st Quarter Update

Transcription

1 1 st Quarter Update April Dennis Kennedy, CPA, Cuyahoga County Fiscal Officer Maggie Keenan, Office of Budget and Management

2 During the 1 st Quarter of, Cuyahoga County: Appraised 386,789 commercial and residential properties Completed the $20 million renovation to the Huntington Park Garage Processed 113,120 auto and boat titles: an average of 1,257 each day Was actively engaged in nine major road projects in 10 cities and townships Reduced 1,972 pounds of carbon through the UH Bike Share Program, which logged 2,236 miles Adopted 21 children into permanent families Collected more than $52 million in child support on behalf of Cuyahoga County children Processed more than 62,000 applications for benefits - an average of 682 each day including 20,000 applications for food assistance and over 30,000 applications for Medicaid Provided high-quality pre-kindergarten programming to 4,252 four and five-year olds Provided shelter to 2,800 homeless adults and children Adopted 388 dogs and cared for 106 dogs in the County Kennel on an average daily basis Provided workforce development services to more than 6,300 adults and teenagers, including placing more than 900 adults in jobs Completed the tunnel connecting the Huntington Park Garage to the Hilton Hotel Demolished 124 residential and commercial structures Additionally, Trip Advisor, as of early April, shows the County s Hotel, operated by Hilton, ranked #3 out of 38 hotels listed for Cleveland. This shows an improvement of one spot from the 4 th Quarter of

3 Summary The quarterly update is a comprehensive overview of the County s financial status. The process seeks to provide an accurate assessment of how current operations are meeting the objectives affirmed in the biennial budget (R ). General Operating Fund 2017 Budget Estimate 2019 Estimate Beginning Cash Balance $151,010,097 $136,869,099 $136,869,099 $133,457,809 Operating Revenue $360,642,024 $375,654,640 $377,374,548 $374,057,038 Operating Expenditures $348,532,791 $377,435,217 $368,854,767 $371,298,707 Subsidies to Other Funds $26,250,231 $12,073,159 $11,931,071 $12,750,291 Unadjusted Ending Cash Balance $136,869,099 $123,015,363 $133,457,809 $123,465,849 % Balance to Expenditures 36.5% 31.6% 35.0% 32.1% 0.25% Fund 2017 Budget Estimate 2019 Estimate Beginning Cash Balance ($26,192,636) $43,509,878 $43,509,878 $40,858,610 Operating Revenue $118,685,841 $50,484,752 $54,426,932 $53,519,320 Operating Expenditures $13,844,414 $17,977,939 $17,910,000 $15,365,000 Subsidies to Other Funds $35,138,913 $39,727,250 $39,168,200 $38,836,320 Unadjusted Ending Cash Balance $43,509,878 $36,289,441 $40,858,610 $40,176,610 % Balance to Expenditures 88.8% 62.9% 71.6% 74.1% General Fund 2017 Budget Estimate 2019 Estimate (General Operating % Fund) Beginning Cash Balance $124,817,461 $180,378,977 $180,378,977 $174,316,419 Operating Revenue $479,327,865 $426,139,392 $431,801,480 $427,576,358 Operating Expenditures $362,377,205 $395,413,156 $386,764,767 $386,663,707 Subsidies to Other Funds $61,389,144 $51,800,409 $51,099,271 $51,586,611 Unadjusted Ending Cash Balance $180,378,977 $159,304,804 $174,316,419 $163,642,459 % Balance to Expenditures 42.6% 35.6% 39.8% 37.3% HHS Levy Fund (combined) 2017 Budget Estimate 2019 Estimate Beginning Cash Balance $39,132,806 $33,677,235 $33,677,235 $36,620,826 Operating Revenue $234,103,768 $231,755,183 $231,755,183 $231,755,183 Operating Expenditures $75,554,631 $75,787,620 $75,787,620 $75,787,620 Subsidies to Other Funds $164,004,708 $162,578,469 $153,023,972 $164,736,927 Unadjusted Ending Cash Balance $33,677,235 $27,066,329 $36,620,826 $27,851,462 % Balance to Expenditures 14.1% 11.4% 16.0% 11.6% All Funds 2017 Budget Estimate 2019 Estimate Beginning Cash Balance $615,895,118 $681,647,718 $681,647,718 $691,297,928 Operating Revenue $1,497,646,012 $1,489,031,875 $1,475,163,036 $1,465,571,971 Total Expenditures $1,431,893,412 $1,576,748,413 $1,465,512,826 $1,476,678,221 Unadjusted Ending Cash Balance $681,647,718 $593,931,180 $691,297,928 $680,191,678 2

4 General Operating Fund The General Operating Fund is the main operating fund in the County budget and the County s primary unrestricted fund. As such, the County s financial strength is positively correlated with the health of the General Operating Fund and the County s Financial Policies seek to ensure that the General Operating Fund remains on strong financial footing, so the County can meet its obligations to its citizens. General Operating Fund 2017 Budget Estimate 2019 Estimate Beginning Cash Balance $151,010,097 $136,869,099 $136,869,099 $133,457,809 Operating Revenue $360,642,024 $375,654,640 $377,374,548 $374,057,038 Operating Expenditures $348,532,791 $377,435,217 $368,854,767 $371,298,707 Subsidies to Other Funds $26,250,231 $12,073,159 $11,931,071 $12,750,291 Unadjusted Ending Cash Balance $136,869,099 $123,015,363 $133,457,809 $123,465,849 % Balance to Expenditures 36.5% 31.6% 35.0% 32.1% As of the 1 st Quarter, the General Operating Fund is projected to end the year with an operating deficit defined as expenditures greater than total revenue of about $3 million. Please note that the calculation of expenditures includes both the operating expenditures in the General Operating Fund and the transfers to support operating expenditures in the various special revenue funds. Revenue is projected to total $377 million in, which is nearly $2 million, or 0.5%, higher than what was anticipated in the budget. The increase over budget can largely be attributed to a $2 million increase in investment earnings following the restructure of the portfolio in late Expenditures are projected to total just under $381 million, which is $9 million, or 2%, under approved appropriation levels. Please note that the current approved budget includes $14 million in carryover appropriation tied to contract balances from Revenue Discussion General Operating Fund revenue is projected to total $377 million. This is 0.5% higher than what was estimated in the budget. Shortfalls in both Sales Tax and Charges for Services revenue are offset by increases in revenue generated from the Local Government Fund, Investment Earnings, and other Miscellaneous sources. The sections below discuss the performance of each category of revenue to the County s General Operating Fund. Sales Tax The County s Sales Tax revenue is split between the General Operating Fund and the 0.25% Fund, a separate subfund in the General Fund (please see discussion beginning on page 17). Through the 1 st Quarter of the year, the County has collected $63.7 million in combined sales tax revenue. This is a 10% decrease from what was collecting during the same 3

5 period in 2017 and is a 1% decrease when comparing this year s collections against what was collecting last year from only non-medicaid Managed Care Organization (MCO) sales tax. The County stopped receiving MCO sales tax in October Combined Sales Tax revenue is projected to total $246 million in. This is $4 million (2%) less than what was expected in the budget. As previously stated, through March, Sales Tax collections are down 1% YoY, but there was a rebound with April s collection: through the first four months of the year, Sales Tax is up 1% over the same time last year. The 1 st Quarter estimate for Sales Tax assumes that year end collections will be 1% greater than what was collected in non-mco Sales Tax in The portion of Sales Tax revenue that is allocated to the General Operating Fund is estimated to total $196 million in, which is approximately 52% of the Fund s total revenue (based on 1 st Quarter estimates). In previous years, Sales Tax represented more than 60% of total General Operating Fund revenue. The estimate is $10.2 million under the budget, but please note that the budget for sales tax reflected the transfer of $6.5 million from the 0.25 Fund. This transfer took place but posted to Miscellaneous revenue so as not to co-mingle permissive and additional sales tax collections. Excluding this change in reporting, the sales tax estimate is 2% under budget. Sales Tax revenue to the General Operating Fund is projected to increase by approximately $350,000 in This increase is due to an assumed 0.5% rate of growth, offset slightly by the fact that the estimate includes an $800,000 repayment from the 0.25% Fund for debt service on the Q Transformation Sales Tax is projected to total $199 million: this is based on an assumed 0.5% growth rate, offset by a $5.4 million increase in debt service on the 2014 Various Purpose Bonds. There are four outstanding debt issues that are backed by the County s Sales Tax. As required by the terms of the respective indentures, the County s Sales Tax revenue is distributed from the State to the trustee for all the County s Sales Tax Revenue Bonds. The trustee withholds what is required for debt service on three of the four issues and then forwards the remaining Sales Tax to the County. o 2014 Various Purpose this debt is repaid solely with sales tax revenue. Debt service increased by approximately $4 million in to $6.5 million and increases again to $11.9 million in 2020 through Debt service decreases for one year in 2025 to $5 million and then remains at $11.8 million 2026 through maturity in These bonds supported various capital projects, including a portion of the Enterprise Resource Planning project (please see attachment for details on the 2014 Issue). 4

6 o o 2016 HPG this debt is backed by the County s sales tax and, as such, is withheld by the trustee from the monthly distribution, but the General Fund is made whole by a transfer of cash from the Huntington Park Garage (HPG) Fund to the General Fund. The HPG Fund will ultimately cover the cost of annual debt service payments which increased to $740,000 in from $380,000 in Debt service payments will increase to $1.5 million in 2019 and remain at that level until the bonds mature in The HPG Fund generates revenue from parking fees, which will increase in due to the conclusion of the renovation work in the garage Q Transformation this debt is repaid by several sources including the Cleveland Cavaliers, City of Cleveland admissions taxes, the 1.5% bed tax authorized by ORC (H)(2), and the General Fund (0.25% Fund). Total debt service is withheld by the trustee and the County is made whole by way of cash transfers from the 0.25% Fund to the General Operating Fund equal to the bed tax contribution and from the 0.25% Fund to the General Operating Fund equal to the County contribution (R-0068). When the Cavaliers make payment in June, the County will be refunded what was advanced from the Sales Tax in the first half of the year. Please note that the Supreme Court of the United States (SCOTUS) heard oral arguments on April 17, in South Dakota v. Wayfair, Inc., which could significantly impact Sales Tax revenue. At issue in this case is whether the Commerce Clause prohibits collecting sales tax from retailers that do not have a physical presence in the State. This prohibition is based on the 1967 decision in Nat l Nellas Hess. V. Dep t of Rev. of Ill but is inconsistent with subsequent decisions. Overturning Hess would allow states and counties to collect sales tax from certain online retailers, likely based on the substantial nexus test. Should the SCOTUS abrogate the physical nexus requirement, Cuyahoga County sales tax revenue could increase by as much as $7.6 million/year. This estimate is based on a U.S. Government Accountability Office (GAO) s November 2017 report to Congress which estimates that Ohio would gain between $288 and $456 million per year if all online purchases were subject to sales and use tax. According to the State s Legislative Services Commission, Cuyahoga County has received an average of 2% of Ohio s sales and use revenue in the past few years. Using the mid-range of GAO s Ohio estimate, 2% percent of $372 million equals $7.6 million. Based on this same analysis, Greater Cleveland Regional Transit Authority, which lost approximately $20 million annually in MCO Sales Tax, would see an increase of $6.1 million per year. 5

7 Property Tax The County s Fiscal Office, through the County Treasurer, collects approximately $2.6 billion annually in property tax revenue, the majority of which is distributed to school districts, libraries, and municipalities. Approximately 15% of total taxes collected are retained by the County, 35% of which is revenue to the General Operating Fund. Property Tax revenue is estimated to total $13 million: an increase of $500,000 from what was estimated in the budget. The estimates assume no change to property tax revenue based on the Sexennial Appraisal, which will be completed in Property Tax revenue is projected to increase by $5.8 million due to the decrease in debt service on the Series 2009 General Obligation Bonds. General Obligation Bonds are supported by a portion of the County s 1.45 millage: 0.95 of that is allocated directly to the Bond Retirement Fund, which captures the activity of the County s General Obligation Bonds. Annual debt service on the Series 2009 Bonds totals $5.2 million in years 2020 through 2024 and increases to $12.3 million in The Series 2005 Bonds mature in 2020, therefore property tax revenue will increase again in 2021 by $7.9 million. In 2023, debt service on the Series 2012 Bonds decreases by approximately $1.7 million, which will increase property tax revenue (a ssuming no change to values) by the same amount. 6

