REPORT TO SHASTA COUNTY BOARD OF SUPERVISORS

BOARD MEETING DATE:  February  28, 2017
CATEGORY:  Regular - General Government-4.

SUBJECT:

Fiscal Year 2016-17 Mid-Year Budget Report

Supervisorial District No. :  All

DEPARTMENT CONTACT:  Terri Howat, County Chief Financial Officer

STAFF REPORT APPROVED BY:  Terri Howat, County Chief Financial Officer

RECOMMENDATION

Take the following actions: (1) Receive an update on the status of the Fiscal Year (FY) 2016-17 Shasta County Budget; (2) direct departments to make spending adjustments to stay within approved net county cost contained in the FY 2016-17 Budget, as adjusted; (3) approve the budget principles recommended for the FY 2017-18 Proposed Budget; and (4) in accordance with Government Code section 29064(c), approve the Budget Adoption Schedule recommended for the FY 2017-18 Proposed Budget and direct the publication of a recommended budget pursuant to the Budget Adoption Schedule.

SUMMARY

The Mid-Year Report is an analysis of the County’s fiscal condition as it relates to the adopted spending plan for the year.  Information for this analysis is provided by staff of each County department following a review of actual and projected expenditures and revenues at mid-year of the budget cycle.  The mid-year review is the precursor to the County’s budget planning for the coming fiscal year.  Adopting budget principles have proven to be an effective means of managing the county’s spending during economic downturns.

DISCUSSION

The County Executive Officer (CEO) requested that departments conduct a thorough review of their budget units.  Departments were directed to identify any unfavorable variances from budgeted revenues and expenditures.

Departments report no significant variations to budgeted plans.  Consistent with past budgets many deviations from budget are driven by activities in Sacramento and Washington.  Departments will continue to monitor their budgets and request budget amendments as necessary to adjust for variances in expenditures and revenues before June 30, 2017. 

At mid-year, we take the opportunity to direct departments to stay within approved net county cost contained in the FY 2016-17 Budget, as adjusted.  The Auditor-Controller controls budget expenditures at the Object Level; department heads are responsible for revenues in the adopted budget.  They must notify the CEO of any revenue shortfall; and further, they must reduce spending as necessary to remain within the FY 2016-17 Adopted Budget net-county-cost.

The CEO held a kick-off meeting for the FY 2017-18 Budget on February 8, 2017.  As a baseline, General Fund departments, and departments receiving a General Fund contribution, are directed to plan on a status quo budget.  Exceptions to this will be made on a case-by-case basis for departments with a Minimum Maintenance of Effort (MOE).  Due to the impact of the increasing costs of health care, retirement, potential changes to Federal funding, and the State of California planning for a recession, we are asking departments to watch expenses now and start planning for future reductions into FY 2017-18.

ALTERNATIVES

There are a number of budget principles included in this Mid-Year Report for your consideration.  The Board may choose to approve none, any, or all of those presented.  You may also choose to provide Staff additional direction.

OTHER AGENCY INVOLVEMENT

Every County department head submitted a mid-year status report to the CEO.  Other than those discussed in the Report, all departments are projecting current year activities consistent with their approved budget.

FINANCING

The County balances its annual spending plan by estimating expenditures and revenues based on assumptions.  This method has worked well and generally results in a positive fund balance carry-over each fiscal year.  

The County has taken prudent steps to withstand an economic downturn.  We have reduced spending, and maximized revenues where possible.  Our multi-phased approach balances the needs of the community and our county family within available resources.