4. (DISCUSSION) Close-out process for FY01-02.
Mark Lui reviewed the process, as the Finance Committee did not meet before to be brought up to date on last year’s closing.
Basically it ended with a small surplus, the second year in a row that the Dept. has ended with a surplus. This time, though, the City allowed the Dept to carry over the surplus to this year’s budget. This won’t happen again. Some of the things which helped in obtaining this surplus was credit for energy costs, unspent funds ---eg. order for computers that never got filled, other purchase orders and special services contracts where the set aside monies were not spent. Some payables were not paid in that fiscal year but the next, so that resulted in less expenses.
Public comments: There was none.
5. (DISCUSSION) Budget planning process for FY02-03
The year’s planning included two levels of cutbacks. First was a 5.5% cut to the budget, with a 10% contingency cut plan. The City was ultimately able to approve its overall budget when the unions (with the exception of 790) accepted a freeze on raises, and a one year payment for employee portion retirement (which the City normally takes up 100% for vested employees). The Dept had to cut back additional $282K in positions. In the review by Harvey Rose, additional cuts were made, including the Asst. Dir. at LCRS. and $170K in OT and fringe benefits for JH.
Title IV(e) revenues were set at $3.6M, but this was $400K more than last year, and that amount was credited in a reserve fund. If it does not actually materialize, that would be taken back by the City and the Dept would be that much more in deficit.
The Dept has been able to fill 6 positions in JH. There are currently 20-30 out on workers comp. There is one who has been out for 2 yrs. When someone is out on workers comp. they are on full salary and benefits, in addition to the medical costs.
There was a problem initially with the workers comp. administrative body (Cambridge) which led to some laxity in resolving workers comp claims. But this has improved with the direction of the City’s workers’ comp. director (Minh Vu).
Contract processing procedures are being reviewed. The Dept has a longstanding need for updated and reliable vehicles. Now the City uses a lease/purchase procedure, which spreads the costs over 3 yrs, rather than outright purchase.
There is essentially no money for furniture (getting ergonomically compliant). Comm. Ricci asked for a breakdown of how many desks/chairs etc. are being sought. M. Lui said he’d get a list to her. But an estimate was for 13 staff.
Comm. Ricci also asked for information on the configuration of computers the Dept is in need of.
The TANF spending plan isn’t going to change. There is administrative monies to cover that plan. Four of the original six programs under the local action plan are still operative. Much of the funding for those have been taken over by local sources. Challenge I funding ended, and AB 1913 funds were used to continue much of the programs begun with Challenge I funds. In Dec. the Juvenile Justice Coordinating Council will meet to discuss the upcoming yr’s priorities.
TANF is about $3.2 mil.. and there’s $350K of TANF for the Ranch.
$350K of AB 1913 funds pays for girls services, $260K for home based detention services, the rest for Performing Arts Workshop.
Proposition J—through MOCYF) ($194K) pays for about 6 different programs (Parenting program, Street Law, SLUG landscaping for the Dept were mentioned).
Public comments
There was none.
6. (DISCUSSION) Planning for the FY03-04 fiscal year.
M. Lui referred to the budget instructions given to the Dept. just last week, from the Mayor’s office. They are asking for a 3% reduction immediately for the remainder of this fiscal year. Of this, the amount of $164K in capital improvement money not spent was allowed to be used in reducing the cut to $511K .
So, this 3% cut will be carried into the new fiscal year budget, along with the burden of any COLAs the Dept will have to pay. This will demand another 5% reduction in order to handle the expenses.
There may also be another 5% cut asked as a contingency, if the City’s economic outlook doesn’t improve.
With all this, the Dept will have reduced its budget over the past two years, of 25%.
This year’s budget will be compressed a month, giving the Dept only until the end of Jan. 03 to submit their budget to the Mayor’s office.
M. Lui commented that all labor contracts are up for re negotiation next year, and the target date for approving them is April 1, 03.
Title IV(e) funds pay for 2/3 of the salaries of all POs who work on foster care cases. If POs were cut, this revenue would be lost. Prop D, Children’s Baseline funds, requires a certain minimum amount be given to children’s services each year from the general fund. However, the City has been spending some $7 mil. over that amount, but now with the new budget problems, this may be reduced closer to the minimum levels.
The Juvenile Justice Advisory Committee (created by the Bd of Supervisors) will be hearing from Gabe Cabrera regarding the Dept’s situation and be advising the Bd of Supervisors during the budget process.
Impact on the Dept from budget cuts:
Administration: there’s a big delay in bill paying ability. There are more errors and chances for overpaying and/or double paying invoices. We will have problems in obtaining materials and supplies because vendors will not respond to us in a timely manner. Their costs will be higher, due to the inability to shop around and get the best deals. Will not have financial reporting and monitoring control to manage the budgets better. Contract compliance has also been reduced. Compliance requirements are increasing, and we cannot meet them due to reduced staffing. There is an increase in staff absenteeism, due to increased load on the staff. Staff morale is also low.
There may be reductions in direct service programs. The performance measures set by the City, for each division and the Dept as a whole, will be more challenging to meet.
The Chief said that the Finance Division has been working overtime, weekends till 10pm trying to get this budget together.
The impact of the State’s budget on the City’s budget has yet to be revealed.
Comm. Bonilla asked if mechanisms to maximize potential staff were being investigated (using volunteer interns to fill openings in wait for hiring availability). Yes.
The Chief said that Dec. 9 is the deadline for submitting the proposed 3% reduction for the current fiscal year.
Quest: how many staff in Finance Division. 12, but 4 are vacant.
Public comments
There was none.
7. (ACTION) Adjournment
There being no further business, the meeting was adjourned at 10:40 am.
