1. 1 Board of Supervisors Napa County FY 2014-2015 Budget Overview County Executive Office June 16, 2014

2. Financial Planning Process Strategic Financial Plan (5 Year Plan) Five-Year Capital Improvement Plan Annual Budget 2 Policy Direction Implementation Reserve Requirements General Fund Supported Programs Programs slated for growth in GF Support Fiscal Contingency Strategy

3. Napa County 2017 Strategic Financial Plan Guiding Principles 1.Maintain sufficient General Fund reserves and fund balance to provide adequate cash flow and avoid short term borrowing to hedge against unanticipated fiscal crisis. 2.Use General Fund discretionary resources to finance “core” programs that are by state law the responsibilities of counties or have historically been funded by local taxpayers. 3.In cases where a significant need exists and the County has determined not to assume responsibility for funding or services, the County may provide advocacy, coordination, technical assistance, and start-up funding to aid others to provide services. 4.Generally not use one-time or limited duration revenue to fund ongoing operating costs. One-time or limited duration revenues will be used to meet needs such as capital projects or paying down unfunded liabilities. 5.Over each five-year planning period, on average, General Fund operating expenditures do not exceed revenues. 6.In periods of financial distress, it is appropriate to temporarily use fund balance or reserves to balance the budget, but only as part of a plan to achieve long-term structural balance. 7.Provide high priority services in an efficient manner, even if it limits the number or type of lower priority services offered. 3

4. Napa County 2017 Strategic Financial Plan Guiding Principles 8.In the event of a reduction in resources to provide State and federal programs, to the extent legally possible, avoid backfilling reductions in State and federal dollars. 9.Wherever legally possible, revenues are treated as discretionary resources rather than dedicated to a particular program or service. 10.When charging for services or claiming federal or State revenues, the goal is to recover the full cost of services provided, including overhead. 11.Use discretionary resources to fund programs or services that provide a broad public benefit. Programs or services that primarily benefit a smaller sub-group should be paid for with user fees or assessments. 12.Because city residents already pay taxes to their cities for municipal services, city residents should not subsidize the cost of providing services to residents of the unincorporated area. 13.Any expenditures of public funds will incorporate appropriate control and accountability measures to insure that the public purpose is achieved. The County will use appropriate performance measures to help evaluate the effectiveness and efficiency of programs and services. 4

5. FY 2014-2015 Recommended Budget Key Budget Policies With some exceptions, goal is no increase in Net County Cost Pursue new revenue to the fullest extent possible With limited exceptions, no new or enhanced programs unless offset by dedicated revenue (exceptions include implementing Corrections Realignment, Adult Correctional System Master Plan and Major Capital Improvements Program) Maintain General Fund Contingency equal to 3% of appropriations; (exception for inmate relocation cost of $1.25 million) Do not backfill reductions in State or Federal funding Goal of General Reserves and Fiscal Contingency Designation combined equal to 20% of appropriations Once other needs met, any additional available discretionary resources to be transferred to Accumulated Capital Outlay (ACO) budget. Amortize OPEB unfunded liability on a 20 year schedule, continue not phasing in PERs rate adjustments and continue prepaying Miscellaneous employer contributions. 5

6. APPROPRIATIONS – ALL FUNDS FY 2013-2014 Adopted and FY 2014-2015 Recommended 6 FY 2013-2014 FY 2014-2015 Adopted Recommended Difference General Fund$176,087,793$183,714,929$7,627,136 Tobacco MSA/Special Projects2,310,0047,291,5404,981,536 Operating Funds144,164,482147,984,4623,819,980 Non-Operating Funds34,259,00533,993,788(265,217) Capital Project Fund60,245,18843,257,237(16,987,951) Debt Service Fund3,936,7114,589,096652,385 Enterprise Funds4,331,9705,747,6841,415,714 Internal Services Funds28,730,32531,633,9072,903,582 Total Appropriations$454,065,478$458,212,643$4,147,165

7. GENERAL FUND BUDGET [1] FY 2013-2014 Adopted and FY 2014-2015 Recommended 7 FY 2013-2014FY 2014-2015 AdoptedRecommendedDifference Resources Beginning Balance [2] $7,936,000$7,510,389$(425,611) Discretionary Revenue104,670,634112,959,8238,289,189 Departmental Revenue66,181,48263,560,160(2,621,322) Total Revenue170,852,116176,519,9835,667,867 Total Resources$178,788,116$184,030,372$5,242,256 Requirements Expenditures170,587,793179,464,9298,877,136 Contingency5,500,0004,250,000(1,250,000) Total Appropriations176,087,793183,714,9297,627,136 Provision for Reserves1,200,323315,443(884,880) Designation Increase____1,500,000___-0-(1,500,000) Total Requirements$178,788,116$184,030,372$5,242,256 [1] Not including revenues and expenditures for the Tobacco MSA and Special Projects budget units, which are now technically part of the General Fund. [2] Unassigned beginning balance

