State law requires that the County end the year with a balanced budget, whereby funding sources are equal to financing uses. On a countywide basis, 2016-17 revenues ended the year $18.2 million less than budgeted amounts (a negative variance), while expenditures ended the year $61.8 million less than budgeted amounts (a positive variance). Altogether, combined year-end revenues and expenditures reflect a net positive variance of $43.7 million relative to budgeted amounts, as reflected in Attachment A.
While the overall County budget ended fiscal year 2016-17 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, both in regard to appropriations and to revenues. Reviewing all year-end budget variances in both appropriations and revenues 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 – $1,321,585 Positive Net Variance
The Agriculture department ended the fiscal year with a net positive variance of approximately $1.3 million, due primarily to a $1.1 million net surplus in the Cannabis Program. Cannabis Taskforce expenditures ended the year nearly $2.3 million below budget due to a lag time in ramping up program staffing and expenditures that had not yet posted at year-end, as detailed in the August 1 update on the Cannabis Cultivation Program. Cannabis revenues ended the year $1.2 million below budget, as 2016-17 was the first year of the Cannabis Program and year-end results only reflected a half-year of program operation.
Assessor/Clerk-Recorder/Elections - $1,079,815 Positive Net Variance
Assessor/Clerk-Recorder/Elections ended the fiscal year with a positive net variance of $1.1 million primarily due to positive variances in the Elections and the Clerk-Recorder divisions. Elections experienced a net budget surplus of $348,000, mainly due to cost savings from ballot printing for the November 2016 election. Clerk-Recorder realized a year-end net surplus of $695,000 as a result of salary savings from vacant positions and additional revenues related to an increase in documents being recorded.
Although overall the department experienced a positive net variance, the Assessor’s office was slightly over budget in expenditures by approximately $75,000; this was due to salary and benefit costs that were charged to the Assessor although the staff was originally budgeted under the Administration budget unit. This overage was offset by additional revenues in the Assessor’s office.
Capital Improvement Program - $1,859,042 Net Positive Variance
The Capital Improvement Program (CIP) budget ended the fiscal year with a net positive variance of approximately $1.9, due primarily to slower than anticipated project execution of the Monroe Jail Expansion. The budget for this project assumed that construction would begin in 2016-17; however, a required redesign of the Justice Campus water fire suppression system pushed back project approval at the State level. As a result, total expenditures for this project were $10.5 million less than budgeted, while grant reimbursement revenues were lower by $9.9 million. The Monroe project is anticipated to begin construction in 2017-18.
Community Services - $12,214,081 Positive Net Variance
The Department of Community Services ended the fiscal year with a positive net variance of approximately $12.2 million as a result of both lower than anticipated expenditures and an increase in revenues. Planning and Building realized a net year-end surplus of $343,000 from salary savings due to vacant positions and not purchasing the OnBase Server and other equipment this fiscal year. The savings was partially offset by lower than anticipated revenues, as a portion the budgeted revenues were generated in the next fiscal year. Environmental Health experienced a year-end surplus of $744,000 due to a combination of salary savings from vacant positions, the delay in building a facility for Hazmat vehicle storage, and an increase in revenue attributable to CUPA enforcement settlements.
Road Fund Construction and Maintenance experienced a positive net variance of $5.9 million at the end of the fiscal year. The unit experienced significant expenditure savings of $10.7 million primarily related to capital projects, including the GF Pavement Preservation Project, which didn’t start until late June 2017, and the Pavement Maintenance & Rehabilitation project. In addition, the unit experienced savings from contract services related to capital projects and position vacancies. As a result of fund consolidation and decreased expenditures related to capital projects, Road Fund Construction and Maintenance also realized a savings in fund transfers and other financing uses; this savings was offset by a related decrease in revenues of $4.7 million from lower than anticipated fund transfers due to decreased expenditures.
Integrated Waste Management ended the fiscal year with a positive net variance of approximately $5.1 million due to both lower than budgeted expenditures and increased revenue. The division experienced $2.1 million in savings due to a delay in the completion of capital projects, including liquid waste impoundment improvements and pavement construction projects. Services and supplies savings associated with the delayed capital projects, and salary savings as a result of position vacancies also contributed to the surplus. Additionally, Integrated Waste Management realized $3.0 million in higher than anticipated revenue as a result of increased waste volume from both self-haul and franchise waste.
