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  Time Set   # 30.       
  
Meeting Date: 09/28/2021  
Brief Title:    FY21-22 Adopted Budget
From: Daniel Kim, Interim County Administrator, County Administrator's Office
Staff Contact: Chad Rinde, Chief Financial Officer, Department of Financial Services, x8050

Subject
Receive report on preliminary fund balances as of June 30, 2021; hold a public hearing and adopt the County of Yolo budget for fiscal year 2021-22; hold a public hearing as the In-Home Supportive Services (IHSS) Public Authority Board and approve the IHSS Public Authority budget for fiscal year 2021-22; and approve the 2021-22 budgets for Board-controlled Fire Districts. (General fund impact $104,899,526) (Kim/Rinde)
Recommended Action
  1. Receive a report on preliminary County fund balances as of June 30, 2021 (Attachment A);
     
  2. Hold a public hearing on the County of Yolo and IHSS Public Authority budget for fiscal year 2021-22;
     
  3. Approve the 2021-22 County of Yolo budgets and adopt the 2021-22 Budget Resolution (Attachment C, including Exhibit C1);
     
  4. Approve the 2021-22 IHSS Public Authority budget as reflected in Attachment C, including Exhibit C1;
     
  5.  Approve the 2021-22 budgets for Board-controlled Fire Districts as reflected in Attachment C, including Exhibit C1; and
     
  6.  Approve changes to the 2021-22 Authorized Equipment List (Attachment H).
Strategic Plan Goal(s)
In Support of All Goals (Internal Departments Only)
Reason for Recommended Action/Background
Background
 
State law requires that the Board adopt the annual budget by October of each year.  The attached budget resolution (Attachment C and Exhibit C1) is based on the FY21-22 Recommended Budget as approved by the Board of Supervisors on June 15, and as revised by the recommendations included in this report. These recommendations have been reviewed with the Chair and Vice Chair in accordance with the Board’s Governance Manual.
 
Preliminary Fund Balance Report
 
The Preliminary Fund Balance Report (Attachment A) is a general accounting of the fund balances for all County funds as of June 30, 2021. Fund balance used or not available indicates amounts that are either appropriated for use in FY21-22 or that are not available for current spending (such as prepaid expenses and inventories). The available fund balances are those remaining amounts that can be used in the manner outlined in statute. The Level of Restriction column identifies how much flexibility the Board has in directing the use of those available funds. It should be noted that the fund balances in this report are preliminary and therefore subject to change until completion of the annual financial audit.
 
FY21-22 Adopted Budget
 
On June 15, 2021, the Board approved the FY21-22 Recommended Budget, which provided appropriation authority until the Adopted Budget is approved. The proposed FY21-22 Adopted Budget incorporates changes to the Recommended Budget based on revised revenue projections, available fund balances, changes resulting from the State budget, additional department requests, and Board priorities.

Since the approval of the Recommended Budget, the economy continues to show signs of positive growth and improvement. This improvement translates to general purpose revenues projected to increase in FY21-22 by approximately $1.8 million. Significant state and federal resources have also become available to respond to the pandemic and to recover from it. In addition, due to conservative management practices during the pandemic, including performing a hiring review and having a high vacancy rate, the County ended the prior year (FY20-21) with an additional $5.1 million in general fund unassigned fund balance. This allows the County to either restore budget cuts made during the COVID-19 recession or make additional targeted commitments.
 
A total of 33.5 new positions are being proposed in the Adopted Budget.  Of the 33.5 positions, only 4.5 positions are fully funded by the General Fund with the remaining 29 positions funded either partially or fully by a variety of other non-general fund sources. Most notably, the Adopted Budget includes funding for 10 Correctional Officers for the jail expansion. When Proposition 172 and general purpose revenues decreased due to the COVID-19 pandemic, the County was not able to fund these positions. These correctional officers have been requested for several years; however, they were previously deferred as they were tied to the Jail Renovation projects, which are only now nearing completion. (Additional discussion on this is in the Sheriff section below).
 
The table below provides a summary of the new positions recommended in the Adopted Budget. Attachment G lists the details of new positions, positions being funded after previously being held vacant, positions being eliminated, positions being held vacant but not eliminated, and requested positions that are not recommended at this time.
 
FY21-22 Adopted Position Changes
         
Adopted - New Positions
Department Position FTE Funding Source  Full Year Cost
(ongoing )
Sheriff 10 Correctional Officer I 10.0 Prop 172, General Fund         1,197,140
Sheriff In Custody Treatment Manager 1.0 General Fund/CCP             149,972
Sheriff Technical Support Specialist 1.0 General Fund             107,838
Sheriff Property and Evidence Technician 1.0 General Fund               91,465
Sheriff Correctional Officer II 1.0 CCP             127,241
Sheriff Communication and Patrol Vehicle Tech 1.0 General Fund             156,202
Sheriff Resident Deputy Sheriff 1.0 General Fund             166,349
District Attorney Deputy District Attorney III 1.0 CCP             181,040
District Attorney Victim Services Program Assistant 1.0 CCP               89,625
Financial Services Senior Accounting Technician 1.0 Property Tax, General Fund               89,179
Financial Services Accounting Technician 0.5 General Fund               40,582
General Services Senior Accounting Technician 1.0 Project Reimbursements               78,490
Health & Human Services Administrative Services Analyst   2.0 Federal/State             138,810
Health & Human Services Admin Clerk II 2.0 Federal/State             121,858
Health & Human Services Assistant Storekeeper  2.0 Federal/State             147,854
Health & Human Services Senior Accounting Technician 1.0 Federal/State             104,989
Public Defender Deputy Public Defender III 1.0 State             197,331
Public Defender Deputy Public Defender II 1.0 CCP             164,425
Public Defender Public Defender Investigator I 1.0 CCP             144,526
Public Defender Mitigation Specialist 1.0 CCP             133,006
Financial Services Accountant II 1.0 ARP             124,994
County Administrator's Office Principal Management Planner 1.0 ARP             193,170
  Subtotal 33.5    

The Adopted Budget reflects a change from the Recommended Budget, which included conservative revenue projections. With more updated revenue projections, the Adopted Budget adds additional general purpose revenues to restore the highest priority needs and address Board priorities. It should be noted, however, that the Adopted Budget still assumes a significant amount of salary savings, which may decrease once vacancy rates decline. Staff believe it is still reasonable to assume this salary savings due to the present difficulty to fill numerous positions.
 
Economic Recovery

At Recommended Budget, it was noted that the COVID-19 pandemic continues to hold back a full economic recovery. However, the State has moved “Beyond the Blueprint” which was the previous approach of managing restrictions on business operations in coordination with local pandemic case counts. Despite the removal of most restrictions on businesses to operate, certain restrictions still persist including local masking requirements along with vaccine/testing requirements by some employers and for attendance at large events. While these restrictions are minimal in comparison to the prior set of restrictions, until COVID-19 is under control, the economy is not expected to fully recover. At the present moment, the state and nation are grappling with the surge from the Delta variant of COVID-19 which has contributed to high levels of disease across the country. Yolo County is currently labeled as a community that has significant spread according to federal CDC Guidelines.
 
The improving revenue figures, in the midst of a COVID-19 resurgence, represents a dichotomy. It is still anticipated that with increases in vaccination and testing the economy will continue to improve but at a slower rate since some individuals may choose to not work or reduce their economic activities due to the risk of the Delta variant. Thus, in the Adopted Budget, we attempt to use the increase in revenue to focus on the highest priority needs and utilize much of the one-time gains to strengthen the County’s fiscal position by making contributions to contingencies and reserves that were not possible in the prior two years while grappling with the recession.
 
