1. County of Orange 1 Current Economy  Recession Officially Ended in June 2009  Slow Growth Projected  Few Signs of “Double Dip”  Primary County Impacts  Lower Revenue Base (sales tax, property tax)  Expenses Have Been Reduced  Increased Pension and Benefit Costs

2. County of Orange 2 Current Economy Recovering Slowly  Mixed Signals  Home Values Improving  Residential New Construction Permits Up  Increased Levels of Federal & State Debt  Consumer Spending Up  Employment has Marginally Improved  Unemployment Remains High  High Office Vacancy %

3. County of Orange 3 Unemployment Rate Source: California EDD for October 2010 (prelim)

4. County of Orange 4 Secured Assessed Valuation

5. County of Orange Proposition 172 Revenue 5

6. County of Orange Realignment Revenue 6 Annual Percentage Change

7. County of Orange 7 Five Year Forecast 5 year SFP

8. County of Orange 8 Available Sources of Funding 5 Year SFP

9. County of Orange 9 Identified Risk Factors - FY 2011/12 $2.4 million Identified Budget Risk$45.6 million US Marshal Contract – revenue increase $11.7 million Crime Lab – new revenue$5.0 million ICE Contract Beds Increase VLF Increase Sunset – State law$19.0 million CSA Classification Savings $7.5 million Budget Shortfall (Best Case): $43.0 million Budget Shortfall (Worst Case Excluding State Impacts): $88.6 million State Impacts $xx.x million

10. County of Orange 10 Current Year Budget – General Fund

11. County of Orange Options for Closing the Gap  Available Funding?  5% NCC Reduction$21M  Hiring Freeze?  Salary & Benefits Cost Reduction?  Pension Prepayment?  Service Reductions?  New Revenue?

12. County of Orange 12 Reserves Available to General Fund Projection $350 $313 $291 $303 Note: The chart does not reflect any draws from reserve during the SFP period.

13. County of Orange NCC Reductions (Countywide Reductions*) FY 08/09FY 09/10FY 10/11 San Bernardino County8.0% 10.0% Riverside County5.0%10.0%19.0% San Diego County0.0%3.5%9.2% Average4.3%7.2%7.7% Orange County5.0% * Represents general NCC reductions. Reductions to specific programs within each county vary.