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  Regular-General Government   #   31.    
Board of Supervisors Financial Services  
Meeting Date: 02/25/2020  
Brief Title:    FY2019-20 Midyear Budget Monitoring
From: Chad Rinde, Chief Financial Officer, Department of Financial Services
Staff Contact: Mubeen Qader, Chief Budget Official, Department of Financial Services, x8217

Subject
Receive the 2019-20 Mid-Year Budget Monitor report, adopt a budget resolution amending 2019-20 revenues and appropriations, and approve changes to the 2019-20 Authorized Equipment List. (No general fund impact) (4/5 vote required) (Rinde/Qader)
Recommended Action
  1. Receive the 2019-20 Midyear Budget Monitoring report; 
     
  2. Adopt a budget resolution amending fiscal year 2019-20 revenues and appropriations; and
     
  3. Approve changes to the 2019-20 Authorized Equipment List.
Strategic Plan Goal(s)
In Support of All Goals
  • Provision of organizational supports and services
Reason for Recommended Action/Background
This report provides the Board of Supervisors with a midyear update on the 2019-20 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.
 
Assessor/Clerk-Recorder/Elections: The Assessor/Clerk-Recorder/Elections department is projecting a budget surplus of approximately $164,000, primarily due to salary savings across the three divisions that comprise this department.
 
The Assessor’s division is projecting a surplus of approximately $53,000, primarily related to salary savings due to delays in hiring both an Assessor/Clerk Recorder Specialist and a Limited-Term Assessor/Clerk Recorder, funded by State Supplementation for County Assessors Program (SSCAP) grant funding.
 
Clerk Recorder is projecting higher than anticipated Licensing and Permitting revenues which are contributing to a $27,000 surplus in the division.
 
The Elections Division is projecting a surplus of approximately $83,000 as it moves into the current election cycle.  The projected surplus is primarily related to salary savings related to vacancies in three positions, along with savings in Services and Supplies related to not utilizing contracted Innovation Technology Services. Inability to fill these positions has increased reliance on extra help positions, offsetting additional salary savings. The department anticipates providing a revised projection after the March 2020 Presidential Primary and all election costs are known. 
 
Capital Improvement Projects: The majority of projects within the Capital Improvement Project program are projecting to complete the year in balance, however, two have been identified as exceeding current year appropriations.
 
The Historic Courthouse Renovation is estimating exceeding their current year appropriations by $220,000; however, the project as a whole is not anticipated to go over the total project budget that was previously approved by the Board.  There may be a need to increase the budget for this fiscal year at a later time in order to complete various punch-list items; however, General Services is working closely with the contractor to avoid any further adjustments to the budget. 
 
The CAO, LAFCO, and County Counsel remodel budget is projecting a year end deficit of approximately $104,000 primarily related to unbudgeted expenses. General Services, CAO and DFS will be addressing this deficit in the 3rd Quarter Monitor, and have already identified the use of Accumulated Capital Outlay funds as a viable solution.
 
The Central Library Archives project was completed in the first quarter of the fiscal year. The project was completed under budget, with a savings of $197,000.
 
The Leinberger Jail Expansion project is requesting a budget adjustment to reflect necessary changes in appropriation due to the delay of construction.  In order to complete the fiscal year, the project only requires an appropriation of $800,000, as opposed to the $33.3 million previously budgeted. 
 
The Tuli Mem Project is requesting an appropriation of $176,275 in order to fund final project expenses, such as adding additional sidewalk and addressing erosion in the storm water basin.  These additional expenses are within the approved project budget, and the project has adequate fund balance to support these expenses.
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the Capital Improvement Projects’ budget as described above.
 
Child Support Services: Child Support Services is projecting to end the fiscal year with a budget surplus of approximately $288,000, primarily due to salary savings from vacant positions. The Department is waiting to fill vacant budgeted positions because the state is implementing a new budget methodology that may affect future allocations and in consideration of our exploration of regionalizing Child Support operations with Colusa and Sutter local child support agencies.
 
The state has allocated an additional $320,745 to cover the cost of an operational assessment, which was previously approved by the Board, for the exploration of regionalization between Yolo County, Sutter County and Colusa County Child Support agencies. The department is requesting the $320,745 be appropriated to services and supplies.
 
Staff recommends approving the budget adjustment as reflected in Attachment B to adjust the Child Support Services’ budget as described above.
 
