This report provides the Board of Supervisors with a midyear update on the 2017-18 budget. As part of the monitoring process, year-end revenue and expenditure projections were developed by each department and reviewed by the Department of Financial Services. Overall, most departments are projected to end the year in balance. The sections below provide additional information on departments and program areas that are projecting significant variances or that require close monitoring. A detailed summary of the midyear projections for each department is provided in Attachment A. For those budget units where staff recommends a budget adjustment, it is noted in the narrative and included in the budget resolution provided in Attachment B.
Community Services: The Community Services department is projecting to end the fiscal year with a surplus of $4.0 million. Integrated Waste Management is projecting a $3.5 million budget surplus, primarily due to higher than anticipated revenues as a result of increased waste volume and unspent funds due to a delay in capital projects and equipment purchases. Any surplus remaining at year-end will offset the budgeted use of fund balance. Additionally, Planning and Building is projecting a $285,000 surplus which is primarily attributable to salary savings from vacant positions during the first half of the fiscal year.
Road Fund Construction and Maintenance is projecting to maintain a balanced budget at year-end although both revenues and expenditures are projected to be under budget. This is due to the construction phase of the pavement preservation project not starting until the next fiscal year, lower than anticipated bids for the County Road 99W Bridge, and the delay of capital projects due to staff vacancies.
County Administrator’s Office: The County Administrator’s Office (CAO) is requesting a budget adjustment in three budget units to ensure a balanced budget by year-end. The 2017-18 contribution to the Cooperative Extension is $3,500 more than anticipated, so staff is requesting a minor appropriation transfer from the main County Administrator budget unit. In addition, extension of the contract with the Conflict Resolution Center has increased projected expenditures in the Dispute Resolution budget unit, which can be covered with available fund balance. Finally, the Yolo Electric Internal Service Fund needs an additional $235k for increased PG&E billing and an education payment required as part of the project bond funding. This increase will be paid for by additional department charges.
Staff recommends that the Board approve the requests budget adjustments, as reflected in the attached budget resolution.
County Service Areas: Most County Service Areas (CSAs) and Assessment Districts are projected to end the year within budgeted amounts, except for four CSAs.. For CSA No. 9 (Garcia Bend), a $17k budget increase is needed to fund the current-year transfer to West Sacramento Fire for annual fire protection services. Esparto Park Maintenance & Operations Assessment District needs an adjustment to utilize $45k in additional fund balance to cover both a decline in anticipated revenues, as well as posting of a prior year expense. The North Davis Meadows Sewer CSA requires a $95k appropriation increase to correctly reflect payment of prior year City of Davis utility bills.
Finally, recent evaluations of the Wild Wings Wastewater Recycling Facility and related operations identified a need for major emergency repairs and rehabilitation to ensure continued operation of the facility and associated irrigation of the golf course, and to resolve violations of the State discharge permit. On February 6, the Board adopted a budget resolution utilizing all available Wild Wings CSA Sewer funds for this purpose. Cost to adequately address the wastewater system failures, irrigation needs of the golf course, and respond to the State’s Notice of Violation are estimated to exceed available funds by at least $150k. While an update to the Engineer’s Fee Report for the CSA’s water and sewer systems was already underway to inform adjusting fees to support current-day operations and required reserves (Prop. 218 proceedings expected by the end of the FY), a solution is yet to be identified for rebuilding an adequate reserve in the short-term and repaying an anticipated loan to address the $150k shortfall.
Staff recommends that the Board approve the requested budget adjustments for CSAs and Assessment Districts, as reflected in the attached budget resolution.
District Attorney: District Attorney is projecting to end the year with a positive net variance of $197k; however, a deficit of $387k exists in the Criminal Prosecution Unit, primarily due to $45k reduction in Federal DUI Grant revenues and $333k increase in salary and benefit costs. These salaries and benefit cost increases are largely a result of changes in the estimates of salary allocations between budget units for Criminal Prosecution and Neighborhood Court ($145k), and an Attorney on long-term medical leave who can no longer covered by grant revenues ($132k). The department expects to absorb the deficit via savings generated by under-filling positions, and holding positions vacant slightly longer.
District Attorney is requesting budget adjustments to appropriate additional grant revenue, including $119,263 from the Proposition 47 grant, $185,000 in MDIC, and $124,957 in Victim Services. These grant revenues were not included in the Adopted Budget and will be expended to cover services and supplies and personnel costs within the Neighborhood Court, MDIC, and DA Victim Services Budget Units.
Staff recommends approving the budget resolution reflected in Attachment B to increase District Attorney revenues and expenditures by $429,220.
General Services: General Services is projecting to end the year with a $113,600 net deficit. Two divisions are projecting a surplus, Parks and PC Replacement, with Facilities anticipating a $443,000 deficit. Parks surplus can mostly be attributed to salary and benefits savings. The surplus in PC replacement reflects annual department contributions towards PC replacement, which will go into fund balance for future purchases. The deficit in Facilities is primarily due to the diversion of Bauer building rent from Facilities to Countywide to reflect proper accounting.