8 Fines and Forfeitures Fines and Forfeiture revenue is projected to total $8.3 million, just $65,000 (0.8%) less than what was assumed in the budget. The 2019 and 2020 estimates assume no change in the total collected. This revenue derives from costs and fees collected in the four County Courts and the 8 th District State Court of Appeals, which has single jurisdiction in Cuyahoga County. Revenue, therefore, is largely dependent on the number of filings with the clerk. The Clerk of Courts serves as the Clerk for the Court of Common Pleas, Domestic Relations Court, and the 8 th District Court of Appeals. By statute, Juvenile and Probate Courts serve as their own clerk. Costs are collected as cases are disposed. Revenue collected was decreasing over the last several years, but an uptick in filings yielded an additional $1.4 million in Fines and Forfeiture revenue in o o o Court of Common Pleas Civil and Criminal filings totaled 8,674 through the 1 st Quarter of, a 2% increase over the number of filings during the same period last year. After years of persistent decreases, civil filings in the Court increased 3% in This is driving the anticipated increase in revenue over last year. Criminal filings had also been decreasing but rose 10% (approximately 1,000 cases) in 2016 and another 9% (again, approximately 1,000 cases) in In contrast to civil filings, not all costs are collected on criminal cases since most defendants are indigent. An increase in criminal cases presents a financial burden to the County without a corresponding revenue source. Cuyahoga s Court of Common Pleas is by far the busiest Court in the State filings were more than double those in Hamilton County and 51% greater than those in Franklin County. In 2017, Cuyahoga County filings were 65% greater than those in Franklin County. Domestic Relations Court Filings in Domestic Relations Court have been decreasing steadily since Filings through the 1 st Quarter are down 5% from the same period in 2017 and 2017 filings were down 1% from the previous year. Juvenile Court Filings decreased 15% in the first three months of the year from the same period last year. Unruly cases, which represented 6% of total filings in the 1 st Quarter of 2017, are down 90% through the 1 st Quarter of. This results from the Court s diversion efforts and programming to divert juveniles from official court action. Data show that rehabilitation efforts are more likely to be successful if juveniles are diverted from official court action. Delinquency and custody cases are both down approximately 28% from 2017, but there has been a 17% increase in abuse, dependency, and neglect cases in (please see the discussion on Intergovernmental Revenue on page 7 for more information). Charges for Services Charges for Services revenue is projected to total $71 million in, which is $5.6 million (7%) under the budget. The budget assumed $1.7 million in new revenue generated by the Regional Prisoner Project. Since budget adoption, the cost to renovate the old kitchen in Jail I into dorms has been estimated to total $3.1 million and the estimated project completion date has been pushed back to September. The renovated area will be able to house between 120 and 180 prisoners, at a cost of $99/day/prisoner to the municipalities. The revenue estimate assumes a mid-september start date and an average daily population (ADP) of 100 for a total of $745,000. The 2019 and 2020 revenue estimates assume an ADP of 120 for a total of $5.4 million, which is $1.6 million more than what was assumed in the Adopted Budget for 2019 and

9 The Charges for Services budget also assumed an additional $1 million generated by the enforcement of a $50 fine for failure to comply with the County s rental property registry; Ohio Revised Code empowers the County Fiscal Officer to assess a fine between $50 and $150. Postcards are being mailed to property owners in April notifying them of the registration requirement and the fines will be assessed for failure to comply. The 2019 and 2020 estimates assume that the compliance rate will increase, reducing revenue generated to $200,000 in each year. The 2019 estimate is projected to increase by $1 million due to the Regional Prisoner Project operating at full capacity all year, offset by a decrease in revenue generated by the Board of Elections. This reflects the ability of the County to charge political subdivisions for certain costs (Ohio Revised Code , , (D)) associated with elections only in odd-numbered years (which posts the following year). The 2020 estimate increases to $75 million for this reason. Local Government Fund Revenue derived from the Local Government Fund (LGF) is projected to total $19 million in, which is $1.1 million (6%) more than what was estimated in the budget. The budget was calculated based on the allocation from the State. The LGF is supported by 1.68% of general tax revenue collected by the State. The 2019 and 2020 estimates assume a 0.5% and 1% decrease, respectively, due to the reduction of the amount of tax revenue directed to the LGF from 1.68% (July 2017 June 2019) to 1.66% (July 2019). Recently introduced Ohio House Bill 538 proposes to increase the share of revenue allocated to the State s Local Government Fund to 3.53% beginning July 1, Were this to pass, Cuyahoga s share of the LGF would increase to approximately $39 million on an annual basis. This bill was referred to the Ways and Means Committee March 13,. The last time Cuyahoga s LGF revenue was that high was in 2008 ($38 million). Other Intergovernmental Other Intergovernmental revenue is projected to total $17 million in, which is $1 million (5 %) over the budget estimate. This reflects the reimbursement received from the State Public Defender s Office for indigent defense, trial transcript, and guardian ad litem expenditures. The current rate of reimbursement is 45%, though it has fluctuated over the years: from 35% in 2013 to 40% in years , to 48% in years 2015 and Ohio Revised Code established a reimbursement rate of 50% of as much is available. The State s FY09 Biennial Budget (HB69) projected the reimbursement rate would be 35% based on available funds. Please note that on April 27 th (after the 1 st Quarter numbers were complete), the State reduced the rate of reimbursement to 42% effective July. Should the rate remain at 42% through December, the impact to revenue would be a loss of $250,000 in and $700,000 in

10 Through the 1 st Quarter, assigned counsel expenditures in the Court of Common Pleas totaled $1.8 million, a 17% increase over the same period last year. This is reflective of the continued increase in criminal case filings in the Court of Common Pleas, where most criminal defendants are indigent. Assigned counsel expenditures in Juvenile Court totaled $365,000 in the first three months of the year: a YoY increase of 11%. Guardian ad Litem expenditures in Juvenile Court totaled just over $475,000 in the 1 st Quarter of, an increase of 33% over This is due to the increase in abuse, dependency, and neglect cases, which based on 1 st Quarter filings are projected to increase 20% over All juveniles in A/D/N cases are assigned a Guardian Ad Litem. Another factor driving the estimated 21% increase in Guardian ad Litem assignments is the increase in the number of children in the County s permanent custody, which currently totals 525. All children in the County s permanent custody are required to have an annual review in the Court and are assigned a Guardian ad Litem. Please see discussion regarding child welfare placements on page 21 for more information. The increase in spending on indigent defense and Guardian ad Litems will have a corresponding increase in General Fund revenue from the State Public Defender s Office. Investment Earnings Investment Earnings are estimated to total $13.1 million in, which is $2 million (18%) more than what was estimated in the budget. In November 2017, after the budget was submitted, the County s Investment Manager restructured the portfolio increasing the average yield from 1.4% to 1.7%. Presently, the value of the County s investment portfolio totals $744 million. At this time, the 2019 and 2020 estimates assume no change, but the future year estimates will be re-evaluated at 2 nd Quarter as investments mature and are reinvested. 32% of the portfolio matures in, which could benefit the County as interest rates have been rising. Another 13% matures in 2019, but the remaining 55% doesn t mature until 2020 leaving the County potentially vulnerable to future dips in the market due to the inability to maximize investments. On April 11, the Ohio Senate passed HB251, which increases from five to 10 years the maturity period of investments. Currently, the rate on a U.S. Treasury three-year maturity is 2.47% and the rate on a 10-year maturity is 2.81%. While seemingly not a substantial difference, this variance could change in time and this legislation affords the County the opportunity to increase the length of maturity for a portion of its investment portfolio (e.g. reserves) which could substantially increase investment earnings, the majority of which are revenue to the General Fund. Investment earnings have steadily increased since 2014 and this legislation may allow us to continue that increase by working closely with the County s Investment Manager to ensure that the County s inactive moneys are maximized. At the time of writing, this bill had not yet been signed and will be effective 90 days after signature. 9

11 Miscellaneous revenue is projected to total $39 million in, which is $13 million (50%) more than what was estimated in the budget. The variance from budget is driven by: o A change in reporting that captures the $6.5 million transfer from the 0.25% Fund to the General Operating Fund from Sales Tax to Miscellaneous so that the amount collected from the permissive tax is not over-stated. o A nearly $3 million increase in the amount available to transfer in Unclaimed Funds from what was expected to be transferred in the budget. Ohio Revised Code 9.39 authorizes the County to transfer funds that go unclaimed such as uncashed checks after five years into the General Fund to be used for any lawful purpose. The County has not made this transfer since 2005, resulting in a large balance available to be transferred. Please note that transferring these funds to the General Fund does not release the County of its liability to pay should there be a claim. The 2019 and 2020 estimates assume a transfer of $350,000 in each year in unclaimed funds, which is half of what went unclaimed in both 2011 and 2012 (averaging $1.3 million) and the average of what went unclaimed in years ($330,000). o A $2.5 million transfer from the 0.25% Fund, which represents both the County s and Destination Cleveland s contribution toward debt service on the 2017 Sales Tax bonds issued for the Q Arena Transformation project. Annual debt service in years includes a contribution from the County s 0.25% Fund ranging between $1.4 million and $2 million; s contribution totals $1.5 million. In 2017, the County issued $141 million in Sales Tax Revenue Bonds in support of the Transformation project. In accordance with the terms in the indenture, debt service is being withheld from the County s monthly distribution from the State for the 1% sales tax, which is revenue to the General Operating Fund. To make the General Operating Fund whole, a transfer from the 0.25% Fund, as anticipated in the project budget, was necessary. This transfer satisfies the obligation. Annual debt service in years includes a contribution from Destination Cleveland ranging between $1 million and $3.8 million. This contribution is from the 3% bed tax levied under ORC (A)(1) that is transferred, less administrative fees, to the convention and visitors bureau (Destination Cleveland). The County has been withholding Destination Cleveland s debt service contribution from its bed tax distribution and retaining it in the 0.25% Fund. This cash needs to be transferred to the General Operating Fund, which advanced funds to debt service. o A $1.3 million repayment from the Road & Bridge and Sanitary Sewer Funds of the advance made by the General Operating Fund to purchase the Harvard Road Garage for use by the Department of Public Works. The total project is approximately $20 million, 90% of which will ultimately be supported by the Road & Bridge (20%) and Sanitary Sewer Funds (70%), but over a period of 20 years. These repayments are reflected in the future year estimates. Expenditure Discussion Expenditures are projected to total $381 million in, which is $9 million (2%) under the budget of $390 million. Please note that the current budget includes appropriation carried over from the previous year to support encumbrances certified in 2017 that will be paid out in, which increased appropriation levels from the $375 million approved by Council via R by $14 million. The current expenditure estimate of $375 million includes $12 million in subsidy transfers to other County funds (referred to in the Schedules as Other Financing Uses ). The General Operating Fund supports programs and services in nearly every facet of County government, supporting agencies under the authority of the County Executive, those under other elected officials (e.g. courts, Prosecutor), and those controlled by independent Boards and Commissions. General Operating Fund expenditures are budgeted by agency/department, but for reporting purposes are also grouped into six programs based on the type of activity they support. The projections and variances from budget will be discussed based on programs. 10

