Receive report of preliminary fund balances as of June 30, 2022; hold a public hearing and adopt the County of Yolo budget for fiscal year 2022-23; hold a public hearing as the In-Home Supportive Services (IHSS) Public Authority Board and approve the IHSS Public Authority budget for fiscal year 2022-23; and approve the 2022-23 budgets for Board-controlled Fire Districts. (General fund impact $115,358,418) (Pinedo/Rinde)

State law requires that the Board adopt the annual budget by October of each year.  The attached budget resolution (Attachment C and Exhibit 1) is based on the FY22-23 Recommended Budget as approved by the Board of Supervisors on June 14, and as revised by the recommendations included in this report. These recommendations have been reviewed with the Chair and Vice Chair in accordance with the Board’s Governance Manual.

The Preliminary Fund Balance Report (Attachment A) is a general accounting of the fund balances for all County funds as of June 30, 2022. Fund balance used or not available indicates amounts that are either already appropriated for use in FY22-23 or that are not available for current spending (such as prepaid expenses and inventories). The available fund balances are those remaining amounts that can be used in the manner outlined in statute. The Level of Restriction column identifies how much flexibility the Board has in directing the use of those available funds. It should be noted that the fund balances in this report are preliminary and therefore subject to change until completion of the annual financial audit.

On June 14, 2022, the Board approved the FY22-23 Recommended Budget, which provided appropriation authority until the Adopted Budget is approved. The proposed FY22-23 Adopted Budget incorporates changes to the Recommended Budget based on revised revenue projections, available fund balances, changes resulting from the State budget, additional department requests and Board priorities.
 
Since the approval of the Recommended Budget, certain revenue streams continue to show signs of improvement although the broader economy is showing increasing economic headwinds. This improvement translates to a projected increase in FY22-23 general purpose revenues of approximately $1.0 million. These additional dollars are largely due to an increase in property tax growth that was not included in the Recommended Budget.  In addition, due primarily to heightened vacancy rates significantly above historical averages, the County ended the prior year (FY21-22) with $20.2 million in General Fund unassigned fund balance, $10.1 million more than what was already appropriated in the Recommended Budget. These additional funding sources allow the County to make targeted strategic investments while leveraging resources to prepare for harder economic times that may come.
 
A total of 23 new positions are being recommended for funding in the Adopted Budget.  However, of the 23 positions, only 3 positions are funded by the General Fund while the remaining 20 positions are fully funded by a variety of other non-General Fund sources.
 
The table below summarizes new positions recommended in the Adopted Budget. Attachment G provides a comprehensive overview of all position changes and requested positions that are not recommended at this time.

At Recommended Budget, it was noted that the economy generally had recovered from the COVID-19 pandemic as GDP had increased and that the unemployment rate was returning to pre-pandemic levels. However, it was also noted that coming out of the COVID-19 pandemic inflation had been persistent and has continued to increase as evidenced by high housing prices and other broad-based price increases. Leading into Adopted Budget and likely to continue subsequently, the Federal Reserve has taken action to combat inflation through a series of significant interest rate increases. There is the risk that these aggressive actions to stabilize prices and mitigate inflation-related harm may cause an economic slowdown or recession.  While the economy remains resilient and unemployment is low, the actions by the Federal Reserve are still working their way through the economy and the full impact of these interest rate increase may not be clear for some time as they continue to combat inflation.   These economic headwinds have not yet caused reductions to County revenues; however, the County like other organizations is experiencing significant cost inflation. Thus, the Adopted Budget attempts to use the slight increase in ongoing revenues to fund a select set of highest priority needs and use much of the one-time resources to strengthen the County’s fiscal position through contingencies and reserves to provide a temporary buffer against rising prices and prepare should an economic downturn accelerate.    

While the County is being cautious with local resources, a significant amount of state and federal resources are still available and County departments are attempting to obtain and leverage those resources wherever possible. The County enters the second year of our American Rescue Plan and since funds have been substantially allocated, those projects are beginning to materialize and see expenditure of funds. In addition, the opportunities have still increased in the Infrastructure Investment and Jobs Act at the federal level and with the State of California having a record breaking 2022-23 budget that provides various grant funding opportunities.   Overall, the Adopted Budget takes a measured, yet opportunistic approach in its recommended actions.
 
The sections below discuss significant proposed adjustments that are included in the Adopted Budget.

The General Fund ended FY21-22 with a preliminary estimated available fund balance of approximately $20.2 million. In anticipation of higher fund balances resulting from abnormally high vacancy rates, the FY22-23 Recommended Budget included approximately $10.1 million in estimated carryforward fund balance as a funding source. As a result, an additional $10.1 million in fund balance is available for appropriation in the Adopted Budget.  
 
The table below shows the unassigned General Fund balance over the past five years for context.

 

General Fund unassigned fund balance has been high and generally increasing for several years; however, staff believe that fund balances have likely reached a peak and will not maintain at comparable levels in future years. Vacancy savings are increasingly being used as a budget balancing tool, and inflationary cost increases combined with the impact of labor negotiations are likely to consume a larger share of what was historically budgetary savings. In addition, a slowdown in the economy is expected to result in a corresponding decline in the rate of employee turnover. As such, fund balances available at Adopted Budget continue to be used for one-time purposes in accordance with Board policy.
 
The projected FY22-23 general purpose on-going revenues have been revised to reflect an increase of approximately $1.0 million. The growth in property assessments reported by the County Assessor was 7.23 percent, or 2.23 percent higher than assumed in the Recommended Budget, resulting in an increase of approximately $1,500,000 in property tax revenue. Revenue projections were also adjusted to reflect increases in sales tax by $76,000, court fines and fees by $12,000 and interest earnings by $150,000.  However, Document Transfer Tax revenues are trending lower than anticipated at Recommended Budget due to slowing home sales, resulting in a reduction of $688,000.
 
