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Special Budget Committee Meeting

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Special Budget Committee Meeting

    ATTACHMENT A

Special Budget Committee Meeting

    January 20, 2009

    The Board of Supervisor’s Budget Committee met on January 20, 2009 and received the following reports:

1. Approval of action minutes from the November 25, 2008 meeting.

     Budget Committee Action: Minutes approved as submitted.

     Follow-Up Action: None.

2. Consent Agenda Items:

    A. State Department of Finance Bulleting for December 2008.

    B. 2009 Budget Committee Meeting Schedule.

     Budget Committee Action: Consent Agenda Items received and accepted.

     Follow-Up Action: None.

    3. Mid-Year reduction plans for the Planning Department, Building Services and Resource

    Management Agency (RMA). Wayne Tanda, RMA Director, Mike Novo, Planning Director

    and Tim McCormick, Building Services Director reported that all options were explored in

    the development of the mid-year budget reduction plans. Given the magnitude of the budget

    shortfall, a reduction in staffing levels is a major consideration. In December 2008, the

    Board of Supervisors approved the elimination of 5.5 FTE vacant positions in the Planning

    Department. That action brought the Planning Department positions into balance with

    current revenue projections, but also eliminated all salary savings that was a funding source

    for a Water Resources Agency liaison position. Also in December 2008, the Board of

    Supervisors approved the elimination of 10 vacant positions in the Building Services

    Department, which reduced the difference between projected and actual revenues, but still

    left a relatively large deficit to address. Another 18 positions would need to be eliminated to

    significantly reduce the deficit and maintain a minimal level of service in the Department’s

    core services. In addition, central support services provided by the RMA to the Planning and

    Building Department’s would need to be reduced by three positions and funding for the

    WRA Liaison position would not be available.

    There was considerable interest by many employees of the Building Services Department for

    a voluntary work furlough program and it was suggested that the provision include an

    agreement by the County that savings generated through furloughs would be used to avoid

    layoffs.

    Budget Committee Action: Report received and accepted.

    Follow-Up Action: None.

    4. Gang Task Force funding gap solution for FY 2008-09 and projected Net County Cost for

    FY 2009-10. Sheriff Mike Kanalakis reported that the remaining FY 2008-09 budget

    shortfall for the Gang Task Force is $325,121. Of this amount, the Sheriff’s Office has

    identified $169,044 in expense reductions it will implement, reducing the funding gap to

    $156,077. The amount of $156,077 was requested to be transferred from the Contingency

    Fund.

    ATTACHMENT A

Budget Committee Action: Report received and accepted.

    Follow-Up Action: This item referred to the full Board of Supervisors for consideration.

    5. Silver Star Gang Prevention and Intervention (SSGPI) funding gap solution for FY 2008-09 and projected Net County Cost for FY 2009-10. Manuel Real, Chief Probation Officer reported that the remaining FY 2008-09 budget shortfall for SSGPI is $235,689. The Probation Department and County partners have identified $110,265 in expense reductions that will be implemented and $57,044 in one-time salary savings to offset partner costs, thereby reducing the funding gap to $68,380. It was requested that the $68,380 funding gap be transferred from the Contingency Fund.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: This item referred to the full Board of Supervisors for consideration.

    6. Financial analysis and discretionary revenue impact analysis regarding the reports as prepared by the departments of Planning, Building, Sheriff, and Probation. Dewayne Woods, County Budget Director, gave a PowerPoint presentation providing a concise financial picture of what each recommendation represented as well as the potential cumulative financial impact that would likely resurface in preparing the FY 2009-10 Recommended Budget.

     Budget Committee Action: Presentation received.

     Follow-up Action: None.

    7. Estimated costs and timeframes for an outside audit firm to conduct an independent analysis of Monterey County’s Budget and financial condition. Mari Beraz, Principal Administrative Analyst in the County Administrative Office reported that this request came from representatives from SEIU Local 521. The Board of Supervisors considered the request at its meeting on December 16, 2008. Comments at that time involved whether or not the County would gain anything new from such a review, whether or not costs for an audit could be justified at a time when spending reductions have been imposed for all departments and whether or not those entities requesting an audit would be willing to assist with its cost. Based on general discussions regarding the requested review of the County’s Budget,

    informal costs were estimated between $50,000 to $85,000 and the time needed to conduct and provide an independent analysis ranged between six to eight weeks. CAO staff spoke with representatives from the following agencies: Diehl, Evans & Co., LLP, Hayashi & Wayland, Gallina, LLP, Macias Consulting Group, Harvey Rose & Associates, and Vavrinek, Trine, Day & Co.

