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Conduct a noticed/published hearing to consider adoption of the FY2024/25 Recommended Budget
a) County Administrator’s presentation of the FY2024/25 Recommended and Supplemental Budget
b) Recommendations for consideration and action regarding the FY2024/25 Recommended Budget and Supplemental Budget documents, including technical adjustments proposed at this hearing
c) Receive Public Comment of the FY2024/25 Recommended Budget
d) Selection of budget units for discussion and Board of Supervisor members’ comments
e) Board discussion of budget units selected for discussion by functional area
f) Continue FY2024/25 Recommended Budget Hearings as needed until conclusion
g) Receive final Public Comment of the FY2024/25 Recommended Budget
h) Adopt the Budget and Position Resolutions for FY2024/25 and other recommendations included in the Recommended Budget, Supplemental Budget and technical adjustments or other modifications arising from the Board budget hearings
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Published Notice Required? Yes __X__ No _ _
Public Hearing Required? Yes __X__ No _ _
DEPARTMENTAL RECOMMENDATION:
The FY2024/25 Recommended Budget of $1,616,490,797 is a balanced budget utilizing a combination of funding from State, federal, and local revenue sources. It is important to note that while the budget is balanced, it does rely on draws from reserves, use of fund balance, and one-time American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund (SLFRF) funding previously designated by the Board under the U.S. Treasury Category of Revenue Replacement primarily to be used to fund a structural deficit in Health and Social Services’ (H&SS) Family Health Services Division resulting from insufficient revenue at the clinics.
While the County’s ongoing revenues continue to grow over prior years, the County’s current General Fund fiscal projection reflects deficits through FY2026/27. Future revenue growth may not be sufficient to keep pace with increases in operating costs. In addition, challenging economic conditions, the State’s significant budget deficit, and the exhaustion of the County’s ARPA-SLFRF Revenue Replacement one-time funds are expected to impact the County’s ability to balance the budget in future years. Staff will continue to actively monitor economic conditions, the State Budget, and budget performance to ensure proactive actions are taken to maintain a balanced budget.
State Budget
The Governor’s FY2024/25 Proposed State Budget and the May Revise include funding reductions in several County programs. On June 13, the legislature passed a “placeholder” State Budget and negotiations are ongoing with no final decisions made at the time this report was developed. Based on reductions included in the Proposed State Budget and the May Revise, departments have included information regarding impacted programs under “Pending Issues” as part of Attachment B of the FY2024/25 Supplemental Budget. While funding impacts are unknown at this time, it is anticipated that many programs administered by Health and Social Services (H&SS) will have significant reductions. The County Administrator’s Office is working collaboratively with H&SS to monitor these reductions and will return to the Board in the fall, if necessary, with an update after the FY2024/25 State Budget is adopted.
Federal Budget
Congress is currently developing the appropriation bills that will comprise the federal fiscal year (FFY) 2025 budget, but it is unlikely that Congress will adopt a budget before the October 1 statutory deadline. Therefore, to avoid government shutdown, Congress may need to approve a short-term budget (Continuing Resolution) to maintain federal funds for departments and agencies. The FY2024/25 Recommended Budget does not anticipate that the FFY2025 Budget will impact County funding or programs. The County Administrator’s Office in coordination with County Departments will continue to monitor the federal budget and will return to the Board in the fall, if necessary, with an update after the FFY2025 Budget is adopted.
FY2024/25 Supplemental Budget
The FY2024/25 Recommended Budget was published on May 24, 2024. Since then, several departments have identified budget-related technical, and programmatic changes that require the Board’s consideration as part of your deliberation of the FY2024/25 Budget. There are also position changes included in the Supplemental Budget resulting in a net decrease of 2.0 FTE. If approved by the Board as presented herein, the revised total FY2024/25 Budget for all Governmental Funds subject to the Budget Act including the Supplemental Adjustments will be $1,616,490,797 an increase of $31,141,312. The increase includes $10,494,144 in supplemental adjustments due to re-budgets of FY2023/24 programs and increases of $20,647,168 reflecting additional anticipated revenues and proposed increase in expenditures. The Supplemental Budget adjustments result in a net increase $6,462,839 in General Fund costs, funded by additional revenue of $519,029, a draw of $4,843,252 from the Capital Renewal Reserve, and $1,100,558 funded through available fund balance or a reduced transfer to the Capital Renewal Reserve in FY2024/25.
