Receive report on 2021-22 year-end budget variances and adopt budget resolution to adjust final year-end appropriations for overdrawn budget units. (No general fund impact) (4/5 vote required) (Rinde/Haynes)

Receive report on FY 2021-22 year-end budget variances and adopt budget resolution approving year-end appropriation adjustments for overdrawn budget units.

Government Code Section 29009 requires that the County end the year with a balanced budget, whereby funding sources are equal to financing uses.  On a countywide basis, 2021-22 operating expenditures (excluding Capital Improvement Projects) ended the year $112.0 million less than budgeted amounts (a positive variance), while operating revenues ended the year $59.6 million less than budgeted amount (a negative variance).  Altogether, combined year-end operating expenditures and revenues reflect a net positive variance of $52.2 million relative to budgeted amounts, as reflected in Attachment A. The majority of the positive variance is attributed to project and program delays due to vacant positions throughout many County departments. In additions there were some remaining COVID-19 related challenges including supply chain issues as well as some restrictions during the Delta and Omicron surges that contributed to project delays or lower costs. 

While the overall County budget ended fiscal year 2021-22 in balance, budgetary control is established at the budget unit level, and year-end expenditures for several budget units exceed current appropriations.  As a result, year-end appropriation adjustments are required to bring these budget units into balance.  These appropriation adjustments are reflected in Exhibit 1 to Attachment B. 
 
While Board action is required only for those budget units that have overdrawn current appropriations, this year-end variance analysis report examines all department variances whether positive or negative.  Reviewing all year-end budget variances can be helpful in identifying budgetary trends or operational impacts that may need to be monitored.  It also provides the opportunity to review and consider budgetary practices that may be out of line with actual results.
 
The sections below provide narrative descriptions of the most significant department year-end variances.  Emphasis is put on explaining departments’ net variance, or the combined result of how actual revenues and expenditures compare to budgeted amounts.
 
Agriculture – $1,072,214 Positive Net Variance
Agriculture ended the fiscal year with a net positive variance of $1.07 million, primarily due to a delay in the relocation to 120. W. Main Street. The relocation is funded with the department’s Building Replacement Fund. In the primary Agriculture operating fund, there are savings in Services and Supplies of $79,000 due to less than anticipated IT Service expenditures, reduction in transportation and traveling due to limited amount of training, and the Spray Program transferring resulting in reduced chemical purchase expenses. Furthermore, the Dog Team Call Center – CASS Agreement came in lower than anticipated as expenses and hours were overestimated. However, these savings, in addition to unanticipated additional revenues, is being largely offset by an unbudgeted operating transfer of approximately $100,000 from Agriculture’s main fund to the Building Replacement fund and approximately $46,000 to the Equipment Replacement fund. These transfers are done annually in order to meet the Agriculture Maintenance of Effort pursuant to State of California Food and Agriculture Code Section 224.5.
 
Assessor/Clerk-Recorder/Elections - $1,496,674 Positive Net Variance
Assessor/Clerk-Recorder/Elections ended the fiscal year with a positive net variance of approximately $1.5 million primarily due to expenditure savings in the Assessor and Elections divisions.  Savings in Assessor is due to a series of vacant positions, delays in implementation of information technology projects, and an unspent portion of the State Supplementation for the County Assessor Program (SSCAP) grant. Savings in Elections was due largely in part to additional appropriations provided by the State for the purpose of facilitating the November 2021 Recall election.
 
The Clerk-Recorder division also experienced a surplus, due to various vacancies throughout the fiscal year.  The division also received more revenue than budgeted, due to low interest rates during much of the fiscal year and the high number of recorded documents during that time period.
 
Board of Supervisors - $176,468 Positive Net Variance
The Board of Supervisors ended the fiscal year with a positive net variance of $176,468, largely due to savings in Salaries and Benefits. Several positions budgeted as full-time were instead hired as extra help, causing a savings.
 
Capital Improvement Program - $5,851,354 Positive Net Variance
The Capital Improvement Program (CIP) ended the fiscal year with a net positive variance of $5.85 million.
 
A sizable portion of the surplus in this program is related to delays in the Leinberger Jail Expansion project ($4.4 million). All unused appropriations were included in the FY 2022-23 Adopted Budget. The project is currently scheduled to be completed in mid-January.
 