The picture is mirrored at the State level where lower income individuals have had significant impacts from the COVID-19 pandemic, while wealthy individuals and those with significant investments have seen asset prices rise to record levels. These capital gains have contributed to a significant amount of additional funding available for the FY21-22 State Budget. In addition, the Federal Government has responded in a robust manner to the COVID-19 pandemic in approving the latest round of assistance including to state and local governments through the American Rescue Plan. The additional funding at the state/federal level allows the County an opportunity to obtain external funding for a variety of needs. Some funding from state/federal sources is reflected in the Adopted Budget while others may need to be amended into the budget throughout the year, when there is clarity on what additional grants or allocations the County will receive. Overall, the Adopted Budget attempts to strike a healthy balance of both caution and optimism in its recommendations.
 
The sections below discuss significant proposed adjustments that are included in the Adopted Budget.
 
General Liability and Worker’s Compensation

For the FY21-22 Recommended Budget, charges for General Liability and Workers Compensation were estimated. Since then, the Yolo County Public Agency Risk Management Insurance Authority (YCPARMIA) finished conducting an organizational assessment which changed the premium calculation methodology as well as obtained final costs from its excess insurance carriers which contribute to the County’s increased rates. The Department of Financial Services (DFS) recalculated the allocation for each department based on YCPARMIA’s increased premiums and the updated calculation methodology. Therefore, in the Adopted Budget, adjustments were made to increase General Liability $501,000 and increase Worker’s Compensation $28,000 to reflect actual charges.
 
The General Fund was significantly impacted by the change in methodology. For General Liability, General Fund departments increased $323,000 and Worker’s Compensation increased $329,000 while Public Safety departments had a decrease in General Liability of $483,000 and a decrease in Worker’s Compensation of $415,000. The balance also affected other County funds. County staff provided notice to YCPARMIA of the possibility of withdrawing from the Joint Powers Agency effective June 30, 2022. In the meantime, DFS staff are reviewing insurance alternatives to ensure the County determines the best option for its long-term insurance needs in the future.
 
General Fund

The General Fund ended FY20-21 with a preliminary estimated available fund balance of approximately $17.1 million. In anticipation of higher fund balances resulting from abnormally high vacancy rates, the FY21-22 Recommended Budget included approximately $12.0 million in estimated carryforward fund balance as a funding source. As a result, $5.1 million in additional fund balance is available for appropriation in the Adopted Budget.  
 
The table below shows the unassigned General Fund balance over the past five years.
 
FY16-17
Actual
FY17-18
Actual*
FY18-19
Actual
FY19-20
Actual
FY20-21 Preliminary
$9,280,022 $13,653,833 $14,250,635  $10,510,023  $17,105,237
* Does not include $3.5M from one-time SB90 reimbursement.

The available fund balances have been high for several years, but last year was an anomaly in that vacancy rates were particularly high due to a hiring review in effect from March 2020 to March 2021 where each position required review and justification on the need to fill it which limited or slowed the filling of positions. This was lifted in March 2021 when economic improvements were no longer justifying the additional procedure. In addition, the County had reimbursements from CARES act funding that reduced costs in certain areas of the prior year, and this also contributed to a higher than usual fund balance.
 
The County budget still reflects that vacancy rates will remain elevated during FY21-22, as they were built into the budget as salary savings assumptions in the Recommended Budget. Over time, however, this level of vacancies may not be sustained and as a result this level of carryforward is not expected to be available in the future. As such, fund balances available at Adopted Budget continue to be used for one-time purposes in accordance with Board policy.
 
The projected FY21-22 general purpose on-going revenues have been revised to reflect an increase of approximately $1.8 million. The growth in property assessments was 0.6 percent higher than assumed in the Recommended Budget, resulting in an additional $363,300 in property tax revenue. Revenues that had been significantly negatively impacted by COVID-19, such as sales tax, Hotel/Motel taxes, and court revenues are showing increased growth. The Adopted Budget was adjusted to reflect increases in sales tax by $415,200, Hotel/Motel taxes by $99,000, and court fines and fees by $87,000.  In addition, the FY21-22 Recommended Budget had conservatively budgeted for franchise fees. The Adopted Budget now reflects updated expectations, based on actual data, resulting in an increase of $370,000.
 
The table below provides a summary of the recommended additional General Fund funding sources and uses. Attachment D provides a detailed listing of the recommended funding uses, while Attachment E further describes department requests that are not recommended for funding.  
 
Funding Sources FY21-22 Recommended FY21-22
Adopted
Additional Funding
Fund Balance 12,000,000 17,105,237 5,105,237
General Purpose 86,309,117 88,110,929 1,801,812
Total 98,309,117 105,216,166 6,907,049
       
Prop 172 and Public Safety Realignment   1,782,414
Net Available for Appropriations   8,689,463
       
Funding Uses     Additional Uses
       
Staffing Levels 1,327,244
Contingencies and Reserves   6,671,592
Critical County Services   690,627
Total     8,689,463
       
Department Requests Not Funded   4,006,651

County Departments

The following sections provide an overview of the County department budgets. The narrative includes discussion about adjustments to balance the FY21-22 Adopted Budget, a summary of major programs as well as highlights of significant budget changes.
 
A detailed listing of items not funded for all departments is included in Attachment E. Items funded with non-general funds are included in Attachment F.
 
Assessor/Clerk-Recorder/Elections
Staff recommends an increase of General Fund for the Assessor for additional overtime of $25,000.  The overtime request is necessary to compensate for an increasing trend of overtime and the potential impact of Proposition 19 (The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act) implementation on staff.
 
The Assessor’s division has re-budgeted for the extension of the State Supplementation for County Assessor’s Program (SSCAP) grant. The department received approval to extend the program another year to spend the remaining $359,000. The funds are to be used to hire staff and improve information technology systems. The State Department of Finance will be tracking the data to determine if the funding resulted in an increase in taxable property values attributed to tasks completed by employees hired with these funds.
 
While the Elections division has received State funding for the Recall Election, and there is a reduction in the number of local elections to be held during the fiscal year compared to the number originally anticipated during the Recommended Budget, staff recommends an increase of $30,000 for extra help and $15,000 for overtime for costs associated with the June Primary Election (2022). As requirements change for voter accessibility and the cost of staffing polling locations while at the same time providing mail-in ballots, staff costs have increased.
 
Child Support Services
Child Support Services’ Adopted Budget includes funding for an Administrative Services Analyst position which was approved by the Board of Supervisors on May 4, 2021. The Federal and State allocation for Yolo County was increased by $156,980 due to a regionalization recalculation completed by the State. This increase in revenue and a small reduction in Services and Supplies offset the various increases in expenditures noted above.
 
Community Services
The Adopted Budget for the Planning division includes increases in Professional Services to hire consultants for the Cannabis Land Use Ordinance (CLUO) and Environmental Impact Report. The expenditures are fully reimbursed by Zoning Permit Fee revenue. The budget also includes $200,000 of General Fund for the Climate Sustainability Project to hire outside consultants which supplements the $50,000 the Board set-aside for this purpose at Recommended Budget. The consultants will assist with preparing procedures, researching background information, providing recommendations, and supporting the recently created Climate Action Commission, as needed.
 
The Adopted Budget for the Roads/Public Works Division includes an increase of $30,000 in State Highway Users Tax (HUTA) funding for the Russell Boulevard Corridor Project in coordination with the City of Davis. Additionally, an increase of $150,000 is included to pay the Yolo Land Trust for land mitigation. The land mitigation is funded by the Ag Conservation Easement Program’s Fund Balance.
 
The Building Division’s current permitting software Trak-It is more than 10 years old and does not meet the department’s requirements any longer. Increases to capital asset software expenditures were included in the Adopted Budget to purchase new permitting software. The funding for this software improvement project includes $200,000 in Tech Cost Recovery Fee Fund Balance and $127,329 salary savings.
 
