Budget Committee - Regular Meeting

05/21/2025, 3PM special meeting of the Monterey County Board of Supervisors Budget Committee. We are live in the Monterey room at the Monterey County Board chambers as well as on Zoom as well as from the Greenfield California District three board office, as well as from the Marina District 4 offices at 03:01, and we're gonna go ahead and get started. Let's see here. Supervisor Lopez and myself are both present, and we will do see if there are any additions or corrections to our agenda.

There are none.

All right. Is anyone with us for public comment on items under the jurisdiction of the committee but not otherwise listed on the agenda today? If you're with us in person, you can approach the podium. Otherwise, raise your hand, and we will call on you for public comment.

No public comment in the Monterey Room, and I don't see any hands raised on Zoom.

Alright. Great. I'm not seeing any hands either. So we'll go ahead and close-up general public comment and move on to approval of our action minutes from the April 30 budget committee meeting. Any comments or corrections to those?

None for me.

Okay. Any public comment on our item number one action minutes from April 30?

No public comment.

Okay. I'm not seeing any public comment there. So we will does look good

to approval?

Yeah. And I'll second. So with the consensus from the committee, we will consider those approved. We'll move on to our consent calendar. We have two items on our consent agenda. Anything to pull on that? Nope.

Good morning. Any

public comment on our consent agenda?

No public comment.

No public comment. Alright. We will bring that back. I'll move approval of our consent agenda.

Second it.

Second, we've got consent, from the committee, and we'll move right on to our regular agenda. We have two items on our regular agenda today. One, two I'm sorry, we have a handful of items on our regular agenda today. The first one and maybe one of the most significant is to receive the fiscal year 'twenty five-'twenty six recommended budget from the CAO's office. And we will pass the floor over to, I'm guessing Debbie Debbie Pallanelli to present.

We've got a presenter listed here. And we'll make sure that for anyone who wants to follow along, if we could just share a link to the agenda in the chat. Or if there is a chat, yes. We'll share a link to the agenda in the chat for anyone who wants to follow along. Right. Thank you for joining us, Debbie. And thank you for all the work that you did to pull this together. I know this is your first pulling the first county level budget together and with a new system nonetheless. So it's been a huge lift for you and your team. And we just really appreciate, everything that you've done to dive in, and wrap your arms around, all of the pieces of, Monterey County's, finances. So thank you.

Great. Yeah. Thank you. It it was, the new system did make this budget challenging, and I do wanna reach out and say thanks to the team, and they've been amazing through this process. So I do have a PowerPoint to share to start off with. So, let me get that up on the screen. And I think you should be seeing it now. Is everybody good with the screen? Yes. Yep.

Okay. Okay. So this is an overview of what is gonna be presented to the board of supervisors for the recommended budget. And just to kinda just start the process off and just a quick explanation of how we do the budget process, we start with departmental forecast, and we get an initial baseline budget. The departments then return the baseline budget to the CAO staff and to the budget staff with what they can fit in their baseline budget plus any augmentation request.

We go through those augmentation requests, and we do a recommendation of what we can fund with the existing resources that we have, and then that's how we come up with our requested budget. Couple things to start off with is just some of the environment around the fiscal environment right now. Right? So the national economy, there's the tariffs that we're looking at. There's interest rates that are expected to remain high, and we're expecting some growth recession there.

There was some below trend growth and rising unemployment. On the state side, there is there is a $12,000,000,000 deficit and a $5,000,000,000 solutions are gonna be focused on reductions. The governor did come out with his May revise. I'll have I I have a couple slides on what was on that, but the departments are still actually going through those that those revises and getting all of the information together. It did come out kinda late this year as opposed to, like, prior years.

So a couple of the state budgets, we know that there's gonna be a reduction in Medi Cal related expenditure growth, including freeze and CPI adjustments, eliminate family planning, supplemental payments, 11 main perspective payments to clinics, and so on. You can kinda read them there on the screen. You know, the direct hit to the county budget, it's not it's not significant to the county budget, but it is a hit to the constituents. Right? And that's where that's where a lot of that'll come into. IHS, they have a cap on overtime and travel. And there's a little more. And like I said, when it actually comes to the board of supervisors, I'll have a little bit more on that as we're going through the through through through the May revise. Some local risk. There's some general fund discretionary revenue growth.

It is not sufficient to keep up with the rising cost, and that's been the kind of mantra through the last few years. All the available discretionary revenue growth is recommended to keep up with these increased costs and maintain current staffing. We've used onetime funds to balance the budget 25, 26, which is not always ideal, but it's it's in this, you know, nevertheless. And our strategic reserve levels are actually not where they're supposed to be. That's at 58,600,000.0, which is about 5.8% of the budget, and the target balance is about 94.3.

So that's kinda where we need to be as our financial policy is at 10%. The local level, this budget is balanced, and most of the negotiations with bargaining groups have been completed and the wage, increases have been negotiated. We did pass the new measure AA revenue, which is a 1% transaction in use tax in the unincorporated counties, areas of the county. And still, like I said, the state and especially federal budget impacts are being are going through the analysis process. But the count you know, the county could be adversely impacted, especially with the unknown federal ones coming down.

And and just a kind of a quick note, in the state budget, they did not put anything in their budget to account for any of the federal any of the federal changes that may come through. So those it may come with more more changes to the state budget as those federal ones come through through the state. And, of course, as we talked about last year, onetime funding sources of ARPA and unassigned fund balance have been used and are not available this year to use in this budget. So this is an overview of the budget. $2,270,000,000 this year.

