May 21, 2010 > Board of Supervisors Budget Workshops
Board of Supervisors Budget Workshops
Board Chambers, 70 W. Hedding St., San Jose
Tuesday, May 18 - 1:30 p.m.
á Budget Overview
á Children, Seniors and Families: Department of Child Support Services, In Home Supportive Services
á Health and Hospital: Children's Shelter and Custody Health Services, Drug and Alcohol Services, Community Health Services, Valley Health Plan, Public Health, Mental Health
Tuesday, May 18 - 6:30 p.m.
á Children, Seniors and Families, continued: Social Services Agency
á Health and Hospital, continued: Valley Medical Center
Wednesday, May 19 - 1:30 p.m.
á Finance and Government Operations: Special Programs and Reserves, Contingencies, Board of Supervisors, Clerk of the Board, County Executive's Office and LAFCO/ Affordable Housing, Assessor, Procurement, County Counsel, Registrar of Voters, Information Services Department, Three Year Technology Plan, County Communications, Facilities and Fleet, Capital Programs, County Library, Employee Services Agency, Finance Agency
Thursday, May 20 - 1:30 p.m.
á Public Safety and Justice: Office of the District Attorney, Office of the Sheriff, Medical Examiner-Coroner, Office of the Public Defender, Office of Pretrial Services, Department of Correction, Probation, Criminal Justice System-wide Costs, Measure B, Planning and Development, Agriculture and Environmental Management, Parks and Recreation, and Roads and Airports Department.
á Housing, Land Use, Environment and Transportation: Measure B, Planning and Development, Agriculture and Environmental Management, Parks and Recreation, and Roads and Airports Department.
Budget hearing meetings to make final decisions on the FY 2011 Budget will take place June 14-18, 2010.
County Executive releases fiscal year 2011 recommended budget
Submitted By Gwendolyn Mitchell and Laurel Anderson
Santa Clara County's Fiscal Year (FY) 2011 Recommended Budget was released on May 3. The $4.2 billion budget includes all services, operations, capital improvements and reserves, and addresses a $223.2M General Fund shortfall. The $2.2 billion General Fund budget outlines proposed spending for all discretionary and many mandated services for the fiscal year beginning July 1, 2010.
The County is legally required to balance its annual budget. The Recommended Budget signals the start of budget review workshops and hearings by the County's Board of Supervisors.
Like many California counties, Santa Clara County has an on-going structural imbalance in its budget. Current methods of financing county government are inadequate to maintain existing service levels. When the economy is strong, healthy tax revenues support programs and services. In bad times, demand for County safety-net services increases as revenue shrinks, as has been the case for the past several years.
Steep declines in discretionary revenues have created a ninth consecutive General Fund deficit. Since FY 2003, the County will have closed cumulative budget gaps of $1.8 billion.
"Local governments struggle daily to provide essential services with dwindling resources. The current economic climate has heightened this situation," Smith said. "The recession's impact has been devastating to families in Santa Clara County, state-wide, and nationally. Local governments teeter on the brink of insolvency because of staggering falls in revenue. The most optimistic forecasts don't see significant improvement in the near future."
To meet the $223.2M shortfall, Smith's budget combines net reductions of approximately $84.8M from programs and services, and use of one-time revenue of $138.4M. Proposals include elimination of 193 full-time equivalent positions from the General Fund.
Departmental reductions amount to almost $700M from fiscal years 2003 to 2011. For FY 2011, County departments will help close the budget shortfall either with expenditure reductions or new revenues of $48.5M. Santa Clara Valley Medical Center (SCVMC) is contributing $35.7M. The bulk of SCVMC's solutions is revenue-related and does not reduce services.
The Social Services Agency will reduce costs and maintain core services while serving a dramatic increase in clients because of the recession. The Department of Family and Children's Services will see cuts of $27.8M, including loss of 45.5 positions. Other major reductions include the closure and decentralization of the Clover House Visitation Center and elimination of 16.5 positions. Visitation services for children in out-of-home placement and their families will be integrated into other service locations. A State adjustment to group home rates will save the General Fund $3M.