12 The PR6 report included in the attached Schedules details the projections by agency and department. Please note that the projections for almost every agency and department are inflated by an increase in the employer s share of employee healthcare from what was anticipated in the budget. Since Open Enrollment begins after the budget is submitted, what is included in the budget for both the employer and employee s contributions toward healthcare costs is based on a set of assumptions from the County s Benefits Consultant. The results of 2017 s Open Enrollment differed from what was assumed would happen following the elimination of one of the medical providers. More employees elected to shift to the higher cost provider than expected. As a result, the employer s contribution which is reflected as an expense in agency/department budgets is higher than expected. At this time, the Fiscal Office does not recommend changing the rates as we do not have enough claims data to determine whether revenue generated will be insufficient to cover costs. The Fiscal Office will continue to review and analyze each month and will forward a recommendation regarding the rates to the Department of Human Resources later in the year. General Government Program expenditures include the County Executive, County Council, the Fiscal Office, the Law Department, the Board of Elections, the Department of Information Technology, and the Department of Human Resources. Development expenditures are projected to total $72 million in : $7 million (8%) under approved appropriation levels. This surplus is attributed to: o Information Technology - $3 million (14% of budget) reflects vacancies in the Department and anticipates that much of the Department s $4 million in prior year carryover will be liquidated (unpaid) in. s currently anticipated a total of 136 FTEs in, which is two more than 2017 and five fewer than The Department s 2020 budget anticipated an increase in staffing levels to 153 FTEs following the migration of the ERP costs from the capital budget to the operating budget. Expenditures are expected to increase from $19.6 million in 2019 to $23.5 million in 2020 because of this migration: at this time no savings from the implementation of the ERP are reflected in the projections. o County Headquarters - $1.7 million (19% of budget) anticipates that a portion of the cost associated with the Headquarters Building will be allocated to the budgets of agencies and department budgets that are not supported by the General Fund. This is an allowable reallocation of overhead costs. In previous years, this cost had been charged to the other budgets and reflected as revenue in the General Fund; to prevent the cost from being overstated, the costs will be reallocated from the General Fund to the other budgets. No revenue is reflected in the General Fund estimates for Headquarter charges. o Miscellaneous Obligations $650,000 (19% of budget) predominantly driven by the anticipated liquidation of prior year encumbrances, which will increase available appropriation. As contracts are liquidated, OBM will submit fiscal items to Council to request appropriation reductions, but approval of those items is not reflected in the variance. o Fiscal Office $530,000 (4% of budget) largely reflects a combination of position vacancies and position reductions in anticipation of the implementation of the Enterprise Resource Planning (ERP) system, which will replace both the financial and budget systems. o Treasury - $500,000 (13% of budget) driven by a combination of a slight surplus in personnel due to new positions included in the budget that are not filled ($145,000) and contracts/professional services ($350,000). o Board of Elections - $450,000 (3% of budget) fewer temporary employees and printing fewer ballots. Ohio Revised Code (B) authorizes the County Board of Elections to print ballots on demand - in numbers equal to 5% 11

13 the number of registered voters that voted in the last similar election. In prior years, out of an abundance of caution, the Board had been printing more than the required 5% but now feel comfortable printing fewer, resulting in an anticipated surplus of $250,000. Please note that SB135 passed the Senate and is being transferred to the House for consideration. This legislation would provide counties with funding for voting equipment; Cuyahoga s share would total $10 million in This calculation is based 50% on a tiered system that groups counties according to population and the remaining 50% it is based on actual population. So, for the first 50%, Cuyahoga County would be grouped with Franklin and Hamilton and all three counties would get the same allocation. For the remaining 50%, Cuyahoga would receive more than Hamilton and slightly less than Franklin. Justice & Public Safety This program captures the cost of the County s four courts, the 8 th District State Court of Appeals, the Prosecutor s Office, the Office of the Public Defender, the Clerk of Courts, the Medical Examiner s Office, the Sheriff s Office, and the Department of Public Safety and Justice Services. Justice and Public Safety expenditures represent more than 70% of total General Operating Fund expenditures. The County Jail, which housed an average daily prison population totaling 2,294 in the 1 st Quarter of, is the largest single spend: totaling an estimated $70 million in. Justice and Public Safety spending is projected to total $269 million in, which is just $700,000 (0.2%) under budget. Variances from budget include: o Common Pleas Court $350,000 (0.7%) over budget driven solely by benefits/employee healthcare o Juvenile Court $990,000 (3%) over budget results from shifting staff from other funds to the General Fund budget ($400,000) and benefits ($540,000). The Court is working on several cost-saving initiatives to reduce expenditures and operate within existing appropriation levels. The current projections are reflective of the fact that there is little data to evaluate the effectiveness of these efforts, but it is anticipated that the spending projection will be less at 2 nd Quarter. The Court has already made substantial improvements in overtime in the Detention Center following changes in scheduling. Through 1 st Quarter, overtime hours have decreased 10% from the same period last year. 12

14 o Sheriff s Office - $1.5 million (2%) under budget driven by surpluses in salaries, an anticipated decrease in the cost of food in the jail, and an anticipated decrease in the cost of medical services provided outside of the jail. The surplus in salaries of about $700,000 despite the increase in overtime worked in the 1 st Quarter of from the same period last year. Food costs are projected to be 8% under what was spent last year, and outside medical is projected to be 7% under what was spent last year. These decreases are despite a 6% increase in the average daily population (ADP) in the County Jail. Outside medical expenses have decreased dramatically since the County partnered with MetroHealth for the provision of medical services in the Jail. In 2016 the County spent $1.3 million on outside medical and $530,000 in The number of runs for outside medical have been reduced through a combination of improved medical management, the build-out of the clinic in the Jail that enables the County to provide more services in-house, and the certification of medical providers in the Jail to provide medically assisted drug treatment. Development Development captures activity in the Departments of Development, Regional Collaboration, and Sustainability. Development expenditures are projected to total $3.3 million in, which is $300,000 (8%) under budget. The surplus is reflected in the Department of Development s contracts budget, at this time there has been no defined use for approximately $200,000, and in the Department of Regional Collaboration s budget because both approved positions in this budget have been vacant all year and are expected to be filled in May. Social Services This program includes expenses attributed to the Veterans Services Commission (VSC). In accordance with Ohio Revised Code , the VSC is provided an annual budget that is not to exceed 0.25 mills. The current projection for the VSC totals $6.9 million, which is $270,000 (2%) under budget. The surplus is largely in the budgets for contracts & professional services and client services, the latter of which reflects payments on behalf of or to clients. In response to consistent under-spending in the budget for the VSC, County Council approved Section of the County Code, which requires the year-end surplus in the budget to be appropriated the following year in the Veterans Services Fund, which is allocated at the Council s discretion. The currently projected surplus of $170,000 is reflected as a 2019 expense in the General Operating Fund as a subsidy to the Veterans Services Fund. There is no subsidy projected in 2019 for the Veterans Services Fund because the 2019 estimate for the Veterans Services Commission reflects the total amount to which the Commission entitled and does not assume a surplus. Should there end up being a surplus in 2019, it will be reflected as a General Fund subsidy expense in

15 Health and Safety General Operating Fund expenses dedicated to Health and Safety are reflected in the Department of Public Safety and Justice Services CECOMS division, which manages and operates the County s Wireless 911 call center. Expenditures are projected to total $427,648 in, which is 14% under the budget of $495,784. This surplus is largely driven by a decrease in spending in contractual and professional development services. Miscellaneous Miscellaneous expenditures are those that do not fall into the other program areas. The largest expenditure in this program is the General Fund contribution toward the Department of Public Works Capital Improvement Plan (CIP) for the Facilities Division, which includes projects to maintain the County s owned and operated buildings. Miscellaneous spending is projected to total $16.7 million in, which is $950,000 (5%) under the budget. o $7.3 million of total expenditures are attributed to the CIP. Based on the current spending plan, it is anticipated that the full General Fund contribution will be needed to support project activity in. o $5 million of total expenditures are attributed to legal settlements. In the 1 st Quarter of the year, the County made a $4.5 million in payments to three individuals wrongfully convicted and incarcerated. o $2.8 million of total expenditures are attributed to miscellaneous obligations of the County, including the transfer of reimbursements owed to the City of Cleveland for indigent expense projections ($750,000 in ), the transfer of cash to the 27 th Pay Reserve (for the 27 th pay period that happens once every 11 years), and $350,000 for pay equity. Please note that the Executive s Recommended Budget included $3 million in each year (inflated in future years by 2% each year) for equity adjustments to non-bargaining salaries. This was allocated $700,000 to the General Fund and $900,000 in the HHS Levy Fund. During the amendment process, Council reduced the budget by $350,000 in anticipation of savings from the voluntary furlough program, which began in mid-april and runs through mid-november of. To reflect the impact of the savings, the Miscellaneous Obligations was reduced by $350,000. The 1 st Quarter projections assume the full cost of the equity adjustments, assuming they will be retroactive to January 1 st, and $350,000 in savings associated with the voluntary furlough program. To date, 34 employees have signed up to participate in the voluntary furlough. The larger agencies, such as the Sheriff s Office, Public Works, and Health and Human Services, opted out. Subsidies to Other Funds General Fund subsidies to other County funds are projected to total $12 million in, which is $140,000 (1%) less than what was included in the budget. Notable variances from budget include: o Centralized Custodial $2 million under budget A $2 million subsidy was planned in the budget for the Centralized Custodial Fund, which captures the activity of the Facilities division of the Department of Public Works. This Fund generates revenue by way of charges to agencies and departments based on building costs and service utilization. The surplus results from a substantial credit that will be processed in to reconcile 2016 charges. This credit means that the actual 2016 costs were less than the estimates that were charged to agencies and departments each month. Though we do not yet have the final space maintenance charges for 2017, an analysis of total Facilities costs indicates that there will be another credit (not as large as 2016) in Again, this means that what is being charged to agencies and departments 51% of which impacts the General Fund and 21% of which impacts the HHS Levy Fund is too high. Please Note: the projections for space costs in the agencies and budgets have not been adjusted to reflect the credit. Instead, for simplicity s sake, the subsidy was reduced to show the impact on General Fund cash. A subsidy will be processed to Custodial as planned in, but once the 2017 reconciliation is provided by the Department of Public Works there will be a corresponding offset in the operating budgets. The net impact will be a savings to the General Fund. 14

16 o Gateway (Series 1992A & 2010C) Debt Service - $530,000 over budget The County s contribution toward Gateway debt service is offset by both admissions taxes and a bed tax contribution from Destination Cleveland, the latter of which is calculated annually based on the prior year collections. The agreement with Destination Cleveland that established the bed tax contribution was amended as part of the Q Transformation Plan and the bed tax revenue was reallocated to support debt service on the bonds issued in support of that project. The final payment of bed tax dollars for Gateway was calculated after the County had made its required pledge payment in, therefore it will offset the 2019, and not the, payment. As that was the final payment, the 2020 pledge is expected to mirror. These bonds mature in o Regional Crime Lab - $1.6 million over budget The subsidy is projected to total $4.4 million in, which represents virtually no change from In this case, OBM acknowledges that the budget amount submitted for this subsidy was incorrect. o Animal Shelter - $300,000 over budget Expenditures are expected to total approximately $2 million in, which is on par with the prior years. Last year, however, revenue generated was insufficient to cover expenditures and the fund ended the year with a negative cash balance totaling $200,000. This shortfall needs to be addressed in and the Fund does not bring in enough revenue to cover its costs, which is why the subsidy was required beginning in Shelter operations are also supported by donations, reflected in the Dick Goddard Fund. This Fund is projected to end the year with a cash balance of approximately $200,000, which could be drawn down to minimize the increase in the General Fund subsidy over budget. o Brownfield (Series 2010A) Debt Service - $690,000 under budget At the end of last year, OBM completed a thorough review of the trust accounts related the loans that were issued with the proceeds of this bond issue. The result was the identification of revenue that had not been properly applied to the debt service revenue account and remaining bond proceeds that, combined, eliminated the need for a pledge from the County in. Based on an analysis of loan repayments, the 2019 and 2020 debt service payments are projected to total $250,000 and $1 million, respectively. o Commercial (Series 2010B) Redevelopment Debt Service - $400,000 over budget The budget was reduced to reflect the impact of the County s Investment Manager taking over active management of the investment of the cash in the various debt accounts held with the trustee banks. It was unknown at the time how those earnings would be applied. Thus far in the year, only accounts held with one of the trustees have been taken over by the Investment Manager, but this one change has already yielded an additional $500,000 in investment earnings. This will offset debt service, not on the Commercial Redevelopment bonds, but on the Medical Mart bonds and the Hotel Certificates of Participation. If the Investment Manager were to assume responsibility for the accounts held with the other trustees timely, it is expected that the County could generate additional investment earnings. Reserves on Balance There are several reserves on balance in the General Operating Fund, including: o o o Bond Guaranty - $1.1 million The County is contractually obligated to maintain an annual reserve for the debt service on the Flats East Bank project. Police HQ Project - $1.7 million This represents the estimated remaining cost of the purchase and renovation of the Cleveland Police Headquarters building, adjacent to the Cuyahoga County Justice Center. The project is estimated to cost $9.3 million to purchase and $6.2 million for build-out. Carryover - $3 million Estimate for contract balances that will be paid in Effective May 2016, the Fiscal Office changed the policy vis-à-vis contract encumbrances to only certify what is needed in the current fiscal 15