Detailed explanations of the Supplemental Budget proposed changes can be found in the Attachments. There is consensus between the County Administrator and department heads on the FY2024/25 Recommended and Supplemental Budget documents presented to the Board for approval.
The County Administrator, in collaboration with the Auditor-Controller, Human Resources, and the department heads, has prepared the attached Supplemental Budget Adjustment documents and resolutions for the Board’s deliberation during the Public Hearing.
Budget Considerations and Recommended Actions:
The following are the Recommended Budget actions:
1. Adopt the attached Budget Resolution (Attachment F) which includes both the FY2024/25 Recommended Budget and the FY2024/25 Supplemental Budget adjustments (Attachment A & B) that include the following specific authorizations listed in items 2-27.
2. Approve the attached Changes in Position Allocation List reflecting allocated positions included in the Recommended and Supplemental Budgets and Adopt the Resolutions Amending the List of Numbers and Classifications of Positions incorporating the deletions and additions recommended in the FY2024/25 Recommended Budget, as modified by the Supplemental Budget requests for FY2024/25 (Attachment C).
3. Approve the Recommended Contributions to Non-County Agencies as included in the Recommended and Supplemental Budgets (Attachment D).
4. Approve the Fixed Assets included in the Recommended and Supplemental Budget (See Recommended and Supplemental Budget narratives).
5. Approve the Capital Projects included in the Recommended and Supplemental Budget (See Recommended and Supplemental Budget narratives).
6. Approve the write-off of a $304,248 receivable in the General Fund due from Catholic Charities of Yolo-Solano resulting from costs to administer the Rental Assistance Program that was not covered by Coronovirus Aid, Relief, and Economic Security (CARES) Act funds. This represents the General Fund’s share of cost for this program based on an audit completed by the Auditor-Controller’s Internal Audit Division.
7. Receive the Board Priority Setting Status Update (Attachment E).
The following delegated authority is recommended to facilitate the closeout of FY2023/24:
8. Authorize the Auditor-Controller, with the concurrence of the County Administrator, to transfer appropriations within a fund to cover FY2023/24 year-end closeout if justified, subject to the transfer(s) not increasing the total appropriation within the fund.
9. As part of FY2023/24 closeout, transfer and/or redistribute Board-approved County General Fund Contribution between departments within Fund 900 (Public Safety) and between Departments/Divisions for Fund 902 (Health & Social Services), provided that the Board-approved General Fund Contribution/appropriation amount directed to each of the individual Funds 900 and 902 remains within the approved County General Fund Contribution/appropriations amount.
10. Authorize the Auditor-Controller, in consultation with the County Administrator, to carry forward Board-approved capital project appropriations into FY2024/25 to facilitate the accounting and management of multi-year capital projects, provided the funding has been received.
11. Authorize the Auditor-Controller, in consultation with the County Administrator, to carry forward Board-approved unspent grant appropriations into FY2024/25 to facilitate the accounting and management of multi-year grants, provided the grant-funding has been received.
12. Authorize the Auditor-Controller, in consultation with the County Administrator, to carry forward Board-approved unspent American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) appropriations into FY2024/25 to facilitate the accounting and management of Board-approved ARPA projects.
13. As part of the FY2023/24 closeout, authorize the Auditor-Controller, with the County Administrator’s approval, to transfer available Accrued Leave Payoff funds appropriated in the General Expenditures Budget to any Department/Fund which has incurred unanticipated accrued leave payoff costs which cannot be covered within existing department budget appropriations.
14. In addition, as part of FY2023/24 closeout, if the Midyear projection of Fund Balance for the General Fund is not met (estimated at $36.7 million), then the County Administrator will authorize the Auditor-Controller to reduce, in this order, Accrued Leave Payoff, Employer PERS Rate Increase Reserve, Capital Renewal, and then General Fund Contingency for FY2024/25 by the amount short of the projection.
The following delegated authority is recommended to facilitate other actions related to approval and financing of the FY2024/25 Recommended Budget:
15. Authorize the Auditor-Controller, with the County Administrator’s approval, to fund the net General Fund cost for Supplemental Budget Adjustments, by utilizing any year-end available Fund Balance in the General Fund or by reducing the transfer to the General Fund Committed Fund Balance for Capital Renewal Reserve.
