Thursday, February 23, 2017
Budget and Financial Information

Budget and Financial Information

Riverside County Budget Summary 

Riverside County’s FY 16/17 recommended budget establishes $5.4 billion in appropriations for Riverside County, an increase of 1.7 percent. Overall estimated revenue is projected to increase to $5.1 billion, an increase of 2 percent. The difference of $329 million is backed with use of fund balance, net assets, and reserves.

The FY 16/17 budget includes $3.1 billion in general fund appropriations, comprising 57 percent of the overall budget. General fund discretionary revenue continues to show modest growth. Estimated discretionary revenue is projected to increase from $735.2 million in FY 15/16 to $752.8 million in FY 16/17, an increase of just $17.6 million, or 2 percent. This small increase is due primarily to modestly rising property-related tax revenues and less one-time revenues. Discretionary spending, however, increased to $813.7 million. Of that, an appropriation for general fund contingency is budgeted at $20 million, or 2.7 percent of discretionary revenue.

The $60.9 million gap between discretionary revenue and discretionary spending is covered by $20.5 million in available general fund unassigned fund balance assumed to be remaining at year-end, $11.4 million in use of departmental reserves, and an anticipated $29 million draw from the reserve for budget stabilization. The general fund reserve for economic uncertainty remains intact at $124.7 million, but the reserve for budget stabilization will be drawn to $21.6 million, leaving an assumed combined balance of $146.4 million. The draw on the reserve for budget stabilization depend on the actual amount of available unassigned fund balance remaining at year-end. The commitment for disaster relief continues to total $15 million.

Ongoing costs continue to outpace ongoing revenues, widening the structural deficit. Most significant are labor costs, negotiated cost of living increases, merit and promotional raises and pension increases coming into full effect, and escalating costs of liability coverage and other internal services. Departments requested an additional $131.3 million above their discretionary general fund allocations. Prudently optimistic growth in discretionary revenues is factored into the multi-year planning to cover ongoing obligations, so there is little flexibility to undertake additional ongoing spending without drawing further on general fund reserves. Consequently, strategies to contain and reduce ongoing costs will be essential to achieve structural balance and meet the Board’s core strategic priorities.

 

BUDGET PROCESS AND TIMELINE

The budget process is year round, beginning with development of internal service rates in the fall and culminating with approval of the adopted budget. Budget amendment takes place throughout the fiscal year with a 4/5ths vote threshold, and significant changes coincident with the approval of quarterly budget reports.

 

              

October through December

In the first quarter report, the Executive Office presents budget guidelines for the next fiscal year based on economic indicators, revenue forecasts, and Board of Supervisors priorities. Internal service rates are developed based on anticipated operating budgets for the next fiscal year in accordance with Board policy.
 

January through February

In the midyear report, the Executive Office presents an overview of projected budget conditions, recommends budget policies for the coming fiscal year, and seeks guidance regarding budget priorities from the Board. Internal service rates are also presented for approval. The Executive Office distributes Board budget policies, priorities, and information about budget targets, deadlines, and rates to departments
    

March through April

Departments submit budget requests to the Executive Office for review and inclusion in the recommended budget. If economic conditions allow, departments submit new capital improvement project requests to the Executive Office. Due to current economic conditions, new requests were not solicited for FY 16/17.
   

May through June

The Executive Office presents the third quarter report in May, which includes the current year budget status, economic forecasts, and previews budget considerations for the following fiscal year. The Executive Officer presents the recommended budget to the Board for approval in June, immediately after which budget hearings the Board conducts budget hearings and provides direction on policy decisions.


July through September

The Executive Office prepares final budget recommendations addressing the direction given by the Board. The year-end closing process begins in July and concludes in September, which establishes ending fund balances.

August through November

Once year-end balances are complete, the Executive Office finalizes the adopted budget for publication, which is submitted to the State Controller by December 1 in accordance with the County Budget Act (Government Code §§29000-29144 and §30200).


 

 

 

FY 16/17 OPERATING BUDGET SUMMARY

OVERALL COUNTY BUDGET
The table below compares appropriations in the FY 16/17 budget to FY 15/16 by fund group.

Total Budgeted Appropriations

Overall, the FY 16/17 budget contains $5.4 billion in appropriations, an increase of 1.8 percent from FY 15/16 adopted budget. Within that, governmental fund appropriations total $3.8 billion. Broken out by function, the largest sector of overall county appropriations is for public protection at 30 percent, followed closely by health and sanitation at 23 percent, and public assistance at 22 percent. These three functions comprise 75 percent of governmental fund appropriations. Growth in overall appropriations is attributable primarily public protection. Broken out by spending category, 43 percent of overall appropriations are for salaries and benefits, with 30 percent for services and supplies, and 24 percent for other charges, such as debt service. Just 4 percent of overall appropriations are for acquisition of fixed assets, and 0.4 percent of the overall budget is set aside for general fund contingency.

Personnel Summary

For FY 16/17, departments requested approval for 28,412 authorized positions, a reduction of 1,704 positions from the authorized level as of May 24, 2016. This represents a voluntary reduction of authorized positions on the part of departments to achieve cost savings. As of May 24, 22,848 regular, full-time positions were filled and 7,268 were vacant. Vacant positions may not need funding for a full fiscal year, if at all. The Executive Office is continuing to analyze vacant position levels for opportunities to achieve cost savings.

 

Total Estimated Revenues

The FY 16/17 budget includes $5.1 billion in estimated revenues. Within that, estimated governmental fund revenues total $3.7 billion. Of that, 46 percent is intergovernmental state and federal revenues, while charges for current services comprise 34 percent. Smaller revenue sources include taxes; licenses, permits and franchises; use of money and property; and fines, penalties, and forfeitures projected. Internal service fund revenues total $546 million, derived from direct charges for services provided to departments for custodial and maintenance services, information technology, human resources and insurance, and printing and fleet services. Revenues from the county’s enterprise funds, chiefly the county medical center and waste resources functions, total nearly $708 million.