    The County employee associations were contacted regarding cost sharing for study related expenditures. Representatives from the various safety groups have tentatively agreed to a combined contribution up to $10,000. Representatives from SEIU have stated that they are contemplating contributing $5,000 toward the cost for the requested financial review. At the time of this writing, no absolute commitment to participate in audit costs has been provided.

Budget Committee Action: Report received.

    Follow-Up Action: This item referred to the full Board of Supervisors for consideration.

    ATTACHMENT A

Budget Committee Meeting , January 282009

    The Board of Supervisor’s Budget Committee met on January 28, 2009 and received the following reports:

1. Bi-Annual report from the County Assessor-Clerk Recorder’s Office. Steve Vagnini,

    Assessor, report that as of January 1, 2009, the Secured Assessment Roll total for the County

    of Monterey is $49.7 billion compared to last year’s July 1, 2008 value of $49.6 billion – an

    increase of 0.2%. An additional 6,733 anticipated supplemental assessments was projected

    with a value of $246.0 million an additional 0.5% increase. Proposition 8 reductions were

    projected to reduce assessed valuations by over $2.0 billion a 4.0% decline in value. Based

    on this information the Assessor now predicts a 2.0% decline in the assessment roll from FY

    2008-09 to FY 2009-10.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    2. Preliminary status report on the estimated financial impact to Monterey County as a result of

    the FY 2009-10 Proposed Governor’s State Budget released on December 31, 2008.

    Dewayne Woods, County Budget Director, reported that preliminary estimates projected a

    potential $8.6 million reduction in annual funding. He advised that the full impact of many

    reductions couldn’t be absolutely determined due to the complexity of the funding formulas

    and other regulatory issues imposed on State funding sources. He also stated that the cash

    flow situation is critical. The Governor has indicated that if registered warrants (commonly

    known as IOUs) were issued, the following programs would be affected: Citizens’ Option

    for Public Safety (COPS) and Juvenile Justice Crime Prevention Act (JJCPA) grants,

    Williamson Act subventions, reimbursement for the Homeowners’ Property Tax Exemption,

    and certain Medi-Cal payment from the Department of Health.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    3. Update on the countywide hiring and non-essential expenditure freeze. Paul Lewis, Principal

    Administrative Analyst, reported that countywide vacancies total 380.7 or 10.4% of

    authorized positions as of January 5, 2009. This is the lowest number of vacancies in recent

    history. He advised based on the January 5, 2009 updates that departments projected $3.1

    million in unspent FY 2008-09 salary and benefit appropriations. This level of savings is

    significantly lower than prior years’ savings. He stated that the CAO’s Office received 98

    exemption requests as of January 14, 2009 that included 41 requests to fill positions, 29

    requests for delegated authority to internally approve hiring decisions for job classifications

    deemed mission-critical, 11 requests to purchase fixed assets, and 17 other requests (e.g.,

    contracts or software renewals). Of the 98 requests, 60 were approved, 10 were disapproved

    and 28 were delegated to departments for internal approval in the case of mission-critical job

    classifications.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    ATTACHMENT A

    4. Freeze report update from Natividad Medical Center (NMC). Harry Weis, Chief Financial

    Officer of NMC, reported that NMC had adopted a variety of “best in class” financial

    management reporting tools for internal management purposes. Every hospital department is

    constantly monitored from a cost perspective in terms of raw dollars spent vs. budget and on

    a dollar per “departmental stat” basis. NMC’s capital budget is $7.0 million for FY 2008-09

    and year-to-date (YTD). NMC has thoughtfully spent only $1.7 million on critical capital

    needs and is exercising great caution and care in its capital expenditures throughout the fiscal

    year and in containing its operational costs for FY 2008-09.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    5. Freeze update from Water Resources Agency. Curtis Weeks, Director of Water Resources

    Agency, reported that the Agency has 63 authorized positions of which 8.5 are vacant. The

    vacant positions will result in an estimated salary and benefit savings totaling $0.4 million

    for FY 2008-09. The Agency completed an organizational study that resulted in no net

    increase in budgeted total salary and benefits in FY 2008-09. This included the additional of

    three new FTEs that will not be filled until FY 2009-10.