Facility Capital Projects ended the year with a $253,763 negative net variance. Despite lower than anticipated revenues, there were expense savings of $3.8 million due to delays in the Agriculture Department relocation project and the acquisition of the St. Johns Facility. The funds were set aside to complete the St. Johns purchase however ultimately it was determined that the purchase would not proceed creating budgetary savings. The Agriculture relocation project is anticipated to be out for bid in early 2023, with construction to follow, likely to continue into fiscal year 2023-24.
 
The Yolo Library Replacement Project ended the year with a $1.3 million negative net variance. The County secured financing sources to complete the project however funding sources were not transferred in during 2021-22 awaiting the results of the State grant funding. Now that full funding is secured, those transfers will occur to reimburse costs during 2022-23. 
 
It should be noted that many of the County’s capital improvement projects are multi-year in nature. As such, it is not expected that the entire project budget will be expended in a given fiscal year.
 
Child Support Services - $75,497 Negative Net Variance
Child Support Services ended the fiscal year with a net negative variance of approximately $75,000 primarily due to a deficit in intergovernmental revenues – Federal and State. The revenues budgeted were based on allocation amounts provided to the State Department of Child Support Services (DCSS). State DCSS will perform a true-up each quarter and reduce the advancement if funds were unspent in the prior quarter by the department. Due to overall salary savings and unspent funds from services and supplies, State DCSS reduced the department’s actual advancement to offset the unspent funds. The State does a true up each quarter to make up for any shortages/overages as long as the department does not exceed the State budget, which this fiscal year it has not. The department will have enough revenue in the December 2022 deposit that will cover for the deficit.  
 
Community Services - $16,143,370 Positive Net Variance
The Department of Community Services ended the fiscal year with a positive net variance of approximately $16.1 million.
 
Integrated Waste Management (IWM) had the largest variance of $14.4 million primarily due to surpluses in various funds including in the 2022 Solid Waste Revenue Bond fund due to the debt financing being completed this year but only current year project expenditures being included in the budget.  In the division’s primary operation fund, expenditure savings included Service and Supplies and Capital Assets, in addition to an unanticipated increase of Charges for Services revenue. The $2.6 million in service and supplies savings were mostly due to professional contracts including architectural and maintenance that came in significantly lower than expected. In addition, there are savings in capital improvement projects with some extending into FY22-23. For example, two of the mitigation land purchases that were budgeted in FY21-22 were actually purchased in FY22-23, creating a surplus of $1.7 million in capital asset expenditures. In Charges for Services revenue, it is showing a surplus variance of $2.4 million due to the increase in sanitation services. Budget was based on actual cost as January 2021 and services have significantly increased since then.  
 
The Cannabis division ended the fiscal year with a positive net variance of $2 million primarily due to delays in completion of a Cannabis building to be implemented at the Beamer Campus. The project is now scheduled to be completed in FY 22/23. There were savings in services and supplies due to budgeted amounts for a new software to replace their inspection software, Envision Connect, which is delayed to this FY22-23 along with lower than anticipated legal expenditures. Normally, the department pays the Sheriff’s Department for two sheriffs to assist with inspecting various Cannabis sites. Lately, this service has not been needed, causing an increase in savings of $400,000 in Intrafund Transfers. There is also a salary savings of $192,000 for an open position – Cannabis Code Enforcement Officer that has not been filled yet.
 
The Roads/Public Works fund ended the fiscal year with a negative net variance of $2.0 million primarily due to lower than anticipated Intergovernmental Revenues from State and Federal. The County Road 98 project has been taken longer for right of way acquisition and thus revenue budgeted to be received in 2021-22 will be received later creating $1.5 million less revenue for the project in the current year.  In addition, the County Road 40 Bridge accounts for $2.5 million of revenue deficit, as billing to the State on the project is expected to occur later in the project and be received in 2022-23. Lastly, County Road Bridge over Dry Slough is not yet completed and will be extended into FY22-23 accounting to the deficit in revenues this fiscal year that was anticipated to receive to complete the project. Furthermore, state revenues – HUTA and SB-1 shows a negative net variance of $8.6 million. This is due to the department drawing down on less revenue during the current year that anticipated to complete projects than originally forecast. The principal offset to the negative variance of these revenues are the savings in capital assets and road maintenance services due to as described above projects proceeding slower than originally projected however this is typical as roads and bridges capital improvement projects stretch across multiple years in nature. Any unused appropriations will be re-budgeted in FY22-23 to continue the planned projects. An additional surplus of $2 million in services and supplies is largely due to a decrease in road maintenance service and supplies. There is also salary savings ($883,000) due to vacancies of two Senior Engineers and Road Crew leader positions throughout the fiscal year.
 