During FY17-18, a mower was purchased by the Facilities division to be shared with Parks. The division is requesting a budget adjustment Staff recommends that the budget resolution presented in Attachment B be approved to transfer appropriations from the Parks division to the Facilities division in the amount of $18,585 for the Parks share of the cost. Parks will also transfer $35,000 in surplus capital asset appropriations to Facilities for the purchase of a replacement truck.
Staff recommends that the the Board approve the requested budget adjustments, as reflected in Attachment B. Staff also recommends a budget adjustment to the Facilities division for the correction of Bauer rent now being diverted to countywide in the amount of $394,061.
Health and Human Services Agency: The 2017-18 Adopted Budget for the Health & Human Services Agency included two significant fiscal challenges: The In-Home Supportive Services (IHSS) cost shift from the State and a sharp increase in the need for costly acute mental health services. As described further below, these issues continue to present a budgetary challenge as reflected in the year-end projections.
Behavioral Health – The Behavioral Health division is projecting to end the year with a $4.5 million deficit in the core Mental Health unit as compared to budgeted amounts. Costs related to hospitalization and inpatient placements continue to be high, and Medi-Cal revenues are projected to fall short of budgeted amounts. The 2017-18 Adopted Budget for Mental Health assumed a decline in hospitalization costs and an increase in Medi-Cal revenues due to billing improvements and implementation of an internal crisis management program. While some of the projected variances are due to a lag time in ramping up the crisis management program, a significant portion is also due to budget assumptions that were overly optimistic. However, it should be noted that billing improvement are projected to increase Medi-Cal revenue by nearly $3 million compared to the prior year.
To mitigate the projected deficit, the division is proposing to utilize additional 1991 Realignment fund balances. In addition, Agency staff have been conducting a thorough review of prior year activity, and have determined that both 1991 and 2011 Realignment funds were previously allocated for Substance Use Disorder and Mental Health Services Act (MHSA) expenditures that could have been funded by other sources. As a result, staff is proposing to return these prior year allocations to the respective Realignment funds, and re-purpose them for core Mental Health. Due to the complexity of these budget adjustments, staff will prepare a subsequent budget resolution for the Board’s consideration at a later time.
Social Services – The Social Services division is projecting a deficit of $1.3 million in the Administration unit due to increased costs associated with the IHSS cost shift, and a deficit of $1.1 million in the Assistance unit due to an unanticipated increase in foster care assistance payments. These deficits are offset by 1991 Realignment funds that are higher than budgeted amounts due to accelerated caseload growth payments and redirected growth payments from the Health, Mental Health and CMSP subaccounts. These changes in the 1991 Realignment growth payments were enacted as part of the IHSS cost shift in order to assist counties adjust to the higher cost obligation.
To ensure that the Social Services Administration and Assistance unit remain balanced at year-end, staff is recommending the transfer of additional 1991 Realignment funds, as reflected in the attached Budget Resolution. The 2017-18 Adopted Budget also included approximately $2 million in HHSA contingency funds, which are not recommended for use at this time.
Public Guardian – Public Guardian is projected to end the year in balance. However, staff will be requesting the addition of two new positions to support the Corrective Action Plan, which will be brought forward for Board consideration in March. The additional cost of these positions is projected to be offset by savings in other areas, such as lower than anticipated legal services. However, it should be noted that these new positions will constitute an additional ongoing General Fund obligation in 2018-19 and beyond.
Library: The Library is projecting to end the year with a $211,000 budget surplus. However, due to higher than anticipated costs for the Davis Branch Library AV equipment and the automatic book sorter approved by the Board on December 12, 2017, a budget adjustment is needed to increase appropriations for Capital Assets. This increase will be funded by the Davis Library Measure A fund. Additionally, an appropriation reduction of $1,438 to the Library Service CCP budget is needed in order to align the budget with the approved Community Correction Partnership (CCP) budget.
Staff recommends approval of these requested budget adjustments.
Probation: Probation is projecting to end the year with a positive net variance of just over $1 million, which is primarily attributable to vacancy savings and reduction in contracted services in the Public Safety fund budget units due to a lower number of youth placements in the Yolo County Construction Program (YCCP) and Mentally Ill Offender Crime Reduction (MIOCR) Programs.
Probation has developed a new cost allocation methodology that will result in $2.1 million in overhead costs to be allocated from the Administrative unit to the other budget units in the department. Historically, administrative overhead costs were not charged consistently across the department. The new methodology will result in a net-zero budgetary impact department-wide, but will allow overhead costs to be reimbursed from the various funding sources. Due to the complexity of these budget adjustments, staff will prepare a subsequent budget resolution for the Board’s consideration at a later time.