    Budget Committee Action: Report received.

    Follow-Up Action: None.

    6. Freeze update from Clinic Services. Len Foster, Health Director, reported that the Health

    Department-Clinic Services Division is currently projecting no additional savings from the

    “freeze” at this time.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

7. Freeze update from the Department of Social and Employment Services (DSES) Office of

    Employment Training (OET). Elliott Robinson, Director of DSES-OET, reported that there

    are a total of 57 authorized positions with six current vacancies and these positions have not

    been authorized to be filled.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    8. Monthly report from Natividad Medical Center (NMC). Harry Weis, Chief Financial Officer

    of NMC, reported that NMC reports a net income of $0.7 million in December and YTD the

    net income was $1.9 million vs. a YTD budgeted loss of $0.9 million yielding a YTD

    positive bottom line variance of $2.9 million.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    9. Monthly report from the Department of Social and Employment Services (DSES). Elliott

    Robinson, Director of DSES, reported that the comparison of the average monthly overall

    workload of FY 2008-09 indicated an increase of 10.5% from FY 2007-08 and 24.5% from

    FY 2006-07. This magnitude of growth is expected to continue as the winter weather

    reduces jobs in the local agriculture industry and the economy continues down.

    ATTACHMENT A

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    10. Monthly forecast report and schedule for Capital Projects. Gordon Siebert, Architectural

    Services Manager, reviewed the following projects: Agricultural Commissioner Master Plan,

    Juvenile Hall, Jail Compound, Government Center Master Plan Update, Youth Center-

    Probation Education Center and the Recorder’s Security Gate.

     Budget Committee Action: Report received.

     Follow-Up Action: Supervisor Calcagno requested an update on the parking structure in

    February 2009.

    11.Quarterly report from the Health Department-Clinic Services. Len Foster, Director of Health,

    reported that as of December 31, 2008, the Clinic Services Division had expended $10.6

    million or 46.0% of its budget, and received revenue totaling $8.8 million or 48.6% of the

    budgeted amount. Patient volume was slightly below target levels for the second quarter. He

    advised that information was recently received from the federal Centers for Medicare &

    Medicaid Services (CMS) that the Family PACT program will be continued provisionally

    until March 31, 2009, and the State is attempting to secure permanent funding streams for

    this cost-effective program.

     Budget Committee Action: Report accepted.

     Follow-Up Action: None.

    12. Quarterly report from Public Works. Yaz Emrani, Public Works Director, reported that due

    to decreasing discretionary revenue and increasing maintenance and constructions costs,

    there is a structural imbalance in the Road Fund. Since 2002, the major discretionary

    revenue sources have declined overall by approximately 5% while costs of maintaining the

    roadway system have increased on an average of approximately 42%. He stated that salaries

    and benefits are estimated to be $0.9 million under budget and services and supplies are

    estimated to be $9.3 million under budget.

     Budget Committee Action: Report accepted.

     Follow-Up Action: None.

    13. Quarterly report from the Sheriff’s Office. Mike Kanalakis, Sheriff, informed the Committee

    that the Sheriff’s Office is still expecting overruns in appropriations for salaries and benefits,

    especially in overtime, in the amount of $1.0 million barring any natural disasters or acts

    beyond control. This estimate has significantly improved compared to the last Budget

    Committee report’s projection of $2.8 million. He advised that the estimated appropriation

    overrun is a result of 53 vacant positions not being funded for the current fiscal year.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    14. Quarterly report from Water Resources Agency (WRA). Curtis Weeks, Director of WRA,

    reported that revenues for all major WRA funds except development review fees are

    anticipated to meet or exceed budgeted estimates. Development fees are estimated to be $0.2

    ATTACHMENT A

    million below budget. Expenditures are anticipated to remain within budget and litigation

    costs remained low as anticipated.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    15. Bi-Annual report from Mental Health. Wayne Clark of Behavioral Health reported that the