17 year (which for the County is a calendar year), as opposed to the past practice of certifying 12 months, which often overlapped years. This policy was changed to comply with State Code and has significantly decreased annual carryover balances. Since certification amounts are based on an estimate, it is not likely that carryover can be eliminated entirely. o o Enterprise Resource Planning (ERP) Project $13.5 million The County has allocated $25 million to the design and implementation of an ERP, with several phases going live in the second half of. Approximately $430,000 was spent in 2016 and $3.5 million was spent in Through the 1 st Quarter of $725,000 has been spent and it is estimated that a total of $13.5 million will be spent by year end. The balance should be spent by the end of This reserve reflects the balance of the $25 million that will be spent in Beginning in 2020, all ERP-related expenditures (e.g. personnel, system maintenance) will migrate to the operating budget. Please note, according to budget presented by the ERP Team to Council in the April 24 th Finance & Budget Committee meeting, approximately $4 million was identified as contingency or unallocated. Should the contingency not be drawn on and additional change orders not needed, the reserve and 2019 estimate could be overstated. Any dollars that remain unspent from the $25 million allocation increase the General Fund cash balance. Harvard Garage Project - $17.1 million This represents the outstanding costs associated with the rehabilitation of the Harvard Road Garage for use by the Department of Public Works, specifically Sanitary and Road & Bridge divisions. The total project is approximately $20 million, $3 million of which was for the purchase of the property, which took place in the first half of. It is anticipated that this project will result in future cost savings associated with the sale of existing facilities and fuel. The project is supported by an advance for the General Fund, with repayment coming from the Sanitary Sewer Fund ( 70%) and Road & Bridge Fund (20%), totaling $1 million and $300,000 per year, respectively. 0.25% Fund The 0.25% Fund is a subfund of the County s General Fund that captures the activity associated with the additional sales tax levied by the Board of County Commissioners in 2007; this additional tax sunsets in These dollars are legally unrestricted and can be used for any lawful General Fund purpose. This Fund captures costs associated with the Global Center for Health Innovation, the County s Hotel, and the County s contribution toward the Q Arena transformation. 0.25% Fund 2017 Budget Estimate 2019 Estimate Beginning Cash Balance ($26,192,636) $43,509,878 $43,509,878 $40,858,610 Operating Revenue $118,685,841 $50,484,752 $54,426,932 $53,519,320 Operating Expenditures $13,844,414 $17,977,939 $17,910,000 $15,365,000 Subsidies to Other Funds $35,138,913 $39,727,250 $39,168,200 $38,836,320 Unadjusted Ending Cash Balance $43,509,878 $36,289,441 $40,858,610 $40,176,610 % Balance to Expenditures 89% 63% 72% 74% Revenue Discussion Revenue is projected to total $54 million in : $4 million (8%) over what was assumed in the budget. This surplus is driven by a change in reporting and is offset by an increase in expenditures. The primary source of revenue to this Fund 16

18 is Sales Tax, which is projected to total just short of $49 million in, which is nearly $6 million over what was estimated in the budget. The revenue estimate reflected the transfer of $6.5 million in sales tax generated by the additional tax to the General Operating Fund; this was instead processed as a cash transfer, which is reflected as an expense in the Fund. Please Sales Tax discussion beginning on page three. This Fund also derives revenue from both the County and City Bed Tax, the former of which is authorized by Ohio Revised Code Of the total collected, 3% (less administrative fees) is allocated to the Convention & Visitors Bureau (CVB) by statute ( (A)(1)), 1.5% is allocated to the CVB by way of Agreement for capital improvements ( (D) & (H)(2)), and 1% is retained by the County and allocated to the County s Convention Center ( (I)(3)). Through the 1 st Quarter of the year, collections from the County s bed tax totaled $4.7 million, which represents no change from the same period last year. The 1% tax levied pursuant to (I)(3) is deposited into the 0.25% Fund and is used to support debt service on the $343.4 million in revenue bonds issued in 2010 to support the Global Center for Health Innovation (GCHI) and the Huntington Convention Center (then known as the Medical Mart). A portion of the 1.5% tax levied pursuant to (D) & (H)(2) is being retained by the County effective in to support debt service on the Q Arena Transformation project. The CVB agreed to contribute a total of $44 million between 2017 and 2034 to support the project. The, 2019, and 2020 amounts being retained for debt service from the 1.5% total $1.75 million. Finally, the budget assumed a transfer of $1 million from the Cuyahoga County Convention Facilities Development Corporation (CCCFDC) based on the 2017 operating surplus. The County provides the CCCFDC with $5.4 million per year in operating revenue. This payment is reflected in the operating budget of the 0.25% Fund (identified as GCHI/Convention Center on the PR6 Budget Forecast Analysis report). Per Section 7.8 of the Amended and Restated Sublease and Operating Agreement between the County and the CCCFDC, prior year operating surpluses shall be paid to the County on or before February 1 of the immediately following sublease year, and if not paid by such date, then the County may deduct the surplus from the next succeeding payments. At the time of writing, the CCCFDC has not provided the County with the 2017 reconciliation and surplus. To date, the County has transferred $1.8 million to the CCCFDC. The 1 st Quarter projections assume the $1 million transfer from the CCCFDC to the County will be made, but no transfer is assumed in 2019 or Expenditure Discussion expenditures are projected to total $57 million, which is $630,000 (1%) under the approved budget. Expenditures include the annual payments to the Cuyahoga County Convention Facilities Development Corporation for operations at the Global Center for Health Innovation (GCHI), the asset management contract for the County Hotel, operated by Hilton, and annual debt service on the GCHI and the Huntington Convention Center (formerly known as the Medical Mart) and the Q Arena Transformation project. The variance from budget is largely the result of the impact of the County s assumption investment management for the debt accounts; the subsidy needed to cover debt service on the Certificates of Participation for the County Hotel are expected to be about $500,000 under budget because of an increase in investment earnings. 17

19 Reserves on Balance There is one reserve on balance in the 0.25% Fund that seeks to obligate a portion of the cash balance for known future expenses related to the County Hotel. Each year Hilton submits a request to the County for consideration to draw on the capital reserve. While the County has authority over the allocation of these funds, it is anticipated that there will be many requests that must be approved each year for routine maintenance. Assuming a 6% growth rate in yielding a reserve contribution totaling $665,940, the ending balance in reserve will total just under $750,000. According to the County s asset manager, the capital reserve with the trustee will be insufficient to fund anticipated needs beginning in 2024, which includes $6.5 million for the renovation of guest rooms (totaling $13.2 million over three years. The anticipated shortfall in 2024 totals approximately $750,000 and increases to nearly $6 million in These shortfalls assume 3% revenue growth each year. Not reflected in the Schedules but important to note is a $11 million capital reserve fund for the GCHI and Convention Center that is being held in an account by the CCCFDC. This reserve has been funded in previous years by the difference between the County payments to the CCCFDC and the CCCFDC s annual operating expenditures. The County is in discussions with the CCCFDC about having those funds transferred to the County. General Fund (General Operating %) General Fund revenue and expenditures are projected to total $432 million and $438 million, respectively. The ending unadjusted cash balance in the General Fund is projected to total $174 million, which is equal to 40% of total expenditures. This includes $133 million in the General Operating Fund (33% of expenditures) and $41 million in the 0.25% Fund (72% of expenditures). After factoring in the Reserves on Balance, the ending cash balance is estimated to total $123 million: 28% of expenditures. As of 1 st Quarter, the County follows Section of the County Code, which requires a minimum of a 25% cash balance. 18

20 Health and Human Services Levy Funds Cuyahoga County residents have generously approved two levies for supporting health and human services. The larger of the two levies, 4.8 mills, was most recently approved in March 2016 for eight years. The smaller levy, 3.9 mills, was last approved in 2013 for five years and will be presented to the voters for renewal on the May ballot. Health & Human Services Levy Fund (combined) 2017 Budget Estimate 2019 Estimate Beginning Cash Balance $39,132,806 $33,677,235 $33,677,235 $36,620,826 Operating Revenue $234,103,768 $231,755,183 $231,755,183 $231,755,183 Operating Expenditures $75,554,631 $75,787,620 $75,787,620 $75,787,620 Subsidies to Other Funds $164,004,708 $162,578,469 $153,023,972 $164,736,927 Unadjusted Ending Cash Balance $33,677,235 $27,066,329 $36,620,826 $27,851,462 % Balance to Expenditures 14.1% 11.4% 16.0% 11.6% Revenue Discussion Revenue generated by the County s two levies is projected to total $231 million in : equal to what was anticipated in the budget. No change is projected to the revenue estimates in 2019 and 2020, which assume that the 3.9 mill will be approved by voters. Should the levy not be renewed, annual Health and Human Services (HHS) Levy revenu e would decrease by $104 million. This loss in revenue would increase exponentially due to the loss of Federal and State matching funds. It is important to note that the Sexennial Appraisal, which will be completed in, will not impact the revenue generated by the two levies. HB920 protects property owners from unvoted tax increases by capping the amount of revenue that can be collected from a voted levy. Should property values increase resulting from the Sexennial Appraisal, the effective rate decreases by the amount necessary to maintain existing revenue generation. Additional information on HB920 and its impact on the amount of revenue generated from voted levies can be found on the Fiscal Officer s website ( Expenditure Discussion Expenditures from the HHS Levy Fund include both operating expenditures the County s support for the Alcohol, Drug Addiction, and Mental Health Services Board (estimated to total $39.4 million in -2020) and the MetroHealth System (estimated to total $32.5 million in -2020) as well as subsidies to other County funds to support operating expenditures. The subsidies provided to other County funds represent the difference between Federal, State, and other program revenue and the cost of operations for agencies and departments that provide health and human services throughout the County. HHS Levy expenditures represent approximately 27% of total County spending in the areas of social services, health and safety, and justice and public safety. There should be some expectation of variation in the subsidy amounts from what was planned in the budget. Non-local revenue that supports human services activity is dependent on the type of services provided and the demographics of the individuals receiving those services. Not all child support cases, for example, are IV-D cases (meaning eligible for the 66% reimbursement through Federal Title IV-D of the Social Security Act), but the County is obligated to process all child support cases. A decrease in IV-D eligible cases would increase the subsidy to the Child Support program. Similarly, not all juveniles placed in residential treatment by Juvenile Court are IV-E cases (meaning eligible for reimbursement through Title IV-E of the Social Security Act for out-of-home placement), but the Court is nevertheless obligated to remove some juveniles from their homes. A decrease in IV-E cases in Juvenile Court will increase the subsidy provided to the Court. 19

21 Further, there should be an expectation of variance relative to non-local revenue, as this will be based on service levels not only in Cuyahoga County, but in counties throughout the State. The State redirects funding from counties that demonstrate difficulty in spending their annual allocations (Cuyahoga County has never experienced said difficulty) to counties with expenditures more than revenue amounts. This redirected revenue is nearly impossible to project but will lessen the burden on the HHS levies. The HHS Levy expenditure projection of $229 million is nearly $10 million (4%) under the approved budget. There are some variances in the projected subsidies which again, represent the difference between other revenue sources and total expenditures from what was assumed in the budget, including: o o o o HHS/Early Childhood - $8.8 million under budget due to the drawdown of cash in the fund that captures the activity of the Office of Early Childhood. In previous years, the County s commitment of $10 million toward the expansion of the Universal Pre-Kindergarten program (UPK 2.0) had been transferred from the HHS Levy Fund to the Early Childhood Fund. To consolidate where HHS reserves are recorded and to ensure transparency in reporting, the cash is being drawn down to support current year operating expenses and the HHS Levies will subsidize UPK 2.0 until the County s $10 million commitment is satisfied which, based on current projections, will be in HHS/Job & Family Services - $3.7 million under budget due to the combination of additional revenue received from Federal and State sources and the substantial surplus projected in. HHS Children & Family Services - $2 million over budget due to the need to cover a negative cash balance from the previous year. Workforce Investment Board - $1.5 million over budget No subsidy was budgeted for the Workforce Investment Board, nor is one needed to cover expenditures. The Workforce Investment Board is solely supported by funding from the Workforce Investment and Opportunities Act (WIOA). Funding from WIOA is received on a reimbursement basis, which in years past had resulted in negative cash balances at year end. These negative cash balances are cited in the County s financial audit and the Fiscal Office is making all possible efforts to eliminate audit citations. This subsidy is being provided to eliminate the ending cash balances only the dollars will not be spent by the Board. The agencies and departments supported by the HHS Levy Fund are all projected to operate within budget this year. It is important to note, however, that the estimated surplus from budget for the HHS Division of Children and Family Services is less than $300,000, which is 0.2% of the total budget. Due to an increase in overtime hours, salaries in DCFS are projected to be $1.8 million over budget. An additional $400,000 deficit is projected in benefits, due in part to the increase in earnings. Overtime hours worked through the first six pay periods of are up nearly 25% from what was 20