This is everything. There is appropriations increases of about 255,000,000, so $2.65 in revenue, $2.55 in appropriations. One thing I wanna point out, and it's gonna be apparent in most of these slides, is there's a change in the way we accounted for the cost plan. With the new system that you had mentioned earlier, it was originally decided that we would account for the cost plan as a revenue and then an expense. And in the past, it had been a contra account.

So we would just net the two, and it would be one line. Obviously, that doubles the number, so we're seeing it on the revenue side and on the appropriation side. But and I'll have a slide at on the end. We will be the decision now has been made to go back to the way and make it a contra expense. So when between the recommended and the adopted, you will see that change, And and it'll come back the way it used to be, but there will be, like I said, a $78,000,000 change, which is just an accounting change, not a actual change.

Overall, big picture here of of all the funds, the general fund, obviously, right there at the billion dollar mark this year, followed by Natividad, behavioral health. The rest of my slides will kinda go focused on the general fund because that's kinda where all of our discretion is. So the general fund recommended budget, that billion dollars in appropriations and revenues this year, 131,000,000 over the prior year with 65,700,000.0 is that cost plan change that I mentioned. So that $1.31 number isn't really as big as it seems. Of course, the next one is the increase in salaries and benefits of 48,900,000.0, and then followed by 12,900,000.0 is clinic services and public health, 10,000,000 in some homelessness grants that we have received, and 6.1 in entitlement programs.

It does there's a slide on it later, but it does have a decrease of of a 123.5 vacant positions. Same thing on the revenue side, 60,000,000 is the cost plan change, 59,000,000, which is your program revenue. That is also with the appropriations on the top. There was an $11,100,000 increase in discretionary revenue. So in order to balance this budget, we used 19,200,000.0 of onetime funds.

10,500,000.0 is for the health department true up that came from their funds. That was not discretionary revenue, but it is part of their budget, and they used it for a true up for, when they did the reconciliation of some of their programs, and now they're able to true them up with this money. 2,200,000.0 for community programs within social services and 605,000 safety restricted for public safety programs. The the onetime money we use in this from the CEO's perspective of it is the contingency assignment, which was 5.4. And if you remember during the budget workshop, I had said that there was a contingency reserve of about 8.4.

This recommended budget incorporates 5,400,000.0 of that 8.4. 202,000 for cannabis for the climate action plan, That was actually budgeted in the prior year, and that is a rollover into this year's recommended budget. And then 125,000 from compensated absences to help for the community requests that come in through the supervisor's offices. Finally, a little bit 22,000 there for in the general capital assignment for some voting equipment and elections. So other things in this budget is 6,500,000.0 from the TOT to the road fund.

It's a decrease decrease of 3,100,000.0 from the current adopted, and I'll have a slide that goes over this later. And then 2,200,000.0 of contributions to from the TOT to the DSA agencies, which is of 843,000 from the current year. And then 4.1 and 2,200,000.0 contributions from POP one seventy two to both fire and the nine one nine one one dispatcher user user agencies. So here's a pie chart of what where the general fund money is going. Obviously, health and social services because of their programs and their nondiscretionary revenue is on there with most of the piece of that pie followed by the sheriff and then the other departments, as you can see, listed on this slide.

So general fund cost drivers, salaries and benefits. If you look at that chart, you you can see where most of the increase in cost is coming, if you go all the way back to 2016 and just in a ten year span right there to twenty twenty five or nine year span. Salaries and benefits grew 45,900,000.0, which was discussed earlier. This is a representation of both base wage studies and increases at the bargaining table. Wage just the wages, not the benefit parts, increased 28,200,000.0.

This also includes salary savings of about 33,700,000.0 or 9%, which is budgeted within the department's budgets. So pension pension costs. Right? They are a big part of our salaries and benefits. And based on the actuarial, reports from CalPERS, pension costs are projected to grow about $5,700,000 in fiscal year twenty five, twenty six in the general fund and also going through to twenty thirty, thirty one.

Of course, this can change up or down with the unfunded liability unfunded liability depending on how the market goes. But right now, the market is so volatile. I I couldn't even start to tell you where it's gonna be. So unfunded liability for the county is gonna be estimated at 1,000,000 as the latest valuation report, which is done back in 2003 because it's, you know, a little behind as we're trying to get all of their financials done. The, the losses due to investment losses, CalPERS used an rate, assumption of 6.8, and it did not make 6.8.

You can see just on this chart in 2021 was a really good year in the market, and it can fluctuate just like that. There's a plan this year to use 6,300,000.0 from the one fifteen plan to pay the increase in the unfunded liability. So what we're trying to do is use that plan. That'll leave a balance of a little over 100,000,000 as as of now or as of a couple weeks ago. I can't tell you what the market did to those funds in the last couple weeks because those can swing all over the place left in that fund.

Health insurance premiums, you can look at this and see where a big piece of the increase in cost drivers are coming from 61,900,000.0 to 81,600,000.0 and then 85,100,000.0. As as you can see on this chart, that was a big part of of the negotiations and the increases in salary and benefits. So from last year to this year, it increased about 3,500,000.0, and accounting cost has cumulatively increased by about 34,900,000.0 since twenty sixteen, seventeen, so 70%. The general fund revenue trend here is the purple lines is your total revenue, and then the blue lines is nondepartment revenue. That's really the money that we have control over right there.

