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T F D R T F b ye s b a im fi B in m m T yo yo B A A To: Depa From: Janet Date: April 2 Re: FY 20 That time ha Finance staf udget units ear budget pending ite udget cycle fter the sta mpacted oth nal adopted Board of Su nstead of A meeting, the memo. The purpose our Departm our departm BUDGET TI April 7 April 16 23 artment Hea Dutcher, A 23, 2015 015/2016 P as arrived to ff will work w s under thei as next ye ems. The c e until Augu rt of the fisc her deadlin d budget. T pervisor’s m ugust) and e Board ado e of this me ment’s bud ment’s subm MELINE FY 1 Set Bud Bud Dep mod For are d ads and Fis Assistant CA Preliminary o begin wor with depart r area of re ar’s initial s ompelling r ust. This m cal year cau es and resu The rollove meeting, Fin by doing s opted the p emo is to tra get request mission. 15/16 prelim dates to ho get instruct get system partments e dule. those depa distributed scal Staff AO to Budg Budget Gu rk on the pr tments in de esponsibility spending pl reason for u means the C using a tim ulted in fou r process is nance reco o discard th reliminary b ansmit to yo ts. The ins minary budg old budget m tions transm online goe nter their in artments wit via departm 1 CO Dep Car Jan get and Fina idelines an reliminary b eveloping t y. In previo an (the roll using a rollo County adop e-consumin r months o s neither ef ommended he rollover budget cale ou the guid structions be get calenda meetings w mitted to de es live for b ndividual bu thout acces ment mailbo OUNTY O partment o rol McElroy- net Dutcher- ance d Instructio budget proc heir individ ous years, t over budge over budge pted its fina ng, labor in f spending fficient nor e starting the budget pro endar descr elines and elow provid ar approved with Board. epartment h udget entry udgets usin ss, paper c oxes. F ALPINE of Finance - CAO/DOF - Asst CAO ons cess for FY ual budget the County et) after rem et was the d al spending tensive pro that doesn effective. A e budget cy ocess entire ribed in furt instructions de guidance d by BOS. heads and f y. ng the site-b opies of the E to Budget Y 2015/2016 packages rolled the p moving all o delay in star plan four m ocess that f n’t correspo At the April ycle earlier ely. At that ther detail i s for formu e for compl fiscal staff. based budg e budget re and Financ 6. for the prior one-time rting the months urther nd to the 7, 2015 (in April same n this lating eting geting eports ce ---PAGE BREAK--- 2 BUDGET TIMELINE April 7-30 Finance prepares the following: - Schedule of assumptions and economic factors expected to impact the budget. - GF revenue projections. Departments are responsible for projecting Non-GF revenues. - Schedule of salary and benefit accounts. Finance will input all salary and benefit accounts into the site-based budget system. The same percentage allocation used last year for salaries will be used again this year unless departments advise otherwise. If you anticipate using a different allocation percentage, please advise Finance as soon as possible. June 1 Departments submit budget forms back to Finance and departmental budgets are completed by the close of business. June 1-8 Finance balances projected revenues with proposed appropriations. Finance estimates the structural deficit and proposes strategies for bring the budget into balance. Finance compiles preliminary budget reports and forms. June 9, 10 & 11 CAO, Finance and Departments conduct one-on-one meetings. June 16 Finance presents overview of FY 15/16 budget with comparison to past results and trends. June 18 Recommended preliminary budget is released with Agenda for BOS budget meetings. Finance distributes published budget to known participants. June 23 & 24 Special Board Meetings. Opportunity for public comments concerning final budget. Finance reviews budgets with Board. Opportunity for department heads to address the Board concerning budgetary matters. Department heads should be available at meeting to answer questions. Board of Supervisors considers adoption of preliminary budget. BUDGET DEVELOPMENT GUIDELINES The budget is a tool specifically meant to measure and control financial accountability. It communicates information about the anticipated allocation of resources and expenditures. A balanced budget ensures the County does not spend beyond its means. A balanced budget is also required by California State law. A structurally balance budget further ensures the County’s use of resources for operating purposes does not exceed operating revenues. This is our ultimate goal with the budget process as it strengthens the County’s fiscal sustainability. The goal of Finance is to achieve a ---PAGE BREAK--- 3 structurally balanced budget for the County’s General Fund within the next couple of years. These guidelines are designed to help the County achieve this goal. A structurally balanced budget is defined as one that budgets recurring expenditures at no more than the amount of recurring revenues. Guidelines for estimating revenues Operating or recurring revenues are those