8. Discretionary Revenue 8

9. 9

10. Net County Cost 10

11. 11 Net County Cost by Functional Area Total: $119,362,032

12. Salary and Benefit Overview FY 2014-2015 Budgeted Salary and Benefit Costs: All Funds: $166.9 m ($8.2 m – 5% - increase over FY2013-14 Adopted Budget) General Fund: $97.9 m (51% of Budgeted expenditures) Recommended Budget reflects DSA increases from FY 2013-2014 Budget October 2013 1% adjustment July 2014 2.6% COLA Employee Insurance (e.g., Health, Vision, Dental): 8% increase FY 2014-2015 Total Budgeted Employee Insurance- All Funds: $23.3 m General Fund: $12.8 m Employee Health Insurance rate increases are unknown 12

13. Salary and Benefit Overview, cont. Other Post-Employment Benefits (Retiree Health Insurance) Costs: FY2014-15 budgeted OPEB Costs: $6.7 m Workers Compensation Costs –Total Charges: $2.8 m No increase in FY 2014-15; increase anticipated next year Retirement – Total FY2014-15 Cost- All Funds: $20.6 m General Fund: $12.3 m PERS assumption changes will impact contribution rates beginning in FY 2015-16 with full impact by FY 2019-20 13

14. FY 2014-2015 Budget Issues Major Capital Improvement Projects – Milliken Bridge – Jail Construction Negotiations with SEIU 14

15. State Budget State starting to act like Napa County – Pay Off Debt – Address Pension Liability – Save for a Rainy Day – 5-Year Budget Projections $100 million for Pre-2004 Mandated Cost (SB 90) Debt ($73 million to counties) – Napa could see $600,000 $500 million for jail construction – treatment & programming space Roads fund repayment Status of PILT 15

16. County Budget Book CEO Letter and General Information Schedules and Financial Summaries Functional Areas Non-operating Special Revenue Funds Special Districts and Other Entities 16

17. Budget Book Detail Schedules http://www.countyofnapa.org/ Select: Departments Select: Auditor-Controller Menu of Department Links, select: All Department Documents Filter by “Budgets” Use CTRL-F to find the detail to a Division 17

18. Functional Area Reports 18 Photo by Nadine Willoughby

19. General Administration & Finance Total Appropriations $101,366,636 Non-Operating Special Revenue Funds $5,070,120 19 Photo by Nadine Willoughby

20. Community Resources & Infrastructure Total Appropriations $136,258,644 Non-Operating Special Revenue Funds $1,872,999 20 Photo by Neal O’Haire

21. Capital Improvement Projects General Fund General Fund Support for Projects = $1.7 M: – $1.4 million in rollover Capital Projects – $294,000 in new funding for projects $300,000 for minor and major emergency maintenance projects 21

22. Capital Improvement Projects Accumulated Capital Outlay Estimated July 1, 2014 Available Balance- $17.8 Million Estimated Ending Available Fund Balance: $22.6 Million 22

23. Fleet Management Change in cost allocation methodology reflects departments actual needs – Net reduction of 10 vehicles – 4 reassigned to pool 24 vehicles requested are replacements only – No new vehicles added All Equipment Replacement ($1 million) for Roads Division 23

24. Changes to Property Management South County Campus impact Emergency Projects Addition of 3.0 FTE positions Evaluating existing custodial practices 24

25. Law & Justice and Public Safety Law & Justice Total Appropriations $37,335,534 L&J Non-Operating Special Revenue Funds $2,124,948 Public Safety Total Appropriations $61,757,040 PS Non-Operating Special Revenue Funds $1,880,462 25 Photo by Carolina Harry

26. Human Services Total Appropriations $93,090,001 Non-Operating Special Revenue Funds $23,045,259 26 Photo by Nadine Willoughby

27. Appropriation for Contingency Total Appropriation $4,250,000 Reduction of $1.25 million to allow for relocation of inmates during jail construction Recommend as priority item to restore funding to $5.5 million 27

28. Budget Close-Out & Looking Ahead Labor Negotiations Worker’s Compensation PERS Health Insurance Capital Infrastructure Projects Jail Funding 28 Photo by Lance Bingham

29. Closing Remarks 29 Photo by Carolina Harry