Attachment A. County of Orange FY Third Quarter Budget Report

Transcription

1 County of Orange FY Third Quarter Budget Report

2 Cover photo: Aliso Beach Designed by Publishing Services

3 FY THIRD QUARTER BUDGET REPORT TABLE OF CONTENTS EXECUTIVE SUMMARY... 1 BUDGET ISSUES... 9 HUMAN RESOURCES ISSUES Position Update Classification Issues Position Summary Vacant Positions - Aged Limited Term Positions RECOMMENDED ACTIONS Class Specifications Budget Adjustment Summary Position Change Summary i

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5 County of Orange FY Third Quarter Budget Report April 26, 2016 EXECUTIVE SUMMARY The Quarterly Budget Report provides the Board of Supervisors, County departments, members of the public, and other interested parties with an overview of the current status of revenues, expenditures, Net County Cost (NCC), total budgeted positions and various departmental issues requiring recommended changes to the County s budget. The Executive Summary provides information at a summary level. Overall Status The Quarterly Budget Report provides a year-to-date overview of revenue, expense and Net County Cost measured against prior year revenue, expense, and NCC at March 31, Variances are generally associated with one-time items and the timing of revenue receipts and expenditures from year to year. Revenue Total County revenue for the first nine months of the current fiscal year was 3.1% below prior year third quarter revenue and is primarily the result of a change in accounting methodology where receipt of proceeds for prepaid pension obligation bonds previously recorded as revenue is now recorded as a balance sheet account entry. General Fund revenue inclusive of General Purpose Revenue was 12.6% below the prior year third quarter revenue primarily due to a change in accounting methodology where receipt of proceeds for prepaid pension obligation bonds previously recorded as revenue is now recorded as a balance sheet account. This decrease is partially offset by increased current secured property tax revenues, and increased Federal and State public assistance. General Purpose Revenue experienced a 6.4% increase over the prior year third quarter primarily due to increased secured property tax revenues, property transfer taxes, and other taxes. Property taxes were 6.0% above prior year third quarter largely due to increased current year secured tax collections this quarter. Expense Total County expenditures were 3.3% below prior year third quarter expenditures primarily due to a change in accounting methodology where the prepaid pension obligation contribution to OCERS previously recorded as an expenditure is now recorded as a balance sheet account entry. Factoring out the prepaid pension obligation contribution, current year third quarter year-to-date expenditures are 1

6 County of Orange FY Third Quarter Budget Report April 26, 2016 above the prior year expenditures by 6.3% due primarily to increased expenditures in assistance programs offset by state and federal revenues; and capital projects for John Wayne Airport and roadway improvements. General Fund Department expenditures are 10.4% lower than in the third quarter of the prior year primarily due to the change in the prepaid pension obligation accounting methodology mentioned earlier. Factoring out fluctuations in debt service expenditures, current year third quarter year-to-date expenditures are above the prior year expenditures by 4.1% due primarily to increased salaries and benefits and professional services costs. Net County Cost General Fund Net County Cost (NCC) is $31.8 million (or 4.5%) above prior year NCC for the third quarter and is consistent with increased NCC approved as part of the FY budget process as well as one-time planned capital and equipment purchases in the current year. This quarter total NCC impacts are as follows: Budget Control Department NCC Request Description 002 Assessor $ 350,000 Commercial & Multi-Family property valuations Refunding Recovery Reserve balance no longer (1,536,085) Bonds needed for debt service 026 District Attorney 1,602,093 Maintain current operations 026 District Attorney (See note Maintain current 514,759 below) operations 031 Registrar of Voters 54,720 Poll Worker stipends 036 Capital Projects 1,557, Civic Center 036 Capital Projects 200,000 Capital projects contingency 036 Capital Projects 583,477 Sheriff Maintenance Repair Plan 036 Capital Projects 577,408 OC Animal Care Center Project 080 OC Public Works 53,385 Maintain current operations Total NCC Request $ 3,957,565 Note: The Auditor-Controller will increase appropriations and Net County Cost by up to $514,759 for the District Attorney (DA), Budget Control 026, current staffing and operations. The DA will first attempt to absorb these costs within existing appropriations and NCC. Only the amount required will be appropriated in the 2

7 County of Orange FY Third Quarter Budget Report April 26, 2016 DA s budget; thus, the actual NCC increase may be less than the $515K identified above. The NCC requests this quarter are funded through Miscellaneous, Budget Control 004, contingency monies and use of reserve monies no longer needed for debt service. In addition, as described in the Budget Issues section of this report, $10.2 million in SB90 revenue is appropriated for various one-time capital and public safety projects. Finally, a planned decrease to reserves of $4,422,592 is requested to fund the OC Animal Care Center project. Cash, Obligated Fund Balances and Reserves Cash: Overall, total County cash balances were 12.2% above the level 12 months ago. This is primarily due to timing of revenue receipts and project expenditures in enterprise, capital projects, and Community Facilities and Assessment Districts funds. The General Fund cash balance of $344.9 million is above the level 12 months ago by $66.3 million or 23.8%. It is anticipated that cash balances will fluctuate throughout the year depending on the timing of revenue receipts and expenditures consistent with the normal business cycle for the County. Cash is monitored on a regular basis to ensure sufficient available balances to meet the County s obligations. General Fund cash balance comparisons are presented in the following table: 3