reasonably expected to continue year to year with some degree of predictability. Some revenues have both non-recurring and recurring components and the exercise of judgment is required to determine how much is truly recurring. Generally, only the recurring portion is budgeted. Finance will very conservatively estimate General Fund operating or recurring revenues and this is especially true for those revenues that are highly volatile and difficult to accurately predict. This is done to avoid overspending and to prevent mid-year appropriation cuts. Finance will not budget non-recurring or one-time revenue unless: o A specific appropriation or use of the revenue has been identified, o Receipt of the revenue is reasonably assured and o The amount can be estimated with a high degree of accuracy. o Departments responsible for budgeting revenue outside the General Fund will adhere to this guideline. Finance is responsible for estimating revenues for the General Fund. Departments are responsible for estimating revenues for those funds under their authority and outside the General Fund. Revenue projections should be based on grantor award letters, anticipated allocations, trend analysis, economic modeling or any other method that is appropriate that results in conservatively projecting the amount of revenues anticipated to be received. Guidelines for estimating expenditures Operating or recurring expenditures appear in the budget each year and include salaries, benefits, materials, services, utilities, supplies and maintenance. Capital asset acquisitions are not considered recurring and although some capital assets are acquired every year they are not the same assets year after year. Recurring expenditures are those necessary to continue providing the same level of service provided in the prior year. The finance department will estimate and enter salaries and benefits for all funds using the following guidelines: o Salaries are based on current pay rates and anticipated step increases. o Budgeted salaries are limited to those positions approved and currently filled or, if vacant, an active recruitment is currently taking place. ---PAGE BREAK--- o o o Insura inform and h depar Indire sched All de guide o o o PERS co payment payment applies. N the Count Health ins 1, 2016. Workers c informatio trends res ance amou mation prov historical tre rtment will b ect cost allo dule of amo epartments elines: Estimate 2015 proj budgets u and a diff see below If the dep account e results by departme justificatio documen FY 2016 s be more t actual res Do not bu one-time available time reve available listed on t include un budget. ntributions of $201,26 of $355,28 Note that fo ty’s share o surance pre compensat on provided sulting from nts are bas vided by Tri ends resulti be distribut ocations are ounts by fun are respon expenditur ected actua unless circu erent budg partment’s p exceeds the y the greate ent must pro on as to wh ted using th services an than 120% sults withou udget one-t revenues ( and obligat nues or car or obligate the Unfund nfunded req are genera 8 for safety 1% for non or FY 15/16 of retiremen emiums are ion amount d by Trindel m paid claim sed on a se ndel. This ng from pa ed once co e based on nd is attach nsible for bu es using hi als) and no umstances et amount proposed bu e projected er of $1,000 ovide financ hy. Justifica he Budget J nd supplies of last year ut providing ime expend or carryove ted in some rryover bala d, these ite ed Reques quests in th 4 ally based o y personnel -safety per 6, PERS ha nt contributi e estimated ts are base l. This alloc ms. eparate allo allocation t id claims. omplete. the County hed. udgeting se storical act ot carryover have chang is warrante udget for a FY 2015 a 0 or 20%, th ce with ation is to b Justification budgets ca r’s projecte justification ditures unle er balance) e manner. ance is not ems should st form. Do he departm on 20.23% o l and 9.353 rsonnel. Ra as changed ions. d with a 8% ed on a sep cation take ocation prep takes into c A schedule y’s cost plan ervices and ual results r ged ed (but ny actual he be n form. annot ed n. ess is If one- be not ent’s F p 2 a w T ju b o T im T c s p $ of salary pl 3% of salary ates are low their meth increase b parate alloca s into cons pared by Fi consideratio e of amount n filed with supplies us from prior y For office proposes sp 2016. FY 2 and FY 2015 were $10,000 The departme ustification budget of $13 of FY 2015 pr The FY 2015 mpact. This does n cannot budg supplies. It m provide justific $3,000 more t us a lump s y plus a lum wer if PEPR od of calcu beginning Ja ation using ideration hi nance usin on asset ow ts by fund a the State. sing the fol years (inclu Example supplies, a pending $13 2015 budget 5 projected . ent is requir because th 3,000 is great rojected resul budget of $1 ot mean the get $13,000 means the dep cation to prop than it did in t sum mp sum RA lating anuary istorical g wnership and A lowing uding FY a departmen ,000 for FY was $12,00 actual result ed to provid he propose ter than 120% ts of $10,000 12,000 has