It is total revenue is gonna grow by a 130,000,000, but the cost plan, you know, like I've been I've been saying is 60,600,000.0. So about 70,000,000 of that is there. So the 60,000,000 is just an inflated number on that. 59,000,000 is program revenue from federal and state aids for caseloads as well as using the 15 the department's used about 15,000,000 more in realignment funds. The discretionary revenue, that I talk about, 11,100,000.0, is mainly due to increases in property taxes at 10,800,000.0.

So here's the discretionary revenue drivers. This is what we used to balance this budget here, and you can see the differences between the adopted 2425 and 2526. Everything there's that that 10.8 in property taxes that I just mentioned at the very top, and then some of the other revenues, the cannabis was adjusted down. The revenues have not been as good on that. Sales tax were projecting a little bit down as well.

If you look at the lines that really changed on here, you see transaction and use tax. That 1.873 is the little bit of AA measure measure AA funds that are being used, recommended in this budget to use. Not obviously, not all of what we expect to get, but a little bit of it. And that federal aid line that went from 1,800,000.0 to zero, that was ARPA money in the previous budget that's no longer available. So then like I said at the beginning, we started with baseline, and then the departments did requested augmentations.

So in total, the departments requested augmentations in about a $121,200,000. 8,700,000.0 is to keep the 49.1 filled positions and 21.5 to keep status quo costs not related to positions. And then $10,000,000 for status quo vacation positions for accounted about 58 FTEs. So you can see right here where from what, what they submitted. I will say the capital improvements line at the top is not included in this budget. We don't include capital improvements. We will talk about that during the budget process, but it is not in the recommended budget book. So that 64,000,000. There's a couple more slides, and it brings it out breaks it out in one. Here's the same number by fund.

A little bit of you can see the general fund right there at 56,300,000.0 and the different to get to the 121,000,000. This one still does have the capital projects of 63,200,000.0 in there. Little bit down here, 2,100,000.0 behavior health. They used for seven new positions offset with revenue, emergency communications, on here with six vacant positions offset with some revenue, health realignment fund, and so on. Here's the requested augmentations by department.

Largest request there with the shares department at 30,800,000.0. District, public works, Facilities and Parks volume was 7,200,000.0. District attorney with 4.6, and Public Defender with 2.9, Department of Social Services with 2.2. In this slide, you can see that the Public Works, Facilities and Parks, 64,200,000.0 was project number, and that's where I pull it out of that 121,000,000. And it brings the augmentations outside of the capital projects to 57,000,000.

So that was what was requested. Now this is what we recommended. This is how we funded. So in the recommended budget, there's $13,100,000 of funds that we used to get to where we were during the budget workshop. Direction was to to say try and save all of the field positions, which this recommended budget does.

And then it also was to do a few other projects. And there'll be slides that detail that out here in a little bit, but this is what we used. We used about 1.9, like I said, of the measure AA funds, and we've talked about that cannabis assignment and those compensated absences already. That 5.4, the contingency reserves is what was used at the 8.4. Then at the budget workshop, I had mentioned how some revenues came in over what was expected by about a million dollars, and and there and there, right there, that capital assignment.

And then there was some reallocation of some GFC that was already left over in a budget and was remaining in the budget. So that was used to fund the augmentations and then the redirected TOT. I will have a slide that lays that out later, in in a little more detail. So the recommended augmentations by fund, fund and department are here. So there's in the recommendations, the big ones here are pulled out on the right.

13,500,000.0 is the number is the number I showed earlier. 3,200,000.0 is of give is for the sheriff's department, 2.9 for the public defender, 2.8 for the district attorney, 1.5 for social services. It's funding, 75.1 FTEs on there, and the 21, the sheriff's office, 15 in public defender, three in district attorney, one in department emergency management. Three are left unfunded in the assessor. They're there, but they're not funded, and then some new positions that were funded with revenue down here on the bottom.

And of the six of emergency communications, two were fill or four were filled and two were left unfunded. So general fund augmentations, this slide comes back later in a different format. So right now, this shows you the funding sources that were used. So this breaks down that first table with the AA funds, the cannabis assignment, the compensated absences going on down with the bold print on the left. And then below it, you can see how much each department got of each fund to make this come into balance.

With that 13.1 number down in the far bottom right, it adds up to that. It fills, like I said, fifty fifty point one filled positions in the sheriff's department district attorney and public defender, and then the vacant positions here are the same ones we felt we talked about on the prior slide. This is a list of the funded positions. These are all the ones that were filled. We were able to successfully, fund all the filled positions.

So anything that a department asked for as a as position that they wanted saved that was had a body in it, it is it is it is, being recommended for funding. And there's two two slides here. Page one and page two are both both on the on these slides. The other recommend Reddit augmentations that were, suggested for us to look at funding during the budget workshop were the ones listed on this page right here. What we did because everything was so tight, we basically reduced them by 25% and funded them all at 75% with the exception of the general plan because that's just a set number.

So you can see what the request is, what the reduction is, and what the recommendation for each line is on this one. So that the one that I told you earlier, you would see in a different format that had the funding source and then which departments got what. So this is just kind of the opposite of that. So this starts with each department that got a augmentation and says what is what was used for each each augmentation to get up. So it's just the the other slide in the reverse order.

These are the positions. So we're recommending elimination of 116.7 positions. These would be the ones that were vacant, that we're not funding. You see 79 of them coming from social services, 28 from sheriff, 10 from district attorney, nine from child support, and and on. And there's a couple of increases in the Tivit and Penn Health because those were funded with outside sources.

