FY Maintenance of Effort Budget

Transcription

1 FY Maintenance of Effort Budget Presented to the Alameda County Budget Workgroup April 17, 2018 Susan S. Muranishi, County Administrator Melanie Atendido, Principal Analyst Pete Coletto, Principal Analyst

2 Overview State & Federal Budget Updates Long-Term Budget Drivers Retirement Costs Closing Last Year s Funding Gap FY Maintenance of Effort Budget Projected Funding Gap 2

3 State Budget Update Legislative Analyst s Office fiscal outlook Budget improved, but continued uncertainty Recession would quickly throw budget from surplus to deficit Governor s Budget Cautioning prudence & placing surplus in the Rainy Day fund Awaiting May Revise New IHSS MOE in place with costs to the County growing Proposed bills to limit the County s ability to contract with community providers 3

4 Federal Budget Update On 3/23/18, the President signed a $1.3 trillion spending bill Funds the federal government through the end of September Increases funding for military and domestic spending Tax Cuts and Jobs Act signed into law on 12/22/17 State & local tax deduction cap Long-term fiscal impact Individual health care mandate eliminated Policy, funding, interest rate, and tariffs/trade uncertainty 4

5 Long-Term Budget Drivers Retirement Costs

6 National Public Sector Pension Costs 6

7 Public Sector Pension Costs Pension Costs Rising Nationally Increase in pension liabilities Change in investment environment (lower bond yields) Trend expected to continue 1937 Act County ACERA Use of General Fund to fund required contributions has increased sharply 7

8 Nationwide State Pension Fund Changes in Actuarial Value of Assets & Liabilities SOURCE: National Association of State Retirement Administrators 8

9 Public Pension Funding Levels National Survey SOURCE: National Association of State Retirement Administrators 9

10 Alameda County Retirement Costs as a Percentage of the General Fund Budget 10% 9% 9.2% 8% 7% 6% 5% 5.1% 4% 3% 2% 1% 0% FY 04/05 FY 05/06 FY 06/07 FY 07/08 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 MOE 10

11 Alameda County Pension Liabilities Current ACERA Unfunded Liability ACERA is 78.1% funded vs. a National Association of State Retirement Administrators median of 73.8% Unfunded liability divided among participating employers and amortized County & ACERA Actions to Prepare for Cost Increases Continue to fully fund our employer contributions County pension designation Reserve for Other Post Employment Benefits Pending Factors Future Discount Rate Decreases Alameda Health System 11

12 Closing Alameda County s FY Funding Gap

13 Alameda County ERAF Losses by Year $500 $450 $400 $350 $300 $250 $200 $150 Total since FY : $6.7 billion $236 $220 $206 $187 $170 $158 $129 $130 $135 $140 $147 $367 $320 $335 $347 $326 $320 $322 $330 $297 $263 $273 $400 $428 $456 $100 $50 $30 $0 13

14 Alameda County Funding Gaps Since ERAF (in millions) Funding Gaps Since ERAF (in millions) Total since FY : $2.1 billion $200 $180 $160 $140 $120 $172.3 $100.6 $155.9 $116.1 $177.6 $152.4 $137.9 $108.5 $100 $80 $77.6 $74.2 $73.9 $92.0 $78.2 $73.6 $88.1 $80.2 $67.1 $65.1 $72.2 $60 $48.9 $52.0 $40 $20 $0 $13.6 $13.3 $5.8 $6.7 14

15 Alameda County Property Tax Dollar Schools 42 Cities 18 Redevelopment 12 Special Districts 13 County 15 Over time, redevelopment agencies share of property taxes should be distributed to other entities. 15

16 FY Budget Balancing FY Final Budget closed a $108.5M gap $40.0M restored as part of new IHSS MOE $44.7M in one-time solutions Use of FMR = $30.8M One-time appropriation reductions = $2.6M One-time revenues = $11.3M $23.8M in ongoing strategies Program appropriation reductions = $11.9M Program revenue increases = $11.9M 16

17 FY Budget Balancing Program Area Net County Cost Reductions (in millions) General Government $22.3 Health Care $19.3 Public Assistance $11.4 Public Protection $13.6 Program Total $68.5 New IHSS MOE $40.0 Grand Total $

18 FY Budget Balancing - Use of Fiscal Management Reward (FMR) Savings Program Area Use of FMR (in millions) General Government $20.5 Health Care $7.0 Public Assistance $ 0.0 Public Protection $ 3.3 Total FMR $