n e departmen 0 for offic partment mus pose spendin the prior year nt Y 0 ts e d % . o nt e st g . ---PAGE BREAK--- 5 GENERAL FUND DEPARTMENTS – HELPING SOLVE THE STRUCTURAL DEFICIT The General Fund has a structural deficit that exceeded $350,000 in FY 2015. This is $100,000 lower than the prior year. As previously stated, the goal of Finance is to achieve a structurally balanced budget. Balancing ongoing expenditures with ongoing revenues will move the County towards fiscal sustainability and when actual revenues exceed actual expenditures the County can become fiscally resilient allowing the build-up of reserves to fund one-time expenditures and capital improvement projects. A chart illustrating fiscal sustainability and fiscal resilience is attached. A worthy goal for FY 2016 would be to cut the structural deficit by another 1/3rd with a combination of revenue gains or budget savings of $100,000. Although the amount is uncertain at this time, there likely will be some level of revenue gains next year in property taxes, triple flip revenues and sales taxes. This will contribute towards a share of this goal. The remainder should be achieved through appropriation reductions. While Finance is not recommending at this time implementing any sort of forced flat appropriation cuts in each general fund department’s services and supplies budget, the following table illustrates the potential budgetary savings that could be achieved: % Budget Savings 1% $11,500 3% $34,500 5% $57,500 10% $115,000 12% $138,000 15% $172,500 Rather than make these kind of indiscriminate cuts, please review the activity in each of your department’s accounts identifying potential solutions that will reduce the County’s net cost and contribute towards reducing the structural deficit. DEPARTMENTAL INSTRUCTIONS – THOSE WITH ACCESS TO SITE-BASED BUDGETING MODEL Departments will prepare this year’s preliminary budget request using the site-based budgeting model which is accessible from the site-based voucher system menu. Using the Site Based Budget – Department Menu, each general fund department will enter their projected amounts for services and supplies using the guidelines described above. Non-general fund departments will enter their projected revenues, services and supplies. Salaries and benefits will be entered by Finance. Budget amounts for each budget unit are entered separately based on the department’s site code and fund/department combination. The budget system will display the 2015 YTD and 2015 Budget amounts and a place to enter the Department’s 2016 Request. Budget input to the system must be completed by the close of business on Monday, June 1. ---PAGE BREAK--- 6 DEPARTMENT INSTRUCTIONS – THOSE WITHOUT ACCESS TO THE SITE-BASED BUDGETING MODULE For those departments without access to the site-based budgeting module, Finance will distribute reports to department mailboxes. These departments should review their budgets and make corrections directly on the report. Corrected reports should be returned to Finance no later than the close of business on Monday, June 1. ---PAGE BREAK--- FY 15/16 Calendar for Preliminary Budget Adoption Updated 4/23/2015 v2 1 fy 2016 budget calendar ‐ prelim.docx Activity Timing 1 Board of Supervisors approves budget calendar and sets special board meeting to review and approve preliminary budget April 7 2 Finance prepares: Schedule of assumptions and economic factors GF revenue projections (departments are responsible for non-GF revenues) Schedule of salary and benefit accounts Estimate of structural deficit/surplus and develops strategy for balancing budget Schedule of GF department net cost discretionary funding allocations, if necessary to balance budget April 3 Finance distributes department budget instructions April 16 23 4 Budget system online goes live for budget entry. Departments enter budgets by accessing site-based budgeting module. Department receives budget templates, forms and schedules. May 1 – May 31 5 Departments submit budget forms back to finance and departmental budgets are completed on or before June 1. June 1 6 Finance balances projected revenues with proposed appropriations. Budgets are finalized. Finance compiles preliminary budget reports and forms. June 1 - 8 7 One-on-one meetings with Department Heads, CAO and Fiscal staff June 9, 10 & 11 8 Finance presents overview of FY 15/16 budget with comparison to past results and trends. June 16 9 Preliminary budget document ready for agenda and made available to Board Members, Departments and Public when agenda is released June 18 10 Board of Supervisors Special meeting – Board considers adoption of preliminary budget June 23 & 24 ---PAGE BREAK--- ---PAGE BREAK--- FY 2016 BUDGET Department Meeting Schedule Department Budget Meetings Tuesday June 9 Wednesday June 10 Thursday June 11 8:30am ‐ 9:00am 30 min 9:00am ‐ 9:30am 30 min 9:30am ‐ 10:00am 30 min 10:00am ‐ 11:00am 60 min 11:00am ‐ 12:00pm 60 min AGENDA REVIEW 1:30pm ‐ 2:30pm 60 min 2:30pm ‐ 3:00pm 30 min 3:00pm ‐ 3:30pm 30 min 3:30pm ‐ 4:00pm 30 min 4:00pm‐4:30pm 30 min 4:30pm ‐ 5:00pm 30 min