Probation is requesting two budget adjustments. The first budget adjustment is to increase appropriations by $60,000 for purchase of two new vehicles, one in the Juvenile Justice Crime Prevention Act Unit funded by unbudgeted Juvenile Justice Realignment Growth funds and the other in the Adult Probation Services Unit using unbudgeted Proposition 47 grant funds as provided for in the MOU with HHSA (resolution 17-261). The second budget adjustment is to move $73,515 in Proposition 172 revenues and services and supplies expenditure appropriations from Juvenile Probation Unit to Juvenile Detention Unit to accommodate purchase of additional capital assets, including a monitoring system, a key management system, and replacement of an industrial freezer, oven, and food warmer.
Staff recommends approving these budget adjustments as reflected in Attachment B.
Public Defender: The Public Defender is currently projecting a deficit of $131,130 due to the PDrms Upgrade project. The current records management system is antiquated and requires upgrades to incorporate new technologies. This project will streamline staff workflow and provide better tracking of department resources in support of client needs. Both the District Attorney and Probation departments have already successfully implemented similar systems. The Public Defender is requesting IT Innovation contingency to fund this project, as reflected in the attached budget resolution.
The Public Defender has indicated that she will be requesting Board approval for a new Assistant Chief Deputy Public Defender position in the future. This position will add to the leadership base and help the Public Defender develop and execute organizational plans. No additional funding is being requested in 2017-18, but if approved this will be an additional general fund obligation in future years.
Staff recommends that the Board approves the Public Defender's request for IT Innovation funds to support the PDrms Upgrade project.
Sheriff: The Sheriff’s Office is projecting an overall surplus of $1.1 million, primarily in the Patrol division. Of this projected surplus, $194,000, due to lower-than anticipated supplies expense and $505,600 is due to higher-than anticipated revenue. Overtime in this division is exceeding budget by approximately $244,000, but is offset by vacancy savings. Other divisions with a significant positive variance are the Civil and Detention divisions. Detention overtime is exceeding budget by $364,000, along with deficits in vacation buyback, supplies and revenue. However, these deficits are offset by vacancy savings of just over $1.0 million. Civil is showing savings in service and supplies and asset purchases.
Public Safety and Realignment Revenue
A 2-month delay exists in sales tax revenue receipt; therefore, about five months of data (July thru November) was utilized to project the Public Safety and Realignment Revenues. The synopsis of the revenues is as follows:
- 1991 Realignment: The year-to-date 1991 Realignment revenues are 30.1% ($2.6 million) above budget due to higher growth payments in Social Services, Family Support, and Child Poverty and Family Support Supplemental Subaccounts. The year-end forecast reflects 1991 Realignment revenues about 11% ($2.6 million) over budget. A significant portion of the surplus is due to accelerated caseload growth and redirected County Medical Services Program (CMSP) growth, which will be offset by higher expenditures related to the IHSS cost shift.
- 2011 Realignment Health and Human Services: The current year-to-date revenues are 7.8% ($401k) above budget as growth funds received were higher than budget by $472k. This revenue stream is estimated to be 2.7% ($401k) over budget at year-end.
- 2011 Realignment Public Safety: The current year-to-date revenues are 12.4% ($663k) over budget due to receipt of $673k in growth payments above the budget in the Community Corrections and Enhancing Law Enforcement Activities Subaccounts. The current year-end projection is about 4.6% ($663k) above budget.
- Public Safety Sales Tax (Proposition 172): To date, the Proposition 172 revenues received are 3.5% ($279k) above budget as actual statewide sales tax revenues have been coming in higher than Yolo County’s projection. Consequently, the year-end estimates are 1.4% ($279k) above budget.
General Purpose Revenue
General purpose revenue projections for the fiscal year are lower than expected by $319k. Property taxes, the County’s largest source of general purpose revenue, is projected to end the year on budget. However, year-end projections are reflecting potential reductions in Redevelopment pass-through payments, sales tax revenue and justice collections. Staff will continue to closely monitor general purpose revenues throughout the year.
General Fund Contingency: The current balance in general fund contingency is $570,489 as reflected in the table below. This includes all items approved by the Board through the February 6, 2018 board date. It is recommended that all remaining contingency and unanticipated revenues remain unallocated to provide future resources for balancing the 2017-18 budget, if necessary. Any amounts that are unspent at year-end will be carried forward to be allocated as part of the 2018-19 budget.
| Contingency Designation |
Original Allocation |
Amount Remaining as of 2/6/18 |
| General |
$ 2,000,000 |
$ 608,944 |
| Health |
$ 2,090,000 |
$ 2,090,000 |
| IT Innovation |
$ 500,000 |
$ 476,103 |
| Public Safety |
$ 500,000 |
$ 500,000 |
| Safety & Security |
$ 100,000 |
$ 64,363 |
| County Service Areas |
$ 100,000 |
$ 100,000 |
| Operational Excellence |
$ 100,000 |
$ 100,000 |
| Total |
$ 5,390,000 |
$ 3,939,410 |
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