22 worked during the same period in 2017 and up 47% from Likely contributing to the increase in overtime is the increase in out-of-home placements. Placement numbers have increased significantly in the last two years after steady years of decline: from more than 6,000 in the early to 1,700 in 2015 and As of the week of April 30,, there were 2,295 children in out-of-home placement and 532 children waiting to be adopted. Despite the increase in placements, spending on board and care has remained relatively stable over the last several years. This is due in part to an increased reliance on kinship placements. The number of children in out-of-home placements in Cuyahoga County has increased 17% over last year (comparing March 2017 to March ), though the Department has indicated that spending levels are not likely to be affected unless and until the number of children in out-of-home care reaches 2,600, which is not assumed in either the current or future year estimates. 21

23 Ending Cash Balance The HHS Levy Fund is projected to end with a cash balance of $37 million: 16% of projected expenditures. The reserve requirement prescribed in Section is 10% of total expenditures. Based on 1 st Quarter estimates, the balance is projected to be well above the mandated minimum. It is important to factor in the ending cash balance in the combined Public Assistance Funds when considering the amount of reserves available to support HHS programs and services. At 1 st Quarter, the ending cash balance in the combined Public Assistance Funds is projected to total approximately $17 million. This, combined with the ending cash balance in the HHS Levy Fund equals 23% of total expenditures. All Funds The All Funds budget captures the County s total annual operating activity, excluding grants and capital projects. This includes not only the General and Health and Human Services Levy Funds, but also all the special revenue (restricted) funds. All Funds 2017 Budget Estimate 2019 Estimate Beginning Cash Balance $615,895,118 $681,647,718 $681,647,718 $691,297,928 Operating Revenue $1,497,646,012 $1,489,031,875 $1,475,163,036 $1,465,571,971 Operating Expenditures $1,431,893,412 $1,576,748,413 $1,465,512,826 $1,476,678,221 Unadjusted Ending Cash Balance $681,647,718 $593,931,180 $691,297,928 $680,191,678 Revenue Discussion All Funds revenue is projected to total $1.5 billion, which is $9 million (0.06%) under what was estimated in the budget. Significant variances from budget include: o o o Debt Service (Hotel) - $8 million under budget budget assumed the Hotel would make its priority payment to the County, but instead it will be forwarded directly to the trustee. The County s contribution toward debt service decreases by the same amount, therefore there is no net impact on the General Fund. Human Resources - Regional Benefits Program - $11 million under budget due to the loss of participants in the Regional Benefits Program. The number of entities was not known at the time the budget was developed, so the assumption was that there would be no change from Medicaid MCO Transition Fund - $6 million over budget reflects the additional $6 million received from the State to counties and transit authorities. Expenditure Discussion All Funds expenditures are projected to total $1.5 billion in, which is $111 million, or 7%, less than the budget of $1.6 billion. With few exceptions, surpluses are projected in the All Funds budgets throughout the Counties agencies and departments. Significant variances in agency budgets include: o Information Technology - $4 million under budget reflects vacancies in the Department (please see discussion on page 11), as well as a $2.5 million surplus in the contracts budget. IT s carryover balances at the end of 2017 totaled $4 million and the projections anticipate that many of those balances will be liquidated (unpaid) by the end of the year. As prior year contracts are liquidated, requests will be submitted to reduce appropriation. 22

24 o o o o o o o Debt Service (Hotel) - $8 million under budget please see revenue discussion re: Debt Service above Human Resources - Regional Benefits Program - $10 million under budget please see revenue discussion re: the Regional Benefits Program on page 19 Board of Developmental Disabilities - $11 million under budget surpluses are projected in each of the Board s budget lines and reflects the continued transition from direct services. HHS/Job & Family Services - $10 million under budget After adjusting for the increase in employee healthcare costs, nearly half of the projected surplus can be attributed to personnel. In, FTEs are projected to total 755, which is 25 fewer than 2017 and 58 fewer than budgeted. In its budget reduction plan, the Department of Health and Human Services committed to decreasing overtime expenditures, which has happened based on data available through the 1 st Quarter. Overtime hours worked through Pay Period 6 in are down 70% from what was worked through Pay Period 6 of last year. Overtime earnings are projected to total $1.2 million in, which, despite the cost of living adjustments to salaries is 53% less than what was paid in 2017 and less than half of what was paid in Public Works/Road & Bridge - $14 million under budget based on the estimate of expenditures related to road and bridge projects active in Human Resources County Benefits Program $17 million under budget based on data available through the 1 st Quarter of the year, which includes costs incurred in Spending on major medical services are expected to increase in over 2017 levels due to the migration of employees to higher cost plans. The decrease in 2017 from 2016 reflects the reduction in the number of employees (approximately 500) participating in the County s benefits program. Public Works/Sanitary - $24 million under budget based on the estimate of expenditures related to sanitary projects active in 23

25 Fund Balances Benefits/County Program This fund captures the activity associated with the County s Benefits Program and is projected to end the year with an available cash balance totaling $18.6 million, which is 20% of total expenditures. Revenue is projected to total $108 million, which is $4 million (4%) over what was assumed in the budget. The increase reflects the migration of employees to higher cost plans, which increases the County s share of the cost: reflected as revenue in the Self Insurance Fund. Please note that this revenue increase is reflected as an increase in costs in the operating budgets of agencies and departments. As of 1 st Quarter, expenditures are projected to total $92 million, $4 million (4%) under budget. The ending cash balance in the fund in is estimated to total $18.6 million, which is equal to 20% of total expenditures. This cash balance is higher than the 14% minimum required to cover incurred but not reported (IBNR) payments the following year. A surplus of cash in this fund could result in a decrease of the rates in 2019, which would bring expenditures back in line with the approved appropriation levels for Benefits/Regional Program This fund captures the activity of the Regional Benefits Program, which currently has seven participants. According to the Department of Human Resources, one of the entities will be leaving mid-year. This fund had an operating deficit in 2017, when 10 of the participants existed, and in. This could be attributed to run-out claims associated with the former participants, which until the contracts were renegotiated in are the County s responsibility. The operating shortfall in is projected to total $1.4 million, resulting in a negative cash balance in the fund of $2.6 million. It is anticipated that a General Fund subsidy will be needed to eliminate this deficit. Real Estate Assessment The Real Estate Assessment Fund generates revenue from a fee applied on property tax bills as authorized by the Ohio Revised Code. The cash balance in the Fund is projected to total more than $16 million at the end of, at which time the full cost of the Sexennial (Full) Appraisal should be known. Ohio Revised Code (B)(6) requires that the County return surplus funds to the taxing authorities that contributed to the Fund at the end of the Sexennial Appraisal. Workers Compensation This fund captures the premium and claims costs of the County s Workers Compensation program. Revenue derives from charges to agency and departmental budgets based on a combination of claims costs and risk. In 2016, the County Fiscal Office suspended the charges because the cash balance in the Fund was well above what was required and generating additional revenue was unnecessary. At the close of 2017, the Fund had an ending cash balance of nearly $24 million, which is almost $14 million higher than needed based on the Actuary Report received in April. Based on current estimates, the charges are not expected to resume until The last year workers compensation charges were processed was 2015: charges totaled just short of $6 million, 40% of which impacted the General Fund and 25% impacted the HHS Levy Fund. 24

26 Five Year Forecast In accordance with County Code (A), the tables below present a five-year outlook for the General Operating Fund, the General Fund, and the Health and Human Services Levy Funds. General Operating Fund 2019 Estimate 2020 Estimate 2021 Estimate 2022 Estimate Beginning Cash Balance $133,457,809 $123,465,849 $98,289,943 $72,992,866 Operating Revenue $374,057,038 $374,722,430 $382,722,430 $382,722,430 Operating Expenditures $371,298,707 $385,862,107 $393,992,278 $402,366,354 Subsidies to Other Funds $12,750,291 $14,027,229 $14,027,229 $14,027,229 Unadjusted Ending Cash Balance $123,465,849 $98,289,943 $72,992,866 $39,321,713 % Balance to Expenditures 32% 25% 18% 9% Assumptions: o Property Tax: $8 million increase in 2021 due to retirement of Series 2005 GO Bonds; no change in 2022 o Sales Tax: No change from 2020 o Fines & Forfeiture, Charges for Services, or Other Intergovernmental revenue: no change from 2020 o Miscellaneous revenue: No change from 2020; Does not assume utilization of $6.5 million remaining balance in MCO Transition Fund o Personnel: 3% increase in both years o Other Expenses: No change from 2020 o No savings associated with the implementation of the ERP o No issuance of debt that would repaid with General Fund revenue General Fund 2019 Estimate 2020 Estimate 2021 Estimate 2022 Estimate (General Operating % Fund) Beginning Cash Balance $174,316,419 $163,642,459 $133,433,852 $103,595,074 Operating Revenue $427,576,358 $427,713,231 $435,713,231 $435,713,231 Operating Expenditures $386,663,707 $401,177,107 $409,307,278 $417,681,354 Subsidies to Other Funds $51,586,611 $56,744,731 $56,244,731 $56,244,731 Unadjusted Ending Cash Balance $163,642,459 $133,433,852 $103,595,074 $65,382,220 % Balance to Expenditures 37% 29% 22% 14% Assumptions: o See Assumptions above o Subsidies to Other Funds: $500,000 decrease from 2020 due to change in debt service requirements for the Medical Mart and Hotel Please Note: Debt service on the 2014 Revenue Bonds (Western Reserve Fund) increases from $785,000 in 2022 to $2.8 million in 2023 and $9 million in 2024 and Debt service was paid from the General Fund but shifted to the Economic Development Fund in. The balance in this Fund will be insufficient to support the increase in debt service and economic development activity, which will require General Fund resources. Please Note: Combined debt service on the Sales Tax Revenue Bonds (2013, 2015, 2016 & 2017) decreases from $23 million in 2024 to $20 million in This is offset by a $3 million increase in debt service on the General Obligation Bonds (2009 and 2012). 25

27 HHS Levy Fund (combined) 2019 Estimate 2020 Estimate 2021 Estimate 2022 Estimate Beginning Cash Balance $36,620,826 $27,851,462 $13,023,973 ($10,343,265) Operating Revenue $231,755,183 $231,755,183 $231,755,183 $231,755,183 Operating Expenditures $75,787,620 $75,787,620 $75,787,620 $75,787,620 Subsidies to Other Funds $164,736,927 $170,795,049 $179,334,801 $188,301,542 Unadjusted Ending Cash Balance $27,851,462 $13,023,973 ($10,343,265) ($42,677,244) % Balance to Expenditures 11.6% 5% (4%) (16%) Assumptions: o No increase in revenue in all years o No change to support for the ADAMHS Board and the MetroHealth System o 1.5% increase in subsidies in each year due to the anticipated increase in personnel costs in the agencies and departments supported by the HHS Levy Fund HHS Levy Funds $245,000,000 $240,000,000 $235,000,000 $230,000,000 $225,000,000 $220,000,000 $215,000,000 $210,000,000 $205,000,000 $200,000, Total Expenditures Total Revenue 26