8 County of Orange FY Third Quarter Budget Report April 26, 2016 $400 Monthly Cash Balance (end of month) $350 $300 Millions $250 $200 $150 $100 $50 $0 July Aug Sept Oct Nov Dec Jan Feb March April May June Obligated Fund Balances and Reserves: There is a net decrease in total County reserves of $266.2 million from the beginning of the current fiscal year (from $3.089 billion to $2.824 billion) which is primarily related to net budgeted decreases to obligated fund balances and net position reserves used to balance FY budgets. The budgeted decreases are consistent with GASB 54 requirements and changes in year-end accounting practices. The aggregate budgeted decreases are partially offset by the $128.1 million positive Fund Balance Unassigned booked after fiscal year end June 30, Budget Issues This report contains recommended budget changes related to a variety of departmental issues including recognition of grant funds, position changes, and technical budget adjustments. 4

9 County of Orange FY Third Quarter Budget Report April 26, 2016 Investments and Debt Investments: The Treasurer's Monthly Investment Report and other items of interest are available by accessing the Treasurer-Tax Collector s web site at The Treasurer's Monthly Investment Report includes sections on investment pool balances, investment inventory with market values, detail transaction report and other relevant information. Debt: The following are Completed FY Debt Issuances as of March 31, 2016: On July 15, 2015, the County utilized its Teeter Note Purchase and Reimbursement Agreement with Wells Fargo to finance the Teeter property tax receivables purchase. The amount outstanding as of March 31, 2016 was $40.4 million. In January 2016, the County issued $334.3 million in short term taxable Pension Obligation Bonds to prepay, at a discount, a portion of the County s pension obligation. Interest rates on the Bonds ranges from.75% to 1.2%. The following are Contemplated Debt Issuances as of March 31, 2016: CEO Public Finance continues to work on the financing for the Central Utility Facility project which is estimated to be $68 million. We anticipate returning to the Board with finance details for consideration in the fourth quarter of The following chart and table include the prior three years history of General Fund bankruptcy and non-bankruptcy debt as well as a projection of the principal debt outstanding at the end of the current fiscal year. 5

10 County of Orange FY Third Quarter Budget Report April 26, 2016 $200,000,000 GENERAL FUND DEBT $150,000,000 Bankruptcy Debt $100,000,000 Non-Bankruptcy Debt $50,000,000 $0 FY FY FY FYE FY Projection FY FY FYE Projection FYE Projection General Fund Debt Maturity FY FY FY Bankruptcy Date Lease Revenue Refunding Bonds, Series 2005 July 2017 $ 85,585,000 $ 64,805,000 $ 43,015,000 $ 5,590,000 Refunding Recovery Bonds 2005 Series A June ,270,000 17,555, Total - Bankruptcy $ 119,855,000 $ 82,360,000 $ 43,015,000 $ 5,590,000 Non-Bankruptcy Lease Revenue Bonds 2006, Utilities-Cogen Project June 2018 $ 18,185,000 $ 14,895,000 $ 11,440,000 $ 7,810,000 Lease Revenue Refunding Bonds, Series 2012, Juvenile Justice Center Facility June ,860,000 25,180,00 20,400,000 15,480,000 Refunding Certificates of Participation Series 1991, Parking Facilities December ,822,000 2,261,000 1,743,427 1,261,106 Total Non-Bankruptcy $ 50,867,000 $ 42,336,000 $ 33,583,427 $ 24,551,106 Grand Total $ 170,722,000 $ 124,696,000 $ 76,598,427 $ 30,141,106 Additional information related to Outstanding Debt may be found at the following website links: and 15cdr. 6

11 County of Orange FY Third Quarter Budget Report April 26, 2016 Positions FY began with an adopted position count of 18,148. In the first quarter, there were 16 net positions added. Second Quarter actions increased the net position count by 24 to a total of 18,188. This report includes a net addition of 2 positions. Position changes requested in this report, would result in an authorized position count of 18,190. Further detail of Third Quarter position actions can be found in the Human Resources Issues section of this report. Current fiscal year position actions are summarized in the following table: Proposed Third Quarter Position Changes Board Adopted FY Positions 18,148 Net FY First Quarter Actions 16 Net FY Second Quarter Actions 24 Net FY Third Quarter Actions 2 Current Authorized Positions 18,190 A historical summary of authorized budgeted positions is presented in the following chart: Five-Year Authorized Position Comparison 20,000 15,000 10,000 5, Total Positions 17,257 17,303 17,781 18,053 18,188 Vacant Positions 1,483 1,484 1,825 2,004 1,867 Filled Positions 15,774 15,819 15,956 16,049 16,321 Vacant and Filled Positions are as of March 18, 2016, and do not include Third Quarter changes. 7

12 County of Orange FY Third Quarter Budget Report April 26, 2016 Supplemental Data The County of Orange uses the OpenOC Data Tool which is a web-based software providing increased transparency and easy access to finance and budget information. Supplemental expense and revenue data are available by accessing the OpenOC link: Budget and actual reports as of March 31, 2016 can be viewed using the Budget Report Report Links found on the left hand side of the web page. 8

13 County of Orange FY Third Quarter Budget Report April 26, 2016 BUDGET ISSUES For the budget issues discussed below, the County Executive Office (CEO) evaluated the justification provided by departments and based recommended actions on the following policies: Departments are expected to absorb most changes within existing appropriations. CEO may recommend an appropriation transfer to a General Fund agency from elsewhere in the General Fund if necessary and allowable. For this quarter, CEO recommends use of contingency appropriations, to fund Net County Cost (NCC) impacts when indicated in this section. Department Requests Program I Public Protection District Attorney (Department 026) District Attorney (Fund 100, Department 026, Budget Control 026) In Budget Control 026, District Attorney (DA), increase salaries and benefits by $2,486,220 and services and supplies by $446,663 to meet current year operational needs. The increased appropriations will be offset by aggregate transfers in of $1,330,790 from the following funds: o Fund 116, DA s Narcotic Forfeiture and Seizure: $214,622; o Fund 12G, Real Estate Prosecution: $900,171; o Fund 14H, DA s Supplemental Law Enforcement Services: $15,997; and o Fund 14J, Excess Public Safety Sales Tax: $200,000. The balance of $1,602,093 will be funded by NCC with authorization for the Auditor- Controller to increase salaries and benefits as needed in Budget Control 026, for up to an additional $514,759. Actual further appropriation increases will be determined at the end of the current fiscal year. In Fund 116, DA s Narcotic Forfeiture and Seizure, increase transfers out by $214,622 to Budget Control 026, DA, offset by an increase in miscellaneous revenues of $32,447, a decrease to services and supplies of $13,175, and a decrease of $169,000 to obligated fund balance. In Fund 12G, Real Estate Prosecution, increase transfers out by $900,171 to Budget Control 026, DA, offset by an increase in recording fees of $290,000, a decrease to 9