But like I said, these were all vacant positions. There there is no these are not filled positions. So these are this is what didn't make the cut. Right? These are the unfunded augmentations, and there's a couple really long list in here. So this is a summary of what was not funded by department here. You can see what the request was and then what was the net request. This is a combination of both positions and services that were all all all in one. And then the capital projects augmentation, like I've mentioned before, is not is not in our recommended budget. Here, the augmentation's unfunded by category.

Gives you a little bit you can see that field positions is off this list now because that they were funded at a 100%, but there's some new mandated programs, new programs with general funding, and some new positions status quo other and other vacant positions on this list. So this is four pages, and I'm just gonna go through it a little bit, like, slow. Like, I'm just gonna kinda flip through it. It has everything, that was unfunded so you guys can see each and every line, of what was unfunded. This is listed out by department and their their request for funding.

This is, a little bit longer this year than normal years, so I apologize for the four pages, but I couldn't fit it, obviously, all in one page or you wouldn't be able to read it. So next is unfunded capital projects, and I'm gonna talk about it a little bit. And then, there's there's probably, I'm sure, somebody from public works on the line if there's more questions on it. But this first slide represents all of the projects that are already in the queue that have some sort of funding. So if they're funded in 2526, you can see the project and how much was funded, and these are already funded.

But as you can see, a lot of them need additional funding. This slide represents what was the well, the top part of it recommend is what was recommended or requested for us to look at to fund during the budget workshop. That is the top line below the initial gray box there. And then below are some supplemental, projects that public works facilities and perks, believes very strongly in that we need to may, get done sooner rather than later. These will be some of the questions that the, board of supervisors.

When the whole board is together, these decisions will be made here. These are the capital projects. That 52,000,000 I told you is not in ours. But I will tell you, the one thing about slide is if you look at the unfunded total on the bottom, the 19,300,000.0, and then look at the 14,800,000.0 that's available in fund four seventy eight, there will be some decisions that need to be made. I'm gonna talk about these. These are gonna be known administrative or technical corrections, like I said, that are gonna come from the from the re from the recommended budget to the adopted budget. We've been talking about this cost plan change right here at the beginning. There's, 78,000,000 there. That's gonna come. It's just gonna look different.

I don't want anybody from the public or internally saying, oh, wow. That's a huge cut. It's not. It's just gonna be a change. They're gonna be netted out. These positions down here, there's about six positions. Every single one of these positions, the funding is already in the budget. It's, it's already in the budget book. The the dollars are in there with the new system and the way we were adding and subtracting positions. Some of them got kind of messed up when we did our final rec reconciliation.

These are the ones. So we're we need to add, these positions in or change or remove them, but the related funding is right. It just needs the title and the words for the positions. So this is, I promised you, TOT allocations and where we were with that and how we got to where we are. So for the DSAs at the very top, this is history of what our funding level has been with them from twenty seventeen, eighteen to today.

What we did with this is we kinda rolled it back to the '22, 23 levels. You can see that number in 2526 does match '22, '23. With the road fund, that 6.4 number that's on there for the recommended budget does equal the MOE. Last year, we had used 25% of the TOT and gave them that. It's, we used some of that to fund some of the positions and some of the services that I described earlier, which brought them back down to 6,400,000.0, about 17%, which kinda rolls them back just a little bit above 2324.

Here's the recommendations. This is what's gonna be on the hold the budget hearings. These are just the recommendations during the budget, during the budget hearings that will be asked of the board of supervisors. It's a couple pages long here. They're basically just what's gonna be in the recommended part of the of the item.

And so the next steps, this is what the board of supervisors has in front of them and how to modify the budget moving forward. Of course, there can be redirections. The board can direct any of the programs to be discontinued and take those dollars and give it to any other program they so feel like unless it's required by law for us to do it. There's the contingency appropriation that's in the recommended budget right now. It's 1% of the estimated general fund revenues, which for this year amounts to 8,700,000.0.

There is 1,300,000.0 left in the cannabis tax assignment. This is the very end of it, so that's still sitting there. And then there's the balance of contingency reserves. There's 3,000,000. I I've been talking about the 8,400,000.0 that we had. 5,400,000.0 is used in this budget with 3,000,000 remaining after that 5.4. And then the measure AA funds, like I said, we we don't know exactly what those are. There is about 1,900,000.0 of these funds used to balance this budget. But, you know, I'm trying to use a lot of this money. We're trying to develop some policies around what we're gonna do with it as well as it's a new revenue source.

So it's kinda hard to say exactly what that's gonna be coming in at, especially in light of some of the forecast of people curbing and shopping, and those will all have a direct direct effect on our sales tax and, of course, the measure AA funds. One thing I'm putting out there this year, when we come in November and December, we usually take the whatever is the unassigned fund balance, and we put it here in all these different places and try and do a lot with it. This year, I'm really we would our office would really like to recommend that we save at least 10,000,000, maybe more of that when we come in November and December to use in this process next year so that we have it it is onetime funding, and I get it. But to use these funding gaps because we're using the onetime funding this year, if we can fill it in at least for next year, we'll we'll have a little bit more little more flexibility, and it won't be great, but it'll help us out in this process. And then finally, this question comes up a lot.

This comes up a lot, and it is, what is our FEMA reimbursement. This has been updated by department of emergency management, and some of the numbers have been adjusted there. As of this point, they think they're getting about 17,700,000.0 that will potentially be coming back, but it will not all return to the general fund. And there's other funds such as the road fund that had put money into these, different categories during the actual, event. And so those monies will go back to those those departments as as they need to be. So that concludes, my presentation, and I am available if anybody has any questions.