County Administrator’s Office - $73,037 Positive Net Variance
The County Administrator’s Office ended the year with a positive net variance of approximately $73,000. The Office of Emergency Services had a positive net variance of $1.3 million, due largely to the delay of several grants to the 22-23 fiscal year. Additionally, both the CAO’s primary accounting unit and those of the Housing & Community Development program experienced surpluses due to ongoing COVID delays of various projects.
 
Yolo Electric finished the fiscal year with a $2.6 million negative net variance.  The program experienced both higher than anticipated expenditures, related to $828,000 of unbudgeted deprecation costs, and $2.0 million in reduced revenues.  These revenues include variation in department billing based on prior year kilowatt fees, and the withholding of an Internal Revenue Service subsidy. Savings in Services and Supplies ($230,000) is offsetting a portion of the negative variance. Yolo Electric will need to charge higher rates to departments in future years to resolve these shortfalls. 
 
County Counsel - $ 263,486 Positive Net Variance
County Counsel ended the fiscal year with a positive net variance of approximately $263,000, primarily due to savings in both Salary and Benefits and Services and Supplies. The Legal Office Services Manager position became vacant at the end of September 2021, saving $87,000. Additionally, the department experienced lower than anticipated expenditures from outside legal service of $62,000. The professional services need fluctuates each year, but it is available in case outside legal counsel or other services are needed. The Indigent Defense division accounted for $108,000 of the surplus due to savings from one of the conflict panel attorneys not performing as much work as originally anticipated along with further savings in professional services where anticipation for more outside services were not required for the fiscal year.  
 
County Service Areas - $2,097,351 Positive Net Variance
County Service Areas (CSA) ended the fiscal year with a positive net variance of $2 million with the Wild Wings areas accounting for approximately $1.5 million.
 
In the Wild Wings Water division, there were savings of approximately $808,000 in capital assets in relation to the new meters and well to be constructed. The unused appropriations will be re-budgeted to FY22-23 to finish the projects. Services and supplies have a savings of $255,000 primarily due to professional services – other account relating to the new meters and new well. The Wild Wings Golf Course division ended the year with a positive net variance of $323,000 primarily due to the utility bill not received on time and as a result will be posted in FY22-23. Intrafund transfers were lower than anticipated due to fewer transfers from the County to Kemper who manages the Golf Course. Lastly, Wild Wings Sewer ended the year with a positive net variance of $156,000 primarily due to savings in services and supplies along with more than anticipated revenues ($100,000) received regarding a legal settlement revenue for the County against the Wild Wings Owners Association.
 
The El Macero Water division ended the year with a positive net variance of $185,000 primarily due to savings in services and supplies and charges. Due to the drought from year 2021, more residents are conserving water resulting in overall reduction of water usage. Charges for services has a deficit of $154,000 that offsets the services and supplies due to lower water usage.
 
Countywide - $19,333,496 Positive Net Variance
The Countywide department ended the fiscal year with a positive net variance of $19.3 million, due primarily to lower General Fund transfers to other funds ($9.7 million), an increase in development impact fee revenues ($2.3 million) and an unanticipated growth allocation ($1.6 million) in the Community Corrections Partnership (CCP).  The CCP voted to utilize this sizable one-time increase in order to build their fund balance and prepare for future volatility within their funding stream.  Court MOU revenue was also higher than anticipated, allowing for offset of additional expenses, while still ending the year with a surplus of $749k.
 
Cannabis Measure K revenues were considerably lower than budgeted ($2.3 million), however, many of the projects  had lower than budgeted expenditures in the current year, which offsets much of this deficit. These projects will be carried forward to 2022-23 as approved in the adopted budget. 
 
