Managers 2009-10 Budget Update

April 6, 2009

Managers2009-10 Budget Update

April 6, 2009

County of San BernardinoCounty of San Bernardino

3

General Fund Departments Spending

SPENDING WHERE THE BOARD HAS NO DISCRETION. INCLUDES: 1,698,266,062

Welfare costs reimbursed by state and federal monies ($805.5 million)

Other program costs funded by program revenues such as user fees ($892.8 million)

REQUIRED HEALTH AND WELFARE MATCHES AND OTHER FIXED OBLIGATIONS: 140,883,934

SPENDING WHERE THE BOARD HAS SOME DISCRETION. INCLUDES: 557,177,164

Reserve Contributions ($5.0 million)

Contingencies Contributions ($88.2 million)

Law and justice program costs funded by local revenues ($280.5 million)

All other program costs funded by local revenues ($183.5 million)

TOTAL: $2,396,327,160

No Discretion71%

Some Discretion

23%

Required matches/fixed

obligations6%

4

Remaining General Fund Financing

Ongoing One-time

Financing Available at Budget Adoption 7.8 7.0 Additional Fund Balance 30.1

Total Financing Available 7.8 37.1

Restore New Positions/Reclassifications (3.0) Approved MOU Increases (9.5) Not fund MOU Increase except L&J and HS 4.8 High Desert Government Center (10.0) Litigation Costs (0.3) 8% Reduction to Departments 5.4 Increase in Priority Policy Needs (1.3) Purchase Building and Land on Haven Avenue (6.6) Extend Old and Grand Prix Fire Permit Waiver (1.0) Inland Empire Economic Recovery Corp (2.5) Lodgemakers Settlement (2.7) Other Approved Mid Year Board Agenda Items (1.3)

Remaining Available 4.2 12.7

(In Millions)

5

Current Assumptions in Five Year Forecast

Property Tax Growth (-6% in 2009-10, -3% in 2010-11 and 2% thereafter)

Sales Tax Growth (-16% in 2009-10 , 0% in 2010-11 and 2% thereafter)

Not Fund MOU/Retirement (Except L & J and HS)

Not Fund Inflation

6

Current Five Year Forecast of General Fund Operations

(In Millions)

2009-10 2010-11 2011-12 2012-13 2013-14

AV % Grow th -6% -3% 2% 2% 2%

Revenue Grow th:

Property Related (33.9) (12.2) 8.0 8.1 8.3

Prop 172 (20.0) - 2.8 2.8 2.9

Other Revenue (3.0) 0.9 1.2 1.3 1.3

Total (56.9) (11.3) 12.0 12.2 12.5

Increase in Costs:

Salaries & Benefits (26.0) (21.8) (24.8) (26.2) (27.4)

Retirement Increases (5.8) (15.7) (15.7) (17.5) (22.1)

Adult Detention Center Staff ing - - (15.5) (18.7) -

Other Costs (2.0) (1.6) (2.3) (2.3) (2.8)

Total (33.8) (39.1) (58.3) (64.7) (52.3)

Net Yearly Operating Deficit (90.7)$ (50.4)$ (46.3)$ (52.5)$ (39.8)$

7

Mitigations Need in Five Year Forecast

(In Millions)

2009-10 2010-11 2011-12 2012-13 2013-14

Net Yearly Operating Deficit (90.7)$ (50.4)$ (46.3)$ (52.5)$ (39.8)$

Mitigations Needed:

Property Tax Revenue from 2008-09 8.4 - - - -

Workers Comp Savings from 2008-09 10.6 - - - -

Adjust Workers Comp Future Rates 8.5 - - - -

8% Local Cost Reduction in 2008-09 5.4 - - - -

Not fund MOU/Retirement except LJ&HS 8.7 10.1 10.9 11.8 13.3

8% Local Cost Reduction in 2009-10 9.0 - - - -

4 Payroll Hours per Pay Period 18.2 - - - -

Remove Backfill from HS 4.2 - - - -

Use Ongoing Set Asides 14.9 - - - -

Mitigated Financing Available (2.8)$ (40.3)$ (35.4)$ (40.7)$ (26.5)$

8

Past Five Year Actual General Fund Revenue Growth

(In Millions)

2004-05 2005-06 2006-07 2007-08 2008-09

AV % Grow th 10.8% 14.5% 17.9% 15.9% 5.1%

Revenue Grow th: Estimate

Property Related 42.3 77.4 64.4 43.1 (4.7)

Prop 172 13.0 18.8 8.9 (1.1) (18.0)

Other Revenue 4.7 28.8 13.4 2.3 (22.4)

Total 60.0 125.0 86.7 44.3 (45.1)

9

Actual General Fund Operations Activity

Past Five Year Revenue Growth Compared to Incremental Costs

(75.0)(50.0)(25.0)

-25.050.075.0

100.0125.0150.0

2004-05 2005-06 2006-07 2007-08 2008-09

In Millions

Revenue Growth Incremental Costs

10

Changes in Actual General Fund Revenue Base

(In Millions)

2004-05 2005-06 2006-07 2007-08 2008-09

Estimate

Countyw ide Discretionary 421.5 489.9 567.7 613.1 586.0

Prop 172 122.6 141.4 150.3 149.2 135.4

Realignment 193.0 211.1 212.5 209.3 185.9

Total 737.1 18% 842.4 35% 930.5 10% 971.6 4% 907.3 -7%

11

Prop 172 Revenue

100,000,000

110,000,000

120,000,000

130,000,000

140,000,000

150,000,000

160,000,000

Total Prop 172 Revenue 122,638,813 141,416,739 150,305,026 149,208,809 135,400,000

