1. 1 2011-2012 Midyear Budget Report & 2012-2013 Preliminary Budget Outlook March 13, 2013

2. 2011-2012 Net County Cost ($ in Millions) 2

3. 2011-12 General Purpose Revenue ($ in Millions) 3

4. Issues Identified Sales Taxes 4  Midyear receipts continue to improve  General Purpose Revenue  11-12 receipts at $13.6M  $1.4M over budget & $716K better than 1 st quarter  Prop 172 Public Safety – ½ cent Statewide  Allocation based on local collections  11-12 receipts at $40.0M  $2.4M over budget & $1.3M better than 1 st quarter  Realignment – Social Services  Allocation based on State formula  11-12 receipts at $29.8M  $2.5M over budget & $245K better than 1 st quarter

5. Issues Identified Sales Taxes ($ in Millions) 5 $104.5 $74.0 $83.4

6. Issues Identified SJGH 6  Inpatient census 2.1% below target  Medical Guarded Unit census at 14 by March  Net operating loss thru Dec 2011 = $700K  $3 million better than budgeted

7. Issues Identified Human Services Agency 7  Overall program expenses $28.2M below budget  $2.9M NCC savings  Primarily due to State policy/programming changes  CalWORKs – ($8.7M)  Foster Care – ($5.5M)  Administration – ($13.8M)

8. 2011-12 Reserve for Contingencies 8  2011-12 Reserve Level$13,795,071  Plus: Excess year-end GF Balance+2,971,018 Adjusted Reserve Level$16,766,089  Less: LEMA/SDSA Lawsuit-1,808,222 Reserve Balance$14,957,867

9. Staffing Changes

10. Organizational Downsizing 10  Board proactive actions to minimize service impacts & employee layoffs  Feb 2008 – reinstated Admin Hiring  Nov 2008 – implemented Hiring Freeze  14.2% smaller workforce compared to FY07-08  Net reduction of 883 positions  Overwhelming majority were vacant positions  Unable to avoid layoff entirely

11. Status of Laid Off Employees Nov 2008 to Jan 2012 11 Positions Deleted: 883 Layoff Notices Issued: 433 Rescinded: 63

12. Vacant Positions As of Jan 31, 2012 12  463 positions or 8.6% vacancy rate  SJGH  Health Care Services  Human Services Agency  Public Works  Replace Hiring Freeze with Hiring Control  Broaden recruitment to include non-County employees

13. 2012-2013 Preliminary Budget Outlook

14. One-Time Solutions 2009-10 to 2011-12 Recap ($ in Millions) 14

15. 2012-13 Preliminary Budget Outlook Major Revenue Changes – General Fund 15 Increase/ (Decrease)  One-time transfers/use of fund balances$(24.2) M  2% decline in property taxes(2.9) M  Decrease in interest & penalties(0.8) M  Growth in sales tax  General Purpose2.1 M  Prop 172 public safety5.3 M  Realignment social services4.5 M Net Revenue Changes$(16.2) M

16. 2012-13 Preliminary Budget Outlook GPR ($ in Millions) 16 $279.2 $400.7 $261.1

17. 2012-13 Preliminary Budget Outlook Changes in Labor Costs 17 Increase/ (Decrease)  MOUs/Resolution$(15.1) M  Negotiated increases3.2 M  Retirement contribution3.2 M  Employee health premiums4.1 M Net Labor Cost Changes$(4.6) M

18. 2012-13 Preliminary Budget Outlook Budget Planning/Approach 18  General Fund NCC shortfall = $14M to $16M  Budget planning  Departments to develop “status quo” budget  Suspend policy limiting use of General Fund balance  Negotiations  concession savings  Health plan redesign  reduce rate increase  Mid-term budget forecast

19. Recommended Actions 19 1.Receive & file Midyear Budget Report 2.Effective immediately, discontinue the Administrative Hiring Freeze and replace it with Administrative Hiring Control