Community Services: The Community Services department is projecting to end the fiscal year with a budget surplus of $9.7 million, primarily due to delayed completion of capital projects and purchase of equipment in the Integrated Waste Management (IWM) division.
 
The Roads fund is projecting a year end surplus of approximately $902,000 primarily related to the 2020 road rehabilitation and County Road 95 bridge projects being delayed until next fiscal year.
 
The Cannabis Task Force is projecting a year end deficit of approximately $197,000, primarily related to a decrease in licensing fees due to fewer active cultivation sites compared to what was originally budgeted. While there is sufficient fund balance to mitigate any potential deficit, staff will continue to closely monitor this area and, if necessary, recommend additional actions as part of the 3rd Quarter monitoring report when a more accurate estimate is available.
 
The IWM Post-Closure fund is projecting a year end deficit of approximately $246,000 primarily related to the investment funds not drawing the revenue that was expected.
 
The Highway 16 Flood Control fund is projecting a year end deficit of $200,000; however, a budget resolution to appropriate available fund balance to cover this overage will be presented to the board on March 10, 2020.
 
County Administrator’s Office:  The County Administrator’s Office (CAO) is projecting to end the fiscal year in line with the budget. The department is also proposing a budget adjustment of approximately $758,000 for additional revenue and expenditures based on the revised Intergovernmental Agreement with the Yoche Dehe Wintun Nation, approved in November 2019, which provides funding for two additional Sheriff deputies and vehicles to patrol the Capay Valley area.
 
Staff recommends approving the budget adjustment as reflected in Attachment B to adjust the County Administrator Office’s budget as described above.
 
County Counsel: County Council is projecting to end the fiscal year with a budget surplus of $66,444 for Indigent Defense, due to the early termination of a conflict attorney contract.  County Counsel will also have a budget surplus of $135,270, primarily due to savings in services and supplies. The surplus is due to the timing of when outside counsel is needed for the WaterFix contracts and several other projects. Once activate litigation begins, there will be a significant increase in Professional Services.   
 
County Service Areas:  All County Service Areas (CSAs) and Assessment Districts are projected to end the year in line with the budget. However, a budget adjustment has been requested by El Macero Sewer Fund.  This unit is requesting increased appropriation of $59,800 to accommodate higher than anticipated city utility bills. Assessment revenue has been identified as funding this request and was adjusted in a recent Proposition 218.
 
Staff recommends approving the budget adjustment as reflected in Attachment B to adjust the County Service Area’s budget as described above.
 
Debt Service: Debt Service is projecting to end the fiscal year with a budget deficit of $350.  The proposed deficit is due to additional expenses in Services and Supplies relating to the Davis Library Debt Service Fund.  Library is requesting increased use of fund balance to balance this unit.
 
Staff recommends approving the budget adjustment as reflected in Attachment B to adjust the Debt Service’s budget, specifically for the Davis Library, as described above.
 
District Attorney: District Attorney is projecting to end the fiscal year with a budget surplus of approximately $135,000.  Criminal Prosecution is projecting a surplus of approximately $238,000 primarily related to vacancy savings from unfilled positions due to turnover. This surplus is partially offset by a reduction in revenue for lower ESCARS grant reimbursement and a reduction in diversion and discovery fees. The Real Estate Fraud division is projecting a surplus of approximately $152,000.  This surplus is also related to a vacant investigator position.  This position has been filled in January with an Extra Help County retiree. 
 
The DNA Identification fund is projecting a year end deficit of approximately $72,000.  The DA’s investigation unit has been working on a cold case started by genealogical DNA testing.  The deficit is related to the increased workload which has resulted in unanticipated overtime.  
 
The FY19-20 Adopted Budget for Victim Services included the purchase of three kiosks using a California Office of Emergency Services (OES) grant for marginalized victims of $33,462.  It has been determined that computers stationed on desks would be a better option than the larger kiosks.  The three kiosks are being removed from the FY19-20 Equipment List and the appropriations will be moved to Service and Supplies for purchase of the non-capital equipment. 
 
The Children’s Abduction Unit, though projected to be balanced, is requesting a budget adjustment of $17,000 to increase capital assets.  In the FY19-20 budget, the DA was approved to purchase a sedan. The DA has since determined that a minivan would be more beneficial for transporting families.  The increased cost is $17,000 that will be covered by state mandated cost funding.
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the District Attorney’s budget as described above.
 
