1. Alameda County FY 2010/2011 Budget Review Vincent Gordon, Budget Analyst, PA 730

2. Mission Statement ALAMEDA COUNTY MISSION: To enrich the lives of Alameda County residents through visionary policies and accessible, responsive, and effective services sustainability healthy and thriving populations

3. Demographics and the Economy  Unemployment 11.5 %, up from 4.9% before recession in 2007  Median Home Value $360,000, down from $619,00 in 2007  Home Foreclosures: 6486 at end of FY 2009, down from 8288 in FY 2008, up from 181 in 2005.

5. Funding Gap Closed  FY 2010-2011 – Funding Gap of $152 million closed.  Causes of revenue shortfalls - State reallocation of property taxes to meet state budget shortfalls - ERAF losses (Educational Revenue Augmentation Fund) - County unemployment rate at 11.5%, still below state (12%) but increases need for safety net programs. - Mortgage crisis – yet to be felt while banks pay current property tax rate for foreclosures. Property tax revenues will go down when sold. - Dim outlook for Federal matching funds for Medi-Cal could mean additional $13 million shortfall in healthcare services.

6. The Budget Process Alameda county uses a Program Budget format. Program Areas for General Revenue Funds: – General Government – Healthcare Services Agency – Public Assistance – Public Protection – Capital Projects – Public Ways and Facilities – Non Program Expenditures – Contingency and Reserves – Cultural, Recreation and Education

7. Values Based Budgeting – Priorities – 1. Vulnerable populations (infants, children, elderly, disabled, young mothers, etc.) – 2. Public Safety – crime control and prosecution – 3. Drug abuse control and treatment – 4. Budget measures to promote prevention – 5. Assurance that essential services are budgeted when priority programs are funded. – 6. Reward efficiency and effectiveness in service delivery – 7. Assure the minimal level of mandated services

8. Share Analysis of Appropriations

9. Five Year Trend of Appropriations

10. Five Year Trend of Appropriations Per Capita

11. Five Year Trend of FTE Growth -FTE growth rate since FY 2007 = 18.25% -Appropriations Growth Rate = 11.7% -In FY 2010-2011, spending requirement for FTE increased due to inflation and cost of living. -Revenues declined by 4.1%; Appropriations increased by 2.2%, yielding shortfall of $152.4 million -FTE decreased by 33 permanently for FY 2010-2011 budget as part of over all strategy to close funding gap

12. Revenues  Total General Fund Revenue 2.443.4 million  Discretionary Revenue = $ 502.7 million or 25.9% of general revenue.  The rest is program funding  48.1% of general fund comes from State, Federal and Local aid.  County at risk when state and feds reduce spending or re-allocate local tax revenues.  ERAF: 4 billion in losses since 1992

13. Educational Revenue Augmentation Fund

14. Total Government Debt

15. Debt Per Capita

16. Strategy to Close Gap Combination of severe cuts, revenue raising and innovation -SSI Advocacy Trust (to recover retroactive Medi-Cal benefits -Closure of Fairmount Animal Shelter -Efficiency initiatives such as “facility and property usage utilization” to reduce office space and re-use furniture. -Ranked choice voting reduces costs of election run-offs -Increase of service fees -105.6 FTE reduced in general fund programs, Healthcare, public protection and general government -Cooperation with collective bargaining units resulted in salary freeze and three year suspension of COLAs in order to reduce more FTE losses. -Biggest loses in general government and healthcare.

17. Blame the State and Feds! Report places large role in shortfalls on state and federal jurisdictions, which contribute 48% of revenues for general funds. State continues to reallocate tax and fee revenues from local jurisdictions such as with ERAF, sales tax, vehicle registration, etc. While economic downturn plays a big role, ineffective state legislature and 2/3 vote need for tax increases blamed for inability to reach a budget, which just delays and worsens shortfalls. Federal Stimulus package promised matching funds for Medi-Cal but new proposed budget rescinds it and cuts all funding but security County must watch state and feds closely but it is likely that more is coming.

18. Conclusions and Recommendations The program budget was a sensible way to organize units but didn’t seem to have any performance measures. Discussed changes in staffing, touted innovative programs, etc. but didn’t try to justify cuts. No mission statement in the budget itself. There was one in the CAFR but it was rather generic. Not enough trend analyses. Over-emphasis on drug prevention in priorities. Values based budgeting seems like a good rubric for prioritizing. Lots of innovative programming and green initiatives. Long-term prospect seems to be more short-falls due to slow housing recovery and unemployment. Recommend reducing overhead and facility costs at Santa Rita jail. County should research innovative self-sufficient job programs, teaming up with venture capital and green economy. Jobs would lower safety net spending and increase sales tax revenue.