Great. Thank you so much, Debbie, for the comprehensive presentation. And again, this is attached in the staff report on Legisstar for anyone that wants to see or reference the detail. Supervisor Lopez, questions, comments? Knowing that we will receive this presentation at the board hearings, just wanted to make sure we had a chance to preview it here.

Yeah. No. I appreciate the preview. I got questions and things that I'm gonna say for the hearings themselves. I appreciate all the work that went in to get us to this point, Debbie. So, yeah, at this point, I don't think I have anything in addition to this is the second time I've seen it. I'll get to see it again on Wednesday. This will be fun. But thank you so much, Debbie. I appreciate how quickly you're able to get through this presentation that is thoughtful and really important information. So thank you.

And we will open it up to pub and same, I appreciate. And as budget committee chair, I did want to make sure that the public had a chance to receive the presentation here at committee before it goes public or gets presented during the budget hearings at the full board. And so thank you, Debbie, for being able to add it to the agenda today. I have a whole list of comments and suggestions and comments and changes that I intend to propose to my colleagues at the hearings when the time comes. But for today, I will just open it up to public comment with the expectation setting that we won't be able to respond to comments, but that this would be a chance and an opportunity to make a comment to provide feedback.

So if you could raise your hand, we'll start with those who are online as panelists and then move over to the attendee side. Again, just for two minutes public comment, we do appreciate everyone who's joining us today. And we'll go I just see one hand raised. So we've got one hand raised, and we'll go to Moira Lamonton. Thanks for joining us.

I think we'll have to give Moira the opportunity to unmute. She can go ahead and unmute herself. Okay. Fantastic.

Thank you so much. I was just asking. There was a comment about the May revise at the state level that will kinda trickle down into some of our departmental levels, and it's new it's late, and it's still being developed. Will there be an expected revision of the budget relative to those impacts before the budget is approved, or will it happen after it's moved? I just it feels like it's gonna be bigger than we think.

So the question is whether or not it will be the the deadlines for departments to respond, is that before the final budget is approved?

Thank you, Mara. We'll see. Is there any other well, do so maybe one quick round of responses after all public comment. Any other public comment for this item on committee today? And I'm not seeing any other hands raised. So just briefly, we'll just say Debbie, just in regards to how the state budget impacts come at the board. Generally speaking, the county doesn't backfill state reductions. That is a policy that we have within our general financial policies. So we do hopefully, we'll be able to hear from departments, and they are tracking very carefully any impacts that state changes would have. And it would work through the CEO's office to our committee and then the full board.

But, Debbie, do wanna add anything more to to that?

No. The only thing is that so the May revise is what it is. That's what the governor budget's gonna be, and so this is based on that revision. But the only thing that will change or could change later is that the state has to adjust their budget for the federal budget, and that trickles down to us. So as far as the state budget right now, it's pretty set, but there could be changes in the state budget that happens with the federal budget.

Understood. Thank you.

Thank you. All right. And as a reminder for all folks, a significant portion of county budget is state and federal dollars that flow through the county that allow us to provide critical services that our residents and our cities and our partners rely on to provide for critical safety and health and human service functions that allow people to thrive in our communities. So we will continue to watch and advocate for federal and state dollars through our legislative committee, which is actively working and pushing advocacy positions from the county out in parallel path. But with that, I don't see any other public comment on this.

So we'll close public comment, bring it back to the board. There's no action needed or the committee, there's no action needed on this item. This was just to receive the presentation. So with that, we can move on to item number five, which is to receive, looks like, a request from the sheriff's office. And then we have sheriff under sheriff Boyd here with us today, or maybe under sheriff or or deputy

Got a promotion, Jason.

Oh, we got. Who do we have with us today?

You're stuck with you. Smith.

Thanks for joining us.

Absolutely. So I'll start off with good afternoon, supervisors and, other county leaders and staff. Initially, we, discovered as we, we're going through the process that, our sheriff's budget account number I'll call them one and three, accounts one and three, were actually flip flopped. We, caught that, issue, tried to get it fixed, and I'm requesting that, you authorize for those two to essentially be flip flopped. It's obviously, funds that we currently have, and it just, makes for those, proper alignment of the funds that are supposed to be in the proper account.

Moving on, the second is the, sheriff's office has also requested an increase the fiscal year twenty four twenty five adopted budget in the amount of, roughly little over 3,500,000.0. This request has covered the deficits in the admin operations and corrections, bureaus. Expenditures are estimated at 161,360,000.00 or roughly 3,579,000.000 higher than the budget, while revenues are estimated to be on target at approximately 53,000,000. After the midyear estimate projection of an of an s approximate 7,000,000 shortfall and, sheriff's office has exercised due diligence in reducing the projected shortfall by implementing stronger internal controls to mitigate any overspending. Procurement card spending was greatly reduced by canceling high eight unnecessary procurement cards and requiring the use of purchase orders to better track expenditures.

Overtime was significantly reduced by scheduling range days and other mandatory trainings, for on duty time whenever possible. However, there were and are unexpected unbudgeted charges that the department will not be able to fully absorb. The roughly 3,579,000 overrun in payroll costs are due to various unbudgeted costs. All bargaining units within the sheriff's office were granted wage increases ranging from 2% to 4%, which were not budgeted. In addition, in the first half of the fiscal year, the Monterey County Sheriff's Office hired 24 deputy sheriff recruits, all which attended the Basic Police Academy for six months.