Fleet has one minor adjustment on the Equipment List with a net zero impact to the budget. Instead of purchasing a generator and key cabinet for $20,000 each, the division would like to use the entire $40,000 budgeted for the key cabinet.
 
The Transportation Division’s Adopted Budget includes a reduction of $88,873 in Transit Assistance State revenue and associated expenditures due to a reduction in the Yolo Bus budget. The division aligns the budget with the total amount of funding available from the Local Transportation Fund and State Transit Assistance Fund (LTF & STA).
 
County Service Areas (CSAs)
The Adopted Budget for the Wild Wings Water CSA includes a new Water Conservation Rebate Program for residents. This new rebate program is funded with Fund Balance. The budget also includes increases of $1,353,220 in Building and Improvement including engineering and construction expenditures for a new water well. The new well will be funded with Fund Balance although the division is pursuing grant funding to help offset the cost. Wild Wings and the County recently reached a settlement agreement where staff costs related to dissolving the County Service Area and creating a County Service District will be absorbed within the County. At the Board of Supervisors meeting on July 27, 2021, the Board decided to not dissolve the CSA; however, there is approximately $30,000 in staff time already spent on the work completed for the July Board item. The budget includes a General Fund contribution to cover the costs of the already-incurred staff time.
 
The Adopted Budget for the Wild Wings Sewer CSA includes a reduction of $29,173 in general liability insurance due to the new calculation methodology adopted to align with YCPARMIA. Also included is a reduction in various expenditures and use of Fund Balance related to the Sewer Redundancy System Project delay. This project was originally expected to occur in FY21-22; however, all efforts are being focused on more critical water issues.
 
The Wild Wings Golf Course CSA’s Adopted Budget includes an increase of $139,226 for Kemper Sports’ management contract. The contract amendment is funded with an increase in golf fees, taxable sales and Fund Balance. The CSA needs to purchase a replacement mower for green maintenance since one of the mowers became inoperable in June, estimated at around $60,000. Additionally, adjustments to Building & Improvement expenditures to continue work on the Nest Building repairs, dry rot, painting, and updating the weather station for the irrigation system for a net cost of $46,000.
 
The Adopted Budget for the El Macero Street CSA includes an increase in Road Improvements for the Resurfacing Oaks Project funded with Fund Balance. The El Macero Water CSA is anticipating an increase in utility expenditures based on prior years actuals. The $90,000 increase is offset by an increase in assessment revenue.
 
The Adopted Budget includes other minor adjustments to the County Service Areas budgets. These adjustments include small increases or decreases to assessment revenue, Services and Supplies, and Fund Balance to better align revenues and expenditures with FY20-21 actuals.
 
County Counsel
County Counsel’s Adopted Budget includes two re-classifications for the Chief Assistant County Counsel and Assistant County Counsel positions approved by the Board of Supervisors on May 18, 2021. Staff recommends increasing legal services expenses by $50,000 due to potential need for additional amounts in contracts for outside legal counsel. Additionally, there was a small increase for the Small Claims contract.
 
Debt Service
The FY21-22 Adopted Budget includes the use of the Chula Vista fund to pay off the debt balance of $1.7 million on the District Attorney building originally financed in 1998 and re-funded in 2012. At the June 29, 2021 Board of Supervisors meeting, a resolution was adopted directing the use of proceeds from the Chula Vista decision to three areas; reserve accumulation, debt reduction and avoidance, and a revenue smoothing policy.
 
The recommendation to pay off the remaining debt on the District Attorney building falls within the Board direction and is presently one of the debts with the highest interest rates and is eligible to be paid off before its maturity. The payoff frees up approximately $250,000 annually in future budget years. The Department of Financial Services will explore additional beneficial uses for the remaining balance of the fund.
 
District Attorney (DA)
The District Attorney’s Public Safety Fund base budget increased by $159,000 for Worker’s Compensation and General Liability. These same expenses within special revenue funds increased by $53,000 but the special revenue funds were able to absorb the costs.
 
During the FY21-22 Recommended Budget process, the District Attorney requested the replacement of four vehicles. The General Fund was unable to fund that request, and the District Attorney was able to purchase those vehicles with expenditure savings in FY20-21. This action was approved by the Board of Supervisors on May 18, 2021. To minimize the District Attorney's net county cost, many of the department’s requests will be funded by Proposition 172, other State funding or with special revenue funds.
 
Yolo County was one of nine counties to receive new funding from the State of California for the County Resentencing Pilot Program. The District Attorney will receive $717,000 for the three-year pilot program designed to draft and implement a policy for recommending individuals for recall and resentencing, and ensure adequate staffing of deputy district attorneys, paralegals and other support staff. The FY21-22 budget provides funding for 2 new extra help deputy district attorneys, funding an existing supervising deputy district attorney, and 50% of an existing paralegal.
 
Through Community Corrections Partnership (CCP) Innovation funds, the District Attorney is receiving $388,400 for the Mental Health Diversion program. This program will partner with the Public Defender, treatment providers and Probation to create a team to identify suitable individuals, obtain assessments, create individualized treatment plans, and support the individual through the justice process.  
 
Also, through CCP Innovation funds, the Restorative Justice Partnership program received $93,000 to fund a Victim Services Advocate for the growing needs of the Restorative Justice Partnership victim population.
 
In prior years, the District Attorney shared an Information Technology position with the County Administrator’s Office. This position has been completing crucial District Attorney technology projects and will no longer be partially funded by the County Administrator's budget due to the focus becoming wholly on DA technology projects. The remaining cost of the position, $116,000, and other increases in operational costs will be adjusted to be funded by Proposition 172 revenue.
 
The District Attorney holds asset forfeitures in a fund controlled by the Law Enforcement Administrator Coordination Council (LEACC), a board of Chiefs for all Yolo County law enforcement agencies. A purchase by West Sacramento for $35,000 was approved by the LEACC board for reimbursement from this fund in FY21-22 and is included in the budget recommendation. Also being purchased with the District Attorney’s seized assets special revenue funds are 24 replacement hard drives for $20,000.
 
Financial Services
The Financial Services Adopted Budget includes one (1.0 FTE) new Senior Accounting Technician position to process property tax roll changes, refunds, and review direct charges. This position would be approximately 35% funded by Property Tax Administration revenue, and the remaining portion would be funded by General Fund. Additionally, a new half time (0.5 FTE) Accounting Technician for the Satellite Finance team is recommended to provide fiscal support to County Counsel and Public Defender. This is part of a longer term effort to centralize financial functions where appropriate.
 
The Audit division shifted appropriations for FY21-22 from the Limited Term Auditor I position to Services and Supplies to hire a consultant to contract out audit services and complete audits more timely. This reappropriation has been approved by the Audit Committee and has been included in the FY21-22 Audit Plan. The Limited Term Auditor position will remain unfunded and vacant for the full fiscal year.
 
General Services
The General Services Adopted Budget includes an increase of $108,440 in Facilities reimbursement revenue due to an hourly rate increase and a decrease of $13,374 in rental reimbursement at 120 W. Main due to the Veterans Services Office moving to the Bauer building on the Health & Human Services Agency campus. Both revenue adjustments listed above affect the General Fund allocation for the department.
 
The budget also includes a one-time request of $50,000 to double fill the Facilities Superintendent position for up to three months until the current incumbent retires in December, to provide continuous operations and to provide training to the new employee. The position is critical to County operations and has oversight of deferred maintenance costs and forecasting, budget development and monitoring, request for information or proposals, and composing Board items when needed.
 
For the Facilities Division to complete the scheduled Accumulated Capital Outlay (ACO) projects, funding for staff time to coordinate and manage the projects is needed. Staff time was not included in the original estimated project costs. Since these projects are for ACO projects, funding of $166,300 from ACO Fund Balance is recommended. Salary and benefits were already included in the FY21-22 Recommended Budget so the increase in special revenue will reduce the General Fund allocation for the department.
 