    Department is projecting a cash flow problem during FY 2008-09. Services for Medi-Cal

    have been billed up to November 2008. As of December 29, 2008, no payments have been

    received. The Department anticipates increasing revenues and appropriations due to

    additional Mental Health Services Act (MHSA) revenue as more component funds are

    approved by the State and incorporated into the County’s contract with the State. If unpaid

    revenues from SB 90 claims in the amount of $12.0 million were paid, the Department would

    be in a more favorable position.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    16. Bi-Annual reports from the Parks Department. John Pinio, Director of Parks, reported that

    revenue is currently almost 16% under plan. This is a result of a significant drop off in

    attendance at the lakes caused by continue low water levels and the current state of the

    economic downturn being experience throughout the Country. It is anticipated that the

    current negative trend at the lakes will continue through the second half of FY 2008-09.

    The goal for the resorts operations is to maintain self-sufficiency, so as to not add burden to

    the County’s Net County Cost. Any profits from the resort should be utilized to repay the

    County’s Productivity Investment Fund as well as to maintain and improve the operations in

    order to maximize the revenue earning potential. Based on historical data, approximately

    45% of annual revenue at the resorts operations is generated during the second half of the

    fiscal year. If this holds true for 2009, the Parks Department should end the year with a

    positive balance of $0.8 million.

     Budget Committee Action: Reports received.

     Follow-up Action: None.

17. Presentation from the Sheriff’s Advisory Council (SAC). Al Saroyan, SAC President, gave a

    PowerPoint presentation of the effectiveness and vitality of the Sheriff’s helicopter program

    and handed a letter to Supervisor Calcagno requesting an allocation of $0.5 million for the

    helicopter program. The letter stated the SAC will provide and additional $0.1 million for

    the total program cost of $0.6 million. This will allow the program to run for 12 consecutive

    months in FY 2009-10.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: Supervisor Armenta requested stats from CHP and the Coast Guard for

    the past 10 months.

    18. Status of Agricultural Commissioner’s addition and renovation project. Gordon Siebert,

    Architectural Services Manager, requested the Committee receive the report and provide its

    support for proceeding to the full Board of Supervisors to execute a one-year lease agreement

    ATTACHMENT A

    of $15,225 per month effective March 15, 2009, to provide temporary occupancy during the

    renovation and construction phase of office areas.

     Budget Committee Action: Report received and supported.

     Follow-Up Action: None.

    19. Update on capital improvement projects due to the expansion of Mental Health Services Act

    (MHSA). Wayne Clark of Behavioral Health, gave an update on this issue and requested

    support for authorizing the Contracts/Purchasing Office to sign all deed transfer documents thand amendments associated with properties at 298 12 Street in Marina and a second parcel

    identified as Building 4481; support the collaboration of Public Works-Architectural and

    Facilities Division, Health Department-Behavioral Health Division, in renovation of these

    properties; and support the Department to forward this action to the full Board of Supervisors

    for approval.

     Budget Committee Action: Report received and items supported.

     Follow-Up Action: Item to go before the Board of Supervisors.

    ATTACHMENT A

Budget Committee Meeting

    February 25, 2009

    The Board of Supervisor’s Budget Committee met on February 25, 2009, and received the following reports:

    1. Approval of action minutes from the January 20, 2009 and January 28, 2009, meetings.

     Budget Committee Action: Minutes approved as submitted.

     Follow-Up Action: None.

    2. Three-Year Financial Forecast for the period of FY 2008-09 through FY 2011-12. Dewayne

    Woods, County Budget Director, reported that the forecast projected a gap between revenues and

    expenditures to continue growing into the current year (FY 2008-09) and through the forecasted

    period. He explained that the gap is expected to reach $11.1 million in the current year,

    increasing to $41.6 million in FY 2009-10 and, without corrective action, reaching $65.4 million

    by FY 2011-12.

     Budget Committee Action: Report received.

     Follow-Up Action: Item to go before the full Board of Supervisors on March 3, 2009.

    3. Update on the countywide hiring and non-essential expenditure freeze. Paul Lewis, Principal

    Administrative Analyst, reported that General Fund vacancies total 373.9 or 10.4% of

    authorized positions as of February 5, 2009. He advised that departments now project $1.3

    million in Net County Cost (NCC) savings in FY 2008-09, which is $0.9 million below

    January’s estimated savings of $2.2 million. He informed that the CAO’s office received 109

    exemption requests as of February 17, 2009 and of the 109 requests, 69 were approved, 10

    were disapproved, and 30 were delegated to departments for internal approval in the case of

    mission-critical job classifications.

