both projects had delays during the 2018-19 fiscal year and asset purchases were deferred to the 2019-20 fiscal year.
The Information Technology division ended the year with a positive net variance of $373,000 due to vacancy savings. There were numerous positions for HHSA contracted IT positions that were vacant during the year but those savings were offset by the reduction of reimbursement revenue. The remaining net variance is due to vacancies at the help desk and a Systems Software Specialist for the Infor system. Additionally, an Accountant and GIS Coordinator were vacant for a portion of the year and more salary was allocated to Telecom for the phone system implementation than what was budgeted for in Connectivity.
The Facilities division ended the year with a positive net variance of $342,000 with an expenditure variance of $1.2 million. Of the expenditure savings, $690,000 was due to a number of capital projects. The 120 W Main St roof replacement ($163,000) and the HVAC controller conversion ($300,000) were delayed until FY19-20, with additional savings of $227,000 due to the lower than budgeted costs for the various roof improvement projects. These savings in expenditures were offset by a reduction of reimbursement revenue. Contributing to the positive net variance is a reduction in professional services, $177,000, for the reduction of security guard services and the remaining portion for services billed to departments that were previously paid by Facilities.
Health & Human Services Agency - $1,707,666 Positive Net Variance
The Health & Human Services Agency ended fiscal year 2018-19 with a positive net variance of approximately $1.7 million, due primarily to positive variances in Intergovernmental Transfers ($8.2 million) and Mental Health Services Act ($6.9 million) programs, partially offset by negative variances in the HHSA realignment funds ($10.3 million) and core Mental Health programs ($4.1 million).
The Intergovernmental Transfers (IGT) program ended the year with expenditures $3.2 million lower than budgeted amounts, primarily due to unspent funding for IGT emerging needs, while revenues came in $5.0 million higher than budgeted. Mental Health Services Act (MHSA) programs realized a positive net variance primarily due to higher than anticipated revenue, Navigation Center contract savings, and a delay in the Transition Age Youth (TAY) Welcome to Wellness center move.
The HHSA realignment funds realized a negative variance primarily due to higher than budgeted transfers that were needed to balance an operational gap and address the long-standing deficit within the Mental Health fund, as well as to offset lower state and federal revenues in Social Services programs. The Mental Health fund ended the year with a negative variance due to lower than budgeted Medi-Cal reimbursements, higher Institute for Mental Disease (IMD) costs, and a one-time transfer to the MHSA fund that was required to ensure the proper allocation of program revenues and expenditures.
Other notable year-end variances include an $816,000 positive variance is Social Services Assistance due to salary savings and lower CalWORKs assistance payments, a $652,000 positive variance in the Emergency Medical Services (“Maddy”) fund due to lower uncompensated trauma reimbursement requests, and a $752,000 negative variance in Substance Use Disorder programs due to lower revenue from Medi-Cal billings.
Library - $1,542,422 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 $700,000 and Library Services Measure A fund, nearly $800,000. Library Operations realized $480,000 in vacancy savings among various positions including a Library Associate, Librarian and Analyst for the full year and Library Assistants, Library Associate and Assistant County Librarian for a portion of the fiscal year. A large-format printer and digital asset management system, replacement of 47 public computers, and the replacement of furniture and minor equipment were postponed and not purchased or replaced in FY18-19. Approximately $184,000 of the net variance is attributed to expenditure savings and conservative budgeting.
Measure A is used to pay debt service costs and after paying debt subsidize the operational costs for the Davis Branch Library. Approximately $252,000 of the $480,000 vacancy savings is for vacancies at the Davis library. The Davis branch also benefited from lower allocated costs from the positive net variance in Library Operations. The net result was the Davis branch’s operating deficit was $700,000 lower than projected, so the transfer out of the Measure A fund into the Operating fund was $700,000 lower than budgeted.
Probation - $2,384,525 Positive Net Variance
Probation ended the year with a positive net variance of $2.4 million, due to $5.8 million expenditures savings. Major areas of savings in expenditures are: $2.2 million from vacant positions, about $1.5 million from lower than expected expenditures County Construction Program for Youth and Juvenile placements. The expenditure savings are offset by more than budgeted revenues i by $2.4 million in various programs such as Youth and Juvenile Placement, Detention Hall, Transportation, and Probation Service Units.
Public Defender - $96,309 Positive Net Variance
Public Defender ended the year with a positive net variance of $96,000 due to unspent funding for Immigration assistance that was approved by the Board of Supervisors in September 2018. This funding was not spent in FY18-19 while options were evaluated with the Board of Supervisors and community-based organizations. During the Recommended Budget Hearings in June 2019, this funding was approved to be rolled into FY19-20 with an additional $50,000 so that an Immigration Attorney could be hired on a limited term basis.
Sheriff - $1,136,641 Positive Net Variance
The Sheriff’s Office ended the year with a positive net variance of $1.1 million with $1 million of the positive variance due to special revenue funds. For the year, the Patrol division exceeded overtime by $122,000 but was offset by a number of service and supply accounts that were under budget, including vehicle fuel and maintenance, minor equipment purchases, professional services and training. The positive net variance of $309,000 is due to vehicles purchased but not delivered until FY19-20.
In Detention, overtime exceeded budget by $219,000 due mostly to staff replacement levels and worker’s compensation insurance exceeded budget by $322,000 due to an increase in claims. These deficits were partially offset by minor increases in revenue and numerous expenditure decreases including transportation and travel, minor equipment purchases, training, and delayed delivery of a Detention passenger van to FY19-20.
All of the Sheriff’s special revenue funds ended the year with positive variances. Budgets for these special revenue funds were to account for any unexpected expenses during the year and in many cases, those expenses were not needed. An exception would be in the Sheriff Civil Process Vehicles fund, the $103,000 positive variance is attributed to vehicles purchased but not delivered until FY19-20. |