The table below provides a summary of the recommended additional General Fund funding sources and uses. Attachment D provides a detailed listing of the recommended funding uses, while Attachment E further describes department requests that are not recommended for funding.  
 

  

The following sections provide an overview of the County department budgets. The narrative includes discussion about adjustments to balance the FY22-23 Adopted Budget, a summary of major programs as well as highlights of significant budget changes.
 
A detailed listing of items not funded for all departments is include on Attachment E. Items funded with non-general funds are included on Attachment F.
 
Agriculture
The Adopted Budget for Agriculture includes a $1 million transfer from the Agriculture Facility Replacement fund to the Capital Project Fund for the department’s move to 120 W. Main Street. Furthermore, the department has a one-time request for a Liquid Propane Gas Prover (LPG) Calibration Trailer System, which is needed for inspections of all county LPG meters and to address any LPG complaints throughout the year. The total amount of this expenditure is $91,500 and will be split 50/50 by General Fund and Agricultures’ Equipment-Vehicle Fund due to the LPG not being entirely qualified for the use of Equipment-Vehicle Fund.
 
The department also requested funding for the promotion of two Ag & Standards Inspectors I to II in the amount of $14,000. Due to the limited amount of additional ongoing funding available during the Adopted budget, and consistent with how funding requests for promotions are treated in other departments, these augmentations are not recommended for approval.  The department may proceed with offering promotions but will need to absorb any fiscal impact.
 
Assessor/Clerk-Recorder/Elections
Staff recommends a $20,000 increase in General Fund for the Elections Division in order to fund anticipated increases in overtime and travel reimbursements for the 2022-23 election cycle. The addition of Voter Assistance Centers, which are open for several days prior to election day, has increased the need for overtime, due to staff ensuring coverage during non-traditional work hours. Staff also recommends the conversion of an existing Assessor Clerk-Recorder Assistant I to an Office Support Specialist to better support department wide administrative functions. There is a $12,000 increase in salary and benefits as a result of this action, which the department will fund by utilizing additional salary savings.  

The Elections Division is also recommended to receive $30,000 in Cannabis Tax funding to support its Youth Empowerment Summit.  This annual event seeks to educate youth about local government, the election process, and the importance of voting and civic engagement. The department is expected to diversify funding sources to sustain this program in future years. A summary of the proposed Cannabis Tax Expenditure Plan is provided in Attachment I, and discussed further below.
 
The department also requested increased appropriations in Professional Service accounts in both the Elections ($35,875) and Assessors ($24,673) divisions.  These requests are not recommended for funding at this time. The amount requested by the Assessors division was to fund additional dedicated ITSD support, however, the dedicated ITSD position is unexpectedly vacant, generating a savings. The Elections expense, related to an increase in software operating costs, will be reviewed for impact during Mid-Year if the department cannot absorb the cost.
 
Board of Supervisors
The Adopted Budget for the Board of Supervisors includes $75,000 in a Board Community Benefit Fund ($15,000 per Supervisorial District).  This concept was briefly discussed at the May 23, 2022, Board Governance meeting and subsequently further refined with the Budget Ad-Hoc Subcommittee and will provide Board members with a small budget for incidental costs related to constituent engagement, community outreach and district operations.  A concept for consideration related to this fund is included as Attachment K. Should the Board support the concept and appropriate funds, staff would return with a policy to the Board at a future meeting.
 
Child Support Services
Child Support Services’ Adopted Budget includes adjustments due to changes in the Sutter Budget and termination of the Colusa Budget with Yolo absorbing some of the expenses. Over the next few years, budget and related expenditures will continue to be gradually transitioned to Yolo County. Federal and State revenue will be used to fund these expenditures.
 
Community Services
The Adopted Budget for the Department of Community Services includes adjustments throughout the department’s divisions:
 
The Climate Sustainability division includes one-time General Fund support for extra help for two Civic Sparks Fellows ($70,000) and additional funding for Service and Supplies ($3,900) to account for memberships and postage expenses. Furthermore, staff recommends increasing the Climate Sustainability Contingency by $145,144 for the purposes of adding a Climate Sustainability Analyst should the department not be successful in receiving grant funding from the Prepare California JumpStart Program. This program provides agencies with funding to hire a climate Resiliency/Sustainability Officer with up to $1 million dollars to fund salaries, benefits and materials.  If awarded, funding for the current Climate Sustainability Manager can be drawn down from this program and funding already approved for the same position can be utilized to fund an analyst for the division.  Should funding not be awarded, the contingency funds can be immediately utilized to recruit for the analyst. Applications for the Prepare California JumpStart Program are due in October, with awarded agencies notified this winter.
 
The County Surveyor division includes an increase in Professional Services for Planning division’s six staff members and Code Enforcement’s two staff members who will all need licenses to the new software, Clariti. The expenditures are reimbursed by a transfer in from General Plan Cost Recovery Fund. There are two Planning grants that require a local match which is also provided by the General Plan Cost Recovery Fund: $8,000 for the Sustainable Agricultural Lands Conservation (SALC) Grant and $5,000 for Renewable Energy Aggregated Procurement (REAP) Grant. In addition, $5,000 in one-time funding for overtime for Planning staff is recommended to be funded by General Fund. The department requested a new Senior Planner in the amount of $166,000 to assist with housing elements, general plan, and other assignments; however, due to lack of ongoing funding, this request is not recommended at this time.
 
The Adopted Budget for Roads/Public Works division includes a reduction in revenue by $150,000 for the Flood Safe 2.0 Project due to a more realistic estimate. There’s also an increase of $68,000 in Professional Services accounts for CAMS interfaces and ten Clariti licenses for staff. Furthermore, an increase of $655,000 in professional services and increase of $1.8 million in Special Department Expenses are recommended due to further road maintenance analysis that required additional funds to complete. In addition, an increase in fuel costs in the amount of $175,000 is recommended due to significant fuel costs continuing into the new fiscal year. A decrease in contribution to fund balance is being used to offset these expenditures. The Flood Mitigation Assistance (FMA) Grant will also be closed out in FY21-22 causing a decrease of $77,000 in revenue. The use of fund balance will offset the loss of revenue.
 