Financial Services: The Financial Services Department is projecting to end the year with a budget surplus of approximately $324,000, primarily due to $293,000 in salary savings, generated by delays in filling vacancies in divisions such as Budget/Planning and Internal Audit.  Revenues are trending $31,000 higher than anticipated across several divisions.
 
General Services:  The General Services department is projecting to end the fiscal year with an overall deficit of approximately $80,000.  The deficit is primarily due to the Esparto Tuli Mem Park and Pool. The two revenue sources, Prop 218 and an endowment fund, are not producing enough revenue to cover the ongoing maintenance costs. General Services, the CAO’s office, and the Department of Financial Services are working with both the Esparto Community Services District and the Young Men’s Christian Association (YCMA) to address the causes of this deficit and to develop a long-term solution.  A budget adjustment will likely be required to balance the unit at Third Quarter Monitoring.
 
The ITS department is projecting to exceed appropriations by $50,000 due to the need to replace switches for the County data center.  The increased appropriations will be offset by an increase in IT charges to departments through the year end true up process. A budget adjustment is being requested.   Also in the IT Department, a Cisco “Fire Power” Fire Wall will need to be purchased for the public safety departments to be integrated onto Office 365.  The cost of $15,000 can be absorbed by department cost savings.   Starting in FY20-21, the ITS department will be a stand-alone department. 
 
In the Parks division, during the FY19-20 Adopted Budget, a replacement water tank was approved for the Cache Creek Campground at a cost of $40,000.  It was determined that due to the water quality, an upgraded water tank with a special mesh liner plus prevailing wages will be needed in place of the originally requested water tank.  The increased cost of $13,000 will be covered by department cost savings. 
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the General Services’ budget as described above.
 
Health and Human Services Agency:  The Social Services division is projecting a budget surplus of approximately $80,000, primarily due to salary and benefit savings in Social Services Administration. This savings is partially offset by increased public assistance expenditures related to raised caseload count and costs per case in adoptions and foster care placements. The department is requesting a budget resolution to shift 1991 and 2011 Realignment revenues from administration to assistance to cover this overage.
 
The Behavioral Health division is projecting a year end surplus of approximately $5.3 million, primarily related to lower than anticipated contract expenditures in Mental Health Services Act (MHSA) Community Services and Support (CSS) programs. The surplus is partially offset by a projected deficit of approximately $367,000 in Core Mental Health related to decreased services provided to Medi-Cal eligible participants and $200,000 in unclaimed expenditures to the Cooperative Agreements to Benefit Homeless Individuals (CABHI) grant. The department is working to revise the final grant reimbursement request; however, realignment resources may be needed to cover the deficit should this effort not be successful.  The revenue shortfall in Core Mental Health is partially offset by lower projected expenditures in salary & benefits and contractual services.
 
The department is also projecting a budgetary deficit of approximately $1 million in the Substance Use Disorder program related to decreased charges for services provided to Medi-Cal eligible participants due to a high claim denial rate through Drug Medi-Cal Organized Delivery System (ODS) waiver program. The department is currently reviewing the cause of the high claim denial rate and is exploring a multi-faceted approach to addressing this issue, including seeking assistance from the Department of Health Care Services, working with the County Behavioral Health Directors Association, and invoicing County vendors per contract terms in cases where the denial is due to vendor error or omission. In addition, the department is working to identify other potential sources of funding to help address the deficit.
 
The department is requesting a budget resolution to reduce both revenues and expenditures by $2.4 million in Core Mental Health Services and $492,000 in Substance Use Disorder Treatment program in order to align expenditures with year-end projections. Additional budget adjustments may be recommended in the third quarter monitoring report if revenue shortfalls continue to be projected.
 
Finally, the In-Home Supportive Services Public Authority (IHHS-PA) program is projecting increased revenue and expenditure by approximately $270,000. The increase is attributable to increased state-covered IHSS Provider health benefits. The department is requesting a budget resolution to increase revenues and expenditures associated with these increased benefits.  
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the Health and Human Services Agency’s budget as described above.
 
Library: The Library is projecting to end the fiscal year with a budget surplus of $613,575, primarily due to savings from vacant positions at the Mary L. Stephens Davis Library. The department is requesting to use savings to purchase equipment for the Arthur F. Turner (West Sacramento) Community Library Audio Visual upgrade for $18,000 and Mary L. Stephens Davis Library Security Cameras for $13,000.
 