 

COUNTY GENERAL FUND

Total General Fund Appropriations

The FY 16/17 budget includes $3.1 billion in general fund appropriations for basic operations including equipment purchases. Public protection accounts for the largest portion, totaling $1.4 billion, or 44 percent. Over $1 billion, or 32 percent, is for public assistance programs and another $535 million, or 17 percent, supports health and sanitation services. General government services account for only 7 percent, at just over $214.5 million.

 

Total General Fund Estimated Revenue

The budget projects $3 billion in estimated general fund revenue net of transfers, 66 percent of which is state and federal intergovernmental revenue.

 

Discretionary General Fund Estimated Revenue

Overall, county spending is dominated by mandated core functions such as health, welfare, and criminal justice, which are heavily supported by purpose-restricted state and federal subventions. While having fiduciary responsibility for oversight of the entire county budget, the Board of Supervisors has discretionary spending authority over a limited amount of the county's overall financial resources, and the service priorities of the community are reflected in the manner by which the Board allocates its discretionary revenue to the countywide services.

 

The Board alone decides how general fund discretionary revenue will be spent. Only 20 percent of the county’s FY 16/17 estimated general fund revenue is discretionary, with the remaining 80 percent comprised of purpose-restricted sources such as state and federal revenues. Discretionary general fund revenues are estimated in part on internal projections based on revenue history and on reports from independent economists hired by the county to provide economic forecasts. FY 16/17 general fund discretionary revenue is estimated at $752.8 million, a 2 percent increase of just $17.6 million from the FY 15/16 adopted budget estimate. Of total discretionary revenues, 77 percent are driven primarily by growth in property values. The year-over-year changes reflected at right in interest earnings and miscellaneous state revenue are due to adjustments for one-time events or recharacterization, and do not reflect changes in underlying trends, discussed further below.

 

Discretionary General Fund Appropriations

The discretionary general fund portion of the FY 16/17 budget includes $813.7 million in discretionary general fund net cost (NCC) allocations, which remain largely unchanged from the previous year in most cases. Departments were instructed to absorb any labor cost increases without additional support from the general fund, consistent with the Board’s budget policies. The Sheriff, District Attorney, Probation, the Public Defender, and Correctional Health and Detention Behavioral Health were among the departments that received increases in their NCC allocations for FY 16/17. Most of the increase in recommended discretionary allocations is attributable to public protection, which comprises 75 percent of the discretionary budget with a total of $609.6 million. Of this, the Sheriff’s Department is recommended to receive $278.7 million, which includes an increase of $24 million in additional general fund support carried over from an ongoing increase in FY 15/16 intended to close the Sheriff’s long-standing deficit in labor costs. The District Attorney’s Office increased by $6 million to $69 million. The Fire Department, which also receives structural fire tax revenue, will receive about $50.8 million in general fund support, including $500,000 in one-time funding for capital expenditures. The budget allocates $10.9 million toward indigent defense and $35.7 million to the Public Defender’s Office, which is up by $1.5 million carried over from an ongoing increase in FY 15/16 to cover labor and staffing costs. The Probation Department will receive $41.6 million.

 

MULTI-YEAR FORECAST

The Executive Office prepares multi-year forecasts to set the context for major discretionary budgetary decisions of an ongoing nature. Current modeling indicates previous spending assumptions would exceed prudent projections for growth in discretionary general fund revenues. Requirements of the prisoner settlement obligate tens of millions in new annual spending. Remaining on the current trajectory is unsustainable even over the short-term. Any additional spending for expansion of programs or services will exacerbate that deficit. Spending assumptions within the Board’s control must be modified.

Financial Information

 

Financial Information

FY 2016-2017
FY 2016-2017 Recommended Budget
FY 2016-2017 Adopted Budget
FY 2016-2017 First Quarter Budget Report
FY 2016-2017 Midyear Report

FY 2015-2016
FY 2015-2016 Recommended Budget
FY 2015-2016 Adopted Budget
FY 2015-2016 First Quarter Budget Report
FY 2015-2016 Midyear Budget Report
FY 2015-2016 Third Quarter Budget Report

FY 2014-2015
FY 2014-2015 Recommended Budget
FY2014-2015 Adopted Budget 
FY 2014-2015 First Quarter Budget Report
FY 2014-2015 Midyear Budget Report
FY 2014-2015 Third Quarter Budget Report

FY 2013-2014
FY 2013-2014 Recommended Budget
FY 2013-2014 Adopted Budget
FY 2013-2014 First Quarter Budget Report
FY 2013-2014 Mid-Year Budget Report
FY 2013-2014 Third Quarter Budget Report

FY2012-2013
FY 2012-2013 Recommended Budget
FY 2012-2013 Adopted Budget
FY 2012-2013 First Quarter Budget Report
FY 2012-2013 Second Quarter Budget Report
FY 2012-2013 Third Quarter Budget Report

FY2011-2012
FY 2011-2012 Recommended Budget
FY 2011-2012 Adopted Budget

FY2010-2011
2010-2011 Recommended Budget
FY 2010-2011 Adopted Budget

FY2009-2010
2009-2010 Proposed Budget
2009-2010 Final Budget

FY2008-2009
2008-2009 Final Budget

Comprehensive Annual Financial Report (CAFR)

Compliance Analysis and Investment Report
Statement of Investment Policy

 

Comprehensive Annual Financial Reports (CAFR)

FY 2014 Comprehensive Annual Financial Reports (CAFR)