The Adopted Budget for Roads/Public Works also includes a total amount of $306,000 worth of equipment which includes a sand spreader, shoulder machine, GPS for a grader, and a sweeper with cab. In addition, an electric truck and electric van is included in the Adopted Budget totaling up to $117,000. These equipment and vehicle purchases will be offset by the decrease in contribution to fund balance. The garage bay doors on the Road Maintenance Building needs replacing due to its safety feature no longer working, which could lead to damaging vehicles and/or persons.  Staff recommends all equipment expenses.
 
Adjustments in the amount of $36,000 are being recommended in the Transportation Adopted Budget, following release of the Yolo County Transportation District budget.  This division acts as a pass through of certain local transportation funds for the Transportation District.
 
Staff recommend approval of a transfer from the Technology Cost Recovery Fee Planning Fund to the Building Fund in order to help pay for the Clariti upgrade (TrakIT’s replacement). The Technology Fee Fund was created to help pay for software upgrades.
 
The Building Division’s Adopted Budget includes a transfer in from Tech Fee Fund of $116,000 in order to pay for Clariti expenses. Furthermore, with significant fuel costs continuing into FY22-23, the department is increasing vehicle fuel expenses in the division by $7,500 and decreasing contribution to fund balance by the same amount.
 
The Fleet Division includes building improvements to the Fleet building along with the increase of inflation costs in the amount of $300,000 due to a delay in completing the project. Reimbursement through internal billing to County departments for overhead and fuel/maintenance help fund these expenditures.
 
The Adopted Budget for the Cache Creek Resource Management Division includes a revenue increase of $30,000 for the Capay Open Space Grant.  This grant will be financing improvements at the Capay Open Space Park. There was an increase in expenditures of $379,000 due to Gravel Contracts update, decreasing contribution to fund balance to offset.
 
Off Channel Mining Plan Adopted Budget includes an increase of $222,000 to match with updated Gravel Contracts. Fund balance is used to fund these expenditures.
 
County Counsel
The Adopted Budget for County Counsel includes an increase of $15,000 in professional services due to a change of contract in the Small Claims division from a local attorney to Legal Services of Northern California (LSNC). The local attorney is now unable to continue in the capacity the County is going towards, hence the change to LSNC. The Court has tentatively agreed to fund a portion of this increase, but $5,200 from the General Fund is recommended to support this change.
 
County Service Areas (CSAs)
The Department of Community Services requested an increase of $30,000 in the County Service Area (CSA) budgets in order to account for County staff time spent on the CSAs. Currently only productive hours can be allocated out for reimbursement, therefore $30,000 in General Fund support was requested to cover the unbillable time (sick, vacation, holidays, etc.). This request is not recommended for funding at this time.

The Adopted Budget for Snowball CSA includes an increase of $7,600 due to the update of the contract with Department of Water Resources on the Flood Maintenance Assistance Program (FMAP). Fund balance will be used to cover this expenditure.
 
The Adopted Budget for the El Macero CSA Water Operations includes a decrease of $320,000 in utility expenditures based on prior year’s actuals. This was caused due to the drought from last year and the reduction of water consumption from residents of CSA. This is offset by a decrease in primarily special assessment revenue and fund balance.
 
The Adopted Budget includes other minor adjustments to the other County Service Areas budgets. These adjustments include small increases or decreases to special assessment revenue, services and supplies, and fund balance to better align revenues and expenditures with FY21-22 actuals.
 
District Attorney (DA)
Staff recommends $7,500 in additional funding to the District Attorney’s Office for the one-time purchase of Law Enforcement Supplies. These supplies are necessary for the office to complete investigations and maintain various training certifications.
 
Increased appropriations for the NICE Justice System are also recommended. The NICE Justice software solution allows the District Attorney to standardize processes for collecting and distributing discovery to the defense in a timely, downloadable format.  Video from any media source and/or format can be standardized through this system, making it universal, for easy viewing by both DA staff and the defense.  Additionally, the system allows staff to transcribe any video/audio discovery within two minutes with 90% accuracy, in 50 different languages.  The BOS approved a five-year agreement with NICE Systems in May 2022, funded with CALMMET revenues and IT Innovation funds.  At this time, the department is requesting use of $153,000 of its CALMMET fund balance to budget for first year costs, which were not included in the Recommended budget.  
 
During the Recommended Budget process, funding for several promotions ($140,000) was requested by the District Attorney’s Office and was deferred to the Adopted Budget. Additionally, the department has requested six new positions in the Adopted Budget.  These positions, a Case Preparation Specialist, Legal Secretary II and four Deputy District Attorneys were requested to support the Prosecution unit.  Due to limited ongoing funding, both the promotional costs and new positions are not recommended for funding.
 
Financial Services
The Department of Financial Services’ Adopted Budget includes upgrades to two existing systems in addition to several staffing requests. The Master Fee System is used by county departments to submit changes to their list of fees and has been utilized since the early 2000s. The system is antiquated and not user-friendly. Staff recommend the use of one-time funds in the amount of $65,000 for replacement of this system.  Additionally, as the County continues migration to the new Infor system, upgrades to the County budgeting software, Sherpa, will be required in order to update the global ledger to ensure the systems can interface. Staff recommends $30,000 in one-time funding for this purpose.
 
Furthermore, staff recommends one-time funding of $41,000 to double fill the Property Tax Supervisor position for up to three months, until the current incumbent retires at the end of calendar year 2022, to provide continuous operations and training to the new employee. In addition, funding for an Office Support Specialist position ($90,000) is recommended to perform a variety of administrative tasks throughout the department not limited to: human resources duties, scheduling, equipment and supply management, office reception, and file management. The department has been without an administrative support position since the onset of the COVID-19 pandemic, when a vacant Office Support Specialist position was unfunded as a cost-savings measure. A portion of this position’s costs will be recaptured through the cost plan in future years.
 