19 Alameda County Maintenance of Effort Budget 19

20 Board- Approved FY Budget Policy Adopt the Final Budget no later than June 30, 2018 Continue the Fiscal Management Reward Program Include revenues from all sources as early in the budget development process as possible Include a 3.5% cost-of-living adjustment for eligible CBO contracts Designate 1% of discretionary revenue to offset cost of County s capital projects and facility maintenance Designate 1% of discretionary revenue for the general reserve 20

21 FY MOE Budget General Fund (in millions) Appropriation $2,862.3 Revenue $2,796.4 Funding gap $

22 FY MOE Budget General Fund ($ in millions) FY FY Inc/ % FINAL MOE (Dec) Change Appropriation $2,750.2 $2,862.3 $ % Revenue $2,750.2 $2,796.4 $ % Funding Gap $0 $65.9 $65.9 FTE Positions* 7, , % *Full-time equivalent positions Note: Totals may vary slightly due to rounding 22

23 FY MOE Budget - General Fund ($ in millions) Program Appropriation Revenue Net Cost FTE General Government $242.1 $158.2 $ Public Protection $749.3 $395.0 $ ,722 Public Assistance $860.2 $762.3 $97.9 2,588 Health Care Services $843.5 $693.7 $ ,531 Subtotal Programs $2,695.1 $2,009.2 $ ,778 Capital Projects $6.0 $1.1 $4.9 0 Contingency/Reserve/ Debt Service/Designations $161.2 $63.0 $ Non-Program Financing $0.0 $723.1 ($723.1) 0 Subtotal Other $167.2 $787.2 ($620.0) 0 Total $2,862.3 $2,796.4 $65.9 7,778 23

24 FY MOE Budget Net Cost Change by Program ($ in millions) Program FINAL Net Cost MOE Net Cost Change % Change General Government $101.7 $83.9 ($17.8) -17.6% Public Protection $321.3 $354.3 $ % Public Assistance $77.6 $97.9 $ % Health Care $136.8 $149.8 $ % Subtotal Programs $637.4 $685.9 $ % 24

25 FY MOE Budget Net Cost Change Non-Program ($ in millions) Program FINAL Net Cost MOE Net Cost Net Cost Change Net Cost % Change Capital $11.6 $4.9 ($6.7) -57.8% Contingency/Reserves/ Debt Service, Designations $75.1 $98.2 $ % One-time use of FMR ($30.8) $0.0 $ % Non-Program Financing ($693.3) ($723.1) ($29.8) 4.3% Subtotal Other ($637.4) ($620.0) $ % Subtotal Programs $637.4 $685.9 $ % TOTAL $0 $65.9 $

26 Net County Cost Change Prior year use of FMR $30.8 Salary & benefits increases due to COLAs $20.2 Other benefits increases $ 6.1 Internal Service Fund costs $11.1 IHSS MOE inflation $ % COLA for CBOs $ % COLA for Alameda Health System $ 1.7 Adult Inmate Medical Care contract $ 2.5 Indigent defense contract $1.0 Net change in other expenditures $9.8 Decreased Trial Court revenue $ 1.9 Net change in other program revenues ($7.5) Discretionary revenue increases ($29.8) TOTAL Major Components of Net County Cost Change (partial list, $ in millions) $65.9M 26

27 FY Discretionary Revenues (partial list, $ in millions) Discretionary Revenue Changes from FY : Property Taxes $23.3 Motor Vehicle - ERAF $ 5.0 Sales & Use Taxes $ 0.6 Interest revenue $ 0.5 Other revenues $ 0.4 TOTAL $29.8M 27

28 Pending Factors Federal and State actions Governor s May Revision Federal budget and policy changes Labor, health, retirement cost increases Economic Downturn 28

29 Budget Development Timeline BWG: FY Funding Gap April 17, 3:00 PM BWG: Reduction Targets April 25, 1:00 PM Governor s Revised Budget May 2018 BWG: Reduction Plans May 21, 4:00 PM Proposed Budget Submitted Early June 2018 Budget Hearings and Adoption Late June

30 FY Maintenance of Effort Budget Presented to the Alameda County Budget Workgroup April 17, 2018 Susan S. Muranishi, County Administrator Melanie Atendido, Principal Analyst Pete Coletto, Principal Analyst