14 County of Orange FY Third Quarter Budget Report April 26, 2016 special items appropriations of $545,000, and a decrease of $65,171 to obligated fund balance. In Fund 14H, DA s Supplemental Law Enforcement Services, increase transfers out by $15,997 to Budget Control 026, DA, offset by an equivalent increase in intergovernmental revenue. In Fund 14J, Excess Public Safety Sales Tax, increase transfers out by $200,000 to Budget Control 026, DA, offset by a corresponding decrease to obligated fund balance. Office of Independent Review (Department 051) Office of Independent Review (Fund 100, Department 051, Budget Control 051) In Office of Independent Review, Budget Control 051, add one Executive Director (Title Code 8010E2) position in accordance with Orange County Ordinance (Office of Independent Review), adopted by the Board on December 12, Section 2(b) of the Ordinance states, The Executive Director and all staff of the OIR shall be employees of the County of Orange. Costs associated with this position will be absorbed within the current appropriations. Probation (Department 057) Probation (Fund 100, Department 057, Budget Control 057) In Budget Control 057, Probation, establish transfers out of $5,839,000 to Fund 104, Criminal Justice Facilities - Accumulative Capital Outlay (ACO), offset by an increase to State revenues of $4,339,875 and a decrease to appropriations of $1,499,125. The transfers out will provide $1,400,000 in funding for maintenance projects at Probation facilities, and $4,439,000 in funding for Probation's Multipurpose Rehabilitation Center. In Fund 104, Criminal Justice Facilities - ACO, establish transfers in from Budget Control 057, Probation, of $5,839,000 offset by a corresponding increase to Obligated Fund Balance. In Fund 100, General Fund, authorize a decrease of up to $5,839,000 to Fund Balance Assigned for Maintenance and Construction, Probation (9743-PR01) and an equivalent increase to Fund Balance Assigned for Reserve Target ( ) in accordance with the amount transferred to Fund 104, Criminal Justice Facilities - ACO. The actual amounts to be transferred to Fund 104 Criminal Justice Facilities - ACO, and recorded in General Fund obligated fund balance will be determined during the 10

15 County of Orange FY Third Quarter Budget Report April 26, 2016 FY year-end process and are dependent upon the Department's expense savings and receipt of additional unanticipated revenues. The amounts transferred will require CEO/Budget concurrence before recording the transfers and the increase/decrease to General Fund Balance Assigned balance sheet account codes. Sheriff-Coroner (Department 060) Sheriff-Coroner (Fund 100, Department 060, Budget Control 060) In Sheriff-Coroner, Budget Control 060, increase capital assets by $197,204 offset by a corresponding decrease to services and supplies, and authorize the purchase, delivery, training and installation of a server and data system upgrade. This equipment will allow the Sheriff-Coroner Department to increase storage of the existing data system to serve as a live data back-up system in the event of a disaster. Sheriff-Coroner Replacement and Maintenance Fund (Fund 13R, Department 060, Budget Control 13R) In Fund 13R, Sheriff-Coroner Replacement and Maintenance Fund (SCRAM), increase transfers in by $561,320 from Budget Control 060, Sheriff-Coroner, offset by a corresponding increase to equipment for the purchase of food delivery carts and other kitchen appliances and equipment for the Inmate Services Division. In Budget Control 060, Sheriff-Coroner, increase transfers out by $561,320 to Fund 13R, SCRAM Fund offset by a corresponding decrease in equipment. County Executive Office (Department 017) Trial Court (Fund 100, Department 017, Budget Control 081) In Budget Control 081, Trial Court, increase services and supplies by $181,288 offset by increases to State revenue of $150,659, and Federal revenue of $30,629 for service delivery to victims of violent crime from Community Service Provider Grant allocations. 11

16 County of Orange FY Third Quarter Budget Report April 26, 2016 Program II Community Services OC Community Resources (OCCR) (Department 012) OC Community Resources (OCCR) (Fund 100, Department 012, Budget Control 012) In Budget Control 012, OC Community Resources, increase services and supplies by $199,500 offset by an equivalent increase in intergovernmental revenue for contributions from the City of Anaheim and the City of Santa Ana for extension of the Armory Shelter program through April 15, In Budget Control 012, OC Community Resources, increase services and supplies by $500,000 offset by an equivalent increase cost apply from Budget Control 036, Capital Projects, for support costs for temporary shelter services at the Santa Ana Transit Terminal site. In Budget Control 036, Capital Projects, increase transfers in by $500,000 from Fund 15D, Countywide Capital Projects Non General Fund, offset by a corresponding increase in services and supplies for temporary shelter services at the Santa Ana Transit Terminal site. In Fund 15D, Countywide Capital Projects Non General Fund, increase transfers out to Budget Control 036, Capital Projects, by $500,000 offset by an equivalent decrease in obligated fund balance. In Budget Control 012, OC Community Resources, increase services and supplies by up to $200,000 offset by an equivalent increase to cost apply from Budget Control 036, Capital Projects, for the Kraemer site year-round emergency shelter/multi-service center. In Budget Control 036, Capital Projects, increase transfers in by up to $200,000 from Fund 15D, Countywide Capital Projects Non General Fund, offset by a corresponding increase in services and supplies for the Kraemer year-round shelter site. In Fund 15D, Countywide Capital Projects Non General Fund, increase transfers out to Budget Control 036, Capital Projects, by up to $200,000 offset by an equivalent decrease in obligated fund balance. The actual amount of appropriations to be increased will be determined during the FY year-end process and will be coordinated between CEO Budget and Auditor- Controller. 12