     Budget Committee Action: Update received.

     Follow-Up Action: None.

    4. Freeze report update from Natividad Medical Center (NMC). Harry Weis, Chief Financial

    Officer of NMC, reported that NMC continues to show 101% hospital-wide productivity

    performance when monitoring paid FTEs against actual department volumes. NMC has

    hired 61 individuals and 51 individuals have separated from NMC. He advised that NMC’s

    capital budget is $7.0 million for FY 2008-09 and year-to-date NMC has thoughtfully only

    spent $1.94 million on critical capital needs. NMC is exercising great caution and care in its

    capital expenditures throughout the fiscal year and in containing its operational costs for FY

    2008-09.

    Budget Committee Action: Report received.

     Follow-Up Action: None.

    5. Freeze update from Water Resources Agency. Curtis Weeks, Director of Water Resources

    Agency, reported that there were no changes from last month’s report.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    ATTACHMENT A

    6. Freeze update from Clinic Services. Len Foster, Health Director, reported that the Health

    Department-Clinic Services Division is currently projecting an approximate $50,000 from

    the “freeze” at this time.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

7. Freeze update from the Department of Social and Employment Services (DSES) Office of

    Employment Training (OET). Elliott Robinson, Director of DSES-OET, reported that there

    are a total of 57 authorized positions with seven current vacancies. He advised that in

    preparation for the increased Workforce Investment Act funding included in the Federal

    Stimulus Act, the Director has authorized the hiring of the Management Analyst II position.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    8. Monthly report from Natividad Medical Center (NMC). Harry Weis, Chief Financial Officer

    of NMC, reported that NMC reports a net income of $2.3 million in January and year-to-date

    (YTD) NMC’s net income is $4.3 million vs. a YTD budgeted loss of $1.1 million, yielding a

    YTD positive bottom line variance of $5.4 million. He also advised that NMC recorded

    7/12ths or $2.65 million of the long awaited CMS approved CHOMP donation of $4.2

    million in January.

     Budget Committee Action: Report received.

     Follow-Up Action: None.

    9. Monthly report from the Department of Social and Employment Services (DSES). Elliott

    Robinson, Director of DSES, reported that the comparison of the average monthly overall

    workload of FY 2008-09 indicated an increase of 10.2% from FY 2007-08 and 17.9% from

    FY 2006-07.

     Budget Committee Action: Report received and accepted.

     Follow-Up Action: None.

    10. Monthly report for budget forecast and schedule for key active capital projects. Gordon Siebert,

    Architectural Services Manager, reviewed specific projects with the Committee that included:

    North Wing-Salinas Courthouse, East-West Wing-Salinas Courthouse, Health Department,

    Parking Structure, Agricultural Commissioner Master Plan, Juvenile Hall, and the Youth Center-

    Probation Education Center.

    Budget Committee Action: Report received and accepted.

    Follow-Up Action: None.

    11. Draft interim parking plan. David Pratt, Public Works, gave a presentation on the top seven

    parking strategies.

    Budget Committee Action: Report was not received or supported.

    Follow-Up Action: Supervisor Calcagno requested that a report be brought forward that gives

    solutions to the parking problem and requested that the CAO’s Office work with Public Works

    Department to come up with a report for action on this issue.

    ATTACHMENT A

    12. Report on reimbursement of costs associated with the Basin Complex Fire. Scott Ruble, Principal Administrative Analyst-Budget and Analysis Division, reported that of the $513.6 thousand costs eligible for reimbursement, FEMA reimbursed 75% ($385.2 thousand) and OES reimbursed 75% of the balance ($96.3 thousand) for a total reimbursement of $481.5 thousand.

    The most significant portion of reimbursement is $362.9 thousand to the Sheriff’s Office for expenses of overtime hours worked, mileage and equipment hours. Support of an increase in revenues and appropriations in the amount of $362.9 thousand for the Sheriff’s Office-Budget

    Unit 230 was requested.

    Budget Committee Action: Report received and increase in revenues and appropriations for the Sheriff’s Office-Budget Unit 230 in the amount of $362.9 thousand supported.

    Follow-Up Action: None.

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