28 Pending Legislation and Litigation that May Impact Cuyahoga County HB 415 State Legislature (Greenspan) - proposes to reallocate half of the annual revenue surplus in the State budget to a new Local Government Road Improvement Fund, which would be used to support road improvement projects. Funds would be allocated to local governments including counties based on the number of centerline miles of roadways maintained by the political subdivision as a percent of the total number of miles in the State that are maintained by a political subdivision. The County has only 22 miles, if enacted the financial impact would be minimal. Bill passed the House and was referred to the Senate Finance Committee on March 21 st. SB 21 State Legislature - would allow boards of elections to reduce the number of poll workers in locations that serve more than one precinct and utilize electronic pollbooks. Approximately 75% of Cuyahoga County s voting locations serve more than one precinct and all utilize electronic pollbooks. If enacted, General Fund savings could total approximately $150,000 per election. Bill passed the Senate and was referred to the House Government Accountability and Oversight Committee on March 6 th. HB 538 State Legislature - proposes to increase the share of revenue allocated to the State s Local Government Fund to 3.53% beginning July 1, If enacted, the County s share could increase by $20 million/year. Bill was referred to the House Ways and Means Committee on March 13 th. HB571 State Legislature (Greenspan) clarifies that the price on which the lodging tax is applied in cases where hotels are purchased through an intermediary shall be based on the amount paid by the consumer as advertised by the intermediary. If enacted, collections from the County s 5.5% bed tax, which supports debt service on both the Hotel and the Q Transformation, would increase. Bill was referred to the House Ways and Means Committee on April 10 th. HB569 State Legislature limits the expansion of internet sales tax for some services. If enacted, Sales Tax revenue could decrease but the impact would be minimal. This legislation may also be voided by the SCOTUS decision in Wayfair. Bill was referred to the House Ways and Means Committee on April 10 th. SB274 State Legislature - would require courts to use a risk assessment tool when considering bail and to require the Supreme Court to create a list of validated risk assessment tools. Bill was referred to the Senate Judiciary Committee on March 21 st. SB135 State Legislature would provide $115 million in funding State-wide for voting equipment. If enacted, Cuyahoga County would likely to receive $10 million. Bill passed the Senate and was introduced in the House on April 12 th. HB627 State Legislature would eliminate the statute of limitations on the criminal prosecution for the crime of rape. Bill introduced in the House on May 1 st. HJR15 State Legislature proposing to enact Section 7 of Article VI of the Constitution to require a universal preschool education program that is free and available to all four and five-year olds residing in the State. Proposed May 1 st Cleveland City Council would impose a temporary moratorium on short-term home rentals for the rest of the year. If enacted, the County will experience a decrease in collections from the 5.5% bed tax levied by the County. 27

29 South Dakota v. Wayfair, Inc. Supreme Court of the United States will decide whether the Commerce Clause prohibits collecting sales tax from retailers that do not have a physical presence in the State. Should the SCOTUS abrogate the physical nexus requirement and the Ohio Legislature enact a law authorizing the assessment of the tax, Cuyahoga County sales tax revenue could increase by as much as $7.6 million/year. Oral arguments will be heard on April 17,. Husted v. A. Philip Randolph Institute, et. al Supreme Court of the United States will decide whether Ohio s process to maintain its active voter list violates 52 U.S.C Oral arguments were heard on January 10,. Janus v. American Federation of State, County, and Municipal Employees, Council 31 Supreme Court of the United States will decide the constitutionality (1 st Amendment) of requiring government employees to pay fair share fees to unions. The legality of this practice was originally confirmed by the SCOTUS in 1977 ( Abood v. Detroit Board of Education). The SCOTUS considered this question in 2016 in Friedrichs v. Cal. Teachers Ass n and split 4-4; at the time the seat held by former Justice Scalia was vacant. Oral arguments were heard on February 26,. State of Ohio v. Demetrius Jackson Ohio Supreme Court will decide whether social workers must advise an incarcerated defendant of his Miranda rights. If the Appellate Court decision is upheld, social workers will be required to Mirandize individuals in custody prior to interviews. Oral arguments were heard on February 13,. Ball v. Kasich United States Federal Court will determine whether Ohio has been non-compliant with the Americans with Disabilities Act (ADA), Section 504, and Medicaid requirements. The suit alleges that individuals with developmental disabilities are being unnecessarily segregated and admitted to care facilities that the plaintiff considers institutions and seeks to expand opportunities for individuals residing in Intermediate Care Facilities (ICFs) to access community options. Should the Court find for the plaintiff, County Boards of Developmental Disabilities will be required to provide more community-based options to decrease long wait lists. This cash was originally filed on behalf of six individuals but has been granted class-action status. This could have a significant impact on the Cuyahoga County Board of Developmental Disabilities, which has been operating in a deficit for years. 28

30 29

31 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - 1Q Forecast Summary By Fund 14:12 01A001 General Fund Operating Current Year Budget Current PY-CY % Chg 2019 Total CY-BY % Chg 2020 Total

32 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - 1Q Forecast Summary By Fund 14:13 01A004.25% Sales Tax Fund Current Year Budget Current PY-CY % Chg 2019 Total CY-BY % Chg 2020 Total

33 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - 1Q Forecast Summary By Fund 14:13 01A General Fund Operating Current Year Budget Current PY-CY % Chg 2019 Total CY-BY % Chg 2020 Total

34 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - 1Q Forecast Summary By Fund 14:12 29A Health and Human Services Levy Fund Current Year Budget Current PY-CY % Chg 2019 Total CY-BY % Chg 2020 Total

35 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - 1Q Forecast Summary By Fund 14:11 1 General Fund / HHS Levy Current Year Budget Current PY-CY % Chg 2019 Total CY-BY % Chg 2020 Total

36 TOTAL SUBSIDIES $26,250,231 $12,073,159 $11,931,071 $142, % -54.5% $12,750,291 $14,027,229

37 DS-Med Mart Refunding Series 2014C 682, , ,700 (1,800) 0.3% -0.3% 678, ,100 Debt Service County Hotel 7,732,283 20,308,344 11,748,344 (8,560,000) 42.2% 51.9% 11,738,344 11,753,344 Medical Mart Series 2010 Debt Service 26,724,130 26,736,406 26,739,156 2, % 0.1% 26,419,076 30,282,058 TOTALSUBSIDIES 35,138,913 47,727,250 39,168,200 (8,559,050) 17.9% 11.5% 38,836,320 42,717,502

38

39 PR6 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis 1Q Update General Fund Operating 17: Current Year Budget Current Budget Variance % Over or Under YTD % Obligated % Change PY1 - CY 2019 Total 2020 Total County Executive Agencies Office of the County Executive 1,003,607 1,177,553 1,002, , % 167, % -0.1% 1,045,229 1,067,433 County Executive Transition Department of Communications 745, , ,393 (16,893) -2.1% 190, % 10.3% 855, ,331 County Law Department 2,108,038 2,290,234 2,242,914 47, % 473, % 6.4% 2,426,901 2,323,995 Human Resources 3,997,414 4,182,227 4,241,998 (59,771) -1.4% 962, % 6.1% 4,470,156 4,584,053 Development 2,462,567 3,057,580 2,849, , % 747, % 15.7% 2,950,495 2,921,773 Regional Collaboration 243, , ,415 56, % 9, % -16.9% 269, ,568 County Fiscal Office 10,596,939 13,080,138 12,545, , % 2,447, % 18.4% 12,739,533 12,598,090 Treasury 2,914,829 3,956,947 3,460, , % 767, % 18.7% 3,490,792 3,529,238 Information Technology 17,530,533 22,329,427 19,321,369 3,008, % 4,895, % 10.2% 19,787,693 23,686,019 Public Works - Facilities Management 2,175,609 3,075,288 3,128,469 (53,181) -1.7% 785, % 43.8% 1,756,051 1,769,148 County Headquarters 5,988,187 8,665,198 7,011,039 1,654, % 2,221, % 17.1% 7,110,039 7,235,800 County Hotel Operating 269, , ,000 67, % 303, % 88.9% 215, ,000 County Sheriff 93,870,514 96,926,817 95,366,095 1,560, % 23,350, % 1.6% 97,546,072 99,846,898 Public Safety & Justice Services 2,086,958 2,697,601 2,138, , % 554, % 2.5% 2,273,243 2,334,146 Clerk of Courts 8,377,737 8,631,342 8,889,525 (258,183) -3.0% 1,843, % 6.1% 9,133,627 9,341,751 County Medical Examiner 6,141,527 6,624,965 6,760,755 (135,790) -2.0% 1,589, % 10.1% 7,075,451 7,206,805 GRF & HHS Levy Operating Revenue 163,488 1,868,575 1,651, , % 1,428, % 910.1% 223, ,016 Department of Sustainability 357, , ,194 23, % 55, % -23.9% 282, ,934 GCHI/Convention Center 5,400,000 5,400,000 5,400, % 1,800, % 0.0% 5,400,000 5,400,000 Capital Improvement GF Subsidy 8,639,480 7,200,000 7,200, % 4,807, % -16.7% 7,200,000 7,200,000 General Fund/Self Insurance Fund 155,637 5,074,719 5,022,120 52, % 80, % % 527, ,120 Info. Technology Automation & Enterprise 33, % 0 0 Miscellaneous Obligations & Payments 4,047,048 3,440,945 2,782, , % 1,235, % -31.2% 2,811,485 2,857,312 Medicaid Sales Tax Transition Fund 8,174,476 12,000,000 12,000, % 12,000, % 46.8% 9,750,000 9,700,000 Statutory Expenditures 72,274 74,147 74, % 1, % 2.6% 74,147 74,147 Innovation and Performance 427, , ,409 92, % 93, % 75.7% 932, ,858 Total County Executive Agencies $187,984,094 $214,535,180 $205,646,696 Elected Officials $8,888, % $62,814, % 9.4% $200,344,666 $207,036,435 County Council 1,821,437 1,950,152 1,969,371 (19,219) -1.0% 442, % 8.1% 2,126,800 2,183,191 County Prosecutor 31,760,402 32,392,704 32,572,293 (179,589) -0.6% 7,522, % 2.6% 34,267,745 35,190,685 Court of Common Pleas 50,359,579 50,716,107 51,073,737 (357,630) -0.7% 13,178, % 1.4% 53,047,219 54,250,838 Domestic Relations Court 9,546,662 9,784,043 9,733,633 50, % 2,408, % 2.0% 10,373,768 10,641,286 Juvenile Court 37,581,700 36,594,326 37,580,833 (986,507) -2.7% 8,671, % -0.0% 38,950,154 39,793,137 Probate Court 6,524,623 6,515,273 6,597,000 (81,727) -1.3% 1,625, % 1.1% 6,842,033 7,014,256 8th District Court of Appeals 770, , , , % 275, % 12.4% 878, ,433 Municipal Judicial Costs 3,469,066 3,557,655 3,552,957 4, % 784, % 2.4% 3,628,278 3,661,972 Total Elected Officials $141,834,297 $142,498,398 $143,946,257 ($1,447,859) -1.0% $34,908, % 1.5% $150,114,431 $153,601,798

40 PR6 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis 1Q Update General Fund Operating 17: Current Year Budget Current Budget Variance % Over or Under YTD % Obligated % Change PY1 - CY 2019 Total 2020 Total Boards and Commissions Inspector General 689, , ,096 35, % 193, % 23.9% 975,503 1,002,709 Department of Internal Audit 484, , ,163 39, % 138, % 44.7% 779, ,010 Personnel Review Commission 1,644,820 1,923,805 1,872,300 51, % 402, % 13.8% 1,988,210 2,036,455 Board of Elections 12,208,372 15,155,393 14,702, , % 2,141, % 20.4% 12,627,156 16,569,163 Debarment Review Board 0 1, , % 0 0.0% 0 0 Public Defender 10,432,981 12,392,594 11,961, , % 2,601, % 14.7% 12,700,084 12,998,456 Soldiers' and Sailors' Monument 179, , ,165 25, % 36, % 17.2% 234, ,742 Veterans Service Commission 6,919,062 7,039,870 6,869, , % 1,587, % -0.7% 6,900,338 6,900,338 Total Boards and Commissions $32,558,810 $38,379,578 $37,171,814 $1,207, % $7,101, % 14.2% $36,204,610 $40,538,873 TOTAL OPERATING EXPENDITURES $362,377,201 $395,413,156 $386,764,767 $8,648, % $104,823, % 6.7% $386,663,707 $401,177,106

41 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - 1Q Forecast Summary By All Funds 4/30/18 14:14 PR Current Year Total Total Total Budget