The Cannabis Measure K Tax Plan includes funding in the amount of $125,000 for the Tuli Mem Park & Pool to sustain operations. In the FY21-22 Recommended Budget, Tuli Mem was funded with General Fund so the funding from Cannabis Tax also reduces the General Fund allocation needed for the department. The Cannabis Tax Plan was recently approved by the Cannabis Ad-Hoc Subcommittee and the Citizen’s Oversight Committee so the funding was not included with the Recommended Budget.
 
The Adopted Budget includes funding for a new Senior Accounting Technician to assist with various job duties transferred from the County Administrator’s Office, including administration and fiscal support for the Airport, Leinberger Replacement Project, Gibson House and Tuli Mem Park & Pool. The department also absorbed the Electric Vehicle (EV) Charging Stations from Community Services and the Yolo Library Replacement Capital Improvement Project from the Library. This position would be fully (100%) reimbursed from the various projects.
 
General Services also included a new ACO funded item as well as re-budgeted items from FY20-21. The new item is a Construction Specification Standard document to provide all departments with specifics when new construction or remodeling is requested. This document would be provided by consultants after a study was conducted. Delays in other projects caused the Isolation Valves and Justice Well to be delayed so these items were re-budgeted from the prior year.
 
The department re-budgeted the Off-Highway Vehicle (OHV) Grant from FY20-21 since no revenues were received or expenditures incurred in the prior year. Minor adjustments were also made to the Electric Vehicle (EV) Charging Stations Project and Multiple Roof project budgets to reflect the remaining project budget after FY20-21 actuals had been finalized.
 
Human Resources
The Human Resources Adopted Budget includes increases in expenditures in the Risk Management division due to YCPARMIA premiums. The increased premiums are calculated by the Department of Financial Services and allocated to County departments through internal billing. The estimated increases are $501,000 for General Liability and $28,000 for Worker’s Compensation.
 
Health & Human Services Agency
The Health & Human Services Agency (HHSA) Adopted Budget includes a net county cost of $525,000. Staff is recommending General Fund of $25,000 for extra help in the Veterans Services division and a $500,000 increase for the jail medical contract. Veterans Services currently has their extra help position filled with staff who have been working for the division for multiple years, and this funding was mistakenly reduced during the Recommended Budget. For FY21-22, the current jail medical contract with Wellpath was re-negotiated to achieve as much as $1 million in savings to the County, dependent on maintaining the jail population at lower levels. As actual data is being analyzed, revised projections show the full $1 million savings may not be realized, due to the population slowly increasing above pandemic lows. The jail medical contract will continue to be monitored and if further adjustments are needed, those adjustments will come before the Board at a future meeting.   
 
HHSA is adding 7 new positions, all funded by State or Federal funding. A Senior Accounting Technician will focus on denied Medi-Cal claims. Extensive research is required to resolve the claim issues and re-submit by the deadline. Currently, there are $950,000 in denials with much of that recoverable if addressed timely. Two Assistant Storekeepers and two Administrative Clerks, one of each located in West Sacramento and one of each located in Woodland, will assist with increased workloads and improve service delivery for CalWORKs, CalFresh, and Medi-Cal clients. Two Administrative Service Analysts, one for Governance and one for Data Management, will assist with the data governance structure within HHSA such as data quality, data lineage and metadata management. They will also transform extracted data from large and disconnected datasets into information for presentations to various stakeholders.
 
Homeless Services has increased the Adopted Budget by over $11 million.  Appropriations in the Adopted Budget for Project Roomkey and Rehousing grant from the California Department of Social Services in the amount of $2.3 million will provide non-congregate shelter options for people experiencing homelessness, to protect human life and minimize the strain on the health care system capacity.   The Emergency Solutions Grant of $4.1 million is appropriated for the prevention and response to the coronavirus among individuals and families who are homeless or receiving homeless assistance and to support additional homeless assistance and homelessness prevention activities to mitigate the impacts created by the coronavirus.  The third major project in Homeless Services is the No Place Like Home Grant from the California Department of Housing and Community Development for $5.3 million.  The County is a pass through agency on this grant which will be used on the East Beamer project in Woodland to invest in the development of permanent supportive housing for persons in need of mental health services and are experiencing homelessness, chronic homelessness, or who are at risk of chronic homelessness. Counties receiving this grant are committed to providing mental health services and help coordinate access to other community-based supportive services.  Within the Whole Person Cares program, including donations from Sutter and Dignity Health, a mobile medicine vehicle will be purchased for $541,500 with mobile medicine services provided by Communicare.  
 
While the funding in Homeless Services is over $11 million, there is limited County discretion.  Much of the funding is restricted by the State through the grant process (for example, Whole Person Cares program)  or HHSA is only the fiscal administrator with Continuum of Care (CoC) controlling the allocation of funding (for example, Emergency Solutions Grant).  The Homeless Services funding is to address the short term and immediate needs of the Homeless population.     
 
The Crisis Now pilot program is included as a 3-year program with an average annual cost of $11,800,000 for a crisis call center, mobile crisis support, the crisis receiving center and short-term beds for clients in transition. Through 17 various funding sources including Medi-Cal, MHSA, Intergovernmental Transfer (IGT), Realignment, and the cities, available first year funding is $5,660,000 with a gap of $5,686,000 to begin operations. HHSA has requested American Rescue Plan (ARP) funding to help fill the remaining gap. A presentation to the Board of Supervisors on September 14, 2021 went into more detail on the Crisis Now pilot program.
 
On March 2, 2021, HHSA received an allocation of $10,468,641 through the Epidemiology and Laboratory Capacity (ELC) Enhancing Detection Expansion for the period of January 15, 2021 to July 31, 2023. This funding is to be used for COVID-19 vaccine support, testing, contact tracing, containment and mitigation, including adding staff and other infrastructure needed to detect and track variants of the virus. HHSA has budgeted the funding to be used to support on-going staffing and support required for County-led testing, contact tracing, and vaccine activities. This includes hiring additional limited term and permanent employees to support these efforts, as well as up to $500,000 for community partners to conduct vaccine outreach and enrollment.
 
Intergovernmental Transfer (IGT) Funding
Each year HHSA seeks to secure federal financial support for services delivered to the Medi-Cal population that have not previously received federal matching funds. The mechanism for securing these funds involves an intergovernmental transfer (IGT) process through an agreement with the California Department of Health Care Services (DHCS). The IGT process requires that Yolo County transfer local funding to DHCS, which uses the funds to draw down additional federal matching funds. DHCS then transfers the original county funds along with the federal matching funds (minus an administrative fee) to the local Medi-Cal Health Plan (in Yolo County this is Partnership Health Plan of California). Partnership then awards these funds to their partnering entities, including Yolo County.
 
The FY21-22 Adopted Budget includes $7.0 million in IGT expenditures. Of this total, $3.1 million is budgeted for the three-year Crisis Now Pilot Program. Other expenditure areas include In-Home Supportive Services Provider Costs ($786,000), costs related to the increasing caseloads in the CalFresh program ($704,000), and Information Technology Infrastructure for Business Intelligence and Dashboard software as part of the INFOR project ($566,400).  Attachment K lists all the recommended IGT allocations which were presented to the Budget Ad-hoc Subcommittee on September 9th.
 
Innovation & Technology Services
The Innovation & Technology Services (ITS) Adopted Budget includes a funding adjustment to reflect a position reclassification from a GIS Coordinator to GIS Manager. The incumbent was recently promoted in FY20-21, and the position was being underfilled as it was already authorized as a GIS Manager.
 
There has been a significant increase in email-based threats over the last several months. Cyberattacks via email include email phishing, spear phishing and compromised attacks that can lead to data breaches, malware and ransomware attacks. The budget includes an increase of $60,000 for Office 365 Security, an email protection solution. This cost is offset through interfund billing to county departments.
 
