FY 2017-18 BUDGET INSTRUCTIONS WORKSHOP Friday, 12/16/2016

BUDGET DEVELOPMENT CALENDAR ESTIMATES

Highlights & Changes 1 fiscal year budget Consolidated Budget Adjustments Federal/state funding allocations Peer review support Earlier budget development start Recommended and Requested budgets Adopted to recommended $ variances No assumptions from successor labor agmts Reports by position record – yay  !! 2017 Board Priorities

Budget Flow Base Budget Mid-Year Estimates Budget Policy Issues Program Changes Requested & Recommended Budget Adjustments to Fees & Charges Third Quarter Estimates Supplemental Changes Budget Hearings Actions Adopted Budget

Calendar Review

Calendar Review

Calendar Review

Mid-Year Estimates due Jan. 20th Salary & Benefit Tracking Tool Hyperion Instructional Video (UPK) Template for Submission to CAO BUD005 - BudgetEstimateSummary

BUD005- Budget Estimate Summary

Consolidated Budget Adjustments Current FY 2016-17 Q2 Prior Board Direction Only Adjustments due on Feb. 7th FY 2017-18 will also likely only include two Consolidated Adjustments (fall and spring)

Defining Prior Board Action A specific action by the Board Only way to use contingencies or add positions Continuation of a Board-approved program Can include appropriation of new revenue Clean-up transactions Add/delete positions that meet requirements Position vacant and no cost increase Capital Projects: Transfer of funds between projects and new/ increased funding where conditions met

Board Budget Policy

Budget Policy Workshop Overview State Impacts due Jan. 20 Governor’s and President’s budgets provide guidance to lawmakers. Impacts to assess: Proposed changes to local programs and services Estimated financial impact to local gov’ts Impact to Sonoma County Budget Policy Workshop Governor’s budget released early January President’s budget released early February Budget Hearings Governor’s revised budget released in May

Budget Policy Workshop Overview. Fiscal Policy Issues email due Jan Budget Policy Workshop Overview Fiscal Policy Issues email due Jan. 20th Significant funding changes which require Board direction to reduce or establish new services Establishes a new funding policy, i.e. program reserve or replacement program Seeks a significant local discretionary funding investment Early review of fiscal challenges and opportunities Not the same as Program Change Requests (PCR), but may trigger a PCR

FY 2017-18 BUDGET

General Fund Net Cost Primer

General Fund Net Cost Contribution Timeline/Sequence: January 13: CAO to distribute initial FY 17-18 GF targets to departments Departments review calculations for accuracy Coordinate with CAO Analyst to make any adjustments to the baseline Departments’ assigned CAO Analyst must approve all Net Cost Target adjustments To help facilitate departments’ review, the initial GF target file distributed to departments will be an Excel file with formulas and supporting data. To preserve communication chain, ask Departments to send all calculation correction requests to their CAO Analyst and copy NK on their emails. This will be more efficient than contacting NK directly, because too many situations arise where I need to obtain concurrence of CAO Analysts. “Adjustments to baseline” means: Adjusting for recurring costs that were incorrectly entered as 1x adjustments in FY 16-17, or missing position costs. It does NOT meant to cover new positions or programs. Additional GF needed for these requests will be incorporated thru the Program Change Request approval process.

GF Net Cost Target Calculation FY 16-17 Rev Bud* Net Cost for GF Budgets FY 16-17 Rev Bud Total Expenditures for GF Budgets % of GF Funded Expenditures Step 1 - Calculate departments’ FY 16-17 ratio of General Fund expenditures: The following thee slides present a graphical illustration of the GF Net Cost target calculation methodology, which is consistent with prior years. Note: “Revised Budget” means the Board’s adopted budget thru December, which includes Q1 CBAs and subsequent PeopleSoft Adjustments. For example, assume a fictional department has a GF section budget with total expenditures of $1,000,000. The department finances its operational expenditures with total revenues and reimbursements of $200,000 from fees and other sources, and the General Fund contributes the remaining $800,000 to balance the section budget. The % of GF Funded Expenditures would be equal to 80%. *Note: “Rev Bud” means the Board’s adopted revised budget thru December, which includes Q1 CBAs and subsequent PeopleSoft adjustments.