17 County of Orange FY Third Quarter Budget Report April 26, 2016 OC Animal Care Donations (Fund 121, Department 012, Budget Control 121) In Fund 121, OC Animal Care Donations, increase services and supplies by $30,000 offset by an equivalent increase in miscellaneous revenues to recognize donations received by OC Animal Care. Orange County Housing Authority (OCHA) (Fund 15F, Department 012, Budget Control 15F) In Fund 15F, Orange County Housing Authority (OCHA), add one Limited Term Housing Specialist II position funded by an additional award from the U.S. Department of Housing and Urban Development for the Family Self-Sufficiency Program. Increase salaries and benefits by $15,552 offset by a corresponding increase to Federal revenues. OC Housing (Fund 15G, Department 012, Budget Control 15G) In Fund 15G, OC Housing, increase transfers out to Budget Control 036, Capital Projects, by $315,000 offset by an equivalent decrease to other charges for the capital development of year-round emergency shelters/multi-service centers. In Capital Projects, Budget Control 036, increase buildings and improvements by $315,000 offset by a corresponding increase in transfers in from Fund 15G, OC Housing. Child Support Services (Department 027) Child Support Services (Fund 100, Department 027, Budget Control 027) In Child Support Services, Budget Control 027, establish $65,000 in structures and improvements offset by a corresponding decrease in services and supplies for design costs related to the customer service area re-design/remodel capital project. Health Care Agency (Department 042) Health Care Agency (Fund 100, Department 042, Budget Control 042) In Budget Control 042, Health Care Agency, increase transfers out by $200,000 to Fund 13T, HCA Purpose Restricted Revenue, offset by a corresponding increase in charges for services revenue to allow for the proper recording of potential fee revenue. In Fund 13T, HCA Purpose Restricted Revenues, increase transfers in by $200,000 from Budget Control 042, Health Care Agency, offset by an increase in special items appropriations. 13

18 County of Orange FY Third Quarter Budget Report April 26, 2016 Medi-Cal Administrative Activities/Targeted Case Management (Fund 138, Department 042, Budget Control 138) In Fund 138, Medi-Cal Administrative Activities/Targeted Case Management increase transfers out by $20,000 to Health Care Agency, Budget Control 042, offset by a corresponding decrease to obligated fund balance for the offset of eligible expenses. In Budget Control 042, Health Care Agency, increase transfers in by $20,000 from Fund 138, Medi-Cal Administrative Activities/Targeted Case Management, offset by a corresponding increase in services and supplies. Mental Health Services Act (Fund 13Y, Department 042, Budget Control 13Y) In Fund 13Y, Mental Health Services Act, increase services and supplies by $15,000 offset by an equivalent increase in revenue to recognize higher than anticipated investment administration fees and interest revenue. Program III Infrastructure and Environmental Resources OC Public Works (OCPW) (Department 080) Building & Safety General Fund (Fund 100, Department 080, Budget Control 071) In Budget Control 071, Building & Safety General Fund, increase services and supplies by $1,400,000 offset by an equivalent increase in construction permit revenue for increases in plan check review consultant services. OC Public Works (Fund 100, Department 080, Budget Control 080) In Budget Control 080, OC Public Works, increase salaries and benefits by $53,385 offset by a corresponding increase to NCC to fund existing positions and maintain current operations. Air Quality Improvement (Fund 140, Department 080, Budget Control 140) In Fund 140, Air Quality Improvement, increase equipment by $315,000 offset by a decrease to special items of $70,000 and a decrease to obligated fund balance of $245,000 for the purchase of nine new Plug-in Hybrid vehicles to replace nine Class E Compressed Natural Gas (CNG) vehicles that are due for replacement. OC Flood (Fund 400, Department 080, Budget Control 400) In Fund 400, OC Flood, add one Administrative Manager I and one Environmental Engineering Specialist transferred from OC Road, Fund 115, to align staffing with anticipated workload. No appropriations are required for addition of the positions. 14