Probation
The department requested $15,000 to replace two aging radios which now experience connectivity issues when attempting to communicate with various city agencies. The department also requested $210,000 to offset increased Extra Help and Overtime staffing expenses in order to continue to operate the Quarantine Pod at the Juvenile Detention Facility (JDF) as needed by the ongoing COVID-19 pandemic. Juveniles are required to be maintained in separate housing (quarantine) for a time duration upon arrival before introduction to regular housing. These requests are unable to be funded with General Fund, and are instead being funded by $379,000 of the departmental allocation of Proposition 172 revenue.
 
Other items in the Adopted Budget for Probation includes re-allocations and adjustments of overhead expenditures, salary and benefits, and services and supplies within the various divisions and programs to align staffing with current needs of the department. Instead of requesting additional General Fund for the re-allocated positions, Probation was able to absorb these movements due to the additional allocation of Proposition 172 revenue.
 
The State realigned the responsibility for juveniles in the State’s Department of Juvenile Justice (DJJ) programs back to Counties effective July 1. At the May 4, 2021 Board of Supervisors meeting, the Board approved joining a consortium of counties in order to address housing needs related to implementation of Juvenile Justice Realignment. At that time, the cost of joining of this consortium was unknown. Since then, staff have learned that the year-one cost for membership in this group is 1% of the County's block grant funding for this purpose, or approximately $2,750 for the first year (FY21-22). As the county's funding will increase each year, the department expects the cost for continued membership will also increase each year. This expense is for membership only; should the County have a juvenile sentenced to a term with the DJJ, additional expenses could be incurred.
 
Since the Recommended Budget was approved, anticipated revenue for the department’s Special Revenue Fund, Juvenile Justice Crime Prevention Act, has been reduced by $650,000. The department intends to bridge the gap by increasing its use of available fund balance from that source.
 
Public Defender
The Public Defender’s Adopted Budget has base increases of $122,000 for workers compensation, and general liability insurance. However, the Probation Department has permitted the use of Probation Juvenile special revenue funds to fund an existing juvenile-focused Social Worker in the Public Defender’s Office, and this will  reduce the Public Defender’s net county cost by $134,000 so that position has no net county cost.
 
The Public Defender has received a number of non-General Fund grants and funding to provide new client focused programs. Those funds include an Indigent Defense State grant, a County Resentencing Pilot Program PC 1170(d) from the State, and increased funding from Community Corrections Partnership (CCP).
 
The Public Defender’s Indigent Defense grant through the State of California Board of State and Community Corrections (BSCC) was approved in the later months of FY20-21, and the program has been fully budgeted in FY21-22 at a cost of $347,900. The grant funding will provide for hosting Partners for Justice advocates, improving and expanding the office’s intern-to-public defender pipeline program, and supporting implementation of diversity and implicit bias training.
 
The Public Defender has also received $415,000 for a three-year County Resentencing Pilot Program PC 1170(d). The funds are to be used to support resentencing of individuals qualified per the program, and ensure adequate staffing of deputy public defenders and other support staff to represent incarcerated persons.  In FY21-22, a new Deputy Public Defender III will be hired to implement this new pilot program. The grant will also fund a community-based organization to have trained advocates to create re-entry plans.
 
The Public Defender’s Community Corrections Partnership (CCP) allocation is $519,000, an increase of $375,000 from FY20-21. With the FY21-22 allocation, the Public Defender is able to fund a new Mitigation Specialist and a new Investigator position. CCP funding is also able to continue supporting a Supervising Mitigation Specialist, offset the partial cost of an attorney and support legal defense work delivered by the conflict panel attorneys.
 
In addition, CCP Innovation funds were also granted to the Public Defender for a new Mental Health Diversion program in collaboration with the District Attorney’s Office, the Probation Department, and a community-based organization to address the unmet needs of criminally involved individuals suffering from mental illness.  The Public Defender’s funding is $168,000 annually, which will be used to pay for a portion of four journey level attorneys from each of the four felony court departments to implement this program. With $168,000 in General Fund salary savings, the Public Defender will hire a Deputy Public Defender I.  
 
Sheriff
Included in the Sheriff’s proposed Adopted Budget are base adjustments for a reduction of $1.1 million.  The reductions are due to the re-calculation of the YCPARMIA Workers Compensation and General Liability insurance formula. With the emphasis on exposure to potential claims as opposed to the emphasis on claims history, the Adopted Budget now reflects a reduction to the Recommended Budget amounts.  
 
The General Fund has been able to fund various high priority Sheriff requests. Staff is recommending the replacement of a Boat Patrol vehicle ($63,000), 2 replacement Patrol vehicles ($169,000), a new Communication and Patrol Vehicle Technician position ($156,000) and a new Resident Deputy and vehicle ($247,400).
 
On a rotating basis, a certain number of Sheriff Patrol vehicles must be replaced each fiscal year. Due to the number of miles per month and the length of time to get a new vehicle ready for service, vehicles are budgeted for and ordered many months in advance of actual need. The Fleet Manager is involved and has approved the number of vehicles to be replaced.  
 
The new Communication and Patrol Vehicle Technician is a new classification and will provide in-house installation of public safety vehicle equipment (radios, cameras, lights, etc.). In addition, by having the installations done in-house, and not relying on the availability of the vendor, it should reduce the cost of installation as well as the total time of preparing a vehicle for service.  
 
A new Resident Deputy, expected to be assigned to the Capay Valley, is also being recommended by staff. The community has voiced concern for safety and response time to public safety calls. A Resident Deputy will live in the community, thereby improving response time and increasing accessibility for the community.  A new vehicle is also included in the cost of the Deputy.
 
With an increase in Proposition 172 revenue and the use of General Fund, the County is able to fund 10 new Correctional Officers, including mandatory training and officer equipment. The additional Correctional Officers have been an obligation since the State awarded funding for the jail expansion in 2015. A recent staffing study conducted by an outside consultant has recommended the additional Correctional Officers as necessary for the proper operation of the facility (Attachment L). In past fiscal years, limited revenue growth and impacts from the COVID-19 pandemic did not allow for the funding of these requested new positions. The Leinberger facility currently is under construction and expected to be completed Fall of 2022. However, due to the significant lag in hiring and training of correctional officers, it is appropriate to fund this need in advance of the opening of that facility which provides low-risk offenders additional services and prepares them for re-entry. Staff did a deep dive and prepared an analysis (Attachment M) on the merits of the construction of the facility in November 2020. The Board at that time determined the facility and appropriate staffing was critical to offer facility programming to prepare individuals for re-entry into the community.
 
Because of mandated staffing levels from a Memorandum of Understanding (MOU) with the Courts and lack of State funding, the County used General Fund and salary savings the past several years  to balance Court Security costs.  Due to increased Public Safety Realignment for the Adopted Budget ($418,000), staff was able to reduce the amount of salary savings by $150,000 and also reduce the net county cost to meet Yolo Superior Court MOU specific staffing requirements.
 
At Recommended Budget, the CCP allocation could not fund the existing positions so General Fund will cover these costs. With the increased one-time growth in CCP revenue, the net county cost was reduced at Adopted Budget; however, since it was balanced with one-time funding, this may need to be reviewed in future budget years for sustainability.
 
Through CCP Treatment program funds, the Sheriff’s Office received $30,000 for the Co-Responder program and $127,000 for a new Correctional Officer for the Medical Assisted Treatment (MAT) program.  The CCP Treatment program is also partially funding a full time In-Custody Treatment Manager $100,000, with the remaining $50,000 being funded with General Fund.  
 
