ORANGE COUNTY BUDGET FY Worksession Overview July 21, 2009

Presentation Outline Worksession Agenda Proposed FY Budget Future Budget Challenges Budget Timeline

Presentation Outline Worksession Agenda Proposed FY Budget Future Budget Challenges Budget Timeline

Worksession Agenda July 21, 2009 Introduction Fire Rescue Public Safety Office / Radio Communications MSTUs Public Hearing Corrections Corrections Medical Community & Environmental Services Parks & Recreation Orange County CRA (OBT) I-Drive CRA Day 1 - Budget Worksession

Utilities Public Works Growth Management Convention Center Administrative Services Health Services Family Services LYNX Day 2 - Budget Worksession Worksession Agenda July 22, 2009

Constitutional Officers Court Administration Jury Services Sheriff Library Outside Agencies / Commissioner Reports Summary of Changes / Requests –Approval of: Proposed Millages / Budget Budget Consent Agenda Day 3 - Budget Worksession Worksession Agenda July 23, 2009

Presentation Outline Worksession Agenda Proposed FY Budget Future Budget Challenges Budget Timeline

Proposed FY Budget General Fund$ 821M$ 748M (9.0%) Special Revenue 1, (31.8%) Debt Service % Enterprise Funds (17.1%) Internal Service (5.5%) $ 3,635M $2,983M (18.0%) FY 2009FY 2010 %

Proposed FY Budget County’s Total Budget Items That Cause Budget Fluctuations –Large capital projects/debt issues –Increases in grants and multi-year grant awards –Accounting/budgeting changes Impact of Budgeting Standards –Interfund Transfers – $365 million –Internal Service Funds – $223 million –Pass Through Funds Fund balance/reserves

Proposed FY Budget Rate Rate Change Countywide (14%) Fire MSTU (13%) Sheriff MSTU (15%) Millage Rate Comparison 2007 Millage 2010 Millage Taxable Value: $200K Home $1,975 $1,697 ($278)

Proposed FY Budget FY FY Millage Property Property Rate Taxes Taxes Change Countywide $474.6M $427.9M ($46.7) Fire MSTU (14.4) Sheriff MSTU (11.6) Total $710.3M $637.6M ($72.7) Maintaining Current Millage Rate Property Tax Revenues Down 10%

$959 $942 $853 ($89) Proposed FY Budget $474$476$475$428 $107 $105 $94 $130$133 $131 $116 $128$126 $116 $104 $89 $88 $87 Major Revenue Sources

Deleting 300+ Vacant Positions Operating Budget Reductions Using Current Year Cash Savings CIP Savings Reserves 2010 Budget Strategies Proposed FY Budget

Constitutional Officers 5 Administrative Services 22 Comm. & Environ. Services 33 Convention Center 29 Corrections 19 Family Services 16 Fire Rescue 7 Growth Management 82 Health Services 4 Public Works 48 Utilities 15 County Admin. Support 20 Other 8 TOTAL308 Proposed FY Budget Deleted Positions

FY Budget Proposed FY Budget

$482M

$249M Proposed FY Budget $482M

Proposed FY Budget $142M $249M $482M

Proposed FY Budget $142M $249M $482M $60M Savings

Proposed FY Budget Tax Based Operating Budget

Public Safety Tax Based Operating Budget Sheriff $184M Fire Rescue 146 Corrections 146 Other ___6_ TOTAL $482M Proposed FY % Decrease Proposed FY Budget

Administrative Services $46M Family Services 45 Health Services 37 Parks & Recreation 31 Comm. & Environ. Services 20 Growth Management10 Other60 TOTAL $249M Proposed FY 2010 General Government Tax Based Operating Budget 13.8% Decrease Proposed FY Budget

Constitutional Officers$ 53M LYNX 35 Other 54 (CRAs, Outside Agencies,Courts, CRP) TOTAL $142M Proposed FY 2010 Outside Agencies Tax Based Operating Budget 3.4% Decrease Proposed FY Budget

Tax Based Operating Budget $60M Reduction Proposed FY Budget

Deleting 300+ Vacant Positions Operating Budget Reductions Using Current Year Cash Savings CIP Savings Reserves $60M 2010 Budget Strategies Proposed FY Budget

CIPs –Animal Services Expansion Deleted ($8.4M) –Corrections Expansion Reduced ($9.1M) General Fund Reserves –$51.1 Million –6.8% of General Fund 2010 Budget Strategies Proposed FY Budget

Deleting 300+ Vacant Positions Operating Budget Reductions Using Current Year Cash Savings CIP Savings Reserves 2010 Budget Strategies $60M $30M Proposed FY Budget

Regular Employees – No cost of living adjustments – Annual salary increases – Periodic market studies Bargaining Unit Employees – Step plans – Negotiated annual step increases and various incentives – Periodic market studies Proposed FY Budget Salary History

Five Year Average Annual Salary Increases : –Regular employees: 2.7% Ten Year Average Annual Salary Increases : –Regular employees: 3.3% Proposed FY Budget

General County Employees (Excludes: Const. Offices, Enterprise Operations, and Public Safety)

Presentation Outline Worksession Agenda Proposed FY Budget Future Budget Challenges Budget Timeline

Future Budget Challenges Revenue Outlook 2011 and Beyond Property Tax Outlook –FY (5.6%) Sales Tax & Other Major Revenues –FY (2.0%)?