19 County of Orange FY Third Quarter Budget Report April 26, 2016 In Fund 115, OC Road, delete one Administrative Manager I and one Environmental Engineering Specialist for transfer to OC Flood, Fund 400. No appropriation adjustments are required for the position deletions. OC Waste and Recycling Enterprise (Department 299) OC Waste and Recycling Bankruptcy Recovery Plan (Fund 285, Department 299, Budget Control 285) Due to an anticipated increase in importation revenue, and less than budgeted reimbursable capital project expenditures during FY , net revenue to be transferred to General Fund for Bankruptcy recovery is expected to be more than budgeted for the year. To capture the additional net revenue to the General Fund, the following adjustments are requested: In OC Waste and Recycling Bankruptcy Recovery Plan, Fund 285: o Increase transfers out to Budget Control 016, 2005 Lease Revenue Refunding, by $8,235,000; o Decrease transfers out to Fund 273, OC Waste and Recycling Capital Project o Fund by $4,307,235; and Decrease transfers out to Fund 299, OC Waste and Recycling Enterprise by $1,445,000; o Decrease appropriations by $187,765 Offset by: o Increased waste importation revenue of $2,280,000; o Increased interest revenue of $15,000 In 2005 Lease Revenue Refunding, Budget Control 016, increase transfers in by $8,235,000 from Fund 285, OC Waste and Recycling Bankruptcy Recovery Plan, offset by a corresponding increase to transfers out to Fund 15Z, Plan of Adjustment Available Cash. In Fund 15Z, Plan of Adjustment Available Cash, increase transfers in from 2005 Lease Revenue Refunding, Budget Control 016, by $8,235,000 offset by an equivalent increase to appropriations. In Fund 273, OC Waste and Recycling Capital Project Fund, decrease transfers in from Fund 285, OC Waste and Recycling Bankruptcy Recovery Plan, by $4,307,235 offset by a decrease to capital assets of $3,807,235 and decrease to services and supplies of $500,000. In Fund 299, OC Waste and Recycling Enterprise, decrease transfers in by $1,445,000 from Fund 285, OC Waste and Recycling Bankruptcy Recovery Plan, offset by an equivalent decrease to other charges appropriations. 15

20 County of Orange FY Third Quarter Budget Report April 26, 2016 County Executive Office (Department 017) Real Estate Development Program (Fund 135, Department 017, Budget Control 135) In Fund 135, Real Estate Development Program, increase services and supplies by $400,000 offset by a decrease of $200,000 in transfers out to Budget Control 017, County Executive Office, and a decrease to obligated fund balance of $200,000 for costs associated with Lowe s Enterprises Real Estate Group. In County Executive Office, Budget Control 017, decrease transfers in from Fund 135, Real Estate Development Program, by $200,000 offset by an equivalent increase to charges for services revenue. In Fund 135, Real Estate Redevelopment Program, establish a transfer out of $210,000 to Budget Control 036, Capital Projects, offset by a corresponding decrease in obligated fund balance for the Civic Center Master Plan (CCMP) Phase 1A - Building 16 Demolition Environmental Impact Assessment (EIA). In Budget Control 036, Capital Projects, establish transfers in of $210,000 from Fund 135, Real Estate Redevelopment Program, offset by a corresponding increase in services and supplies by an equivalent amount, for the CCMP Phase 1A - Building 16 Demolition EIA. Program IV General Government Services Assessor (Department 002) Assessor (Fund 100, Department 002, Budget Control 002) In Budget Control 002, Assessor, increase services and supplies by $330,000 and capital assets by $20,000 for new hardware and software used for valuation of commercial and multi-family properties, offset by an increase in NCC of $350,000. This increase is requested to improve the quality and consistency of commercial and multi-family property valuations as well as stream-line the department's Commercial Valuation and Commercial Prop. 8 reviews that cannot be absorbed in the current fiscal year. Auditor-Controller (Department 003) Auditor-Controller (Fund 100, Department 003, Budget Control 003) In Budget Control 003, Auditor-Controller, increase services and supplies by $380,000 of which $260,000 is for increased costs related to household expense, building improvements and maintenance; and $120,000 is for professional services 16

21 County of Orange FY Third Quarter Budget Report April 26, 2016 for the Internal Audit Workpaper System offset by an equivalent increase in cost apply to recognize greater than budgeted reimbursements from satellite operations and CAPS Program, Budget Control 014. Registrar of Voters (Department 031) Registrar of Voters (Fund 100, Department 031, Budget Control 031) In Budget Control 031, Registrar of Voters, increase services and supplies by $57,000 offset by an increase of $2,280 to election services revenue and an increase of $54,720 to NCC for increases to the stipend pay for Poll Inspectors and Poll Clerks. Treasurer-Tax Collector (Department 074) Treasurer-Tax Collector (Fund 100, Department 074, Budget Control 074) In Budget Control 074, Treasurer-Tax Collector, establish transfers out of $130,000 to Fund 289, Information & Technology ISF, for the re-budget in FY of the SunGard/Quantum system upgrade and offset by an equivalent decrease in services and supplies. In Information & Technology ISF, Fund 289, establish transfers in of $130,000 from Treasurer-Tax Collector, Budget Control 074, offset by a corresponding increase to net position reserved. Program V Capital Improvements County Executive Office (Department 017) Data Systems Development Projects (Fund 100, Department 017, Budget Control 038) In Budget Control 038, Data Systems Development Projects, increase services and supplies by $200,000 offset by a corresponding decrease to special items appropriations for the CAPS+ HR Data Warehouse project. In Budget Control 038, Data Systems Development Projects, establish transfers out of $3,665,200 to Fund 289, Information and Technology Internal Service Fund (ISF), offset by a corresponding decrease to services and supplies to ensure funding availability for continuation across fiscal years of the following projects: o OC PA/PG Conservatorship System: $1,026,000 o Public Defender Case Management System: $240,000 17

