SANTA CLARA COUNTY, CALIF.—Today, the County of Santa Clara Board of Supervisors completed its deliberations and approved a balanced budget for Fiscal Year 2013. The County’s total approved budget including all services, operations, capital improvements and reserves is $4.1 billion. The $2.2 billion General Fund budget reflects the proposed spending plan for all discretionary and many mandated services for the fiscal year beginning July 1, 2012. An additional 350 positions were approved, many (80 positions in Fiscal Year 2012 and 77.5 in Fiscal Year 2013) are related to the implementation of AB109, the Public Safety Realignment Act which transfers responsibilities for certain state prisoners to counties.
This year the budget was described as a maintenance budget because it marked the first time in the past 11 years that the County did not have to make major cuts combined with revenue measures to meet projected annual deficits in excess of $200 million.
County Executive Jeffrey V. Smith called the new budget a “welcome respite from deficits” that would not have been possible without prior year support from employees and labor. “Entering Fiscal Year 2013 having achieved $75 million in concessions from our union partners is critically important,” he said. “The willingness of County employees and labor to work together with management was essential to bringing down the cost of services and will help to create a sustainable County.”
The Board’s adoption of the budget represents the culmination of an extensive budget planning and review process that included discussions at policy committees, workshops and public hearings attended by residents, community organizations, and employees who advocated for various services and programs. Also, since the County Executive’s Recommended budget was printed staff identified additional available ongoing General Fund revenue of $2.9 million and one-time General Fund revenue of $4.6 million, providing the Board with additional flexibility for strategic budget enhancements.
“As the State budget is debated, we are very concerned about local impacts to single moms, child care and In-Home Supportive Services for the disabled,” said President George Shirakawa, County of the Santa Clara Board of Supervisors. “Also, fears about the impact of the upcoming U.S. Supreme Court’s decision on health care reform are very real for our health system and Valley Medical Center. Yet, in large part, thanks to our employees, we avoided cuts, were able to reserve funds for these threats and are much better off than other counties.”
Strategic Budget Enhancements
Under the plan, the County will make strategic investments to address infrastructure needs that could not be funded over the past several years. The budget calls for $100 million in technology bonds, $70 million targeted to support the implementation of the Epic core health information system at Santa Clara Valley Medical Center (SCVMC). This investment will allow SCVMC to increase its ability to deliver high quality medical services to patients through the used of electronic medical records and other commonly used technology; increase its efficiency; and remain competitive. The balance will be use for other critical information technology needs, including County Communications 9-1-1 equipment.
A total of $13,750,000 is designated for the capital improvement program, of which $5 million will be used to address maintenance and repair backlog at the jail and other facilities, and $1 million for energy savings projects.
Sixteen new positions will be added to the Assessor’s Office and 12 new positions to the Tax Collector’s Office to address a backlog in assessments.
The County restored $379,154 to the Social Services Agency’s Senior Nutrition Program, to address the rising cost of food, the increasing demand for nutrition services, and to make up for use of reserves to fund program costs. It also added funding for four additional staff in the In Home Supportive Services (IHSS) Unit to support timely processing of provider payroll, reduce excessive telephone wait times, and address delays in receiving responses to inquiries.
A total of $12.9 million will be set aside in reserve to address State/Federal impacts; $5 million allocated to a Cash Reserve, in addition to the County’s annual Contingency Reserve which is $96.9 million for Fiscal Year 2013 (5% of ongoing General Fund revenues).
The Board of Supervisors also voted to create a Child Sexual Exploitation Unit in the Office of the Sheriff in the amount of $327,684.
“Online child pornography is an absolutely disgusting and insidious crime that is exploding,” said Shirakawa. “By supporting my proposal to add two deputies to eliminate the backlog and immediately act on every search warrant, the Board of Supervisors put potential child molesters on notice that we do not tolerate the victimization of our children.”
The Board also approved $30,000 for a halftime coordinator for the Health Partnership’s Community Mammography Access Program. The program serves low income women who use the County’s clinics.
“Many of the programs we are supporting focus on prevention,” said Supervisor Liz Kniss. “By investing in such services now, we avoid much costlier prospects of trying to take care of needs after they emerge.
“One example is Community Mammography Access Program. We know that early detection of breast cancer is a key factor in saving women’s lives,” continued Kniss who championed the program. “Because having a mammogram is not a pleasant experience we need to move additional barriers, by making the service accessible to women at risk.”
One of the proposals adopted in the budget is $174,000 for the Court Mentoring Program.
“The Court Mentoring Program has been widely recognized for its effective use of parents who have graduated from the Drug Dependency Treatment Court to mentor others who are facing similar significant challenges,” said Supervisor Dave Cortese. “Last year the mentors worked with 381 parents, some at risk of permanent loss of their children. The mentors’ compelling personal stories inspire others when they have little or no hope of changing.”
-Both Supervisors Cortese and Shirakawa advocated for additional positions in Office of Veterans’ Services to address a backlog of cases for the men and women who serve.
Cortese proposal to create a small budget to support the work of the Youth Task Force was approved as was a chapel at Valley Medical Center for families to use while waiting to learn of a patient’s condition.
Public Safety Realignment Program - AB 109
On October 1, 2011, the County became responsible for a category of non-serious, non-violent, non-high risk sex offenders being released from state prison. At the same time, sentencing regulations changed and individuals convicted of certain felonies with sentences greater than one-year are now being housed in County jail instead of State prison. These changes, known as Public Safety Realignment, created a new criminal justice system at the local level, and counties had only three months to plan and implement how to manage these populations.