County Administrator’s Office - $835,346 Negative Net Variance
The County Administrator’s Office (CAO) ended the fiscal year with a net negative variance of approximately $835,000. Year-end expenditures were $4.2 million less than budgeted amounts, while revenues came in $5.1 million less than budget. These variances are primarily attributable to grant funds in the Housing Assistance and Office of Emergency Services divisions that were budgeted but not fully expensed or reimbursed. These grants, which will carry forward to 2017-18, include the HOME Esparto Multi-housing grant, West Kentucky water grant and Department of Water Resources Delta Grant. The Yolo Solar Electric Internal Service Fund ended the year with a negative net variance of approximately $1.6 million, due primarily to higher depreciation expense than was budgeted, and lower than budget revenues as a result of department charged being based on prior year actuals. These charges will be trued up in 2017-18 when actual cost allocations are determined.
Other significant variances include lower than budgeted revenues and expenditures in the County Administrator division due to Water Resources grants that were budgeted but not fully expensed and reimbursed, and over budget revenue in the Tribal Mitigation unit due to the one-time $1.5 million payment from the tribe under the new Intergovernmental Agreement.
Countywide - $12,939,617 Positive Net Variance
Countywide ended the fiscal year with a positive net variance of approximately $12.9 million. Total expenditures came in $8.4 million less than budget due primarily to lower general fund support to departments, unspent General Fund contingency funds and a delay in the issuance of the CIP bond, which postponed the first debt service payment to the next fiscal year. In addition, revenues exceeded budgeted amounts by $4.5 million due to increases in general purpose revenues, primarily related to an increase in the Teeter revenue transfer, and an increase in unbudgeted development impact fees.
District Attorney - $3,519,303 Positive Net Variance
The District Attorney’s Office ended the fiscal year with positive net variance of slightly more than $3.5 million, primarily due to the Prosecution and Consumer Fraud & Environmental Protection units. The Prosecution unit had a net positive variance of approximately $1.2 million, which is primarily a result of salary savings from under-filling positions, staff attrition, utilization of extra help, and a delay in hiring of the Technology Innovation Manager, Assistant Chief Investigator, and IT Innovation Technician positions.
The Consumer Fraud and Environmental Protection Unit had a net positive variance of $2.7 million, primarily due to $1.8 million in higher revenue receipts for settlements and investigation-related State revenues. Additionally, expenditures for contracted services such as lab testing of retail products, outside Attorney services, and investigation services were $587,000 lower than budget as a significant portion of the unit’s focus was shifted to the Cannabis Program in FY 16-17.
In addition, the Special Investigations Unit has a net variance of $559,000 mainly due to lower revenue receipts from the Workers Compensation and Auto Fraud Grant in FY 16-17. This grant revenue was budgeted in FY 16-17 but because of late revenue receipt was deposited in FY 17-18.
Financial Services - $615,111 Positive Net Variance
The Department of Financial Services ended the fiscal year with positive net variance of approximately $617,000 due to salary savings from vacant positions and additional revenue. The revenue increase was the result of an increased share of the property tax administration fee in addition to an increase in collection fees due to the implementation of new software.
General Services - $1,256,018 Positive Net Variance
General Services ended the fiscal year with a positive net variance of $1.26 million, primarily due to surpluses in the Equipment Replacement and Telecom Internal Service Funds (ISF). The Equipment Replacement ISF, which is used for both the IT PC replacement program and AG equipment replacement, ended the year with a net budget surplus of nearly $720,000. Approximately $419,000 of this amount is related to the AG equipment replacement. The remaining $300,000 are funds collected from the departments towards their contribution to their PC replacement account. The Telecommunications ISF ended the year with a net budget surplus of nearly $614,000. Projects like the conduit project between Woodland and Davis, telecom work order and billing systems have been delayed and assets were not purchased. Additionally, smaller projects and contracts for services were either not completed or not necessary.
