BACKGROUND INFORMATION ON THE FAIRFAX COUNTY FY 2019 ADVERTISED BUDGET

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1 BACKGROUND INFORMATION ON THE FAIRFAX COUNTY FY 2019 ADVERTISED BUDGET On February 20, 2018, Fairfax Executive Bryan Hill released his FY 2019 Budget proposal (also called the Advertised Budget ). He emphasized that his main goal for his first budget was to focus on the priorities of the Board and the community, but also commented that this spring he would initiate a multi-year strategic planning effort to identify efficiencies and programmatic reductions that will not impact the level of services. Mr. Hill proposed a FY 2019 Budget that increases the real estate tax rate (currently $1.13 per $100 of assessed value) by 2.5 cents; fully funds the School Board's requested transfer (a 4.49 percent increase, or $88.35 million); fully funds the County's compensation plan; funds Board priorities such as Diversion First, gang and opioid prevention efforts, and early childhood initiatives; and provides an available balance of $3.88 million. On March 6, 2018, the Board of Supervisors authorized the advertisement of a FY 2019 Real Estate Tax Rate of $1.155, the rate proposed by the County Executive. With the exception of Supervisor Herrity, all Board members voted for this advertisement. Most of the supervisors, however, made it clear that they hope to be able to adopt a lower tax rate for FY After hearing the concerns of County residents, the Board of Supervisors will make changes to the FY 2019 Budget and approve it at the markup meeting on April 24. Formal adoption will be on May 1. In his budget transmittal letter, Mr. Hill stated that inequity is the thread that runs through many of the core problems we face as a community, and expressed his hope for the growing understanding that Fairfax County's future will be even brighter if we ensure the full inclusion of the economic, social, civic, and creative contributions of all County residents. The FY 2019 Budget documents and the 2018 Human Services Issues Paper provide a host of indicators of the persistent disparities Mr. Hill is concerned about. For example: During each of the last 3 fiscal years, due to lack of capacity, an average of 169 clients were not able to receive services at Artemis House, the County's 24-hour emergency shelter for victims of domestic and sexual violence, stalking, and human trafficking. The annual growth rate for applications for SNAP, TANF, and Medicaid has remained steady over the past few years, but in FY 2017 the caseload rose by about 4 percent to just over 96,000, indicating that recipients are remaining eligible for longer periods of time. In 2016, 66,681 County residents (including 18,857 children), 5.9 percent of the population, were living below 100 percent of the Federal poverty level, compared to 47,832 people in In FY 2017, 53.3 percent of people receiving County services for mental illness, substance abuse disorder, or developmental disabilities had incomes below $10,000. In CY 2016, over 100 Fairfax County residents died from an opioid overdose. Currently, approximately, 100 individuals are on a waiting list for residential treatment for substance use and co-occurring mental health disorders. People who need medical detoxification or Suboxone detoxification for opioids must also wait for these services (10-21 days). In FY 2017, the emergency shelter program served 2,744 homeless people. The family population included 435 adults and 608 children in 292 households. Approximately 700 FCPS students in the 8 th, 10 th, and 12 th grades report being gang members at some point in their lives, and the average age of initial gang participation is 12.3 years old.

2 Page 2 PROPOSED FUNDING INCREASES IN HEALTH AND HUMAN SERVICES The FY 2019 Budget proposes a total increase in Health and Human Services funding of about $9.74 million. No decreases have been recommended. The increases include: Contract Rate Increases: An increase of $3.32 million will support contract rate increases for a variety of programs and providers. The increase is partially offset by $500,000 in revenue, for a net cost to the County of $2.82 million. Consolidated Community Funding Pool (CCFP): FY 2019 is the first year of the next 2-year funding cycle. The County Executive has proposed an increase of $557,085 (5%) in County funding for the CCFP, which, along with Federal CDBG funding, brings the total CCFP funding to about $13 million. Early Childhood Care Slots: An increase of $540,000 will support 36 new early childhood care slots to serve at-risk pre-schoolers in comprehensive early childhood programs in community-based settings. New School-Age Child Care (SACC) Rooms: An increase of $430,000 will fund the opening of 2 new SACC rooms at Fair Oaks E.S. The increase is partially offset by an increase of $340,000 in SACC revenue, for a total net impact of $90,000. Expand Nurse Family Partnership Program: An increase of $ (plus $80,708 in Fringe Benefits funding) will fund the expansion of the Nurse Family Partnership Program into the Herndon and Reston areas of the county. This evidence-based nurse home-visiting program works with lowincome mothers who are pregnant with their first babies and are at risk for poor birth outcomes in order to achieve healthier pregnancies and births, stronger child development, and a path toward economic self-sufficiency. The program currently serves 100 families in Bailey's Crossroads and Mt. Vernon; the new funding will expand services to approximately 50 families in Herndon and Reston. Nursing Services for Medically Fragile Students: An increase of $130,000 will be used to address the increase in one-on-one nursing services for medically fragile students enrolled in FCPS. These services are mandated under federal law for eligible students. Over the last several years there has been an increase in demand for one-on-one nursing services, and the demand is expected to continue to grow as more medically fragile students are entering FCPS at the age of pre-school and remaining in the system until they complete their school years. Opportunity Neighborhoods: An increase of $440,000 will support the continued expansion of the Opportunity Neighborhood (ON) initiative to the Bailey's/Culmore area of Human Services Region 2 and to Herndon in Region 3. ON (in NCS) coordinates the efforts of multiple County agencies and community-based programs to promote positive outcomes for children and youth. ON is currently operating in Mt. Vernon and Lee Districts, and the expansion into the Reston area was begun in FY AAA Matching Funds: A increase of $380,00 will fund Local Cash Match requirements primarily associated with the Area Agency on Aging grants.