The Gibson House Museum received $780 in donations that was not included in the FY2019-20 Adopted Budget. The department is requesting to increase appropriations for revenue and services and supplies to utilize these donations.
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the Library’s budget as described above.
 
Probation:  Probation is projecting to end the year with a surplus of approximately $31,000. This surplus is projected despite the discontinuance of the Federal Office of Refugee Resettlement (ORR) grant causing an approximate $681,000 deficit in that unit, and is the result of identified projected savings in the Care of Court Wards unit ($262,000), Juvenile Probation Services unit ($122,000), and Adult Probation Services ($51,000), along with receipt of unanticipated SB 678 Community Correction Performance Incentive revenue ($276,000).
 
Though solutions to this deficit have been identified, a budget adjustment is not being requested at this time.  DFS will continue to work with the department to monitor the Probation budget, and will request budget adjustments during the 3rd Quarter Monitoring or Year-End process.
 
The department is requesting two budget adjustments at this time. First, the Adult Probation Services Unit is requesting an addition to the authorized 2019-20 equipment list in order to purchase a Keytrack Guardian System ($17,000) for managing both vehicle and office building keys.  The department has requested a transfer of funds ($16,000) between Services & Supplies and Capital Assets to fund the purchase.  The remaining required funding is being offset by receipt of unanticipated Fines and Forfeitures revenue within the unit.
 
Second, the department has been notified that the County will be receiving higher Community Correction Performance Incentive (SB 678) funding than previously anticipated.  The department was notified of the increased amount ($1.5 million) in early January.  Due to this increased revenue, the department is requesting to reduce use of fund balance by $276,000 which it had previously budgeted to balance the unit.
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the Probation’s budget as described above.
 
Public Defender:  The Public Defender is projecting to end the fiscal year with a budget surplus of approximately $155,000, primarily due to a vacant Immigration Attorney approved by the Board of Supervisors during the FY2019-20 Recommended Budget. 
 
Sheriff:  The Sheriff’s Office is projecting to end the fiscal year with an overall surplus of approximately $3.3 million.  Of the total surplus, approximately $1.1 million is in the Sheriff’s Small and Rural Patrol fund.  Small and Rural funds are funding the case management upgrade project and the project is several months behind schedule lowering expenditures for the current year.  Those funds not spent in FY2019-20 will be carried forward to FY2020-21. 
 
The other Sheriff special revenue funds, in total, are projecting a surplus of $852,791.  This includes Citizen’s Option for Public Safety (COPS) $183,345, Remote Access Network (RAN) Board $196,059 and Inmate Welfare $213,307.  The COPS and RAN Board budgets are not anticipating the expenditure needs originally included in the Adopted budget.   The Inmate Welfare fund surplus is due to the slowing of expenditures while the Inmate Welfare committee decides on what programs to provide.
 
The Detention division is projecting a year end surplus of approximately $911,000 primarily related to 11 vacant positions.  Though a number of those vacant positions were to be held vacant for three months to balance the Adopted Budget, the projected surplus in salary and benefits is $579,000.   Recruitment for all positions has been slow and background checks are lengthy.  Many positions are being hired at a step 1 but originally were budgeted at step 3.  However, overtime has partially offset some of the vacancy savings.  Overtime is expected to exceed budget by $150,000 mostly related to required escorts for construction staff and the posting of extra guards at the construction site. 
 
The Detention division received additional 2018 State Criminal Alien Assistance Program (SCAAP) funding of approximately $92,000 and 2019 SCAAP for the current fiscal year of approximately $123,000.  These payments are to offset the costs associated with the incarceration of undocumented criminal aliens.  
 
The Patrol division is projecting a year end surplus of $399,000 primarily related to vacancy savings.  There have been various positions vacant throughout the year with the majority being one Lieutenant and eight Deputy positions.  Despite the various vacancies, overtime is not expected to exceed budget. 
 
Court Security is the only Sheriff division projecting a year end deficit of approximately $499,000.  This continues to be attributed to the underfunding by the State for mandatory levels of service at the Superior Court. The Sheriff and County Administrator’s Office are continuing discussions with the Superior Court on staffing levels for the Courthouse.
 