Between October 2011 and April 2012, the County received approximately 818 Post Release Community Supervision (PRCS) offenders that are now supervised by Probation. Since December 2011, Probation has used the Correctional Assessment and Intervention System, Risk/Needs Tool for offenders. An estimated 246 PRCS offenders were assessed: 15 classified as low risk, 90 classified as medium risk, and 141 as high risk. Of the 655 PRCS offenders under Probation supervision from October 2011 through March 2012, 6% were referred to Mental Health Treatment, 19% were referred to Substance Abuse Treatment, and 12% were referred to Employment, Vocational, and Educational Services.
Santa Clara County has been recognized across the State for developing an innovative plan that focuses significant resources on the programs and services these individuals need to exit the cycle of criminal behavior. The Mental Health Department and the Department of Alcohol and Drug Services are working with Probation staff to design the programs and services that will meet the needs of each parolee or inmate. This is a work in progress, but initial results have been extremely promising as the number of individuals violating parole and re-offending is declining. Based on early guidance that the County’s $12.6 million Fiscal Year 2012 allocation for AB 109 will likely double in 2013, and experience to date, the budget substantially increases in resources for the majority of the components of AB 109. A total of 150 positions have been added to support the full implementation of the Public Safety Realignment Program.
Innovation and Flexibility
The Center for Leadership and Transformation (CLT) program has been developed to drive the change that needs to take place in the organization to find new and more efficient ways to deliver excellent services. This budget recommends an ongoing commitment to CLT, recognizing the importance of this initiative. We are recommending an increase of $556,145 to fund this effort at an annual level of $736,145.
The goal of the CLT is to empower employees to look at their jobs differently and initiate changes that will improve performance in a material way. To date, the 39 CLT teams that are currently working have created over $400,000 in ongoing savings and over $1 million in one-time savings, as well as numerous client and customer service improvements. As this effort spreads to more employees within the organization, horizontally and vertically, more savings and customer satisfaction results will be achieved and reported.
Concerns Continue about Risks and Threats to County Budget
Healthcare Reform and SCVMC
Santa Clara Valley Medical Center is facing significant challenges relating to economic conditions and the uncertainty regarding healthcare reform. The organization is now preparing for the changes that have already started in healthcare, and are due to change again dramatically in 2014. Recognizing that a decision by the U.S. Supreme Court could send Federal health care financing into chaos, the risk to Valley Medical Center and the County in the near future is considerable given that much preparation has gone into meeting the Federal requirements associated with healthcare reform.
In addition, in Fiscal Year 2012, SCVMC did not realize its revenue projections. Monthly financial reports revealed that SCVMC would end the year with a $60 million deficit. The Administration developed a plan to address this shortfall through changes in the scheduling of clinics and significantly increasing access to the healthcare system. At the same time, the Board approved bridge financing of $30 million from the General Fund. The operational changes are beginning to show some results and are expected to generate significant revenue in the year ahead.
Upcoming Labor Negotiations
Retaining the integrity of the $75 million in total salary and benefit savings assumed in this budget will require negotiating concessions with the remaining bargaining units whose contracts are open in Fiscal Year 2013. The value of these necessary concessions totals approximately $15 million and requires agreements with units that include the Registered Nurses Professional Association and the Deputy Sheriff's Association. The recommended budget assumes these savings and they must be achieved for the budget to be balanced.
State and Federal Issues
Santa Clara County will receive over 50% of its revenue from Sacramento and Washington, D.C. for the fiscal year. This reliance creates significant risk in this period of economic uncertainty. At both the State and Federal levels, lawmakers are contemplating solutions to address their respective budget deficits. While the specific impacts on the County will not be known for some time, possibly not until mid-Fiscal Year 2013, it is reasonable to assume that future State and Federal funding to the County will be reduced.
The Governor has proposed various changes to social services, which would affect the County's clients, and cuts to health programs, affecting both clients and the County. In the health area, a large cut to the Medi-Cal and Federal Qualified Health Center (FQHC) programs has been recommended, with unknown impacts to the County.
The Budget Control Act, approved by Congress in 2011, limits spending in the Federal Fiscal Year 2013 budget. In February, the President released his proposed budget, which contains budget reductions in areas of importance to the County. Also, a key provision of the Budget Control Act - budget sequestration will begin in January 2013. Sequestration requires automatic, across-the-board cuts to government programs, with half the reductions coming from defense spending. Cuts of $1.2 trillion over the next decade must be enacted, which represents lower Federal spending of approximately 9%. A number of County programs are exempt from sequestration, including Medicaid, the Children's Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF), and the CalFresh food stamp program. However, if not specifically exempted, all other federal funding would be subject to the automatic reduction. Unless Congress passes, and the President signs, legislation to alter or delay the pending sequestration, it will occur, and Federal funds to the County are likely to be reduced.
“We have many challenges ahead,” said Smith. “We are positioning the organization so that it will be able to respond to those challenges in a way that best serves the people of Santa Clara County.”
Possible Interviews Today
Jeff Smith, County Executive – available throughout the day, call 408-299-5102
Supervisor Shirakawa – available between 10:00 a.m. and noon, call 408-299-5020
Supervisor Wasserman – available 2:00 p.m. - 5:00 p.m., call 408-299-5010
Supervisor Cortese – available by telephone throughout the day, call 408-299-5030
Supervisor Kniss – unavailable after 10:30 a.m., call 408-299-5050
Mary Stephens, Budget Director – available until 4 p.m., call 408-299-5174
Posted: June 15, 2012