3 Page 3 PROPOSED FUNDING INCREASES FOR MULTI-AGENCY PRIORITIES The proposed FY 2019 Budget includes increased funding for Board and community priorities that require integrated planning and implementation among several County departments. They are: Fighting the Opioid Epidemic: A total increase of $1.47 million is required to address the growing opioid epidemic. The funding, based in the Health Department, the CSB, and the Police Department, will support the implementation of the multi-year plan developed by the Board's Opioid Task Force. Health Dept.: An increase of $107,600 will support a position transferred to the Health Dept. during FY 2018 to increase epidemiological support, including data analysis, monitoring, and evaluation. Police Dept.: $109,000 in operating expenses. CSB: An increase of $1.2 million (including $1 million in personnel services and $122,300 in Operating expenses). This funding will be used to increase education and awareness and to expand the use of Medication Assisted Treatment, which involves the provision of medications plus nursing services, community case management, and in-home supports. Diversion First: This is a multi-agency collaboration between the Police Dept., Office of the Sheriff, Fire and Rescue Dept., the Fairfax County Court System, and the CSB to reduce the number of people with mental illness in the County jail by diverting low-risk offenders experiencing a mental health crisis to treatment rather than to incarceration. A total increase of about $2.46 million will support the third year of the Diversion First Initiative, which is also the first year of the 5-year fiscally constrained plan. CSB: $1.1 million, which will be used to strengthen operations at the Merrifield Crisis Response Center, establish a 3 rd Mobile Crisis Unit, provide resources to the Court systems, provide needed housing and other resources, and strengthen behavioral health services at needed intercepts. Police Dept: $184,407 and one position, which will allow the Police Dept. to support diversion services at the Merrifield Crisis Response Center on a 24 hour per day, 7 days per week basis. Juvenile & Domestic Relations District Court: $136,134, which will allow the JDRDC to provide increased supervision of the pretrial cases requiring mental health services and further align practices with the General District Court. Office of the Sheriff: $276,336 and 3 positions to allow the Office of the Sheriff to provide supervision for the officer assigned at the Merrifield Crisis Response Center and to provide secure transportation for psychiatric hospitalizations. Gang Prevention: This is a multi-agency collaboration between the Police Dept., Office of Public Affairs, Juvenile & Domestic Relations District Court, Dept. of Neighborhood & Community Services, and FCPS. Funding is designed to help the County better provide education, prevention, enforcement, and coordination in responding to gangs. The proposed FY 2019 Budget includes an increase of about $612,000 for this work. Police Dept.: $96,270 will support one position that will be added at the FY rd Quarter Review.