The Probation Department will lose 23 positions, and restructuring of the Juvenile Electronic Monitoring/Community Release Program will save $2.9M. The Probation plan also recommends elimination of the Informal Juvenile and Traffic Court, which will redirect clients into the Court system.
The Capital and Technology Plan has identified $25M in capital projects but will fund just $8.8M. Since 2002, the County's Capital Plan has built three Valley Health Clinics, the Valley Specialty Center, the Morgan Hill Court House, a new Crime Lab, and has acquired and improved the Charcot facility and a new fleet facility.
The Recommended Budget also identifies new initiatives in health and law enforcement programs.
The budget proposes a new relationship between the Sheriff's Office and the Department of Correction that could reduce operating costs by around $5M. In 1987, the removal of the jails from the Sheriff created budgetary savings but subsequent court decisions, and new statutes have led to inefficiency. The proposed change eliminates duplication between the two departments in Personnel, Internal Affairs, and Administration. With some limited staffing changes, this new plan will generate significant savings without compromising safety. Correctional officers will continue to receive specialized training. The Sheriff will exercise additional authority over correctional officers' right to carry weapons.
For the first time in several years, the Public Health, Mental Health, and Drug and Alcohol departments are not required to reduce services. Smith recommends adding $8M back into health programs.
The Public Health Department will receive $3M in new funding and an additional $2M to backfill programs, such as HIV/AIDS and Adolescent Family Life Program, which are no longer State-funded. The Department of Drug and Alcohol Services will receive $500,000 in new funding and $2.5M to replace lost State Proposition 36 funding.
"We must start rebuilding these health programs to... help stabilize critical safety-net services and generate an even greater return by reducing the flow of clients into the health care system," said Smith.
One-time Revenue Solutions
The County will rely on one-time funds to prevent excessive service reductions to the community, especially the vulnerable who are trying to recover and may depend on County services.
One-time solutions rely on three major revenue sources totaling $110M, which represents 79 percent of the proposed budget's one-time solutions.
Over the past two years, the American Recovery and Reinvestment Act (ARRA) revenues have enabled the County to cope with the economic downturn. For FY 2011, ARRA funds will be extended for six months, specifically through increased reimbursements for the Federal Medical Assistance Percentage (FMAP) formula. Additional funding of $33.8M to local governments for Medi-Cal services will save hundreds of positions. Many residents seek County-assistance after losing their jobs and health insurance. If ARRA is not extended beyond FY 2011, the County will lose $56.2M in revenue.
Santa Clara Valley Medical Center will contribute $49M in Medi-Cal revenue through the Hospital Fee. AB 1383 utilizes the ARRA extension by enacting a hospital fee whereby the State will tax hospitals to gain an additional $4.3 billion in federal funding to increase State Medi-Cal resources.
The County has a tentative agreement with the San Jose Redevelopment Agency that will provide $27M in one-time funds, and a timetable that will define when regular payments resume. From FY 2009 to FY 2010, the Agency owed the County a total of $42M. The loss of both prior-year and on-going revenue would have devastated County services and programs.
Tough decisions have been made to address the $223M deficit. The budget plan could have been more draconian, but Smith prefers to mitigate the most difficult service reductions now.
"Over the past few years, the County has successfully put enough resources together to maintain most services. Living 'paycheck to paycheck' has been necessary to preserve a viable 'safety net,' one of the Board's highest priorities," Smith explained. "However, the magnitude of the FY 2011 deficit and use of reserves and one-time funds to maintain service in prior years provides no flexibility to create a reserve for likely State reductions."
These factors necessitate additional budget actions when the State decides its budget in the summer or fall. The County will maintain a five percent contingency reserve but will not have additional reserves to cover State reductions.
As for next fiscal year, Smith hopes Healthcare Reform and a new 1115 Medicaid Demonstration Waiver to fund hospitals and indigent care, coupled with an improving economy, might help offset the looming FY 2012 deficit. However, the County faces challenges ahead with no immediate reserve for State reductions for FY 2011 and expects pension costs will increase in the next fiscal year along with other pension benefit costs in FY 2013.
"The national economy may be improving but we face daunting fiscal challenges over the next five years," Smith said. "These challenges will require a new level of collaboration and cooperation to survive this crisis."
View the FY 2011 Recommended Budget at www.sccgov.org.