The Marine Patrol is requesting a budget adjustment of $6,904 for unbudgeted funds received from Sacramento County Regional Sanitation District (SCRSD) for the purchase of service and supplies as part of the 2018-19 award to improve regional water quality. 
 
Staff recommends approving the budget adjustments as reflected in Attachment B to adjust the Sheriff’s budget as described above.
 
 
Public Safety Sales Tax 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 for the remainder of the year. The summary of the revenues is as follows:
 
  1. 1991 Realignment: The year-to-date 1991 Realignment revenues are 6.9% ($1.0 million) above budget due to receipt of higher growth payments in Social Services. The year-end forecast reflects 1991 Realignment revenues about 3% ($1.0 million) over budget.  A significant portion of the surplus is due to unbudgeted Social Services caseload growth.
  2. 2011 Realignment Health and Human Services: The current year-to-date revenues are 6.1% ($394,000) below budget as growth payments arrived ($360,000) below budget. This revenue stream is estimated to be 0.2% ($394,000) under budget at year-end.
  3. 2011 Realignment Public Safety: The current year-to-date revenues are 6% ($390,000) below budget due to lower growth receipts by $324,000 in Community Corrections Partnership Program. The current year-end estimates are 2% ($390,000) below budget.
  4. Public Safety Sales Tax (Proposition 172): To date, the Proposition 172 revenues received are 3.2% ($282,000) above budget as actual statewide sales tax revenues have been coming in higher than budget.  The year-end projection reflects that this revenue stream will be 1.2% ($282,000) above budget at the end of this Fiscal Year.
 
General Purpose Revenue
General purpose revenue is projecting to end the fiscal year above budget by approximately $689,000. Sales tax is projected to end the year above budget by $382,000.  Springlake development fees are higher than expected by $516,000, primarily related to both FY18-19 and FY19-20 payments being received in the current year. These higher than anticipated revenues are slightly offset by conservative projections in court revenues, document transfer taxes and adjustments to property taxes.   Staff will continue to closely monitor general purpose revenues throughout the year.
 
Contingency Appropriations: The table below reflects the balance of all contingency appropriations as of January 28, 2020.
 
Contingency Designation Original Allocation Amount Remaining as of 1/28/20
General $ 2,500,000 $  2,298,369
Health and Human Services $ 1,000,000 $ 1,000,000
IT Innovation $   300,000 $   300,000
Public Safety $   1,000,000 $   1,000,000
HHS Emerging Needs $   225,000 $   0
Sustainability Innovation $   30,000 $  30,000
Total $ 5,055,000 $ 4,628,369
 
The County policy on Fund Balance and Reserves identifies appropriation for contingencies as the first line of defense against uncertainty and are budgeted in specific funds to cover minor unanticipated needs of a non-recurring nature or for small increases in service delivery costs that are not anticipated during budget development.  Any contingency balances that remain unspent at year end will carry forward to be appropriated as part of the 2020-21 Adopted Budget.
Collaborations (including Board advisory groups and external partner agencies)
Year-end revenue and expenditures projections were developed by each County department and reviewed by the Department of Financial Services. County Counsel reviewed the budget resolution as to form.

Fiscal Information
Fiscal impact (see budgetary detail below)
Fiscal Impact of this Expenditure
Total cost of recommended action -$31,049,587
Amount budgeted for expenditure $0
Additional expenditure authority needed -$31,049,587
On-going commitment (annual cost)
Source of Funds for this Expenditure
General Fund $0
Fund Balance $554,833
2011 Realignment $1,089,046
Other Revenue -$32,693,466
Further explanation as needed
Approval of the recommended actions will amend the 2019-20 revenues and appropriations as reflected in the attached budget resolution (Attachment B). The $31 million decline in appropriations is driven by a $32.5 million reduction in the current-year budget for the Leinberger Jail Expansion project in order to align appropriations with anticipated expenditures for 2019-20. 
Attachments
Att. A. 2019-20 Midyear Monitoring Summary
Att. B. Midyear Budget Resolution and Exhibit 1
Att. C. Equipment List Amendment

Form Review
Inbox Reviewed By Date
Carolyn Jhajj Carolyn Jhajj 02/19/2020 09:15 AM
Form Started By: Mubeen Qader Started On: 01/27/2020 07:43 AM
Final Approval Date: 02/19/2020
Level double AA conformance,
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