ALAMEDA COUNTY BUDGET UPDATE

Transcription

1 ALAMEDA COUNTY BUDGET UPDATE Presented to the Alameda County Budget Workgroup March 1, 2018 Susan S. Muranishi, County Administrator Melanie Atendido, Principal Analyst Pete Coletto, Principal Analyst

2 Economic Update 2

3 Alameda County Unemployment Rate 7% 6% 5% 4% 3% 2% 3.0% 1% 0% 3

4 Alameda County Median Home Values $900,000 $800,000 $762,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 4

5 Alameda County Assessed Value 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Change in Assessed Valuation 6.7% Source: Alameda County Assessor s Office 9

6 Federal Budget Update On 2/9/18, the President signed into law a two-year budget deal reached by Congress Increases in defense & non-defense spending caps Omnibus spending bill to come in March The President released his FY19 budget request on 2/12/18 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, and interest rate uncertainty 6

7 State Budget Update Legislative Analyst s Office (LAO) fiscal outlook Budget improved, but continued uncertainty Recession would quickly throw budget from surplus to deficit Governor cautioning prudence and placing State surplus in the Rainy Day fund New IHSS MOE in place with costs to the County growing Proposed bills to limit the County s ability to contract with community providers 7

8 Preliminary 5-Year Budget Forecast Presented at January 30, 2018 Alameda County Board of Supervisors Retreat

9 5-Year Forecast Assumptions & Drivers Assumptions: Continued Strong Economy (predicted downturn is pending factor not included in assumptions) Affordable Care Act Remains in Place No Other Major Federal or State Policy Changes No New Unfunded Programs No Major Changes to Labor Agreements Major Drivers: Labor Costs Salary, Benefits & Pension (S&EB) Increased Operating Costs Outpacing Revenue Growth IHSS Cost Shift 9

10 Key Revenue Growth Rates 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 7.00% 4.00% 4.00% 6.50% 3.75% 3.50% 6.25% 3.50% 3.25% 6.00% 3.25% 3.00% 5.00% 5.00% 3.00% 2.50% 2.50% 2.00% 0.00% FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 Projection FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 Measure A Sales Tax Property Tax Prop 172 Sales Tax 10

11 One-Time Budget Balancing Solutions ($ in Millions) $53.0 $49.7 $37.8 $41.3 $44.7 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 Fiscal Management Rewards Other 1-time 11

12 5-Year Forecast Base Case Projected Budget Gap (Millions) $193.2 $163.5 $129.6 $100.3 $67.5 FY FY FY FY FY Assumes No Locally Negotiated IHSS Provider Wage Increase 12

13 Budget Gap - Forecast Comparisons $193.2 $163.5 $167.6 $129.6 $142 $140.7 $58 $68.5 $73 $67.5 $60.2 $91 $83.8 $100.3 $112 $ January 2016 Forecast July 2017 Forecast January 2018 Forecast 13

14 ACERA Actuarial Changes ACERA adopted new actuarial assumptions at their December Board meeting ACERA lowered the discount rate from 7.6% to 7.25% Other changes in actuarial assumptions, such as increasing retiree longevity, will also result in increased employer contributions Based on 2016 actuals, these changes would result in a 379 basis point increase in the employer contributions rate for the County This scenario assumes these new actuarial assumptions would start September

15 Impact of Proposed ACERA Changes The Gross Cost Impact of Proposed New Actuarial Assumptions: FY 2018/19 - $24.3 Million FY 2019/20 - $30.4 Million FY 2020/21 - $31.6 Million FY 2021/22 - $32.9 Million FY 2022/23 - $34.3 Million Based on Segal estimate of 379 basis point increase in County contribution rate 15

16 Pending Factors Federal and State Funding Changes 65% of County budget is State and federal revenue (including Medicaid charges for services) Impact of IHSS MOE change Rising Labor and Retirement Costs ACERA lowered discount rate from 7.6% to 7.25% Economic Downturn 16

17 Budget Process Overview MOE Budget Requests have been submitted CAO reviews (and tweaks if necessary) Department requests are combined with non-department budgets to identify the funding gap Budget Workgroup consensus on distribution of the gap VBB phase Departments submit reduction plans based on assigned targets Proposed, balanced budget is submitted for Board approval Final Approved Budget incorporates Proposed Budget, Final Adjustments, and any Board-authorized changes 17

18 Budget Calendar Key Dates ISF budget requests due January 24, 2018 Last Board meeting for mid-year adj. February 6, 2018 Non-ISF budget requests due February 23, 2018 Budget narratives due March 2, 2018 CBO, Unincorp., Human Impacts due March 16, 2018 Children s Services budgets due March 28, 2018 Early Budget Work Session April 10, 2018 Reduction targets to depts. April 2018 VBB plans submitted by depts. May 2018 Proposed Budget submitted Early June 2018 Final Budget adopted Late June

19 ALAMEDA COUNTY BUDGET UPDATE Presented to the Alameda County Budget Workgroup March 1, 2018 Susan S. Muranishi, County Administrator Melanie Atendido, Principal Analyst Pete Coletto, Principal Analyst