$959 $942 $853 ($89) $474 $476$475 $428 $107 $105 $94 $130 $133 $131 $116 $128$126 $116 $104 $89 $88 $87 Major Revenue Sources $810 $402 $88 $109 $101 $85 ($43) Future Budget Challenges

Sheriff $183.9 million operating budget Largest budget in county Sheriff’s MSTU millage rate: –Reduced from to over the last three years –15% reduction Sheriff’s MSTU supports approximately 50% of Sheriff’s budget Future Budget Challenges

Sheriff FY 2010 budget includes no salary increases Trend not sustainable FY 2011 will require evaluation of revenue enhancement options and/or service level adjustments Future Budget Challenges

Fire Rescue $145.8 million operating budget Budget is structurally imbalanced Based on current trends, Fire will deplete reserves by FY 2011 Fire’s MSTU millage rate: –Reduced from to over the last three years –13% decrease Future Budget Challenges

New stations and equipment replacement on hold Various programs on hold FY 2010 budget is based on no salary increases Trend not sustainable FY 2011 will require evaluation of revenue enhancement options and/or service level adjustments Future Budget Challenges Fire Rescue

Corrections $148.7 million operating budget Budget highly dependent on inmate population Current inmate population is 3,800 compared to August 2008 peak of 4,955 Inmate population is volatile and can increase in future based on a variety of factors Future Budget Challenges

Corrections Future facility requirements Medical care costs Juvenile Assessment Center Future Budget Challenges

Public Safety Radios County operates an extensive public safety radio system The current radio system has been in operation since 1992 The FY 10 budget provides $9 million to replace Sheriff’s out-dated radios The budget includes approximately $5 million to replace radios in Fire, Corrections, and other departments Radio infrastructure CIP needs to be funded in future Future Budget Challenges

State Mandated Costs The FY 10 budget includes approximately $66 million in state mandates These costs include: –$45M FRS –$9.3M Medicaid match –$8.1M DJJ –$3.7M Medical Examiner’s Office As State revenues decline, we may see additional mandates Future impact of federal and state mandates on county’s budget is unknown Future Budget Challenges

Primary Care Access Network (PCAN) The budget includes $14.6 million for 11 PCAN clinics Over the past ten years, patients being served have increased from 5,000 to 100,000 Increases in healthcare costs and expensive secondary care creates financial challenges for the PCAN program Program needs to be restructured to control costs: –Cap enrollment –Close clinic(s) –Provide more revenue support –Restrict secondary care Future Budget Challenges

Orange County’s funding for LYNX has increased from $23 million to $40 million over the past 5 years In FY 09, the County’s $40 million funding contribution included extra funding for fuel costs Major recipient of stimulus funding Once stimulus funding goes away, funding will have to be increased Future Budget Challenges LYNX

For FY 10, LYNX funding is $35 million LYNX is providing status quo service next year Providing dedicated funding for LYNX continues to be a challenge Future Budget Challenges

Public Works 48 positions are being eliminated in FY 2010 Staffing level below FY 2000 Providing adequate O&M funding continues to be a challenge Level of services have been reduced CIP has been reduced by $70 million from FY Funding new road construction will continue to be a challenge Future Budget Challenges

Family Services Increasing demand for mental health and homeless issues Lack of funding for safety net programs Streamline service delivery Future Budget Challenges

Facility Costs Facilities Management maintains over 6 million square feet Escalating maintenance costs with aging infrastructure Over the past five years, utility costs have increased from $7.4 million to $12.2 million, which is a 65% increase Costs and square footage are increasing, while budget is decreasing Future Budget Challenges

Healthcare Costs $72 million program covering 9,111 employees and 18,981 total members Includes BCC, Constitutional Officers (except Sheriff), LYNX and other organizations Medical trend is 9% increase Future funding challenges County continues to implement cost containment strategies: Self insurance, wellness programs, plan design changes, and other Future Budget Challenges

Environmental Protection Limited funding for Total Maximum Daily Load (TMDL)/water quality Air and petroleum programs funding uncertain GreenPLACE maintenance Future Budget Challenges

Tourist Development Tax TDT collections are down due to the recession Attendance & operating revenues for the OCCC are down Additional OCCC operations subsidy will be needed Challenges for Community Venues Future Budget Challenges

Utilities Declining revenues in Utilities due to economic conditions Water supply continues to be a concern heading into the future –Funding for alternative water supply projects Funding for solid waste cell construction continues to be a challenge Future Budget Challenges

Presentation Outline Worksession Agenda Proposed FY Budget Future Budget Challenges Budget Timeline

Budget Worksession with BCC Jul 21 – 23 –Approval of Tentative Millage Rates –Approval of Tentative Budget –Approval of Budget Consent Agenda Notify PA of Proposed Millage Rates Aug 1 PA Mails TRIM Notices Aug st Budget Public Hearing – 6:00 p.m. Sep 10 1 st Library Public Hearing – 5:01 p.m. Sep 15 2 nd Library Public Hearing – 5:01 p.m. Sep 22 2 nd Budget Public Hearing – 6:00 p.m. Sep 24 Budget Timeline

ORANGE COUNTY BUDGET FY Worksession Overview July 21, 2009