22 County of Orange FY Third Quarter Budget Report April 26, 2016 o e-agenda Upgrade (CAMS): $939,200 o Integrated Talent Management System: $510,000 o BOS Crestron Communication Panel: $950,000 In Fund 289, Information and Technology ISF, establish transfers in of $3,665,200 from Budget Control 038, Data Systems Development Projects, offset by a corresponding increase to obligated fund balance. Capital Projects (Department 036) Capital Projects (Fund 100, Department 036, Budget Control 036) In Budget Control 036, Capital Projects, increase buildings and improvements by $53,045, and transfers out to Fund 15D, Countywide Capital Projects Non-General Fund, by $1,504,763 offset by an increase of $1,557,808 in NCC for the following critical projects and upgrades at 401 Civic Center Drive: o Elevator modernization - $477,000; o Heating, Ventilation, and Air Conditioning - $725,000; o Roof replacement - $80,000; o Curtain Wall/Waterproofing - $80,000; and o Permits, management fees, etc. - $195,808 Funding is for the first two years of a three-fiscal year project request and funding for the third year of this project will be included in the FY Budget. In Fund 15D, Countywide Capital Projects Non-General Fund, increase transfers in from Budget Control 036, Capital Projects, by $1,504,763 offset by an equivalent increase to obligated fund balance for the second of two years of the 401 Civic Center project. In Budget Control 036, Capital Projects, increase services and supplies by $200,000 offset by a corresponding increase in NCC for capital projects contingency. In Capital Projects, Budget Control 036, increase professional and specialized services by $600,000 offset by an equivalent decrease to unallocated maintenance funding for the Civic Center Master Plan, Building 16 design services to be provided by Griffin Structures, Inc. as approved by the Board on March 22, 2016 (Agenda Item S25E). In Budget Control 036, Capital Projects, increase transfers out by $583,477 to Fund 14Q, Sheriff-Coroner Construction and Facility Development, offset by an equivalent increase to NCC for the following Sheriff Maintenance Repair Plan capital projects: o James A. Musick subfloors and shower areas replacement: $320,527 18

23 County of Orange FY Third Quarter Budget Report April 26, 2016 o James A. Musick asphalt road repairs: $172,700 o Loma Ridge heating, ventilation and air conditioning system renovation: $90,250 In Sheriff-Coroner Construction and Facility Development, Fund 14Q, increase transfers in by $583,477 from Budget Control 036, Capital Projects, offset by an increase to services and supplies of $320,527 and an increase to capital assets of $262,950. In Budget Control 036, Capital Projects, establish transfers out of $5,000,000 to Fund 16D, OC Animal Shelter Fund, offset by a decrease of $4,422,592 to General Fund obligated fund balance and an NCC increase of $577,408 for the new OC Animal Care Center project. In Fund 16D, OC Animal Shelter Fund, establish $5,000,000 of capital assets offset by an equivalent increase in transfers in from Budget Control 036, Capital Projects, for the new Animal Care Center project. Program VI Debt Service County Executive Office (Department 017) 2005 Refunding Recovery Bonds (Fund 100, Department 017, Budget Control 021) In Budget Control 021, 2005 Refunding Recovery Bonds, decrease obligated fund balance by $1,536,085 with no offsetting entry and direct the Auditor-Controller to close Budget Control 021. The 2005 Refunding Recovery Bonds are no longer outstanding and the obligated fund balance is no longer needed. Program VII Insurance, Reserves and Miscellaneous OC Public Works (OCPW) (Department 080) OC Fleet Services (Fund 296, Department 080, Budget Control 296) In Fund 296, OC Fleet Services, establish a transfer out of $2,790 to Fund 280, Airport - Operating, offset by a corresponding decrease to services and supplies to properly allocate proceeds of vehicles auctioned in FY In Fund 280, Airport - Operating, establish a $2,790 transfer in from Fund 296, OC Fleet Services, offset by an equivalent increase in special items appropriations to recognize proceeds of auctioned vehicles. 19

24 County of Orange FY Third Quarter Budget Report April 26, 2016 County Executive Office (CEO) (Department 017) Miscellaneous (Fund 100, Department 017, Budget Control 004) In Budget Control 004, Miscellaneous, establish transfers out of $6,465,054 to Fund 15D, Countywide Capital Projects Non General Fund, offset by an equivalent decrease in transfers out to Fund 15B, CEO Single Family Housing, to realign transfers to the fund in which expenditures for year round shelters will be recorded. In Budget Control 036, Capital Projects, decrease transfers in of $6,465,054 from Fund 15B, CEO Single Family Housing, offset by a decrease of $6,415,054 to capital assets and an increase in other governmental revenue of $50,000. In Fund 15B, CEO Single Family Housing, decrease transfers in from Budget Control 004, Miscellaneous, by $6,465,054 offset by a corresponding decrease in transfers out to Budget Control 036, Capital Projects. In Fund 15D, Countywide Capital Projects Non General Fund, establish transfers in of $6,465,054 from Budget Control 004, Miscellaneous, offset by an equivalent increase to obligated fund balance. In Miscellaneous, Budget Control 004, establish transfers out to the following funds offset by an increase of $10,192,546 in interest revenue to recognize SB90 interest paid by the State: o Fund 13R, Sheriff-Coroner Replacement & Maintenance Fund (SCRAM): $200,000 for a mass notification system; o Fund 15D, Countywide Capital Projects Non General Fund: $2,065,751 for Sheriff-Coroner one-time equipment purchases; o Fund 15D, Countywide Capital Projects Non General Fund: $5,000,000 funding for the Automated Jail System; and o Fund 15L, 800 MHz Countywide Coordinated Communication System (CCCS): $2,926,795 for Countywide Cells Backbone In Fund 13R, SCRAM, establish transfers in of $200,000 from Miscellaneous, Budget Control 004, offset by an equivalent increase to special items to fund a mass notification system. In Fund 15D, Countywide Capital Projects Non General Fund, establish transfers in of $7,065,751 from Miscellaneous, Budget Control 004, offset by an equivalent increase to obligated fund balance to provide funding for Sheriff-Coroner one-time equipment purchases of $2,065,751 and Automated Jail System expenses of $5,000,