The Sheriff’s Small and Rural special funds will be funding a number of requests.  With Small and Rural funds, $479,100 will be used to purchase 2 replacement Patrol vehicles, a department website refresh, a mobile fingerprint scanner for the Coroner and equipment and other one-time costs for the body worn camera project. The Small and Rural fund is also funding the final year of the Records Management System / Jail Management System (RMS/JMS) software implementation, $475,000. After delays due to the COVID-19 pandemic, FY21-22 will be the final phase of implementation for the RMS/JMS.
 
During both the FY20-21 Recommended and Adopted Budget process, the Sheriff’s Office requested Body Worn Cameras but the County was unable to fund the request. In the FY21-22 Adopted Budget, for transparency and accountability, funding this program has become a high priority for both the Sheriff and the County. The one-time costs will be funded by the Sheriff’s Small and Rural funds, a total of $352,100 for 260 cameras, implementation, training, project contingency, and staff costs. The on-going costs for the annual subscription of 260 cameras and two new positions – a Property & Evidence Technician and a Technical Support Specialist is funded by General Fund ($459,300).
 
The body camera project will be implemented in phases over multiple years. Cameras would be implemented for Patrol Deputies first, followed by Detention Officers and others at a future time. The two new positions will provide support as video forensic specialists, manage the software, respond to public records requests, minimize the impact to the technology infrastructure with the addition of 260 cameras and ensure compliance with operational guidelines.  
 
There were a number of Sheriff General Fund requests that are not recommended at this time. The Sheriff requests are included on Attachment E.
 
Contingencies
The County policy on Fund Balance and Reserves identifies appropriations for contingencies as the first line of defense against uncertainty in the annual budget, and provides that the County Administrator will recommend a specific level of appropriation for contingency, usually between 1% - 3% of total budgeted expenditures. The proposed Adopted Budget includes an additional $2,800,000 in appropriation for various contingencies, as outlined below. Use of any contingency funds will require subsequent approval by a 4/5 vote of the Board of Supervisors.
 
General Fund Contingency – No additional contributions are being made to the general fund contingency.  The total amount of $2,450,000, or 1.4%, will be used to cover unexpected expenditures for FY21-22.
 
Public Safety Contingency – It is recommended that an additional $250,000 be added to the Public Safety Contingency to cover unexpected expenditures.  This contribution will bring the Public Safety Contingency to a total of $1,350,000, or 1.6% of public safety expenditures for FY21-22.
 
Health & Human Services – It is recommended that $1,500,000 be added to a Health and Human Services contingency for unanticipated budgetary shortfalls. Areas that are being monitored and may require the contingency are the continued increase in Foster Care costs and the impacts of the IHSS wage increase.
 
Fire Sustainability Contingency – It is recommended that the County set aside a contingency of $550,000. This contingency would only be used if the Board approves a long-term financial sustainability plan which is mutually agreed upon with the Rural Fire Districts. The County and Districts are hopeful after the LAFCO report that a mutually agreeable plan may be developed in a timely manner. There was concern by the Fire Districts that without funds set aside to potentially implement this plan, it would hamper continued good faith efforts toward that plan. County staff expect any plan put before the Board will require the Fire Districts to first take substantial self-help actions to finance their own district needs before or concurrent with any commitment of County funds.
 
Roads Contingency - It is recommended that an additional $150,000 be added to the Roads Contingency. During the Recommended Budget process, the Board had communicated a specific interest in funding a Roads contingency of $350,000 to allow for pre-planning activities. This contribution will bring the Roads Contingency to a total of $350,000 for FY21-22.
 
HHSA Emerging Needs Contingency - An HHSA Emerging Needs contingency of $225,000 is budgeted in the Ceres fund from deallocated funds to be appropriated, when needed, for new or emerging needs.
 
IT Innovation Contingency – It is recommended that $200,000 be used to fund the IT Innovation Contingency for IT projects and solutions identified throughout the fiscal year that result in efficiencies or enhanced customer service. In prior years, IT Innovation has been used to fund projects such as digital asset management, digital scanning, cybersecurity and eDiscovery software.
 
Safety and Security Contingency – It is recommended that $150,000 be used to fund the Safety and Security contingency to take security measures to protect the staff and the County facilities. These funds will be appropriated to General Services to be available for any immediate safety needs as they arise, and thus subsequent Board action would not be needed to appropriate. General Services has committed to prepare a full report of expenditures to be brought back to the Board of Supervisors at the end of the fiscal year.
 
Child Support Contingency - The Child Support contingency would provide Child Support a small amount of general funds that could be utilized if needed to maximize their State and Federal funding. In the past, Child Support, due to having no general fund available, would be conservative in their expenditures in order for the department not to exceed its State/Federal allocation. This small contingency of $30,000 is available should expenditures slightly exceed those allocations.
 
Reserves (Attachment N)
 
General Reserve – The Board Policy on Fund Balance and Reserves establishes a General Reserve target of 10% of average General Fund expenditures. In FY19-20 and FY20-21, due to the impact of the COVID-19 pandemic, the County was not able to contribute to the general reserve, and the percentage in reserves fell to 5.7%. As a result, the County in this year is recommending a significant contribution to bring the reserve up to 7.0% to reinstate progress toward this target.
 
Capital Improvement Plan (CIP) Reserves - The County also has significant capital projects on the horizon including the Knights Landing Levee, Yolo Library, Information Technology and Agriculture Building Renovations, among others. As a result, there is the need to set funding aside to meet some of these capital projects as the full needs are known. Thus, a certain amount is being set aside in the CIP reserve in the amount of approximately $634,000. This reserve requires subsequent appropriation from the Board to specific projects when needed. An updated Capital Improvement and Financing Plan is anticipated to be brought to the Board in October.
 
Audit Disallowance Reserve - Each year the state audits mental health reimbursements and disallows payments for a variety of reasons.  This reserve addresses the risk of a significant negative disallowance in an audit finding.  In addition, the County has significant additional audit risks related to the significant inflow of state and federal funds to respond to the COVID-19 pandemic, which make this reserve critical to maintain.
 
Liability ReserveA liability reserve has been established to protect against future litigation or claims against the County.  County Counsel has indicated that a liability reserve of $600,000 should be sufficient to protect the County from litigation exposure.  Because the County has met the threshold, no additional contributions are necessary for FY21-22.
 
As discussed in the sections above, the FY21-22 Adopted Budget allocates additional funds to various reserves and contingencies. The tables below summarize the total reserve and contingency amounts included in the FY21-22 Adopted Budget, inclusive of amounts that were previously approved in the Recommended Budget.
 
FY21-22 Total Appropriation for Contingencies
(Recommended and Adopted)
General Fund (1.4%)            2,450,000
Public Safety (1.6%)            1,350,000
Health & Human Services (0.5%)            1,500,000
Fire Sustainability Contingency                550,000
Roads                350,000
HHSA Emerging Needs                225,000
IT Innovation                200,000
Safety & Security                150,000
Child Support                  30,000
 
FY21-22 Total Budgeted Reserve Levels
(Recommended and Adopted)
General Reserve (7.0%)          17,494,052
Capital Improvement Program            2,457,238
Audit Disallowance            2,000,000
Liability Reserve                600,000
OPEB Trust*          35,846,221
Pension Trust*            8,707,825

Community Corrections Partnership
The proposed Adopted Budget for the Community Corrections Partnership (CCP) reflects an anticipated one-time sizable growth allocation, increasing anticipated revenue in the fund by $3,000,000 over the Recommended Budget. Additionally, the CCP has spent the past fiscal year reviewing its budgeting process and implementing a percentage-based budgeting methodology. This change will allow stability in departmental allocations of anticipated revenues in future years, thus allowing departments to better plan and manage their CCP funded programs. Percentage based allocations for the CCP are as depicted in the following table:
 
Department Percentage FY21-22 Allocation ($)
Probation 27.5% 3,175,066
Sheriff 27.5% 3,175,066
Treatment 25% 2,886,424
Innovation 9% 1,039,113
District Attorney 4.5% 519,556
Public Defender 4.5% 519,556
Administration 2% 230,914

As a result of this process, both the Sheriff and Probation departments have seen reductions in their departmental specific CCP allocations. However, additional Treatment allocations allowed both departments to bridge some or all of these reductions.
 