16. Authorize the Auditor-Controller, with the concurrence of the County Administrator, to increase (from the June 30, 2024 year-end close/Fund Balance) the following (please refer to Schedule 4 of the FY2024/25 Recommended Budget):
i. Committed Fund Balance - Capital Renewal by $2.4 million.
17. Authorize the County Administrator, assisted by the Auditor-Controller, to draw down (please refer to Schedule 4 of the FY2024/25 Recommended Budget and Supplemental adjustments):
i. Committed Fund Balance - Employer PERS Rate Increase Reserve by $2.0 million.
ii. Committed Fund Balance - Accrued Leave Payoff by $2.0 million.
iii. Committed Fund Balance - Capital Renewal by $10.8 million.
18. In the event the General Fund’s year-end Fund Balance exceeds the amount needed to balance the FY2024/25 Budget, as may be authorized by the Board of Supervisors following Budget Hearing deliberations, authorize the County Administrator to authorize the Auditor-Controller to (please refer to page D-15 of the Budget Construction & Legal Requirements of the FY2024/25 Recommended Budget):
i. Increase the General Fund Committed Fund Balance for Capital Renewal up to $15.0 million; and/or
ii. Increase the General Fund Committed Fund Balance for Employer PERS Rate Increase and/or 115 Trust up to $15.0 million;
iii. Increase the General Fund Committed Fund Balance for Accrued Leave Payoff up to $2.0 million; and/or
iv. Increase the General Fund Committed Fund Balance for General Fund Reserves up to $5.0 million.
19. Authorize the Auditor-Controller to apply year-end available Fund Balance at June 30, 2024 as an Operating Transfers-Out to the Library Contingency (BU 9304) in the following Budget Units: Library Zone 1 (BU 6150), Library Zone 2 (BU 6180), Library Zone 6 (BU 6166), and Library Zone 7 (BU 6167).
20. Authorize the Auditor-Controller to increase (decrease) appropriations in the Department of Child Support Services Operations Division (BU 2488, subobject 0002312) by the available year-end fund balance as of June 30, 2024.
21. Authorize the Auditor-Controller to increase (decrease) appropriations in the East Vallejo Fire Protection District (BU 9814, subobject 0002245) by available year-end fund balance.
22. Authorize the Director of Human Resources, with the concurrence of the County Administrator, to make technical changes to the Position Allocation List.
23. Authorize the Auditor-Controller, with the concurrence of the County Administrator, to make adjustments after the close of the Budget Hearings and the end of the fiscal year as needed and where applicable to balance the FY2024/25 Adopted Budget.
24. Authorize the County Administrator to delete positions that have been vacant for over six months, in accordance with the 2011 Budget Reduction Strategy of eliminating or freezing vacant positions and only filling positions that are “Mission Critical” to the organization, and to accordingly direct the Director of Human Resources to make technical changes to the Position Allocation List as needed.
25. Authorize the Auditor-Controller, with concurrence of the County Administrator to increase General Fund Committed Reserves for Capital Renewal, Employer PERS Rate Increases or General Fund Reserves by repayments from General Fund Loans.
26. Authorize the Auditor-Controller, with the County Administrator’s approval to increase the General Fund Balance or the General Fund Balance for Accrued Leave Payoff by the amount appropriated in the General Expenditures Budget for Accrued Leave payoff not used by the end of the fiscal year.
27. Authorize the County Administrator to sign all agreements and/or contract amendments resulting from the Board’s approval of the FY2024/25 Recommended Budget and Supplemental Budget requests.
In Summary the following separate attachments have been prepared in support of the recommended Board actions and provide additional detail and explanations:
Attachment A: Summary of Supplemental Budget Adjustments
Attachment B: Supplemental Adjustments to FY2024/25 Recommended Budget
Attachment C: Changes in the Permanent Position Allocation and Resolutions Amending the List of Numbers and Classifications of Positions in the Recommended and Supplemental Budget
Attachment D: Community Investment Fund Update (Reflects previous Board approved awards for FY2024/25)
Attachment E: Board Priority Setting Status Update
Attachment F: FY2024/25 Budget Resolution
Attachment G: Link to the FY2024/25 Recommended Budget
Attachment H: Budget Notice