25 County of Orange FY Third Quarter Budget Report April 26, 2016 In Fund 15L, 800 MHz CCCS, establish transfers in of $2,926,795 from Miscellaneous, Budget Control 004, offset by an equivalent increase to equipment to provide funding for 800 MHz Countywide Cells Backbone. IT Support Services (Fund 100, Department 017, Budget Control 037) In Budget Control 037, IT Support Services, add 11 positions (one Photo Reproduction Technician; one IT Systems Technician II; one Senior IT Systems Engineer; one IT Supervisor; one IT Security Administrator II; three Administrative Manager Is; one Administrative Manager II; one Administrative Manager III; and one Staff Specialist) transferred from Budget Control 289, Information & Technology ISF, effective April 29, Increase salaries and benefits by $244,929 offset by an equivalent increase in Charges for Services revenue. In Budget Control 289, Information & Technology ISF, delete 11 positions (one Photo Reproduction Technician; one IT Systems Technician II; one Senior IT Systems Engineer; one IT Supervisor; one IT Security Administrator II; three Administrative Manager Is; one Administrative Manager II; one Administrative Manager III; and one Staff Specialist) for transfer to Budget Control 037, IT Support Services. Decrease salaries and benefits by $244,929 offset by an equivalent decrease in Charges for Services revenue. Information & Technology ISF (Fund 289, Department 017, Budget Control 289) In Fund 289, Information & Technology ISF, add seven positions (one Information Technologist I; one IT Supervisor; three IT Business Analyst IIs; one Information Technologist II, and one Administrative Manager II) transferred from Budget Control 037, IT Support Services, effective April 29, 2016 to facilitate alignment of OC Information Technology functional teams. Increase associated salaries and benefits by $166,999 offset by an equivalent increase in Charges for Services revenue. In Budget Control 297, Reprographics ISF, add one position (one Sr. Computer Graphics Specialist) transferred from Budget Control 037, IT Support Services, effective April 29, Increase associated salaries and benefits by $12,921 offset by an equivalent increase in Charges for Services revenue. In Budget Control 037, IT Support Services, delete eight positions (one Information Technologist I; one IT Supervisor; three IT Business Analyst IIs; one Information Technologist II, one Administrative Manager II; and one Sr. Computer Graphics Specialist) for transfer to Budget Control 289, Information & Technology ISF, and Budget Control 297, Reprographics ISF. Decrease salaries and benefits by $179,920 offset by an equivalent decrease in Charges for Services revenue. 21

26 County of Orange FY Third Quarter Budget Report April 26, 2016 Other Issues County Local Revenue 2011 (Fund 100, Department 003, Budget Control 090) Direct the Auditor-Controller to reimburse AB109 costs claimed as incurred by the District Attorney (Budget Control 026), Health Care Agency (Budget Control 042), Public Defender (Budget Control 058), and Sheriff-Coroner (Budget Control 060), in excess of current AB109 allocations with reimbursement to be made from any unspent AB109 allocations of other departments and/or the Undistributed allocation, providing the flexibility to ensure maximum benefit in use of all AB109 monies and to minimize any negative impact on the General Fund. Direct the Auditor-Controller to make any changes necessary to Budget Controls 026, District Attorney; 042, Health Care Agency; 057, Probation; 058, Public Defender; and 060, Sheriff-Coroner appropriations and AB109 revenues to balance to final reimbursement of claimed amounts as part of fiscal year end closing entries to be reported in the FY Fourth Quarter Budget Report. The Community Corrections Partnership (CCP) recommended bringing this action to the Board at their January 21, 2016 meeting. The action is consistent with prior actions taken since implementation of AB109 whereby the Board approved initial funding allocations during the annual budget process, and authorized reallocations, if necessary, as part of the Fourth Quarter Budget Report process in prior years. This action, like past actions, identifies that funding allocations may be adjusted during the year to ensure maximized funding for each County department and to avoid any negative impact on the General Fund. Based on the most current estimates provided by departments (see table on the following page), it appears that unspent monies from all Departments and undistributed allocations will be available to cover any anticipated shortfalls in any of the County departments. This year's allocations include large distributions of onetime funds for stabilization and growth in funding. These one-time funds, coupled with lower AB 109 populations, contribute to the projection of unspent funds detailed in the table. The CCP has established an ad hoc committee to discuss potential uses of these funds to present to the CCP and ultimately the Board for consideration and approval. 22