The surplus in the ISFs was slightly offset by a $119,000 net deficit in the Facilities division. This deficit was primarily due to lower rental revenue, based on a determination that rent from the Bauer building should be allocated to Countywide instead of General Services. However, expenditure savings due to projects not being completed and service and supply charges over estimated in the budget minimized the impact of the reduction of rent revenue.
Health & Human Services Agency - $6,131,191 Positive Net Variance
The Health & Human Services Agency ended the fiscal year with a net positive variance of approximately $6.1 million, primarily due to expenditure savings in Public Health and Social Services, partially offset by higher than budgeted expenditures in Behavioral Health.
The Public Health division ended the year with a net positive variance of approximately $4.0 million. Expenditures came in under budget by nearly $5.4 million, due primarily to staff vacancies and Intergovernmental Transfer (IGT) funds that were budgeted but not fully expended. Revenues ended the year $1.3 million less than budgeted amounts due to lower than anticipated transfers from the 1991 Realignment fund, and a downward trend in Emergency Medical Services “Maddy” fund revenues.
The Social Services division ended the year with a net positive variance of approximately $3.1 million. Total expenditures came in $6.8 million less than budgeted amounts due to staff vacancies and lower than anticipated expenditures in direct to client services, CalWORKS assistance payments, CalWORKS Welfare to Work supportive payments, and CalWORKS child care contract. Revenues ended the year $3.7 million under budget due to lower State and Federal reimbursements as a result of expenditure savings, and a lower transfer from 2011 Realignment.
The Behavioral Health division ended the year with a net negative variance of $957,000. Expenditures exceeded budgeted amounts by $4.1 million due to unanticipated increases in contracts for acute hospital services, and use of unbudgeted 2011 Realignment fund balances to support the deficit in core mental health services. Year-end revenues exceeded budgeted amounts by $3.1 million, due primarily to the additional transfer in of 2011 Realignment funds. Without these additional Realignment funds, total revenues were $1.9 million below budget, which was due to lower State and Federal reimbursements and service charges for programs that were budgeted but not implemented.
Library - $455,548 Positive Net Variance
The Library ended the fiscal year with a positive net variance of approximately $456,000. This variance was primarily due to expenditure savings in library operations ($295,000) from position vacancies, including the County Librarian position, and savings in utility costs from solar panel installation. Additionally, the Davis Library cash available fund (the Library Measure A fund) ended the year with a savings of approximately $173,000, which is attributable to increased revenue from other funding sources resulting in a lower parcel tax transfer needed to fund Davis Library expenditures.
Probation - $2,143,491 Positive Net Variance
Probation ended the year with a positive net variance of $2.1 million, primarily due to $1.5 million in vacancy savings and $950,000 in lower expenditures for contracted mental health services and services provided by Yolo County Construction Program (YCCP). The youth population in Probation programs was lower in FY 16-17 than the department had originally anticipated, which resulted in these savings.
Sheriff - $216,725 Negative Net Variance
The Sheriff’s Office ended the year with a negative net variance of $216,000 due mostly to the Patrol and Detention units. The Patrol unit had a net deficit of $813,000. Revenue fell short of budget due to a decrease in state revenue. In addition, salaries and benefits exceeded budget due to an increase in workers compensation expense and overtime, while services and supplies exceeded budget due to public liability insurance charges. The Detention unit kept salaries and supplies within budget, but did not receive a portion of Realignment dollars and did not receive a budgeted transfer from the Small and Rural fund. In total, Detention ended the year with a net deficit of $351,000.
While the Patrol and Detention units were over budget, some units saw significant savings. The Sheriff's Management unit had $485,000 savings in service and supplies due largely to Public Liability insurance, which was budgeted in the Management unit but charged to the individual divisions. The Small and Rural fund saw significant savings of $498,000 due to not immediately filling the Crime Analyst position, not purchasing any equipment or supplies that were originally budgeted, and not transferring budgeted funds to the Detention division. The Detention – RAN Board unit had net savings of $112,000, including $403,000 in expenditure savings due to not purchasing the Livescan equipment and other assets, partially offset by lower revenues from not using budgeted fund balance. |