Debt Service - $161,417 Negative Net Variance
The Debt Service department ended the fiscal year with a negative net variance of $161,000 mainly due to the Davis Library and 2020 Lease Revenue Bonds. Library only needed to transfer $425,000 to cover the next debt service payment in December 2022, based on cash balances available in June 2022 and therefore the budgeted transfer of $522,000 was not fully needed. Additionally, the 2020 Lease Revenue bonds came in lower than anticipated by $56,000. The deficit is related to a transfer of ACO funding approved for use in reaction to delays in the ITSD move that did not happen as intended.
 
District Attorney - $352,263 Positive Net Variance
The District Attorney’s Office ended the fiscal year with positive net variance of $352,263 due mainly to numerous vacancies and grant work that did not materialize as budgeted.  Criminal Prosecution ended the fiscal year with a positive variance of $578,000 due mostly to vacant positions.  This surplus offset multiple revenue deficits in the Neighborhood Court and Special Investigation units, leaving the Public Safety Fund units with an overall $130,896 positive net variance. Most District Attorney special revenue funds ended the year with positive net variances.  An exception is the Consumer Fraud Environmental Protection unit, which ended the fiscal with a negative variance of $391,000 largely due to lower civil penalties than budgeted.
 
Financial Services - $541,448 Positive Net Variance
The Department of Financial Services ended the fiscal year with positive net variance of approximately $541,000 primarily due to salary savings of $567,000 from various vacancies throughout the year including Chief Budget Official, Senior Financial Services Analyst, interim assignments (CFO became interim CAO and ACFO became interim CFO), accountants, and accounting technician positions. There were also increases in property tax administration fees, supplemental roll administration fees, and internal audit revenue which include treasury cash count, department cash audits, and Purchase card continuous auditing contributing to the surplus of the department. Savings from vacant positions are partially offset by lower reimbursement for staff time on Cannabis from Community Services, Procurement Specialist from HHSA, and Satellite Finance.
 
General Services - $619,073 Positive Net Variance
The General Services Department ended the fiscal year with a positive net variance of $619,073 due to surpluses in the Facilities and Parks divisions.  
 
The Facilities Division ended the year with an overall positive net variance of $278,000 with an expenditure surplus of $2.2 million.  The significant variance in expenditures can partially be attributed to salary savings in the division with the Senior Accounting Technician position being filled late in the year and additional salary savings due to loss of staff that include two Project Coordinators, a Project Manager and two Building Craftmechanics (BCM).  With County staff returning to the workplace full time and the department being down BCM positions, work orders are trending 23% lower than anticipated partially resulting in the surplus in services and supplies. 
 
General Services received Safety and Security Contingency Fund ($150,000) for countywide projects, however, of those funds only $77,063 were used for Safety and Security projects requested by departments.  Many of the planned projects for fiscal year 2021-22 were not completed due to the loss of Project Managers, COVID restrictions and supply chain issues resulting in a surplus in capital assets of $1.6 million.  These surpluses are offset by lower than budgeted revenues due to the inability to complete a variety of ACO projects, revenue for the EV charging station being received in 2022-23 and work order revenue trending lower than anticipated.
 
Parks ended the year with a positive net variance of $364,536 for several reasons. The division experienced salary savings due to a vacant Senior Parks Planner position and additional Salary Savings for under filling an Administrative Services Analyst with a Senior Accounting Technician position ($221,383).  Additional expenditure savings exist due to the Off-Road Highway grant being finalized and expenses being lower than projected, the Prop 68 Grant project not being fully executed by the state, and expenses being lower for the Esparto Community Park.
 
The Airport ended the year with a negative variance of $23,513.  This is primarily due to Salaries and Benefits not being budgeted within the unit and expenses being incurred ($111,000).  These expenses are offset by a year-end budget true up using general fund to close the deficit. 
 
Health & Human Services Agency - $5,564,714 Positive Net Variance
While the Health & Human Services Agency experience a $5.56 million positive net variance, the Social Services division ended the fiscal year with a deficit of $1.1 million.  Despite considerable salary savings throughout the branch, 52 vacant positions at the end of the fiscal year, and savings in Intrafund transfers, the deficit is attributable to lower than anticipated revenues throughout the division, but largely in due to a reduction in anticipated use of fund balance. This fund balance was not required as the department received more 1991 Realignment than budgeted.
 