Percentage-based budgeting has allowed the CCP to align funding with the goals of the 2019-2022 CCP Strategic Plan and has allowed the partnership to make considerable investment in Treatment and Innovation efforts. In addition to historically funded Treatment programs, the CCP has approved $100,000 for an In-Custody Treatment Manager, $462,695 for a Medication Assisted Treatment Program, $40,000 for Vocational Development Services, $250,000 for In-Custody Substance Use Disorder Treatment and $100,000 for a Discharge Planner. Additional funding in Innovation is being used to fund a new Mental Health Diversion Program, a Victim Advocate, and Intercept One of the Crisis Now Model. Additionally, $200,000 in Innovation funds will be provided to the City of Woodland, to assist in funding their Advance Peace program.
 
Administration funding is being used to fund a portion of two existing FTEs: the CCP Analyst and Probation Fiscal Administration Officer. Both positions provide the CCP dedicated programmatic and fiscal support.
 
Rural Community Investment Program
The Rural Community Investment Program (RCIP) is a mechanism for advancing unaddressed programs, policies, and initiatives in rural unincorporated areas. In prior years, staff from the County Administrator’s Office and Yolo County Housing gathered information on the interests of the rural communities to target potential County and grant funding resources. Information was gathered through conducting town meetings in some of the rural areas. Staff also reviewed the needs identified in the action plans of Capay Valley, Clarksburg, and Knights Landing, and in the Yolo County Agricultural Labor Study.
 
Investments recommended for FY21-22 were driven by prior outreach efforts and internally identified funding needs. Historically, the RCIP has been funded with General Fund revenues. Due to budgetary constraints on the General Fund, staff is recommending that the $1,050,000 in projects identified in the table below be funded with Cannabis Tax revenues. This proposed use of Cannabis Tax revenues is consistent with the general Cannabis Tax expenditure framework previously adopted by the Board and falls within the specific category related to investment in rural infrastructure and support. More information on RCIP may be found on the County's website.
 
Rural Community Investment Proposal Amount
Rural Law Enforcement $200,000
Madison-Knights Landing CSD Truck $50,000
Prop 68 Rural Parks Grant Match $65,000
Knights Landing Levee Project $105,000
Guinda Town Hall Improvements $5,000
Fire District Sustainability $500,000
Tuli Mem Operations & Maintenance $125,000
Total: $1,050,000

Attachment J provides a brief description of each of the RCIP requests and staff recommendations for FY21-22. The attachment includes both the recommendations requested by the Board’s Cannabis Ad Hoc Subcommittee as well as the Cannabis Tax Citizen’s Oversight Advisory Committee.
 
Cannabis Tax Expenditure Plan
In FY20-21, the County generated approximately $2,073,000 in Cannabis Tax revenue and had additional interest earnings and unallocated funds from prior years for a total of $2,480,000 to allocate. The County followed a two-stage process in the appropriation of the cannabis funding, appropriating $1,165,000 during the recommended budget on June 15, 2021 using Cannabis revenues collected for the first two quarters for FY20-21. After the 4th quarter collections were completed (in July 2021), staff updated figures with the actual final collected amounts for FY20-21.
 
Then, pursuant to the County’s cannabis tax ordinance, staff drafted the updated expenditure plan for Adopted Budget (Attachment I), which provides funding to each of the five funding priorities identified in the Board’s cannabis tax general framework (Criminal Enforcement of Illegal Cultivation, Early Childhood Intervention and Prevention, Youth Development, and Rural Infrastructure), and Financial Sustainability.
 
The expenditure plan was reviewed with the Cannabis Tax Citizen’s Oversight Committee on August 27, 2021. The Citizen’s Oversight Committee unanimously expressed the desire to see the addition of a resident deputy to the Sheriff’s program to promote safety in the Capay Valley, which has been impacted by the cultivation of cannabis. The Committee advised staff to consider funding this request by reducing the youth development area of the plan or to explore avenues to fund with County sources other than Cannabis. As discussed above (in the Sheriff section), staff recommend funding the additional Resident Deputy requested using the General Fund.
 
American Rescue Plan (ARP) Expenditure Plan
The 2021-22 Adopted Budget appropriates the County’s $42.8 million in ARP funds. The initial ARP expenditure plan is expected to be considered for approval on September 28th in a separate board item prior to the budget hearing, where the Board will be asked to approve several priority projects. The balance of the ARP funds will remain appropriated but unallocated pending further Board direction and approval of additional funding uses.  In accordance with the County Budget Act, by appropriating all the ARP funds within a single fund, the Board may approve subsequent funding allocations for specific purposes with a simple majority vote.
 
Capital and Maintenance Projects
 
Accumulated Capital Outlay (ACO)
The proposed Adopted Budget for Accumulated Capital Outlay (ACO) includes two new items for funding. General Services is working on various ACO-funded projects; however, the original project estimates did not include staff time. An additional $166,300 is recommended to cover the staff costs associated with these projects. The second new item is $10,000 for a consultant to provide a Construction Specification Standard document to provide departments with consistent specifics for new construction or remodeling of facility buildings.
 
Carryforward Appropriations

The FY21-22 Adopted Budget includes $2.6 million in unused appropriations from FY20-21 that will be encumbered and carried forward into FY21-22. These appropriations are for one-time purchases that have been ordered but not yet paid for, or for specific one-time projects or initiatives that were not completed by year-end. Examples include vehicle purchases that have not yet been invoiced, or contingency funds awarded for a specific project that had not yet been completed. The purpose of carryforward appropriations is to ensure sufficient budgetary authority to meet contractual obligations and to carry out Board directives. A summary of carryforward items and amounts by department is provided in Attachment B.  All carryforward appropriations have been incorporated into the FY21-22 Adopted Budget and are included in the budget totals reflected in the budget resolution Attachment C, Exhibit C1.
 
Looking Ahead

The County had significant fiscal challenges on the horizon even before the COVID-19 pandemic. While revenue growth since the recommended budget has been better than initially expected, challenges still exist.
 
Labor Negotiations
The County is completing labor negotiations with those bargaining units whose agreements expired on June 30, 2021. The negotiations appear to have resulted in higher labor cost increases for certain labor units than originally anticipated in the Recommended Budget. These labor increases are expected to be absorbed in department budgets. However, should a department determine over the course of the year that labor costs cannot be absorbed in their budget, they may request contingency to close the gap at regular budget monitoring intervals (ex. Mid-year, third-quarter, fourth-quarter).
 
Pension Costs
The impacts of the recession created by COVID-19 were short-lived on the investment markets, and CalPERS had returns above the benchmark for the fiscal year ending on June 30, 2021. However, any benefits of those increased returns will not be seen until FY23-24 contribution rates. In addition, CalPERS plans to use those returns to de-risk the system through a risk mitigation policy and has indicated their policy was triggered to drop the expected rate of investment return to 6.80% as a result of investment returns.
 
CalPERS also may choose to reduce their discount rate further by the CalPERS Board in December 2021. At their Board meeting in mid-September, CalPERS Board began considering portfolio structures with return rates ranging from 6.25-6.75% which are below the present 7.00% rate. Whenever the discount rate is lowered, it puts more burden on employer contributions than investment earnings to properly fund the pension system. Lower discount rates mean higher County contribution rates in the future.
 
As of the last published actuarial report dated June 30, 2020, the County’s total unfunded liability for miscellaneous and safety plans is $370 million (increase of $20 million from prior valuation) and the funded ratio is approximately 65%. The table below shows contribution rates for upcoming years (however these do not reflect additional changes in CalPERS policies as discussed above).
 