27 County of Orange FY Third Quarter Budget Report April 26, 2016 AB FY Year-End Estimates Department FY Base Allocation FY Growth Fund Allocation Total FY Allocations (Base + Growth Funds) FY Year- End Estimated Expenditures Variance/ Estimate to Allocation Estimated Funds Available for Reallocation Estimated Allocation of Unspent Funds (Note 1) Estimated Year- End (Shortfall)/ Unspent Postrelease Community Supervision (PCS)/Local Incarceration Sheriff 36,635,020 4,491,370 41,126,390 29,808,018 11,318,372 11,318,372 (11,318,372) - Probation 15,603,805 15,603,805 14,629, , ,477 (974,477) - HCA (In-Custody) 8,141, ,459 8,753,575 6,341,501 2,412,074 2,412,074 (2,412,074) - HCA (Post-Custody) 6,105,837 6,105,837 3,897,008 2,208,829 2,208,829 (2,208,829) - District Attorney 339, , , Public Defender 339, , , Local Law Enforcement 678, , ,466 79, Sub-Total (PCS/Local Incarceration) 67,842,630 5,103,829 72,946,459 55,952,747 16,993,712 16,913,752 (16,913,752) - One-time and Other Funds Undistributed 2,971,363 4,944,486 7,915,849-7,915,849 7,915,849 24,801,656 24,801,656 Health Care Agency (Risk Pool/Stop Gap) District Attorney - 800, , ,158 (57,158) - 57,158 - Public Defender - 50,000 50,000 20,787 29,213 29,213 (29,213) - Sub-Total (One-time and Other Funds) 2,971,363 5,794,486 8,765, ,945 7,887,904 7,945,062 24,829,601 24,801,656 Total PCS/Local Incarceration Funds 70,813,993 10,898,315 81,712,308 56,830,692 24,881,616 24,858,814 7,915,849 24,801,656 District Attorney/Public Defender PCS Representation (Carryover plus FY allocation) (Note 2) District Attorney 946, ,644 1,183,308 1,071, ,504 N/A - Note 2-111,504 Public Defender 1,262, ,644 1,498, , ,370 N/A - Note 2-849,370 Total DA/PD PCS 2,208, ,288 2,682,187 1,721, , ,873 Total Allocations/Expenditures 73,022,892 11,371,603 84,394,495 58,552,006 25,842,489 24,858,814 7,915,849 25,762,529 Note 1: In January 2016, the CCP recommended allocating unused/undistributed FY allocations to any departments with shortfalls. Due to reduced populations and higher than anticipated allocations, there are no projected shortfalls for departments. Unspent funding will roll over to future fiscal years. Note 2: District Attorney and Public Defender PCS Representation Funding is additional funding from the State and not part of the AB109 Allocation pool. Unused amounts rollover for their use in future fiscal years as needed. Note 3: Growth funds include additional one-time growth funding. The one-time funding coupled with reduced AB 109 populations contribute to the unspent funds anticipated at year-end. 23

28 County of Orange FY Third Quarter Budget Report April 26, 2016 Countywide Capital Projects Capital Projects (Fund 100, Department 017, Budget Control 036) In Budget Control 036, Capital Projects, establish transfers out to Fund 15D, Countywide Capital Projects Non-General Fund, of $2,020,914 to transfer unspent funding for multi-year capital projects for re-budget in the following fiscal year and offset by the following changes to appropriations: o Decrease revenue by $50,000 o Decrease services and supplies by $257,820 o Decrease structures and improvements by $1,477,094 o Decrease transfers out to Fund 14Q, Sheriff-Coroner Construction and Facility Development, by $236,000 In Fund 14Q, Sheriff-Coroner Construction and Facility Development, decrease transfers in from Budget Control 036, Capital Projects, by $236,000 offset by an equivalent decrease to structures and improvements. In Fund 15D, Countywide Capital Projects Non-General Fund, establish transfers in of $2,020,914 offset by an equivalent increase in obligated fund balance. Health Care Agency (Fund 100, Department 042, Budget Control 042) In Budget Control 042, Health Care Agency, increase transfers out by up to $2,334,255 to Fund 15D, Countywide Capital Projects Non-General Fund, offset by a corresponding decrease to services and supplies to transfer funding for the rebudget of multi-year projects. In Fund 15D, Countywide Capital Projects Non-General Fund, establish transfers in of up to $2,334,255 from Health Care Agency, Budget Control 042, offset by an equivalent increase to special items appropriations. Vehicle Purchases OC Fleet Services, Fund 296, is the centralized fund from which County vehicles are purchased and managed. This quarter, the following purchases of vehicles are requested by departments: In OC Community Resources (OCCR), Budget Control 012, increase transfers out by $16,200 to OC Fleet Services, Fund 296, offset by an equivalent decrease to services and supplies for the purchase of two replacement Class E vehicles for the OC Animal Care canvassing fleet. In Fund 296, OC Fleet Services, increase equipment by $62,000 offset by an increase to transfers in of $16,200 from OCCR, Budget Control 012, and a decrease 24

29 County of Orange FY Third Quarter Budget Report April 26, 2016 to obligated fund balance of $45,800 for the purchase of two replacement Class E vehicles. In Budget Control 060, Sheriff-Coroner, increase transfers out to Fund 296, OC Fleet Services, by $238,000 offset by a corresponding decrease to services and supplies for the purchase of six new vehicles and reclassification of two Full Size 1-ton Pickup Trucks Class FF to two 4X4 Full Size Pickup trucks with service body Class HF. In OC Fleet Services, Fund 296, increase equipment by $238,000 offset by an equivalent increase to transfers in from Budget Control 060, Sheriff-Coroner, for the purchase of six new vehicles and reclassification of two Full Size 1-ton Pickup Trucks Class FF to two 4X4 Full Size Pickup trucks with service body Class HF. Annual Leave Payout Account Miscellaneous (Fund 100, Department 017, Budget Control 004), has approximately $1,000,000 set aside to reimburse small General Fund Departments for unanticipated, non-discretionary leave payouts, consistent with the unanticipated leave payout policy adopted by the Board on November 23, This quarter, the following four departments request increases to salaries and benefits offset by increased cost apply to Miscellaneous, Budget Control 004, consistent with this policy: In Budget Control 006, Board of Supervisors First District, increase salaries and benefits by $5,000 offset by a corresponding increase in cost apply. In Budget Control 008, Board of Supervisors Third District, increase salaries and benefits by $16,500 offset by a corresponding increase in cost apply. In Budget Control 031, Registrar of Voters, increase salaries and benefits by $110,689 offset by an equivalent increase in cost apply. In Budget Control 074, Treasurer-Tax Collector, increase salaries and benefits by $20,536 offset by an equivalent increase in cost apply. Additional Information The County of Orange Third Amended Retiree Medical Plan is an Other Post- Employment Benefit (OPEB) plan intended to assist employees in maintaining health insurance coverage following retirement from County service. Eligible retired County employees receive a monthly grant which helps offset the cost of monthly County offered health plans and/or Medicare premiums. The monthly grant amount is 25