The Adopted budget also includes a reduction of $30,375 to anticipated revenues in the Internal Audit Division, and $6,500 in one-time funding for Sustainable Procurement Consulting services.  The Procurement division budget will be administratively moved to General Services in future budgets however given the timing of the reorganization was not moved in time for adopted budget.
 
The department also requested several other positions including one Senior Administrative Services Analyst, an Accountant III, and a promotion for an Associate Procurement Specialist to a Procurement Specialist. Due to lack of funding, these requests are not recommended at this time.
 
General Services
Staff recommends approval of several one-time budget augmentations in the General Services Facilities Division Adopted Budget.  These requests include purchase of a golf cart to allow staff to easily navigate the justice campus ($20,000), installation of a pedestrian gate to allow staff to safely enter the justice campus ($10,000), additional funding to continue to replace several magnetic door locks throughout various County facilities ($100,000), and additional funding for the purchase of MERV 13 air filters at the recommendation of the County Health Officer ($50,000). Additionally, staff recommends funding extra help to assist with administrative tasks related to building relocations ($20,000), new lighting improvements at 600 A street ($14,000), and requests for laptops for the facilities staff to work remotely when necessary and answer department requests timely ($10,349).
 
The Facilities Division also includes an adjustment to work order revenue.  Adjustments were made during the recommended budget to address the fee increase for the facilities work orders from $83 to $92, however an additional adjustment is necessary to reflect more accurately how facility work order are reimbursed ($15,100). Staff also recommends approval of adjustments to the departments rental agreements, which result in a net increase of revenue of $37,000.
 
The General Services Department also requested a kiosk for members of the community to navigate the administration building.  This request is not currently recommending for funding; however, the department may consider requesting IT Innovation funding for the kiosk.
 
The Parks Division Adopted Budget includes $55,000 for a replacement vehicle due to high mileage.  The ongoing maintenance of the current vehicle will not be cost effective per the Fleet Manager and replacement of the vehicle is recommended.
 
The Project and Administration Division’s Adopted Budget includes $41,000 for a hybrid vehicle to replace two vehicles in the General Services fleet.  This vehicle will be used specifically for staff oversight and for administrative tasks in order to reduce the use of staff members personal vehicles.
 
Tuli Mem Park and Pool’s Adopted Budget includes adjustments to revenue and contract amounts. In the Recommended Budget, $132,000 in Cannabis Measure K funding was approved for Tuli Mem to support operations and maintenance of the park and pool; however, this funding was inadvertently not included in the Tuli Mem budget.  The Adopted Budget also includes an adjustment to Prop 218 revenue that was made to correct an error and more accurately reflect assessment revenues.  In addition, the Esparto Unified School District is planning to use the pool for after school programming, extending the start and end dates for swim lessons, and a higher maintenance contract with Esparto CSD results in increased expenses ($104,830) offsetting much of the added revenues.  The net impact of these adjustments is approximately $27,000 in additional revenues.
 
The Airport’s Adopted Budget includes $100,000 in a one-time general fund contribution for construction of Run Up Aprons.  Run Up Aprons are turnout areas off the runway that allow aircraft to conduct safety inspections prior to takeoff.  This project will be mostly funded by a Federal Aviation Administration (FAA) grant; however, the department will return to the Board with specific information regarding county match obligations and project funding as it becomes available. Lastly, the Airport’s Adopted Budget includes the addition of a contract with the West Plainfield Fire District ($15,000) to provide fire protection at the airport and the addition of insurance as it was not previously budgeted ($6,737).
 
Items that were re-budgeted from the prior fiscal year include the Curtis Paint Stripping project and the destruction of four monitoring wells at the airport. Previously paint stripping was conducted near a pond at the airport resulting in the state recommending soil and water monitoring to ensure the area was not contaminated.  The project is now complete, and demolition of the monitoring wells is necessary ($18,100).
 
Human Resources
The Human Resources Adopted Budget includes an increase of $30,000 in the Risk and Management Division.  Staff recommends approval of this expense. It will be used to host employees and their families for flu vaccine clinics. 
 
Additionally, the department requested $140,000 to fund executive recruitments, internal investigations and to pay for internal audit services related to the Human Resources payroll audit. These requests are not recommended for funding at this time.
 
Health & Human Services Agency
The 2022-23 Adopted Budget for the Health & Human Services Agency includes 21 new positions, most of which are funded by state and federal sources.  General Fund support is recommended for one new Office Support Specialist for Public Guardian, which is needed to handle administrative functions in order to free up Conservatorship Officers and other staff to handle increasing caseloads and service demands.  The department also requested General Fund support for 18 new Service Center positions (9 Public Assistance Specialists and 9 Service Center Administrative Specialists) due to significantly increasing caseloads in CalWORKS and CalFresh as well as upcoming mandatory recertifications in Medical. While this is an important issue worthy of further discussion, due to limited ongoing General Fund revenues these positions are not recommended at this time.
 
Other positions recommended for funding with non-General Fund sources are highlighted on the position summary table above, and include four positions to support additional In-Home Supportive Services (IHSS) clients, two limited term positions to lead planning efforts for implementation of the Family First Prevention Services Act (FFPSA), two Community Health positions to support health equity initiatives and provide oversight of Maternal, Child and Adolescent Health (MCAH) program, four limited term positions to provide contractual and administrative oversight for a number of homelessness and criminal justice grants, and four positions (two limited term) to support Mental Health Services Act (MHSA) programs. In addition, the Adopted Budget for HHSA includes four positions (Assistant Director, Administrative Services Analyst, Clinician II and Behavioral Health Case Manager) that were previously approved by the Board.
 