Actual 2004-05 Actual 2005-06 Actual 2006-07 Actual 2007-08 Estimate 2008-09

12

Realignment Revenue

170,000,000

175,000,000

180,000,000

185,000,000

190,000,000

195,000,000

200,000,000

205,000,000

210,000,000

215,000,000

Total Realignment Revenue 192,990,301 211,051,999 212,540,415 209,300,060 185,896,892

Actual 2004-05 Actual 2005-06 Actual 2006-07 Actual 2007-08 Estimate 2008-09

13

2009-10 Local Cost Adjustments

Reduction for 2008-09 Cut (8% less MOU)

Reduction for 2009-10 Cut (Another 8%)

Reduction for Workers Comp Rates Reduction for Work Schedule

Reduction (4 hours)

14

2009-10 General Fund Reduction Breakout

Salaries & Benefits (82 FTE)

43%

Services & Supplies35%

Other4% Reimbursements

/Revenues18%

15

4 Hour Reduction per Pay Period

Effective July 1, 2009 Reduced Work Schedule

Program One unpaid day off per

month Reduce earnable

compensation by 5%

16

Retirement Incentive Program (RIP)

Approved March 3, 2009 Eligible Employees > 50 yrs Retiring between March 3, 2009 and

June 30, 2009 $1,000/yr, paid over 5 yrs Delete position and not reinstate for 5

yrs

17

Current Balance of Reserves Actual Estimated

30-Jun-08 Approved Approved 30-Jun-09

Balance Contributions Uses Balance

General Purpose Reserve 57,217,492 2,516,125 59,733,617

Specific Purpose Reserves

Future Space Needs Reserve 37,713,000 10,830,455 48,543,455 Retirement Reserve 38,600,000 7,900,000 46,500,000 Medical Center Debt Service 32,074,905 32,074,905 Jail Expansion Reserve 21,500,000 (21,500,000) - Juvenile Maximum Security 13,941,206 3,944,454 (17,885,660) - Teeter Reserve 17,747,201 17,747,201 Moonridge Zoo Reserve 4,750,000 1,000,000 (5,750,000) - Capital Projects Reserve 4,000,000 4,000,000 Insurance Reserve 3,000,000 3,000,000 Restitution Reserve 1,790,025 (75,000) 1,715,025 Electronic Voting Reserve 370,000 370,000 Justice Facilities Reserve 119,316 21,246 140,562 Business Process Improv Reserve 4,390,033 (4,096,300) 293,733

Total Specific Purpose 179,995,686 23,696,155 (49,306,960) 154,384,881

Total Reserves 237,213,178 214,118,498

2008-09

18

County Reserve History

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

General Purpose Reserve 31.9 34.8 37.2 41.7 52.5 57.2 59.7

Specific Purpose Reserves

Future Space Needs Reserve 19.6 37.7 48.5 Retirement Reserve 7.0 7.0 7.0 14.9 30.7 38.6 46.5 Medical Center Debt Service 32.0 32.0 32.0 32.0 32.0 32.0 32.0 Jail Expansion Reserve 7.0 16.4 21.5 - Juvenile Maximum Security 1.5 1.5 1.5 5.7 9.4 13.9 - Teeter Reserve 19.3 19.3 19.3 17.7 17.7 17.7 17.7 Moonridge Zoo Reserve 3.8 4.8 Capital Projects Reserve 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Insurance Reserve 5.0 3.0 3.0 3.0 3.0 3.0 3.0 Restitution Reserve 2.1 2.1 1.6 1.9 1.9 1.9 1.8 Electronic Voting Reserve 5.7 0.5 0.5 0.5 0.4 0.4 Justice Facilities Reserve 4.9 3.7 1.3 0.6 0.1 0.1 0.1 Business Process Improv Reserve

3.0 2.5 0.6 4.4 0.3

Total Specific Purpose 81.5 72.6 73.2 89.8 139.7 180.0 154.3

Total Reserves 113.4 107.4 110.4 131.5 192.2 237.2 214.0

(In Millions)

19

Stock Market

March 23 March 30 % Chg

S & P 500 768.54 815.94 6.2%

Dow Indu 7,278.38 7,776.18 6.8%

20

4th Qtr 2008 4th Qtr 2007 % Chg

Solano County 14,875,531 14,035,993 6.0%

San Diego County 100,164,624 109,685,843 -8.7%

Los Angeles County 289,422,454 322,567,330 -10.3%

Orange County 119,003,272 134,885,492 -11.8%

San Luis Obispo County 8,990,734 10,517,124 -14.5%

Imperial County 4,881,552 5,732,238 -14.8%

San Bernardino County 59,191,403 70,087,008 -15.5%

Riverside County 56,343,617 68,729,962 -18.0%

Ventura County 26,150,235 32,145,892 -18.7%

Most Recent Quarter

Sales Tax Trends for Counties

21

Unemployment

County State U.S.

Unemployment Rate - Feb. 2009 11.9% 10.9% 8.1%

# of Persons Unemployed 104,700 2,027,400 12,467,000