After graduation, the sheriff's deputies deputy sheriffs entered the field training program for a minimum of three months. Although these 24 deputy sheriffs are filling a position, they're not able to contribute to decreasing overtime costs until at least nine months after their initial hire date. For these nine months, overtime was used to cover minimum staffing requirements. In addition, when positions are vacant or employees are off work due to unanticipated leave, those shifts must be backfilled. The overtime is used the overtime use is completely unpredictable and impossible to budget.

Therefore, it's inevitable to incur overtime to fill mandatory positions to provide law enforcement and protection services to the public. In addition, the need to hire temporary employees to fill crucial critical functions amount to unbudgeted of 407,008 or four hundred seven eight hundred and seventy. These temporary professional staff provided support to coroner investigation civil records, warrants, jail, fiscal, and IT divisions. Sheriff's budget has increased significantly in the past ten years. However, the number of professional staff did not increase in proportion to the increase in operational needs.

These temporary professional staff are critical in providing support to all overall operations of the sheriff's office. The 3,579,000.000 request amount is based upon known factors as of May 1. It does not include any unexpected expenditure that may occur before June 30, such as emergency repairs in the jail. However, the sheriff's office remains diligent in our efforts to reduce our deficit further prior to the end of the fiscal year. I'm very happy even as of today.

We're we're feel that although this is our request, I feel that we, very confident that we're gonna even come in lower than our request. Obviously, the money would come back because, we're just continuing truly with my fiscal staff current fiscal staff. They're doing an amazing job, really tightening the reins on, you know, just trying to contribute to reducing this amount.

Great. Thank you. And for the presentation, I guess do appreciate I'll just make some initial comments. I do appreciate the restraint and the way in which the sheriff's office has been able to take what was initially estimated as a was it a $7,000,000?

7.5.

$7,500,000 estimated over budget scenario down to what is now being estimated at $3,579,000 overage to the the budget scenario. And I guess I you know, we're still in May. We've got a couple months left to get to the end of the budget year. And I guess the question that I would just have is, you know, what more or where do you think, you know, contingency is so limited, you know, dollars 3.579 of the county's total $8,000,000 contingency is a significant amount of that total contingency that we had available that was supposed to cover the entirety of the year. The fact that we even have contingency available this late in the year shows incredible restraint, I think, from the Board of Supervisors in terms of our spending on a variety of needs that have presented themselves over the course of the year.

So, you know, I guess when you say when you offered or suggested that there may be a path to further reducing the 3 0.579 down further over the remainder of the fiscal year. How much further do you would you think that that may be able to realistically get down to?

I feel like I I would feel comfortable under three.

Under three? Okay.

2.5 to three. I mean, I'm I'm having to, look at that crystal ball and and, you know, those emergencies and critical things that might come up. So I I I really don't wanna sell us short. However, that is my comfort level. You know, truly, the tightening up of of meeting timelines and and really accounting and holding things accountable, you know, department wide, but critically within the within the fiscal division has, been a tremendous, significant turn for us, in in that manner. I feel a lot, much more comfortable presenting today and where we were before.

Yeah. No. Thank you for that. And then I guess the other question that I have for our county budget team would be that if if this committee or if the board didn't make this allocation of contingency at this point in the year and the sheriff or any department then ultimately came in at the end of the year over budget, what would what would that process be?

So it it depends on why they're coming in over budget. Right? So if they're coming in over budget because they did not have revenues, then they would just be in over budget, and it would be negative because they would have the appropriations. If they were coming in over budget because they exceeded their allocation and their their their, appropriations, then they wouldn't be able to make payroll.

And that's the situation that this, scenario presents. Yeah. Is that if we don't make this allocation, the sheriff's office would not be able to make payroll?

Right. So it's because I and and they had if this is the re they're they're expecting to come in on on on point on their revenue side, then this is onto the expenditure side. So so it'd be that. Yeah.

Okay. Thank you for that. Supervisor Lopez.

No additional questions, but I think you hit them. My big question is what's left after should we do 3.5 as requested plus? What's left in that contingency for the last thirty days of the year, thirty seven to eight days here?

And I and I knew that was coming up, and I'm looking for it right now. But if I remember correctly, we used Public Works used some of it, and I think it brought our balance down to about 5,000,000 after they used the piece of it. And I'm trying to go to the last budget committee to look for that piece, and I have a message out right now. But I I don't oh, wait. Maybe this is it.

Yeah. I'm I'm thinking it was about the balance. I wanna say there was five left in it. So there was enough left to cover this, which would probably leave us about $2.02 left to 2,000,000.

I don't think I have any additional questions supervisor asked you.

Yeah. Thank you. Let's open this one up to a public comment. Any public comment here for us on this item number five? Not seeing any hands raised. No hands raised. No public comment. And no one in chambers. Okay. Got it.

We'll bring it back. So I guess, you know, can we definitely need to make sure that the sheriff meets payroll. That is a critical responsibility that ultimately falls on the board of supervisors apparently. And so I I think that we can definitely take this request into consideration with those with those responsibilities. Take those responsibilities seriously.

And I think the balance that I would hope that maybe we can look at as we recommend or send a recommendation along to the full board would be looking at that difference of the 2,500,000.0 with a request that the sheriff continue to take responsibility for finding appropriate cost cutting measures to balance within the appropriations that the Board originally provided, which as a reminder were again significant increases over previous years, which we will again be looking at providing significant increases in this current and upcoming year's budget. So I'm I'm not sure if that's something we could put in as an option for the board to consider when this comes to the full board for consideration. If if you if unless there's agreement on that point, supervisor Lopez. I heard you

say point five. The recommendation was what? 2.5? Is that what you're saying?