The department also requested four additional positions in the HHSA Administration branch, including a Senior Personnel Analyst, Administrative Services Analyst, Ombudsman and Employee Relations Manager. Positions in the Administration Branch are allocated out as overhead costs across all other HHSA programs. A significant portion of these costs are able to be charged against state and federal funding sources; however, a portion may also require realignment or General Fund support. Staff in the Department of Financial Services is continuing to work with HHSA to determine the fiscal sustainability of the requested four additional Administration positions. As such, those positions are not recommended for funding at this time.
 
The 2022-23 Adopted Budget for HHSA also includes General Fund support for the following purposes:

HHSA also requested an additional $188,185 in General Fund support related to increased overhead cost allocation to Jail-Medical ($158,424) and Veteran’s Services ($29,761). These increases are not recommended at this time as the reason for the increased costs to Jail-Medical were unclear and the increases to Veteran’s Services were largely due to the requested Administration positions that are not recommended for funding.
 
Innovation & Technology Services
With security being a point of emphasis, the Adopted Budget for the Innovation and Technology Services Department (ITSD) includes a new Network Systems Specialist position with total salary and benefits of $176,000. This position will initially be funded with one-time General Fund support and will be incorporated into IT charges in future fiscal years.  ITSD’s Adopted Budget also includes $70,000 in one-time funding to conduct a risk assessment of the current IT environment and operations to assist in identifying potential threats and vulnerabilities. 
 
The Adopted Budget for ITSD includes receipt of a $15,430 federal Homeland Security grant for the planning and creation of a multi-unit address mapping mobile application. This application is intended for use in the field and will allow for individual addresses of multi-unit locations such as apartment complexes and mobile home parks to provide accurate spatial location of addresses. This will allow public safety agencies such as police and fire departments to quickly identify where they are needed through GIS, opposed to searching an entire apartment complex or mobile home for the apartment or unit number. 
 
Also included is $120,000 in one-time General Fund support for a Sharepoint consultant to train County staff on the use of the program. Lastly, staff recommends approval of two new vehicle purchases for $35,000 each. These are new vehicles intended to accommodate the increase in IT staff and are not replacing any aged vehicles currently in the IT fleet.
 
Library
The Library’s FY22-23 Adopted Budget includes a minor adjustment to increase professional service contracts by $6,020 to account for the increase in Internal Audit fees as well as to hire a coordinator/trainer for the fall forum for the Library Advisory Board. In addition, there is a re-appropriation of unspent funds from FY21-22 for a laptop that was not received until FY22-23. Fund Balance will be used to cover these expenditures.
 
Probation
The Probation Adopted Budget includes an adjustment to the revenue for SB 678. Since the Recommended Budget, the California State Budget included additional funding to all counties receiving SB678 funds, as the current amounts were determined by the legislation. This adjustment resulted in increased revenues of approximately $170,000. This increase allows the Probation department to reduce the use of budgeted fund balance and increase salary allocation to the unit.
 
The Juvenile Justice Realignment Block Grant is also projecting a revenue reduction of $78,599 for the 2022-23 fiscal year based on the 2022-23 California State Budget.  Though less revenues are being received, there is no immediate impact to departmental operations. These funds have been realigned to the county as a result of the closure of the Department of Juvenile Justice and must be utilized for placement of secure-track youth.
 
The Juvenile Probation Services Division is increasing funding for overtime in the amount of $20,000.  This increase is related to an officer assigned to the Federal Bureau of Investigation (FBI) Safe Streets Task Force and is fully reimbursed by the FBI. The Safe Streets Task Force works collaboratively with federal, state, and local law enforcement agencies to address violent crimes that are plaguing communities.
 
Other items in the Adopted Budget for Probation includes re-allocations and adjustments of overhead expenditures, salary and benefits, and services and supplies within the various divisions and programs to align staffing with current needs of the department. Instead of requesting additional General Fund for the re-allocated positions, Probation was able to absorb these movements due to reallocation of Proposition 172 revenue. 
 
Public Defender
The Public Defender requested three new Deputy Public Defender positions totaling approximately $465,000. Due to the limited amount of additional ongoing funding available during the Adopted budget, these positions are not recommended for approval.
 
Staff are recommending the use of one-time funds for replacement of an existing vehicle within the department’s fleet ($32,000). This new vehicle will replace one utilized by the investigations unit that has been in use since 2007.
 
In addition, the Public Defender is adjusting fund balance to match the actual remaining balance of the Indigent Defense Grant as well as adjusting fund balance to adjust revenues to match the actual remaining balance of the County Resentencing Pilot Program 1170(d) grant.
 
Sheriff
Staff are recommending approval of several equipment purchases included in the Sheriff’s Adopted Budget.  These include purchase of shelving, fencing and lockers for the Boat Shed, and two buoyant vests with ballistic protection to be utilized by Marine Patrol ($33,000) and furniture for the Patrol room, security camera pods and updated evidence workstations for the Patrol Division ($70,000).  Updates to training room technology at the Cameron Facility ($75,000) are also recommended for approval. Additionally, the replacement of an Inmate Transportation Vehicle ($100,000) and Forklift ($40,000) for the Detention Division are recommended by staff.  Both replacements have been recommended by Fleet, and considering the indoor use of the forklift, an electronic, emission free unit has been recommended.
 
The Coroner’s Office is no longer receiving forensic autopsy support services from the County of Sacramento, and as a result staff are recommending a one-time increase of $22,600 to the division’s extra help budget.  This funding will allow the department to hire as-needed forensic technician positions necessary for performance of autopsies.
 
The Adopted Budget for Animal Services includes an increase in the use of available fund balance ($180,000) for the replacement of two aging trucks. The replacements are recommended by Fleet. This purchase will not increase any of the cost-sharing agreements with the cities.  
 
The Sheriff’s Small and Rural special funds will be funding a number of requests, including the final months of the Records Management System / Jail Management System (RMS/JMS) software implementation ($407,000).  Additionally, use of Small and Rural funds is being recommended in order to facilitate a Gun Buy-Back Program ($5,000), which will allow citizens wishing to exchange unwanted guns for gift cards, and to offset the expense of a new plane for the Aero Squadron ($75,000).
 