Behavioral Health ended the fiscal year with a surplus of $2.13 million, due primarily to lower than anticipated expenditures throughout the division.  A portion of these savings ($340,000) is largely related to delays in implementation of the Crisis Now Pilot Program; however, the largest portion ($1.8 million) is attributable to MHSA-Community Service and Support.  The budget for this program included programs that were anticipated to be a component of the MHSA Annual Update but did not materialize. The Board approved the MHSA Annual Update on August 30, 2022.
 
Public Health concluded the year with an overall surplus of $1.12 million, due largely to a reduction in anticipated transfers to Crisis now for project start-up due to delays in program launch. The IGT positive variance of $3.3 million is due to expense savings related to delays in implementation of the Crisis Now Pilot Program.
 
Both Public Guardian and Veteran Services ended the year with small deficits.  Public Guardian ($15,906) due to higher than anticipated staffing costs, and Veterans Services ($1,742) to reduced state revenues.
 
Human Resources - $266,106 Positive Net Variance
Human Resources ended the fiscal year with a positive net variance of approximately $266,106.  The main Human Resources operating budget had expenditure savings of $53,000 primarily due to position vacancies throughout the year and higher than anticipated revenues related to various recruitments.
 
The Risk Management Division ended the year with a deficit of $123,302.  This is mostly due to increases in general liability and workers compensation insurance premiums.  Unemployment Self Insurance ($121,561) and Dental Self Insurance ($214,521) ended the year with a surplus due to lower than budgeted insurance premiums.  
 
Innovation & Technology Services - $536,304 Negative Net Variance
Innovation & Technology Services (ITS) ended the fiscal year with an overall negative net variance of $536,304 due to variances in the ITS, Telecom, and PC Replacement divisions. 
 
During the fiscal year, ITS was unable to fill certain technical positions resulting in approximately $1.25 million in Salary and Benefit savings.  The department also saw significant savings in Services and Supplies due to lower than budgeted expenses for replacement equipment, ERP charges, connectivity charges, and the termination of the Genuent contract.  The bulk of savings ($576,000) is due software and licenses such as Microsoft servers, Cisco Smartnet, Zoom and Esri contracts being lower than budgeted and expenses being reimbursed back from departments for these licenses.  Offsetting these savings is expenditures is $1.9 million in decreased revenues due to lower than projected staff time being spent on projects for the District Attorney, Probation and Sheriff departments. 
 
Telecom ended the fiscal year with a negative net variance of approximately $150,000.  Expenditures were lower than anticipated and most of these savings exist within Services and Supplies where Telecom cost plan charges were $54,000 less than budgeted and where projects were budgeted, but not expended in fiscal year 2021-22.  These savings are offset by lower than budgeted revenues in the Telecom Division.
 
Library - $793,270 Positive Net Variance
The Library ended the fiscal year with a positive net variance of approximately $800,000, due largely to savings in Measure A.
 
Library Operations experienced $220,000 in salary savings due to vacancies in Extra Help and two vacant librarians throughout the fiscal year. In addition, some expenditures in leave buyout and worker’s compensation insurance came in significantly lower than were anticipated. Services and Supplies were also reduced due to the branch closures related to COVID-19 including utilities, office supplies, security, and maintenance. The department also received over $190,000 unanticipated revenues for Redevelopment Agency (RDA) residual revenues and pass-through revenues that came in higher than budgeted estimates. In addition, revenues that came over what was budgeted were Donations from Friends of the Library ($50,000), Yolo County Library Foundation ($30,000), and various private donations to branches and/or the opening day collection for the new Yolo Branch Library.  These expense savings and considerable additional revenue allowed the department to significantly reduce the budgeted transfer of Measure A funds into this unit.
 
Measure A is used to pay debt service costs and support costs for the Davis Branch Library. The significant surplus in Library resulted in a transfer reduction of approximately $1 million from the Measure A fund into the Library Operations. As discussed above, the reduction was caused by significant decreases in branch expenditures, increase in branch revenues, particularly RDA pass-through revenue and residual revenue, and an over-transfer in FY2021 of $268,000 that the department have applied to FY2022.  
 
Probation - $2,442,159 Positive Net Variance
Probation ended the year with a positive net variance of $2.4 million, mainly in Probation’s Adult Probation Services and the department’s various special revenue funds.
 