Yeah. The the staff report request 3.579.

Right.

And the I I'm suggesting that we and as was suggested that they may be able to get it down to $2,500,000 that's what I would be suggesting that we make the recommendation to the board at 2.5. And if there's a need for more, then come back and make an additional request. But ultimately, our responsibility at this point is that if we don't make this recommendation and if we don't allocate these dollars, the sheriff's office is not able to make payroll. So we we knew do need to get the the cash appropriated so that, you know, our deputies and staff receive.

So I guess in terms of clarity, I thought I heard somewhere between two point five and three. Was that right, Jason?

Sorry. Yep. Yes. It is. I mean, obviously, we're I'm checking it every day with with staff, and and and we are moving in that lower trend. However, there is some unexpected stuff out there. I I I wouldn't wanna sell us short, but, I am very confident, under three, somewhere between 2.5 and under under three.

Okay. I mean, the the I I'm I'm afraid to put it at 2.5 because then we will be back here. You know, I I've just

I'm And I'm trying to give you the most honest answer I can at this point. Right? It's just

And I appreciate that.

The stuff that comes up that I I I truly don't know what's gonna be happening. That's it.

Were you comfortable with the recommendation 2.75, Wendy?

Yeah. I mean, let's let's put it forward to the board, I think. And then when it gets to the the full board, I mean, I think there'll have to be some conversation at that point, and maybe we'll have a a new updated number.

Figure.

And, you know, as we're talking a week or two out at that point, so maybe we'll have some some updated report to share.

So 275, we'll send as a recommendation with the conversation from the full board. So we'll make sure this is a timed item, Debbie, when it comes forward. Thank you.

Thank you. K.

Yeah. Great. Thank you. And so it sounds like I have a motion and a that was a motion, Chris. I'll second it, and we'll take that

Call that a motion.

Move forward. Alright. Thank you so much, and thank you for being here to present. And thank you for all the work that you're doing to, you know, take seriously and steward our taxpayer dollars.

Thank you, Sabrina. Yep.

Moving right along, we'll move on to item number six, which is to support or to consider a request to amend our health department, behavioral health bureau budget. And we have I can't quite read that name on my screen.

So supervisor Rulescu, it will be me, Miriam Mendoza.

Miriam Mendoza here to present. Thank you so much for joining us, Miriam.

Yes. Good afternoon, supervisor, Lopez. As I stated, I'm Miriam Mendoza, the health department's finance manager, and I will get us started in this item. So we're bringing forward this action seeking your support to increase appropriations in our behavioral health bureau, and we're asking to increase appropriations in two, in two of our funds. Fund 23 is our operating budget, and fund 22 is where we recognize, 2011 sales tax realignment.

So and so the re increase in appropriations in fund 22 is so that we can increase the operating transfers into our, operating fund, fund 23. And the contributing factors for needing increased appropriations in our operating fund is that we have increased salary and benefits costs, resulting from wage studies and also a better than anticipated, vacancy rate and also increases in our service contracts. And the actually, issue with our our contracts is that negotiations with our providers are taking a bit of a little bit longer since the implementation of CalAIM. Pre CalAIM, there was an annual cost settlement process which allowed us to contract at provisional rates. And then at the end of the fiscal year, there would be a true up of the cost.

And if that if, providers were underpaid, at that point, we we would be able to make them whole. And conversely, if we overpaid them, we were able to recoup those overpayments. Under CalIM, there is no such reconciliation process, so it is crucial that we work with our providers to ensure that the math, works on both ends and there are no over or underpayments. And so to allow for extended contract negotiations of what we have done in the past couple of years is bring to your board a request for status quo, level contract authority for our agreements, which allows us to continue to make payments to our providers and continue to negotiate. And also knowing that, you know, at the end of our negotiations, we might need to make budget adjustments if the final agreements either added programs or, increased levels of services as, in this case.

I will say that we had, you know, anticipated bringing this action, before you, closer to to the mid, mid fiscal year. However, we had other other more pressing items that we needed to tend to, and so that's why we're here this late in the year. And, in summary, that's why we're here asking for your support to increase appropriations for what we are estimating the total cost to be at the end of the fiscal year, all financed with, department revenue. And so I'll stop my comments right here and turn it over back to you for any questions.

I am muted. Okay. Supervisor Lopez, any comments or questions?

No questions. Supportive. Appreciate the work.

Yep. Great. Thank you. Any public comment on this item number six? I'm not seeing any hands raised.

No public comment in Monterey Room.

Closing public comment. Also supportive. Thank you for the work in the presentation and the clear the clear request that is clearly shows that there's a a money money on either side to support the request. So if supervisor Lopez, if that was a motion, I'll second it. I'm I'll move. Direct the ACO to modify the budget to support this change. Thank you.

Thank you.

Thank you. We'll move along to item number seven, which is a request for social services for some changes. And I think that was again, I can't quite read the text for our presenters.

I can take that one. Yeah. Good afternoon, Chair Rudascu and Supervisor Lopez and county staff. My name is Rocco Cosenza, and I'm a finance manager at Department of Social Services.

Rocco, thank you for joining us. We're so glad you're here. Thank you.