GF Net Cost Target Calculation FY 17-18 Est. S&B for Perm Positions FY 16-17 Rev Bud S&B for Perm Positions Year-over-Year Change % of GF Funded Expenditures GF Baseline Change Step 2 – Calculate the prorated FY 17-18 General Fund increase for labor: Calculate the difference between FY 17-18 Salary & Benefit costs for permanent positions (in Hyperion and SC Labor) and FY 16-17 Revised Budget S&B costs for permanent positions. The Year-over-Year change is then multiplied by each department’s % of GF funded expenditures to derive the prorated GF FY 17-18 Net Cost Increase. As with prior year net cost calculation, the assumption is that each department’s other non-GF funding sources will also increase proportionally. The General Fund Contribution baseline is not adjusted for: Non-Permanent Position Costs, such as extra-help, overtime, premium/specialty pays, and payouts. Non-Labor costs, which include everything other than Character 50 Salaries and Benefits, i.e., Character 51 - Supplies & Services, Character 53 - Other Charges, etc.

GF Net Cost Target Calculation FY 16-17 Rev Bud Net Cost for GF FY 17-18 GF Baseline Change FY 16-17 Recurring Costs from Q1 CBAs & BOS Contingencies FY 16-17 1x costs from Q1 CBAs FY 17-18 GF Target Step 3 – Adjust for departments’ FY 16-17 budget adjustments: Finally, to pull everything together and calculate the FY 17-18 GF Target: Start with FY 16-17 Revised Budget net cost; Add the prorated increase to S&B costs; Add any recurring expenditures added as part of Q1 CBA’s, as well as GF Contingency requests approved by the BOS that carry over into FY 17-18. Remove non-recurring FY 16-17 Q1 budget adjustments.

S&B Assumptions Position Assumptions Based on how position is allocated, not filled Vacant positions = I step, K2 Medical, New Retirement Tier Merit increases are included Rate Assumptions (included in instructions) Salary & Benefit Reports in SCLabor Salary Savings

Internal Service Rates Posted on the CAO’s Budget Instructions intranet site: http://sc-intranet/budget/index.htm Rates posted as of 12/14: Worker’s Comp, ACTTC Audit Charges, Fleet, and Utility. Rates to be posted by: 12/31/16 – Cost Plan, Liability Insurance, ACTTC Accounting Charges, HR Benefits Admin, and all ISD Rates 01/31/17 – EFS Charges and HRMS Charges

Requested vs. Recommended Budget Enter into Hyperion both set of values by 3/7 REQUESTED RECOMMENDED Adjusted Base Rev & Exp Adjusted Base Rev & Exp. Values include Program Change Requests submitted GENERAL FUND NET COST Does not match adjusted base target, IF Program Change requires GF increase Matches Net Cost Target

Operating Transfers due Feb. 24 Use of OT tool in Hyperion Identifies correct account for budget automatically Allows departments to balance before submission Replaces the spreadsheet previously submitted OT’s must be balanced across the organization before budget can be closed Due in the OT tool before the budget is due OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC

Operating Transfers due Feb. 24 ISD DMP OTs Not part of the OT tool Will be in new OT accounts Read only for departments Review rate sheet provided by ISD and respond with changes before Hyperion is updated

Fund Balance Statements due March 7th Available as of February 1st Current FY 2016-17 beginning and ending balances based on Q1 Revised budget ACTTC schedules cover only GF, Special Revenue Funds, County Special Districts, Debt, and Capital Projects Proprietary Funds: Internal Services, and Enterprise are not centrally tracked OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC

Variance Justification due March 7th +/-2% and +/- $50k at the Section and Character level EFS Report (BUD007) will be available- save as Excel and enter comments. OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC

Narratives & Fiscal Table due March 23 Components are the same except for Strategic Planning Strategic Planning 2017 Board Priorities and Core Principals sub-sections may be revised or deleted Amounts listed do NOT need to match the total budget Fiscal Table – Option to Redesign Program/Division Hyperion verification through customized mapping Contact CAO Analyst ASAP to meet due dates!! Budget Changes = variance from Adopted OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC

Supplementals due on May 12th Adjustments resulting from new information not available before narrative submission Board 2017 Strategic Planning and Work plan May include some program change requests derived from not previously known information OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC

Q & A OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC

Next Workshops 1/11 @ 2:00 PM 1/25 @ 1:30 PM Review Internal Rates & Allocations Development of Fees & Rates Budget Hearing Presentation Other?? OT Tool in Hyperion is a communication tool that makes budgeting easier Indentifies the correct account (within a fund, between funds) Allows the department to balance at the departmental level before submission Spreadsheet will no longer need to be submitted OT’s across the organization must be balanced before the budget can be closed Out of balance OT’s lead to budget changes, so we want to balance these earlier in the process, therefore The OT tool should be completed by Feb 24, so if there are changes, they can be made before the budget is due Guidance as to the use of OT vs revenue/reimbursement comes from ACTTC