42 PR6 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis 1Q Update All County Funds 16: Current Year Budget Current Budget Variance % Over or Under YTD % Obligated % Change PY1 - CY 2019 Total 2020 Total County Executive Agencies Office of the County Executive 1,003,607 1,177,553 1,002, , % 167, % -0.1% 1,045,229 1,067,433 County Executive Transition Department of Communications 745, , ,393 (16,893) -2.1% 190, % 10.3% 855, ,331 County Law Department 2,108,038 2,290,234 2,242,914 47, % 473, % 6.4% 2,426,901 2,323,995 Human Resources 136,058, ,416, ,160,092 17,256, % 29,526, % -3.6% 138,260, ,571,037 Development 23,467,506 22,934,765 22,730, , % 11,730, % -3.1% 22,839,495 22,821,046 Regional Collaboration 243, , ,415 56, % 9, % -16.9% 269, ,568 County Fiscal Office 28,593,968 38,665,959 37,933, , % 9,380, % 32.7% 36,007,623 36,153,252 Treasury 11,768,273 14,516,147 13,703, , % 1,192, % 16.4% 13,780,589 13,869,497 Information Technology 25,616,326 32,194,169 28,279,959 3,914, % 7,929, % 10.4% 27,319,962 31,360,526 Dog Kennel 2,190,577 2,456,431 2,225, , % 502, % 1.6% 2,278,111 2,312,701 Public Works - Facilities Management 52,502,841 56,416,259 58,914,595 (2,498,336) -4.4% 15,061, % 12.2% 54,507,338 55,605,591 County Headquarters 5,988,187 8,665,198 7,011,039 1,654, % 2,221, % 17.1% 7,110,039 7,235,800 County Hotel Operating 269, , ,000 67, % 303, % 88.9% 215, ,000 Public Works - County Road & Bridge 36,851,796 51,161,939 37,504,758 13,657, % 5,357, % 1.8% 38,163,118 38,478,373 Public Works - Sanitary Engineer 42,672,737 45,889,090 22,242,571 23,646, % 4,493, % -47.9% 22,700,782 22,996,746 Public Works - County Airport 1,509,499 1,596,909 1,510,053 86, % 590, % 0.0% 1,556,429 1,576,884 County Sheriff 106,901, ,167, ,563,420 1,603, % 26,549, % 1.6% 111,290, ,964,423 Public Safety & Justice Services 10,576,021 11,478,993 9,931,058 1,547, % 2,208, % -6.1% 10,324,565 10,514,061 Domestic Violence 238, , ,672 61, % 126, % -21.3% 167, ,246 Clerk of Courts 8,377,737 8,631,342 8,889,525 (258,183) -3.0% 1,843, % 6.1% 9,133,627 9,341,751 County Medical Examiner 12,341,654 13,667,065 13,314, , % 2,816, % 7.9% 14,052,264 13,826,021 Office of Health and Human Services 13,593,629 14,167,709 10,847,054 3,320, % 1,939, % -20.2% 10,904,746 10,943,235 HHS Children and Family Services 138,875, ,210, ,932, , % 33,343, % 2.9% 145,866, ,801,386 HHS Senior and Adult Services 18,518,024 19,499,448 18,941, , % 4,516, % 2.3% 19,663,351 20,189,757 HHS Cuyahoga Job & Family Services 78,543,654 83,136,497 73,467,231 9,669, % 17,810, % -6.5% 76,209,524 77,887,206 Cuyahoga Support Enforcement Agency 41,683,413 44,086,010 43,892, , % 9,861, % 5.3% 44,958,946 45,654,315 Early Childhood Invest In Children 18,593,321 18,505,076 16,651,432 1,853, % 4,604, % -10.4% 16,664,608 16,687,753 Family & Children First Council 4,363,109 5,154,428 4,559, , % 1,429, % 4.5% 4,600,670 4,624,821 HHS Office of Reentry 2,484,882 2,587,546 2,256, , % 434, % -9.2% 2,306,806 2,322,709 Office of Homeless Services 6,070,949 10,375,521 9,361,483 1,014, % 1,824, % 54.2% 7,951,989 7,965,447 Human Services Other Prgms 1,330,916 2,356,246 2,356, % 939, % 77.0% 2,680,246 2,704,656 GRF & HHS Levy Operating Revenue 3,632,460 5,820,536 5,603, , % 1,428, % 54.3% 4,174,977 4,174,977 Department of Sustainability 357, , ,694 27, % 68, % -9.4% 307, ,934 Debt Service 110,027, ,387,083 95,394,264 15,992, % 32,470, % -13.3% 86,063,974 86,019,302 GCHI/Convention Center 5,610,535 5,611,247 5,611, % 1,800, % 0.0% 5,588,382 5,593,279 Capital Improvement GF Subsidy 8,639,480 7,200,000 7,200, % 4,807, % -16.7% 7,200,000 7,200,000 General Fund/Self Insurance Fund 155,637 5,074,719 5,022,120 52, % 80, % % 527, ,120 Social Impact 0 (2,000,000) 0 (2,000,000) 100.0% 0 0.0% 0 0

43 PR6 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis 1Q Update All County Funds 16: Current Year Budget Current Budget Variance % Over or Under YTD % Obligated % Change PY1 - CY 2019 Total 2020 Total County Executive Agencies Info. Technology Automation & Enterprise 33, % 0 0 Miscellaneous Obligations & Payments 4,047,048 3,440,945 2,782, , % 1,235, % -31.2% 2,811,485 2,857,312 Medicaid Sales Tax Transition Fund 8,174,476 16,000,000 16,000, % 20,000, % 95.7% 22,250,000 18,200,000 Statutory Expenditures 72,274 74,147 74, % 1, % 2.6% 74,147 74,147 Innovation and Performance 427, , ,409 92, % 93, % 75.7% 932, ,858 Total County Executive Agencies $975,261,400 $1,069,099,314 $972,910,624 Elected Officials $96,188, % $261,364, % -0.2% $976,040,717 $993,223,495 County Council 1,821,437 1,950,152 1,969,371 (19,219) -1.0% 442, % 8.1% 2,126,800 2,183,191 Veterans Services Fund 503, , , % 29, % -39.0% 170,567 0 County Prosecutor 36,387,471 38,117,232 37,089,389 1,027, % 8,648, % 1.9% 38,939,467 39,940,735 Court of Common Pleas 53,806,313 55,364,470 54,213,932 1,150, % 14,268, % 0.8% 56,102,849 57,315,002 Domestic Relations Court 9,548,278 9,787,579 9,737,169 50, % 2,410, % 2.0% 10,377,304 10,644,822 Juvenile Court 63,341,542 61,916,089 62,122,593 (206,504) -0.3% 13,473, % -1.9% 63,459,651 64,655,586 Probate Court 7,262,946 7,333,429 7,319,457 13, % 1,702, % 0.8% 7,564,490 7,740,343 8th District Court of Appeals 770,829 1,003, , , % 275, % 12.4% 878, ,433 Municipal Judicial Costs 3,469,066 3,557,655 3,552,957 4, % 784, % 2.4% 3,628,278 3,661,972 Total Elected Officials $176,911,791 $179,336,877 $177,178,434 Boards and Commissions $2,158, % $42,035, % 0.2% $183,247,840 $187,008,084 Inspector General 706, , ,379 43, % 198, % 24.6% 1,002,070 1,029,520 Department of Internal Audit 484, , ,163 39, % 138, % 44.7% 779, ,010 Personnel Review Commission 1,644,820 1,923,805 1,872,300 51, % 402, % 13.8% 1,988,210 2,036,455 Alcohol & Drug Addiction Mental Health Board 0 39,363,659 39,363, % 9,840, % 39,363,659 39,363,659 MetroHealth System 32,472,000 32,472,000 32,472, % 8,118, % 0.0% 32,472,000 32,472,000 Board of Elections 12,208,372 15,155,393 14,702, , % 2,141, % 20.4% 12,627,156 16,569,163 Board of Revision 3,240,024 3,019,448 3,014,237 5, % 627, % -7.0% 3,053,884 3,099,357 Debarment Review Board 0 1, , % 0 0.0% 0 0 County Planning Commission 1,754,075 1,755,148 1,628, , % 344, % -7.1% 1,817,665 1,928,054 Workforce Development 14,523,236 14,049,118 13,799, , % 2,671, % -5.0% 13,851,878 13,879,706 County Board of Developmental Disabilities 184,216, ,263, ,025,267 11,237, % 39,062, % -3.9% 179,539, ,164,666 Community Based Correctional Facility 5,209,063 5,310,000 5,310, % 1,327, % 1.9% 5,310,000 5,310,000 County Law Library Resource Board 559, , ,195 17, % 123, % -10.3% 516, ,097 Public Defender 12,522,537 14,288,650 13,979, , % 3,111, % 11.6% 14,788,124 15,139,871 Soldiers' and Sailors' Monument 179, , ,165 25, % 36, % 17.2% 234, ,742 Solid Waste Management District 2,152,838 2,140,804 2,038, , % 388, % -5.3% 2,068,529 2,081,242 Soil & Water Conservation 927,080 1,108,811 1,053,318 55, % 242, % 13.6% 1,076,405 1,102,970

44 PR6 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis 1Q Update All County Funds 16: Current Year Budget Current Budget Variance % Over or Under YTD % Obligated % Change PY1 - CY 2019 Total 2020 Total Boards and Commissions Veterans Service Commission 6,919,062 7,039,870 6,869, , % 1,587, % -0.7% 6,900,338 6,900,338 Total Boards and Commissions $279,720,220 $328,312,222 $315,423,768 $12,888, % $70,363, % 12.8% $317,389,664 $324,634,851 TOTAL OPERATING EXPENDITURES $1,431,893,411 $1,576,748,413 $1,465,512,826 $111,235, % $373,763, % 2.3% $1,476,678,220 $1,504,866,430

45 PR08 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - Statement of Fund Activity - 04/30/ Projected Fund Activity Beginning Fund Balance Estimated Fund Revenue Available Resources Projected Expenditures Ending Fund Balance Balance to Expenditures % General Fund / HHS Levy 01A001 - General Fund Operating 135,212,393 01A % Sales Tax Fund 43,509,879 29A - Health and Human Services Levy 3.9 Mill 33,054, ,374, ,586, ,785,838 87,142, % 54,426,932 97,936,811 57,078,200 33,823, % 231,755, ,810, ,489,617 27,320, % Total General Fund / HHS Levy $213,433, ,556, ,990, ,353,655 87,277, % Special Revenue Funds 20A100 - Medicaid Sales Tax Transition Fund 12,520,596 18,955,820 31,476,416 4,000,000 27,476, % 20A378 - Inspector General Vendor Fees 273,809 24, ,209 26, , % 272, , , , , % 20A058 - Common Pleas Special Project II 2,914, ,000 3,524, ,866 3,243, % 20A240 - HHS Cuy Co Adult Reentry Court 241,817 60, , , % 20A059 - Veterans Services Fund 112, , , , % 20A060 - Common Pleas Indigent Drivers Alcoh 6, , , % 20A061 - JC-Indigent Driver Alcohol Monitoring % 20A064 - Cuyahoga County Educational Asst. Pr 535,103 1,000,000 1,535,103 1,000, , % 20A076 - Cuy Co Reg Forensic Science Lab SR 449,864 4,776,134 5,225,998 5,171,643 54, % 20A099 - TASC Medicaid Funds (CO) 1,589, ,589, ,722 1,428, % 20A120 - Community Based Corrections Facility 0 5,310,000 5,310,000 5,310, % 0 92,565 92,565 51,500 41, % 20A192 - Treatment Alternatives Street Crime 98, , , , , % 20A195 - Self Insurance - Regionalization (613,544) 4,223,069 3,609,525 5,851,603 (2,589,243) -44.2% 20A196 - Self-Insurance Develpmntl. Disabilitie 769,047 16,400,865 17,169,912 15,741,085 1,038, % 20A264 - County Law Library Resource Board 571, ,958 1,126, , , % 20A288 - Social Impact Financing Fund 4,000,000 1,000,000 5,000, % 20A301 - Real Estate Assessment 21,038,887 15,555,298 36,594,185 20,215,322 16,376, % 20A302 - Dog & Kennel (198,836) 2,274,068 2,075,232 2,075, % 20A303 - Children Services Fund (3,384,194) 68,234,647 64,850,453 63,287,468 (11,283,182) -17.8% 20A268 - Treatment Services Medicaid Funds % 20A307 - County Planning Commission 321,843 1,534,915 1,856,758 1,628, , % 20A312 - Coroner's Lab 332,828 1,050,000 1,382,828 1,381,824 1, % 20A319 - Juv Court Indigent Drivers Alcohol Tre 21,158 2,755 23, , % 20A322 - Delinquent R E Tax Assmt 2,721,884 2,205,000 4,926,884 1,659,540 3,267, % 20A325 - Tax Prepayment Special Interest 2,155, ,000 2,355,634 1,346,406 1,009, % 20A330 - Domestic Violence 126, , , , , % 20A331 - Indigent Guardianship 16, , , ,704 2, % 20A333 - Juv Court-Forfeited Property ORC , , , % 20A334 - Juv Crt - Adr Alternative Dispute Res 1,117, ,520 1,413, , , % 20A337 - Domestic Relations-Legal Research 85,767 19, ,939 3, , % 20A340 - Tax Certificate Administration 783, , , , , % 20A377 - Probation Supervision Fees 2,282, ,000 2,689, ,702 2,214, % 20A390 - Emergency Management 71,267 1,432,765 1,504,032 1,349, , % 20A400 - TASC Medicaid Funds (0) 0 (0) 0 (0) 0.0% 20A495 - Human Services Other Program 9,906 2,346,340 2,356,246 2,356,246 (0) -0.0% 20A550 - County Wellness Fund 49, , , % 20A580 - Prosecutor's DTAC HHF Project 553, ,400 1,047,822 1,261,826 (251,080) -19.9% 20A585 - Legal Computerization 415,792 72, , , , % 20A586 - Legal Research and Computerization 386,605 63, , , % 20A590 - Juvenile Court Incentives & Reward 3, , , % 20A600 - Cuyahoga Support Enforcement Agen 1,557,600 43,424,444 44,982,044 42,709,462 (0) -0.0% 20A601 - Computerized Legal Research 135,722 21, ,394 21, , % Projected ending balances are net of carryover encumbrances and other reserves on available resources.