The current plane utilized by the Aero Squadron is a 1975 Cessna Skyhawk, which can carry three adult passengers and has a fuel tank capacity of 42 gallons.  The department plans to purchase a newer model Cessna, a 1979 or slightly newer, more efficient plane with higher fuel capacity (92 gallons) and the ability to carry four adult passengers.  According to recent market analysis, a 1979 Cessna Skylane could be purchased for $189,000.  The department intends to sell the existing plane for approximately $92,000, (net selling commissions of approximately $6,000), and has received tentative commitment from agencies outside the County for $22,000 in additional funding. The balance of the purchase, $75,000 would be from available Small and Rural fund balance.
 
A small amount of COPS fund balance ($4,000) is also recommended to offset small expenses for computers and vehicle outfitting.
 
The Sheriff’s Department requested a number of new and re-funded positions as part of the Adopted Budget.  These include:

 

The department also requested funding for leave buyback for an anticipated retirement, along with extra help funding in the Patrol Division.  Neither of these requests are recommended for funding at this time.

The County policy on Fund Balance and Reserves identifies appropriations for contingencies as the first line of defense against uncertainty in the annual budget and provides that the County Administrator will recommend a specific level of appropriation for contingency, usually between 1% - 3% of total budgeted expenditures. The proposed Adopted Budget includes an additional $3,297,319 in appropriation for various contingencies, as outlined below. With exception of the Safety and Security Contingency as described below, use of contingency funds will require subsequent approval by a 4/5 vote of the Board of Supervisors.
 
General Fund Contingency – It is recommended than an additional $1,000,000 be added to the General Fund Contingency to cover unexpected expenditures. The total amount of $3,046,220 or 2.3%, will be used to cover unexpected expenditures for FY22-23. This amount is comparably higher than the past couple of years but was deemed a key priority to prepare for higher costs including labor, services and supplies, and to be well prepared for any possible downturn.
 
HHSA Contingency – It is recommended than an additional $500,000 be added to HHSA Contingency.  This contribution will bring the HHSA Contingency to a total of $2,000,000, or 1.5% for FY22-23.
 
Public Safety Contingency – It is recommended than an additional $750,000 be added to the Public Safety Contingency.  This contribution will bring the Public Safety Contingency to a total of $1,750,000, or 2% of public safety expenditures for FY22-23.
 
Climate Sustainability – It is recommended that an additional $145,144 be added to the Climate Sustainability Contingency. This additional contribution is specifically to fund a Climate Sustainability Analyst should the County not receive grant funding from the Prepare California JumpStart Program. This contribution will bring the Climate Sustainability Contingency to a total of $645,144.
 
Roads Contingency – No additional contributions are being made to the Roads Contingency. During the Recommended Budget process, the Board fully funded the Roads contingency of $550,000 to allow for pre-planning activities.
 
Fire Sustainability Contingency – No additional contributions are being made to the Fire Sustainability Contingency.  During the Recommended Budget process, the County maintained the set aside contingency of $550,000. This contingency is intended to be used if the Board approves a long-term financial sustainability plan which is mutually agreed upon with the Rural Fire Districts. The County is continuing to work with districts on self-help steps through Proposition 218 and has a separate update coming to the Board on the results of the LAFCo study on Fire Districts.
 
YOBI Contingency – The County started the Yolo Basic Income Program that will run through June, 2024. The program has an unfunded gap (as described further later in the staff report) and staff are applying to close that gap through receipt of a state grant. In the event that the state funds or private donations materialize, a contingency set aside in the amount of $500,000 is recommended for the adopted budget.
 
Diversity, Equity and Inclusion Contingency – It is recommended that $202,175 be added to a Diversity, Equity and Inclusion (DEI) contingency fund. These funds are intended to support DEI initiatives and provide the ability for the DEI leadership group to focus on key areas around employee engagement, organizational learning and development, and employee recruitment. This may also be used to fund a DEI Manager or comparable position at a later time as the DEI program matures and the appropriate support structure is determined.
 
IT Innovation Contingency – It is recommended that $100,000 be added to the IT Innovation Contingency for IT projects and solutions identified throughout the fiscal year that result in efficiencies or enhanced customer service. In prior years, IT Innovation has been used to fund projects such as digital asset management, digital scanning, cybersecurity and eDiscovery software. This contribution brings the IT Innovation Contingency to a total of $200,000 for FY22-23.
 
Safety and Security – It is recommended that $100,000 be added to the Safety and Security contingency to take security measures to protect staff and County facilities. These funds will be appropriated to General Services to be available for any immediate safety needs as they arise, and thus subsequent Board action would not be needed to appropriate. General Services has committed to prepare a full report of expenditures to be brought back to the Board of Supervisors at the end of the fiscal year. This contribution brings the Safety and Security Contingency to a total of $200,000 for FY22-23.
 
Child Support – An amount of $30,000 was approved in the FY22-23 Recommended Budget. The funds provide a small amount of general funds that could be utilized if needed to maximize Child Support's State and Federal funding.

General Reserve – The Board Policy on Fund Balance and Reserves establishes a General Reserve target of 10% of average General Fund expenditures.  In FY21-22, the County was able to bring the reserve up to 7.0%, though no subsequent contributions were made in the 2022-23 Recommended Budget.  For the 2022-23 Adopted Budget, staff recommends a significant contribution of $3,041,296 to bring the reserve to 8.0%.  
 
CIP Reserves – The County also has significant capital projects on the horizon including possible acquisition and improvement to St. Johns, upgrades to existing security systems and other capital improvements and the potential to fill gaps in American Rescue Plan (ARP) projects. As a result, there is the need to set funding aside to meet some of these capital projects as the full needs are unknown.
 
Thus, the amount is being set aside in the Capital Improvement (CIP) reserve in the amount of approximately $2,005,783. This contribution brings the balance of the CIP reserve to $4,463,021. This reserve requires subsequent appropriation from the Board to specific projects when needed. An updated Capital Improvement and Financing Plan will be brought to the Board for consideration in October.
 