4 Page 4 Neighborhood & Community Services: $160,000 to expand parent liaison services and targeted elementary school outreach. Juvenile & Domestic Relations District Court: $331,500 for Intervention, Prevention, and Education program expansion ($185,000) and for intensive services for reunifying families ($146,500), both in partnership with Northern Virginia Family Service. Office of Public Affairs: $25,000. REVENUE The FY 2019 Advertised Budget is balanced on a Real Estate Tax Rate of $1.155 pr $100 of assessed value, 2.5 cents higher than the current $1.13 rate. The increase provides an additional $61.6 million in revenue. County Executive Bryan Hill has said that this tax rate increase would result in an increase in the average tax bill of about $268. On March 6, the Board of Supervisors authorized the advertisement of a Real Estate Tax Rate of $ This advertised rate is a ceiling. It would not prevent the Board from approving a lower tax rate when it adopts the FY 2019 Budget, but the Board could not adopt one higher than $ For FY 2019, each penny of the Real Estate Tax Rate is worth $24.64 million in revenue. Therefore, if the Board were to approve a Tax Rate lower than $1.155 (both the advertised rate and the rate used to balance the proposed budget), each penny reduction would reduce revenue by $24.64 million. Reduced revenue means that at least some of the new funding for human services priorities could be reduced or eliminated and that current funding for programs and services could also be cut. BUDGET PRESSURES FCPS Funding: The General Fund Transfer to the FCPS Operating Fund reflects an increase of $88.5 million, or 4.49 percent, over the funding level in the FY 2018 Adopted Budget. This level of support is consistent with the transfer request approved by the School Board on Feb. 8, 2018, offset by the anticipated $8.7 million in state revenues due to re-benchmarking and a decrease in the Local Composite Index. According to the School Board, this funding would support salary adjustments for teachers and school employees. Total County support to FCPS including transfers to the School Operating, Debt Service, and Capital Contribution funds total $2.26 billion. This represents an increase of $95.10 million, or 4.38 percent, over the FY 2018 Adopted Budget. School support remains at 52.8 percent of total General Fund disbursement in FY The County also provides $88.1 million in additional direct support for a number of programs, including Head Start, School Health, Behavioral Health Services, School Resource Officers, School Crossing Guards, after-school programming, field maintenance, and recreational programs. The County Executive has said that one of his major priorities for the FY 2019 Budget is full funding of the FCPS Operating Transfer request, commenting that, without an increase in the Real Estate Tax Rate, this transfer would be reduced by more than $25 million from the proposed level, and no additional funding would be provided for School Capital Improvement Plans.

5 Page 5 Employee Compensation: In 2014 the Board adopted a new pay plan for General County Employees that was implemented in the FY 2016 Budget. However, based on limited resources, funding for the calculated Market Rate Adjustment was not included in the FY 2018 Budget. The County Executive therefore identified full funding of the compensation plan as one of his priorities for the FY 2019 Budget, which does include a 2.25 percent Market Rate adjustment for all employees, and performance and longevity increases averaging 2 percent for merit non-uniformed employees and 2.25 percent for merit uniformed public safety employees. This will mark only the third year over the past 10 years where the County's full compensation program has been funded. Mr. Hill has commented that with no increase in the Real Estate Tax Rate, the Market Rate Adjustment would be only partially funded at 1.26 percent. MULTI-YEAR BUDGET Beginning in FY 2014, the County began a more comprehensive than usual General Fund budgeting process the development of a 2-year budget framework that outlines the prospective issues that will need to be addressed as part of the budget process for the following fiscal year, including the impact of decisions in the budget being adopted. The County Executive has provided a fiscal forecast and a list of requirements for FY 2020, indicating that that restrained revenue growth is anticipated for the foreseeable future and that expenditure needs will continue to outpace resources. He predicts a shortfall of about $60 million for FY Health and Human Services Resource Plan: As directed by the Board of Supervisors during adoption of the FY 2018 budget, this Resource Plan was developed in the fall of 2017 through a collaborative effort with Health and Human Services (HHS) staff, the Dept. of Management and Budget, and the Human Services Council. The Resource Plan: Identifies priority funding needs, but is also fiscally constrained. Captures new funding needs; it does not include baseline funding already in the budget. Is organized by needs identified in the 2016 Human Services Needs Assessment, not by agencies or departments. Is not a funding commitment but rather a planning document to help inform funding decisions. Takes into account the priorities already established by the Board and the HHS System. The initial draft identifies funding priorities for the next 3 fiscal years, FY 2019 through FY The current Plan includes only needs supported by the General Fund. Later versions will include needs and programs that rely on significant non-general Fund resources (e.g., Bridging Affordability). Additionally, the Resource Plan will be extended to include 5 years, as directed by the Board. Items listed on the Resource Plan that are included in the proposed Budget and funded by the Board will be integrated into the Adopted Budget and will therefore become part of the baseline. Items not funded will be integrated into the out years of the Plan or removed if funding needs or priorities change. To read the Human Services Resource Plan, go to Type Human Services Resource Plan PDF Document into the Search Function, and then click on fairfax county health and human services fiscal year