Fiscal Year Miscellaneous Safety
FY21-22 31.37% 44.44%
FY22-23 32.69% 46.88%
FY23-24 33.40% 47.90%
FY24-25 34.10% 48.80%
FY25-26 32.60% 48.90%
FY26-27 32.50% 47.70%

In May 2018, the Board approved a Pension Funding policy to establish best practices and guide the County's effort to stabilize pension funding and address the unfunded pension liability. In accordance with the policy, the FY21-22 Budget continues to include a 1.5% payroll charge, or approximately $2.0 million, for purposes of funding the Pension Trust.
 
Other Post Employment Benefits
The FY21-22 Recommended Budget includes $10.2 million in OPEB charges to departments, a decrease of $782,000 from the FY19-20 Adopted Budget. The OPEB actuarially determined contribution rate decreased from 7.8% of payroll in the FY20-21 Adopted Budget to 7.7% in the FY21-22 Adopted Budget.

In May 2011, the Board approved the creation of an irrevocable trust to accumulate assets for the purpose of reducing the OPEB liability. The initial policy had a funding ramp up over 15 years; however, the County achieved that ramp-up sooner than anticipated and in November 2019 updated the policy to fund the trust at the actuarially determined contribution level. The OPEB trust has a balance of approximately $31.1 million as of June 2021.
 
In addition to funding the OPEB trust, significant progress has been made in lowering the overall OPEB liability through the implementation of benefit caps for most employee units. As a result of these efforts, the overall unfunded OPEB liability is now $65.2 million, a decline of $3.5 million in the June 30, 2020 valuation compared to the prior June 30, 2018 valuation.
 
Mental Health Services Act/Core Mental Health Funds
The County of Yolo submits Mental Health cost reports within six months of the close of each fiscal year to the California Department of Health Care Services (DHCS). These cost reports typically receive a desk review within 1-2 years of submission and receive an audit approximately 7 years after submission of the report. The DHCS is still completing the audit of the County’s 2012-13 cost report submission. Following the cost report, which reviews units of mental health services provided, reimbursements from Medi-Cal, and use of funding sources including MHSA, there are adjustments that are required to be recorded in the accounting ledgers to reflect the accurate use of funding sources. When updating their 2021-22 MHSA plan the County’s Health & Human Services Agency (HHSA) realized a need to investigate whether the appropriate accounting entries have been recorded for some of the recently concluded audits. This preliminary review indicates there may be an over-recognition of revenues from MHSA in prior years of approximately $5.2 million which would increase the balances in the MHSA funds; however, making the accounting correction for the over-recognition of revenues would push the Core Mental Health fund into a significant deficit. County finance staff are working closely with HHSA to validate these preliminary estimates and are expected to come back to the Board as part of the mid-year update. In addition, County finance staff in conjunction with HHSA plan to bring forth a financing plan to resolve the $5.2 million deficit created in the Core Mental Health fund. This financing plan may require support from the general fund after exhausting other available resources, however the exact amount if any, cannot be determined at this time. Any additional funds that are placed into MHSA as a result of this correction or other uncommitted balances from prior years, are expected to go through a community stakeholder process before returning back to the Board for approval.

Fire Sustainability
The County continues to have discussions with Rural Fire Protection Districts which face declining volunteers, increased calls for service, and aged equipment and apparatus. While discussions toward fiscal sustainability have not concluded, and the County fully expects Fire Districts to first expand and increase their own revenue sources, the County’s future investment in Fire Districts may not be insignificant. The County needs to be cautious to ensure that its efforts to help aid the sustainability of others does not jeopardize its own efforts toward long-term sustainability and its ability to honor existing commitments.
 
Disaster Emergencies
The County has three present disaster or emergency declarations which include: (1) COVID-19 Pandemic, (2) Local Drought Emergency, and (3) Climate Action Emergency. It is difficult to fully budget for the evolution of each of these emergencies; however, the budget attempts to put aside sufficient contingencies to respond flexibly as these situations evolve and costs become known. The County is positioning itself to leverage state and other funds wherever possible to minimize the local costs required by these emergencies.
 
Conclusion

In the light of these fiscal challenges on the horizon for the next few years, the Adopted Budget optimistically assumes that revenue sources will  recover more quickly than initially expected, but cautions against taking on too many new commitments as the pace of economic growth is still uncertain. The County continues to face the risk that costs will continue to outpace revenues and needs to redouble efforts to strengthen revenue generation where possible and continue diligence in cost containment. In addition, while State and Federal revenues to respond to and recover from the pandemic are substantial, caution is needed to not become dependent on these sources or to assume that expenditures can be sustained at a heightened level when state and federal support concludes.
Collaborations (including Board advisory groups and external partner agencies)
All county departments were provided the opportunity to submit additional budget adjustments and requests. Financial Services staff worked with department heads and fiscal officers in reviewing and analyzing the requests. Proposed funding plan was reviewed with the Board Chair and Vice Chair on 8/26/21 and on 9/9/21. The Fire Sustainability contingency recommendation was brought forward by Board Chair Provenza, Vice Chair Barajas and Supervisor Sandy. Human Resources reviewed staffing requests and prepared the Authorized Position and Salary Resolution. County Counsel reviewed the Adopted Budget resolution as to form.
 
Competitive Bid Process
N/A

Fiscal Impact
Fiscal impact (see budgetary detail below)
Fiscal Impact (Expenditure)
Total cost of recommended action:    $   871,553,241
Amount budgeted for expenditure:    $   0
Additional expenditure authority needed:    $   871,553,241
One-time commitment     Yes
Source of Funds for this Expenditure
$871,553,241
Explanation (Expenditure and/or Revenue)
Further explanation as needed:
This action appropriates funding for FY21-22. The fiscal impact above reflects the total consolidated County budget including interfund transfers.
Attachments
Att. A. FY20-21 Fund Balance Report
Att. B. FY20-21 Carryforward Requests
Att. C. Budget Resolution and Exhibit C1
Att. D. FY21-22 General Fund Augmentations Recommendations
Att. E. FY21-22 General Fund Augmentations Not Recommended
Att. F. FY21-22 Non-General Fund Recommendations
Att. G. FY21-22 Detailed Position Table
Att. H. FY21-22 Equipment List
Att. I. FY21-22 Cannabis Tax Expenditure Plan
Att. J. FY21-22 Rural Community Investment Projects
Att. K. FY21-22 HHSA IGT Expenditure Plan
Att. L. Yolo County Detention Center Staffing Analysis
Att. M.Leinberger Center Analysis from November 2020
Att. N. FY21-22 Reserve Balances
Att. O. Presentation

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Form Review
Inbox Reviewed By Date
Shelby Milliren Shelby Milliren 08/30/2021 11:35 AM
Financial Services (Originator) Shelby Milliren 08/30/2021 11:36 AM
Shelby Milliren Shelby Milliren 09/22/2021 07:47 AM
Financial Services (Originator) Chad Rinde 09/22/2021 08:21 AM
Chad Rinde Chad Rinde 09/22/2021 08:51 AM
Financial Services (Originator) Shelby Milliren 09/22/2021 12:42 PM
Daniel Kim Daniel Kim 09/22/2021 03:19 PM
Shelby Milliren Shelby Milliren 09/22/2021 04:22 PM
County Counsel Hope Welton 09/22/2021 06:33 PM
Joanne Vanhoosear Julie Dachtler 09/23/2021 08:57 AM
Joanne Vanhoosear Joanne Vanhoosear 09/23/2021 02:12 PM
Elisa Sabatini Elisa Sabatini 09/23/2021 03:25 PM
Form Started By: Shelby Milliren Started On: 08/30/2021 11:27 AM
Final Approval Date: 09/23/2021

    

Level double AA conformance,
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