Audit Disallowance Reserve – Each year the state and federal government audits a variety of programs including mental health reimbursements and disallows payments for a variety of reasons.  A reserve addresses the risk of negative disallowance in an audit finding.  The reserve was first created in the FY14-15 Adopted Budget in the amount of $650,000.  In FY15-16, an additional $1.35M was contributed to bring the balance to $2M.   This reserve has not yet been utilized but potential disallowances continue to exist and may be more likely due to the larger amounts of state and federal funds expended in the response to COVID-19.
 
Liability Reserve – A liability reserve has been established to protect against future litigation or claims against the County.  County Counsel has indicated that a liability reserve of $600,000 should be sufficient to protect the County from litigation exposure.  Because the County has met the threshold, no additional contributions are necessary for FY22-23.
 
The tables below summarize the total reserve and contingency amounts included in the FY22-23 Adopted Budget, inclusive of amounts that were previously approved in the Recommended Budget.  

 

   *Reflects estimated FY22-23 contributions and balances based on projected department charges and premium payments.

The proposed Adopted Budget for the Community Corrections Partnership (CCP) reflects an anticipated increase in both base and growth allocations, increasing anticipated revenue in the fund by $1,700,000 over the Recommended Budget. The Adopted budget for the CCP is reflected in the table below:

 

The CCP moved to percentage-based budgeting in FY21-22, but it has not increased planned expenditures in the Treatment, Innovation and Administration areas. Projects approved in FY21-22 with funding in those categories were intended to be two-year projects, to better align with updates to the CCP Strategic Plan, the current version of which sunsets at the end of the 2022 calendar year.
 
Cannabis Tax Expenditure Plan
In FY21-22, the County generated approximately $890,000 in Cannabis Tax revenue and had additional interest earnings and unallocated funds from prior years for a total of $1,541,000 to allocate. The County followed a two-stage process in the appropriation of the cannabis funding, appropriating $1,000,000 during the recommended budget on June 14, 2022, using Cannabis revenues collected for the first two quarters for FY21-22, in addition to available fund balances unexpended from previous allocations. After the 4^th quarter collections were completed (in July 2022), staff updated figures with the actual final collected amounts for FY21-22.
 
Pursuant to the County’s cannabis tax ordinance, staff drafted the updated expenditure plan for Adopted Budget (Attachment I), which provides funding to each of the five funding priorities identified in the Board’s cannabis tax general framework (Criminal Enforcement of Illegal Cultivation, Early Childhood Intervention and Prevention, Youth Development, and Rural Infrastructure), and Financial Sustainability.
 
The proposed expenditure plan was presented to the Cannabis Ad-Hoc Subcommittee on September 7, 2022, and the Citizen’s Oversight Committee on September 20, 2022. The Citizen’s oversight committee met on September 20 to provide guidance to the board on the proposed plan. The Citizen’s oversight committee recommended on a 5-1 vote that the Board consider doubling the investment in youth development and consider those additional funds be allocated to expand the YES youth development program. The committee also unanimously agreed to support the remainder of the plan while expressing a desire for the board to consider ways to fund the two unfunded requests for Yolo Fire for a generator, and funds for lighting associated with the Tuli Mem Shade structure, and recommended the board critically examine entities that have received repeat funding.
 
Rural Community Investment Program
The Rural Community Investment Program (RCIP) is a mechanism for advancing unaddressed programs, policies, and initiatives in rural unincorporated areas. In prior years, staff from the County Administrator’s Office and Yolo County Housing gathered information on the interests of the rural communities to target potential County and grant funding resources. Information was gathered through conducting town meetings in some of the rural areas. Staff also reviewed the needs identified in the action plans of Capay Valley, Clarksburg, and Knights Landing, and in the Yolo County Agricultural Labor Study.
 
Investments recommended for FY22-23 were driven by prior outreach efforts and internally identified funding needs. Historically, the RCIP has been funded with General Fund revenues. Due to budgetary constraints on the General Fund, staff is recommending that the $796,000 in projects identified in the table below be funded with Cannabis Tax revenues. This proposed use of Cannabis Tax revenues is consistent with the general Cannabis Tax expenditure framework previously adopted by the Board and falls within the specific category related to investment in rural infrastructure and support. More information on RCIP may be found on the County's website.

 

Attachment J provides a brief description of each of the RCIP requests and staff recommendations for FY22-23. The attachment includes both the recommendations requested by the Board’s Cannabis Ad Hoc Subcommittee as well as the Cannabis Tax Citizen’s Oversight Advisory Committee.

The proposed Adopted Budget for Accumulated Capital Outlay (ACO) includes two items for funding previously approved by the Board: The Yolo Bypass West Levee Outfall Project ($1,054,000) and Infor CloudSuite ($596,000).  The Yolo Bypass West Levee Outfall Project was approved by the Board in April 2022.  At the time it was approved, staff anticipated using excess CIP bond proceeds from the Monroe Jail project to fund the County’s contribution to the project. Subsequently, however, it was discovered that the County would not own the infrastructure being constructed. As a result, staff determined that using bond proceeds would not be an allowable funding source, and so ACO funds are now being appropriated for this purpose.  The ACO contribution for the Infor CloudSuite project is in accordance with the original project budget approved by the Board in August 2021.
 
Carryforward Appropriations
 
The FY22-23 Adopted Budget includes $5.7 million in unused appropriations from FY21-22 that will be encumbered and carried forward into FY22-23. These appropriations are for one-time purchases that have been ordered but not yet paid for, or for specific one-time projects or initiatives that were not completed by year-end. Examples include vehicle purchases that have not yet been invoiced, or contingency funds awarded for a specific project that had not yet been completed. The purpose of carryforward appropriations is to ensure sufficient budgetary authority to meet contractual obligations and to carry out Board directives. A summary of carryforward items and amounts by department is provided in Attachment B.  All carryforward appropriations have been incorporated into the FY22-23 Adopted Budget and are included in the budget totals reflected in the budget resolution Attachment C, Exhibit C1.
 