And today, we're looking for your support for an appropriation increase of, $3,000,000 for increased, salary and benefit costs. And this essentially represents the cost increases from the negotiated labor agreements that were not part of the fiscal year twenty four twenty five budget process. There is no cost to the county for this increase as the cost will be covered by increases in federal, state, and realignment revenues. Or I can take any questions on this?

Move approval.

Alright. I've got a motion for approval. We'll open it up for public comment. This is on, let's see here, item number seven, a request for social services. I don't see any hands raised from where

I comment.

Okay. Great. No public comment. We'll close for public comment. I'll second the motion. We'll consider that a direction from committee. Thank you, Rocco, for joining us and for the simple, straightforward presentation today. I appreciate the work you're doing. Thank you. Okay. Moving on. We are now at number eight, which appears to be a request again from social services from the military veterans affairs office.

Yeah. I can take that one too. So Alright.

You're out. Thank you.

Yeah. We're looking for an increase of within our social services, military, and veteran service fund, and the increase is for $267,276. So our veteran services unit has been working with the Veterans Transition Center of Monterey County for housing renovation for the purposes of providing housing for veterans. And, you know, due to some project delays, expenditures that were originally expected in fiscal year twenty three, twenty four are now expected in the current year, fiscal year twenty four, twenty five. So, really, we're just, you know, shifting, and, you know, there's no cost here for the county.

This this money has been received. It's it's it's in its reserve in an unassigned unbalanced account. So, you know, we're just gonna draw down on that and, you know, cover cover that that difference.

Great. Thank you. Again, really straightforward. I think some of these we could probably put on a a consent agenda

in the

future when they're really straightforward. But thank you for the presentation. We do appreciate you being here with us. But yeah, I'll move approval on this one.

Okay.

Okay. Perfect. And we will open it up for public comment before we give that direction. I'm not seeing any hands raised, but this is public comment on item number eight. Okay. We'll close public comment and bring it back, and we'll consider that action on behalf of the committee to support the staff report on this. Okay. Moving right along to item number nine, and this looks like it is out of again, out of social services. Is that you again, Rocco?

No. It's Oh, okay. Hold on.

That's fine. Oh, I can see this. Is it Hilda? Hilda Achawai?

Let me see if she's online.

Okay. So it says supporting an approval of a resolution authorizing or directing the ACO to execute an operating transfer of $250,000 from our nineteen ninety one social services realignment subaccount to the 1991 health realignment account for Bright Beginnings program?

Supervisor would ask you if if I may. That's, that's one of our items as well, and that's actually an annual transfer that we execute. You know, one like the previous items, a straightforward, transfer that we do annually for, from from the social services, self sex realignment to fund the programs in public health.

Great. Yep. And I think we've been doing this one. I've seen this now a handful of times. So

Correct. Correct. This is just an annual process, and this is the the staff report that we bring annually to execute to get this, transfer executed from social services onto our public health bureau.

Great. Thank you. So I'll consider, motion for approval on this.

So moved.

Alright. And I'll second that. Do we have any, public comment on item number nine? I'm not seeing any hands raised.

No. Public comment.

We'll consider item number nine approved. And, again, for future items like that, we can throw those onto a consent calendar or agenda. Alright. Moving right on to item 10, and this looks like office of the public defender.

Yes. Good afternoon, supervisors and county leadership. My name is Ashley English, and I am with the office of the public defender. I'm happy to speak with you on this item for you today. We're requesting that the budget committee support authorizing and directing the auditor controller to increase appropriations and estimated revenues by $248,859 in the Office of the Public Defender's fiscal '25 adopted budget funded entirely by grant revenues from the State of California Board of State and Community Corrections Proposition 47 Cohort four grant program.

The Office of the Public Defender was awarded an $8,000,000 BSCC Prop 47 Cohort four grant award and received approval to accept that award from the board of supervisors in November 2024. The need for increased appropriations is because the grant award occurred after the adoption of the the fiscal year twenty five budget, and the associated appropriations and estimated revenues were not included in that fiscal year twenty five adopted budget. This action has no item or sorry, no impact to the general fund, and it does not require any matching funds for the grant.

All right. Ashley, thank you so much for joining us. We're happy to have you here at our budget committee meeting, and thank you for the work that you're doing with the Public Defender's Office on this grant. It's been nice to hear about it over the course of the last handful of months, and really appreciate the leadership that's been shown in terms of being out in the community from the public defender's office on this. Thank you. Thank you. I do it looks like we do need to support this resolution on this. So I'll move approval.

Second.

All right. I've got a motion to second. Is there any public comment on this item? I am not seeing any hands raised. So we will consider that approved by the committee. And thank you again for joining us here. With that, again, I think we don't have any quarterly reports. We don't have any semiannual reports. We'll adjourn this meeting. Our next regularly scheduled meeting of this committee is 06/25/2025 at one p. M. However, our board does meet as a as a whole for our budget hearings, and I don't have those dates in front of me. But, Chair, do you have those budget hearing dates?

They'll be next Wednesday and Thursday if necessary.

Alright.

Yep. Starting at 9AM in Salinas at the board boardroom.

Alright. And I'll be having an open office hours tomorrow from three to 6PM here in our Marina office with our assistant CEO, Debbie Paul Lanelli, to chat about anything related to the county budget with my staff here Debbie. So if you want to talk in more detail about any particular budget items or things that you would like me to raise during those budget board hearings next week, please do stop by and join in our open office hours conversation. Right. With that, I think we can adjourn this meeting. Thank you all for joining us. We appreciate having you with us today.