Adult Probation Services, which includes Court Funded Pre-Trial Services, had cost savings throughout the year due to delays in the implementation of the Court-Funded Pre-Trial Services program.  With the four-month delay in starting the program, staffing expenses were lower than expected and short-term vacancies in the units added to the savings.  In addition, savings in services and supplies ($294,000) can be attributed to such delays in the Court Funded Pre-Trial Services specifically around GPS monitoring. Further savings in this division were attributed to delays in the implementation of the Community Services Infrastructure grant project which allows the County to purchase a home in order to provide transitional housing for justice involved individuals.  The Community Service infrastructure grant has also contributed to the savings in capital assets as these funds were intended to purchase a house and fund other potentially large purchases.  The revenue variances that exist in the Adult Probation program are also due to the delays in Community Infrastructure Grant and the county not receiving the $1 million reimbursement for expenses that were anticipated.
 
The Juvenile Detention Division ended the year with a negative net variance of $256,000. This division consists of three programs: Alternative Sentencing, Transportation, and the Juvenile Detention Facility (JDF). All three programs experienced expense savings ($563,652) due to ongoing vacancies and a continued low population at the JDF.  However, ongoing COVID restrictions in the beginning of the fiscal year restricted the Alternative Sentencing Unit from providing reimbursable services to other county and local agencies.
 
The Juvenile Probation Services unit also ended the fiscal year with a positive net variance ($105,000). Vacancies throughout the fiscal year ($416,000) and reduced Services and Supply expenditures ($466,000) contributed to a total expense savings of $563,652.  Many of these expenses were intended to be offset with Probation special revenue funds, but in light of the savings, these transfers were not required. The unit did receive more State and Federal revenue than anticipated, related to higher reimbursements related to the departments Youth Reinvestment Grant and CalWorks.
  
A small deficit, $946 exists in the departments Community Corrections Partnership unit. This deficit will be offset with available fund balance.
 
Probation special revenue funds (SB 678, Juvenile Justice Crime Prevention Act and Youthful Offender Block Grant) all ended the year with positive net variances.  These funds are intended to offset appropriate expenses in other Probation divisions. Due to the savings in those programs, less was transferred to offset expenses.
 
Further contributing to the department’s positive variance is $269,212 in unbudgeted received revenue related to the Juvenile Justice Realignment Block Grant.  Counties are to use these funds to offset additional expenses incurred as a result of housing juveniles formerly held at the Department of Juvenile Justice (DJJ) and now being returned to home Counties.  Yolo has no youths to be returned, so the funds should fall to fund balance for future use.
 
Public Defender - $1,270,839 Positive Net Variance
Public Defender ended the year with a positive net variance of $1.27 million due mostly to savings in Salaries and Benefits and Services and Supplies.   The salary savings can be attributed to a variety of vacancies throughout the year in the department ($807,000).  Services and supplies also had lower than budgeted expenses in ERP charges, connectivity charges, medical, dental and lab expenses.  Savings also exist in professional services due to not having expenses related to the Partners for Justice 1170(d) grant.  The department’s revenues also appear lower than projected due to the pilot defense grant revenue not arriving during the fiscal year and instead arriving in August 2022, offsetting a portion of the savings.
 
Sheriff - $207,419 Positive Net Variance
The Sheriff’s Office ended the year with a positive net variance of approximately $207,000 with the Public Safety funds ending the fiscal year with a negative net variance of $605,000, due to lower than anticipated revenues. Many of these reduced revenues are related to lower than anticipated transfer of general fund, and reimbursements from the Cannabis Task Force.
 
Some special revenue funds ended the year with small deficits, due largely to unbudgeted DFS Treasury fee costs. Despite this, $1.1 million of the variance is from the Small and Rural fund that has funded the Records Management/Jail Management (RMS/JMS) replacement project.  Delays due to COVID has extended the completion date into FY2022-23. Court Security ended the year with a positive net variance of $185,000 due continuing vacancies and other staffing related expenses.
 
Several divisions experienced vacancy savings throughout the year, including Management, Detention, Patrol, and Court Security. The Public Administrator’s office also had a vacant position for most of the fiscal year, contributing to that division’s $163,000 positive net variance. 

The Department of Financial Services worked with other county departments to review and analyze variance explanations provided by departments for budget units that had a significant year-end appropriation variance.