Looking Ahead
 
Looking past the Adopted Budget, the County has a number of additional significant fiscal matters that are in various stages of being addressed that are important to highlight for the Board’s awareness.
 
Labor Negotiations
 
The County is completing labor negotiations with bargaining units whose agreements expired on June 30, 2022 and one unit that will expire on September 30, 2022. The negotiations may result in higher labor cost increases for these labor units than originally anticipated in the Recommended Budget. Those labor increases are expected to be absorbed in department budgets. However, should departments determine over the course of the year that labor costs cannot be absorbed in their budget, they may request contingency funds to close the gap at regular budget monitoring intervals (ex. Mid-year, third-quarter, year-end).
 
Pension Funding
 
The FY22-23 Adopted Budget includes $55.6 million in employer pension contributions, an increase of $6.6 million from the FY21-22 Adopted Budget. Employer contributions for FY22-23 were determined in the CalPERS Annual Valuation Report as of June 30, 2020. As discussed with the Board on several occasions, employer contribution rates have increased significantly over the past several years and are projected to continue increasing for a few more years before stabilizing. These increases are driven by a combination of changes in CalPERS' demographic and investment assumptions including a lower targeted rate of return, investment results, and amortization policy. The table below shows the projected pension rates over the next five years.

 

The FY22-23 Adopted Budget includes $12.0 million in OPEB charges to departments, an increase of $200,000 from the FY22-23 Recommended Budget. The OPEB actuarially determined contribution rate of 7.7% of payroll was held constant with the rate included in the FY21-22 Budget.
 
In May 2011, the Board approved the creation of an irrevocable trust to accumulate assets for the purpose of reducing the OPEB liability. The initial policy had a funding ramp up over 15 years; however, the County achieved that ramp-up sooner than anticipated and in November 2019 updated the policy to fund the trust at the actuarially determined contribution level. The OPEB trust had a balance of approximately $30.5 million as of June 30, 2022, and this is estimated to increase to $37.9 million based on contributions in FY22-23.   

In addition to funding the OPEB trust, significant progress has been made in lowering the overall OPEB liability through the implementation of benefit caps for most employee units. As a result of these efforts, the overall OPEB liability declined by $3.5 million in the June 2020 valuation. The County is updating the valuation as of June 2022 presently.
 
Disaster Emergencies
 
The County has three current disaster or emergency declarations which include: (1) COVID-19 Pandemic, (2) Local Drought Emergency, and (3) Climate Action Emergency. It is difficult to fully budget for the evolution of each of these emergencies; however, the budget attempts to put aside sufficient contingencies to respond flexibly as these situations evolve and costs become known. The County continues to position itself to leverage state and other funds wherever possible to minimize the local costs requested by these emergencies.
 
American Rescue Plan
 
The County of Yolo received $42.7 million in American Rescue Plan (ARP) funding and over the course of the last year has embarked on a process to allocate the funds for a variety of priority project and categories in order to meet community needs in accordance with allowable uses of the ARP funds.
 
This process is expected to continue where funds allocated to certain categories have not been fully approved for specific projects, and staff will return to the Board periodically for quarterly reports. Attachment N shows the current status of allocation and expenditure of ARP funds through August 31, 2022 to put in context alongside the Adopted Budget. The Board will receive its quarterly report and may consider certain areas for project level allocation in an upcoming meeting during October 2022.
 
Yolo Basic Income Program
 
The Board requested during the lead up to the Adopted Budget for an understanding of ways that the Board can complete funding of the program. The overall program budget as of August 31 was $3,127,809 and the remaining gap to be funded is $1,189,310.
 
The Health and Human Services agency is still working to further reduce the gap through seeking private donations as well as a grant application to the California Department of Social Services in the amount of $1.3 million (but which also includes a small expansion to meet CDSS requirements), and expects to hear back in October 2022. Should the grant effort and obtaining additional private donations be unsuccessful, several County funding sources may be considered in the future to fill some of all of the program gap including but not limited to: (1) Cannabis taxes, (2) Public Health Realignment, (3) HHSA Emerging Needs funds, (4) HHSA Contingency, and (5) American Rescue Plan Children and Families funding.
 
To minimize the risk associated with not receiving grant funding or private donations to close the gap, the Adopted Budget proposes to allocate an additional $250,000 to further reduce the unfunded gap through an additional allocation of Measure K Cannabis Tax funds. It also recommends setting aside $500,000 in a YOBI specific contingency that the Board could appropriate toward the program if the grant is not successful.
 
Juvenile Detention Contracting
 
The Probation Department continues to work towards securing a multi-year contract for detention services with a neighboring county. The Adopted Budget conservatively assumes that the JDF will remain open through the entire FY2022-23; however, when the ongoing contracting efforts are completed, the budget will be revised to reflect costs associated with the agreed upon contract terms.  An update from the Probation department is scheduled to be provided to the Board in October.
 
Conclusion
 
The Adopted Budget attempts to make strategic investments with limited ongoing resources and works to fund the majority of departments one-time needs while also preparing for an uncertain future with robust contributions to contingencies and reserves given the present inflationary environment and possibility of economic slowdown or recession. The budget recognizes that one-time resources may be reaching a peak and fiscal prudence is of paramount concern. At the same time, the County is strategically seeking substantial state and federal funds that may benefit constituents now and in the future. The County must still be cautious though not to become overly dependent on these sources or to assume that expenditures can be sustained at a heightened level when state and federal support concludes.

All county departments were provided the opportunity to submit additional budget adjustments and requests.  Financial Services staff worked with department heads and fiscal officers in reviewing and analyzing the requests. Proposed funding plan was reviewed with the Board Chair and Vice Chair on September 2nd and on September 22nd.  County Counsel reviewed the Adopted Budget resolution as to form.