46 PR08 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - Statement of Fund Activity - 04/30/ Projected Fund Activity Beginning Fund Balance Estimated Fund Revenue Available Resources Projected Expenditures Ending Fund Balance Balance to Expenditures % Special Revenue Funds 20A602 - Probate Court Clerk -Computer Fund 4,060,429 20A603 - Probate Court Special Projects 1,380,014 20A604 - Probate Court Dispute Resolution 673,832 20A606 - Fatherhood Initiative 221,258 20A610 - Probate Court-Conduct Of Business Fu 73,914 20A615 - Office Of Homeless Services 0 20A625 - Solid Waste District-Admin 2,540,045 20A630 - Home Detention Fees 129,076 20A635 - Title IV-E Juvenile Court 4,043,166 20A658 - Certificate Of Title Admin Fund 8,462,529 20A695 - Clerk Of Courts Computerization 633,545 20A720 - Urinalysis Testing 718,410 20A800 - Subsidy-Operation & Maint. of Detent 131,273 20A803 - Treatment Services HHS 0 20A804 - Public Defender - Cleveland Municipa 466,606 20A267 - Public Defender HHS 7 20A805 - Court of Appeals - Special Projects 74,243 20A806 - Carrying Concealed Weapons Applicat 43,765 20A807 - Early Childhood - IIC 1,196,787 20A809 - Witness Victim 105,246 20A810 - Criminal Justice Intervention HHS (0) 20A811 - JC Detention & Probation Services 345,690 20A812 - Common Pleas Special Project 1 62,640 20A814 - Wireless Government Assistance 5,505,153 20A815 - Solid Waste Convenience Center 303,509 20A816 - Solid Waste Plan Update 233,390 20A817 - Solid Waste Grants 184,246 20A819 - Geographic Information System 1,052 20A820 - Delinquent RE Tax Assmt-Prosecutor 2,732,800 20A822 - Custody Mediation 33,094 20A823 - JC HHS Youth & Family Community Pa 0 20A824 - Family Justice Center 121,148 20A830 - Mental Health Services HHS 493,812 20A893 - Naming Rights for the Convention Cen 613,235 20A900 - Euclid Jail 104,127 20AA01 - Health Care Access Programming 3,749 20AA03 - County Land Reutilization Revenue Fu 506,344 20AA05 - Law Enforcement Continuing Profesio 54,893 20D - Brownfield Revolving Loan Fund 4,770,259 20D447 - Cuyahoga Job Creation Fund 27,743,799 20D448 - Casino Tax Revenue Fund 9,659,957 20D449 - Property Demolition Fund 21,645,570 20D Excise Tax 14,550,683 20N306 - Soil & Water Conservation 301,253 20R320 - County Board Of Developmental Disab 93,598,750 24A301 - Children & Family Services 12,536,612 24A430 - Office of Health and Human Services 680,747 24A435 - Cuyahoga Tapestry System of Care 407,730 24A510 - Cuyahoga Job & Family Services 5,010,554 24A530 - Children With Medical Handicap 742,430 24A601 - Senior and Adult Services 179, ,168 4,406, ,067 3,873, % 158,940 1,538,954 15,398 1,523, % 111, ,492 44, , % 1,117,745 1,339,003 1,183,436 (0) -0.0% 3,652 77, , % % 1,325,292 3,865,337 1,230,039 2,527, % 48, , , % 1,622,536 5,665,702 2,329,063 3,336, % 6,289,637 14,752,166 8,186,863 6,565, % 597,700 1,231, , , % 122, ,327 70, , % 15, ,487 40, , % % 1,922,185 2,388,791 1,828, , % 195, , ,218 5, % 12,876 87, , % 111, , ,254 30, % 269,552 1,466, , , % 1,918,925 2,024,171 1,798, , % 0 (0) 0 (0) 0.0% 21,237,398 21,583,088 21,407,174 4, % 882, , , % 3,026,552 8,531,705 3,592,707 4,503, % 422, , , , % 0 233,390 50, , % 200, , , , % 730, , ,501 (32,819) -4.6% 4,095,198 6,827,998 3,255,270 3,572, % 0 33,094 33, % % 233, , , % 1,687,546 2,181,358 1,816,695 (31,815) -1.8% 432,018 1,045, , , % 400, , , % 0 3,749 14,996 (11,247) -75.0% 7,000,000 7,506,344 7,000, , % 0 54,893 5,000 49, % 400,000 5,170,259 2,998,208 1,973, % 5,923,445 33,667,244 3,679,763 14,608, % 7,153,259 16,813,216 5,019,698 5,566, % 0 21,645,570 8,182,935 2,853, % 7,350,037 21,900,720 14,456,988 7,443, % 1,255,810 1,557,063 1,053, , % 178,564, ,162, ,025,267 89,535, % 66,874,822 79,411,434 76,893, , % 19,899,333 20,580,080 18,423,864 1,646, % 3,726,058 4,133,788 2,751, , % 75,080,230 80,090,784 72,338,003 1,815, % 1,748,013 2,490,443 1,129,228 1,361, % 18,853,407 19,033,085 18,941,497 (283,833) -1.5% Projected ending balances are net of carryover encumbrances and other reserves on available resources.

47 PR08 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - Statement of Fund Activity - 04/30/ Projected Fund Activity Beginning Fund Balance Estimated Fund Revenue Available Resources Projected Expenditures Ending Fund Balance Balance to Expenditures % Special Revenue Funds 24A635 - Early Childhood - IIC Public Asst. 9,963,177 24A640 - FCFC Public Assistance 129,015 24A641 - Homeless Services 741,566 24A878 - HHS Office of Reentry 80,934 26A601 - General Gas & License Fees 22,758,047 26A650 - $5.00 Road Capital Improvements 4,803,528 26A651 - $7.50 Road and Bridge Registration Ta 14,473,521 28W036 - WIA - Workforce Development (0) 28W037 - Workforce Other Programs 1 28W038 - WF Innovation & Opportunities Act (1,505,340) 5,993,703 15,956,880 15,956,880 (4,527,928) -28.4% 4,430,667 4,559,682 4,559,682 (1,454,128) -31.9% 9,118,889 9,860,455 9,361, , % 2,587,546 2,668,480 2,256,075 5, % 15,910,662 38,668,709 17,626,433 20,571, % 6,759,962 11,563,490 4,749,855 6,084, % 13,389,610 27,863,131 15,628,470 6,864, % 0 (0) 0 (0) 0.0% % 13,921,720 12,416,380 12,799,580 (4,110,040) -32.1% Total Special Revenue Funds $333,891, ,500,134 1,043,391, ,072, ,630, % Debt Service Funds 30A900 - Debt Service Fund GO (1,383,234) 30A905 - Gateway Arena 0 30A912 - Shaker Square Debt Service 111,665 30A913 - Commercial Redevelopment Debt Ser 0 30A914 - Debt Service - Rock & Roll Hall of Fam 870,343 30A915 - Medical Mart Series 2010 Debt Servic 0 30A916 - Series 2013 Economic Development R 1,018,058 30A919 - Debt Service County Hotel 0 30A920 - DS-Western Reserve Series 2014B 0 30A921 - DS-Med Mart Refunding Series 2014C 0 30A Excise Tax Debt Service 7,864,818 29,133,674 27,750,440 29,268,647 (1,518,207) -5.2% 2,310,463 2,310,463 2,310, % 20, ,665 20, , % 890, , , % 0 870, ,871 1, % 26,739,156 26,739,156 26,739, % 750,191 1,768, ,911 1,068, % 11,748,344 11,748,344 11,748, % 784, , , % 680, , , % 6,926,000 14,790,818 6,926,000 7,864, % Total Debt Service Funds $8,481,651 79,983,712 88,465,363 80,937,276 7,528, % Enterprise Funds 50A410 - Cuyahoga Regional Information Syste 1,179,540 50A412 - County Information Network 274,807 51A404 - County Parking Garage 4,014,334 52A100 - County Airport 748,458 54A100 - Sanitary Engineer (5,280,522) 54A500 - Sanitary Engineer Sewer District Fund 40,159,960 54A901 - Sanitary Engineer/Note Retirement (855,882) 890,778 2,070, ,180 1,391, % 0 274, , % 2,681,156 6,695,490 4,339,070 2,343, % 1,269,187 2,017,645 1,510, , % 25,571,086 20,290,564 17,801, , % 24,445,218 64,605,178 4,118,219 60,486, % 323,050 (532,832) 323,050 (855,882) % Total Enterprise Funds $40,240,696 55,180,475 95,421,171 29,042,680 64,393, % Internal Service Funds 61A607 - Centralized Custodial Services 9,384,991 61A608 - Sheriff Building Security Services 172,547 62A603 - County Garage 332,409 63A100 - Information Services Center 941,829 63A300 - County GIS Management (0) 64A601 - County Supplies 14,527 64A606 - Fast Copier (2,584) 65A604 - Communications/Postage 630,530 67A - Workers Compensation Administration 5,725,420 67A200 - Workers Compensation Claims 18,164,108 68A100 - Hospitalization-Self Insurance Fund 10,836,462 68A200 - Hospitalization - Regular Insurance 1,252,904 39,899,010 49,284,001 46,201,420 1,744, % 11,163,942 11,336,489 11,251,376 7, % 1,087,864 1,420,273 1,231, , % 508,171 1,450,000 1,450, % 0 (0) 0 (0) 0.0% 88, ,429 0 (308,789) 0.0% 2,651,358 2,648,774 2,648,104 (8,216) -0.3% 1,508,608 2,139,138 1,366, , % 0 5,725,420 2,704,471 3,003, % 0 18,164,108 2,841,590 15,322, % 107,613, ,450,114 92,170,035 18,605, % 4,597,066 5,849,970 4,597, , % Projected ending balances are net of carryover encumbrances and other reserves on available resources.

48 PR08 Cuyahoga County Fiscal Office - OBM Budget Forecast Analysis - Statement of Fund Activity - 04/30/ Projected Fund Activity Beginning Fund Balance Estimated Fund Revenue Available Resources Projected Expenditures Ending Fund Balance Balance to Expenditures % Internal Service Funds 68A300 - Hospitalization-Employee Defferrals 140,506 1,946,721 2,087,227 1,946,721 (50,752) -2.6% Total Internal Service Funds $47,593, ,065, ,658, ,408,315 40,161, % Projected ending balances are net of carryover encumbrances and other reserves on available resources.

49 PJ15A Cuyahoga County Fiscal Office - OBM Budget Forecast Summary Personnel Cost Analysis - March 14:08 All County Funds Salaries Fringe Benefits Projected FTEs DEPARTMENT 2017 Current Total Budget Budget Variance 2017 Current Total Budget Budget Variance 2017 Current Total Budget Budget Variance County Executive Agencies

50 PJ15A Cuyahoga County Fiscal Office - OBM Budget Forecast Summary Personnel Cost Analysis - March 14:08 All County Funds Salaries Fringe Benefits Projected FTEs DEPARTMENT 2017 Current Total Budget Budget Variance 2017 Current Total Budget Budget Variance 2017 Current Total Budget Budget Variance Elected Officials Boards and Commissions